Transport Insurer of M v. D Railroad
Case Note contributed by BBL Bracker Boehlhoff & Luebbert. BBL is the International Contributor to this website for Germany.
The insured sent untaxed cigarettes by rail to France during the course of a tax suspension by which the tobacco tax on cigarettes transported within the EU was suspended. In case of such suspension, the duty to pay tobacco tax only arises upon receipt at the place of business of the lawful receiver, who will then be debtor of the tobacco tax. If the cigarettes are withdrawn from the tax suspension process in transit, the sender is obliged to pay the tobacco tax on the goods.
From 1995 until 1997, eight cases of theft of the transported cigarettes occurred. The tobacco tax that the insured was obliged to pay because of the thefts was paid in part by the defendants as a matter of goodwill. The balance of the outstanding tax was paid by the transport insurer of the insured. The transport insurer claimed compensation of this amount from the defendant, relying on Art. 40.3 CIM (Convention on Uniform Rules Concerning the Contract for International Carriage of Good by Rail - see below).
It is generally accepted that Art.40.3 CIM covers only such charges that arise after commencement of the transport and that have accordingly not increased the value of the goods at the place where they have been taken over for carriage.
The BGH then found that only such charges were recoverable pursuant to Art.40.3 CIM, (respectively Art.23.4 CMR) as would also have occurred in the case of a ‘contractual carriage’ (namely, carriage effected without loss or damage) and would have contributed to the value of the goods at the place of delivery, that is, charges that were not caused by the loss itself.
The BGH pointed out that Art.40.1 to 3 CIM, as well as Art.23.1 and 2 CMR, distinguish between the damages that have occurred due to the loss of the goods and the charges incurred by the sender or receiver in respect of the carriage of the goods. Losses exceeding compensation for the value of the goods are explicitly excluded. The risk of such losses is generally to be borne by the sender.
The BGH considered that the CIM restriction on the recoverability of losses - by reason of the limitation to the market value of the goods - was in line with the general norms of compensation, because there are corresponding provisions in Art.23.4 CMR.
As a consequence of the theft of the cigarettes, the insured sender - and not the receiver - became responsible for the payment of the tobacco tax. Because those charges would not have occurred in the case of a contractual transport, the charges were caused by the loss itself. Accordingly, the tobacco tax paid by the insured was not recoverable pursuant to Art.40.3 CIM.
The BGH recognised that its construction of Art.40.3 CIM and Art.23.4 CMR was contrary to the views in other contracting states such as France, the United Kingdom and Denmark, which supported the recoverability of charges as soon as they were ‘closely connected’ to the transport in question, irrespective whether the claimant had incurred them in respect of the contractual performance of the carriage or whether they had arisen only after the loss or damage had occurred.
In addition, the BGH pointed out that a liability to pay taxes had not existed during the course of transport because such obligation had been suspended. It was not the transport but the theft that had caused the obligation of the insured to pay taxes. Accordingly, the BGH equated the tax liability caused during transport with a tax liability that had not yet existed during the transport.
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