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Transport

Carrier liability, time bars and claims for deductible

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Legal news
calendar 21 February 2020
globus Denmark

When a shipment of mattresses was lost at sea, the cargo owner’s insurance company claimed compensation from two contracting and the performing carrier. The Court found that both contracting carriers were liable, but that the claim against the performing carrier was out of time, as the performing carrier and the supplier had not agreed to suspend the limitation period.

A mattress supplier had contracted a buyer in Iceland about a sale of a consignment of mattresses. The mattresses were to be carried to Reykjavik by sea, and the supplier contracted a contracting carrier, who arranged for the carriage with a performing carrier.

The contracting carrier, a large freight forwarder, had another company in the group issue the bill of lading.

The mattresses were packed in a number of containers, but one of them was lost during the sailing due to bad weather. The supplier received compensation from their cargo insurance company and the insurer subrogated into the claim, claiming compensation from the two contracting and the performing carrier.

The supplier and the contracting carriers had made an agreement suspending the limitation period, but no agreement was made between the suppler and the performing carrier. However, a time extension had been agreed between the contracting and the performing carrier.

The contracting carrier had issued bill of lading stating the full number of mattresses stowed into the container. The performing carrier had received the same information but had issued a bill of lading stating that the cargo consisted of one container with an unspecified number of mattresses.

Furthermore, the dispute concerned the size of the claim itself, since the contracting carrier alleged that the insurer could claim the deductible amount. The cargo insurer had only sued in its own name but alleged that the letter of subrogation authorized them to assert the deductible amount.

The Maritime and Commercial High Court: Title for the full claim, responsibility for the loss

The Court found that the insurer had title to sue for the entire claim against all the carriers as the supplier had agreed to this. Therefore, insurer was also entitled to collect the deductible amount.

Since both the contracting carriers had agreed the carriage of the mattresses and had not proven that the loss was not caused by their error or omission, they were both liable for the loss of the mattresses during the carriage, cf. The Danish Merchant Shipping Act, s. 275(1).

Since there was no agreement suspending time between the insurer and the performing carrier, the claim was out of time, cf. The Danish Merchant Act, s. 501(1)(6).

The performing carrier had, however, suspended time in relation to one of the contracting carriers. The performing carrier was therefore liable for the loss in relation to this contracting carrier.

The contracting carriers could not limit their liability, as their bill of lading stated the full number of mattresses in the container. The performing carrier had received the same information in the booking but had issued bill of lading where the number of packages was one (the container). The court considered that the performing carrier had done so without advising the contracting carrier and despite having been provided the number of mattresses in the booking. The court, therefore, found that the performing carrier could not limit liability either.

IUNO’s opinion

It is important to determine who is the carrier and to keep the claim in time against all the carriers that may be liable. The judgment also shows that the Danish courts are rather pragmatic when deciding on title to sue – also on behalf of another part – and that the court is ready to look beyond the bill of lading and assess all the stated facts when determining the limitation of liability.

 [The Maritime and Commercial High Court’s ruling in case BS 33124/2018-SHR]

A mattress supplier had contracted a buyer in Iceland about a sale of a consignment of mattresses. The mattresses were to be carried to Reykjavik by sea, and the supplier contracted a contracting carrier, who arranged for the carriage with a performing carrier.

The contracting carrier, a large freight forwarder, had another company in the group issue the bill of lading.

The mattresses were packed in a number of containers, but one of them was lost during the sailing due to bad weather. The supplier received compensation from their cargo insurance company and the insurer subrogated into the claim, claiming compensation from the two contracting and the performing carrier.

The supplier and the contracting carriers had made an agreement suspending the limitation period, but no agreement was made between the suppler and the performing carrier. However, a time extension had been agreed between the contracting and the performing carrier.

The contracting carrier had issued bill of lading stating the full number of mattresses stowed into the container. The performing carrier had received the same information but had issued a bill of lading stating that the cargo consisted of one container with an unspecified number of mattresses.

Furthermore, the dispute concerned the size of the claim itself, since the contracting carrier alleged that the insurer could claim the deductible amount. The cargo insurer had only sued in its own name but alleged that the letter of subrogation authorized them to assert the deductible amount.

The Maritime and Commercial High Court: Title for the full claim, responsibility for the loss

The Court found that the insurer had title to sue for the entire claim against all the carriers as the supplier had agreed to this. Therefore, insurer was also entitled to collect the deductible amount.

Since both the contracting carriers had agreed the carriage of the mattresses and had not proven that the loss was not caused by their error or omission, they were both liable for the loss of the mattresses during the carriage, cf. The Danish Merchant Shipping Act, s. 275(1).

Since there was no agreement suspending time between the insurer and the performing carrier, the claim was out of time, cf. The Danish Merchant Act, s. 501(1)(6).

The performing carrier had, however, suspended time in relation to one of the contracting carriers. The performing carrier was therefore liable for the loss in relation to this contracting carrier.

The contracting carriers could not limit their liability, as their bill of lading stated the full number of mattresses in the container. The performing carrier had received the same information in the booking but had issued bill of lading where the number of packages was one (the container). The court considered that the performing carrier had done so without advising the contracting carrier and despite having been provided the number of mattresses in the booking. The court, therefore, found that the performing carrier could not limit liability either.

IUNO’s opinion

It is important to determine who is the carrier and to keep the claim in time against all the carriers that may be liable. The judgment also shows that the Danish courts are rather pragmatic when deciding on title to sue – also on behalf of another part – and that the court is ready to look beyond the bill of lading and assess all the stated facts when determining the limitation of liability.

 [The Maritime and Commercial High Court’s ruling in case BS 33124/2018-SHR]

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Poulsen

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Aage

Krogh

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Rosenberg Overby

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The team

Aage

Krogh

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Ida

Thune Ikkala

Legal advisor

Joachim

Sieverts Nielsen

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Lars

Rosenberg Overby

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Mads

Poulsen

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