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Transport

Carrier not liable for fire in uncle’s warehouse

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Legal news
calendar 5 September 2021
globus Denmark

When a truck carrying cargo arrived at the place of arrival earlier than planned, the performing carrier parked the truck in their own warehouse. While parked there, a fire started in the building and the cargo was destroyed. The cargo owner’s insurer claimed compensation from the contracting carrier. However, the carriers claimed that the fire had occurred in another part of the warehouse, which was separated by a wall. This part of the warehouse was owned by the performing carrier’s uncle, who ran a separate business. The Court found that the fire had occurred on the uncle’s property. The cargo was destroyed because of conditions which the executing carrier could not have avoided. Therefore, the contracting carrier was exempt from liability under Section 24(2) of the CMR Act.

A cargo owner entered into a contract for road transport of groupage with a contracting carrier. The contract was subcontracted to a Dutch carrier. The cargo arrived before it was expected to the place of arrival and was parked in the subcarrier’s own warehouse. It was to be parked there during the weekend before delivery. On Saturday afternoon a fire started in the warehouse and the cargo was destroyed.

The cargo owner’s insurer paid for the loss and made a recourse claim against the contracting carrier. The insurer argued that the cargo had been destroyed, while it was in the carrier’s custody, so the carrier also had to be responsible for the loss.

However, the contracting carrier argued that the fire had occurred in a part of the warehouse, which was not owned by the executing carrier, but by his uncle. Their relationship was not good. The uncle and the executing carrier each owned a company using the family surname, so the names of the companies were very similar. The uncle’s activities had had nothing to do with the transport agreement. However, the cargo owner’s insurer alleged that the entire building had to be considered part of the performing carrier’s property and so they were liable for the fire.

The Maritime and Commercial High Court: Fire was caused by conditions the carrier could not avoid

The Court found that the cargo had been destroyed, while it was in the executing carrier’s custody, so as a rule, the contracting carrier was liable in accordance with Section 24(1) of the CMR Act.

However, the Court also found that the fire occurred in a part of the warehouse that the performing carrier did not own or had access to. The loss had then occurred due to circumstances, which the carrier could not avoid. The Court also pointed out that the performing carrier had contacted the fire department og tried to move the trucks from their warehouse as soon as they noticed the fire. Therefore, the contracting carrier was exempt of liability for the loss of the cargo, cf. Section 24(2) of the CMR Act.

IUNO’s opinion

This case is a rare example of a carrier lifting the burden of proof and obtaining complete exemption of liability for a carrier under the CMR Act. The circumstances are quite unique, though exemption of liability also can be proven in less unique circumstances. However, carriers should be mindful that it is, as a rule, quite difficult to avoid liability under the CMR Act.

[The Maritime and Commercial High Court’s ruling in case BS-26331/2020-SHR of 10 May 2021]

A cargo owner entered into a contract for road transport of groupage with a contracting carrier. The contract was subcontracted to a Dutch carrier. The cargo arrived before it was expected to the place of arrival and was parked in the subcarrier’s own warehouse. It was to be parked there during the weekend before delivery. On Saturday afternoon a fire started in the warehouse and the cargo was destroyed.

The cargo owner’s insurer paid for the loss and made a recourse claim against the contracting carrier. The insurer argued that the cargo had been destroyed, while it was in the carrier’s custody, so the carrier also had to be responsible for the loss.

However, the contracting carrier argued that the fire had occurred in a part of the warehouse, which was not owned by the executing carrier, but by his uncle. Their relationship was not good. The uncle and the executing carrier each owned a company using the family surname, so the names of the companies were very similar. The uncle’s activities had had nothing to do with the transport agreement. However, the cargo owner’s insurer alleged that the entire building had to be considered part of the performing carrier’s property and so they were liable for the fire.

The Maritime and Commercial High Court: Fire was caused by conditions the carrier could not avoid

The Court found that the cargo had been destroyed, while it was in the executing carrier’s custody, so as a rule, the contracting carrier was liable in accordance with Section 24(1) of the CMR Act.

However, the Court also found that the fire occurred in a part of the warehouse that the performing carrier did not own or had access to. The loss had then occurred due to circumstances, which the carrier could not avoid. The Court also pointed out that the performing carrier had contacted the fire department og tried to move the trucks from their warehouse as soon as they noticed the fire. Therefore, the contracting carrier was exempt of liability for the loss of the cargo, cf. Section 24(2) of the CMR Act.

IUNO’s opinion

This case is a rare example of a carrier lifting the burden of proof and obtaining complete exemption of liability for a carrier under the CMR Act. The circumstances are quite unique, though exemption of liability also can be proven in less unique circumstances. However, carriers should be mindful that it is, as a rule, quite difficult to avoid liability under the CMR Act.

[The Maritime and Commercial High Court’s ruling in case BS-26331/2020-SHR of 10 May 2021]

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Mads

Poulsen

Partner

Aage

Krogh

Partner

Lars

Rosenberg Overby

Partner

Mads

Christopher Whitta-Jacobsen

Associate

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