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Transport

Danish venue against Maersk Line for dispute regarding loss of cargo from Shanghai

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Legal news
calendar 3 June 2020
globus Denmark

In a cargo claim, the contracting and performing carriers had a separate dispute concerning jurisdiction venue. The performing carrier, Maersk Line’s, standard Bill of Lading terms referred to English law and jurisdiction. The contracting carrier DSV alleged that the terms and conditions did not apply since there was no international element in the carriage.

A contract of carriage for containerized goods had initially been made between the Danish buyer of the goods (rather than the Chinese seller) and DSV. DSV and Maersk Line had contracted the carriage through their Chinese agencies.  

After the loss of the cargo during shipment from Shanghai to Copenhagen, DSV was met with a claim for damages by the cargo interests in the Danish courts. DSV then issued a third-party notice against Maersk Line. The question of jurisdiction was heard separately, and the court was to decide, whether there was an agreement on the use of the contracting carrier’s standard terms and conditions, and especially about venue, between the parties.

Maersk Line’s standard terms and conditions referred disputes to English law and jurisdiction, and they alleged that there was an agreement on international carriage of goods because the cargo had been shipped from Shanghai. DSV, however, alleged that this was not an international In agreement, since all the parties involved were Danish and the fact that the cargo was shipped from Shanghai did not make it an international agreement. As there was no international element subject to the Brussels Regulation, the Danish Merchant Shipping Act and its mandatory rules on jurisdiction applied instead.

Copenhagen City Court: Parties had agreed the jurisdiction clause, but it was not applicable in this case

The standard terms and conditions had been agreed upon by the parties and therefore it would have had precedence over the rules on jurisdiction the Danish Merchant Shipping Act. These rules may be mandatory, but they yield to EU regulation on jurisdiction. However, the jurisdiction clause was only applicable if the dispute concerned an international legal matter. The court observed that all parties involved were Danish, and the legal matter, therefore, could not be considered international. The court agreed with DSV that it did not make a difference that the cargo was shipped from Shanghai. Therefore, the jurisdiction clause did not apply to the matter and the Danish courts had jurisdiction.

The Danish Eastern High Court of Appeal confirmed the first instance ruling.

IUNO’s opinion

This decision opens the door for Danish jurisdiction against Danish carriers despite a jurisdiction clause in favour of a foreign venue. If the cargo interest contracting with the carrier is Danish and no other parties with a real contractual nexus to the contract of carriage are international, the Danish Merchant Shipping Act will apply.

We understand that leave to appeal has been sought. However, if the circumstances are right this may change the landscape when dealing with carriage to and from Denmark and possibly other Nordic countries, where the claim is against a Danish carrier.

[The Maritime and Commercial High Court’s ruling in case BS-6868/2017]

A contract of carriage for containerized goods had initially been made between the Danish buyer of the goods (rather than the Chinese seller) and DSV. DSV and Maersk Line had contracted the carriage through their Chinese agencies.  

After the loss of the cargo during shipment from Shanghai to Copenhagen, DSV was met with a claim for damages by the cargo interests in the Danish courts. DSV then issued a third-party notice against Maersk Line. The question of jurisdiction was heard separately, and the court was to decide, whether there was an agreement on the use of the contracting carrier’s standard terms and conditions, and especially about venue, between the parties.

Maersk Line’s standard terms and conditions referred disputes to English law and jurisdiction, and they alleged that there was an agreement on international carriage of goods because the cargo had been shipped from Shanghai. DSV, however, alleged that this was not an international In agreement, since all the parties involved were Danish and the fact that the cargo was shipped from Shanghai did not make it an international agreement. As there was no international element subject to the Brussels Regulation, the Danish Merchant Shipping Act and its mandatory rules on jurisdiction applied instead.

Copenhagen City Court: Parties had agreed the jurisdiction clause, but it was not applicable in this case

The standard terms and conditions had been agreed upon by the parties and therefore it would have had precedence over the rules on jurisdiction the Danish Merchant Shipping Act. These rules may be mandatory, but they yield to EU regulation on jurisdiction. However, the jurisdiction clause was only applicable if the dispute concerned an international legal matter. The court observed that all parties involved were Danish, and the legal matter, therefore, could not be considered international. The court agreed with DSV that it did not make a difference that the cargo was shipped from Shanghai. Therefore, the jurisdiction clause did not apply to the matter and the Danish courts had jurisdiction.

The Danish Eastern High Court of Appeal confirmed the first instance ruling.

IUNO’s opinion

This decision opens the door for Danish jurisdiction against Danish carriers despite a jurisdiction clause in favour of a foreign venue. If the cargo interest contracting with the carrier is Danish and no other parties with a real contractual nexus to the contract of carriage are international, the Danish Merchant Shipping Act will apply.

We understand that leave to appeal has been sought. However, if the circumstances are right this may change the landscape when dealing with carriage to and from Denmark and possibly other Nordic countries, where the claim is against a Danish carrier.

[The Maritime and Commercial High Court’s ruling in case BS-6868/2017]

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Mads

Poulsen

Partner

Aage

Krogh

Partner

Lars

Rosenberg Overby

Partner

Mads

Christopher Whitta-Jacobsen

Associate

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