Shipper awarded compensation from carrier after settlement with haulier

A carrier was to transport three wind turbine nacelles from Denmark to Ireland, each nacelle on its own truck. The carrier hired an English road haulier to perform the road transportation from England to Ireland.

The three trucks with wind turbine nacelles reached the wind turbine park in Ireland, where the road was narrow and surrounded by swamp. As the driver in back tried to pass the two trucks in the front, the wheels on the right side of the truck got stuck in soft swamp soil. The driver got out of the car and watched the right side of the truck sink down further and further, until the truck tilted to such a degree that the lashing on the cargo broke, and the wind turbine nacelle slipped off the truck and into the swamp. The nacelle suffered damages worth approximately 228.000 EUR.

Subsequently, the English road haulier arranged for a mediation to take place in London, where both the road haulier, the shipper and the carrier participated. The road haulier and the shipper made a settlement according to which the road haulier compensated 134.000 EUR of the damages.

The carrier refused to participate in the substantial negotiations about the settlement. Afterward, the shipper filed a lawsuit against the carrier to get compensation for the residual amount of 94.000 EUR.

Carrier: Dismiss the case or limit the liability

Primarily, the carrier argued that the case should be dismissed by the Court. In the framework agreement between the shipper and the carrier it was provided that disputes should be solved through mediation, and this had not happened.

Secondarily, the carrier argued that if he was responsible, the liability had to be limited according to the RHA 1998-conditions (now 2009), which is a set of terms used in the United Kingdom when transporting goods. The shipper and the carrier had not agreed on RHA-conditions, but the carrier argued that the conditions applied anyway. In support of this, the carrier referred to the network clause in NSAB 2000, article 23, as RHA was a set of commonly accepted transport conditions, and as RHA had been agreed on between the carrier and the road haulier.

The Maritime and Commercial High Court: Unlimited liability

The Danish Maritime and Commercial High Court stated that the shipper should have tried to solve the dispute through mediation. However, the Court did not think that this should hinder the shipper in filing a lawsuit, as a lawsuit had been necessary in order to avoid time-barring. The Court also attached importance to the fact that the shipper had tried to arrange for mediation, even though it had not resulted in a settlement. Thus, the case was not dismissed.

In regard to limitation of liability the Court stated that RHA did not apply, as the shipper was not part of the contractual relationship between the carrier and the road haulier in which the RHA-conditions had been agreed upon. The network clause in NSAB 2000, article 23, did not change this result.

On this background, the Court ruled that the carrier had to compensate the shipper for the full residual loss of approximately 94.000 EUR.

IUNO’s opinion

This judgment is an example of a slightly peculiar situation where at first the shipper makes a settlement with a sub-carrier whom the shipper has no contractual relationship with, and secondly the shipper files a lawsuit against the carrier in order to receive residual damages. This shows that the fact that the shipper makes a settlement with a sub-carrier does not hinder the shipper in making claims against the carrier for residual loss.

Further, the judgment illustrates that if a set of terms have been agreed upon regarding that specific transportation, but with a different party, the terms do not apply. The Court did not express whether the RHA 1998-conditions are commonly accepted transport conditions according to the network clause in NSAB 2000, article 23.

[Judgment of the Maritime and Commercial High Court 20 January 2015, case no. H-41-10]