containers

In international road haulage it is quite common that there is an extensive contractual chain of carriers who accept a transport order and subsequently instruct a subcontractor to carry it out. Often these carriers are referred to as ‘indirect’, ‘paper’ carriers or NVOCC’s. When during the carrier the goods (such as cigarettes or electronics.) are stolen or damaged, the following legal actions will take place. As a Pavlov reflex all parties (in the chain) who are instructed as carriers will start declaratory proceedings before a Dutch court in which they request that the court declares that they can invoke the CMR limitation of liability of 8.33 SDR per Kg (in German these proceedings are referred to as ‘negative Feststellungsklage’). At the same time, the shipper/cargo interested parties will try to start proceedings before a German court in which they will claim damages from the carrier (in German these proceedings are referred to as ‘positive Leistungsklage’). The obvious problem that occurs is that between the same parties in two different countries court proceedings are pending regarding the same subject. The ‘Lis pendens’ in the EU-Regulation 1215/2012 determines in these matters that the court first seised has jurisdiction. This, in order to prevent conflicting court decisions.

The background behind this ‘contest’, who is the first to start court proceedings, is a follows. Art. 17 paragraph 1 of the CMR Convention stipulates that the carrier shall be liable for damage or loss which occurred during the carriage. The grounds for force majeure are fairly limited. Liability of the carrier is quickly assumed. Art. 23 paragraph 3 of the CMR Convention provides for a limitation of liability of 8.33 SDR per Kg, the CMR limitation. Breach of this limitation is regulated in art. 29 of the CMR Convention. This article stipulates that the carrier cannot invoke the CMR limitation if the damage was caused by willful misconduct or by such default considered as equivalent to willful misconduct in accordance with the law of the court seised (the ‘lex fori’). The consequence is that depending on the country were proceedings are initiated the law applicable on breach of the CMR limitation will change. If proceedings are pending in the Netherlands, Dutch law will apply, and if proceedings are pending in Germany, German law. Under Dutch law, the concept ‘recklessness with the knowledge that such damage would probably result from it’ of art. 8:1108 paragraph 1 Dutch Civil Code is used as the interpretation of art. 29 CMR. The Dutch Supreme Court has in the so called ‘Januari 5th rulings’  introduced a very strict measure for this concept. It is very rarely met, and as a consequence breach of the CMR limitation is considered almost impossible in the Netherlands. The measure of art. 29 CMR under German law is considerably less strict. As a consequence a German court will more often than a Dutch court decide to breach the CMR limitation. The conclusion is that whoever is the first to start court proceedings decides whether or not the carrier will be able to rely upon the CMR limitation, or not.

In certain situations it is imaginable that chapter VI of the CMR convention, provisions relating to carriage performed by successive carriers, allows to avoid the practice described above. This is the result of art. 39 paragraph 1 CMR. This article stipulates that a carrier against whom a claim is made as a ‘successive carrier’ is not allowed to dispute the validity of the payment made by the carrier making the claim, if the amount of the compensation was determined by judicial authority after the ‘successive carrier’ had been given due notice of the proceedings and afforded an opportunity of entering an appearance. This article can have the effect that, under circumstance, the ‘successive carrier’ cannot invoke the CMR limitation.

For long time it has been uncertain when there is ‘successive carriage’. If the CMR Convention is interpreted very strict, it seems that the ‘successive carriage’ is carriage by which the goods and CMR Waybill are passed on from one (actual/physical) carrier to another. In the fairly recent ruling of the Supreme Court Veldhuize/Beurskens  clarity on the concept ‘successive carriage’ was provided. In that matter the contractual chain was as follows. Shipper (A) instructed carrier (B) for carriage from the Netherlands to Germany. (B) subcontracted this assignment to (C) and (C) in its term subcontracted with (D). (D) was the only carrier in this chain who actually took receipt of the goods and CMR waybill. During the carriage the goods were stolen. (B) started court proceedings in Germany against (C). The end result was that (C) was fully liable against (B), and could not invoke the CMR limitation. (C) started court proceedings against its subcontractor (D) before a Dutch court. The Dutch Supreme court ruled that (D) took over the goods and CMR waybill and was there also a successive carrier. Often the case will be that, as in the Veldhuizen/Beurskens case, the actual carrier is also a ‘successive carrier’. ‘Indirect’ or ‘paper’ carriers are not considered ‘successive carriers’ as they did not actually took over the goods and CMR waybill.

In the ruling Veldhuizen/Beurskens the Supreme Court has also decided on a second point of discussion. This is the question whether the ‘successive carrier’ who in accordance with the stipulations of art. 39 CMR had been given due notice of the proceedings and afforded an opportunity of entering an appearance, when he is confronted with a claim can still invoke the CMR limitation. The result of the German proceedings was that in the relation (B) against (C), (C) could not invoke the CMR limitation. The Dutch Supreme court decided that because the criteria of art. 39 CMR were met, and (D) had the opportunity to join the proceedings, (D) also could not invoke the CMR limitation in the Dutch proceedings.

The regulation regarding the ‘successive carriage’ therefore allows that, despite court proceedings are pending in the Netherlands, the German interpretation of art. 29 CMR will still have effect on the outcome of the Dutch court proceedings. The consequence may be that even when an actual, but successive, carrier is the first to start court proceedings in the Netherlands, the end result may be that he cannot rely upon the CMR limitation. For cargo interested parties, but also for ‘indirect’ or ‘paper’ carriers the regulation regarding the ‘successive carrier’ could give the opportunity to fully recover their damage or loss. For actual carriers the regulation regarding the ‘successive carrier’ is something to bear in mind when starting declaratory court proceedings.

1 Dutch Surpeme Court 5 januari 2001, S&S 2001/61 en 2001/62 (Cigna/Overbeek en Van der Graaf/Philip Morris I)
2 Dutch Supreme Court 11 september 2015, ECLI:NL:HR:2015:2528, NJ 2016/219 (Veldhuizen/Beurskens)