The Arnhem-Leeuwarden Court of Appeal recently ruled that carriers can be liable under national law for damage to goods during discharge.(1) The decision adds to the body of Netherlands case law on the liability of international road carriers, in addition to their liability under the Convention on the Contract for the International Carriage of Goods by Road (CMR).
To satisfy the delivery of goods to a consignee, a CMR carrier must hand over custody of the goods to the consignee. The court of appeal established that the carrier in this case had not agreed in the contract of carriage to take care of the discharge of goods from the vehicle at the place of delivery. Delivery within the meaning of Article 17.1 of the CMR therefore took place before the discharge of goods. However, the carrier agreed that the goods must be discharged by the consignee while a representative of the consignor was present.The consignee began discharging goods in the absence of this representative, during which time the goods were damaged.
The court of appeal held that the obligation to ensure that the goods would be discharged while the representative of the consignor was present was an additional contractual obligation, and not part of the contract of carriage. That contract ended at the moment of delivery (ie, in this case before discharge). The breach therefore did not fall within the scope of the CMR Convention. The court of appeal established that the causal link requirements (ie, the causal link between the breach of the obligation and the damage) under general Dutch law on contracts were fulfilled, and the carrier was thus fully liable for damage to the goods during discharge. The carrier could not rely on any limitation of liability under the CMR Convention.
The court of appeal referred to the landmark 2015 decision of the Supreme Court in Schenker v Transfennica, which held that a carrier operating under a CMR contract can be liable to its contractual counterparty even if the carrier delivers the goods in sound condition and on time. In Schenker the CMR carrier failed to provide the correct information about the goods required for customs clearance after the leg of road carriage. This was the first time that the Supreme Court had held a CMR carrier liable for breach of an additional contractual obligation. The court noted that although the CMR contract in question had already ended with delivery of the goods, the CMR carrier could be liable for damages resulting from the breach of additional contractual obligations. This liability is governed by national law that applies to the contract of carriage.Insofar as the CMR Convention does not cover the liability in question, national law will apply.
Another relevant decision of the Supreme Court is the 1995 ruling in Cargofoor v RTT concerning the transportation of a liquid cargo in an unclean tank. The contaminated load was discharged into the consignee's land tank, which caused the contamination of other cargo already in the tank. The Supreme Court held that the carrier was liable for the transported goods under Article 17.1 of the CMR Convention. Moreover, the carrier was liable for damage to the other cargo already in the land tank, but such liability was governed by applicable national law. It was held that the carrier could not invoke the CMR limitation since the CMR Convention covers only damage to carried goods and delay during transit.
There seems to be a growing awareness in the Dutch courts of the potential existence of additional obligations on carriers which are not governed by the CMR Convention. As a result, carriers and their principals should be aware of the risk of being held fully liable on the basis of applicable national law if they agree to assume additional obligations. Even arrangements regarding loading or discharge could constitute such additional obligations if they take place before the carrier takes over the goods, or after it delivers the goods within the meaning of Article 17.1 of the CMR Convention which determines the period of carrier's liability to which the CMR Convention applies. The limitations of liability of the CMR Convention do not apply to these additional obligations. This means that the carrier can rely neither on the kilogram limitation provided for in Article 23.3 of the CMR Convention nor on the exclusion of liability for consequential loss in Article 23.4 of the CMR Convention.
Carriers are strongly advised to include a separate limitation of liability to cap or exclude all liabilities not governed by the CMR Convention or national transportation law in their contracts or general terms and conditions. However, a third party which is not bound by the contract or general terms and conditions (eg, the owner of the goods not acting as the carrier's principal) could still hold the carrier fully liable. Therefore, carriers should also include an indemnity clause pursuant to which the principal of the carrier must indemnify the carrier for any claims from third parties not based on the CMR Convention or national transportation law.