In early 2018 the plaintiff hired the defendant to transport a container from Bremen in Germany to Freeport in The Bahamas. This was to be done at a fixed price in line with the German Freight Forwarders' Standard Terms and Conditions 2017. In the email correspondence between the parties, as well as in the defendant's invoice, the estimated date of arrival was stated to be 9 April 2018.
The container's arrival in Freeport was delayed. The plaintiff contacted the defendant by email on 22 May 2018 with a request to check the whereabouts of the container. The plaintiff further wrote to the defendant on 25 May 2018 saying as follows:
As a matter of form, we hold A. GmbH fully liable for the delay incurred... (...) We expect that this matter will now be dealt with [as a matter of] priority, especially as we also have an increased need for [an] explanation to our customer.
The container in dispute finally arrived in Freeport on 23 June 2018.
On 24 February 2021 the Hamburg District Court held that the claim was justified (401 HKO 29/19). According to the Court, the plaintiff had a valid claim for damages against the defendant under sections 280(1), 280(2) and 286(1) of the Civil Code.
The defendant had agreed to transport the container using various modes of transport. As the delay occurred on the maritime part of the route, the defendant was in principle liable as a fixed cost forwarder pursuant to sections 459(1), 452, 452(a) and 498 of the Commercial Code as a carrier. Since there are no particular provisions in German shipping law, the general terms of the Civil Code apply in these circumstances.
According to the Court, the preconditions for default were met. Under German law, a formal reminder is required unless it is not necessary, which is the case, for example, if a fixed arrival date is specified. However, according to the Court, the expected time of arrival is not a fixed arrival date but rather an approximate date without a binding commitment. Therefore, a formal reminder was therefore.
However, the Court did recognise the email of 25 May 2018 as a formal reminder. A "reminder" within the meaning of section 286 of the Civil Code requires a clear request for performance. The plaintiff had already asked for information regarding the whereabouts of the container with the email of 22 May, and on 24 May it had requested a statement as a matter of urgency in this regard.
The Court found that it was clear that the defendant had been requested to perform at the latest by the notice of liability on 25 May, with an associated demand to provide a statement by 3 o'clock in the afternoon and to handle the issue as a priority.
Another stipulation when considering whether a party has been in default is that the required performance must already be due at the time of the reminder. Pursuant to section 271 of the Civil Code, performance is generally due immediately, unless the circumstances indicate otherwise. The particular nature of shipping requires that the transport must both begin and be completed within a reasonable period. In this context, the expected time of arrival was indeed relevant for the Court.
Although an expected time of arrival does not constitute a binding delivery date, it is an indication of what duration is considered reasonable. At the point of the reminder, the expected time of arrival was already more than six weeks overdue; the original estimated travel duration was 17 days. The Court considered this to represent a considerable delay.
In contrast to freight law on land, German shipping law does not contain a legal regulation pertaining to the delivery period, consequently there is no particular legal liability provision for when it has been exceeded. Therefore, liability is governed by the general law of the Civil Code, with the requirements outlined above. These requirements are often not met in the absence of fixed delivery periods or a formal reminder.
The Court also held that the requirements for the content of the reminder should not be overly formal. If the shipper, which does not know the exact status of the transport, requests information about this, they also imply the continuation of the transport. This does not have to be explicitly stated and can be derived from the urgent request, as in this case. Nevertheless, to be on the safe side, the continuation of the transport should be demanded pro forma, even if this appears pointless due to the circumstances. Otherwise, the creditor runs the risk that the debtor will not be in default despite the considerable delay.
With regard to the due date of performance, the expected time of arrival and the estimated duration of the transport are good indicators. In each case, the overrun of the delivery time must be considered in relation to the estimated delivery time. If the estimated delivery time is extended in the region of 50% of the original expected date of delivery, the duration is no longer reasonable and the performance is due.
The Court's decision has been appealed and the matter has not yet been resolved. Irrespective of this, the decision will become relevant in further proceedings, in particular with regard to the delays in the case of the Ever Given container ship.
For further information on this topic please contact Katharina Schmidtke or Marco G Remiorz at Arnecke Sibeth Dabelstein by telephone (+49 40 31 779 70) or email ([email protected] or [email protected]). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.