A German company (the claimant's assured) entered into a contract with the defendant for carriage by air of two pallets of mobile phones from Bochum in Germany to Singapore. The defendant commissioned an air carrier to execute the transport. On receipt of the goods in Bochum, the air carrier issued an air waybill and transported the goods by truck via Dusseldorf to Paris, from where they were flown to Singapore. After delivery in Singapore, 230 mobile phones were reported missing. The claimant compensated the assured and sought recourse against the defendant. The contract was subject to German law.
As it was unclear where the damage occurred, a key issue to be decided by the Federal Court of Justice(1) was whether the road carriage formed an ancillary feeder service within the meaning of Article 18.4 of the Montreal Convention, to which Germany is a contracting party.
If yes, the prima facie presumption in Article 18.4 would apply with the effect that – in the absence of proof to the contrary – the loss would be presumed to have occurred during the air carriage and would be subject to the liability regime of the convention (19 special drawing rights (SDR) per kilogram (kg), but unbreakable).
If no, the loss would be subject instead to the German liability regime applicable to contracts for carriages of goods by road (modelled on the Convention on the Contract for the International Carriage of Goods by Road (ie, 8.33 SDR/kg, but breakable in case of wilful misconduct)). According to Section 452 of the Commercial Code, that regime also applies to multimodal transport contracts when it cannot be established during which leg the damage occurred.
The claimants argued that the road leg of the journey was not an ancillary service, so that land carriage law applied. They alleged that the limitation was broken due to presumed wilful misconduct and therefore claimed full compensation.
The first-instance court dismissed the claim. The appeal court sentenced the defendant to compensate fully without limitation.
The Federal Court of Justice rejected the appeal. As the appeal court it decided that the transport by truck at issue was not an ancillary road carriage within the meaning of Article 18.4. The loss therefore should be assessed in accordance with the German rules applicable to multimodal contracts when the place of damage is unknown (ie, effectively the German rules applicable to the carriage of goods by road). However, it further held that there had been no basis to presume wilful misconduct.
The court first referred to a previous decision from 2012, in which it had established that a road carriage performed as part of a contract of carriage by air is no longer ancillary if carriage by air is technically and conjunctionally possible. Rather, such transport composes an individual carriage to be seen in isolation from the air carriage.
The court went on to reject the argument brought by the defendant that the above requirements were not fulfilled in the present case because the subcontractor commissioned to perform the transport at issue did not provide a direct flight to Singapore from Dusseldorf or any other German airport.
The decision confirms the narrow construction of the prerequisite 'ancillary feeder service' in Article 18.4 undertaken by the Federal Court of Justice in its 2012 decision. Road carriage performed as part of a contract of carriage by air is not ancillary where carriage by air would have been technically and conjunctionally possible, whereas the individual capabilities of the subcontractor commissioned to perform the carriage are irrelevant.
For further information please contact Lina Wiedenbach or Olaf Hartenstein at Dabelstein & Passehl by telephone (+49 40 31 77 97 0) or email (email@example.com or firstname.lastname@example.org). The Dabelstein & Passehl website can be accessed at www.da-pa.com.
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