Palettes with television sets stored by the defendant for the claimant were moved to a third-party warehouse. Soon after the move, a fire broke out in the warehouse and the goods were lost or damaged. The claimant's insurer had not been informed that the goods had been moved and the policy therefore covered only part of the damage. The claimant brought legal action against the defendant for the remaining part. It submitted that the defendant was prevented from relying on the liability limitation in Article 24.1 of the Freight Forwarding Conditions. The defendant had violated a fundamental duty pursuant to Article 27.1 of the conditions in choosing an unsuitable warehouse and not notifying the claimant that the goods had been moved, as required by Article 15.1.
Article 15.1 grants a warehouse keeper the choice of storing goods in its own or a third-party warehouse. However, the claimant must notify the principal immediately in writing of any third-party warehouse company and its address. In this case the claimant argued that the defendant had not done so. The defendant objected that it had informed the claimant that the goods had been moved at a meeting held by the parties before the fire occurred. Subsequent to that meeting, the claimant sent an email with the following content:
"Find below the address of our other possible storage facility for you – for the purpose of your insurance:
[Company name and address of the third party warehouse]."
The Federal Court of Justice(1) held the defendant unlimitedly liable on the basis of insufficient notification, thereby reversing the appeal court's decision.
The Federal Court of Justice initially confirmed the appeal court's finding that a warehouse keeper's duty to select a suitable storage facility and its duty to immediately submit to the principal in writing a notification of the prescribed kind in the case of a move to a third-party warehouse are fundamental duties according to Article 27.1. The latter is a fundamental duty because the principal depends on the information to keep its property fully insured. Notification enables the principal to exercise its right of inspection under Article 15.2. The principal does not have to accept that its property is kept in unsatisfactory storage facilities.
The Federal Court of Justice agreed with the appeal court that it had not been proven that the defendant had violated its duty to select a suitable storage facility. However, contrary to the appeal court, it concluded that the wording of the email, seen in isolation, did not fulfil the requirements for notification pursuant to the second sentence of Article 15.1. The Federal Court of Justice stated that, due to the important function of the notification, it must be unequivocal as to its content and language. This requirement is fulfilled only where it follows from the notification that the goods have already been moved. It must leave no doubt as to whether reference is made to potential storage facilities, regarding whether a move is intended or has already taken place. The email in question left open such doubts.
The court did not exclude that the wording might fulfil this requirement when considered alongisde the individual circumstances known by the parties. For example, if it could be proven that at the time of the meeting preceding the disputed email, the goods had already been moved and the parties had discussed the matter at the meeting, the email might constitute sufficient notice. However, since for procedural reasons the witness statements taken by the first-instance court regarding what had been said at that meeting could not be considered by the Federal Court of Justice, the matter was not ready for a final decision and was thus referred back to the appeal court.
A warehouse keeper's duties to select suitable storage facilities and to notify the principal when moving goods to a third-party warehouse comprise fundamental duties of contract. The breach of such contract deprives the warehouse keeper of the right to limit its liability. The notification must be so clear that it leaves no doubt that the goods have already been moved.
For further information please contact Lina Wiedenbach or Marco G Remiorz 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.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.