DAMAGES FOR FEAR OF DAMAGES

Transcription

1 DAMAGES FOR FEAR OF DAMAGES DR. SIMONE LAMONT-BLACK FLOWS CONFERENCE, 12 TH OCTOBER 2016 LAW AND LOGISTICS: THE WAY FORWARD"

2 THE QUESTION Damages for Fear of Damages Tank was not cleaned according to instructions before loading/transferring a cargo of chemicals Container with fragile content accidentally dropped during transhipment Time of occurrence? During transhipment at intermediate port On transfer to land conveyance: From ship From container terminal Domestic or international land carriage?

3 OVERVIEW Damages for Fear of Damages The question: Can costs to investigate, ascertain or assess damage be claimed as damages? Case A Goods shown to be damaged Case B Goods shown to be intact and undamaged

4 THE QUESTION Can costs to investigate, ascertain or assess damage be claimed as damages where goods remained undamaged? No damage - no loss Versus Damages due to breach of duty of care

5 Damages for Fear of Damages LEGAL BASIS Basis for claiming costs of ascertainment / assessment of damages? Breach of contract? What was owed? Transportation from A-B undamaged? To take care of the goods in carrier s or freight forwarder s charge? Breach of Duty? Case A goods damaged Case B goods undamaged

6 LEGAL BASIS Damages for Fear of Damages Convention system applicable? Damage falling within its scope? Provision for damages? Differences between sea, land and air conventions? Domestic law? English German Standard form contracts or trading conditions? BIFA and AdSP MULTIDOC and COMBICON Differentiation: damaged/undamaged goods?

7 DUTY TO TAKE CARE OF THE CARGO Case A: Breach + compensation Extent? Case B: Breach Compensation if reasonable expense to be foreseeable Extent?

8 GUIDANCE IN TRANSPORT CONVENTIONS? Contractual duty defined? Liability defined? Calculation of damages? Limitation of liability?

9 GUIDANCE IN TRANSPORT CONVENTIONS? Contractual duty? HVR: Article III r.2 HVR: Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. Article IV r.1 and r.2 Negative description of liability by exclusions Article IV r.5 Limit of liability and calculation of value

10 GUIDANCE IN TRANSPORT CONVENTIONS? Hague Visby Rules art IV r.5: limit of liability and calculation of damage (a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding the equivalent of units of account per package or unit or units of account per kilo of gross weight of the goods lost or damaged, whichever is the higher. (b) The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at which the goods are discharged from the ship in accordance with the contract or should have been so discharged. The value of the goods shall be fixed according to the commodity exchange price, or, if there be no such price, according to the current market price, or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality.

11 GUIDANCE IN TRANSPORT CONVENTIONS? The Limnos [2008] EWHC 1036 (Comm): Shipment US Jordan cargo of US corn Wet damage to corn: 262 out of 44,000 tons All fumigated and treated distressed HVR, art IV r.5: limit of liability (a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding the equivalent of units of account per package or unit or units of account per kilo of gross weight of the goods lost or damaged, whichever is the higher.

12 GUIDANCE IN TRANSPORT CONVENTIONS? HVR, art IV r.5: limit of liability and calculation of damage (a) package and weight limitation for any loss or damage to or in connection with the goods (b) The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at which the goods are discharged from the ship in accordance with the contract or should have been so discharged. The value of the goods shall be fixed according to the commodity exchange price, or, if there be no such price, according to the current market price, or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality. Purpose of (b)? Purpose of limitation in gen?

13 GUIDANCE IN TRANSPORT CONVENTIONS? Contractual duty? Rotterdam Rules Article 13.1 RR Specific obligations The carrier shall during the period of its responsibility as defined in article 12, and subject to article 26, properly and carefully receive, load, handle, stow, carry, keep, care for, unload and deliver the goods. Article 17.1 RR - Basis of liability 1. The carrier is liable for loss of or damage to the goods, as well as for delay in delivery, if the claimant proves that the loss, damage, or delay, or the event or circumstance that caused or contributed to it took place during the period of the carrier s responsibility

14 GUIDANCE IN TRANSPORT CONVENTIONS? Art 22 Rotterdam Rules - Calculation of compensation 1. Subject to article 59, the compensation payable by the carrier for loss of or damage to the goods is calculated by reference to the value of such goods at the place and time of delivery established in accordance with article The value of the goods is fixed according to the commodity exchange price or, if there is no such price, according to their market price or, if there is no commodity exchange price or market price, by reference to the normal value of the goods of the same kind and quality at the place of delivery. 3. In case of loss of or damage to the goods, the carrier is not liable for payment of any compensation beyond what is provided for in paragraphs 1 and 2 of this article except when the carrier and the shipper have agreed to calculate compensation in a different manner within the limits of chapter 16.

15 GUIDANCE IN TRANSPORT CONVENTIONS? Contractual duty? CMR: No definition of duty Art 1: carriage of good by road in vehicles for reward Arts 4-6: on consignment note and its particulars Liability of the Carrier Article The carrier shall be liable for the total or partial loss of the goods and for damage thereto occurring between the time when he takes over the goods and the time of delivery, as well as for any delay in delivery.

16 GUIDANCE IN TRANSPORT CONVENTIONS? CMR: Article 23 limitation of liability - loss 1. When, under the provisions of this Convention, a carrier is liable for compensation in respect of total or partial loss of goods, such compensation shall be calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. 2. The value of the goods shall be fixed according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality. 3. Compensation shall not, however, exceed. 4. In addition, the carriage charges, Customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss, but no further damage shall be payable.

17 GUIDANCE IN TRANSPORT CONVENTIONS? CMR: Article 25 limitation of liability - damage 1. In case of damage, the carrier shall be liable for the amount by which the goods have diminished in value, calculated by reference to the value of the goods fixed in accordance with article 23, paragraphs 1, 2 and The compensation may not, however, exceed: (a) If the whole consignment has been damaged, the amount payable in the case of total loss; (b) If part only of the consignment has been damaged, the amount payable in the case of loss of the part affected.

18 GUIDANCE IN TRANSPORT CONVENTIONS? Convention systems sub-conclusion: Conventions generally exclude consequential losses: See road, rail and air conventions See Rotterdam Rules for sea conventions Consequential losses enabled: Hague-Visby Rules Budapest Convention - CMNI Are investigation costs always consequential losses? Distinguish Cases A and B

19 German Law: DOMESTIC LAW Section 429: Compensation based upon value Section 430: Cost of assessing the damage In the event of loss of, or damage to, the goods, the Contractual Carrier shall bear the costs of assessing the damage; this shall be in addition to the compensation payable pursuant to Section 429. When applicable? Case A and B? Costs for enquiry comparable to costs for repair?

20 GERMAN LAW Translations by Deutsche Gesellschaft für Transportrecht e.v. (DGTR) = German Association for Transport Law:

21 English Law: DOMESTIC LAW Principle of restitutio in integrum Compensation normally based on market value Diminution of value for damage Consequential losses normally no space as included in market value Exceptionally costs for enquiry Diminution of value even where no physical damage to goods? Costs necessary for putting goods in proper condition?

22 DOMESTIC LAW Conclusion domestic law: English and German law should allow costs of investigation/assessment in principle For both sets of cost of enquiry into damage

23 CONTRACT TERMS Germany : AdSP terms referring to German law for compensation Schadensfeststellungskosten / costs for assessment thus acceptable England/UK: BIFA terms Liability and limitation similarly to transport conventions: restricted to goods value; explicit exclusion of consequential losses Diminution of value in case of undamaged goods?

24 CONTRACT TERMS England/UK: BIFA terms 26 (A) Subject to clause 2(B) and 11(B) above and sub-clause (D) below, the Company s liability howsoever arising and, notwithstanding that the cause of loss or damage be unexplained, shall not exceed (i) in the case of claims for loss or damage to Goods: (a) the value of any loss or damage, or (b) a sum at the rate of 2 SDR per kilo of the gross weight of any Goods lost or damaged whichever shall be the lower. (ii) subject to (iii) below, in the case of all other claims: For the purposes of clause 26(A), the value of the Goods shall be their value when they were, or should have been, shipped. The value of SDR shall be calculated as at the date when the claim is received by the Company in writing.

25 England/UK: BIFA terms CONTRACT TERMS (B) Failure to deliver (C) Save in respect of such loss or damage as is referred to at sub-clause (B), and subject to clause 2(B) above and Sub-Clause (D) below, the Company shall not in any circumstances whatsoever be liable for indirect or consequential loss such as (but not limited to) loss of profit, loss of market, or the consequences of delay or deviation, however caused. (D) Higher compensation on agreement and payment of extra charges

26 CONTRACT TERMS BIMCOs MULTIDOC and COMBICON: Mirrors closed convention systems Diminution of value as possibility Consequential losses allowed/enabled? Outside convention system?

27 BIMCOs MULTIDOC : CONTRACT TERMS Clause 12 Limitation of Liability Limits according to transport method/leg (e) If the MTO is liable in respect of loss following from delay in delivery, or consequential damage other than loss of or damage to the goods, the liability of the MTO shall be limited to an amount not exceeding the equivalent of the freight under the Multimodal Transport Contract for the Multimodal Transport. Overall limit: liability for total loss Clause 13- Assessment of Damages

28 OUTCOMES Case A: Damages mostly limited to loos or damage to cargo Case B better off?: Depends: Overreaction? Valid and necessary investigation/assessment? Mitigation of loss/diminution or akin to repair?

29 Advice: OUTCOMES Freight forwarder needs to ensure to contract terms in line with his recourse opportunity Where carriage conventions applicable consequential losses generally excluded In any event, limited to value /diminution of damaged cargo General Terms & Cond. to provide accordingly General terms and conditions included in contract? Each contract?

30 THE END Thank you very much for your attention!

31 THE END Thank you very much for your attention!

32 GUIDANCE IN TRANSPORT CONVENTIONS? Contractual duty? CIM Article 6 - Contract of carriage 1 By the contract of carriage, the carrier shall undertake to carry the goods for reward to the place of destination and to deliver them there to the consignee. Article 23 - Basis of liability 1 The carrier shall be liable for loss or damage resulting from the total or partial loss of, or damage to, the goods between the time of taking over of the goods and the time of delivery and for the loss or damage resulting from the transit period being exceeded, whatever the railway infrastructure used.

33 GUIDANCE IN TRANSPORT CONVENTIONS? CIM: Art 30 Compensation for loss 1 In case of total or partial loss of the goods, the carrier must pay, to the exclusion of all other damages, compensation calculated according to the commodity exchange quotation or, if there is no such quotation, according to the current market price, or if there is neither such quotation nor such price, according to the usual value of goods of the same kind and quality on the day and at the place where the goods were taken over. 2 Compensation shall not exceed 17 units of account per kilogramme of gross mass short. 3 In case of damage to a railway vehicle running on its own wheels and consigned as goods... 4 The carrier must, in addition, refund the carriage charge, customs duties already paid and other sums paid in relation to the carriage of the goods lost except excise duties for goods carried under a procedure suspending those duties.

34 GUIDANCE IN TRANSPORT CONVENTIONS? CIM: Article 32 - Compensation for damage 1 In case of damage to goods, the carrier must pay compensation equivalent to the loss in value of the goods, to the exclusion of all other damages. The amount shall be calculated by applying to the value of the goods defined in accordance with Article 30 the percentage of loss in value noted at the place of destination. 2 The compensation shall not exceed: a) if the whole consignment has lost value through damage, the amount which would have been payable in case of total loss; b) if only part of the consignment has lost value through damage, the amount which would have been payable had that part been lost. 3 In case of damage to a railway vehicle running on its own wheels and consigned as goods... 4 The carrier must also refund the costs provided for in Article 30 4, in the proportion set out in 1.