Landmark ECJ Ruling on Liability Limitation for Cargo Theft

Rotterdam based law firm AKD said a recent landmark decision of the European Court of Justice in Luxembourg definitively puts its weight behind forum shopping to limit liability under the CMR Convention in carrier-friendly countries. This is a boon to the Dutch jurisdiction and specifically comes at the expense of the courts in Germany.

The ruling had its origins in a dispute between cargo interests and carriers involving the theft of four consignments of Canon cameras during road transportation under CMR (Convention on the Contract for the International Carriage of Goods by Road) terms from a warehouse at Schiphol Airport in the Netherlands to Willich, Germany, in 2007. The goods were only partly discharged by the cargo interest’s employees, the remainder being left in the trailer for discharge the next morning, when it was discovered that they had been stolen.

Carriers obtained a declaratory judgment from the Dutch courts, which was confirmed on appeal, that the carriers down the contractual chain were only liable up to the CMR limit, in this case €50,000. There was then a judicial settlement between the cargo interests and the first contractual carrier for €500,000. The first contractual carrier’s insurers then sought to recover this amount in the German courts from the carriers further down the contractual chain, who in turn challenged the jurisdiction of the German courts, pointing to the declaratory relief issued by the Dutch courts.

The German courts referred the dispute to the Court of Justice of the European Union which, on December 19, 2013, ruled that the German courts cannot hide behind other international treaties so as to hinder the automatic recognition of judgments by courts in the EU (Nipponkoa Insurance Co. (Europe) Ltd. v Inter-Zuid Transport BV). The Court of Justice ensured the minimum standard within the EU for jurisdiction, recognition and enforcement of judgments that maintain the possibility to limit one's liability under the CMR. In effect, this is a licence for forum shopping in CMR matters to the benefit of Dutch jurisdiction.

Jos van der Meché, partner at AKD, said, “Simply put, Germany is a country of cargo interests, while the Netherlands is primarily a country of carrier and logistics interests. The German courts are therefore likely to award damages in full against CMR carriers, while the Dutch Supreme Court sets a very high bar for the breaking of limitation of liability under CMR.

“The judgment of the Court of Justice is very decisively in favour of the Dutch interpretation of CMR and the EU Brussels 1 Regulation. It effectively endorses the use of pre-emptive strikes in the Dutch courts by CMR carriers. It also specifically rejects the position of the Federal Court of Justice of Germany, and means that it is now much easier for CMR carriers to limit their liability by starting proceedings before the carrier-friendly Dutch courts, without the risk of being sued by the cargo-friendly German courts for the same claim at a later date. It furthermore emphasises the importance of starting proceedings and obtaining a judgment under Dutch jurisdiction as soon as possible after the occurrence of theft of or damage to cargo carried under CMR conditions.”

• The carrier Inter-Zuid was represented by Jan Eckoldt and Carlijn ten Bruggencate of Amsterdam law firm Cox ten Bruggencate and carrier DTC was represented by Jos van der Meché and Annemieke Spijker of AKD.