Fear of Damage and the CMR

 

A recent decision from the court in Amsterdam, ECLI:NL:RBAMS:2019:10104, published 21 February 2020, is a reminder of two salient differences between the liability structure of the international road carriage convention, the CMR, and that under the sea carriage conventions: as regards what constitutes ‘damage’; as regards express contractual provisions varying the scheme of the convention.

Danone, were the shipper of dairy products from Germany to France. When the goods arrived in France it was found that the seal on the container had been broken and Danone destroyed the goods and claimed their full value and the cost of their destruction. The framework contract stipulated that Danone was entitled to destroy all goods in the case that the presence of persons in the trailer was suspected, and could invoice the full value of the goods plus destruction costs. The court decided that ‘damage’ in the CMR meant a substantial physical change in the state of the goods. The fact that the seal had been broken, which allegedly caused a decrease in the market value and marketability of the goods, was not characterised as ‘damage’ within the meaning of the CMR. Recovery of economic loss under CMR is restricted to the items referred to in art.23(4) “the carriage charges, Customs duties and other charges incurred in respect of the carriage of the goods”. By contrast, with carriage of goods by sea under the Hague Rules, a claim can subsist in relation to pure economic loss, such as the value of sound cargo destroyed due to fear of contamination by proximity to damaged cargo (The Ocean Victory Ltd. [1982] 2 Lloyd’s Rep. 88.).

Danone were also unsuccessful in referring to the specific provisions in their framework contract, due to art.41 of the CMR, because because they increased the mandatory liability of the carrier under the CMR.  Article 41 renders null and void derogations of CMR, whether for the benefit of the carrier or the sender. By contrast, art III(8) of the Hague Rules has only a one way effect in rendering null and void provisions which are for the benefit of the carrier, with art V preserving the effect of contractual provisions that benefit the shipper.

 

 

 

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