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    Legal IssuesLiability in transportation

    Carrier’s liability in international law of carriage of goods. Which rules apply, when and why?

    In principle, carrier’s liability for loss of or damage to the goods is regulated by international unimodal conventions whose scope of application is autonomous. However, difficulties can arise when trying to determine whether the Convention on the Contract for International Carriage of Goods by Road (CMR) or the Hague/Hague Visby Rules define the road carriers’ liability where goods are lost or damaged during the sea leg of an international multimodal transport. The issue is of great practical importance and the recent case of Norman Atlantic as well as the existing extensive case-law in Greek and in other jurisdictions speaks very highly for it.

    Usually, when such a question arises, the contract of carriage has previously involved the international transportation of goods by using truck(s) which while carrying the goods were stowed on board of a vessel (piggy-back transports). Moreover, in many cases, it happens that a fire breaks out on board during the sea passage which destroys the vessel along with the cargo. If this is the case, the cause of the fire must be established as soon as possible while close attention must be paid to the effectiveness and operation of the firefighting system on board. The same problem arises when considering any other typical incident for the carriage by sea, such as the sinking of a ship, vessel collisions, groundings, cargo damage from sea water ingress or the movement of the vessel in rough sea were evidently risks inherent in the carriage of goods by sea.

    At the heart of the problem lies the Article 2 CMR, since when the requirements of this article are fulfilled, it is the Hague/Hague Visby Rules and not CMR that governs the road carriers’ liability during the sea leg. In contrast, when the requirements of Article 2 are not fulfilled, it is the CMR that regulates the road carrier’s liability.

    In summary, Article 2 sets out the broad proposition that if the cargo remains on board the road vehicle during carriage by some other mode, e.g. during a Ro-Ro sea crossing, then CMR will generally apply. The exception, also found in Article 2, states that if it is established that the loss or damage was not caused by the road carrier and the loss or damage was attributable to some event which could only have occurred in the course of and by reason of carriage by the other mode, then CMR is ousted in favor of any other “conditions prescribed by law”. It is important to note that CMR will still apply even if the exception is met, if there are no other “conditions prescribed by law.” The purpose of Art. 2 CMR consists in ensuring that the recourse action the road carrier has against, for example, the vessel mirrors the liability the road haulier has vis-à-vis its own client. Otherwise, the road carrier could be left unprotected, as the Hague Visby Rules, applicable to the contract of affreightment between the road haulier and the vessel, provide for different defenses and limitations.

    Since the liability regime as established in CMR appears to be more favorable for the owner of the cargo, the latter has interest in alleging that the applicable liability regime is CMR, despite the damage and loss taking place during the sea leg of the transport. On the other hand, the road carrier would seek to rely on the exception found in Art. 2 of CMR, meaning that it is the Hague-Visby Rules that apply, in order to align the legal framework governing his own liability to this applying to maritime carrier’s liability.

    Generally, the courts rule in favor of carriers’ interests since they state that the road carrier’s liability is to be determined based on a fictitious contract that would have existed, had the seller/shipper of the cargo entered directly into a contract with the carrier of the other mode of transport. Implying a fictitious contract means that for the sea leg of the transport the Hague-Visby Rules are to apply, as these would have been the regime mandatorily applicable to such a contract had it been entered into and accordingly the road carrier’s liability falls to be determined by the Hague Rules and not CMR.

     
    George Maronidis
     
     
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