The Hamburg District Court has denied a freight forwarder’s liability for the loss of goods due to the sinking of the MOL Comfort.
The defendant, a German freight forwarder, was instructed with a multi-modal transport from Hong Kong via Hamburg to Eichenzell, Germany. The ocean carrier subcontracted by the defendant loaded the shipment aboard the MOL Comfort. On June 17 2013 the MOL Comfort sustained damage in the Arabian Sea, broke into two and finally sank. The shipment of bouncy castles was lost.
The MOL Comfort had been built in 2008 and was classified by Nippon Kaiji Kyokaj immediately before the journey in May 2013. Based on a special survey, the classification society awarded the vessel with a classification certificate without any complaints. According to the defendant, the MOL Comfort should have been considered unseaworthy despite the classification, due to cracks in its hull which had gone undetected during the survey. The cracks led to the water break-in during the voyage and eventually caused the sinking – a fact that was undisputed by the parties.
The plaintiff claimed compensation for the loss of its shipment up to the value of the lost goods. According to the bill of lading, the shipment had been packed into 732 cartons and stored in one container by the shipper. The bill of lading included a said-to-contain clause. The plaintiff argued that the claim amount was within the limitation of liability of 666.67 special drawing rights (SDR) per package, while the defendant rejected liability due to the vessel having been unseaworthy. The latter condition could not have been detected by the defendant, leading to an exemption of liability under Section 498 of the Commercial Code. The limitation of liability could not exceed 666.67 SDR for the container only, as it would have to have been taken into account when calculating the package limitation.
The Hamburg District Court disallowed the claim.
The court ruled that any claim for compensation was precluded, as the defendant could rely on Section 498(II)(2) of the code. According to this stipulation, in the event of a vessel being unseaworthy, the carrier’s liability is precluded if it can prove that the loss resulted from circumstances which it could not have prevented, exercising due diligence.
The court took for granted that there had been no mistakes regarding the stowage or stability of the vessel and denied other circumstances leading to the sinking. Thus, the sinking was considered to have been caused by the cracks in the hull as a consequence of a construction error, leading to the vessel’s unseaworthiness.
The court held that the defendant was not responsible for errors in the vessel’s construction. Undisputedly, the defendant had no knowledge of the vessel’s unseaworthiness. The defendant could not be considered responsible for this lack of knowledge, as there was no indication which would have required it to check. This also applied to the ocean carrier as the defendant’s subcontractor and the ocean carrier was therefore right to rely on the findings of the classification society ahead of the final journey.
Any possible misconduct by the shipyard or classification society could not be attributed to the defendant, as neither was considered its subcontractor.
The judgment is one of the first dealing with the new German maritime law. The decision is remarkable, as the experienced Hamburg District Court accepted no evidence regarding the MOL Comfort’s unseaworthiness, but made its decision based on the available facts.
The court also made clear that the German freight forwarder was not obliged, as the carrier, to check the vessel’s construction unless there had been an indication that something might be wrong.
The decision might be surprising, but it is also fair and reasonable. From the plaintiff’s perspective, being unble to recover damage is hard to accept, especially given that the risk of cargo suffering damage while in the carrier’s custody is on the latter. However, in a situation where classification has recently been confirmed and there are no signs of the vessel being unseaworthy at the beginning of the voyage, it would overstress the responsibility of the carrier to check what has recently been confirmed. A carrier must be able to rely on classification certificates from a legal and practical viewpoint.
The judgment is in line with a 10-year-old ruling of the Hamburg Court of Appeal, which confirmed that a tenant, as warehouseman of a storage facility, need not check the construction of the building, but can rely on permits made by the public authorities.
The decision is not yet legally binding. It is expected that the Hamburg Court of Appeal will take evidence on the (un)seaworthiness of the MOL Comfort before dealing with the question of what a German freight forwarder must do when transporting goods on a foreign vessel from Asia to Europe as regards the extent of due diligence.
The Hamburg Court of Appeal is expected to confirm the judgment.