On 20 January 2015, the Danish Maritime and Commercial Court rendered two decisions of general interest to Freight Forwarders. The first case concerned inter alia whether court proceedings commenced in order to interrupt an approaching time bar should be rejected by the court considering that a governing framework agreement referred the parties to mediation. An interesting part of the second decision concerned the question of whether a contracting carrier could be held liable for an insurance company’s loss due to incomplete information from the contracting carrier.
Maritime and Commercial Court case [SH2015.H-41-10] of 20 January 2015
A Danish carrier agreed to perform a transport of wind turbines from Denmark to a wind farm in Ireland on behalf of wind turbine manufacturer. The final part of the transport by road, from the port of discharge in Ireland to the wind farm was by the contracting carrier sub-contracted to another carrier who then sub-contracted the transport to the performing sub-carrier.
Three trucks arrived at the wind farm each carrying a nacelle. On their way to the actual location, where the wind turbines would be set up, one of the trucks decided to overtake one of the other trucks, entailing that the overtaking truck tilted, and the nacelle suffered substantial damages.
Consequently, the manufacturer turned to the contracting carrier for indemnification of the losses incurred due the incident at the wind farm.
As no amicable settlement between the manufacturer and the contracting carrier was found, the manufacturer commenced court proceedings inter alia to interrupt an approaching time bar. The contracting carrier argued that as the manufacturer had failed to comply with the applicable dispute resolution procedure agreed between the parties, cf. cl. 18 of the governing framework agreement, the court proceedings commenced by the manufacturer should be rejected by the court.
Cl. 18 of the governing framework agreement contained inter alia the following wording:
“This Framework Agreement … shall in all respects be governed by and interpreted in accordance with the laws of Denmark.
“The parties shall endeavour to solve disputes or disagreement through negotiations. If the dispute or the disagreement cannot be solved through negotiations between the parties such dispute or disagreement shall be referred to mediation. …”
“If the dispute has not been solved by mediation within 8 weeks upon one of the parties’ request on mediation, each of the parties may require that the dispute is finally settled by the Maritime and Commercial Court of Copenhagen with duly appeal to the Supreme Court.”
The Maritime and Commercial Court found that even though the manufacturer failed to comply with cl. 18, by not referring the dispute between the parties to mediation, this fact did not preclude the manufacturer from commencing legal proceedings in order to interrupt an approaching time bar as no other alternative was available.
The Court added to its decision the fact that a mediation between the parties had taken place in London following the commencement of the court proceedings had also influenced on to the court’s ruling.
Maritime and Commercial Court case [SH2015.H-27-12] of 20 January 2015
A Danish contracting carrier agreed to perform a combined transport of 30 trailers from Poland to Venezuela. The contracting carrier sub-contracted the carriage by sea from Hamburg to Venezuela to a performing sub-carrier.
The 30 trailers were stowed on deck. During the carriage at sea the vessel experienced heavy weather and consequently the lashings taken to the trailers broke or loosened. Eight trailers fell over board and the rest of the trailers were heavily damaged and all were considered a total loss.
The contracting carrier had taken out an all-risk cargo insurance covering the potential risks during the transport and the insurance company with whom the cargo insurance was taken out issued insurance certificates on request of the contracting carrier. It appeared from the insurance certificates that the holder was entitled to receive any damages paid out under the insurance cover.
The loss of the 30 trailers entailed that the insurance company had to pay out full damages to the holder of the all-risk cargo insurance certificates.
Subsequently a dispute broke out between the contracting carrier and the insurance company. The dispute concerned whether or not the contracting carrier had informed the insurance company that the 30 trailers would be carried on deck and if not, whether the contracting carrier could be held liable for the insurance company’s loss due to the incomplete information.
The insurance company claimed not to have been informed that the trailers would be carried as deck cargo and pointed out that if the insurance company positively had known about the fact it would not have offered to cover the transport on all-risk conditions but on limited conditions at the most.
Against the insurance company’s position, the contracting carrier argued that the insurance company had been informed that the trailers were meant to be carried as deck cargo and therefore the losses were covered under the cargo insurance.
The Maritime and Commercial Court found that as the circumstances under which the cargo insurance was taken out appeared unclear it had to make its decision based on the written evidence alone.
Based on the written evidence the Maritime and Commercial Court concluded that nothing appeared from it which should have lead the insurance company to know that the trailers were meant to be carried as deck cargo. As such, the Maritime and Commercial Court ruled in its decision that the final contractual liability for the lack of evidence that the contracting carrier had informed the insurance company about the trailers were destined to be carried on deck, had to be borne by the contracting carrier. Hence, the contracting carrier was referred by the Court to compensate the insurance company for the losses it had incurred due to the incident.