Adry Poelmans, Van Doosselaere Avocaten, Belgium
In Belgian jurisprudence, controversy has arisen recently as to the question whether a forwarding agent is “presumed” and also “entitled” to initiate, continue and maintain legal proceedings, or halt them if he has not received instructions to that effect from his client or principal.
This short contribution was prompted by a ruling pronounced by the Commercial Court of Antwerp, Belgium, on March 9th, 2016 and March 14th, 2018, where it emerged, in an important proceeding and over time, or at least where it was not ruled out, that the forwarding agent had, on his own initiative, filed claims for damages against his co-contractor, specifically the maritime carrier[1] and his stevedore.
As this is not a purely Belgian issue but one that, obviously, also exists on the international scene, this contribution can be the first step towards further and global considerations.
- The facts can be briefly summarized as follows:
A forwarding agent had, by order and on behalf of his clients, received substantial batches of goods in the port of Antwerp. These were delivered there, and following the delivery several problems arose with regard to demurrage, the condition of the goods, their packaging, and there was also a claim against the maritime carrier in connection with possible penalties relating to the contesting of the fact that the maritime carrier did not deliver in time.
- The present case was merely customary. Whereas a forwarder typically, by order and on behalf of their principals, perform, in essence and primarily, legal acts which consist in the conclusion of contracts of maritime transport, air transport, road transport, storage and the like, as well as taking delivery thereof, Belgian jurisprudence holds the view that the right of action against the third parties appointed by this forwarder can, in principle, be exercised only by the forwarder himself. The main reason for this is based on the legal doctrine that a freight forwarder acts in his own name but for the account of his principal. He is not an agent.
In Belgium, in recent years this has led to an often disputed “practice” whereby forwarders have brought proceedings, whether legal or not, with the positive support or even without any knowledge of their actual principals with a view to obtaining damages from the co-contractor appointed by the forwarder.
Consequently, these proceedings were expedited in light of, inter alia, the ms “Mol Comfort” case where on June 17th, 2013 the ms “Mol Comfort” went down with about 4,382 containers on board.
- The legal question which arose in this context was whether the right of action of this forwarder could be asserted and exercised autonomously by him or whether he only had to do so if and when his principal so requested.
A. Antecedents
- Under Belgian law, the legal acts which the forwarder performs in his own name and on behalf of the committent establish a contractual relationship only between the forwarder and the third party, specifically the party appointed by the forwarder, thus not between the principal and the commission agent and the third party.
This was already confirmed in a ruling of the Court of Cassation (the Supreme Court) of October 22nd, 1976, so that only the forwarder can call upon the third party to comply with his obligations. Conversely, only the third party can call upon the forwarder to comply with the obligations entered into by him on behalf of the committent. As a consequence, only the forwarder, as plaintiff or defendant, could be a party to the legal proceedings resulting from the legal act performed by the forwarder on behalf of his committent or principal.[2]Jurisprudence and case law virtually unanimously support the position that only the forwarder may be a party to the legal proceedings to which the legal act performed by the forwarder on behalf of his committent gives rise.
Consequently, an action brought by the third co-contractor of the forwarder against his principal is inadmissible.[3]
- The Court of Cassation on December 9th, 1999 held that, pursuant to article 12 of the law of May 5th, 1872, a forwarder, in principle, only has the capacity to be a party to the legal proceedings which have arisen from agreements which he entered into in his own name but on behalf of his principal.
The ruling of December 9th, 1999 basically confirmed a previous ruling of the Court of Cassation of October 25th, 1963 which pertained to a transport case where a forwarding agent had been instructed by his principal to arrange for transport. As a consequence of this transport, the goods got damaged, whereby the principal of the forwarding agent was compensated by his insurers.
This, at the time, raised the question whether, in such a case, a forwarder still has sufficient interest and whether he can still bring an action without proof of damage that has as yet not been compensated.
To this the Court of Cassation had replied that in accordance with the rules of law specific to commission agreements, only the forwarder is authorised, in his own name, either as plaintiff or as defendant, to be a party to the legal proceedings related to disputes resulting from the agreements entered into on behalf of his committent or principal.The jurisprudence of the Belgian Court of Cassation also won support from the French Court of Cassation in a ruling of December 9th, 1997, in which it held that a carrier can only call upon the principal of a forwarder if the commission agent has not acted in his own name but in the name of the committent.[4]
- Whereas, additionally, this jurisprudence stated that the right of action of a forwarder should, to the satisfaction of the law, be adequately evidenced by his capacity, in subsequent years the question arose as to whether it is then also legally enforceable that a forwarder is ultimately presumed to do this only on behalf of his principal and that, almost by operation of law, good faith is presupposed, so that there is no more relevance in the question whether the forwarder may be presumed, let alone can be requested, to also furnish proof that he, specifically, was instructed by his principal to initiate legal proceedings.
Whereas jurisprudence had already accepted that a forwarder can voluntarily “bring” a legal action without having to present an assignment or instruction from the principal or having to be called on by the latter first and that, however, at the same time, in principle, he is not obligated to do so as such an obligation only arises when the principal asks him to do so and as a matter of urgency, the Antwerp Court of Appeal in a ruling of November 8th, 2001 held that a customs broker who was called on by the customs administration to pay additional customs duties, could suffice to pay such duties and subsequently recover them from his importer. In other words, he is not presumed to automatically contest them. In this particular case, his principal had refused to compensate the forwarding agent for these levies as he believed his forwarding agent had provided little or insufficient assistance in contesting the post-clearance recovery, at least had not brought an action against the customs administration for restitution of what he paid previously. The Antwerp Court or Appeal took the view that the importer failed to prove that this obligation was part of “the general obligations of the forwarding agent” or of the contractual arrangements between the parties.[5]
- A new development.
In the commented judgment, the Antwerp Commercial Court, in this context, took the position that although a forwarder has a right of action of his own, he nonetheless is expected to demonstrate good faith on his part that either he proves that he has received a concrete instruction to initiate the proceedings, or that he is allowed to subsequently present confirmation that his principal agreed to the proceedings being initiated and being continued.
Although at first glance one might argue that the latter is self-evident, it is noted that this development can be viewed as a favourable development in terms of administration of justice in order to put an end to the quite disputed practice where forwarders very often instituted proceedings for damages against their co-contractors without having been empowered to do so and in which case the Court was of the opinion that the forwarder was indeed supposed to furnish proof that he had indeed been mandated in contrast to earlier jurisprudence that gratuitously assumed that this mandate was implicitly acquired and therefore did not need to be examined.
NOTES:
[1] Antwerp Comm. Crt. March 9th, 2016 and Antwerp Comm. Crt. March 14th, 2018, A.R. A/08/1695-A/08/1696-A/08/7748-A/08/7749-A/08/8506-A/08/8507-A/08/8508-A/08/8510-A/09/1271-A/09/1272-A/09/1273-A/09/1274.
[2] Crt. of Cass. October 22nd, 1976, Rul. of Crt. of Cass. 1977, 229, Pas. 1977, I, 229 and R.W. 1976-77, 1273.
[3] Crt. of Cass. December 9th, 1999, Rul. of Crt. of Cass. 1999, no. 672, Pas. 1999, I, 1669, T.B.H. 2000, 366 and R.W. 2001-02, 989, note by A. Van Oevelen (see also comments on the ruling by E. Dirix, “De rechtsverhouding tussen principaal, commissionair en derde” [The Legal Relationship between Principal, Commission Agent and Third Party], in Liber Amicorum Jacques Herbots, 2002, 97-110); Crt. of Cass. October 22nd, 1976, Rul. of Crt. of Cass. 1977, 229, Pas. 1977, I, 229 and R.W. 1976-77, 1273; Crt. of Cass. October 25th, 1963, Pas. 1964, I, 204, R.W. 1963-64, 1216.
[4] French Crt of Cass. December 9th , 1997, Bull.civ. 1997, 288, B.T.L. 1997, 887, J.C.P. 1998, 2129, note by O. Litty and D.M.F. 1998, 493, note by P. Delebecque.
[5] Antwerp November 8th, 2001, T.B.H. 2004, 488.