Charlotte J. van Steenderen, Van Steenderen Mainport Lawyers
The Amsterdam District Court rendered a judgment on 22 February 2023 (ECLI:NL:RBAMS:2023:857) in a case between DSV Solutions Ltd., DSV Road Ltd., DSV Road B.V. and DSV Air & Sea Limited (hereinafter: DSV et al.) as claimants and Huawei Technologies (UK) Limited (hereinafter: Huawei) and China Pacific Property Insurance Co. Ltd. (hereinafter: CPPI) as defendants (jointly referred to as: Huawei et al.) answering the question whether there is a statute of limitations on an action for negative declaratory judgment. Interruption, suspension and extension are discussed.
The facts as established
- Huawei and DSV Solutions Ltd. (initially Panalpina) entered into a framework agreement (hereinafter: the Framework Agreement) on 1 September 2019, under which Huawei issues separate transport orders to DSV Solutions Ltd. Article 8 of the Framework Agreement states that the carrier is liable for damage or loss of transportation, up to a maximum of $ 2,500 each time, not to exceed $ 250,000 per year.
- The Framework Agreement also provides a choice of forum for the courts in England and Wales for disputes arising out of the framework agreement and a choice of law for the law of England and Wales.
- Huawei shipped a shipment of 2,500 cell phones (“the Transport”) packed on 12 pallets from United Kingdom to the Netherlands. The total weight was 1,652 kg. The Transport took place on or about 19 November 2020 from a storage location in Feltham (United Kingdom) to a storage location of DSV Solutions Nederland B.V. at Durbanweg 31 in Amsterdam.
- Attached to the documents is the Transportation waybill dated 24 November 2020. The consignor is listed as DSV Road Ltd. in Essex. DSV Solutions Nederland BV in Amsterdam is listed as the delivery address. Also listed as the consignee is DSV Solutions Nederland BV. Further, the note states: “All of pallets received without straps!”.
- On 24 November 2020, the goods were delivered in Amsterdam, with the aforementioned waybill and a delivery note signed for receipt.
- On 2 February 2021, Huawei reported missing 300 phones to the police in the United Kingdom. According to the declaration, it found out about it on 12 January 2021. The declaration lists as damages an amount of £ 150,848.64. The total weight of the missing cargo is 200 kg.
- Huawei has held DSV Air Sea Ltd. liable for the missing 300 phones. The damage amount is £ 150,848.64.
- By email dated 18 May 2021, DSV Air & Sea Ltd. wrote the following to Huawei:
“(…) We are writing with reference to the above captioned claim.
After further review, we would like to remind you that the Participation Agreement made and entered into by and between Huawei Technologies (UK) Co., Ltd. And DSV Air & Sea Limited provides that DSV’s liability for loss of or damage to the cargo is limited to US £ 12,500 per incident and £ 62,500 in the annual aggregate.
DSV Air & Sea Limited is therefore prepared to dispose of this matter by way of a payment in the sum of US £12,500 in the hope this matter can now be resolved amicably and commercially.
This settlement offer is made entirely without prejudice to any rights, defenses, immunities or limitations of liability which DSV Air & Sea Limited may have in contract, statute, bailment or otherwise, all of which are herewith expressly reserved and none of which may be regarded as waived and should not be construed as an admission of liability of any kind whatsoever by DSV Air & Sea Limited. (…)”.
- By email dated 22 June 2021, Huawei wrote the following to DSV Air & Sea Ltd:
“(…) Hi [name 1] ,
Sorry for jumping into the email.
Regarding the accident report, this is our insurancy policy internally from HQ asking us to have it signed.
This is also for us to claim the loss over 12500GBP so it should not have any damage to DSV here.
So I would like to suggest to review it internally to see whether you can sign it, there is nothing to do with your insurance company as this is not for their use but for our use to our insurance company. (…)”.
- On 14 September 2021 DSV Air & Sea Ltd. sent an email to Huawei with a report of data.
- By letter dated 7 June 2022, Huawei’s lawyer and its insurer CPPI held DSV Solutions Ltd. liable and sought payment of £ 165,933.50 (that is the damage amount plus 10 percent, as the goods were allegedly insured at 110 percent of their value). Huawei et al. based the liability on “breach of contract,” “breach of bailment” and “wrongful interference with goods. That letter further states that on 12 January 2021, DSV Solutions Ltd. staff opened the pallets and found that 300 phones were missing. Huawei traced the phones and found that one of the phones was first activated on 21 November 2020.
- Proceedings are pending in England between Huawei et al. as plaintiffs against DSV Solutions Ltd. as defendant. These proceedings began with a Claim form dated 31 August 2022 from CPPI and 21 September 2022 from Huawei in the High Court of Justice England and Wales.
- DSV et al. claim – in summary – that the court should by judgment, in so far as possible provisionally enforceable, primarily declare that Huawei et al., or at least one of them, is inadmissible in a possible claim for damages against DSV et al and in the alternative, declare that DSV et al. is not liable vis-à-vis Huawei et al., or at least one of them, beyond the amount of the limitation of liability pursuant to Article 23 of the Convention on the Contract for the International Carriage of Goods by Road (hereinafter: the CMR Convention) of 8.33 SDR per missing kilogram of gross weight, with an order for Huawei et al. to pay the costs of the proceedings.
- DSV et al. bases its claims on the following. First, it points out that CPPI is subrogated to Huawei’s rights, or that Huawei’s rights have been assigned to it. For this reason, DSV et al. has an interest in pursuing its claims also against CPPI.
- DSV et al. dispute that the alleged damages occurred during the Transportation. This therefore means that it is primarily not liable for the damage allegedly resulting from the aforementioned loss. Should it be established that the alleged damage occurred during the Transport, the loss of the goods concerns a circumstance which DSV et al. could not have prevented, so that it is relieved of liability on the basis of Article 17 (2) CMR.
In the alternative, should it be ruled that DSV et al. is liable for the alleged damage resulting from the loss, this liability, according to DSV et al., is limited under Article 23 CMR in conjunction with Article 25 CMR to 8.33 SDR per kilogram of gross weight lost or damaged. Given the weight of 200 kg, the liability limit under the CMR would be SDR 1,666 (thus € 2,125). There is no intent or fault within the meaning of Article 29 CMR, which would result in DSV et al. not being able to rely on Article 23 in conjunction with Article 25 CMR.
- Huawei et al. puts forward a defense. It argues that under the CMR Convention’s limitation regime, the claims are time-barred on 25 November 2021. It also argues that DSV Air & Sea Ltd. was not involved as a carrier in the performance of the Transportation of Phones, so that DSV Air & Sea Ltd. has no interest in bringing the present action on that ground. Huawei et al. further points out that the 300 phones did not arrive in the Netherlands, or at least were not delivered in Amsterdam. It has evidence that one of the stolen phones was turned on as early as 21 November 2020, which is three days before the phones should have been delivered to the Netherlands.
Finally, Huawei et al. has argued that DSV et al has no interest in its claims against Huawei because Huawei has assigned its rights to its insurer CPPI.
The findings and the decision of the Court
- DSV et al. claims primarily and alternatively declarations of law that it is – in short – not liable for damages against Huawei et al. or at least not liable beyond the amount of the limitation of liability in article 23 CMR. Huawei et al. put forward as its most far-reaching defense that the claims of DSV et al. are time-barred. DSV et al. disputed that there is a statute of limitations, as the limitation period has been interrupted, suspended or extended. According to DSV et al. it issued the summons in time.
- The Court considers as follows. Article 32 CMR reads as follows:
“1 The actions to which a transport subject to this Convention gives rise shall be prescribed by the lapse of one year. In the case of wilful misconduct or of fault which, according to the law of the court before which the action is brought, is assimilated to wilful misconduct, the period of limitation shall be three years. The statute of limitations shall run:
- a) in the case of partial loss, damage or delay, from the day, on which the goods were delivered;
- b) in the case of total loss, from the thirtieth day after the expiry of the agreed time-limit or, if there is no agreed time-limit, from the sixtieth day after acceptance of the goods by the carrier;
- c) in all other cases, from the expiry of a period of three months from the conclusion of the contract of carriage.
The day indicated above as the beginning of the period of limitation shall not be included in the period of limitation.
2 A written claim shall suspend the period of limitation until the day when the carrier rejects the claim by notification in writing and returns the documents attached thereto. In case of partial acceptance of the claim, the period of limitation shall resume only in respect of that part of the claim which remains in dispute. Proof of receipt of the claim or of the reply and of the return of the documents rests with the party who invokes this fact. Further claims relating to the same subject matter shall not suspend the limitation period.
3 Subject to the provisions of paragraph 2, the suspension of the limitation period shall be governed by the law of the court before which the case is pending. The same shall apply to the interruption of the statute of limitations.
4 A time-barred claim may also no longer be asserted in the form of a counterclaim or plea.”
- Under Article 32(1) CMR, legal claims are time-barred by the lapse of one year. Also a negative declaratory judgment as now claimed by DSV et al. falls under the legal claims referred to here (see Dutch Supreme Court 18 December 2009, ECLI:NL:HR:2009:BI6315, NJ 2010/481). The statute of limitations in the case of partial loss, as is the case here, runs from the day the goods were delivered. Therefore, since the goods were delivered on 24 November 2020, the one-year statute of limitations began to run on the following day.
- DSV et al. sued Huawei et al. on 5 July 2022. According to Huawei et al., DSV et al.’s claim was then already time-barred.
- DSV et al. first argued that the statute of limitations was interrupted by email dated 18 May 2021. Paragraph 3 of Article 32 CMR states that the interruption of the limitation period is governed by the law of the court before which the case is pending. Article 3:317 paragraph 1 Dutch Civil Code stipulates that the prescription of a legal claim for performance of an obligation is interrupted by a written demand or by a written communication in which the creditor unambiguously reserves his right to performance. It follows from the parliamentary history (Parliamentary Papers II, 1992-1993, 22 486 no.5 page 4) that for interruption it is not important which claim is brought. A claim for a declaratory judgment has interruption effect with respect to the underlying claim for payment of damages. This entails that an action for a declaratory judgment that DSV et al. is not liable towards Huawei et al. in respect of the alleged damages with regard to the Transport, falls under paragraph 1 of Article 3:317 of the Dutch Civil Code. This declaratory judgment relates to the question of whether DSV et al. is liable to pay damages (and that relates to an action for performance, under either the Transport Agreement or in tort). Huawei argues, however, that at that point in time there was already a statute of limitations.
- In the Court’s view, DSV Air & Sea Limited unambiguously reserved its right to performance of an obligation to pay damages by email dated 18 May This clearly follows from the text where it invokes the damage limitation from the Framework Agreement. Huawei et al. rightly argued that interruption was only made on behalf of DSV Air & Sea Limited. No interruption letter was sent by the other DSV entities (Claimants 1 to 3).
The interruption triggered a new one-year limitation period. DSV Air & Sea Limited therefore had to sue Huawei et al. no later than 19 May 2022. It failed to do so. Nor did DSV et al. take any other interruption action between 18 May 2021 and 19 May 2022, so no new limitation period began. Although DSV et al. has pointed to correspondence that took place between DSV et al. and Huawei et al. and that it lasted until 14 September 2021, this correspondence was about sending a report with data about the Transport and therefore cannot be considered an act of interruption.
- Second, DSV et al. argued that the statute of limitations was suspended within the meaning of Article 32(2) CMR. However, the situation referred to in Article 32(2) CMR does not arise here. According to the text of paragraph 2, the suspension rule applies only to claims that can be brought against the carrier under the CMR. Since DSV et al. is itself the carrier and has filed a claim, it cannot invoke this suspension arrangement.
- Third, DSV et al. argued that there is a ground for extension of the limitation period, namely Article 3:321 under f of the Dutch Civil Code. Huawei et al. is alleged to have misled the debtor DSV et al. as a creditor. After all, Huawei (et al.) did not report any missing goods upon receipt. Only in February 2021, Huawei (et al.) reports the missing goods to the police and DSV et al. gets to know about it. Then in June 2021, Huawei (et al.) requests the signing of an accident report for internal purposes, with Huawei (et al.) noting without “any damage to DSV”. In doing so, Huawei (et al.) acknowledges that DSV would not suffer any damage for the excess above GBP 12,500.
- The Court considers as follows. Article 3:320 of the Dutch Civil Code provides that when a limitation period would expire during the existence of a ground for extension or within six months of the disappearance of such ground, the period would continue until six months have elapsed after the disappearance of such ground. In the Court’s opinion, there is insufficient evidence that the ground for extension referred to under f of Article 3:321 of the Civil Code exists. This requires that the debtor has deliberately concealed the existence of the debt or the claimability thereof from the creditor, for example by deliberately concealing (legal) facts that form the ground for the existence of the claim. DSV et al. are here faced with a legal claim that they did not expect, but that is not a legal fact underlying the claim. The existence of the possibility of a claim for damages by Huawei or its insurer against DSV et al. was known to DSV et al. DSV et al. is the debtor and not the creditor in this regard. There is therefore no question of extending the limitation period.
- In conclusion, the limitation period therefore expired with respect to Claimants 1 to 3 on 25 November 2021 and with respect to DSV Air & Sea Limited on 19 May 2022. The primary and subsidiary claims of DSV et al. were thus time-barred when DSV et al. issued the summons on 5 July 2022. This means that the claims cannot be allowed for this reason alone. They will be dismissed. DSV et al. will be assessed as the unsuccessful party in the litigation costs of Huawei et al.