The plaintiff is a company engaged in the trade of artificial flowers, trinkets and decorative items, and imports products for marketing in Portugal and Spain. The defendant is a company which provides transport and freight forwarding services. The defendant supplied the plaintiff with such services relating to the transport of goods from the Far East. In May 2002, the plaintiff purchased products from a Hong Kong seller. The plaintiff and defendant entered into an agreement in terms of which the defendant would arrange for the container to be transported by sea from the port of Hong Kong to the port of Leixões. Subsequently, the plaintiff and defendant agreed that the defendant would deliver the goods to the plaintiff's premises. The defendant transported the container to the plaintiff's premises and demanded immediate settlement of the invoice for its transport. The plaintiff refused and the defendant purported to exercise a right of retention over the container. The plaintiff claimed for its losses and the defendant counterclaimed for its storage and other costs.

The court of first instance upheld the plaintiff's claim and dismissed the defendant's counterclaim. The defendant appealed.

Held: Appeal dismissed as unfounded.

The appellant challenged the first instance judgment on the ground that it had a right of retention over the goods arising from art 14 of Decree Law No 255/99 of 7 July and the provisions of art 754 CC. In the Portuguese legal order on contracts for the carriage of goods by sea, the Hague Rules, published in the Government Gazette, 1st Series, is in force as of 2 June 1932. Under the terms of art 1 of Decree Law No 352/98 of 21.10, 'a contract of carriage of goods by sea is a contract in which one of the parties is obliged in relation to the other to transport certain goods from one port to another port, for a monetary consideration, called "freight"'. Further, pursuant to art 2, 'this contract is governed by the international treaties and conventions in force in Portugal and, in the alternative, by the provisions of this decree'.

In the present case, the defendant, being a shipping agent, assumed in respect of the plaintiff an obligation to arrange the carriage by sea of ​​goods purchased by it from its Far East supplier, receiving the goods from the Far East and assuming the responsibility of transporting them to the plaintiff's premises. A contract of carriage was thus entered into between the plaintiff and the defendant. The bill of lading specified Leixões as the port of discharge. Although the maritime transport ceased with the unloading of the goods in Leixões, it is no less certain that the defendant was obliged to deliver them to the plaintiff's premises. Thus, the contract of carriage between the parties only terminated with the delivery of the goods at the plaintiff's premises: it was a contract of maritime carriage until discharge at Leixões​, and then land carriage from the port of Leixões to the plaintiff's premises.

The legal framework set out by the judgment under appeal, which is supported by the judgment of the Supreme Court of Justice of 23 May 1985, is that the Hague Rules apply only to the maritime transport contract and only cover the time elapsed from when the goods are loaded on board the ship until such time as they are unloaded at the port of disembarkation, whereby 'if, in addition to maritime transport and after unloading of the goods, the shipowner is obliged to transport them by land to another city, this phase of the journey is not subject to the Brussels Convention'.

Thus, since the land leg no longer involved maritime transport, art 21 of Decree Law No 352/86, which governs the right of retention by the maritime carrier over the goods transported to guarantee the carrier's claims arising from carriage of goods by sea, does not apply. Instead, this case is governed by art 14 of Decree Law No 255/99 of 7 July (Legal Regime of Forwarding Activity) which provides that 'freight forwarders may exercise a right of retention in respect of goods entrusted to them as a result of their contracts for the resulting claims, unless expressly provided otherwise'.

Here, the parties had agreed to 30 day payment terms after issuing the invoice for each shipment. The defendant may therefore not arrogate to itself a right of retention requiring immediate payment on delivery of the goods.