This was an appeal by Hapag-Lloyd AG (Hapag-Lloyd) from a decision of Southcott J in the Federal Court: see Iamgold Corp v Hapag-Lloyd AG 2019 FC 1514 (CMI738). The Judge found, on an application of German law, that the theft of three containers that were to be carried from Montreal, Canada, to Moerdijk, the Netherlands, by way of ship and truck, had occurred during the road leg of the multimodal transport between the two countries. The Judge therefore applied the higher limitation of 8.33 Special Drawing Rights (SDRs) per kg under the Convention on the Contract for the International Carriage of Goods by Road (CMR), which covered the road leg, as opposed to 2 SDRs per kg under the Hague-Visby Rules, which covered the ocean leg.

Held: Appeal dismissed.

Relying on the Supreme Court’s decision in ITO Int’l Terminal Operators v Miida Electronics 1986 CanLII 91 (SCC), [1986] 1 SCR 752, 68 NR 241, Hapag-Lloyd argued that the theft of the three containers while the goods were at the marine terminal in Antwerp fell within the ocean leg of the multimodal transport, and was thus subject to the lower limitation of 2 SDRs per kg. Hapag-Lloyd submitted that either German law was proven to be the same as Canadian law, or it was not proven to differ, so Canadian law should apply. The Court disagreed, holding that German law had been proven, and that it was the applicable law. The Judge clearly found that the evidence of the experts was sufficient so as to allow him to find the relevant principles of German transportation law and their application to the facts agreed to by the parties.

The Court further held that the Judge did not make a palpable and overriding error regarding German law. With respect to the relevant principles of German law, there was no disagreement between the experts. The only disagreement pertained to the application of these principles to the facts of the case, ie the experts did not agree on the issue whether, on the basis of the relevant principles, the loss occurred during the ocean or road legs. The Judge had to decide that issue based on the help of the experts. After his assessment of Dr Schwampe's and Dr Kienzle’s evidence, he concluded that the loss occurred during the road leg.

The Judge concluded that determining whether the loss in the present matter occurred during the ocean or road legs depended on whether the activities or operations which gave rise to the loss were characteristic of, or attributable to, or closely tied to, a particular leg of transport. On his understanding of German law, which Hapag-Lloyd does not challenge, the Judge found that losses which occur during a road leg are those that result from risks pertaining to, or associated with, activities performed in preparation for that leg of transport. Hence, the Judge did not, as Hapag-Lloyd suggests, engage in speculation or conjecture. The conclusion which the Judge reached was clearly open to him on the evidence.

Hapag-Lloyd does not say that the Judge misunderstood the principles of German law applicable to this case. It says that, on the basis of the principles which the Judge found based on the experts' evidence, he should have concluded that the loss occurred during the ocean leg of the transport. In other words, Hapag-Lloyd disagrees with the Judge’s assessment of the evidence. That does not constitute a ground upon which the Court can interfere.