The appellant issued a public notice for the selection of a service provider to provide regional transportation services from the appellant's plant on Jeju Island to inland destinations. The respondents Dongbang Inc, Jeju Cold Storage Logistics Inc, KD Total Distribution Ltd, and Youngjin Inc (the Dongbang consortium) transported the goods produced by the appellant to the Gangwon area and some regions in the metropolitan area, mainly through Incheon Port or Pyeongtaek Port. The distance of transportation by sea (from Jeju Port to the port of destination) considerably exceeded the distance of transportation by road (from the appellant’s production plant to the port on Jeju Island and Incheon Port, or, from Pyeongtaek Port to the logistics centre). The appellant claimed against the respondents for damage to the transported goods. However, its claim was brought over two years after delivery of the goods. The Court below held that the one-year limitation period in art 814(1) of the Commercial Act regarding short-term limitation period for sea transport operators applied. Thus, the appellant's lawsuit against the Dongbang consortium was unjustifiable on account of the lapse of the period for filing suit. The appellant appealed.

Held: Appeal dismissed.

A multimodal transport contract concerns the performance of freight transport involving at least two different modes of transport, including transportation by land, sea, and air. The former Freight Distribution Facilitation Act, which used to limit the scope of logistics to physical distribution previously centred on transport, storage, and the loading and unloading of goods, was entirely amended into the Framework Act on Logistics Policies by Act No 8617 on 3 August 2007, which extended the scope of logistics to encompass the entire process, from procurement, manufacturing, and consumption, to the retrieval and disposal of goods (art 2(1)1 of the Act). The Framework Act on Logistics Policies stipulates that a multimodal freight forwarder under the former Freight Distribution Facilitation Act is deemed to be an international freight forwarder (art 7 of 159 the Addenda). In addition, as an international freight forwarder may issue under a bill of lading or an air waybill in its own name (see art 5(2)2 of the Enforcement Rule of the Act), in a case where the international freight forwarder concludes a transport contract in its own name and performs carriage, the international freight forwarder acquires the status of a multimodal transport operator and becomes a holder of rights and obligations pursuant to the transport contract. Where the parties concerned conclude a contract regarding general logistics operations that concerns not only multimodal transport but also the unloading, loading, storage and transfer of cargo at the port, as well as the utilisation of logistics information, multimodal transport shall be viewed as the most important element of the contract.

In the event of loss or damage to cargo in the multimodal transportation process, choosing a law applicable to which means of transportation to hold a carrier accountable becomes an issue. As for the liability of a multimodal transport operator, the Commercial Act stipulates that the multimodal transport operator takes responsibility in accordance with an Act applicable to the segment of transportation where the damage has occurred (art 816(1)). Further, art 2 states:

In cases where it is unclear in which segment of transportation the damage has occurred or the occurrence of the damage is not limited to any particular area in its nature, a carrier shall take responsibility in accordance with an Act applicable to the segment of transportation, the distance of which is the longest; Provided, That when the distance is the same or it is impracticable to determine the longest segment of transportation, he/she shall take responsibility in accordance with an Act applicable to the section the freight of which is the highest.

Therefore, in a case where the section of transportation from which damage has occurred is unclear or the occurrence of damage is not limited to any particular area in its nature, if the distance of transportation by sea is the longest, the provisions concerning maritime transport shall be applied.

The claims and obligations of a maritime carrier against a consignor or consignee shall be terminated, whatever the causes for the claims may be, where no judicial claim is made within one year after the date when the carrier has delivered or will deliver the cargo to the consignee (art 814(1) of the Commercial Act). The term 'the date on which the carrier will deliver the cargo to the consignee' generally refers to the date on which the delivery should have been performed had the transport contract been performed in conformity with the terms therein (see eg Supreme Court Decisions 97Da28490, 28 November 1997; 2005Da5058, 26 April 2007 (CMI1423)). The determination of whether the period of filing a lawsuit has lapsed shall be based on 'the date on which the cargo will be delivered', not only in a case where the cargo is lost, but also in a case where the delivery of cargo is not made either because of a carrier’s refusal or for reasons attributable to a carrier.

The same reasoning does not apply to Samjin Shipping Inc. The Hyundai consortium, to which Samjin Shipping Inc belongs, transported the shipments to the Honam area and some parts of the metropolitan area via Wando Port and Nokdong Port. As the distance of land transport surpasses the distance of sea transport, the determination with regard to the Hyundai consortium has to be made pursuant to the law applicable for the segment of road transportation. The short-term limitation period under art 814(1) of the Commercial Act therefore does not apply to Samjin Shipping Inc. As such, Samjin Shipping Inc is obligated to pay the appellant damages incurred from Hyundai consortium’s failure to properly transport the volume of shipments from January-June 2014.