This was a claim brought by LLC Spetskonstruktsiya (the claimant) against LLC Modul (the defendant) for damages caused by the loss of cargo.

The claimant and the defendant entered into a freight forwarding contract for the transportation of cargo from the port of Ningbo, China, to Saint Petersburg, Russia. The parties agreed that the cargo would be delivered within 45 days. After more than 8 months, the cargo was still not delivered. The claimant considered the cargo lost and submitted a claim against the defendant for compensation of its value.

The defendant argued that the breach of the delivery term was due to the detention of the container with the relevant goods by the customs authority in the port of Bruges, Belgium. The cargo was not lost, and was sent back to the port of Ningbo to the shipper. The claimant and the defendant failed to agree on a new date of delivery. However, the cargo was available. Based on this, the cargo could not be considered lost.

The Court of first Instance found in favour of the claimant in full and found the contract concluded between the claimant and the defendant void. The Court of Appeal upheld the judgment of the Court of first Instance but revised its reasoning that the contract was void. The defendant submitted a cassation appeal.

Held: The cassation appeal is dismissed. The Judgment of the Court of Appeal is upheld.

Despite the fact that the contract between the claimant and the defendant was one of freight forwarding, the Courts applied the rules on the contract of carriage of goods by sea.

According to art 115 of the Merchant Shipping Code of Russia (the MSC RF), under the contract of carriage, the carrier is obligated to transport the cargo to the port of destination and deliver it to the authorised party. Under art 150(1), the carrier, from the acceptance of the cargo to its delivery, must properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods. Pursuant to arts 152 and 166 of the MSC RF, the carrier must deliver the cargo within the time agreed upon in the contract of carriage. If a time of delivery is not agreed upon in the contract, the carrier must deliver the cargo within a reasonable time. The interested party may declare the cargo lost if it was not delivered within 30 days after the agreed or reasonable time. Under art 169(1), the carrier is liable for the loss of the cargo in the amount of its value. Pursuant to art 169(2) of the MSC RF, the total amount recoverable is calculated by reference to the value of the goods at the place and time the goods are discharged in accordance with the contract, or should have been so discharged. The value of the goods is fixed according to the commodity exchange price, or, if there is no such price, according to the current market price, or, if there is no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality.

The Court held that the freight forwarder accepted the obligation to deliver the cargo within 45 days. It failed to do so within the agreed time and for more than 30 days after that. Further, the defendant breached all possible reasonable time limits for the cargo delivery. The fact that the cargo was detained by the Belgian authorities did not exclude the defendant’s liability. Therefore, the claimant was entitled to claim compensation for the loss of the cargo in the amount of its value.