Deutz Argentina SA (Deutz) hired Empresa Estatal Líneas Marítimas Argentinas SA (EELMA) to transport cargo from Germany to Argentina. EELMA transported the cargo in two separate packages, but failed to unload one of the packages. The missing package was transported by the same ship and delivered to Deutz almost one year later.

Deutz filed a claim for damages against EELMA. EELMA denied having any liability and argued that, in any event, the court should apply the limitation of liability set forth in art 4.5 of the Hague Rules.

The Court of first instance ruled in favour of Deutz. It concluded that the limitation of liability set forth in art 4.5 of the Hague Rules did not apply to damages caused by delays in the delivery of the cargo, and, therefore, resolved the dispute in accordance with the general principles governing breach of contract under Argentine law.

EELMA appealed the judgment. It argued, among other things, that it would be absurd not to apply the limitation of liability set forth in art 4.5 of the Hague Rules to delays in delivery if such limitation applies to events of a total loss of cargo.

Held: The National Court of Appeals in Federal Civil and Commercial Matters (Court of Appeals) partially reversed the judgment and reduced the compensation based on art 4.5 of the Hague Rules. The Court of Appeals stated that although art 4.5 of the Hague Rules refers to losses or damages to or in connection with goods, from a legal point of view the one who suffers the damage is not the goods, but the owner of the goods. The Court of Appeals also considered that in transport contracts, limitation of liability is not the exception but the general rule. Therefore, the Court of Appeals concluded that the limitation of liability contained in art 4.5 of the Hague Rules should apply by analogy to damages caused by delays in the delivery of goods even if the article does not expressly state so, because that is the spirit of the rule. The Court of Appeals also stated that it would be inconsistent to conclude that a carrier who delivers the goods late has a greater responsibility than a carrier who loses the goods and does not deliver them.