This case involved an appeal and cross-appeal against the judgment of the Paris Court of Appeal, 30 January 2008. Krupp Hazemag (Krupp) commissioned DGT Services (DGT) to organise the transportation from France to Morocco, via Antwerp, of 200 packages which were loaded on the Carima under a bill of lading issued by Compagnie de Navigation France Euro Tramp FRET (FRET). After suffering damage during the crossing, the vessel was towed to Brest and then to Zeebrugge where, during the transfer of the goods to another vessel, the Danica Rainbow, one of the crates, which had already been damaged during the trip, suffered further harm. Zurich International France and Zurich Insurance Ireland (Zurich), having indemnified the insured, Krupp, sued DGT and FRET for reimbursement.

DGT and FRET criticised the judgment for having declared Zurich's claim admissible without investigating whether Krupp had in fact suffered loss. DGT and FRET also argued that the maritime transport contract ended as soon as the shipowner's endeavour was interrupted and the vessel was towed to the nearest port due to engine damage. By not investigating whether the master of the Carima had not immediately made a declaration of general average, from which it necessarily followed that the contract of carriage giving rise to the issuance of the bill of lading had ended in Brest, and that custody of the goods had been transferred to the owner and/or the time charterer who alone decided on the measures to be taken relating to the Carima, the Court of Appeal deprived its decision of a legal basis with regard to arts 1, 2 and 3.6 of the Hague-Visby Rules, together with arts L 132-4 and L 132-5 of the Commercial Code. FRET argued that upon the arrival of the ship in Brest on 27 April 1999, the owner had immediately made a declaration of general average, which terminated the contract of carriage. The damage to the crate which subsequently occurred in Zeebrugge was therefore not the carrier's responsibility.

FRET further argued that it was incumbent on the shipper to prove the existence of defective stowage at the origin of the damage. The legal expert report in Zeebrugge came too late because it was written more than two months after the arrival of the Carima in Brest and its towing to Zeebrugge. The expert expressly noted that because the goods had been the subject of a re-stowage, an opinion could not be given regarding the condition of the stowage at the start of the expedition. The Court of Appeal thus deprived its decision of a legal basis with regard to art 3.6 of the Hague-Visby Rules.

The maritime carrier cannot be held liable as soon as the loss or damage results from perils, dangers or accidents of the sea. The Court of Appeal should have investigated whether the responsibility of the maritime carrier was excluded since it was proven that on the night of 25 April 1999 the Carima, whose main engine had broken down, had been 'disabled' in heavy seas. This exemption is not conditional on proof of exceptional climatic conditions. By holding that FRET could not invoke the perils of the sea, on the ground that the meteorological conditions which affected the ship at the place and at the time of the incident were not exceptional, the Court of Appeal violated article 4.2.c of the Hague-Visby Rules.

Under art 4.5.a of the Hague-Visby Rules, unless the nature and value of the goods have been declared by the shipper before their embarkation and this declaration has been inserted in the bill of lading, the carrier, like the ship, will in no case be responsible 'for any loss or damage to or in connection with the goods' for an amount greater than that fixed by this provision. By holding that this fixed limitation liability for the damaged goods did not also prohibit recovery of the full costs incurred for the execution of the contract of carriage and constituted, in this case, by the justified costs of reshipment of the goods, the Court of Appeal violated the aforementioned provision.

Finally, Krupp and Zurich argued that the maritime carrier is required to compensate the shipper for all damages resulting from its poor performance of the contract of carriage. By deciding that Zurich should only receive, on the one hand, the lump sum compensation for damaged goods and, on the other hand, the costs of reshipment of the goods, on the ground that the fees of lawyers, experts and translators were irrecoverable costs, and that these other costs were not directly related to the necessities of the execution of the contract of carriage, whereas they would not have been incurred if the contract of maritime transport had been correctly executed, the Court of Appeal violated arts 3.2 and 4.1 of the Hague-Visby Rules.

Held: Partial cassation.

The Court of Appeal noted that Krupp had sold the goods DDU, that is to say duty unpaid, which implied that these goods were delivered at the risk of the shipper, who was thus justified and had an interest in claiming for damage occurring before delivery. Krupp provided proof of having made payments corresponding to these damages before issuing its claim. The Court of Appeal was entitled to find that Krupp had legal standing.

A declaration of general average, which commences a procedure for apportioning the costs and damage caused by rescue measures decided in the common interest, does not have the effect of terminating the contract of carriage, which, apart from the case of the disappearance of the goods, ends when they are delivered.

The judgment notes that, at the stopover in Brest, the relevant package, comprising a waterproof internal bag, had fallen from a height and had a perforated side. This damage did not exist at the start of the transport and therefore occurred while the goods were under the responsibility of DGT, who had delegated the transport to FRET. Given these findings, the Court of Appeal was entitled to hold that the presumption of conforming delivery had to be rejected.

Having noted that the meteorological conditions which affected the ship at the place and at the time of the incident were not exceptional, the Court of Appeal was entitled to find that the damage of the goods could not be imputed to the perils, dangers or accidents of the sea.

The Hague-Visby Rules do not include provisions on the due diligence incumbent on the carrier in the event of interruption of the journey. Under art 4 of the Rome Convention of 19 June 1980 on the Law Applicable to Contractual Obligations, as the carrier had its principal place of business in France, where the place of loading was also located, it is presumed that the contract of transport is most closely connected with France and is subject to French law. The decree of 31 December 1966 provides in art 40 that, in the event of interruption of the trip, the carrier or its representative must do diligence to ensure the transhipment and delivery of the goods, and in art 47 that the costs of the transhipment and the freight due to complete the movement of the goods are the responsibility of the cargo owner when the interruption was due to cases of exemption from liability listed in art 27 of the Law on Charter and Maritime Transport Contracts, and are borne by the carrier in other cases. It follows from the judgment that the disputed costs are the result of an interruption of the journey, of the transhipment of the goods and their delivery. This interruption was not due to one of the cases of exemption from liability listed in art 27, so are the responsibility of the carrier.

As to Krupp and Zurich's argument that their other costs should have been compensated, the Court of Appeal was entitled to hold that the alleged damages were not directly linked to the requirements of the execution of the contract of carriage and, consequently, to refuse their compensation.

However, having regard to art 31 of the Code of Civil Procedure, together with art 3.6 of the Hague-Visby Rules, after the insured has been indemnified, it no longer has standing to act against the debtor. The insured therefore cannot, except by express or tacit agreement empowering it to do so, take legal action and thus interrupt the limitation period in the interest of the insurer subrogated into its rights. The judgment held that the conditions of legal subrogation had been met for the benefit of Zurich, that the alleged prescription for these heads of damage could not be effective since the settlement of these items showed only partial payment of the damage suffered, and that the assignment of April 2000, made by a person still having an interest in acting, therefore interrupted the prescription. By ruling thus, the Court of Appeal violated the aforementioned provisions. For these reasons, the judgment is struck down and annulled, but only in that it condemned DGT and FRET to pay Zurich the sum of EUR 43,459.81. On this point, the case and parties are returned to the position they were in before the aforementioned judgment, and the case is referred back to the Paris Court of Appeal, otherwise constituted, to be decided correctly.