In a contract of carriage dated 15 September 2014, the carrier agreed to carry a dismantled tunnel boring machine on the River Rhine to Antwerp for on-carriage by ocean vessel to San Antonio in Chile. The contract provided for German jurisdiction and German law to apply. The goods were loaded onto the ocean vessel at Antwerp between 3 and 7 November 2014. The carrier issued a bill of lading on behalf of its sub-carrier.

On 11 November 2014, the carrier advised the shipper that the cargo had suffered damage due to bad weather in the Bay of Biscay and that the vessel was proceeding to Bilbao as port of refuge. There, a survey was carried out which confirmed that two steel sheets of a separate consignment had come loose and perforated the walls of the ballast tanks. The water entering the hold damaged some parts of the tunnel boring machine. Other packages shipped suffered damage arising from the shifting of cargo. The ballast tanks were repaired and the goods reloaded. After the vessel’s arrival in Chile, the consignee submitted the bill of lading and obtained delivery of the goods.

The shipper brought proceedings against the carrier before the Hamburg Court (Landgericht Hamburg) and applied for a declaration that the carrier was liable for the damage to the goods (estimating the damages at approximately EUR 1.8 million). The shipper maintained that the carrier was liable under ss 489 et seq of the Commercial Code. Based on the weight of the goods of 1,423,830 kg, the limitation amount calculated at 2 SDR per kilogram would be irrelevant. The carrier argued, inter alia, that the shipper was not entitled to claim, as a bill of lading had been issued in relation to the goods, to the effect that only the consignee under the bill of lading had the right to bring claims for damages against the carrier. Further, the carrier submitted that the consignment which included the two steel plates which caused the damage to the tunnel boring machine was loaded on 'free in' terms. As a result, loading was performed by the shipper of the other consignment for whom the carrier would not be responsible. The Magistrate Court found in favour of the shipper. The carrier filed an appeal before the Hamburg Court of Appeal (Oberlandesgericht Hamburg). 

Held: Appeal dismissed.

The Court of Appeal confirmed that the parties had concluded a multimodal contract of carriage and that the damage occurred in the performance of the sea leg. As a result, the carrier’s responsibility was determined by ss 452, 452a of the Commercial Code making the provisions of the Commercial Code relating to the carrier’s liability, ie ss 498 et seq, applicable.

Section 494(1) of the Commercial Code clarifies that, in case of loss of or damage to the cargo, both the consignee as well as the shipper is entitled to claim against the carrier under the contract of carriage. The Court of Appeal explained that, in principle, a bill of lading would, under s 519 of the Commercial Code, bar the shipper’s right to claim to the effect that it is only the consignee under the bill of lading would be entitled to claim. The purpose of this concept is to protect the consignee’s position under the bill. However, the barring effect of the bill of lading determined by s 519 Commercial Code applies only if the if the bill is issued by the carrier and not by some third party including a sub-carrier.

The Court of Appeal further found that the carrier was not entitled to exclude liability on the point that storage and lashing of the two steel plates of the other consignment, which broke loose and perforated the ballast tank, was performed by stevedores for which the carrier was not responsible. The carrier may escape liability, as is provided in s 498(2) of the Commercial Code, by proving that the damage was caused by circumstances which the carrier was unable to avert by applying the diligence of a prudent carrier. The carrier would also be responsible for the acts and omissions of his agents and servants as well as independent subcontractors (s 501 of the Commercial Code). Such proof normally requires that the carrier demonstrates what the cause of the damage was and that he was unable to prevent that because by applying due diligence. Also, if the cause of the damage remains unclear, the carrier would be able to prove that it took all reasonable steps to prevent damage of that type from occurring.

It would be correct that the carrier, in principle, would not be responsible for the stevedores personally involved in the lashing and securing of the two steel plates of the other consignment. However, the carrier failed to prove that the shifting of the steel plates was due to the stevedores’ negligence. Further, the Court found that the vessel had been unseaworthy at the outset of the voyage. To that end, it was sufficient that cargo from a different consignment was able to shift during the voyage and to perforate the walls of the ballast tanks, to the effect that ballast water required for the vessel’s stability was able to enter the hold. Further, the shifting of the steel plates would be able to jeopardize the vessel’s stability. In fact, the stability problems were the reason why the vessel called at Bilbao as a port of refuge.

In the circumstances, the carrier would be burdened by the further obligation provided by s 498(2) of the Commercial Code which requires it to prove that it was unable to detect the vessel’s unseaworthiness at the outset of the voyage. Even if the carrier was not liable for the stevedores' acts and omissions in relation to the stowage and securing of the two steel plates of the other consignment, it still had to prove that the bad lashing could not have been perceived by it, the sub-carrier or the vessel’s crew. Furthermore, the carrier may not rely on the fact that the experts appointed by the vessel’s time charterer failed to detect the bad storage.

Finally, the Court of Appeal pointed out that there was no contributory negligence on the shipper’s side due to the fact that its surveyors instructed to supervise the loading and stowing of the tunnel boring machine failed to raise any objections against the storage of the steel plates shipped and another consignment.