In 2013 M-Comp A/S (M-Comp) was shipping 32 packages containing electric components with a value of USD 72,960 from Hong Kong to Denmark. In the middle of the Indian Ocean the vessel, Mol Comfort, shipwrecked when it broke in half which lead to the loss of the goods. The insurer of the goods, Tryg Forsikring A/S (Tryg), paid out insurance to M-Comp and thus subrogated into M-Comp’s potential claim against the two contracting carriers, UPS Danmark A/S (UPS DK) and UPS Asia Group Pte Ltd c/o UPS Danmark A/S (UPS Asia).

M-Comp had entered into an umbrella agreement with UPS DK in 2012 regarding transportation of its goods.

For the shipment of the electric components in 2013, a waybill was issued in Hong Kong by UPS Asia. In the waybill UPS SCS (Asia) Ltd was named as forwarding agent and UPS SCS (Denmark) ApS as delivery agent. Further, an invoice was issued by Shipco Transport Denmark A/S for ocean freight and terminal handling charges. In the invoice UPS SCS (Asia) Ltd was named as consignor and UPS SCS (Denmark) ApS as consignee.

During the legal proceedings different reports were exhibited, including class inspection reports, stability reports and reports by the Committee on Large Container Ship Safety in Japan.

The main question for the Maritime and Commercial High Court was whether the two contracting carriers, UPS DK and UPS Asia, were liable for damages regarding the loss of the goods due to the shipwreck.

Held: It was uncontested that UPS DK and M-Comp had entered into an umbrella agreement and that this agreement covered transport of the electric components. The fact that the waybill was issued by UPS Asia and the fact that M-Comp corresponded with UPS SCS (Denmark) ApS regarding the shipwreck did not change the fact that UPS DK was the contracting carrier.

According to the Danish Merchant Shipping Act, s 275(1), corresponding with the Hague-Visby Rules, art 4.2.q, the carrier is responsible for loss or damage if the carrier cannot prove that loss or damage were caused without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier. Since the cause of the shipwreck and thus the carriers’ potential fault and neglect were uncertain, the Court found that the carriers had not proven that the loss of the goods was caused without the fault or privity of the carriers or of the agents or servants of the carriers. The Court therefore found that UPS DK and UPS Asia as contracting carriers were liable for damages to Tryg.

The carriers could limit their liability according to the Danish Merchant Shipping Act, s 280, corresponding with the Hague-Visby Rules, art 4.5.a, according to which the carrier is not liable for loss or damage to the goods in an amount exceeding the equivalent of SDR 667 per package.

Finally, the Tokyo District Court in Japan had constituted a limitation fund, but the Danish Court found that this did not prevent the initiation of legal proceedings in Denmark concerning claims caused by the shipwreck.