Recent changes in German transport law and their effect on maritime law
ON July 1 this year, the new German Transport Law Act entered into force. Among other things, it introduced a completely new set of regulations replacing the previous provisions of the German Code of Commerce on the carriage of goods, freight forwarding and the storage of goods.
In cases where it cannot be established where the loss of or damage to the goods - or the incident causing the delay in delivery - occurred, the carrier's liability is subject to the regulations of the general transport law.
As far as the law relating to the contract of carriage is concerned, the new act follows in many respects the Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR). But the effects of the new provisions on the industry are so far-reaching that it will be some considerable time before they are fully understood.
At first glance, this is not so much the concern of the maritime lawyer because the new act deals only with road, inland waterway and air transport. But the act also introduced provisions on multimodal transport, e.g., on carriage performed by different means of transport, which expressly apply to carriage which includes a sea leg.
When determining the regulations applicable to multimodal contracts, the basic principle is that they are subject to the general transport law. Therefore, the quite detailed new provisions dealing with the performance of contracts of carriage are also relevant for multimodal transport. The parties may only deviate from the provisions of the general transport law if the relevant contractual terms are individually negotiated.
General terms and conditions used by either party detracting from the regulations laid down in the general transport law are invalid and unenforceable. This applies also to pre-printed standard bill of lading forms used in connection with multimodal transport.
Carrier's liability for cargo claims in multimodal transport
Traditionally, when looking at the carrier's liability in respect of cargo claims in multimodal transport, a distinction has been made between:
- cases in which the place where the loss of and damage to the goods (or where the incident causing the delay in delivery occurred) is known, and
- cases where this cannot be determined.
- The carrier's liability if the place of loss is unknown
In cases where it cannot be established where the loss of or damage to the goods - or the incident causing the delay in delivery - occurred, the carrier's liability is subject to the regulations of the general transport law. The basic principle here is that the carrier is responsible (i) for all damages caused by loss of or damage to the goods that occurred in the time between the acceptance of the goods and their delivery and (ii) for damages caused by delay in delivery.
The carrier may exonerate itself if it establishes that the loss or damage was caused through circumstances which it could not avoid, and the consequences of which it was unable to prevent by exercising the utmost care. The new transport law also includes regulations on particular situations in which the carrier's liability is always excluded, on the carrier's liability for acts and omissions of its servants, on the calculation of the amount of compensation payable to the claimant, and on the actual carrier's liability. The parties may only deviate from the relevant provisions by way of individually negotiated terms but not, however, on the basis of one party's general terms and conditions.
Of particular interest, of course, are the amounts to which the carrier may limit its liability for loss of or damage to the goods. The new German transport law provides that the carrier's liability is calculated on the basis of 8.33 special drawing rights (SDRs) per kilogram of gross weight of the consignment. The parties' freedom to deviate from these provisions is subject to particular regulations.
The parties may agree on different amounts if they are individually negotiated. But the new law also allows the parties to determine other amounts within specified limits by way of general terms and conditions.
The parties are free to fix any amount between two and forty SDRs per kilogram of gross weight, if the amount is clearly highlighted in print. It follows that carriers are able to reduce the amount relevant for determining their limited liability from 8.33 SDRs, as provided in the new law, to 2 SDRs in their general terms and conditions, i.e., by including appropriately worded clauses in the required form. At the moment, most bills of lading used in multimodal transport, and which are subject to German law, probably fail to take these factors into account.
Carrier's liability if place of loss is known.
The new German transport law expressly provides that, in cases where the place that loss or damage occurred can be established, the carrier's liability for loss of or damage to the goods and for delay in delivery is determined by the law applicable to the leg in the course of which the relevant incident occurred. All other rights and obligations of the parties involved, however, are still governed by the general transport law.
If the incident which caused the loss or damage occurred at sea, maritime law becomes relevant in respect of the carrier's liability. Since the multimodal contract itself, in order to make the new law applicable, must be subject to German law, one may assume that the carrier's liability would be determined by German maritime law.
The respective provisions are based on the Hague-Visby Rules as amended by the SDR Protocol, 1979. Therefore, the carrier's liability is based on amounts of 666.67 SDRs per package or unit, or 2 SDRs per kilogram of gross weight of the goods.
The German legislator, however, in order to promote the new law, also allows the parties to stipulate by way of general terms and conditions
that the carrier's liability for loss of or damage to the goods, or for delay in delivery, is determined by the new transport law (i) irrespective of the leg where the incident giving rise to the carrier's liability occurred or, alternatively, (ii) in cases where the damage occurred on a particular leg.
One issue which has to be considered is the amount to which the carrier's liability for cargo claims may be limited.
If the relevant contract includes a provision to this effect, the parties are also free to stipulate in general terms and conditions that the carrier's liability for loss of or damage to the goods or for delay in delivery is limited to an amount other than 8.33 SDRs per kilogram of the gross weight, if the relevant amount is between two and forty SDRs and if it is particularly highlighted in the print.
It follows that a multimodal carrier may specify in its general terms and conditions that, in cases where the loss or damage occurred at sea, the carrier's liability is subject to the provisions of the new transport law and limited to 2 SDRs per kilogram of gross weight.
The question that multimodal carriers must now ask is whether it is wise to make use of the freedom to provide in their bills of lading that the new transport law is applicable rather than the German maritime law, possibly combined with a stipulation that the amount of 2 SDRs is relevant in respect of the carrier's liability.
Carriers must now compare both systems in order to find out which best suits their interests. One issue which has to be considered is the amount to which the carrier's liability for cargo claims may be limited. German maritime law limits the carrier's liability to 666.67 SDRs per package or unit, or 2 SDRs per kilogram of gross weight, whichever is the higher, while carriers as a matter of general transport law may reduce their liability to 2 SDRs per kilogram of gross weight in all cases.
The alternative - that the limitation amount under maritime law is calculated on the basis of 666.67 SDRs per package or unit - is only of relevance in cases where the resulting amount exceeds the sum calculated on the basis of 2 SDRs per kilogram of gross weight. Consequently, it might be in the carrier's interests to make sure that its liability is always based on the amount of 2 SDRs per kilogram of gross weight. However, before opting for either the new transport law or for maritime law, a carrier must carefully consider all relevant aspects, including the particulars of the trade.