Cefor – Marine Insurance Education, Copenhagen 22-23 April 2014 Henrik Thal Jantzen

introduction Why does cargo underwriters need to know about transport law? to assess appropriate premium (taking possible recovery funds into considerations) to advise on possible risk and exposure to cover (limitations, exemptions, forum, legal entity responsible) to advise about possible additional cover (on- carriage, rejection, deck cargo, subsidiary coverage) to consider appropriate warranty clause to be inserted (deck cargo, pre-loading survey, packages, parking places)

introduction Why does cargo claims handler need to know about transport law? recovery profits are a substantial part of the premium assessment To advise about – or take - immediate actions to protect and safeguard cargo interest position 

Transport law is complex No uniform legislation applies in relation to the various mode of transport No inter-connection regulations between the various unimodal conventions Actual place of jurisdiction decisive in relation to the relevant rules to apply

Recovery prospect It is not possible to predict the recovery prospect until you have an actual cargo claim in hands Is it a C/P claim or a B/L claim? The alternative forum available Terms and conditions applicable Carriers involved (actual and/or contractual) and their prospects to honour a claim Evidence established as regards cause and extent of damage

Most relevant documents required 1. Contract of carriage (B/L, C/P, fixing note, recap) to identify the contractual carrier to decide on the mode of transport agreed to identify the Terms and Conditions agreed

Most relevant documents required 2. Commercial invoice Valuation of goods (to verify the extent of loss or damage) Delivery terms - to substantiate the entity entitled to sue

Most relevant documents required 3. Evidence in relation to the damage/loss Survey reports (preferable joint survey) Sea protest and/or reports about the occurrence Police reports, firefighting reports, custom reports or other public reports or info Tally reports, temperature records, outturn reports Logbook, engine log, pre-loading reports etc.

Legal regime Mode of transport Road (CMR) Sea (Hague, Hague Visby, Hamburg) Air (Montreal Convention) Rail (Codif/CIM) Multimodal (Rotterdam Rules ? or agreed terms)

Unimodal Basically elementary to determinate applicable rules BUT Has the transport been carried in accordance with the agreement? What rules apply in case the carriers have deviated from the agreed mode of carriage?   CASE (Salmon Roe)

Multimodal carriage No mandatory rules applicable Multimodal terms agreed Fiata Combined transport B/L NSAB 2000 - or similar freight forwarder terms Individual Terms and Conditions Network clauses often agreed Known damage – unimodal rules to apply Unknown damage - general rules to apply (SDR 2 per kilo)

Loss/damage caused while goods are in the carriers’ custody Decisive factor in relation to liability prima facie evidence in favour of cargo interest carriers carry a heavy burden of proving that damage did actually not incur while in the carriers’ custody damage was caused by circumstances for which the carriers are not liable

Loss/damage caused while goods are in the carriers’ custody Condition of goods while taken over by the carriers visible inspection of the carriers clean receipt documents (B/L, interchange receipt, mate receipt, consignment note (CMR)) qualified remarks (what about FCL – containers) Case: 850 boxes of fish fingers From pepper to corn

Loss/damage caused while goods are in the carriers’ custody Condition of goods upon delivery to the consignee receivers lodge a notification in time as per the applicable rules reservation made on the receipt document

Loss/damage caused while goods are in the carriers’ custody Loss or damage actually caused during transit (fire, road accident, rubbery during parking, salt-water damage) Loss or damage based on documentation/evidence considered caused in transit Imaginary loss constituted incurred in transit (B/L in hands of third party)  Case: From ram units to microwave oven

forum Extremely important for the recovery prospect: applicable law decided by the competent court in question (conventions incorporated in the jurisdiction) period of time and costs required to obtain a judgement - important factor for level of settlement predictability of the outcome enforceability of the judgement

b/l vs. c/p claim Claim under a B/L: mandatory legislation applicable mandatory jurisdiction in the country where the goods have been taken over and/or at the place of delivery (and often as well in the place of loading and the place of discharging) contractual carrier (liner company named on the B/L) and performing carrier jointly liable 

b/l vs. c/p claim Claim under a C/P: no mandatory legislation applicable terms and conditions inserted in the C/P apply forum clause (often at the place of business of the carriers) applies exclusion or limitation of liability - see ex clause 2 of Gencon 94

Gencon clause 2 Owners’ Responsibility Clause The Owners are to be responsible for loss of or damage to the goods or for delay in delivery of the goods only in case the loss, damage or delay has been caused by personal want of due diligence on the part of the Owners or their Manager to make the Vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied, or by the personal act or default of the Owners or their Manager.

b/l vs. c/p claim Transference from C/P claim to B/L claim: CIF terms - seller C/P party - buyer third party B/L holder FOB terms - Seller  Shipper - Buyer  C/P party and not third party B/L holder

liability 1) Established that loss of or damage to goods incurred in the carriers’ custody 2) Prima facie evidence in favour of cargo interests 3) B/L claim - exemption of liability in case of fire and errors in navigation 4) No liability for damage outside the carriers’ control (inherent vice, shippers fault, act of god)

limitations CMR: SDR 8.33 per kilo SEA: SDR 2 / 667 AIR: SDR 19 Rail: SDR 17

Limitation regime Limitation only for loss of or damage to cargo during carriage No limitation for other losses in relation to the performance of the carriage such as mis-deliveries (CAD, COD), improper customs clearance Rotterdam Rules and FF-terms include universal limitation for all claims under the contract

Breach of limitations CMR: Gross negligence of the road carrier or his servant SEA: Art. 4, subsection 4, of the Hague Visby Rules: “Is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result." AIR: Montreal Convention: Limitation cannot be breached

Claims handling – in practice Now we are prepared to handle loss of or damage to the cargo How has the transport been contracted? How has it actually been carried out? Information about cause of damage Info about transport document issued and remarks made hereon, if any Info about any notice of damage or loss made by the consignee B/L issued and negotiated Possible forum