1. RESEARCHTRAININGINFORMATIO N INSTITUT DU DROIT INTERNATIONAL DES TRANSPORTS ET DE LA LOGISTIQUE INSTITUTE OF INTERNATIONAL TRANSPORT & LOGISTICS LAW

2. Intermediaries – Various Legal Situations The Case of France IRU Symposium – 21 February 2014 Frédéric LETACQ

3. 1- Intermediary Types & Functions The carrier performs transport The forwarder (commissionnaire de transport) organises transport The forwarding agent (transitaire) receives / forwards on IRU Symposium – 21 February 2014

4. Definitions: Forwarder (commissionnaire de transport) Transport Code (L 1411-1): Considered as forwarders: those who organise, under their responsibility and in their own name, the performance of a freight carriage operation by means of their choice on behalf of a principal. Case Law: The carriage assignment is the agreement through which the forwarder commits itself vis-à-vis the principal to perform on the latters behalf any legal acts necessary for the carriage. It is characterised not only by the freedom which the forwarder has to freely organise carriage by ways and means of its choice, in its own name and under its responsibility, but also by the fact that it relates to the whole carriage from start to finish. IRU Symposium – 21 February 2014

5. Legal elements defining the capacity as forwarder 1)Acts in its own name on behalf of the principal (as opposed to an agent) 2)Is an organiser and does not mainly perform physical services (as opposed to the carrier or handler) 3)Is free to choose ways and means and resorts to substitutes (fundamental criterion) In return for this freedom of action => strict liability IRU Symposium – 21 February 2014

6. Definitions: Auxiliaries – Forwarding Agents Transport Code (L 1411-1): Considered as transport auxiliaries: those who contribute to the transport operation without actually performing it or providing the means to perform it. Forwarding Agent: Legal representative – the forwarding agents functions are defined by its assignment, and usually restricted to receiving, warehousing, re-sending and administration (port passage). Forwarding agents may also organise, monitor and coordinate transport operations and book freight, container filling or emptying from carriers. They act on behalf of and in their principals name ( forwarder) IRU Symposium – 21 February 2014

7. 2- Rules of Admission to the Occupation Regulated Occupations: Carrier / Removal firm / Truck rental with driver => YES Forwarder => YES Agent - forwarding agent => NO / Freedom of trade does not require any specific registration IRU Symposium – 21 February 2014

8. ForwarderCarrier / Rental Firm Ref.: Decree n°90-200 amended 2011 + orders Ref.: Decree n°99-752 amended 2011 + several orders (road transport package) Authorisation to operate issued by the regional Prefect upon submission of the RCS company register extract (for companies) Prerequisite for registration in the trade register and issuing of licences Registration omthe forwarder register Location: French company – headquarters Foreign company: main place of business Registration in the carrier / rental firm register Location: French company – headquarters Foreign company: main place of business Conditions : 2 … Conditions : 4 Establishment requirement: premises suitable for the activity to keep documents (transport / accounting / personnel / social documents...) Objective: avoid shell companies Admission to the Occupation

9. ForwarderCarrier / Rental Firm Professional competence: The person in charge of transport assignments must hold a certificate of professional competence issued by the regional Prefect The certificate is obtained via: - Written exam / -Equivalence of diplomas (level III / transport specialist or including 200 h of management) - At least 5 years work experience in management ( uninterrupted + possible 40h internship ) Professional competence: The transport manager (in charge of permanent actual management of carriage or rental activities) must hold a certificate of professional competence issued by the regional Prefect The certificate is obtained via: - Written exam / -Equivalence of diplomas (level III / restrictive list) - At least 10 years work experience in management ( uninterrupted ) Financial standing requirements dropped in 2010 Financial standing: Own capital + reserves Vehicles > 3.5 t => 9000 for first vehicle, 5000 per further vehicle Vehicles 3.5 t => 1800 for first vehicle, 900 per further vehicle Good repute: Applies to management + the holder of the certificate of competence (either a single sentence prohibiting from engaging in a business activity, or several sentences for transport offences) Good repute : Applies to all managers, the director and the corporate body ( List of sentences extended by Regulation 071/2009. Cumulative sentences) Admission to the Occupation

10. ForwarderCarrier / Rental Firm Consequences of registration: A certificate of registration in the register is issued (The companys various establishments are recorded in the register of the company headquarters as well as in the registers of the regions where they are located) Consequences of registration: Leads to issuance of licences by the regional Prefect (in accordance with EC Regulation 1072/2009) : EU Licence => Vehicles > 3.5 t (allows domestic transport / international within the EEA / cabotage) Domestic transport licence => Vehicles 3.5 t (only covers domestic transport) Sanctions: Criminal penalty: Unlawful practice without registration => Misdemeanour (1 year jail sentence and 15,000 fine) Provision of false information => Misdemeanour (2 year jail sentence and 30,000 fine) Administrative sanctions: by the Prefect as advised by a Commission for administrative sanctions Sanctions: Criminal penalty: Unlawful practice without registration => Misdemeanour (1 year jail sentence and 15,000 fine) Administrative sanctions: by the Prefect as advised by a regional Commission for administrative sanctions (withdrawal of authorisation / licence / striking from register) Admission to the Occupation

11. 3- Contractual Framework IRU Symposium – 21 February 2014 ForwarderCarrierAgent / Forwarding Agent Commercial Code regarding Forwarders + Transport Code Commercial Code regarding Carriers + Transport Code Civil Code regarding Assignments Standard contract for transport assignment Standard contracts of road carriage (general or specific) Freely set General Terms System of contracts under French law

12. Transport assignment contracts and contracts of carriage Forwarder Transport assignment contract Governed by: National law Commercial / Transport Codes Standard assignment contract Contracts of carriage Governed by: Standard contracts; CMR; Brussels Convention; CIM Uniform Rules... Goods flow Contractual relationships

13. Benefits of the transport assignment standard contract Provides a legal framework for relationships between the forwarder and the principal Restricts the forwarders personal liability (proof of wrongdoing required for personal liability to be involved) Instates ceilings to automatic compensation Instates periods of notice in case of breach of relations Caution! As with any standard contract, the provisions of the assignment standard contract only apply unless otherwise agreed in writing between the parties IRU Symposium – 21 February 2014

14. Admissibility of Actions Action for contractual liability: Consignor / Consignee against the carrier => YES Consignor / Consignee against the forwarder => YES Shipping contractor against the forwarding agent => YES (commissioning rules; the shipping principal may also take action against the sub-contractor, Civil Code Art 1994) Non-contracting consignee against the forwarding agent => NO (no privity of contract) Legal basis: L132-8 Commercial Code: "the consignment note amounts to a contract between the consignor, carrier and consignee or between the consignor, consignee, forwarder and carrier IRU Symposium – 21 February 2014

15. Admissibility of Actions Action for payment: Domestic carrier against the consignor or consignee => YES International CMR carrier against the consignor or consignee => NO Except if the former demonstrates that French law applies in addition to CMR (Regulation EC 593/2008 Rome 1, Art 5) [chosen law / law of carriers country if this is the same as the country of loading or receipt / law of the country of receipt / escape clause] Forwarder against consignor / consignee, non principal => NO even subrogate Forwarding agent against consigner / consignee, non contracting => NO Legal basis: L132-8 al.2 Commercial Code: The carrier is entitled to direct action for payment of its services against the consignor and consignee, which stand as guarantors for payment of freight charges. IRU Symposium – 21 February 2014

16. 4- Contractual Liability Aspects Carrier against consignor and consignee => Presumption of liability for loss / damage / delay Forwarder against consignor and consignee => Presumption of liability for loss / damage / delay + Liability for actions of substitute carriers (L132-4; 5 & 6 Commercial Code) Forwarding agent – agent against its client (principal) => liability for proven default (commissioning rules; Civil Code art 1992) + in case of hidden assignment subcontracting => the main contractor answers for the subcontractor (Civil Code art 1994 § 2) IRU Symposium – 21 February 2014

17. Case of the subcontracting road carrier Case law before 2005 : The road carrier who freely subcontracts carriage becomes a forwarder => answers for the substitute carrier Case law since 2005 (Commercial Court of Appeal 10 May 2005) : Subcontracting carriage does not entail qualifying as a forwarder for the subcontracting party except where the consignor has approved the substitution => the carrier who freely subcontracts no longer answers for the substitute carrier ORTF Law - 8 December 2009 (Transport Code Art L 3224-1) : The responsibilities of road carriers resorting to subcontracting are those foreseen for forwarders in the Commercial Code => Same liability as forwarder – answers for the subcontractor (does not become a forwarder but is subject to the same liability) IRU Symposium – 21 February 2014

18. IDIT - Institut du Droit International des Transports et de la Logistique 110/112, avenue du Mont Riboudet – F.76000 ROUEN Tél : +33 (0)2.35.71.33.50 Fax : +33 (0)2.35.88.51.64 contact@idit.asso.fr www.idit.fr