Maritime transport: contracting party to the framework agreement liable for damage even as agent – Commentary


Facts
Decision
Comment

Facts

A Danish exporter sold a batch of cream cheese spread to a buyer in the United Arab Emirates.

In August 2017, the exporter concluded a framework agreement with a Danish carrier (T) for the maritime transport of dairy products from specified ports. The agreement provided that the parties were the exporter and T, and the agreement provided, among other things, that:

[T] assumes responsibility for all services rendered by or for [Eksportøren] under this General Agreement, whether the Services under this General Agreement are performed by T or its representatives or a third party.

The exporter booked the transport of the cheese shipment in question from Vejle, Denmark, to the United Arab Emirates with T. The booking indicated that there was REFRIGERATED CONTAINERS 4×40, 3+ DEG CELandTemperature condition: 3.00“.

On the same day, a booking confirmation was issued by T’s Swiss parent company (T1). In the booking confirmation, T1 was listed as “carrier”, while T was listed as “agent” for T1.

Transport from Vejle to the port of Aarhus, Denmark, was subcontracted by T to a subcontractor (D). On June 12, 2019, D sent a schedule to T stating “40 empty TEMP: 03C”. An agreement was concluded between the exporter and D (T was not a party to this agreement), which obliged D to bring the container to temperature when it was taken over empty and before it was presented to the exporter for loading:

The container must be temperature controlled on and off the terminal, regardless of where it is to be picked up. The driver must, together with the street staff, at the exit, check that the temperature has been set in accordance with the reservation/driver’s licence.

D has entered into a container transport agreement with a carrier (S). Under this agreement, D “chartered” cars from S and was responsible for their day-to-day operation. D had daily contact with the drivers, and S had nothing to do with the drivers. S received a settlement once a month from D, and S had no power to decide what tasks the drivers had to perform for D. D explained during the case that D had not asked S’s drivers to check the temperature setting on the empty containers that S picked up in the port, and that the temperature must be set first, “when the container was dropped off at the terminal after loading [and] that it therefore mattered little to the driver of S that it was 3 degrees”.

On June 14, 2019, the container was picked up by S at the port of Aarhus and delivered to the exporter’s terminal in Vejle. The exporter loaded the goods into the container himself and connected the power supply. The container then remained at the terminal over the weekend. The container had not been set at 3°C, but at -20°C, which caused damage to the cheese products in the container. Damage was calculated at 696,258.67 Danish kroner.

On this basis, the exporter brought an action against T for damages. T denied responsibility, citing that the booking confirmation for the order was given by T as agent on behalf of T1. T further denied that he had undertaken to adjust the temperature of the empty containers before they were presented to the exporter for loading. T simultaneously filed a request for recourse against D, who sued S with a request for release.

Decision

The Maritime and Commercial Court concluded that as co-contracting party within the meaning of the framework agreement, T was liable for the damage that occurred, and that T’s booking confirmation could not change this.(1)

The Court further held that T should be regarded as having undertaken that the empty containers presented to the exporter would be regulated at 3°C.

The Court then concluded that D should hold T partly unharmed from the claim in the case, as the Court stated the following:

The court finds that the explanations given must be understood as meaning that the actual temperature setting of the containers had to be carried out by the terminal staff following the instructions of T, while the subsequent temperature control was the responsibility of [D].

The court finds that [D] never educated [S’s] drivers to check if the temperature was correctly set at the time of delivery. In this context, and with reference to the fact that [D] had undertaken to control the temperature setting, the missing

vessel temperature control is assigned to [D] as at least gross negligence.

The court ultimately acquitted S, finding that S was not liable to D, because D never asked S’s drivers to check whether the temperature was set correctly at the time of delivery:

The court then finds that [S] neither could nor should have known there was a

agreement between the exporter and [D] that the driver who received the container at [terminal] must perform a temperature check as part of the delivery.

Comment

It emerges from the judgment, in accordance with settled case law, that it is incumbent on the party who claims to have contracted only in the capacity of agent to prove that the co-contracting party was aware of it at the time of the conclusion of the contract. Where there is a framework agreement stipulating that a party has a position of contractual carrier, this legal position cannot be changed (unilaterally) by the carrier by issuing a booking confirmation on behalf of another party and indicating that he acted as an agent.

In its judgment, the Court ruled that a party which has undertaken to carry out a temperature control of an extinct and empty container and which fails to transmit the necessary instructions to its subcontractor to carry out the control may be considered to have acted with gross negligence.

Finally, the judgment did not explicitly specify whether a carrier who places equipment (truck and driver) at the disposal of a co-contracting party who himself instructs the driver directly as to the performance of the tasks may incur liability as as carrier. It can be said that in such cases the carrier does not occupy a position of performing carrier, since the agreement between the contracting party and the carrier cannot be considered in substance as a transport agreement based on a promise of carry out the transport, but can be considered as an agreement to transfer control over equipment and personnel.

For more information on this subject, please contact Jesper Windahl to WSCO Advokatpartnerselskab by telephone (+45 3525 3800) or by e-mail ([email protected]). The WSCO Advokatpartnerselskab website can be accessed at www.wsco.dk.

Endnotes

(1) Judgment of the Maritime and Commercial Court in case BS-23642/2020-SHR.

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