SCL specifies CMR provisions regarding process of carriage and value of cargo

Lithuania: bnt Vilnius successfully represented the client’s interests in a case involving a carrier and insurer’s liability under the CMR Convention.

The Lithuanian Supreme Court found in favour of client of bnt Vilnius by ruling that in the case of damage to the cargo, the carrier’s insurer has an obligation to pay for loss under the insurance contract through which the carrier’s liability is insured under the CMR Convention. Here the fact that the cargo that was damaged was loaded in a semi-trailer detached from the trailer is irrelevant.

A fish sales company in Germany with a unique online fish-tracking system entered into a contract of carriage with a Lithuanian transport company. The liability of the Lithuanian company was insured under the CMR Convention by one of the biggest insurance companies in Lithuania. The insurance contract contained a list of specified trailers by which the carrier intended to carry cargoes and the list of planned types of cargo (e.g., cargoes with temperature monitoring). The cargo was carried by trailer from the list of the insurance contract and with a refrigerated semi-trailer (not included in the list). The detached semi-trailer with the cargo inside was left at the Kiel terminal; a fire broke out at the terminal. Despite this, the cargo was transported by ferry to Lithuania. The carrier and its insurer refused to compensate for the damaged cargo. The insurance company claimed (1) that it had no obligation to reimburse damage, since the cargo was detached from the insured trailer at the moment of damage, (2) that the policyholder had failed to take reasonable measures to mitigate (eliminate) the damage and (3) that the German company had incorrectly calculated the value of the cargo. The courts supported the position of the German company, represented by bnt Vilnius and rejected these arguments, because:

  • according to the CMR Convention, «continuous transportation» means that carriage also includes stages when the cargo (even in a semi-trailer) is loaded on a ferry. At this point it was of no importance whether the semi-trailer was detached from the trailer. The conception of “carriage” addresses not the process of transportation, but the carrier’s disposal of the cargo. This also includes cases when the cargo is physically transported or stored not by the carrier itself, but by a chosen third party;
  • the market value of the cargo corresponds to the acquisition value, unless there is proof to the contrary. According to this value, it is possible to calculate the amount of compensation in the light of the CMR Convention.

Source: Decision of the Lithuanian Supreme Court of 3 April, 2015, No. 3K-3-969/2015

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