Cefor – Marine Insurance
Education, Copenhagen 22-23 April
2014
Henrik Thal Jantzen
KROMANN REUMERT  CVR.NR. 62606711  REG.ADR.: SUNDKROGSGADE 5  DK-2100 KØBENHAVN Ø
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 (oncarriage, 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