Claims & Liability

Consignee may Enforce I

If the loss of goods is established or if the goods have not arrived after the expiry of the period provided for, the consignee is entitled to enforce in his own name against the carrier, any rights arising from the contract of carriage. Presumptively, the person named as consignee in the consignment note, may enforce the contract of carriage. The consignee may sue in respect of delay or in respect of damage to or the loss of the goods.

The contract may be entered by the consignee personally, or by the consignor as his agent.  In this event, he may sue on foot of the contract and may also enforce the rights arising under the consignment note.  If the consignee is not party to the contract, he may nonetheless enforce rights arising from the contract of carriage, under Article 13 of the CMR.

Where the contract rights are created by the sender for the consignee, the general principles of contract law and agency apply.  If the sender is agent of the consignee, a variation may be binding on the latter.  He does not act as agent; the position is less clear.  In principle, vested rights should not be varied without his consent. A variation may arise from custom or practice, implied authority or estoppel in the particular circumstances.


Consignee may Enforce II

In cases where the contract is made between the consignor as principal and the carrier, rather than the consignee, the consignee may have rights under an implied contract.  When the consignee request delivery of the goods, the implied contract may be inferred with the carrier on the terms of the consignment note and the CMR.  The principle is established in the context of carriage by sea.  The principle is not without difficulties and is not as clearly established in common law legal systems.

The consignee may enforce rights against the carrier.  The CMR Convention restricts the extent to which the contract may be varied unilaterally by the consignor / sender, to the detriment of the consignee.

The consignee who avails himself of the rights granted, must pay the charges shown to be due on the consignment note. In the event of a dispute on the matter, the carrier shall not be required to deliver the goods unless security has been furnished by the consignee.

Under the CMR, the party entitled to claim compensation, is not necessarily the person who has sustained the loss. The generally held view is that the sender also retains the right to enforce against the carrier, although the CMR does not make specific provision in this regard.  The carrier, as a matter of first principle, should not be obliged to pay compensation twice.


Claimant and Property in the Goods

The customer party to the contract of carriage will generally be the sender, but will sometimes be the consignee.  A party to the contract is entitled to sue for breach of contract.  In some cases, the sender may enter the contract as agent for the consignee. At common law, there is a presumption that the owner is the person who has contracted with the carrier.  This follows from the principle that the owner is the person with the economic interest in the goods.

The carrier is entitled to assume that the property in the goods has passed to the consignee.  The most common position under international sale of goods contracts, is that the property passes to the consignee on delivery to the carrier.

Under domestic sale of goods legislation, the title to the goods presumptively passes at the time of making the contract or at the time they are appropriated and identified.  This will have occurred in most cases, prior to entrustment to the carrier.  It may occur at the moment of consignment, dispatch from the seller’s warehouse or other premises, or in some cases, earlier.


Vicarious Liability of the Carrier

A carrier may be vicariously responsible for its employees and agents.  The common rule is also reflected in the CMR.  The carrier may be liable, both under breach of contract principles or torts / civil wrong.  The contractual obligation is likely to be strict. There may be limits to liability in tort.

The employer / carrier is not vicariously liable for agents who are independent contractors. The carrier may be liable in negligence for his selection of a subcontractor. The carrier is vicariously liable for his employees’ acts or omissions, unless they are acting outside the scope of the employer’s business.


Limitation Period

The period of limitation for an action arising out of contract under the CMR is one year.  In the case of wilful misconduct or such default as in accordance with the law of the state which is hearing the case is considered as equivalent, the period of limitation is three years.

The period of limitation begins to run, in the case of partial loss, damage, or delay from the date of delivery.  In the case of total loss, it runs from the 30th day after the expiry of the agreed time limit. Where there is no agreed time limit, it runs from the 60th day from the day on which the goods were taken over by the carrier.  In all other cases, it runs from the expiry of a period of three months after the making of the contract of carriage.

The time limit applies to actions both by and against the carrier. Proceedings must be commenced within the relevant time limit (generally one year).  The commencement of proceedings is governed by the local law.  See generally the principles in relation to the statute of limitations.

There may be provision for further an extension of the period of limitation under national law.  Principles of waiver or estoppel may apply, if national law so allows.  Rights of action which become barred by lapse of time may not be exercised by way of counterclaim or set off.  However, a counterclaim may be allowed if its arises out of the same contract or transaction and is so inseparably connected with it, that one ought not to be enforced, without taking the other into account.


Notice of Claim and Suspension

A written claim suspends the period of limitation until such date as the carrier rejects the claim by notification in writing and returns the documents attached thereto.  If part of the claim is admitted, the period of limitation starts to run again only in respect of the part of the claim still in dispute.  Proof of the receipt of the claim, the reply and the return of the document rests with the party who relies on such facts.

The running of the period of limitation is not suspended by further claims.  The claim may come from a person who has reason to claim and against whom time might otherwise run.

The claim must be such as might be rejected by the carrier.  It is not enough to simply make a request.  There must be something in the nature of a demand.  A claim in writing should be supported by the relevant documents.  The request must be made to the appropriate person; otherwise it may not be effective.  This will generally be the carrier.  In other circumstances it may be an agent.


Place of Proceedings

The CMR makes provision in relation to legal proceedings arising out of carriage under the Convention.  It provides that the plaintiff may bring an action in any court or tribunal

  • of a contracting country designated by agreement between the parties;
  • within whose territory the defendant is ordinarily resident or has a principal place of business;
  • of the branch or agency through which the contract of carriage is made;
  • of the place where the goods were taken over by the carrier; or
  • of the place designated for delivery.

The claim may be taken in no other courts.

The relevant branch or agency is the one through which the contract was made.  Subsequent variations do not affect the position.  The principal place of business is the place in which the business is principally conducted, as opposed to the formal seat or registered office.

The contract of carriage may contain a clause conferring jurisdiction on an arbitration tribunal. The clause conferring competence provides that the tribunal shall apply the CMR convention.   The arbitration clause is governed by the law of the relevant contract.  The clause must require that the arbitraral tribunal applies the CMR. The consignee is bound by the arbitration clause in accordance to general principles.


Place of Proceedings II

The place for taking over the goods is the place where the custody and control of goods is transferred to the carrier in question.  It may be given to the carrier or to an agent.  The place designated for delivery is where it is intended to transfer the custody or control to the consignee.

The designation of a court between the sender and carrier, will generally bind the consignee, if it had notice of this nomination.  The consignee must have actual or at least constructive notice and knowledge of the designation.  He may be bound, if contract is entered by his agent.

The CMR allows action to be taken in any of the states mentioned.  The claimant has a choice of court.  If, however, the action is pending, no new action should be started between the same parties on the same ground, except when the order in the pending action, would not be enforceable in the state in which the new action is commenced.


Judgment

Where judgment is entered by a court or tribunal of a contracting state in an action arising out of CMR carriage, it becomes enforceable in each of the other contracting states, subject to whatever formalities those other states applies.  “Formalities” do not permit the merits of the case to be re-examined.

The above position applies to judgments after trial, judgments by default and settlements confirmed by court order.  It does not apply to interim judgments or awards of damages, in addition to costs against the plaintiff, who wholly or partly fails in his action.  The provisions do not expressly refer to arbitration awards. They may be separately enforceable under the arbitration convention.

Security for cost shall not be required in proceedings arising out of carriage under the convention from nationals of contracting states, resident or having their place of business in one of those countries.


Successive Carriers

There may be a number of successive carriers.  In such cases, there is likely to be a principal carrier and a number of subcontractors.  The legal relationship will depend to some extent on the practice in the relevant jurisdiction. The CMR provides that if the carriage is governed by a single contract, but is performed by successive carriers, each of them will be responsible for the performance of the whole operation.

A second carrier and succeeding carrier becomes a party to the contract of carriage under the terms of the consignment note, by reason of its acceptance of the goods and consignment notes.  The carriers may be jointly and severally liable. It will be liable for their own stage of the operation, but they may also be responsible for the performance of the entire operation. In the case of multi-modal transport, each carrier is responsible for performance of the whole operation.  However, the operations only apply to the relevant mode of transport, so that it would not apply to a subsequent seaborne phase.


Right of Action re Successive Carriers

The right of action is against the first carrier, the last carrier and the performing carrier.  The first carrier is the party who contracts with the seller.  He may subcontract all or part of the contract.  The performing carrier is the carrier who performs that portion of the contract in which the event causing the loss, damage or delay has occurred.

The last carrier is the one who delivers the goods to the destination. These provisions apply, notwithstanding that there may be more intermediate carriers.  Such carriers may be subject to rights on the part of other carriers, against who the claim is made.

The second or subsequent carrier is required by the CMR to enter his name and address in the second copy of the consignment note, which accompanies the goods.  This acts as evidence of the acceptance of the note for the above purposes by the successive carrier. However, this requirement is not precondition for the successive carrier’s liability.


Contribution from Others I

Where a carrier has compensated the consignor or a consignee, he may have a right of recourse against other carriers under the CMR.

National legislation in relation to contribution and indemnity between jointly liable parties, does not apply under the CMR.  CMR makes special provisions which apply in place.

There may be a second or consequential recourse action may be taken.  A carrier who has paid compensation in compliance with the CMR, may be entitled to recover all or part of the compensation paid, together with interest, all cost and expenses incurred by reason of the claim, from other carriers who have taken part in the carriage.  The other contractors must be principal or successive carriers. Compensation must be paid, before recourse action may be taken.

No carrier against whom a claim is made under these provisions, shall be entitled to dispute the validity of the payment made by the carrier who makes the claim, if the amount of the compensation is determined by judicial authority, after the first mentioned carrier had been given due notice of the proceedings and afforded an opportunity of entering an appearance. The maximum amount recoverable is that paid together with interest.

The claimant for contribution must prove that loss, damage and delay occurred while the goods were in the hands of the defendant. If goods are accepted without reservation, there is a presumption that they are in good conditions and that the numbers and markings correspond with the statement in the consignment note.

The carrier responsible for the loss and damage shall be so solely liable for the compensation paid by himself or by another carrier.  The carrier responsible is the carrier on whose stage of the journey the loss, damage or delay happened, or is presumed to have happened. If the carrier concerned is insolvent, there is provision for apportionment between other carriers.


Contribution II

Where loss of damage has been caused by the action of two or more carriers, each of them shall pay an amount proportionate to its share of the liability.  If it is impossible to apportion the liability, each shall be liable in proportionate to the share of the payment of carriage which is due to him.  If it cannot be ascertained to which carrier’s liability, the loss or damage is attributable, the amount of compensation is to be apportioned between all the carriers on the above basis.

If one of the carriers is insolvent, the share of the compensation due from him and unpaid by him shall be divided amongst the other carriers, in proportionate to the share of the payment for the carriage due to them.

A carrier who seeks to take the court’s proceedings may make his claim before the competent court or tribunal in which one of the carriers concerned is ordinarily resident has his principles place of business or the branch or agency through which the contract of carriage was made.  All of the carriers concerned, may be made defendants in the same proceedings.


References and Sources

Convention and Legislation

Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 19th day of May, 1956

Protocol to the Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 5th day of July, 1978

Protocol to the Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 27th of May 2008

International Carriage of Goods by Road Act, 1990.

Books

International Carriage of Goods by Road: CMR 6th Edition ‎ 2014 Malcolm Clarke

C.M.R. : Contracts for the International Carriage of Goods by Road 3rd Ed 2014  Donald James Hill

The Law of Transport and Road Haulage (1999) J. Canny  (Author)