At the end of last year, the English Commercial Court was asked to decide whether a forwarder could limit its liability in a case where the circumstances of the loss were unclear. Which party had the burden of proving what actually happened?

In this case, the forwarder had a contract with a mobile phone distribution company, under which it (the forwarder) could limit its liability to SDR 2.00 per kg if the phones were stolen, but had unlimited liability if they were negligently released. The phones disappeared from a warehouse: the forwarder thought that they had been stolen but could not provide an explanation one way or the other. It sought to limit its liability to SDR 2.00 per kg. The owners of the cargo argued that the burden of demonstrating what had happened fell on the forwarder, because it had promised that it would take care of the goods and would be liable in the event of their loss.

The judge held that the burden of proving what had happened to the goods fell on the forwarder. It had to demonstrate that the loss was caused by something other than negligent release: as a bailee, the forwarder had the goods in its care, and it was therefore in a much better position to state what had happened to them. As it could not say definitely that the cargo had been stolen, the forwarder was held fully liable for the missing phones.