The German Commercial Code dedicates in sections 452-452d a chapter to multimodal transport. Inrecent years a critical question has been whether cargo handling operations at a sea terminal constitute an independent portion of a multimodal transport contract, or whether such cargo handling is still part of the preceding or subsequent sea carriage portion, which generally provides a liability regime that is more favourable to the carrier.

Higher Regional Court (OLG) Hamburg, 19 August 2004

The freight forwarder ('Spediteur') assumed liability as a 'carrier' for the carriage of printing machinery packed in two large boxes first by sea from Bremerhaven (Germany) to Portsmouth (Virginia, USA), then by truck from Portsmouth to Durham (North Carolina, USA). At the start of the sea carriage in Bremerhaven, the two large boxes were placed on a 'Mafi-trailer', i.e. a special low-bed trailer with small wheels and suitable for heavy loads.

On arrival at Portsmouth, a tractor unit pulled the Mafi-trailer out of the vessel and drayed it about 300 metres on the terminal premises to a warehouse where the two boxes should have been loaded onto a truck. First, the safety belts, which secured the boxes on the Mafi-trailer, were loosened. Then, in order to facilitate the loading of the boxes onto the truck, the Mafi-trailer was being realigned to the truck at which point one of the boxes fell from the Mafi-trailer to the ground and suffered damage of some EUR 237,352.

The Higher Regional Court (OLG) Hamburg held that the drayage of the Mafi-trailer from the vessel to the warehouse and subsequent realignment of the Mafi-trailer to the truck were not part of the sea portion any more, but an independent portion of the multimodal transport because the Mafi-trailer was drayed on the terminal premises over a distance of several hundred metres and because the transfer of the boxes from the Mafi-trailer unto the truck required the use of a crane and special instructions by the shipper due to the weight and measurements of the boxes. As a result, the liability limit of 8.33 SDR per kilogram (pursuant to section 431(1) Commercial Code), not the lower 2 SDR per kilogram sea carriage limit, applied to the damage. Since the value of the heavy cargo did not exceed 8.33 SDR per kilogram, the court held the forwarder liable for the full extent of the damage.

German Federal Supreme Court (Bundesgerichtshof) 3 November 2005

The judgment of the German Federal Supreme Court (Bundesgerichtshof) of 3 November 2005 concerned the carriage of a geophysical field laboratory, which was built into a 30 foot special container. Carriage was first by sea from Tunisia to Genoa (Italy), then by road from Genoa to Germany. The court found that the laboratory had been damaged before the start of the road carriage, i.e. either during the sea carriage from Tunisia to Genoa or during terminal operations at Genoa.

The Federal Supreme Court upheld the finding by the Higher Regional Court Celle of 24 October 2002 (the court below) that the sea portion of the multimodal transport ended only with the loading of the 30 foot special container onto the lorry destined for Germany with the result that the carrier was liable for the damage to the special container pursuant to the lower liability limits under the sea carriage law.

The Federal Supreme Court rejected the concept that the handling operations of the special container at the Genoa sea terminal amounted to an independent portion of the multimodal transport. The court explained that unloading of the cargo from the vessel, storage and any handling on the terminal premises were characteristic of modern sea carriage by container where a very close link exists between sea carriage and cargo handling at the terminal. Referring to an article by Drews in the journal 'Transportrecht', the court also said that containers and their contents were not being examined straight after unloading from the seagoing vessel, but at the earliest when they leave the terminal at which point it is often difficult to ascertain whether the damage to the container occurred on board the vessel or during handling operations at the terminal.

The Court did not categorically exclude the possibility that cargo handling at a sea terminal could be deemed an independent portion of the multimodal transport, but merely found that this was not the case in situations (like the one in the case before the court) where 'no particular circumstances' exist.

German Federal Supreme Court (Bundesgerichtshof) 18 October 2007

In its judgment of 18 October 2007 the German Federal Supreme Court considered the carrier's appeal against the judgment by the Higher Regional Court (OLG) Hamburg of 19 August 2004 - see paragraph 'a)' above for the facts of the case and the judgment by the Higher Regional Court (OLG) Hamburg.

Although the drayage of the Mafi-trailer from the vessel to the warehouse covered a distance of 300 metres, the Federal Supreme Court held that it did not constitute an independent portion of the carriage. The court referred to its earlier judgment of 3 November 2005 and found the circumstances of this case did not justify a different verdict.

However, the Federal Supreme Court held the forwarder liable after all, because the court felt that

the damage to the large box during the realignment of the Mafi-trailer to the truck was already part of the operation of loading the box unto the truck. Thus, fine-tuning its judgment of 3 November 2005, the court held that the operation of loading the cargo onto the next means of carriage was already subject to the liability regime which applies to that next portion of carriage.

Incidentally, the forwarder missed his chance to limit his liability to the extent he intended, because the typeface of his bill of lading conditions did not sufficiently emphasize the liability limits (section 449(2) Commercial Code).

Conclusion

The German Federal Supreme Court in its judgments of 3 November 2005 and 18 October 2007 has consistently held that, in case of a multimodal transport contract under German law, cargo handling at a sea terminal does not amount to a portion in its own right. This consistency is welcome (incidentally, three of the five Federal Supreme Court judges were sitting in both judgments). While the court in its judgment of 3 November 2005 left open that terminal operations might have an independent status in 'particular circumstances (without explaining what precise facts could amount to such particular circumstances ), the judgment of 18 October 2007 makes no mention any more of such 'particular circumstances', and after this judgement it is now arguably even more difficult to envisage them.

The finding in the judgment of 18 October 2007 that the loading operations unto the next means of carriage are not part of the sea portion any more but are already the start of the next portion of the multimodal transport, is surely reasonable under the facts of the case. However, this approach might lead to less clear results under different circumstances. For instance when a big gantry crane unloads a container directly from the seagoing vessel unto a flatbed truck and the container sustains loss or damage in mid-air, it would arguably be more natural to consider the unloading/loading operation by the gantry crane as the end of the sea leg, rather then the start of the road portion. There might also be room for debate in a situation where the goods are first being transferred unto a road trailer but then kept in storage at the terminal on that road trailer.

Please use the following web link for the full text of the judgment by the German Federal

Supreme Court (BGH) of 18 October 2007 (in German language):

http://www.bundesgerichtshof.de/

(first go to Entscheidungen , when enter in Aktenzeichen the

text I ZR 138/04 )