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25 July 2007
In an interim judgment dated May 3 2006 the Rotterdam District Court ruled that (i) the Convention on the Contract for the International Carriage of Goods by Road (CMR), rather than the Warsaw Convention, applied in a dispute over cargo loss under a combined transportation agreement between AMD and TNT, and (ii) theft by TNT's personnel led to unlimited liability and to recourse to the three-year time limit for wilful misconduct under the CMR Convention. Had the court ruled that the losses occurred during transportation by air, the claims would have been subject to the two-year limit under the Warsaw Convention and would thus have been time barred.
The dispute involved losses in connection with six consignments of computer parts, five of which were transported overland from Holland to Belgium and then transported by air to various destinations. The sixth consignment was transported directly by air from the Netherlands to Turkey.
AMD argued that all five consignments were contracted to be transported from Hoofddorp in the Netherlands to Liege in Belgium, and then by air to various destinations. However, TNT maintained that the consignments were contracted to be carried by air, and that the road haulage component was subordinate to air carriage.
The Rotterdam District Court ruled that:
The court dealt with the five consignments separately. With regard to the two shipments to Italy, the court found that one or more employees of TNT had been involved in the theft of the computer parts during storage, which was part of the carriage by road from Hoofddorp to Liege. As a result, TNT's liability had to be assessed based on the CMR Convention and any defence based on the Warsaw Convention was dismissed. Therefore, TNT's liability was unlimited and the three-year time bar applied.
Similarly, with regard to the shipment to Ireland, the court based its decision on the assumption that the consignment was stolen or misappropriated with the involvement of TNT's personnel.
With regard to the two shipments to England, the court found that (i) there was insufficient evidence relating to the criminal investigations, and (ii) the fact that the method of operating was identical to that of the thefts in Italy and Ireland was insufficient to create a link with TNT's personnel. As a result, AMD was called upon to prove the alleged losses. The court ruled that if AMD could provide such proof and the losses occurred during carriage by road, TNT would be subject to the liability regime under the CMR Convention. In that case the claims would be time barred, unless AMD could prove wilful misconduct.
Therefore, the court found that TNT was (i) fully liable for the losses related to the shipments to Italy and Ireland, and (ii) potentially liable for the shipments to England based on Articles 3 and 29 of the CMR Convention.
The investigations into the losses involved extensive research in documents filed with the Amsterdam Criminal Court of Appeal, as well as cooperation with law enforcement agencies.
This decision is significant as (i) the Dutch courts have traditionally applied the one-year time limit (Article 32) and the liability limits under the CMR Convention, and (ii) it has become common practice for carriers to initiate proceedings in the Netherlands following theft during CMR transportation, rather than in other less favourable jurisdictions.
In addition, the decision is one of the few to deal with Article 3 of the CMR Convention. With regard to the two shipments to Italy, the court noted:
"Based on Article 3 of the CMR Convention, TNT is liable for the acts of its subordinates and/or employees. The thefts qualify as wilful misconduct within the meaning of Articles 29(2) and 32 of the CMR Convention. This leads to the applicability of the three-year time bar and to unlimited liability for TNT. The action has been initiated within the applicable time period."
Even though the Dutch courts have taken a slightly more even-handed approach in a couple of recent cases, the Netherlands has come to be regarded as a road carrier's heaven for legal disputes. In particular, two landmark Supreme Court decisions in January 2001 made it difficult to exceed the time limits (as was achieved in the TNT Case).
One of the main difficulties for cargo interests is to establish the burden of proof, as all the relevant information (eg, sophisticated tracking and tracing equipment) is in the hands of the carrier. However, in the dispute between AMD and TNT, the defence of wilful misconduct was invoked based on the complicity of the carrier's employees, thereby activating the three-year time limit provision under Article 32 of the CMR Convention. Therefore, the court had jurisdiction to hear the claims and TNT's liability was unlimited.
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