ROAD CARRIER
LIABILITY FOR DELAYED EXHIBITION GOODS
Contributed by
Castrén & Snellman Attorneys Ltd
February 07
2007
Facts Decisions
Upholding a March 2005 decision of the Helsinki District Court, in
December 2006 the Helsinki Court of Appeal held (Decision 3309) that
a carrier that did not carry to an exhibition in Moscow goods
delivered by the consignor to the carrier's warehouse in Espoo had
the right to limit its liability for damages in accordance with
Section 35(1) of the Contracts of Carriage by Road Act (equivalent
to Article 23(5) of the Convention on the Contract for the
International Carriage of Goods by Road).
Facts
Carriage customer A
entered into a contract of carriage with carrier B, in which B
undertook to transport A's exhibition goods by road from Espoo to
Moscow and back. On October 24 2003 A delivered the exhibition goods
to B's warehouse, from where B intended to transport the goods that
evening to an exhibition to be held in Moscow from November 3 to
November 6 2003. However, B's warehouse staff made a mistake, which
resulted in the Moscow truck being loaded with the wrong goods and
A's goods being left in B's warehouse. The warehouse staff's mistake
was partly due to A having delivered the goods to B later than was
agreed, resulting in A's goods not being dealt with by B's usual
goods handling system. On
November 1 2003 A noticed that the goods delivered to the exhibition
in Moscow
were not its exhibition goods. Immediately on receiving notice of
the error, B began to arrange the loading of A's goods onto a
transport that was leaving for Moscow that day. However, A notified
B that it was too late to send the goods to the exhibition and gave
notice that it was dissolving the contract of carriage with B as a
result of the mistake.
B admitted that the
damage was caused by its negligence and offered to pay A the freight
from Espoo to Moscow as compensation for the delay. However, A was
not satisfied with this offer and claimed full compensation from B
in an action in the Helsinki District Court.
A's primary claim
was that B could not limit its liability by invoking the provisions
regarding delay, because B did not carry the goods referred to in
the contract of carriage to Moscow. In A's view, B's carriage was
not delayed, but rather had not been carried out in the manner
defined in the contract of carriage. As the goods were not missing,
reduced or damaged, A argued that the question of fault was not
covered by the act and B's liability should be determined in
accordance with the general principles of contract law. According to
this view, B would have to compensate A in full for the damage
caused.
A's second claim
was that if the provisions of the act concerning delay damage were
applicable to the case, B's actions were grossly negligent and
therefore B would not be entitled to limit its liability.
In addition, A stated that if its primary and secondary claims were
inapplicable to the case, B should be ordered to compensate the
return freight of the exhibition goods in addition to the outgoing
freight.
Decisions
The Helsinki
District Court dismissed A's primary and secondary claims.
Regarding A's
primary claim, the Helsinki District Court deemed that the delay
damage provisions of the Contracts of Carriage by Road Act applied
to the situation because the act does not require that the actual
road carriage have begun. In the district court's view, the fact
that A had notified B that it was dissolving the contract of
carriage before B had started the actual road carriage did not mean
that after this point the damage was something other than delay
damage.
The district court
also dismissed A's secondary claim that B had caused the damage
through gross negligence. It stated that in Finnish legal practice
on road carriage, 'gross negligence' has been considered to mean
very serious carelessness bordering on willfulness, thus indicating
an unscrupulous and reckless attitude. The district court referred
to Supreme Court Decision 2001:17, which held that, when deciding a
question of liability, attention must be paid to (i) the carrier's
awareness of the risk of damage and attitude towards the risk, and
(ii) the kind of behaviour which may be required of a professional
and careful carrier. Even though B's warehouse staff had acted
negligently, the district court did not consider B to have taken an
indifferent attitude to the risk of damage because B's goods
handling system was intended, in normal circumstances, to guarantee
that no loading mistakes occur. Thus, the district court took into
account the fact that, due to A's own actions, A's goods never fell
within the scope of B's usual goods handling system.
However, the
district court allowed A's third claim. It held that the contract of
carriage between A and B was for carriage from Espoo to Moscow and
back, and therefore the amount of compensation for delay damage was
the total cost of the outgoing and return freight.
A and B both
appealed the district court's decision to the Helsinki Court of
Appeal to the extent that the decision was not in accordance with
their claims. The Helsinki Court of Appeal upheld the district
court's decision.
(In’tl Law Off.)