Simonsen Vogt Wiig (partner Frithjof Herlofsen) successfully acted on behalf of the contracting carrier (Pentagon Freight Services) and its insurer (Gjensidige Forsikring ASA) against inter alia the owner of the damaged goods (Nexans Norway AS).

Long awaited clarification on the carrier’s limitation of liability for multimodal transport

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The MV “Norrland” – Nexans Norway AS and others v. K+N v. Pentagon Freight Services/Gjensidige Forsikring ASA. Long awaited clarification on the construction of the CMR Convention Article 2 - on the applicable regime for the carrier’s limitation of liability for multimodal transport.

The Norwegian Supreme Court rendered 14 May 2019 a principled decision on liability issues for multimodal transport. The judgment has wide-ranging relevance for the maritime sector (HR-2019-912-A). Simonsen Vogt Wiig (partner Frithjof Herlofsen) successfully acted on behalf of the contracting carrier (Pentagon Freight Services) and its insurer (Gjensidige Forsikring ASA) against inter alia the owner of the damaged goods (Nexans Norway AS).

The main issue before the Supreme Court was if the carrier’s liability for cargo damage occurring under the sea transit of a multimodal transport, was subject to the Norwegian Carriage of Goods by Road Act (the CMR Convention) or the Norwegian Maritime Act.

The case concerned a transport of a ROV-cable (cable drum) from Stavanger, Norway to Wallsend, outside Newcastle, England. The contractual carrier had issued a CMR waybill to cover the multimodal transport from Norway to England, which included both the road and the sea transport. The cable drum was carried on an open semi-trailer. The MV “Norrland” met heavy weather during the sea transport, which resulted in the cargo moving from the semi-trailer and onto the adjacent trailer. The cargo became a total loss.

The contractual carrier offered a compensation calculated on the basis of the Hague Visby limitation as incorporated into the Norwegian Maritime Code – i.e. 2 SDR per kg. This was rejected by the cargo owner, which claimed full compensation pursuant to the Norwegian Carriage of Goods by Road Act.

The cargo interests were successful in the District Court and the Court of Appeal. However, the Norwegian Supreme Court found that even if the contract of carriage as such was subject to a CMR letter, the exception provisions in Norwegian Carriage of Goods by Road Act Section 4, 2 paragraph apply. The exception afforded by the said provisions is based on the CMR Convention article 2.

The contractual carrier substantiated before the Supreme Court that the subject damage (1) was not caused by an act or omission of the carrier by road; and that it (2) was caused by some event which could only have occurred in the course of and by reason of the sea carriage.

The Supreme Court held that it was clear that the cable drum was inadequately secured to the semi-trailer due to the fault of the road carrier. However, the Supreme Court held that securing a cargo for sea transport is a specialist operation and must be carried out in accordance with applicable provisions and routines. The vessel owner cannot rely on the road carrier’s securing on an open trailer, and must therefore perform independent controls and perform adequate and necessary securing operations, in accordance with the general distribution of liability provisions in the Norwegian Maritime Act Sections 274 and 275 as well as Section 253.

The Supreme Court based its decision on inter alia on the German Federal Supreme Court’s decision (Bundesgerichtshofs decision of 15 December 2011) and held that the damage was a result of the listing of the vessel due to rough sea which was an event which could only have occurred in the course of and by reason of the sea carriage. Thus, the Supreme Court concluded that the carrier’s liability for the cargo damage was subject to the provisions of the Maritime Code.