CMR (Convention Merchandises Routers) Convention has an important position in regarding of carrier’s limited liability ragulated in the international carriage of goods by land. States have become parties to this convention in order to meet the common ground in the disputes about the transportation of goods by land, which are likely to arise between them. The main topic of this article is the carrier’s limited responsibility in road transport between the countries which are parties to the CMR Convention. In this article, firstly CMR Convention and its content are explained. Afterward limited liability of the carrier and compensation requested in cases where the carrier is responsible are discussed. Finally, cases, where the carrier cannot benefit from limited liability, will be explained.
Content and Scope of the Convention
The implementation of the convention depends on three main criteria: loading place and place of delivery must be different from each other, one of these countries must be a party to this convention and goods must be transported by road vehicle for a fee. If the loading place and the place of delivery are the same, CMR Convention does not apply to the legal dispute in question but the law of the country applies to the dispute instead. Nationality or the country of residence of the parties are not important for the implementation of the convention. The important thing is that the place of loading and the destination are different. According to CMR article 1/4, this Convention shall not apply to carriage performed under the terms of any international postal convention, funeral consignments, and furniture removal.
It is also fruitful to refer to the second article of the convention for a better understanding of the topic. CMR article 2 is about multimodal transport. The article states if there is a single contract between parties for multimodal transportation, the carrier shall be responsible for all of the transportation on the conditions that the transportation modal should be changed before the cargo is unloaded and the loading place and the place of delivery should be different
If the location at which the load is damaged is uncertain, the carrier will be liable according to the provisions of the CMR. If the location is known and the damage has occurred at the time of changing the modal, the liability is determined according to the carrier’s negligence. If the carrier is negligent, the provisions of the CMR are not applicable and the liability will be determined in accordance with the law of the relevant modal. If the carrier is negligent, the provisions of the CMR regarding the liability of the carrier will be applied. If a conflict is not regulated in the CMR and the parties have not determined the applicable law, which law should be applied to the dispute is determined according to the second paragraph of article 29 on the International Private and Civil Procedure Law.
Article 4 of the CMR states that the contract of carriage is confirmed by the issuance of a transport document which is proof (Frachtbrief qualification). Namely; The contract of carriage is already validly established, the bill of exchange is only a document showing that this contract has been established and exists. For this reason, the loss or irregularity of the transport document will not raise a question regarding the existence or validity of the transport contract. In article 9 of the CMR, the evidential feature of the transport document is emphasized. Accordingly, the consignment note provides evidence for the conclusion of the contract, the conditions of the contract, and the receipt of the cargo by the carrier, provided that both parties have signed it. (Similar to Turkish Commercial Law art. 858). There are also matters where the transport bill constitutes presumption. It is presumed that the goods and the package are in good condition at the time of receipt by the carrier, provided that the transport document is signed by both parties, and that the numbers, signs, and numbers written on the transported package comply with the records in the transport note and that the weight of the goods is in accordance with the records in the bill of exchange. In terms of the first two presumptions enumerated, the presumption of the transport bill will depend on the existence of the reservation specified in Article 8. The carrier has some control obligations at the time of receiving the cargo. If the carrier makes a reservation during this check, the consignment note will not constitute a presumption. However, in terms of the last presumption, if the carrier is willing to carry out the inspection, this inspection will have to be done at the request of the sender.
The consignment note is issued in 3 copies as stated in Article 5. It is signed by the sender and carrier. It does not matter who issued the bill of lading. The first copy is given to the sender (exporter), the second goes with the cargo (consigned, received), and the third is kept by the carrier. If the cargo is delivered, all three of them will have a signed document and these three people can file a lawsuit.
Finally, in order to avoid confusion regarding the consignment note, we should say that a transport document does not mean the following documents: a truck carnet, identification document, commodity note, and valuable paper.
CARRIER AND CARRIER’S LIMITED LIABILITY
The Concept of Carrier
Before moving on to the limited liability of the carrier, it is useful to mention who is named as the carrier. In terms of the contract of carriage of goods, the carrier can be defined as ‘the person who promises to transport the goods personally or through their agent to the sender who wishes to have the goods transported for a fee. In addition to the transportation of the goods, the carrier also has a responsibility in terms of protecting the goods against dangers.
Carrier’s Limited Liability
In order for the liability of the carrier to be in question, the carrier must have a fault in case of loss of cargo, damage to the cargo, or delay of the cargo. Here, we will first explain the concepts of loss, damage, and delay.
The Concept of Loss
In case of loss, it becomes impossible for the goods to be delivered to the receiver for some reason. In this case, the goods may be destroyed, burned, lost, broken, or corrupted, and may be delivered to someone else in a way that is unlikely to be recovered by the right holder.
It is necessary to examine the loss in two divisions as a total loss and partial loss. There is no doubt that nothing can be delivered to the sender in case of a complete loss. Partial loss includes an item that is delivered incompletely or with a decrease in weight or quantity. It is necessary to enrich the explanation of the concepts of total loss and partial loss with a few examples. The destruction of an item by burning is one of the simplest examples of total loss. There may be some situations that need to be underlined here. For example; If a chess set’s pawn is delivered incomplete, it is a total loss. In other words, if there is unity in terms of the item to be delivered and the whole set without the missing piece loses its function, nothing is deemed to have been delivered. Again, if the repair cost of the refrigerator delivered in the same way will cost more than its value, it is necessary to talk about a total loss here. The fact that 10 pallets of oranges were delivered with 2 pallets is also an example of partial loss. The amount of loss is important in terms of the basis of the carrier’s liability.
It would be correct to include a case of complete loss here, which does not have a clear provision in the CMR but is encountered in practice. In this case, which is called economic loss, the cargo has been delivered in a good condition but the cargo actually damages the economic situation of the sender. The receiver suffered a loss from the profit due to the delay. For example; A florist ordered tulips from the Netherlands to arrive on February 13, but the tulips were delivered to the florist on February 15. The florist’s profits from selling the tulips on February 14 will be greatly damaged so nothing will be deemed to be delivered.
Loss of goods can also be mentioned in cases where the goods reach the point to be delivered late or not at all. This issue is regulated in CMR article 20. According to this provision; If there is an agreed period of transportation, within 30 days following the end of the period, if not agreed, within 60 days from the delivery of the goods to the carrier, the loss of the transported goods will occur.
The Concept of Damage
When we talk about the concept of damage, the first thing that comes to mind should be “loss of value”. Damage means the goods are in a condition different than what was received by the carrier. Damage does not have to occur only in appearance. It is not necessary that the damage is always irreversible. Damage is considered if there is a large amount of expense to be incurred for the return. Rather than exemplifying the existence of the damage, it would be more accurate to evaluate it in accordance with the concrete event.
Loss of value without damage to the goods is not considered within the scope of CMR.
The Concept of Delay
Another situation where the liability of the carrier is in question is the delay situation. There is either a time agreed between the parties (fixed time) or a time period (reasonable time) that the parties do not agree on and can be determined according to the characteristics of the carriage.
The route to be determined by the carrier does not have to be the fastest route to reach the receiver. As a rule, the carrier should choose the safest route for the cargo. If a provision is made regarding the arrival time on the transport document (fixed time), if the special delivery day is specified, the carrier must reach the consignee on that day. Delivery on days after this specified day is considered a delay.
While explaining the delay, it is necessary to mention “economic loss”. Exceeding the specified or reasonable delivery time may result in damage to the consignee’s property, and no damage to the goods. This damage also covers the loss of profit of the receiver.
The liability of the carrier starts from the moment the cargo is left to the protection and custody of the carrier for transportation (the carrier receives the goods, and the possession is transferred to the carrier) and ends with the delivery of the cargo to the consignee. The goods are not deemed to have been delivered until the right of disposal on the goods is provided to the sender (right owner). This is a condition for valid delivery. Since the liability will begin as soon as the goods are received by the carrier, the fact that the transportation has not been started and the goods are damaged during this period will not relieve the carrier from liability.
CMR article 17 paragraph 1 provides for the liability of the carrier. According to this provision; The carrier is responsible for the partial or total loss and damage caused by the cargo from the moment it receives it until it is delivered. Paragraphs 2 and 4 of the same article are the provisions that the carrier will use to avoid liability. CMR article 17/2 regulates one of the cases where the carrier cannot be held responsible: ”The carrier shall, however, be relieved of liability if the loss, damage or delay was caused by the wrongful act or neglect of the claimant, by the instructions of the claimant given otherwise than as the result of a wrongful act or neglect on the part of the carrier, by the inherent vice of the goods or through circumstances which the carrier could not avoid and the consequences of which he was unable to prevent.” In the 4th paragraph of the relevant article, one of the cases where the carrier can be released from liability is regulated. This article states that, in accordance with CMR article 18, paragraphs 2 to 5, the carrier cannot be held liable in cases where loss or damage arises from special risks that are the natural consequence of at least one of the conditions specified in the article (presumption of causation). To take a look at article 18 paragraph 2 of the CMR: ”When the carrier establishes that in the circumstances of the case, the loss or damage could be attributed to one or more of the special risks referred to in article 17, paragraph 4, it shall be presumed that the attributed risk was the cause. The claimant shall, however, be entitled to prove that the loss or damage was not, in fact, attributable either wholly or partly to one of these risks.” Article 18/2 has set forth the presumption of causation.
Special risks specified in CMR article 17 paragraph 4 “cases for which the carrier cannot be held responsible” (presumption of causation):
” (a) use of open unsheeted vehicles, when their use has been expressly agreed and specified in
the consignment note;
the lack of, or defective condition of packing in the case of goods which, by their nature, tend to wastage or to be damaged when not packed or when not properly packed;
handling, loading, stowage, or unloading of the goods by the sender, the consignee, or person acting on behalf of the sender or the consignee;
the nature of certain kinds of goods which particularly exposes them to a total or partial loss or to damage, especially through breakage, rust, decay, desiccation, leakage, normal wastage, or the action of moth or vermin;
insufficiency or inadequacy of marks or numbers on the packages;
the carriage of livestock.” (CMR 17/4)
Considering the high prices of transportation charges, the compensation for the damages that may occur has been tried to be placed on a reasonable basis and the liability of the carrier has been limited in order to encourage the land transportation process.
COMPENSATION THAT MAY BE CLAIMED IN CASE OF LIABILITY OF THE CARRIER
In case of loss or damage to the goods, delay due to exceeding the transportation period, a loss occurs and if this damage is caused by the carrier’s wilful misconduct, there will be an indemnity to be paid by the carrier. This compensation is calculated according to the provisions of CMR 23.
CMR article 23, paragraphs 1 and 2 regulate the compensation to be requested in case of loss, damage, or delay. According to CMR article 23/1, since the carrier is liable to pay compensation for the partial or total loss of the cargo, this compensation is calculated according to the value of the cargo at the place and time it is accepted for carriage. The meaning of this provision is that the value of the load at the place of loading will be taken as a basis while calculating the compensation. CMR article 23/2 explains how to find the value at the loading place. Accordingly, the value of the goods is determined according to the market price, not the invoice value. Paragraph 3 of the relevant article has set forth the upper limit of the calculation of the compensation. Compensation shall not exceed 8.33 units of unit per kilogram of missing gross weight. The unit, called the special drawing right, is a unit used only for calculating compensation in Transport Law. CMR article 23 paragraph 4 should also be mentioned here. According to this paragraph, the transportation fee, customs duties, and other payments paid for the carriage of the cargo are fully paid in case of total loss.
In cases where there is economic loss, which we mentioned above, the provision to be applied is CMR article 23, paragraph 5. In this case, if the right holder proves that the loss and damage were caused by economic loss, the carrier pays compensation for this loss and damage, not exceeding the transportation fee. Here, the upper limit is determined as the transportation fee, contrary to article 23/3 of the CMR.
The calculation of the compensation to be paid in case of damage is based on the CMR article 25. According to this article, the carrier pays the price for the depreciation calculated according to the market value at the loading place in CMR article 23, paragraphs 1 and 2, which we mentioned above. CMR article 25, paragraph 2, has determined the upper limit of the compensation in two different ways as the whole of the property is damaged and a part of it is damaged. Accordingly, the compensation to be paid by the carrier cannot exceed the amount to be paid if all of the goods were damaged, and the amount to be paid for the reduced part if a part of the cargo was damaged.
Competent Court and Authorized Court
In cases where the CMR is applied, the parties can determine one of the contracting parties as the competent court, or they can file a lawsuit in the courts of the country.
Pursuant to article 31 of the CMR, it is also possible to file a lawsuit in the courts of the following countries. Lawsuits cannot be filed in other courts except those listed here:
(a) The place where the defendant is ordinarily resident or has his principal place of business, or the branch or agency through which the contract of carriage was made,
(b) The place where the goods were taken over by the carrier or the place designated for delivery
Period of Limitation
Pursuant to article 32 of the CMR, the general limitation period for lawsuits is one year. However, this period is three years in cases that are accepted as wilful misconduct or fault equivalent to wilful misconduct.
This period starts on the following dates:
A) In cases where there is a partial loss, damage, or delay in delivery: since the delivery date
B) In case of a total loss: 30 days after the end of the agreed time limit, from the 60th day after the cargo, is received by the carrier, unless there is an agreed time limit.
C) In all other cases: the end of the three-month period following the conclusion of the contract
of carriage. The day the limitation period starts is not included in this period.
CASES WHERE THE CARRIER CAN NOT BENEFIT FROM LIMITED LIABILITY
The cases where the carrier cannot benefit from the limited liability provisions are regulated in article 29 of the CMR in two paragraphs. In these cases, the weight of the defect and the gross weight of the cargo cannot be determined. CMR article 29, paragraph 1, has examined the gravity of the fault in two cases: wilful misconduct (direct and indirect), and the fault is deemed equivalent to wilful misconduct (according to the law of the court). According to this article, if the impairment is caused by either of these two situations, the carrier will not be able to benefit from the provisions of limited liability. Article 29, paragraph 2 of the CMR stipulates that the provisions of limited liability will not be applied even if the offense of wilful misconduct and fault is deemed equivalent to wilful misconduct committed by the carrier’s representatives or employees during their duties.
The plaintiff who claims that the carrier should not benefit from the limited liability provisions is also obliged to prove it. The injured party must prove that the impairment was caused by the carrier’s behavior, that the carrier was aware of the gross negligence in the occurrence of the impairment and that this damage could occur, and that the impairment was born without loss or damage or delay.
If we talk briefly about the fact that the gross weight of the cargo cannot be determined, it should be mentioned here that; If the consignee has proven its damage but the carrier is not able to determine the gross weight of the goods, the carrier will not be able to benefit from the provisions of limited liability and will compensate all the impairment.
It will also be necessary to refer to Article 30 of the CMR here:
If the buyer receives the goods without checking their condition with the carrier or at the time of delivery where loss and damage are clearly visible, or within seven days (working days) of delivery in cases where it is not clearly visible, this will constitute a proof that his cargo has been received as stated in the consignment letter. Notice of loss or damage that is not clearly visible shall be made in writing.
After the goods have been checked by the buyer and the carrier, evidence that does not comply with the result of this check can only be accepted for loss and damage that is not obvious. However, the buyer must notify the carrier in writing within seven days (working days) after the inspection.
If the carrier has not been notified in writing within 21 days from the date the cargo is placed at the disposal of the buyer, no compensation will be paid for delays in delivery.
In case the carrier suffers impairment due to loss, damage, or delay of the cargo, it will be liable to indemnify the consignee. Inland transport law, the principle of limited liability of the carrier is valid. According to the principle of limited liability, the compensation to be paid by the carrier to the consignee has a separate calculation method and an upper limit, unlike the cases of loss, damage, and delay, according to the provisions of the CMR. Limited liability provisions shall not apply when the carrier’s wilful misconduct or fault is deemed equivalent to wilful misconduct, or when the gross weight of the cargo cannot be determined. In cases where the liability of the carrier is unlimited, the carrier will compensate the entire impairment.
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Legal Intern İrem TÜRKOĞLU
Att. Muhittin KURNAZ
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