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Cargo owners, freight forwarders and CMR carriers – what to do in case of claiM

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A recent judgment by a Dutch Court of Appeal (Hertogenbosch Court of Appeal, 16 March 2021) addressed the subject of the relationship between cargo owner and road carrier when a freight forwarder negotiated the shipping contract on behalf of the cargo owner.

When a cargo owner appoints a freight forwarder the latter operates as an agent entering contracts of carriage on behalf of its principal. Typically, freight forwarders are not liable to the cargo owner in case of loss, damage or delay in transit. In such cases the principal must collect any damages directly from the carrier.

Under the Convention on the Contract for International Carriage of Goods by Road (also known as CMR) a freight forwarder can enter a contract of carriage under its own name as a shipper, meaning that only him and the carrier are parties of such contract. Thus, the cargo owners have not any claim rights against the carrier.

In order to obtain a claim rights a cargo owner should ask a declaration for its benefit issued by the freight forwarder stating that there is a contract relationship between principal and agent and that the contract of carriage has been concluded on principal’s behalf and interest.

The Dutch decision considers these specific issues:

  • how the cargo owner obtains the freight forwarder’s right against the carrier;
  • whether the freight forwarder must protect the time bar its rights against a carrier on behalf of the cargo owner.

Regarding the first topic, generally, the cargo owner/principle obtains the claim right against the carrier notifying the freight forwarder that it wishes to bring legal action against the carrier exercising directly the right arising from the contract of carriage. The freight forwarder/shipper must issue a declaration stating the transfer to its principal of all right under the contract of carriage. Then such declaration must be presented by the cargo owner in court.

As held by the Dutch Court of Appeal, under Dutch Civil Code, the principal obtains the rights of action against the carrier with the first notification to the freight forwarder. After that the cargo owner becomes legitimate to seek compensation directly against the carrier engaged by the freight forwarder, since the written statement by the latter is not a constitutive requirement.

Last crucial subject concerns the time bar. Under CMR Convention there is a one year limitation period to file a claim or suspend/protect it. Thus, the freight forwarder must protect this limitation period, failing to do so its principal will not be able to exercise its right. In this regard, concurrently, the cargo owners should clearly instruct its agent in respect of the suspension/interruption of the time bar.