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Carriage contract and the obligation to pay late return charges on containers

  • Italy
  • Litigation and dispute management

02-03-2018

Our law firm successfully assisted an Italian forwarding agent (DHL Global Forwarding Italy) in defending against the claim of a carrier for the payment of late return charges on containers involved in a shipment.

Background

A French company (the sender) appointed an Italian forwarding agent (DHL Global Forwarding Italy) to contract for the carriage of certain goods by sea from the port of loading: Genoa, Italy to the port of discharge: Lagos, Nigeria. Given the nature of the goods (mechanical equipment) containers were used to transport them.
The forwarding agent contracted with the sea carrier, Ignazio Messina & C., to transport the goods. The containers were made available to the sender by the carrier (the containers were the carrier’s property). The carrier then issued a bill of lading where a fee per day would be charged for late return of the containers.
As the ship arrived at Lagos, the Nigerian consignee refused to take delivery of the cargo, the goods were subsequently sold by auction, and the proceeds of the auction were used to pay off local duties, storage expenses, and port charges. The empty containers were not returned to the carrier for two years after delivery of the goods, and the carrier commenced proceedings against the forwarding agent before the Court of Genoa for the late return fees on the containers.

The key issues

The carrier alleged that the carriage contract had been executed by the forwarding agent in its name (although on behalf of the sender) and the bill of lading clearly included a fee per day in case of late return of the containers. Since the provision of the containers was ancillary to the carriage contract, the forwarding agent was under a duty to timely redeliver them and therefore required to pay damages if it breached that duty, according to the carrier.
The forwarding agent argued that it had duly complied with all the obligations arising from the carriage contract, inter alia by fully cooperating with the carrier in its efforts to recover the missing containers. However, pursuant to certain (not unanimous) decisions of the Italian Supreme Court, the use of the containers was subject to an entirely separate agreement and therefore was not covered by the carriage contract.
The forwarding agent also joined the French sender as a party to the proceedings, seeking indemnity against the carrier’s claims.

The decision

By a judgment rendered in January 2018 the Court of Genoa dismissed the claim of the carrier against the forwarding agent.
The Court agreed with the arguments of the forwarding agent and held that the use of the containers in the performance of a carriage is subject to a lease contract. The lease of the containers was a separate agreement from the carriage contract even though the two are closely related.
The Court also held that, generally speaking, a forwarding agent has no duty to enter into a lease agreement for containers used in a carriage contract. However factual determinations must be made in a given case as to whether the forwarding agent has been entrusted with such a task.
In the case at issue, the Court held that the lease agreement for the containers was entered into directly between the sender and the carrier since (i) the sender had been clearly designated as shipper in the bill of lading, (ii) the measures of the goods to be stored in the containers had been communicated by the sender and (iii) the carrier had taken delivery of the “sealed” containers from the sender.
The carrier was held liable to pay legal costs, including attorney’s fees.