On June 29 2016 the Supreme Court applied the previous International Merchant Shipping Act 1949 to establish which party was responsible for damages incurred during the unloading of goods.
A refrigerated container of frozen fish was unloaded from a ship and transported to a port unloading area. However, the container was not unloaded in the refrigerated load area, but rather the dry products area. As such, it was not connected to the power grid, which caused the goods to spoil and resulted in €55,000 worth of damages.
The case centred on whether the transport of goods from the ship to the dry products area constituted land or maritime transport. The legal consequences of this decision were significant: in accordance with the legislation applicable to the case, if it was determined to be land transport, the damages claim would be subject to a prescription period of one year. Conversely, if it was determined to be maritime transport, the claim would be subject to an expiration period of one year.
An expiration period, which begins when the action is performed (ie, the filing of a damages claim), cannot be interrupted, whereas a prescription period will be interrupted by a private or ‘friendly’ action that occurs before the parties appear in court.
In this case, the time between the carrier’s delivery of the goods to the fish wholesaler and the filing of the lawsuit was more than one year. However, during this time, the fish wholesaler sent a letter to the shipping company claiming compensation for the damages that the shipping company had caused to the transported goods.
The maritime transport service was contracted under the bill of lading regime prescribed by the previous International Merchant Shipping Act 1949.(1) The act incorporated the Brussels Convention 1924 (modified by the Brussels Protocols 1968 and 1979 (the Hague-Visby Rules)), which was ratified by Spain.
The Supreme Court confirmed the provincial court’s decision that the unloading of cargo in an inadequate dock is part of the maritime transport phase and does not constitute land transport. As such, the claim was subject to an expiration period, as prescribed in the Brussels Convention and the Merchant Shipping Act 1949.
Conversely, a prescription period applies to transport of goods by land contracts under Article 952.2 of the Commerce Code and Article 79 of Act 15/2009.
The Supreme Court held that the damages had occurred when the carrier unloaded the goods in the wrong unloading area (ie, not the one equipped for refrigerated containers), which meant that the container could not be connected to the power grid, causing the transported goods to spoil. Therefore, the key event in relation to the damages (choosing the wrong unloading area in which to unload the container) corresponded to the maritime phase of the transportation, as it had occurred “in the time between the load of the goods and its unloading”, even though the damages had occurred once the container had been unloaded.
For this reason, the damages claim against the carrier was subject to an expiration period, which was not interrupted by the letter claiming compensation. As a result, the fish wholesaler’s claim for damages was rejected.
Although it was the shipping company’s responsibility, it is common sense that a refrigerated container of frozen products should not be disconnected from the power grid either on land or on board a ship.
If the existing Merchant Shipping Act – specifically, Article 286 – had been applied, it would have been clear that the claim was not subject to a prescription period. If a prescription period had applied, the period would have been interrupted and a new term would have had to have been calculated.
For further information on this topic please contact Eduardo Zalvide or Pedro Abad at San Simón & Duch by telephone (+34 96 395 20 67) or email (firstname.lastname@example.org or email@example.com). The San Simón & Duch website can be accessed at www.lsansimon.com.
(1) This act was abolished by the Act on Merchant Shipping (14/2014), published in the National Gazette on July 25 2014, but was in force during the facts of this case, which unfolded in 2009 and 2010.
Pedro Abad y Eduardo Zalvide