Can a ‘holländischer Trick’ be time-barred?

On 9 January 2023 the Dutch Transport Journal (nt.nl) published an article on the tripling number of cargo thefts during (road) transport in the Netherlands. On 2 September 2022 the Transported Asset Protection Association (TAPA) already published on the increase of high value cargo thefts in the EMEA region (tapaemea.org). The numbers quoted therein are alarming. As it concerns mainly high value cargo thefts, transport companies and their underwriters are generally eager to mitigate their loss as a result of cargo claims as much as possible. For this, there is the ‘holländischer Trick’.

‘holländischer Trick’

Whereas CMR’s treaty terms predominantly tend to be interpreted treaty-autonomously, the CMR has stipulated that for the interpretation of a ‘fault equivalent to wilful misconduct’, commonly referred to as ‘gross negligence’, in the sense of section 29 CMR the laws of the court or tribunal seized of the case apply.

Faced with the question of interpretation, the Dutch Supreme Court established an extremely high standard for invoking gross negligence on 5 January 2001 (SC 5-1-2001, NJ 2001/391 and 392) which has made it practically impossible for cargo interested to plea limitless liability as this standard has been widely (and virtually exceptionlessly) observed ever since. The Dutch Supreme Court’s justification for its strict approach is to strike an acceptable balance between; in short, costs, revenues, risks and insurability of transport (SC 18-5-2018, NJ 2018/376). Therefore, it is safe to conclude that generally carriers’ liability is limited along the lines of section 23(3) CMR. Add to this the fact that the Supreme Court has explicitly rejected liability for consequential damages, including excise and VAT damages, with reference to section 23(4) CMR (SC 11-10-2002, S&S 2003/61; SC 14-07-2006, NJ 2006/599).

It is paramount to note that in the other CMR-states another approach is taken as regards the interpretation of gross negligence as well as section 23(4) CMR. Without getting into depth of the underlying theory, the bottom line is that those states, especially Germany, have a more objectified reading of gross negligence. Fast forward conclusion: the likelihood of the carrier being held liable for full compensation and/or compensation of e.g. excise duties is significantly higher in other CMR-states than in the Netherlands.

This gave rise to a phenomenon, which the Germans (irreverently) refer to as the 'holländischer Trick'. In a sense, the Trick shows parallels with the ‘Italian (or Belgian) torpedo’. The Trick entails in most cases that shortly following a loss event of valuable cargo during CMR-carriage with a Dutch touch (in order to establish jurisdiction pursuant to section 31(1) CMR), the carrier(s) seek declaratory relief at the Dutch court securing their limited liability. Section 31(2) CMR provides that it is impossible to have two legal actions on the same subject matter pending at different courts between the parties. As such, a court in another country subsequently sought is no longer competent to rule on the matter. This leads to a race to court: first come, first served. Because a writ of summons can be relatively summary in the Netherlands and all parties involved in the transport can be included as co-defendants in the proceedings fairly easily and without cost consequences, 'the Netherlands' almost always wins this race.

The Germans have appealed against this phenomenon referring to it as ‘atypical manipulation’ of CMR rules. At first, the German BGH has held that a declaratory relief sought sooner in the Netherlands than German claim proceedings does not prevail and/or interrupt the German proceedings (BGH 20-11-2003, I ZR 294/02). Following European interference (CJ EU 4-5-2010 C-533/08; CJ EU 19-12-2013, C-452/12), this momentarily hiccup was washed away by the BGH considering that a previously pending Dutch declaratory relief proceedings stops a subsequent German action claiming full damages from the carrier (BGH 25-07-2019, I ZB 82/18).

From the above it needs to be understood that a timely sought declaratory relief in the Netherlands usually clears the way for a straightforward settlement along the lines of section 23 CMR. Only a (justified) hint of carrier’s wilful misconduct may potentially throw a spanner in the works. Emphasis is made on ‘timely’. With due observation to section 31(2), the carrier should initiate proceedings in the Netherlands sooner than its cargo interested counterparties will in other jurisdictions. Furthermore, and this is where the next paragraphs are about, the carrier should (save in case of justifiable interruption) in any event initiate proceedings within the one-year time bar provided in section 32 CMR.

Time-bar applicable when seeking declaratory relief?

The Dutch Supreme Court has held that from the text of section 32 CMR it needs to be inferred that also a carrier’s action seeking declaratory relief that it is not liable or has limited liability for damage to or loss of cargo falls within the scope of said section (SC 18-12-2009, NJ 2010/481).

What about interruption of the time-bar re action to seek declaratory relief?

Section 32(2) CMR stipulates that a ‘written claim’ shall suspend the time-bar until such date as the carrier rejects the claim by notification in writing and returns the documents attached thereto. Judging from the mere text of Article 32(2) (when interpreting treaty texts one should however also take account of the purpose of the text) it seems sensible to conclude that this section is inapplicable to the case where the carrier seeks declaratory relief vis-à-vis the cargo interests, as this section clearly reads that the time-bar shall be suspended until the moment the carrier rejects the claim.

Potentially, the carriers may benefit from the last sentence of section 32(3) CMR which dictates: ‘[The law of the court or tribunal seized of the case] shall also govern the fresh accrual of rights of action’. In a Dutch declaratory relief matter one should therefore turn to the Dutch law on interruption of claims. In that regard, allow me to draw your attention to the subsequent recent court ruling.

DSV v. Huawei (District Court Amsterdam 22-02-2023, ECLI:NL:RBAMS:2023:857)

Huawei has instructed DSV to transport a consignment of 2,500 mobile phones from Feltham (UK) to Amsterdam (NL). Upon delivery on 24-11-2020 the CMR consignment note was signed for receipt remarking that ‘[a]ll of pallets received without straps!’. On 2-2-2021 Huawei has informed the Dutch police of a loss of 300 mobile phones, which Huawei apparently found out about on 12-1-2021. Estimated damage amounting to £ 150,848.64. The gross weight of the lost mobile phones being apparently 200 kg. For its damage Huawei has subsequently held DSV liable. In turn DSV made an offer of settlement, reserving all rights, on 18-5-2021.

On 5-7-2022 DSV initiated proceedings against Huawei seeking declaratory relief. Huawei argues i.a. that DSV’s action has been time-barred on 25-11-2021 (one year following delivery) pursuant to section 32(1) CMR. With reference to the above-mentioned Supreme Court ruling, the District Court Amsterdam follows this line of reasoning. DSV argues that the time-bar is interrupted by:

A. DSV’s reservation of all rights on 18-5-2021 (cf. section 3:317 DCC)

The District Court Amsterdam holds that it is in fact possible to interrupt the subject action to seek declaratory relief if the carrier would unambiguously reserve its right to compensate. The message dd. 18-5-2021 holds this notion according to the court, thereby starting a new one-year time bar as of that date. The writ of summons dates 5-7-2022 is therefore still too late.

B. The time-bar has been suspended (cf. section 32(2) CMR)

The District Court Amsterdam precludes the rule of suspension provided in the CMR for the subject action to seek declaratory relief and holds that this rule applies solely to cases where the cargo interested parties pursue the carrier, e.g. for compensation of cargo damage or loss.

C. The time-bar has been extended cf. section 3:321 sub f DCC as Huawei would have wilfully concealed the (legal) facts constituting the ground for the existence of the claim

The District Court Amsterdam dismisses this argument as well, as DSV has not substantiated that the strict criteria for invoking section 3:321 sub f DCC have been met.

At the end of the day, the District Court Amsterdam draws the conclusion that DSV’s action to seek declaratory relief against Huawei is time-barred. In the court’s statement of the facts, it is mentioned that in England Huawei and its underwriter have initiated claims proceedings. As the subject declaratory relief action has failed in the Netherlands, the cargo interests are one step closer to obtaining full compensation.

Conclusion

This article aims to draw one’s attention to the possibility of initiating declaratory relief proceedings as a carrier in the Netherlands, thereby benefiting from the Dutch, carrier-favourable interpretation of gross negligence and consequential damage. As is often the case, time is of the essence. Preferably as quickly as possible after the incident however at most within one year, whether defending the cargo interests' or the carrier’s interests, I recommend to seek counsel from a Dutch lawyer.

If you have any questions about this article, please feel free to contact Vincent Hofman.