• Germany Enacts a New Maritime Statute
  • December 27, 2013
  • Law Firm: Borden Ladner Gervais LLP - Toronto Office
  • April 25, 2013 was a noteworthy date in the history of German maritime legislation. On that date, the new German maritime statute came into force, amending Book 5 (Maritime Trade) of the German Commercial Code (the Handelsgesetzbuch or “HGB”). The amending legislation, on which work began in 2004, is the first major revision of German shipping law since 1861 and is designed to modernize the country’s Commercial Code, bringing it from the age of sailing vessels into the contemporary era of container ships. Redundancies have been eliminated, gaps filled and various provisions harmonized with Germany’s civil and general transport law.

    As regards the carriage of goods by sea, Germany remains a Hague Rules state, which never ratified the Visby Protocols but has implemented them by national legislation. There appears to be little chance of Germany ratifying the Rotterdam Rules any time soon. The amended Commercial Code, however, introduces some changes to the Hague-Visby regime, drawn from the Hamburg or Rotterdam Rules or the coun- try’s 1998 general transport law. Nevertheless, any such changes relating to “contracts for the carriage of general cargo” that conflict with Germany’s international obligations under the Hague-Visby Rules (e.g. the elimination of the defences of error of navigation or management of the ship and fire) will not apply to bills of lading issued in Hague-Visby states.

    Some of the salient features of the amended Book 5 of the HGB are the following:

    • Ship arrest will now be facilitated in Germany. In the past, it was necessary to show a valid ground for arrest (e.g. the impossibility of enforcement of the maritime claim in another jurisdiction or a matter of urgency), as well as a valid maritime claim. Under the amended legislation, only a valid maritime claim need be proven. As a result of that change, Germany should now become a jurisdiction where ship arrest will be easier (and likely also more frequent), its arrest law now being more akin to that of Belgium and the Netherlands.

    • Certain provisions on masters, considered outdated, have been repealed, masters now being considered as employees of shipowners rather than as quasi-entrepreneurs as they often were in the nineteenth century.

    • Shipowners will now be liable for damages done by their crews and others on board their ships, provided that the person who suffered the damage also has a claim for damages against the crew member in question. In addition, the shipowner will be liable for on-shore damages to cargo and that liability may only be excluded by individually negotiated agreements, not by general terms and conditions of a contract.

    • German law, for the first time, now provides expressly for time and bareboat charterparties, by detailed mandatory provisions on such contracts. Voyage charters continue to be regulated as hitherto.

    • In the carriage of goods, the carrier’s period of responsibility for cargo loss or damage is will now extend from the taking over of the goods until their delivery, rather than from tackle to tackle. The carrier may avoid such liability, however, by proving that the loss or damage was due to circumstances which it could not avoid and the consequences of which it was unable to prevent.

    • In cases where the vessel was unseaworthy or uncargoworthy, and where the facts indicate a likelihood that the loss or damage was caused by that condition, the carrier may escape liability only by proving that the condition in question could not have been discovered prior to the commencement of the voyage by a reputable carrier exercising due care.

    • The Hague Rules exceptions of error in the navi- gation and management of the ship and fire have been repealed. Nevertheless, the legislation permits the parties to a contract of carriage to exclude liability for navigational fault and fire by general terms and conditions (e.g. standard bill of lading terms) or by express agreement.

    • The other traditional Hague Rules exemptions re- main unchanged in the German legislation, and limitation of liability remains set at the Hague-Visby level (i.e. the higher of 667.67 SDRs per package or unit or 2 kilograms of the gross weight of the cargo), unless the parties agree to higher limitations. As in Hague-Visby, those limitations are broken where the damages are proven to have been caused by an act or omissions of the carrier done with intent to cause such damage or recklessly and with knowledge that the damage would probably result.

    • The new statute introduces into German law the new concept of “performing carrier”, being the party (other than the contracting carrier) who actually performs the transport service. Although not stated expressly, the relevant definition appears to include as performing carrier parties such as a sub-carrier, a time charterer, a sub-charterer or a terminal operator. The performing carrier has the same liability as the contracting carrier for damage resulting from the loss of or physical damage to the goods and is jointly and severally liable for such loss or damage, together with the contracting carrier. Performing carriers and their servants may invoke the same exemptions from and limitations of liability as the contracting carrier. Any contractual arrangements with the shipper or the consignee whereby the carrier expands its own liability applies to the performing carrier only if the latter has agreed to those terms in writing.The statute specifies the compulsory content of a bill of lading, including, notably, the name and address of the carrier, thus facilitating the taking of suit for cargo loss or damage.

    • The shipper’s liability for damages caused by his false declaration will no longer be fault-based. Rather, damages caused by the provision of false information concerning dangerous goods or bad packaging may now be claimed from the shipper, regardless of any fault on his part.

    • A time limitation for indemnity claims has been established, requiring the party wishing to seek in-demnification to file his claim within three months of being made aware of the claim, on pain of loss of the right to any such indemnity.

    • Deck stowage is no longer prohibited perse. While in general goods may not be loaded on deck without the shipper’s consent, such loading is now permitted without such consent, provided that the goods are placed in or on an article of transport suitable for on-deck carriage (e.g. a container) and provided that the deck has been properly fitted out to carry such an article of transport. If goods are loaded on deck without the shipper’s consent (where required), the carrier is liable for any resulting loss or physical damage to them, even if it occurs without any fault or neglect on the carrier’s part, there being a presumption that the loss or damage was caused by such loading. If the carrier had agreed with the shipper that the goods were to be carried below deck and the damages resulted from their having been loaded and stowed on deck, the codal and contractual exemptions and limitations of liability do not apply (a fundamental breach provision).

    • A legal basis for electronic bills of lading has been created.

    • Bills of lading purporting to incorporate by reference the terms and conditions of a charterparty, including any law and jurisdiction clause, will not be effective to incorporate those charter provisions under the new statute. This is considered to be one of the more drastic changes introduced by the amendments.

    • Sea waybills are provided for, in both paper and electronic formats. Such documents are declared by the new legislation to be prima facie evidence of the conclusion of the contract of carriage and of its contents, as well as evidence that the carrier has taken over the goods. A sea waybill must be signed by the carrier but the signature may be reproduced by printing or a stamp.

    It remains to be seen whether the new legislation will prove popular and effective in achieving its stated goals of modernization. In particular, the possible ratification of the Rotterdam Rules by the United States and at least some European Union states may put added pressure on Germany to further amend Book 5 of its Commercial Code. If it should choose not to yield to such pressure, interesting conflict of law problems may lie ahead. Canadian shippers and carriers should be at least generally aware of the amended Code, particularly as the Canada-E.U. Free Trade Agreement begins to affect trade with Germany in the next few years.

    It is encouraging to see this major European Union country taking positive action to update its maritime legislation, but it is also disappointing to some observers that so important a shipping nation has chosen to go it alone with national legislation on carriage of goods, thus further weakening international uniformity of maritime law in that important domain.

    N.B.: The above outline is a purely unofficial summary of some of the key provisions of the amended Book 5 of Germany’s Commercial Code. The full text of the Code, as amended by the 2013 statute, should be consulted for all purposes of interpretation.