Adv. Gill Nadel, Ohad Krief
The international treaties relating to air and maritime transport grant carriers (shipping companies, air carriers) various immunities to lawsuits, including shortened statutes of limitation (one year for maritime transport, two years for air transport). These statutes of limitation were adopted by the Israeli legislator within the framework of the Carriage of Goods by Sea Act and the Air Transport law.
Many entities in the transportation chain seek the protection of the shortened statute of limitations, even though they are not carriers. Such entities argue before the court that within the framework of their specific case, they should be regarded as carriers.
In the following article we will review the decision of the Haifa Magistrate Court, which ruled that in relation to the international treaties, a shipping agent is to be considered a carrier, and enjoy the benefits of a shortened statute of limitations.
Case Facts and Detailed Arguments:
The insured exporter committed to sending chassis and military equipment to a company in Mexico, and hired a shipping company in order to do so. The equipment was exported from Israel in three crates to the port of Valencia, Spain. From there it was to be transported by land to a different port in Spain, and then shipped to the port of Veracruz, Mexico. Upon the arrival in Valencia, two crates were discovered to have been damaged, and a decision was made to return them to Israel for repairs. The undamaged crate continued unhindered to the port of Veracruz, Mexico. The insurance company compensated the exporter for the damages sustained by the equipment, according to an appraisal it conducted of the damages. It then filed a lawsuit against the shipping agent and the Port of Ashdod, claiming they are the entities responsible for causing the damage.
The shipping agent filed a third party claim against another shipping agent, Associated Maritime Agencies AMA Ltd., which requested the claim be dismissed outright due to the statute of limitations.
The shipping agent sued by the third party claim argued that it was never in possession of the cargo, nor did the shipping agent transport it, and therefore the agent couldn't have caused the damage to the cargo. Moreover, the shipping agent claimed the statute of limitations applies to it, since it should be regarded as a sea carrier or an agent thereof in relation to international treaties. None disputed the fact that the claim was filed only after more than 12 months passed from the date the cargo was delivered, while a sea carrier's statute of limitations period is one year.
The Court's Ruling:
The court noted that the Carriage of Goods by Sea Act grants the Hague-Visby Rules of maritime transport a legal status in Israel. According to these rules, the carrier and the ship are absolved of any liability for the goods if a claim is not filed within a year from the date the goods were delivered. The statute of limitations is extended for third party claims.
Another clause within the Hague-Visby Rules expands the protection granted to the sea carrier to cover its agents as well: "If such an action is brought against a servant or agent of the carrier (such servant or agent not being an independent contractor), such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke under these Rules".
The court determined that the there is no dispute of the fact that the name of the shipping agent appeared on the bill of landing, and that it served as an agent of the carrier and not an independent contractor. Therefore, the court ruled that the shipping agent is not a "third party", and is subject to the protection provided to the sea carrier. It was noted in the ruling that only entities that are not a direct party to the transaction and the bill of landing may be considered third parties. These would not include the sender, the forwarder or the sea carrier.
In light of all of the above, the court accepted the shipping agent's request and ruled that the claim filed against it is subject to the statute of limitations, since the third party claim was filed more than a year after the arrival date of the cargo. Even so, the court refrained from charging the plaintiff with legal costs.
[TA (Haifa Magistrate Court) 39891-04-12 Migdal Insurance Co. Ltd. and others v. Dynamic Shipping Services (DSS) Ltd., presiding judge: Esperanza Alon, on 27.8.15]
For additional articles on sea or air carriers statute of limitations, please view the links below:
The above review is a summary. The information presented is for informative purposes only, and does not constitute legal advice.
For more information, please contact Adv. Gill Nadel, Chair of the Import, Export and Trade Law Practice
Email: Gill.Nadel@goldfarb.comPhone: 03-6089979.