Iamgold Corporation v. Hapag-Lloyd Ag

In Carriage of Goods by Sea, Experts and Expert Evidence on (Updated )

Précis: The Federal Court of Appeal upheld a finding that a loss of cargo on the road leg of the carriage was subject to the limitation of liability applicable to road carriage under German law.

Facts: In this case the Court was asked to decide a question of German law to determine the defendant carrier’s quantum for loss of the plaintiffs’ cargo. The defendant issued a sea waybill for the transport of cargo in four containers from Montreal to the Netherlands via the Port of Antwerp. The cargo would be transported from Antwerp to the Netherlands by a truck. The cargo arrived at Antwerp but three of the containers were released to an unauthorized truck driver who provided the proper PIN numbers for the containers. The weight of the cargo that was stolen was 66,266kg. At issue was whether the provisions of the sea waybill which incorporated the Hague Visby Rules applied to the loss, or whether the Contract for the International Carriage of Goods by Road (“CMR”) applied. Both regimes use Special Drawing Rights to quantify liability, with 2 SDR per Kg under Hague Visby and 8.33 SDR per Kg under the CMR. The applicable limitation regime governing the loss depended on whether the loss occurred during ocean carriage or road carriage.

The Federal Court found that the loss occurred on road leg, with the limitation of liability at 8.33 SDR. Based on the German case law which considers whether the risk that materialized and caused the loss is inherent in or associated with a particular leg, the Federal Court found that the releasing of the cargo by the Port to the truck upon production of the correct PIN was an activity attributable to road transport. The carrier appealed.

Decision: Appeal dismissed.

Held: The Federal Court of Appeal had no difficulty in determining that German law applied to the present matter based on the parties agreed statement of facts and evidence of the expert German lawyer witnesses. The carrier argued on appeal that the standard of review should be correctness, however the Federal Court of Appeal dismissed that argument and held that the standard was that of palpable and overriding error when dealing with experts witnesses testifying in respect of foreign law. The Federal Court of Appeal, in applying this standard, found that the trial judge made no palpable and overriding error in concluding that a loss which was pertaining or associated with activities performed in preparation for the leg transport was attributed to the road leg of the carriage.