Carriage of a consignment of magnesium oxide from Delfzijl (the Netherlands) to Baltimore (USA), on the order of Nedmag, on board the MS Marietje Marsilla, owned by Danser, under a bill of lading issued by the master and naming Harbison as consignee. Upon arrival, a part of the consignment appears to have become wet (by contact with seawater) and contaminated with silica carbide (SiC). The cargo was stored, after being separated based on the nature of damage, and inspected by Crawford (Marine Surveyors). Nedmag commenced liability proceedings against the shipping company (Danser) on 22 March 2012. On behalf of Danser, its P&I club disputed Nedmag’s title to sue. On 3 July 2012 Crawford, communicating that it was instructed by the cargo insurers of Nedmag, commenced liability proceedings against Danser ‘on behalf of cargo interest’. On 20 February 2013 Crawford, ‘acting on behalf of cargo interest’, requested an extension of the time limit. On 26 February 2013 the P&I club confirmed an extension of the time limit to 17 June 2013 on behalf of Danser, ‘provided that your clients have a title to sue and the claim is not time-barred yet’. Nedmag, Harbison and the (subrogated) cargo insurers - together, the cargo interests - served a summons on Danser within the extended time limit in order to claim damages.

Held: Crawford requested the extension of the time limit ‘on behalf of cargo interest’, which in transport law generally includes (all) the cargo interests. It is therefore acceptable that the granted extension of the time limit applies to all of the cargo interests (including Harbison). The word ‘clients’ in the phrase ‘provided that your clients have a title to sue’ does not appear to solely refer to the cargo insurers.

The question of who is the bearer of the rights arising from the bill of lading against the carrier, is not governed by the (applicable) Hague-Visby Rules, but must be answered in accordance with the law to be applied according to art 10:162 of the Dutch Civil Code (DCC), being the law of the agreed port of discharge, in this case being the law of the State of Maryland (USA). Given the fact that Nedmag accepted the buyer’s rejection of the damaged cargo and agreed to pay for it, Nedmag has a claim against the carrier under the applicable US law as seller and counterparty of the carrier.

However, art 10:162 of the DCC does not preclude a choice, made by the parties in the course of the proceedings, to apply Dutch law to the issue of title to sue. Since the parties agree that Harbison, as rightful and regular holder of the bill of lading, has a right of action based on art 8:441 of the DCC, which agreement constitutes a procedural choice to apply Dutch law to this issue, it is not necessary to revert to another legal system on account of art 10:162 of the DCC.

Under the main rule, the carrier has an obligation to exercise due diligence to make the ship seaworthy prior and at the commencement of the voyage, and also to make sure that the holds are in good condition. If the carrier wants to escape liability for a cargo claim using the exception of art 8:383(1) of the DCC / art 4.1 of the Hague-Visby Rules (damage caused by unseaworthiness), the burden to state the necessary facts and to provide evidence that said due diligence was exercised rests on the carrier. If the cargo damage points towards unseaworthiness, a successful appeal to that exception cannot be supported solely with the statement that the ship was in class and was maintained in accordance with the prescribed rules.

The amount of damages recoverable from the carrier is calculated by reference to the value the damaged cargo would have had at the place and time at which the cargo was discharged, if there had been no damage for which the carrier was liable. This value is fixed according to the commodity exchange price, or, if there is no such price, according to the current market price, or, if there is no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality. In this case, the value is calculated by multiplying the amount of damaged cargo by the invoice price per megaton, as invoiced by Nedmag to the buyer. This ‘expected value’ must be reduced by the real value of the damaged cargo, the so-called ‘arrived value’. This arrived value is affected by the costs incurred to determine and realise it, such as the costs of taking measures to minimise damages, surveyor’s fees, sales commission, etc. The surveyor’s fees claimed by the cargo interests are considered to be costs incurred in the context of the transport, because the activities of Crawford and the local experts engaged by it were intended to determine the cargo damage and the liability for that damage. The fees were not unreasonably high and were made for a good reason. The costs of the American correspondent (inter alia to obtain information about US law) are costs made for the preparation of court documents. This means that the rules governing the costs of the proceedings apply. These costs will be taken into account when an order for costs is made, ie an extra point in the court-approved scale of costs will be granted.