18 December, 2022
We all remember the rush for masks during the early months of the Covid-19 outbreak, in March-April 2020. Fashionably late, courts are beginning to address the matter from the perspective of claims filed against forwarders and air carriers for compensation on damages incurred due to delay or non-arrival of goods.
The Petah Tikva Magistrate Court recently issued a ruling rejecting such a claim filed against DHL Israel. In this case, an importer ordered KN95 masks with a filter in March 2020 in order to distribute them in Israel. The importer purchased the masks in Hong Kong, and they were forwarded by DHL to Israel by air carrier with seven bills of lading. The importer claimed that part of the goods were delivered late and some were never delivered, and therefore demanded compensation from DHL. DHL argued, among others, that it is not liable for these damages, as they were caused as a result of the importer’s conduct and the Chinese suppliers’ conduct, including splitting the shipments by the Chinese suppliers, false value declarations by the importer and Chinese suppliers, and the refusal of the importer to pay the tax discrepancies demanded by Customs.
Of interest to us in this article are DHL’s precedential arguments, which the Petah Tikva Magistrate Court’s ruling addresses.
DHL Israel argued that there is no legal-contractual dispute between it and importer, as it was not a party to the contractual agreements between the importer, the Chinese suppliers and the air carrier – DHL China. DHL Israel argued that it acted as an agent of the air carrier, and the services provided by it in relation to the goods in question were provided to DHL China. In addition, DHL Israel argued that under Section 10 of the Carriage By Air Law, 1980, the principle of uniqueness of grounds applies, according to which an air carrier and its agents may only be sued on the grounds of this law. The law applies to actions relating to the cargo taken in the airport of the destination country as well, as long as the cargo did not reach the warehouse of the entity which placed the order.
In addition, DHL Israel argued that the claim should be dismissed in limine due to the lack of filing a protest within the proper timeframe, as the importer failed to meet the condition of filing a protest within the proper timeframe set by the Montreal Convention, in accordance with the Carriage By Air Law, 1980.
The court accepted DHL’s position and rejected the claim.
As for the lack of legal-contractual dispute, the court ruled that DHL Israel “proved through documents presented by both parties, that the bills of lading were a contractual agreement between the plaintiff, the Chinese supplier and DHL China, without the defendant as a party to the contract, and its involvement in the release of the cargo was created in a later date, when it was approached by DHL China to perform actions relating to the release of cargo in Israel. Therefore, there is no contractual relation between the defendant and the plaintiff, and the argument of a contractual dispute is dismissed in limine”.
The court noted that a tort claim may still be based on the grounds of negligence, as DHL Israel violated its obligation of care as a sub agent of the air carrier DHL China towards the plaintiff. Even so, the court ruled that due to the principle of uniqueness of grounds under the Carriage By Air Law, “an air carrier and its agents may only be sued under the Carriage By Air Law, and no other legal grounds may apply. Therefore, a claim against the defendant cannot be based on breach of contract, negligence, unjust enrichment etc. that were included in the statement of claim”.
The court accepted DHL Israel’s position that the Carriage By Air Law and the Montreal Convention apply to it as an agent of an air carrier. The court ruled that “under Section 43, the defense of the Montreal Convention applies to agents of air carriers, in other words, the defendant. This term was widely discussed in legal literature”.
The court therefore accepted DHL Israel’s that the importer failed to meet the condition of filing a protest within the proper timeframe set by the Montreal Convention. The court noted that “Section 31 of the Montreal Convention states that in the event of a delay in receiving a cargo, the plaintiff must file a written appeal/objection/complaint within 21 days of the date in which he was informed of the damage (i.e. the non-release of the cargo). Failure to do so will result in the dismissal in limine of the claim. The correspondence attached by the plaintiff (appendix D to the Statement of Claim) does not meet the criteria of filling a complaint as detailed above”.
In conclusion, the court ruled that the contractual grounds (including those filed under the Contract for Services Law, 1974 and the Bailees Law, 1967) are dismissed in limine due to lack of dispute; the contractual and tort grounds, as well as unjust enrichment and consumer protection law grounds, are dismissed in limine due to the principle of uniqueness of grounds; and the grounds under the Carriage By Air Law are dismissed in limine due to failure to meet the provisions of the Montreal Convention in relation to filing a complaint within 21 days.
Our firm represented DHL Israel in this case.
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