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What constitutes loss under the terms of the CMR Convention?


An Amsterdam court has recently ruled that ‘damage’ under the terms of the CMR Convention means “a substantial physical change to the state of the goods”


The Convention on the Contract for the International Carriage of Goods by Road (CMR) covers the rights, responsibilities and compensation due when goods are shipped by road. At BIFA, we receive queries on this convention that broadly speaking fall into three main categories: delays, jurisdiction and damage. Article 17.1 of the convention states: “The


carrier shall be liable for the total or partial loss of the goods and for damage thereto occurring between the time when he takes over the goods and the time of delivery, as well as for any delay in delivery.” One area that seems to be contentious is what constitutes damage? Given the international nature of the convention, it is important to be aware of judgments in other jurisdictions.


Amsterdam case Recently, an Amsterdam court passed judgment on a case regarding ‘damage’, deciding that relative to the CMR Convention it meant “a substantial physical change to the state of the goods”. In the case in question, it ruled out that a broken seal on a container constitutes damage. Many Members transporting foodstuffs have often been in a situation where clandestines


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illegally entered a trailer. The consignee claims that they have to throw all the goods away in case of contamination. This case was very similar. In 2016, Danone contracted for a consignment


of dairy products to be moved from Germany to France. During the night the driver heard a noise in the trailer and upon investigation found that the seal had been broken, but failed to locate anyone in the trailer. Upon delivery, Danone destroyed the goods


and claimed for the full value of the cargo and destruction cost. The consignee argued that the carrier had failed to comply with the framework contract with the carrier. This contract contained a clause stating that Danone was entitled to destroy all goods in the case that the presence of persons in the trailer was suspected. Also, the contract stated that Danone could invoice the full value of the goods plus destruction costs to the carrier. The court agreed with the contention that the


carrier was responsible for loss under Article 17.1 of the CMR Convention. However, this case revolved around damage, and in line with other national decisions and international literature, the court ruled that ‘damage’ meant that there had been substantial ‘physical change’ in the state of


the goods. The fact that the seal was damaged, which allegedly caused a decrease in the market value and marketability of the goods, did not constitute damage within the meaning of the CMR. The court noted that Danone had suffered


loss, but it was not a consequence of the affected state of the goods. Danone had been concerned and did not want to risk that the state of the goods had been affected. The court noted that this “fear of loss” did not constitute damage under the CMR Convention.


Court ruling Regarding the contractual terms that Danone was entitled to destroy all goods in the case that the presence of persons in the trailer was suspected, and that Danone could invoice the full value of the goods plus destruction costs to the carrier, the court ruled that this created a broader liability than the carrier liability under article 41 of the CMR Convention. This judgment is interesting and from the


forwarders’ and hauliers’ perspective provides useful guidelines. Too many traders are overly keen to destroy product because of a fear of contamination. Now it is clear that it is essential to check on


the goods and arrange suitable testing as soon as possible in order to establish whether or not the physical state of the goods has substantially changed. By simply destroying the goods it is impossible to establish the burden of proof for ‘damage’.


October 2020


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