Could the DCFR be an answer to the lack of harmonization in the field of forwarding law? Part II Contract interpretation (& Liability) dr. Wouter Verheyen Erasmus University HUB

outline Problem statement: –National courts apply different interpretation rules –National laws apply different liability rules –Mainly (but not only) difference between commissionaire de transport and freight forwarder. –Attempts to create uniform forwarding law unsuccessful. Research question: Can a contractual incorporation of harmonisation instrument (DCFR) take away existing divergences? –Is contractual incorporation useful? Interpretation? Liability? –Is contractual incorporation sufficient? Mandatory national rules?

Problem overview Contract A Bel Ger Fr. FF CDT carrier. Fault based presumed mandatory limited Uniform Ger+ Ned

Different interpretations: Status questionis Extensive catalogue (+15) of elements relevant for qualification & no hierarchy between different elements Developments in national (case) law give more/decisive weight to specific elements BUT in different countries –Different elements are taken into account –Different weight is given –the same element might have opposed consequences Consequence: diverging qualifications Example: Parcel distribution companies: generally qualified as carrier in “freight forwarder-countries”  as commissionaire de transport in France.

Reasons underlying the different qualification of the parcel distribution companies Wordings of the contract: often very vague: FF-countries: “soft” information duty: in case of doubt, qualification as carrier  in France: no presumption Cargo consolidation: in Germany automatically liable as carrier (Sammelladungsspediteur), in Belgium also element pro qualification as carrier  in France activity typically performed by Commissionaire. Billing a lump sum: in Germany automatically liable as a carrier (fixkostenspediteur), in other countries relevant element (sometimes with only limited weight (f.ex. Belgium))  in France: argument pro qualification as commissionaire de transport. “subcontracting the carriage”: Lack of material carriage is not taken into account as a relevant element in FF-coutries, while it always played a big role in France pro qualification as commissionaire de transport (even more since CTF)

Can DCFR create uniformity in interpretations? Only possible insofar DCFR can limit the discretionary power of the national judge to this extend that contrary interpretations are impossible. This condition is not fulfilled: –Interpretation is in DCFR, just like in existing qualification case law, based on two factors: wordings of the contract Broader context –DCFR is not succesfull in eliminating the existing differences (one exception: contra proferentem).

wordings of the contract similar to the rules existing today –Art. 8:101 (1): common intention of the parties (art UNIDROIT & 5:101 (1) PECL) –Art. 8:101 (3): in a way a reasonable person would interpret wordings (art UNIDROIT & & 5:101 (3) PECL ) –Art. 8:102 (2): according to the particular meaning if the other party was aware. (art. 4.2 UNIDROIT& 5:101 (2) PECL) –Art. 8:105: terms should be interpreted in their context (art. 4.4 UNIDROIT & 5:105 PECL) –Art. 8:104: precedence of individually negotiated terms (art. 5:104 PECL) –Art. 8:106: interpretation in such a way that gives effect to the terms (art. 4.5 UNIDROIT & 5:106 PECL) –Art. 8:101 (1): Literal meaning is not decisive (art. 5:101 (1) PECL) Due to the practise of operating vague/ ambiguous wordings not very useful

contra proferentem rule Can limit the divergence between France and other countries on this point  can create “soft” information duty in all countries, also in France. However, only useful insofar as there is doubt => when a judge can establish the qualification based upon the broader context, he will not apply contra proferentem rule. See also art. 5:103 PECL; and art. 4.6 UNIDROIT

Broader context See also art. 5:102 PECL & 4.3 UNIDROIT

Broader context: observations Still extensive catalogue not binding No hierarchy Very open formulation  Allows national judges to continue current practise.  Example: parcel distribution : French judge can still take into account consolidation, lump sum and subcontracting as argument pro commissionaire  FF countries will still take these elements into account as arguments pro a qualification as carrier…

Conclusion: harmonization instruments can’t change forwarding law DCFR not fit for uniform interpretation soft law unable to create uniformity What is the way forward in forwarding law?

DCFR not fit for uniform interpretation Contractual incorporation of DCFR does not create uniformity in interpretation. (PECL and unidroit principles of international commercial contracts have very similar rules  same deficiencies) Uniformity seems to be only possible if: –Interpretation is limited to the wordings of the contract/ if there is as strict hierarchy (HOWEVER: problem: possible evasion mandatory carriage law) OR –In case the rules are more specific  not possible under general harmonisation instruments.

soft law unable to create uniformity Even if a soft law instruments would exist that fulfil all conditions to create uniformity in case law, then still there is a strong hindrance to uniformity in practise: –Choice of law for soft law instrument is not a choice of law envisaged by Rome I-Regulation  possibility to refer to soft law depend on the question whether national law allows this. –Contractually incorporated soft law is superseded by mandatory national law. –Even though forwarding-law is to a large extend non- mandatory, in some situations the freight forwarder is held mandatory liable as carrier (see supra: fixkostenspediteur, Sammelladungsspediteur).

What is the way forward in forwarding law? Sector conditions? Interpretation rules in sector conditions? See for example art. 3 Belgian forwarding conditions: limited list of situations that cause the forwarder to be qualified as carrier vicious circle?  interpretation clause in sector conditions as hidden qualification clause? => In how far is the judge bound? A new attempt to create uniform law? Difficult to achieve, but maybe the only real way forward….

Common core, PECL and DCFR: could they change shipping law? Not on this point…