The Higher Regional Court of Hamburg (OLG Hamburg) ruled whether a shipper is a “protected party” under the arbitration agreement concluded between the carrier and another shipper. Other than in the order of the same court of 23 May 2019 (6 Sch 1/19 – see here: https://kdb.legal/en/a-third-party-may-rely-on-an-arbitration-clause-contained-in-a-contract-with-protective-effect-for-that-third-party/ the OLG ruled that the packaging obligations in a contract for the carriage of goods by sea do not have protective effect for other shippers as third parties:
OLG Hamburg (6th Civil Senate), Order of 12 August 2019 – 6 Sch 2/19
- If an arbitration clause is agreed in a contract in favour of a third party, it shall also apply to the beneficiary third party.
- An ocean freight contract between a charterer and a shipper is not a contract with protective effect in favour of other charterers, even with regard to the obligations under sec. 484 HGB.
6 Sch 2/19
…the Hanseatic Higher Regional Court – 6th Civil Senate – decides…
The applicant’s application for a declaration that arbitration proceedings are admissible under the rules of the GMAA, in respect of claims for damages brought by the Applicant on account of damage to her cargo (stainless steel cylinders) transported under bill of lading on board the Y (Y) as a result of a shift of rail cargo, in Hamburg on 31 December 2017 against the shipper under bill of lading … stowed on deck of the same ship is rejected.
Orders the applicant to pay the costs of the proceedings. The value of the subject-matter is set at € 300,000.
The applicant requests that the admissibility of arbitration proceedings be determined.
The applicant, a supplier of offshore installations, commissioned the …Ltd, which in turn commissioned ….GmbH & Co KG to transport two stainless-steel-cylinders together with accumulator assembly from Antwerp to Singapore.
The goods were taken on board the Y in Antwerp on 27 December 2017. In Hamburg, further cargo was accepted, including a consignment of rails originating from Austria, which were stowed on deck next to the applicant’s cylinders. For these goods (the rails) the R.-Line issued “as agent on behalf of the carrier” … … GmbH & Co KG a Bill of Lading in which the defendant 1) (“as agents” of the defendant 2)) is named as “” (Annex ASt 4). The defendant in 2) – represented by the defendant in 1) “as agents”- issued a “…” (Annex ASt 5). The bill of lading conditions of the R.-Line (Annex ASt 3) contain an arbitration agreement in para. 25 paragraph 2.
The applicant claims that the defendants are charterers with regard to the rails to be transported (in relation to R.-Line or C.). The applicant claims that, on the way to Genoa, there was a shift of cargo from the rails to port, which damaged the applicant’s stainless-steel-cylinders.The applicant claims that the claims of Ltd and the recipient were assigned to it. The applicant claims that the damage was caused by the fact that the rails were not properly packed. The applicant considers that the contract between the defendants and the carrier – at least in so far as the obligations under Paragraph 484 of the Commercial Code are concerned – is a contract with protective effect in favour of third parties, so that the arbitration clause also applies in the relationship between the parties to the present proceedings.
The applicant requests that the Court should
declare that, with regard to the applicant’s claims for compensation for damage to her goods under bill of lading on board the MS RICKMERS NEW ORLEANS (stainless-steel-cylinders) as a result of a shift of rails, loaded in Hamburg on 31 December 2017 under a bill of lading on deck of the same ship, arbitration under the rules of the GMAA against the defendants is admissible.
The defendants request that the application be dismissed.
The defendants dispute the applicant’s right to bring proceedings and the alleged assignments. The defendants deny that they were charterers with regard to the maritime transport of the rails. The order for the disputed sea transport of the rails had rather been placed by Q Ltd.
The defendants take the view that a contract of maritime transport is not a contract having a protective effect in favour of third parties (namely other charterers). Even if that were the case, it would not lead to an extension of the arbitration clause.
In addition, reference is made to the pleadings exchanged and the annexes thereto.
The application is admissible under Section 1032(2) of the Code of Civil Procedure and is also admissible in other respects. The senate has competence for the decision in accordance with sec. 1062 para. 1 no. 2 ZPO, because the place of the (intended) arbitral proceedings is Hamburg. No. 25 para. 2 of the bill of lading conditions (Annex ASt 3) speaks of “arbitration in Hamburg”.
In so far as the defendant states under 1) on page 3 of the submissions of 30 April 2019
“The concept of a contract with protective effect for third-parties cannot, however, lead to the defendants being subjected to an arbitration clause agreed between the applicant and the shipping company, thereby depriving the defendants of the right to take ordinary legal action and appeal,”
the Senate feels compelled to make the following comment:
The Senate understands the applicant’s argumentation to mean that what matters is not the arbitration clause in the contract between it (more precisely, the Ltd.) and the GmbH & Co KG (R. Line), but the arbitration clause in the contract which the defendants are alleged to have concluded as charterers (according to the contested submission of the applicant) with the GmbH & Co KG (R. Line) as carrier. It is correct, however, that the bill of lading conditions which the applicant has submitted as Annex ASt 3 should be part of the bill of lading Annex ASt 2. This bill of lading concerns the stainless-steel cylinders and not the rails. However, a bill of lading has also been issued for the transport of the rails (Annex ASt 4; the reverse side is not submitted there). However, the Senate understands the applicant’s submission as meaning that R. Line always agreed an arbitration clause in the bill of lading conditions and did so with the defendants (if they were – as the applicant claims – shippers). The question is then whether the defendants are bound by the arbitration clause they themselves agreed upon (only in relation to the applicant).
The Senate therefore states that what matters in the present case is the arbitration agreement in the (alleged) contract between the defendants and the GmbH & Co KG. For this would be the contract with protective effect in favour of third parties, to which the applicant refers. However, the arbitration agreement in the contract between the Ltd. and the GmbH & Co KG is not relevant.
In the following statements, the Senate assumes that the defendants were charterers with regard to the rails (with a contractual relationship with the GmbH & Co KG as the carrier). For the first defendant, however, this is very questionable, because in the bill of lading Annex ASt 4 is listed under the heading ‘shipper’, but only ‘as agents of’ the defendant 2).
It is unclear whether the defendant 2) was a charterer. This is contradicted by the fact that the sea transport of the rails was commissioned by “Q Ltd” (Annex AG 2-1). This is supported by the “Waybill” issued by the second defendant, which also includes the transport from Hamburg to Xingang.
The Senate leaves this question open because further pleadings would be required in this regard.
Irrespective of the question of passive legitimation, the application is unfounded simply because, in the opinion of the Senate, there is no contract with protective effect in favour of third parties.
In the view of the Senate, this question is relevant because an arbitration clause is also likely to be effective in relation to the beneficiary third party if it has been agreed in a contract with protective effect in favour of third parties. It is generally recognised that there is the possibility of an arbitration agreement in favour of third parties (see OLG Düsseldorf, SchiedsVZ 2006, 331, quoted in juris, para. 28; Musielak/Voit, ZPO, 5th ed., § 1031, marginal no. 3; Stein/Jonas/Schlosser, ZPO, 23rd ed, § section 1029, margin 70; Zöller/Geimer, ZPO, 32nd ed., section 1031, margin 18; Lachmann, Handbuch für die Schiedsgerichtspraxis, 3rd ed., margin 503; Münch in Münchener Kommentar, ZPO, loc.cit.) Apart from this, the arbitration clause shall apply to the beneficiary third party if a contract is concluded in favour of a third party within the meaning of sec. 328 et seq. BGB (see Münch in Münchener Kommentar, ZPO, loc.cit., § 1031, marginal no. 18; Stein/Jonas/Schlosser, loc.cit, § 1031, marginal 70; Baumbach/Lauterbach/Albers/Hartmann, ZPO, 77th ed., § 1029, marginal 23; Lachmann, loc. cit., marginal 502, Schwab/Walter, Schiedsgerichtsbarkeit, 7th ed., Chapter 7, marginal 36). This also applies to the beneficiary of a contract with protective effect in favour of third parties (see Stein/ Jonas/Schlosser, loc.cit., § 1029, marginal 70). The Senate endorsed this view in an unpublished decision of 23 May 2019 (6 Sch 1/19).
That presupposes, however, that a contract with protective effect in favour of third parties has actually been concluded. This question is decisive, on the one hand, as to whether the applicant may, if necessary, assert a substantive contractual claim against the defendants. On the other hand, it is also decisive for whether an arbitration agreement binding the parties to the present proceedings has been concluded. In this respect this is a doubly relevant circumstance.
The Senate takes the view that a contract of carriage by sea between a charterer and a carrier is not a contract having a protective effect in favour of other charterers. This also applies to the extent that obligations under § 484 HGB are involved.
In the case of a contract having a protective effect in favour of third parties, the (principal) performance owed is due solely to the creditor, but the third party is involved in the contractual duties of care and custody in such a way that he can assert contractual claims for damages if they are breached. The formation of the contract with protective effect in favour of third parties in the case-law of the Reich Court and the Federal Court of Justice is based on a supplementary interpretation of the contract and thus ties in with the hypothetical will of the parties, which according to § 157 of the Civil Code is to be researched under consideration of good faith. In order not to extend the liability for the debtor incalculably, strict requirements must be set for the inclusion of third parties in the contractual protection.
The hypothetical intention of the contracting parties to include a third party in the scope of protection of the agreement concluded between them must then be determined on the basis of a careful balancing of their interests worthy of protection and those of the third party. The starting point of the case law on the contract with protective effect in favour of third parties were cases in which the creditor, recognisable to the debtor, owes protection and care to a third party on the basis of a legal relationship with a personal impact and the third party suffers damage due to a breach of the debtor’s duty of care. In the further development of this case law, the inclusion of third parties in the scope of protection of a contract has also been affirmed if the creditor has a special interest in their protection, the content and purpose of the contract indicate that this interest is to be taken into account and the parties have the will to establish a duty of protection of the debtor in favour of these third parties. For example, persons who possess special expertise recognised by the state and who issue expert opinions in this capacity may be liable under a contract with protective effect in favour of third parties to persons to whom the client makes use of the expert opinion as intended (so-called “expert liability”).
On the basis of those principles, the inclusion of a third party within the scope of protection of the contract is subject to the following conditions: The third party must be in contact with the (main) performance as intended and be exposed to the dangers of breaches of protection obligations in the same way as the creditor. The creditor must have an interest in the inclusion of the third party in the scope of protection of the contract. The debtor must be able to recognise the third party’s proximity to the performance and its inclusion in the scope of protection of the contract and must be able to reasonably expect him to do so. In addition, the balancing of interests required in the context of the interpretation, taking into account good faith, requires that there is a need for the extension of contractual protection. A protective effect therefore does not apply if the third party is entitled to his own contractual claims which have the same or at least equivalent content as those claims which he would be entitled to if they were included in the scope of protection of the contract (see BGH, NJW 2018, 1537, quoted in juris, para. 16 to 18, with further references).
According to those criteria, there is no contract having a protective effect in favour of third parties.
In the opinion of the Senate, the prerequisite that the applicant “came into contact with the defendant’s performance as intended” is already missing. In the opinion of the Senate, it is not sufficient in this respect that in maritime freight transport, goods of different charterers are frequently transported on one ship and are therefore possibly exposed to dangers which may emanate directly or indirectly from other goods. The circle of protected persons must be narrowly defined in order to avoid a boundless extension of contractual claims. Particularly in the freight business, in view of the typical interests of the often numerous persons who come into contact with the transport in one form or another, it makes sense, in order to clearly and unambiguously delimit the different interests, to either expressly include duties of protection and the corresponding claims for compensation or to leave them out of consideration (cf. Karlsruhe Higher Regional Court, Higher Shipping Court, VersR 1998, 212, quoted in juris, para. 14). It is admittedly – as stated above – customary that on a voyage by sea, goods of different charterers are transported on one ship and can come into contact with one another, which is then not merely accidental. However, this alone is not sufficient for the assumption of “proximity to performance”. It would be mistaken to include all possible owners of tangible assets which may be endangered in a contract of carriage by inland waterway vessels (and sea-going vessels) due to their geographical proximity or intended use in the scope of protection of a contract of carriage in such a way that they should benefit from the same contractual protection against defective performance as is incumbent on the contracting parties (see Karlsruhe Higher Regional Court, loc. cit, juris para. 17; also OLG Cologne, Higher Shipping Court, TranspR 2013, 123, quoted in juris, para. 26; there with reference to the fact that the appeal against the quoted decision of the OLG Karlsruhe was not accepted, BGH II ZR 349/96).
A situation of interest comparable to the present case formed the basis of a decision of the BGH in which the BGH had denied a contract with protective effect in favour of third parties (BGHZ 133, 168 et seq., quoted according to juris). In the case decided by the BGH there were several customers of a contractor (who operated a nitriding furnace). One day, nitrided goods of the parties to the dispute at that time were together in the nitriding furnace. An explosion occurred, which damaged the nitrided material of the then plaintiff, who claimed against the then defendant because the nitrided material handed over by the defendant to the contractor would not have complied with the regulations. In the above-mentioned decision, the Federal Court of Justice denied that there was sufficient proximity of performance (of one customer in relation to the other customer) (loc. cit., juris para. 23).
The other contractual agreements do not indicate otherwise either. Decisive would be the agreement between the defendants and … GmbH & Co. KG. It is further assumed that this agreement was based on the bill of lading conditions which were also the subject of the contract between the applicant and GmbH & Co. KG (Annex ASt 3). No. 12 para. 1 only mentions the responsibility of the “” (i.e. the customer) towards the carrier (” “), as can be seen from the wording “liable to the ” “. Nor does the version of the law cited by the applicant indicate otherwise. In § 488 HGB n.F. it says in paragraph 1: “The charterer must compensate the carrier for damages and expenses” (emphasis by the senate).
Section 484 states: “The charterer has to pack the goods in such a way that no damage is caused to the carrier….”. The Senate assumes that this is not an editorial error, since the old version of the law (sec. 563 para. 1 HGB old version, sec. 564 para. 1 HGB old version) made a distinction between liability towards the carrier and towards other persons (mentioned in § 512 HGB old version). Even if there were still a provision like sec. 563 para. 1, 564 para. 1 HGB (as not), it would be questionable whether the liability regulated there would be based on a contract with protective effect in favour of third parties (with the consequence of being bound by an arbitration agreement) or whether it would be a liability regulated by law (where there would be no reason to be bound by an arbitration agreement).
In the opinion of the Senate, a contract with a protective effect in favour of third parties does not exist either because such an interpretation of the contract would not be reasonable for a charterer. Particularly in the case of sea freight, it is the case that goods of very many charterers are transported together, which – depending on the type of possible damage (e.g. fire) – could be affected. For a charterer, it is not at all foreseeable how many other charterers will have goods transported with the same ship, how susceptible they are to danger and what value they have. A liability would be unmanageable. The Federal Court of Justice (BGH) considered liability towards a basically unlimited group of persons to be unreasonable and not covered by the hypothetical will of the parties (see BGH VersR 2017, 839, quoted according to juris, para. 20 loc. cit. In the present case, the number of other charterers is admittedly not completely unlimited, which is already based on the size of the ship. However, the number and the scope of liability would be completely manageable, so that the Senate assumes that even in such a case it would be unreasonable to expect this.
In the light of the foregoing, it can be left open whether the acceptance of a contract with protective effect in favour of third parties also fails because the applicant may have its own contractual claim against the carrier. If such a claim exists, which has the same or at least an equivalent content as the claim which the third party would have if it were included in the scope of protection of the contract, there is no need for an extension of the contractual claims. However, the BGH has stated that a claim subject to a shorter limitation period is not equivalent. If one applies the considerations of the BGH regarding equivalence to the present case, it must be pointed out that claims against a carrier- apart from exceptions (cf. § 507 HGB) – are subject to a maximum liability (cf. § 504 HGB), whereas the liability of the shipper is generally unlimeted according to § 488 HGB para. 1 sentence 1 no. 3 HGB in connection with § 484 HGB (which would also apply to the third party in the case of a contract with protective effect in favour of third parties) is in principle unlimited. This argues against an equivalence of the liability of the carrier, which, however, is not relevant for the reasons mentioned above.
The decision on costs is based on Paragraph 91 of the ZPO.
The Senate set the value of the subject matter at one third of the value in dispute in the main proceedings of the intended arbitration proceedings (stated by the applicant as at least 900,000 Euro
(The decision is published (in German) as BeckRS 2019,37488)