Excessive conventional penalty for failure to send carriage documents within a specified period of time.

Our Office has recently analysed the principles of stipulating conventional penalties in transport orders. It happens quite often that Orderers stipulate high conventional penalties for failing to send carriage documents on time.

Liability for damages is not provided in the CMR Convention in the case when carriage documents were send too late, and when the conflict of law rules provide that the norms of Polish law shall apply in such situations, the contract will be assessed with the consideration of the provisions of Polish Civil Code.

As is stated in Article 483 § 1 of Polish Civil Code, one may stipulate in the contract that the damages resultant from failure to perform or from inadequate performance of a non-pecuniary obligation shall be redressed by the payment of a specified amount of money (the conventional penalty).

There is an opinion in the jurisdiction that when applying Article 483 § 1, one takes into consideration the legal character of those obligations (pecuniary or non-pecuniary) which belong to essentialia negotii, and not additional obligations (see the judgement of the Supreme Court of 19 December 2000, V CKN 171/100). Sending carriage and settlement documents is a secondary, not the main, aspect of performing the carriage contract. That is why stipulating in the contract a permanent and excessive conventional penalty (Article 484 § 2 Civil Code) which depends on the secondary obligation of sending the carriage documents on time should be deemed inadmissible.

Ewa Kosowska-Czapla
    Attorney at law