The demand of the Orderer to submit carrier’s liability insurance in the international carriage which would the events specified in Article 29 of the CMR Convention.

One of our clients working for the transport industry has recently mentioned to us that his foreign contractors ask him increasingly more often if his carrier’s liability insurance for international carriage covers the liability for events specified in Article 29 of the CMR Convention.

According to the CMR convention, the carrier may in certain situations limit his liability, or the burden of proof is shifted in favour of the carrier, or the liability of the carrier may in some situations be excluded completely.

However, Article 29 forbids the carrier to avail himself of these convenient provisions. In some situations the carrier will always be held liable. It will happen when the damage occurred as a result of the wilful misconduct of the carrier (or by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage ) or default.

Insurance companies frequently refuse to pay the compensation quoting Article 29 of the Convention. They demonstrate that compensation may not be paid as given action was an instance of gross negligence.

General liability insurance does not require the insurance company to be held liable in this case. The insurers may only voluntarily take liability for such situations. In some insurance companies there is a possibility to include in the policy this type of situation, e.g. for an additional fee.

Therefore it is very important for the carrier whether his subcontractor has such an insurance. Our client also could ask his subcontractors about it as he is responsible for their actions. If it transpires that a subcontractor is liable because of his gross negligence (e.g. his driver parked the vehicle on an unguarded parking lot) and a damage occurred, then our Client will be liable for it jointly and severally. He may demand the payment of this amount directly from the subcontractor, but when the subcontractor is not insured against it and does not have the required amount, our client will not be able to enforce him to pay.

Often when the subcontractor is not insured in this respect, the carrier concludes a supplementary insurance contract, which means that the freight will have to take into account the cost of this supplementary contract.

Ewa Kosowska-Czapla
Attorney at law