1. Factual Circumstances:
A Danish importer purchased a shipment of 5,220 cartons of garlic from a Chinese exporter in Qingdao, China. The exporter entered into an agreement with a Danish container shipping company for the transport of the goods to Aarhus. On November 8, 2021, the goods were loaded into the container by the exporter in China. The container was handed over to the shipping company in Qingdao on November 9, 2021. The bill of lading specified that the transport temperature should be "-3 °C," that the container should be ventilated at "10 m³/hour," and that the humidity level in the container should be "65%."
The container arrived in Aarhus on January 12, 2022, and was delivered to the recipient in Odense on January 14, 2022. Upon receipt, it was discovered that the garlic had started to sprout. It was confirmed at the time of delivery that the container had been ventilated at 10 m³/hour. The cargo insurer filed a lawsuit against the shipping company, seeking compensation.
In support of the claim, the cargo insurer argued:
- That the garlic had been stored under refrigeration up until it was loaded into the refrigerated container and that it must be considered proven that the goods had the prescribed temperature when handed over to the shipping company;
- That the garlic had started sprouting during sea transport, which must be considered a consequence of insufficient air circulation and an excessively high transport temperature in the container;
- That this could be due to defects in the container's temperature monitoring system, including software errors, deficiencies in the container, the container's placement on the ship, or lack of supervision;
- That the shipping company was responsible for ensuring that the refrigeration unit functioned correctly and for continuously monitoring it, including ensuring that the agreed-upon temperature was maintained.
The shipping company rejected the compensation claim and argued that:
- It had not been proven how the garlic had been stored prior to and during transport to the loading port, and that it might have been stored at excessively high temperatures;
- The temperature had been set at a setpoint of -3.0 °C as agreed, and this setpoint had been maintained throughout the entire transport;
- The briefly recorded temperature increases were due to the defrosting of the refrigeration system;
- A ventilation setting of 5 m³/hour instead of 10 m³/hour did not affect the refrigeration unit's functionality and could not have caused the damage.
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2. The Court's Findings:
The court concluded that the shipping company could not be held liable for the deterioration of the garlic. The court emphasized that the cooling log showed that the temperature in the container had been "significantly above the setpoint of -3 °C" in the period before it was handed over to the shipping company. The court also noted that the container had undergone defrosting three times on November 9, 2021, each lasting up to 30 minutes, and four times on November 10, 2021, each lasting up to 38 minutes, which the court found could be due to "conditions related to the cargo." Finally, the court placed importance on the fact that no documentation had been presented regarding the condition of the garlic before it was handed over to the shipping company and that "temperature data from Jining on November 8, 2021, and November 9, 2021, indicated temperatures ranging between -0.3 and -16 degrees, whereas the cooling log nevertheless showed 'supply air and return air temperatures reaching up to +17 degrees.'" Based on this, the court stated that the cargo insurer had not "provided sufficient evidence that the garlic was damaged during [the shipping company's] custody period," and therefore, the shipping company was acquitted.
3. Comments on the Judgment:
The ruling confirms, in accordance with general transport law principles, that it is the customer's responsibility to prove that damage to the goods occurred while they were in the carrier's custody. If the goods are loaded and stowed by the sender, the information on the bill of lading regarding the goods is usually irrelevant in this regard, provided that the carrier did not have a reasonable means to verify the accuracy of the information and that this is indicated in the bill of lading. However, if the customer can otherwise prove that damage must have occurred during transport, the burden shifts to the shipping company to prove that no errors or negligence occurred that could have caused the damage. The ruling illustrates that it can be significantly challenging for customers to meet the burden of proof and that simply referring to the sender's information about the quality of the goods at dispatch is not necessarily sufficient. In this case, the customer attempted to meet the burden of proof through expert evaluation, but despite the expert's remarks that certain factors suggested the sprouting could be related to transport conditions and that different refrigeration equipment might have been more suitable, this was not sufficient for the customer to be considered to have met the burden of proof.
Maritime and Commercial Court Judgment of January 13, 2025, in Case BS-30376/2022-SHR
