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Is a Forwarder the “Merchant” or “Holder” of a Bill of Lading?

A recent decision of the Federal Court of Canada, DHL Global Forwarding vs. CMA-CGM SA, 2013 FC 534, considered the broad definition of the word “Merchant” under the carrier’s bill of lading, as well as the application of the Bill of Lading jurisdiction clause in favour of the courts of Marseille.

The claim in Canada was brought by DHL for relief from CMA-CGM’s claim in Maresille for over $680,000 in storage and demurrage that was accumulating on 68 containers shipped from Halifax to Ho Chi Minh City. DHL was withholding the bills from the consignee as freight remained unpaid (apparently due to some dispute between the shipper, BSH International and the consignee Tan Mai Group Joint Stock Company.

CMA-CGM had filed suit in the Tribunal de Commerce de Marseille, pursuant to the jurisdiction clause in its bill of lading. DHL filed in Canada for a declaration that it did not owe the storage and demurrage charges and was not itself bound by the bill of lading that it had formed as agent for its customer, the shipper.

The terms and conditions on the rear of the carrier’s bill of lading purport to bind the carrier and the Merchant, a defined term. The CMA-CGM bill of lading contained this definition:

Merchant includes the Shipper, Holder, Consignee, Receiver of the Goods, and Person owning or entitled to the possession of the Goods or this Bill of Lading and anyone acting on behalf of any such person. [emphasis per Prothonotary Morneau]

As may be seen from the Prothonotary’s choice of emphasis, the Court had no difficulty in determining that both as the holder of the bills – who was indeed exercising the power of detention by holding the bills – and as the person acting on behalf of the Shipper or Consignee, DHL would be bound by the terms and conditions of the bill.

The Court accepted that DHL had acted as agent for the shipper and consignee, and that it had completed its own contractual obligations to its customer. However, the Court rejected DHL’s argument that the forwarding contract could be separated from the Bill of Lading terms. The Court noted that DHL arranged carriage through quotations, and that although it acted as agent the actual shipper was only identified at the stage of issuing the Bill of Lading. DHL was identified as the customer in these preliminary documents, which all incorporated the Bill of Lading terms, and the Court found that this was because the carrier “precisely intended to render moot the splitting up of contracts sought by DHL.”

The Jurisdiction clause provided that all actions against the carrier under the contract of carriage evidenced by the bill of lading shall be brought at Marseille, whereas it provided that actions against the Merchant may be brought at Marseille. Clearly bound by this bill of lading clause, DHL could not establish that the contractually selected forum was a forum non conveniens.

Comment: In the author’s view, the reference of the Court to forum non conveniens in obiter at the conclusion of the judgment may be deceptive.  The “strong cause test” for overturning a contractually selected forum, as originally stated in The Eleftheria ([1969] 1 Lloyd’s Rep 237 (Adm Div), was adopted in Canada in ZI Pompey Industrie v ECU-Line NV [2003] 1 SCR 450, and remains the law of Canada.

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