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Practical Aspects of Italy Recovery Law: Overview and New Case Update

This article provides an overview of the limitations periods and package limits in domestic and international road, sea, air, and rail carriage claims in Italy. It also includes a new case update.

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Practical Aspects of Italy Recovery Law: Overview and New Case Update

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  1. Practical Aspects of Italy Recovery Law: ___Overview and New Case Update__ Alberto Batini BATINI TRAVERSO & ASSOCIATI Via Assarotti,11/9, 16122 GENOA Also at Milan, Livorno, Ravenna and London Phone: +39 (010) 8310-455 Email: a.batini@bbpartners.it Web: www.bbpartners.it June 2016 5th INTERNATIONAL CARGO RECOVERY CONFERENCE The Legal and Business Aspects of Handling Ocean, Air, Rail & Motor Cargo Claims

  2. Page 2 LIMITATIONS PERIODS DOMESTIC ROAD CARRIAGE DOMESTIC MULTIMODAL OR COMBINED CARRIAGE Statute of limitation : 1 (one) year (Art. 2951 civil code) INTERNATIONAL ROAD CARRIAGE INTERNATIONAL MULTIMODAL CARRIAGE Statute of Limitation: 12 months In case of willful misconduct or gross negligence: 3 (three) years (CMR Convention and Art. 2951 civil code) Placeholder Placeholder for text Insert your own text here Page 2

  3. Page 3 LIMITATIONS PERIODS DOMESTIC SEA CARRIAGE Statute of limitation : 6 (six) months But if carriage starts or ends outside Europe or Mediterranean countries: 1 (one) year (art. 483 code of navigation) Page 3

  4. Page 4 LIMITATIONS PERIODS INTERNATIONAL SEA CARRIAGE INTERNATIONAL MULTIMODAL CARRIAGE Statute of Limitation: 1 (one) year From actual or agreed delivery Hague Visby Rules Brussels Convention 1924 as amended by Brussels Protocols 1968 and 1979 Page 4

  5. Page 5 LIMITATIONS PERIODS HAMBURG RULES (Hamburg Convention 1978, in force but not yet ratified by Italy) Statute of Limitation: 2 (two) years from effective or agreed delivery Page 5

  6. Page 6 LIMITATIONS PERIODS ROTTERDAM RULES Convention on contracts for the International carriage of goods wholly or partly by sea (New York, 2008) As of 1.1.2016 twenty-five countries have officially expressed their support for the new UN convention ‘Rotterdam Rules’, produced by UNCITRAL on a CMI draft work. Important seafaring nations such as the United States, Norway, Greece, France, Sweden and the Netherlands are among the signatories. The Rotterdam Rules are therefore now into force. Italy has not yet ratified the Convention by EU urged the Members States to ratify the instrument. Upon entry into force of the convention for a country, it should denounce the conventions governing the Hague-Visby Rules as well as the Hamburg Rules as the convention does not come into effect without such denouncements. Page 6

  7. Page 7 LIMITATIONS PERIODS INTERNATIONAL AIR CARRIAGE Statute of Limitation: 2 (two) years from arrival of cargo at destination or from the scheduled date or from date of interruption of the air carriage Montreal Convention 28.05.1999 (art. 35) EU Reg. n. 2027/97 (as amended by EU Reg. 889/2002) incorporating Montreal 1999 in the EU system Page 7

  8. Page 8 LIMITATIONS PERIODS DOMESTIC AIR CARRIAGE Statute of Limitation: 2 (two) years from arrival of cargo at destination or from the scheduled date of arrival Art. 954 Code of Navigation (same as in Montreal 1999) Nature: Time bar Page 8

  9. Page 9 LIMITATION PERIODS DOMESTIC RAIL CARRIAGE Statute of Limitation: 1(one) year from arrival of cargo at destination or from the scheduled date or from date of interruption of the rail carriage Art. 2951 civil code

  10. Page 10 LIMITATION PERIODS INTERNATIONAL RAIL CARRIAGE Statute of Limitation: 1 year from arrival of cargo at destination or from the scheduled date or from date of interruption of the rail carriage Wilful or reckelss conduct: 2 years Art. 48 - COTIF Convention (Bern 9.5.1980) – Appendix B Amended by Vilnius Protocol 3.6.1999 In force in Italy since 5.2.2015

  11. Page 11 Package Limits for different types of claims Page 11

  12. Page 12 PACKAGE LIMITS DOMESTIC ROAD CARRIAGE DOMESTIC MULTIMODAL OR COMBINED CARRIAGE One (1) Euro per Kilo of gross weight of lost or damaged cargo (no admitted contractual exceptions in favour of carrier) (Art. 1696, 2° parag., civil code) INTERNATIONAL ROAD CARRIAGE INTERNATIONAL MULTIMODAL CARRIAGE SDR 8,33 per Kilo of gross weight of lost or damaged cargo 1 SDR = 1,121 Euro (as of 1.04.2014, source IMF) (Art. 23 para 3 of CMR Convention and Art. 1696, 2° par., civil code) Page 12

  13. Page 13 PACKAGE LIMITS DOMESTIC SEA CARRIAGE 103,29 Euro per each cargo unit (or up to the higher value declared before shipment) (Art. 423 para 1 Code of Navigation) Page 13

  14. Page 14 PACKAGE LIMITS INTERNATIONAL SEA CARRIAGE SDR 666,67 per package or unit or SDR 2 per kilo of gross weight of lost or damaged cargo, whichever is the higher (unless higher values declared before shipment) Art. IV (5) (a) Hague Visby Rules Page 14

  15. Page 15 PACKAGE LIMITS INTERNATIONAL SEA CARRIAGE (Rotterdam Rules) 875 units of account per package or other shipping unit or 3 units of account per kilogram of the gross weight of the goods that are the subject of the claim or dispute, whichever amount is the higher, except when the value of the goods has been declared by the shipper and included in the contract particulars, or when a higher amount than the amount of limitation of liability set out in this article has been agreed upon between the carrier and the shipper. (Art. 59) Not in force in Italy Page 15

  16. Page 16 PACKAGE LIMITS INTERNATIONAL SEA CARRIAGE (Rotterdam Rules) Liability for economic loss due to delay is limited to an amount equivalent to two and one-half times the freight payable on the goods delayed. The total amount payable pursuant to this article may not exceed the limit that would be established pursuant to art. 59 in respect of the total loss of the goods concerned. (Art. 60) Not in force in Italy Page 16

  17. Page 17 PACKAGE LIMITS INTERNATIONAL AIR CARRIAGE SDR 19 per Kilo in case of destruction, loss or delay (unless higher values declared before shipment) Art. 22 n. 3 Montreal Convention 1999 (as revised pursuant to Art. 24 n. 1) Page 17

  18. Page 18 PACKAGE LIMITS DOMESTIC AIR CARRIAGE Art. 941 Code of navigation incorporating by reference Montreal 1999 (same discipline as in international air carriage) Page 18

  19. Page 19 PACKAGE LIMITS DOMESTIC RAIL CARRIAGE Euro 18,08 per Kilo of lost or damaged cargo (Art. 46.1 Trenitalia T&C’s) INTERNATIONAL RAIL CARRIAGE SDR 17 per Kilo of gross weight (Art. 30 COTIF Convention Bern 9.5.1980 – Appendix B Amended by Vilnius Protocol 3.6.1999 In force in Italy since 5.2.2015 ) Page 19

  20. Page 20 HOW LONG DOES IT TAKE ? • 1 day to appoint a Court expert • 2-6 months for settlement • 1,5-2,5 years for a first instance judgment • 2 years for an appeal (but first instance judgment immediately enforceable) • 1 day for a ship arrest Page 20

  21. Page 21 HOW MUCH DOES IT COST ? • No Cure – No Pay Max 20% plus costs (extended to Court litigation) • Hybrid Agreements (incl. fee capping schemes) • Trial costs are almost entirely recoverable (around 90%) Page 21

  22. Page 22 ADVANTAGES OF ACTING IN ITALY POSITIVE ASPECTS OF CARGO LAW • Copies of documents are generally accepted • Free translations are accepted • Theft and robberies in road cargo claims are not considered automatically force majeure or act of god so carriers are not exempted from liability unless special degree of evidence is provided • Gross negligence breaks limitation in domestic claims (sea, road, rail, air) • Gross negligence in road carriage is not difficult to be proved • First instance ruling is immediately enforceable against carrier pending appeal Page 22

  23. Page 23 PRECAUTIONS NEGATIVE ASPECTS OF CARGO LAW • Title to sue requires great attention (when insurers are acting in subrogation: receipts and release must be signed by those legitimated under the contract of carriage. In case of loss, except under the CMR regime, receivers are legitimated only if they asked redelivery to the carrier, otherwise title rests with shipper/sender. ) • Letter of claim by insurers or cargo settling agents is not considered as suitable to interrupt time bar unless insurers indemnified the claim. To be effective the letter of claim must be countersigned also by cargo interests with title to sue. Page 23

  24. Page 24 RECENT CASE LAW Recent Court Authorities • A forwarder becomes a carrier when undertakes to perform the entire carriage through owned or charertered means of transport against a freight which reflects a profit margin proportioned to the associated risks (Supreme Court 21.1.2011 – Supreme Court 6.8.2013) • Hague-Visby rules are applicable to cargo damage occurred during loading even if the B/L has not yet been issued (Genoa Court of Appeal 13.6.2012) • A multimodal carrier cannot benefit of the limitation of liability rules afforded to carriers of the single transport segments (Court of Genoa 11.1.2011) • In a CIF sale of goods the seller has title to sue the carrier for damage or loss of cago even after the goods were delivered to the carrier until the time the goods arrived at destination and the consginee applied for redelivery (Supreme Court 17.1.2012) Page 24

  25. Page 25 Recent Court Authorities RECENT CASE LAW • A violent cargo robbery does not by itself exempt the carrier from liability unless it is proved that the event was unforseen and unforseeable considering all relevant factual circumstances (Court of Latina 10.9.2012) • It acted in gross negligence a carrier who left for 2 hours a loaded truck without activating any alarm system, so that limitation of liability is afforded following the theft of such cargo (Court of Milan 13.3.2013) • The value of the damaged goods must be assessed by reference to the price of the same on the place and time of redelivery. This may not be related to the cost sustained to purchase such goods as evdienced by a commercial invoice. (Supreme Court 28.2.2011) • According to art. 13 CMR not only the Consignee but also the shipper/sender has alternatively title to sue the Carrier. Should the Carrier indemnify the Consignee for a damage to cargo, the latter will have title to sue the sub carrier as a subrogated entity in the rights of the carrier (Supreme Court 1.12.2010) Page 25

  26. Page 26 Recent Court Authorities RECENT CASE LAW • In order to benefit of exemptions under art. 17.4 CMR the Carrier should prove having adopted all required diligence and industry practice regulations, including having followed any instruction received (Supreme Court 1.12.2010) • In a robbery to cargo carried by road the simple report of the event to local Police does not constitute a conclusive evidence about the actual robbery which the Carrier should prove otherwise. To be exempted from liability it will have also to prove that the event was unforeseeable and unavoidable adopting due diligence (Court of Milan 4.1.2012) • If a shipment is subcontracted to a sub carrier the contracting carrier and the sub carrier(s) are not jointly and severally liable to cargo interests in case of loss of or damage to cargo. The contracting carrier who paid the claim will have action against the sub carrier(s) to recover whatever due (Court of Milan 4.1.2012) Page 26

  27. Page 27 Newest developments NEWEST DEVELOPMENTS To exempt the carrier from liability the theft or robbery should be also unavoidable, considering all the circumstances in which the theft occurred and all the possible measures (which could have been adopted by the carrier) suitable to avoid or reduce the risk of the loss of cargo (Supreme Court 06.08.2015) Page 27

  28. Page 28 Newest developments NEWEST DEVELOPMENTS In connection to a loss suffered during carriage the Italian Supreme Court defines gross negligence as  “.. an inexcusable negligence of the carrier, who consciously - even if with no intention to damage third parties - not only failed  to take the proper measures of care and custody to protect the cargo as imposed by his professional diligence, but also failed to adopt, in handling the shipment, the minimum grade of diligence normally observed by everyone” Page 28

  29. Page 29 Newest developments NEWEST DEVELOPMENTS • In respect to robbery the carrier has been found grossly negligent in a case in which the robbery was proximately caused by a deviation of 160 Km, including a stop during the deviation.  Court  of Milan (4/3/2010) • Other Court precedents recognized the liability of the carrier in case of robbery when the same occurred in geographical places or locations known to be at risk for robberies. Trento Court of Appeal (3.9.2013) • The leading cargo subrogate underwriters have authority to sue the carrier also on behalf of the coinsurers on the basis of the subrogation receipt and release. MV AGNESKA Court of Venice (3.10.2013) Page 29

  30. Page 30 Newest developments NEWEST DEVELOPMENTS • Carrier liable for damages to frozen cargo in container redelivered in abnormal temperature conditions for failure to ask the shipper to replace the container or check the causes of the defect. Court of Livorno (30.4.2013). • As far as Carrier’s liability is concerned loading and unloading operations in port are covered under the contract of carriage (bill of lading Hague Visby) even when “Free In Liner Out” or “Free In Free Out” Clauses are printed on the B/L. Supreme Court 19.03.2015 n. 5488 • As a consequence of the above principle the limitation period against Terminal Operators in damages during loading or unloading is one (1) year as for the contract of carriage (Himalaya Clause applies ex lege in Italy and no need to stipulate it by contract). Supreme Court 10.06.2015 n. 12087 Page 30

  31. Page 31 Newest developments NEWEST DEVELOPMENTS • In CMR claims (international road carriage claims) a sub carrier can be sued directly by the consignee for loss of or damage to cargo. Supreme Court 14.07.2015 n. 14665 • CMR applicable only if the parties incorporated it by reference in the contract of carriage. Supreme Court 10.04.2015 n. 7201 Page 31

  32. Page 32 ? Any Questions? ? ? BATINI TRAVERSO & ASSOCIATI Via Assarotti,11/9, 16122 GENOA Also at Milan, Livorno, Ravenna and London Phone: +39 (010) 8310-455 Email: a.batini@bbpartners.it Web: www.bbpartners.it Page 32

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