Your are here: Home >> Decisions

Carriage by Road: Contract of Carriage: Wilful Misconduct

Datec Electronics Holdings Limited -v- United Parcels Service Limited

May 2007

This is only the second case concerning the CMR to have been considered by the House of Lords. It related to three packages of Pentium computer processors which were collected by UPS from Datec's premises in Milton Keynes for delivery in Amsterdam. They were carried by road to Luton. They were then flown to Cologne and finally carried by road to Amsterdam. However, whilst they reached UPS's hub there, the packages were never delivered to the consignee.

Such carriage was undertaken in the context of a framework agreement concluded between the parties. This agreement contained various restrictions relating to the size, value and contents of the packages to which it was to apply. It was provided that UPS did not offer carriage of packages which did not comply with such restrictions and would not meet any losses which the shipper might suffer arising out of its carriage of such packages.

In this instance, each of the three packages exceeded the stipulated limit of value. UPS argued, therefore, that they had never offered or agreed to carry them. However, the framework agreement did not explain that there would be no contract of carriage if a package which did not meet the restrictions was presented and accepted. Rather, it provided UPS with the right either to refuse to accept such a package or to suspend carriage of the same should it already have commenced. The court concluded that this carried the implication that, unless and until UPS exercised one of those rights, there was a contract that it would carry the package.

There was no dispute that, in such circumstances, the CMR governed the international road carriage (between Cologne and the consignee in Amsterdam) which UPS undertook. As a result, UPS were unable to rely on the framework agreement to avoid any liability for loss, damage or delay which they would otherwise incur under the Convention.

However, the court had to decide whether UPS could rely on the limit of liability provided by the CMR, or whether such limit was inapplicable because the loss was caused by the wilful misconduct of the carrier's employees. The judge had concluded that the probable cause of the loss was accidental, rather than theft. Nevertheless, the House of Lords agreed with the Court of Appeal that this was implausible and that theft involving an unidentified UPS employee had been shown on a strong balance of probability to have been the cause of the loss. UPS were therefore precluded from relying upon the CMR limit of liability.

Return to Decisions