Introduction: Background to the Case
On 20 May 2025, the First Hall of the Civil Court (the "Court"), delivered its judgement in the case Elmo Insurance Limited vs Jet Freight Limited and Clayton Abela Logistics Limited, touching upon the burden of proof of carriers under the International Carriage of Goods by Road Act (Chapter 486 of the Laws of Malta, the "CMR").
Facts
In November 2020, Top Choice arranged for the shipment of 475 appliances worth €25,382.40 from the Romanian warehouse of Global Purchasing and Sourcing Group (the "GSPG") to Malta and concluded a contract with Jet Freight Ltd ("JF"), a Maltese freight forwarder, which assumed responsibility for the entire carriage. This contract was also governed by the CMR rules.
The goods were shrink-wrapped on six pallets, and were collected from GSPG's warehouse in Romania on 7 November 2020 and transported by road to Bolonga, Italy in a sealed trailer which was also evidenced through a CMR consignment note. Such CMR consignment notes are used in the international transport of goods, and they are standardised documents which confirm that the relevant items have been received, and they allow for the tracking of the movement of goods across borders by road.
The road transport was subcontracted through a chain of carriers before reaching Bologna. The cargo was then shipped by sea from Italy aboard the MARIA GRAZIA ONORATO on 20 November 2020 arriving in Malta on 23 November 2020 and was then unloaded into JF's warehouse in Hal Far. As is common in the international transport of goods, JF did not physically carry the goods for the entire journey. Freight forwarders typically act as logistics coordinators where they contract with other carriers to perform parts of the transport route, and this is known as subcontracting.
Following the arrival of the goods in Malta, on 27 November 2020, Clayton Abela Logistics Limited picked up the pallets from JF's warehouse and delivered them to Top Choice. During the unloading at Top Choice's warehouse, its employees noticed anomalies in the shrink-wrapping and discovered that several pallets were empty or partially loaded with goods stacked on top of each other to disguise the missing items. Top Choice therefore halted further unloading and notified Clayton Abela Logistics Limited immediately. Moreover, the supplier in Romania also confirmed and provided photographic evidence, that the pallets had been fully and properly packed when the goods were dispatched.
On 1 December 2020, a joint survey was conducted, where there were surveyors representing the plaintiff, the defendant, JF and Top Choice. In such cases, it is typical to hire surveyors to conduct an independent technical assessment of the condition of the goods and assist with establishing when and where the damage or loss occurred. The findings of surveyors also carry evidential weight in court proceedings. In this case, the survey confirmed that 422 appliances were missing, which loss was valued at €21,276.30.
Top Choice was covered by a marine cargo insurance policy which was issued by the plaintiff. Such a policy insures goods in transit against physical loss or damage. Following the loss identified by the joint survey, the plaintiff indemnified Top Choice under the insurance policy for €21,276.30 and through a subrogation agreement, the plaintiff sought to recover this loss against the defendants. Such subrogation allows the insurer to step into the shoes of the insured, and it acquires the insured's legal rights to claim against third parties responsible for that loss. By means of the subrogation agreement with Top Choice, the plaintiff was able to open a case against JF and Clayton Abela Logistics.
The Court's Considerations
There were two main matters that the Court had to assess:
- When did the goods go missing?
- Who was responsible for the loss of the goods pursuant to the CMR rules?
After hearing the evidence produced, the Court noted that the goods that left the Romanian warehouse were still intact and sealed. In the factual context presented to the Court, it was convinced that the goods went missing on the part of the journey from Romania to Bologna. After establishing this, the Court needed to determine who was responsible for this loss.
It was noted that the contract between Top Choice and the defendant, JF, was regulated by the CMR Rules and therefore, the Court delved into detail on the relevant articles for this case. It noted that Article 3 of the CMR rules provided that "the carrier shall be responsible for the acts of omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage", which article clearly evidenced that JF is responsible for the conduct of its other subcontractors and that the CMR rules are there to protect the owner of the goods.
As noted above, subcontracting is a common occurrence in such international carriage of goods, and these rules place responsibility on one company, in this case JF, whose responsibility it was to ensure that the cargo was protected from theft and damage. The Court also reflected on the judgement Atlas Insurance PCC Ltd vs BAS Limited where it was concluded that it is incumbent on the carrier to ensure that goods are delivered in full to its customer.
Article 17 (3) of the CMR Rules was also considered, which states the following:
"The Carrier shall not be relieved of liability by reason of the defective condition of the vehicle used by him in order to perform the carriage, or by reason of the wrongful or neglect o the person from whom he may have hired the vehicle or of the agents...".
However, there also seems to be an exception to this. Article 17(2) provides as follows:
"The carrier shall be relieved of liability if the loss, damage or delay was caused by the wrongful act or neglect of the claimant, by the instructions of the claimant given otherwise than as the result of a wrongful act or neglect of the carrier.... through circumstances which the carrier could not avoid and the consequences of which he was unable to prevent".
The Court explained that it is not enough for the carrier to perform his obligations under contracts for the carriage of goods, however, they must also take the necessary measures beyond ordinary diligence to protect these goods. Such carriers may therefore be exonerated if the circumstances beyond their control occur. Further to this, the Court assessed the minimal evidence provided by JF on the loss of the goods and noted that they did not show that they did everything they could to protect the goods from damage or theft.
The Court also took into account the various judgements and interpretations of Article 17(3) of the CMR rules and confirmed that the Maltese courts have always indicated that there must be a high level of care and protection by the carrier and it is not enough that they are simply diligent.
Lastly, the Court noted that the other defendant, Clayton Abela Logistics Limited, was not subcontracted by JF, and since the goods were transported within Malta, from the Hal Far Warehouse to Top Choice's, it did not fall under the CMR Rules. Moreover, the Court had also concluded that the goods were damaged during the transport between Romania to Bologna, and therefore, Clayton Abela Logistics was not liable for the payment of damages.
In view of the above the Court concluded that JF was to pay €21,771.60 to Elmo Insurance Limited.
Concluding Remarks
This judgement is important for carriers operating in international transport chains and for them to understand the liability regime imposed by the CMR Rules. It highlights the importance of documentation and active participation in legal proceedings as they face a high evidentiary burden when cargo is lost in their custody while also affirming subrogation as a practical recovery tool in such cross-border transport disputes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
