Limitation of recourse claims in transport law

Book 8 of the Dutch Civil Code (“DCC”) contains its own (short) limitation provisions. On 4 February 2022 the Dutch Supreme Court rendered a judgment on the limitation period for recourse claims in transport law[1]. Section 8:1720 DCC contains a "bonus" period of three months and has various starting points. The judgment shows that this article is easily overlooked in practice[2] , because it was not mentioned by the district court nor the court of appeal. It was only at the Supreme Court that this special limitation rule for recourse claims was brought to the fore. In this blog, Mirjam Louws discusses this judgment.

The "forgotten" article 8:1720 DCC: additional period of three months

What was it about? Iris Shipping B.V. ('Iris') and Somtrans N.V. ('Somtrans') entered into a bareboat charter agreement under which Iris leased a motor tanker to Somtrans for a period of five years. In mid-2014, shortly after the agreement had ended, investigations revealed that the gas oil on board the vessel did not comply with the applicable legislation. Somtrans was held liable by Iris for the possible consequences. The issue in this case was whether Iris' recourse claim to Somtrans had become time-barred. The recourse claim had arisen because (several years later, in mid-2018) the Tax Authorities (Belastingdienst) had imposed an additional excise duty assessment on Iris based on facts for which Somtrans was responsible (allegedly mixing white gas oil with red gas oil). Iris believed that the limitation period had only started on the day following the date of the additional assessment (and therefore in 2018 and not already in 2014).

The court ruled (without mentioning article 8:1720 DCC) that the recourse claim was time-barred: Iris would only have sued Somtrans after the expiry of the one-year limitation period of article 8:1730 DCC[3]. Iris appealed in cassation against the judgment of the Court of Appeal. Among other things, Iris complained that the Court of Appeal had wrongfully ignored article 8:1720 DCC (which article the Court of Appeal should have applied ex officio): pursuant to Article 8:1720 paragraph 1 DCC, a new limitation period starts (subject to Article 8:1712 DCC) for the benefit of a carrier or a shipper, insofar as it seeks recourse against a party to an operating agreement, for what it owes to a third party. This three-month period commences with the start of the day following the first of the following days:

1. the day on which the person seeking recourse has complied with the claim addressed to him or
2. the day on which the person seeking redress is sued in the courts or
3. the day on which the limitation period, on which the person seeking redress could rely, was interrupted, or
4. the day on which the period of limitation or prescription of the action for which relief is sought has expired, disregarding any extension which may have been agreed by the parties.

Attorney General Vlas, in his conclusion, was of the opinion that this complaint by Iris against the judgment of the Court of Appeal should fail because it had not been relied upon in fact-finding proceedings. The rules of limitation (also in transport law) are not applied ex officio, but only after a party has invoked them.

The Supreme Court, however, ruled that this complaint succeeds. The Supreme Court came to Iris' aid by following the line of Article 25 of the Dutch Code of Civil Procedure, which stipulates that the court, of its own motion, must supplement legal grounds, and by ascribing significance to Section 8:1720 DCC, even though Iris only seemed to notice this in cassation. Importance was attached to the fact that Iris had argued before the District Court and the Court of Appeal that the limitation period had only started on the day following the date of the assessment notice and that the legal action had therefore been instituted in time. The case is now referred back to the Court of Appeal of Arnhem for further proceedings. The outcome is not yet known, but it is suspected that the starting point of the limitation period will be linked to the additional assessment of the Belastingdienst. The question is then under which of the four starting points included in Section 8:1720 paragraph 1 DCC this claim will be filed. Has Iris paid the additional assessment of the tax authorities (sub a)? Has Iris been sued by the tax authorities or is the imposition of an additional assessment the same as this (sub b)? Or are the cases mentioned in sub c or d at stake here? We will see in due course.

Conclusion

It is common knowledge that the limitation periods in (national and international) transport law are considerably shorter than in cases outside transport law: one and sometimes two years. In the case of a claim for damages, it is important to take immediate action to prevent the claim from becoming time-barred. In recourse claims in transport law, it is good to keep track of time limits and in particular to have an eye on the "bonus" time limit of article 8:1720 DCC and the four starting points included therein. It is important to interrupt deadlines in time and, if possible, to make renewal agreements.

If you have any questions on this or related topics, the specialists in our International Trade, Customs and Product Safety team will be happy to help. Thanks to our many years of experience in (international) trade and logistics, we can serve you quickly and effectively. You can contact Marijn van Tuijl (m.vantuijl@ploum.nl) or Mirjam Louws (via: m.louws@ploum.nl) directly.