A practical guide to the CMR Convention governing the liability of the carrier in the international carriage of goods by road, covering the scope of application, the consignment note, liability for loss, damage and delay, the limit of 8.33 units of account per kilogram, unlimited liability, notice periods, the one and three year limitation periods, jurisdiction and CMR insurance.
Road transport plays a central role in the foreign trade of Türkiye, particularly on the European and Middle Eastern routes. The delivery of exported goods to a buyer in Germany, or the carriage of imported machinery into Türkiye, most often rests on a contract for the international carriage of goods by road. Which rules apply where the goods are lost, damaged or delivered late in the course of carriage, within which limits the carrier is liable, and within which periods the claimant must assert its claims, are governed by the Convention on the Contract for the International Carriage of Goods by Road, known by its abbreviation as the CMR Convention. Türkiye has been a party to the Convention since 1995, and by virtue of Article 90 of the Constitution the CMR applies, in carriages falling within its scope, in priority to the rules of domestic law. This article comprehensively examines the liability of the carrier under the CMR Convention, the limits of that liability, the notice and limitation periods and the matters requiring attention in practice.
1. The CMR Convention and Its Place in Turkish Law
The CMR is a multilateral international convention which subjects the terms of the contract of carriage, the transport documents and the liability of the carrier in the international carriage of goods by road to uniform rules. The Convention was signed in Geneva in 1956, and today a large number of states, including nearly all European countries, are parties to it. Türkiye approved accession to the Convention and to its 1978 Additional Protocol by Law No. 3939, and the CMR entered into force for Türkiye in 1995. Under Article 90 of the Constitution, international treaties duly put into effect carry the force of law; for this reason, where a dispute falling within the scope of the CMR comes before a Turkish court, the judge applies the provisions of the CMR directly, without recourse to the rules on the conflict of laws. Moreover, the provisions of the Turkish Commercial Code No. 6102 concerning carriage were drafted with considerable inspiration drawn from the CMR; there is therefore a conceptual parallel between the two regimes, but in international carriage priority always lies with the CMR.
2. The Scope of Application of the Convention
Three basic conditions must be satisfied together for the CMR to apply. The first is that the goods are carried by vehicle by road for reward; gratuitous carriage falls outside the scope. The second is that the place of taking over of the goods and the place designated for delivery, as specified in the contract, are situated in different countries; domestic carriage where both places are in the same country is not subject to the CMR. The third is that at least one of these countries is a contracting country. The nationality or place of residence of the parties is irrelevant; what is decisive is the places of taking over and of delivery. For example, a carriage from Istanbul to Munich falls directly within the CMR, since both countries are parties. The Convention expressly excludes certain types of carriage; carriage performed under international postal conventions, funeral consignments and the carriage of household removal goods are not subject to the CMR. In a carriage falling within the scope of application, the parties may as a rule not derogate from the mandatory provisions of the CMR by contract; stipulations alleviating the liability of the carrier below that provided for in the Convention are void.
3. Combined Transport and the Ro-Ro Route
A situation frequently encountered in carriage between Türkiye and Europe is that the road vehicle is itself carried by ship over part of the route. Article 2 of the CMR regulates this possibility specifically. Where the goods are carried, together with the vehicle on which they are loaded, over part of the journey by sea, rail, inland waterway or air, and the goods are not unloaded from the vehicle, the CMR applies to the whole of the carriage. By virtue of this rule, a carriage passing, for example, from Pendik to Trieste by ro-ro vessel and continuing from there by road to Germany is subject in its entirety to a single liability regime. However, where it is proved that the loss or damage did not result from an act of the road carrier but only from an event that could have occurred in the course of the other mode of transport, the liability of the carrier is determined according to the mandatory rules applicable to that mode. This distinction is of practical importance, particularly for damage occurring during the ro-ro crossing, and renders critical the determination of the stage at which the loss arose.
4. The Consignment Note and Its Evidentiary Function
The consignment note drawn up in CMR carriage, known in practice as the CMR document, is the fundamental document establishing a presumption of the existence and terms of the contract of carriage and of the taking over of the goods by the carrier. The note is drawn up in three copies; the first is handed to the sender, the second accompanies the goods and the third is retained by the carrier. The absence, irregularity or loss of the consignment note does not affect the existence or validity of the contract of carriage, which remains subject to the provisions of the CMR. The evidentiary function of the note is nevertheless considerable. Where the carrier has entered no reservation as to the condition of the packaging, the number of packages and their marks and numbers when taking over the goods, it is presumed that the goods and their packaging were in good condition when taken over and that the entries are correct. For this reason, the entry by the carrier on the note of any deficiencies and damage observed at loading is decisive for the burden of proof in subsequent disputes. As regards the sender, it is important that the declarations concerning the nature, quantity and in particular the value of the goods are made correctly; the sender is liable for damage arising from incorrect or incomplete declarations.
5. The Basis of the Liability of the Carrier
Under Article 17 of the CMR, the carrier is liable for the total or partial loss of the goods and for damage thereto occurring between the time of taking over and the time of delivery, as well as for delay in delivery. The liability commences at the moment the goods are taken over for carriage and ends at the moment of their delivery to the consignee. This regime provides for an aggravated liability approaching strict liability; the claimant is not required to prove the fault of the carrier, and it suffices to establish that the loss arose during the period of carriage. A carrier wishing to be relieved of liability must prove that the loss resulted from one of the grounds of exoneration enumerated in the Convention. The carrier is moreover liable, as for its own acts, for the acts and omissions of its employees and of any other persons of whose services it makes use for the performance of the carriage, when such persons are acting within the scope of their employment. Accordingly, the use of a sub-carrier does not relieve the principal carrier of its liability towards the sender.
6. Grounds of Exoneration
The Convention regulates the circumstances in which the carrier may be relieved of liability in two groups. Among the general grounds of exoneration are the loss having been caused by the fault of the claimant, by an instruction of the claimant not resulting from the fault of the carrier, by an inherent vice of the goods, or by circumstances which the carrier could not avoid and the consequences of which it was unable to prevent. It is this last ground that is most frequently contested in practice; the case law of the Court of Cassation and of the regional courts of appeal may treat events such as armed robbery and hijacking as unavoidable circumstances according to the specific facts, while concluding, in cases such as the vehicle being left locked but unattended, that the carrier breached its duty of care. The special grounds of exoneration relate to particular risks; the agreed use of open unsheeted vehicles, the absence or defective condition of packaging, the loading and stowage having been carried out by the sender, the nature of certain kinds of goods exposing them to wastage or deterioration, and the carriage of livestock fall within this scope. In the case of the special grounds, where the carrier establishes that, in the circumstances of the case, the loss could be attributed to one of these risks, it is presumed that the loss was so caused, and the burden of proving the contrary passes to the claimant.
7. The Calculation of Compensation for Loss and Damage
In the case of total or partial loss of the goods, compensation is calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. That value is fixed according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is neither, by reference to the normal value of goods of the same kind and quality. In addition to the compensation, the carriage charges, customs duties and other charges incurred in respect of the carriage are refunded in proportion to the loss; however, further consequential damage, such as loss of profit, is as a rule not recoverable. In the case of damage, the carrier pays the amount by which the goods have diminished in value, and that amount may not exceed the amount payable in the case of loss. In practice it is often overlooked that the calculation of compensation must be made not by reference to the invoice value but by reference to the value at the place and time of taking over as provided for by the Convention, and this point is frequently the subject of correction in expert examinations. The claimant must prove the loss and its amount; the Convention contains no provision for liquidated compensation.
8. The Limit of Liability and 8.33 Units of Account
The most characteristic feature of the CMR is that it limits the amount of the carrier's obligation to pay compensation. Under the Convention, compensation for loss and damage may not exceed 8.33 units of account per kilogram of gross weight short. The unit of account is the special drawing right as defined by the International Monetary Fund, and it is converted into the national currency at the rate applicable on the date of payment. This limit applies whatever the actual value of the goods carried; in the case of goods of high value but low weight, the compensation remaining far below the actual loss is the well-known consequence of this system. The route provided by the Convention for averting this risk is for the sender, against payment of an agreed surcharge, to declare in the consignment note a value for the goods or to fix a special interest in delivery; in those cases the declared amount takes the place of the limit of liability. In practice these possibilities are rarely used, recourse being had instead to cargo insurance. An exporter shipping goods of high value must be aware of the limited liability regime and structure its insurance and contractual arrangements accordingly.
9. Liability for Delay and the Limit of the Carriage Charge
Delay arises where the goods are not delivered within the agreed time limit or, where no time limit has been agreed, within the time it would be reasonable to allow in the circumstances. In the case of delay, the liability of the carrier is subject to a limit different from that applying to loss and damage; where the claimant proves that damage has resulted from the delay, the carrier pays compensation for that damage not exceeding the carriage charges. In other words, the upper limit of compensation for delay is the freight. This limit is frequently overlooked in practice; the loss of a buyer whose production line stands idle or who pays contractual penalties because of late delivery is often many times the freight, yet under the CMR regime recovery of that loss from the carrier is confined to the freight. Moreover, the right to claim compensation for delay depends on compliance with the written reservation period discussed below. In carriage where the delivery time is critical, it is advisable for the sender to agree a higher limit by way of a declaration of special interest in delivery, or to have the delay risk covered by insurance.
10. Unlimited Liability and Wilful Misconduct or Equivalent Default
The limits of liability afford the carrier strong protection; that protection is, however, not absolute. Under Article 29 of the Convention, where the damage was caused by the wilful misconduct of the carrier, or by such default on its part as is considered equivalent to wilful misconduct under the law of the court seised of the case, the carrier may not avail itself of the provisions which exclude or limit its liability. In that case compensation is calculated on the basis of the actual loss, without regard to the kilogram limit, and the freight limit for delay does not apply either. In Turkish practice, default equivalent to wilful misconduct is assessed by reference to gross fault and in particular to reckless conduct; leaving the load in an unguarded and unsecured parking area, deliberately interrupting the cold chain, or serious breaches of driving and rest rules may, according to the circumstances of the case, be regarded as falling within this scope. The existence of wilful misconduct or equivalent default also extends the limitation period from one year to three years. For this reason, in actions in which it is sought to break the limit of liability, the degree of the carrier's fault becomes the central issue of the proceedings.
11. Notice Periods on Delivery and Written Reservations
The preservation of the claimant's rights depends closely on its conduct at the time of delivery. Where the consignee has not checked the condition of the goods together with the carrier, it must give the carrier notice of reservations in the case of apparent loss or damage at the latest at the time of delivery, and in the case of loss or damage which is not apparent within seven days of delivery, Sundays and public holidays excepted; in the case of non-apparent damage the reservation must be in writing. Where no reservation is given within the period, it is presumed that the goods were delivered in the condition described in the consignment note, and the burden of proof becomes heavier. In the case of delay, for the right to compensation to be preserved, a written reservation must be sent to the carrier within twenty-one days of the time when the goods were placed at the disposal of the consignee; if that period is missed, the right to claim compensation for delay is extinguished. In practice, the missing of these periods is the most common reason for the loss, on procedural grounds, of claims that are in substance well founded. Companies conducting import and export operations can largely eliminate this risk by incorporating into their goods-receipt processes a standard control procedure including damage inspection and written reservation steps.
12. Limitation of Actions
Under Article 32 of the CMR, actions arising out of carriage subject to the Convention are time-barred after one year. In the case of wilful misconduct, or such default as is considered by the court seised as equivalent to wilful misconduct, the period is three years. The commencement of the period varies according to the type of loss; in the case of partial loss, damage or delay the period runs from the date of delivery, in the case of total loss from the thirtieth day after the expiry of the agreed time limit or, where there is no agreed time limit, from the sixtieth day from the taking over of the goods by the carrier. A written claim reaching the carrier suspends the running of the period until the carrier rejects the claim in writing; this is, in practice, an important instrument of time management. Given the shortness of the one-year period, the claim should be notified in writing as soon as the loss is ascertained, and recourse to litigation or arbitration should be had without delay where necessary. The recent decisions of the Turkish courts likewise show actions brought after the expiry of one year from the date of delivery being dismissed as time-barred.
13. Jurisdiction and Successive Carriage
The Convention also regulates the countries in which proceedings may be brought. The claimant may bring an action before the courts of a contracting country agreed between the parties, before the courts of the country in which the defendant is ordinarily resident or has its principal place of business or the branch or agency through which the contract was made, or before the courts of the place where the goods were taken over by the carrier or the place designated for delivery. These rules of jurisdiction afford the claimant a significant choice; in carriage from or to Türkiye, the jurisdiction of the Turkish courts can be established in most cases. Where an action has been brought before one of those courts in respect of the same claim, no new action may be brought between the same parties on the same grounds. In successive carriage, where the carriage is performed by several carriers under a single contract, each carrier becomes a party to the contract by accepting the goods and the consignment note; the action may as a rule be brought against the first carrier, the last carrier, or the carrier performing the portion of the carriage during which the loss occurred, and the recourse relationship between those carriers is regulated in the Convention.
14. CMR Insurance and the Distinction from Cargo Insurance
In practice, the confusion of two types of insurance connected with the CMR is a widespread error. CMR liability insurance is a liability insurance covering the legal liability that the carrier may incur towards the cargo interests under the provisions of the Convention; the insured is the carrier, and the cover operates as a rule within the limits of liability of the Convention. Cargo insurance, by contrast, covers the interest in the goods independently of whether the carrier is liable; the insured is the cargo interest. The practical consequence of this distinction is as follows; in cases where the carrier is relieved of liability, or where the compensation remains at the kilogram limit, the only cover meeting the actual loss of the cargo interest is cargo insurance. The cargo insurer is subrogated, to the extent of the indemnity paid, to the rights of the claimant against the carrier and pursues its recourse actions likewise within the CMR regime. For exporters and importers, the sound structure is to require from the carrier a valid CMR liability policy and, independently of that, to take out cargo insurance fully covering the value of the goods.
15. Conclusion and Practical Recommendations
The CMR Convention establishes a regime which subjects the liability of the carrier in international road transport to foreseeable and uniform rules, and which Turkish foreign trade practice lives with every day. The prominent practical considerations in this field are as follows. The consignment note should be drawn up completely, and damage and deficiencies observed at loading should be entered on the note. In the case of goods of high value, the limit of 8.33 units of account per kilogram should be borne in mind, a declaration of value or a special interest in delivery should be agreed where necessary, and cargo insurance covering the value of the goods should in any event be taken out. A damage inspection should be carried out on delivery, written reservations should be given immediately for apparent damage and within seven days for non-apparent damage, and the twenty-one-day written reservation period for delay should not be missed. Claims should be notified in writing with the one-year limitation period in view, and proceedings should be commenced before the period expires where necessary. As regards carriers, route security, parking and supervision measures and compliance with driving rules are the basic precautions reducing both the risk of loss and the risk of unlimited liability and of the extended limitation period. The correct structuring of the contract of carriage and of the insurance arrangements from the outset is the most important factor determining the position of the parties when a dispute arises.
For advisory services on disputes arising from international road transport, the liability of the carrier under the CMR Convention, claims for damage and delay compensation, insurance recourse actions and the preparation of transport and logistics contracts, you may contact us at info@guzeloglu.legal.