Germany – Changes Affecting Rules On Time Limits

March 2002

Germany has adhered to the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading of 1924 (the Hague Rules). Broadly, art. III r. 6 of the Hague Rules provides for a one year time bar for certain claims against a carrier. This provision is incorporated in para. 612 of the German Commercial Code (HGB, Handelsgesetzbuch). With effect from 1^st January 2002 the time bar according to para. 612 HGB has been altered in four significant respects by virtue of the new German Act on the Modernization of the Law of Obligations (Schuldrechts-Modernisierungsgesetz):

1. Under the old law, the one year time bar was only applicable to claims brought against the carrier under a Bill of Lading; under the new law, the one year time bar contained at para. 612 HGB applies to all claims brought under any type of seaborne contract of affreightment. By way of illustration: Under the new law an owner’s claim for hire or a receiver’s claim resulting from loss of or damage to the goods, therefore, becomes time-barred after one year. Except in Bill of Lading contracts the parties can agree on a time bar which is shorter than one year.
2. The general provisions of the law of time bar as set down in the German Civil Code (BGB, Bürgerliches Gesetzbuch) are now in principle applicable to the time bar according to para. 612 HGB. Most notably, para. 203 BGB provides that the running of time is suspended if the parties negotiate a claim or its circumstances. "Negotiating" in this context presupposes that both parties participate, i. e. there is no "negotiating" yet where one party requests from the other that the claim be negotiated. When one of the parties refuses to continue negotiating the running of time will resume. In this event the claim is time-barred at the earliest after three months from the end of negotiations. The application of para. 203 BGB will lead to more uncertainty as to when the time bar in fact expires because it will have to be established, if and to what extent negotiations took place.
3. The time bar under para. 612 HGB no longer has the effect of a complete discharge from liability: A party whose claim is time-barred under the new para. 612 HGB can still make use of that claim as a set-off. In other words: The time bar according to the new para. 612 HGB bars the remedy but not the right.
4. Claims arising on 1^st January 2002 or afterwards are subject to the new time bar provisions described above. However, with regard to claims having arisen prior to 1^st January 2002, those claims either are subject to the new time bar (deemed in such case to run from 1^st January 2002) or to the old time bar, whichever expires first. By way of illustration: If a claim under a voyage charter party arose on 1^st July 1990 and, in the absence of a contractual provision, was subject to a time bar of thirty years, the time bar would have expired on 30^th June 2020, but is now subject to the new one year time bar running from 1^st January 2002 and expiring on 31^st December 2002.

 

With thanks to Dr. Christoph Horbach of Lebuhn & Puchta, Hamburg, for preparing this article.