[1] The meaning of a multimodal transport contract / In case where an international logistics brokerage business operator concludes a transport contract under his/her own name and accepts a transport, whether he/she becomes the subject of the rights and obligations under the relevant transport contract by acquiring the status of a multimodal transport operator (affirmative), and in case where the parties have concluded a contract for a multimodal transport as well as all activities related to logistics such as the volume, loading, storage and movement of ports and the use of logistics information, whether the most important factor among them should be deemed a multimodal

[2] In a case where, in the course of multimodal transport, the damage was caused by the loss of or damage to the cargo, but it cannot be limited to any specific area due to its nature or its nature, whether the provisions on maritime transport for the liability of the multimodal transport operator for the said damage should be applied if the maritime transport section becomes the largest (affirmative)

[3] The meaning of “the date on which the cargo is to be delivered” under Article 814(1) of the Commercial Act and whether the time limit for filing a lawsuit under the above provision should be determined not only in cases where the cargo is lost, but also in cases where the cargo is not delivered for reasons such as a carrier’s refusal to deliver the cargo or suspension of carriage due to a carrier’s circumstances (affirmative)

[1] Multimodal transport contract refers to a combined transport of at least two different means of transport among land transport, marine transport, and air transport. The Framework Act on Logistics Policies amended by Act No. 8617, Aug. 3, 2007 in the former Goods Distribution Promotion Act expands the scope of logistics to include all the whole process until the goods are procured, produced, consumed, recovered, and discarded (Article 2(1)1 of the Act), and Article 7(1) of the former Goods Distribution Promotion Act provides that multimodal transport agents under the same Act shall be deemed international logistics brokerage business operators (Article 7(1) of the Addenda). According to the Enforcement Rule of this Act, international logistics brokerage business operators may issue bills of lading and air waybills in their own name (see Article 5(2)2 of the same Act). In cases where an international logistics brokerage business operator concludes a transport contract under his/her own name and concludes a transport contract, he/she shall be the subject of the right and duty under the relevant transport contract after acquiring the status of the multimodal transport operator, as well as the main elements of the multimodal transport and operation.

[2] In the event of the loss of, damage to, etc. the goods during the multimodal transport process, the question arises whether the carrier is liable in accordance with the law applicable to any means of transport. As to the liability of a multimodal transport operator, the Commercial Act provides that the liability of the multimodal transport operator shall be held liable in accordance with the law applicable to the transport section in which the damage occurred (Article 816(1) of the Commercial Act). In addition, in cases where it is unclear as to which transport section the damage occurred or where the damage is not limited to any particular area in its nature, the carrier shall be held liable in accordance with the law applicable to the transport section in which the distance is the longest, but in cases where the distance is the same or the longest distance cannot be determined, the carrier shall be held liable in accordance with the law applicable to the section in which the freight is the highest (Article 2). Therefore, if the transport section in which the damage occurred is unclear or its nature cannot

[3] The claims and obligations of a maritime carrier against a consignor or consignee shall be terminated, whatever the causes for the claims may be, if no judicial claim is made within one year from the date when the carrier delivers or will deliver the cargo to the consignee (Article 814(1) of the Commercial Act). The term “the date on which the carrier will deliver the cargo to the consignee” in this context refers to the date on which the delivery should be made if the transport contract has been performed in accordance with the terms and conditions of the contract. Not only in cases where the cargo is physically lost but also in cases where the cargo has not been delivered for reasons such as refusal of delivery of the cargo by the carrier or suspension by reason of the carrier, the determination of whether the period for filing

[1] Article 816 of the Commercial Act; Article 2(1)1 of the Framework Act on Logistics Policies; Article 7(1) of the Addenda of the Framework Act on Logistics Policies; Article 5(2)2 of the Enforcement Rule of the Framework Act on Logistics Policies / [2] Article 816 of the Commercial Act / [3] Article 814(1) of the Commercial Act

[3] Supreme Court Decision 97Da28490 decided Nov. 28, 1997 (Gong1998Sang, 68) Supreme Court Decision 2005Da5058 decided Apr. 26, 2007 (Gong2007Sang, 754)

Jeju Special Self-Governing Province Development Corporation (Law Firm Driyang, Attorneys Choi Don et al., Counsel for the plaintiff-appellant)

Dong Bank and three others (Law Firm LLC, Attorneys Kim Da-hee et al., Counsel for the defendant-appellant)

Samjin Shipping Co., Ltd. (Attorney Lee Jae-hoon, Counsel for the plaintiff-appellant)

Gwangju High Court ( Jeju) Decision 2018Na10212 Decided January 9, 2019

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff and Defendant Dongba, Jeju Free Logistics Co., Ltd., Limited Liability Company, and Youngjin Co., Ltd., and the costs of appeal are assessed against the Plaintiff, and the costs of appeal between the Plaintiff and Defendant Samjin Shipping Co.

The grounds of appeal are examined.

1. Judgment on the Plaintiff’s grounds of appeal

A. (1) Multimodal transport contract refers to the combination of at least two different means of transport among land transport, maritime transport, and air transport. The Framework Act on Logistics Policies amended by Act No. 8617, Aug. 3, 2007 in the former Goods Distribution Promotion Act expands the scope of logistics to include the whole process of goods to the procurement, production, consumption, collection, and disuse of goods (Article 2(1)1 of the Act), and provides that multimodal transport agents under the former Goods Distribution Promotion Act shall be deemed international logistics brokerage business operators (Article 7(1)1 of the Addenda). Under the Enforcement Rule of this Act, international logistics brokerage business operators may issue bills of lading and air waybills in their own name (see Article 5(2)2 of the same Act). In cases where an international logistics brokerage business operator concludes a transport contract under his/her own name and takes over a transport contract, he/she shall acquire the status of a multimodal transport operator and be the subject of the obligation to perform the relevant transport contract. Furthermore, multimodal transport business operator shall be deemed the core elements of the transport and operation of the two parties.

(2) In the event of the loss of, damage to, etc. the goods in the course of multimodal transport, the question arises whether the carrier is liable in accordance with the law applicable to any means of transport. As to the liability of a multimodal transport operator, the Commercial Act provides that the liability of the multimodal transport operator shall be held liable in accordance with the law applicable to the transport section in which the damage occurred (Article 816(1) of the Commercial Act). In addition, in cases where it is unclear as to which transport section the damage occurred or where the damage is not limited to any particular area in its nature, the carrier shall be held liable in accordance with the law applicable to the transport section in which the distance is the longest, but where it is not possible to determine the transport section the same or the longest distance, the carrier shall be held liable in accordance with the law applicable to the section in which the freight is the highest (Article 2). Accordingly, where the transport section in which the damage occurred cannot be limited to

(3) The claims and obligations of a maritime carrier against a consignor or consignee shall be terminated, whatever the causes for the claims may be, if no judicial claim has been made within one year from the date when the carrier delivers or will deliver the cargo to the consignee (Article 814(1) of the Commercial Act). The term “the date on which the carrier will deliver the cargo to the consignee” generally refers to the date on which the delivery should have been made if the contract of carriage has been performed in accordance with the terms and conditions of the contract (see, e.g., Supreme Court Decisions 97Da28490, Nov. 28, 1997; 2005Da5058, Apr. 26, 2007). In addition, whether the period for filing a lawsuit has expired on the basis of “the date on which the carrier will deliver the cargo to the consignee” should be determined not only in cases where the cargo is physically destroyed, but also in cases where the cargo has not been delivered due to reasons such as the suspension

B. The lower court determined as follows on the grounds indicated in its reasoning.

(1) Each of the instant logistics operation services contract (hereinafter “instant contract”) mainly provides that the Defendants received goods from the Plaintiff’s factory and transported them to the Plaintiff’s sales agent or the place designated by the Plaintiff. In this regard, all the logistics-related business falling under “all logistics-related activities, such as port volume, loading, storage, mobility, etc.,” is difficult to be deemed to be an essential element of the contract, as it is incidental to the transportation. From the time when the Plaintiff first publicly announced the recruitment of a business operator, it appears that the pertinent business was recruited as a multimodal transport contract combining the land transportation and the maritime transportation. In full view of such circumstances, it is reasonable to deem the instant contract as a multimodal transport contract combining the land transportation and the maritime transportation.

(2) Article 816 of the Commercial Act applies to the liability of multimodal transport operator. The damages asserted by the Plaintiff constitute additional costs incurred by requesting a substitute transport to Hanjin Co., Ltd. as the Defendants failed to properly transport the ordered quantity, and falling under “where the transport section in which the damage occurred is unclear or it is not limited to any particular area due to its nature.” Therefore, the Defendants should be held liable pursuant to the law applicable to the transport section, the distance of which is the highest under Article 816(2) of the Commercial Act.

(3) Defendant Dongba, Jeju Free Logistics Co., Ltd., Jeju Free Logistics, limited liability company, and Youngjin Co., Ltd. (hereinafter referred to as “Dongbaconium”) transported products produced by the Plaintiff to Gangwon-do and some regions in the Seoul Metropolitan area mainly through the Incheon or Pyeongtaek Port. In this case, since the distance of marine transportation from the port of arrival to the port of arrival from the Plaintiff’s production factory considerably exceeds the distance of land transportation from the port of Jeju-do and from the Incheon or Pyeongtaek Port to the logistics center, the limitation period should be determined in accordance with the law applicable to the maritime transportation section.

(4) According to Article 814(1) of the Commercial Act stipulating the short-term exclusion period for a marine carrier, the Plaintiff shall seek damages through a judicial claim within one year from the date the Plaintiff could have received the goods if the Dong bank consortium had transported the goods normally. The goods produced by the Plaintiff are likely to have been transported to the Plaintiff’s sales agent or the place designated by the Plaintiff within one month at the latest from the time of shipping the goods from the factory to the date of shipping the goods from the factory. The transport will be completed within one month at the latest. The Plaintiff may receive the goods from the end of July 2014 even in the case of damages due to the failure to transport the Dong bank consortium around the end of June 2014, which occurred most recently. However, since the Plaintiff filed the instant lawsuit on December 12, 2016, the Plaintiff’s lawsuit against the Dong bank consortium was over the period of filing the lawsuit against the Dong bank.

C. Examining the aforementioned legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the legal nature of the instant contract, whether Article 816 of the Commercial Act applies, the cause of damages, and the interpretation of Article 814(1) of the Commercial Act, or by failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal.

2. Determination on the grounds of appeal by Defendant Samjin Shipping Corporation

A. The lower court determined as follows on the grounds stated in its reasoning.

(1) It is difficult to readily conclude that the damage claimed by the Plaintiff occurred in the course of maritime transport as seen earlier, and such damage is either unclear or limited to any specific area due to its nature.

(2) The modern consortium, to which Defendant Samjin Shipping Co., Ltd belongs, transported the quantities to Honam and a part of the Seoul metropolitan area through the satdo and Green Port. Since the distance of land transport exceeds the distance of maritime transport except the nearest distribution centers in each port, it shall be determined in accordance with the law applicable to the land transport section.

(3) Since the short-term exclusion period under Article 814(1) of the Commercial Act does not apply to Defendant Samjin Shipping Co., Ltd., which constitutes a modern consortium, the Plaintiff is obligated to compensate for damages caused by failure to properly transport the volume of goods from January to June 2014. Furthermore, the scope of compensation for damages is the difference between the transport cost that the Plaintiff should have paid if the modern consortium properly transported, and the transport cost incurred by the Plaintiff’s substitute transport through Hanjin Co., Ltd.

B. Examining the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the transport section and the scope of compensation for damages incurred, or by omitting the judgment dismissing the Plaintiff’s claim partially.

3. Conclusion

Therefore, all appeals are dismissed. The costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jung-hwa (Presiding Justice)