In its Judgement nº 248/2019 dated 6th May , the Spanish Supreme Court has confirmed the right of the effective carrier to take direct action against the sender in case the freight for the transport has not been paid. The Supreme Court had previously ruled in favour of this direct action in its Judgement Nº 664/2017 of 24th November, after several conflicting second instance decisions (for example, of the Court of Appeals of Madrid, Zaragoza, Bilbao or Barcelona among others).
This way, the Supreme Court endorses for the second time one of the latest amendments related to the Spanish Land Transport Regime Act (LOTT) included in the Act 9/2013 of 4th July, which in its Additional Provision Six establishes the following: “Direct legal action against the main sender in the event of intermediation. In the event of intermediation in a land transportation contract, the effective carrier can take a direct action for the unpaid part, against the principal sender and everyone who, when applicable, preceded them in the subcontracting chain, in case of non-payment of the freight for the transport by the contracting party, except in the case stipulated in article 227.8 of the restated text of the Public Sector Contracts Act, approved by Royal Legislative Decree 3/2011, of 14th November.”
The Additional Provision Six does not limit this direct action to the sender who has not paid the contracted services. This direct action exists regardless of the relations established between the original parties to the contract and the effective carrier is entitled to claim the price of the transport not only against the main sender but also against the rest of the intervening parties (intermediaries) in the transport chain.
The Supreme Court concludes in both judgments that: “The essential novelty that the amendment of the Act introduces is that the direct action can be exercised by the effective carrier regardless of whether the defendant (the sender or an intermediate subcontractor) has paid or not the price of the transport to his or her contracting party. In other words, The Additional Provision Six “LOTT” does not limit the exercise of the direct action to the case that the sender does not pay his contracting party. This direct action of the effective carrier exists even if the sender has paid its contractual carrier.” These clarifications are important and need to be taken into consideration since, initially, the direct action in land transportation was assimilated to the direct action in a work contract set forth in article 1597 of the Civil Code (which was based in the concept of unjust enrichment) whereas the guarantee established in the Additional Provision Six of the “LOTT” has a broader scope and, undoubtedly, the right of effective carriers is protected in a more substantial way by interpreting that the purpose of the Act to protect the weakest part of the transport chain, i.e., the effective carrier.
Therefore, although there can be no doubt that the position of the effective carrier remains protected by the Act and the Supreme Court interpretation of the same, the sender is placed in a complicated situation as, even if he complies with this obligation to pay the freight, he may still be involved in a third-party claim (actual carrier) for the amounts already paid. If the sender were compelled to make double payment, he would have a recourse action against his contractual carrier and could demand the return of the amount payed to the effective carrier. To protect the sender from such situation and to minimize this risk would to prohibit the contractual carrier to subcontract. In fact, the aforementioned 2017 Supreme Court Judgement advises the sender to have a control, insofar as it is possible, over this phenomenon, the risks of which were already analyzed in our article dated July 10th, 2019, “A competitive but also a secure road transportation”.
Regarding the potential application of this provision to international land transport subject to the CMR Convention, there are contradictory positions. On one hand, some experts argue that the direct action should remain excluded from international transport under the above-mentioned convention because the convention does not include such possibility. On the other hand, other experts consider that the direct action should apply because the “LOTT” complies with the CMR Convention and because its text does not establish the geographical scope of application of the referred action.