In principle the delay liability covers of lost sub-contract or alternative goods, the loss of profit, the decrease of market value, and other pure economic loss sustained by the consignee, for example, where an industrial plant could not operate because components and parts of an essential machine were delivered late, etc. This can be termed ‘economic’ or ‘non-physical’ loss and is sometimes referred to as ‘consequential’ loss.
Owing to the economic value of Article 21 under the Rotterdam Rules might prove to be quite high, Article 60 regulates the limitation of liability for loss caused by delay. If only economic loss occurred as a result of delay in delivery, the limitation of liability of carrier is limited to an amount equivalent to 2.5 times the freight payable on the goods delayed.
The foreseeability rule has its greatest relevance in limiting recovery for consequential or economic damages, including loss of profit. This foreseeability rule can be traced back to an Anglo-American rule initiated by the English Court of Exchequer in Hadley v. Baxendale, 156 Eng. Rep. 145 (Ex. 1854). The Hadley rule is deemed to have affected the concept of foreseeability as a damages-limiting principle in the Japanese civil law, and also that of the Korean counterpart through the Japanese civil code.
On the other hand, the right to limitation of liability under 60 may be lost if the cargo claimants proves: (ⅰ) that the loss was caused by the personal act or omission of the carrier; (ⅱ) that the personal acts or omission were committed recklessly; and (ⅲ) that ‘at the time of those acts or omissions’, the carrier actually knew that such loss would probably result.
The requirement that such loss would ‘probably’ result is so-called the foreseeability. This probably means that the breaching party may be liable for a lesser range of economic loss under the Rotterdam Rules than under the CISG regime. The foreseeability rule as provided in Article 61 under the Rotterdam Rules is different in several respects from CISG Article 74.
From a comparative law perspective, considering especially the respective pertaining to the liability for consequential losses in the Korean civil code, it is thus worth analyzing the doctrine of foreseeability in Anglo-American law established under Hadley v. Baxendale as applicable in the carrier"s liability of delay in delivery under the Rotterdam Rules.