Nanjing Maritime Court Applies Mexican Railway Law in Multi-Modal Cargo Damage Dispute

The Nanjing Maritime Court properly heard a foreign-related cargo damage dispute arising from cross-border sea-land combined transport. It commissioned a professional foreign law research institution to retrieve Mexican laws governing railway transportation and clearly defined the scope and limit of compensation liability for cross-border freight carriers.

In early 2020, a glass manufacturing enterprise based in Jiangsu signed an international freight forwarding agreement with a logistics company in Qingdao. The contract entrusted the Qingdao logistics firm to conduct door-to-door multi-modal transport from Lianyungang to Apodaca, Mexico, carrying tempered glass and matching plastic decorative parts worth USD 140,545.88, with the shipper paying an additional ocean freight of USD 15,400. The logistics company undertook booking, customs clearance and issuance of a through multi-modal transport bill of lading. The goods arrived at the Mexican port smoothly by sea, yet all cargo inside five containers was destroyed after a train derailment during the subsequent inland railway leg. Failing to obtain compensation, the glass manufacturer filed a lawsuit with the Nanjing Maritime Court, demanding full indemnification for the cargo loss and a full refund of ocean freight. Although the freight contract stipulated that all disputes would be governed by Chinese law, the network liability principle under the Maritime Law of the People’s Republic of China required that the compensation standard and maximum liability cap for damage occurring on the Mexican railway segment be determined in accordance with local Mexican railway laws. Collecting foreign legal materials in cross-border freight disputes is a cumbersome process. Searching for legal provisions ad hoc during trial would unnecessarily prolong litigation and lead to repetitive verification work. Moreover, Mexico’s railway legislation contains numerous complex provisions which are difficult for ordinary enterprises and lawyers to retrieve and interpret accurately.

Three prominent practical challenges commonly seen in cross-border sea-land transport disputes emerged in this case. First, multi-modal transport involves multiple jurisdictions, and there lacked standardized procedures to identify and lock in the scope of foreign legal provisions to be verified in advance. Second, the compensation limits and calculation rules for railway cargo damage under Mexican law are highly technical. It poses a high threshold for enterprises to conduct independent legal research, often resulting in incomplete legal references and misinterpretation. Third, the cargo owner claimed full compensation for the goods value while the logistics company defended itself by invoking foreign liability cap rules, leading to a fundamental disagreement over loss assessment criteria.

To shorten the trial cycle and clarify all legal grounds in one go, the trial judge convened a pre-trial conference with both parties to sort out all Mexican legal questions requiring verification and formulate a unified research checklist. The court then entrusted a professional foreign law research center to deliver a comprehensive legal report. Based on Article 52 of Mexico’s Implementing Act for Railway Services obtained from the report, compensation for cargo damage shall be calculated by reference to 15 days of the general minimum wage in Mexico City per metric ton, rather than the full transaction value of the goods. After calculation, the court ordered the logistics company to pay RMB 19,662.93 plus interest as compensation for cargo damage, and dismissed the plaintiff’s other claims for full compensation and freight refund. Neither party filed an appeal after the first-instance judgment was served, as both accepted the court’s reasoning.