Convention on the Contract for the International Carriage of Goods by Road (hereinafter referred to as "the Convention" or simply as "CMR1") is an international convention drafted under auspices of the United Nations in Geneva on May 19, 1956. As of March 2014, the Convention has been ratified by 55 states, figuratively speaking, from the United Kingdom to Iran. The Convention consists of 51 articles, which are divided into eight chapters. Despite the fact that it was ratified in 1956, it is still an effective, complex and far reaching regulation of transportation of cargo in the contracting states and beyond. In course of its application, it has been amended only once in 1978 by a protocol2 modifying the liability limit in article 23 from Golden Francs to units called Special Drawing Rights.
Scope of Application
First of all, it is necessary to define the scope of application of the Convention, which is, both positively and negatively, defined in article 1 of the Convention. The positive definition states that the Convention "shall apply to every contract for the carriage of goods by road in vehicles for reward, when the place of taking over of the goods and the place designated for delivery, as specified in the contract, are situated in two different countries, of which at least one is a contracting country, irrespective of the place of residence and the nationality of the parties." The definition extends application of the Convention to all carriage by road from or to contracting states and only one of the states needs to be a contracting state to the Convention. Moreover, only the place of dispatch and delivery is relevant in establishing the scope of the convention. Place of residence of the contracting parties (consignor, consignee and carrier) are in this regard irrelevant. Nevertheless, carriage performed under the terms of any international postal convention, funeral consignments and furniture removal are types of carriage excluded from the application of the Convention.
The positive definition of the scope of the Convention seems to be straightforward provision, but it contains several terms which need to be further defined. The definitions of the terms are not part of the Convention, but needs to be taken from the article 4 of the Convention on Road Traffic enacted in Geneva on September 19, 1949. Road is there defined as "any way open to the public for circulation of vehicles" and motor vehicle is there defined as "any self-propelled vehicle normally used for the transport of persons or goods upon a road, other than vehicles running on rails or connected to electric conductors." The complexity and compulsive nature of the Convention is rooted in article 1(5) which banns any contractual variations of the provisions of the convention. However, other conventions, related to carriage by road, such as the ADR3, complement to the convention by regulating other specific aspects and needs of the carriage.
Ratification in Turkey
The Convention entered into force, in accordance with its article 43, on July 2, 1961, and Turkey has ratified the Convention on August 2, 1995 by Law no. 3939, and it came into force on October 31, 1995. Turkey, along with several other countries, used the opportunity to make a reservation granted in article 48, and excluded article 47 of the Convention from application in its jurisdiction.4
Consignment note, also referred to as waybill, is a principle document of carriage of goods by road developed by the International Road Union. It has three language mutations and shall be present in a vehicle while the goods are being transported. The consignment note serves as a prima facie evidence of a contract of carriage, terms and conditions of the contract and acceptance of the goods by the carrier according to Article 9 of the CMR. Nevertheless, "absence, irregularity or loss of the consignment note shall not affect the existence or the validity of the contract."5 The Convention does not specify a form of the consignment note, but it lists all obligatory and facultative requisites, which every consignment note shall, respectively should, contain. All the content requirements are listed in articles 6 and 7 of the Convention. The consignor is responsible for preparation of the consignment note and is as well "responsible for all expenses, loss and damage sustained by the carrier by reason of the inaccuracy or inadequacy of" all the particularities except "a statement that the carriage is subject, notwithstanding any clause to the contrary, to the provision of this Convention."6 The carrier is liable for expenses, loss or damage cause by lack of such statement in the consignment note.
The carrier is obliged, when taking over the goods, to visually check the goods, and also their packing, marking and numbers, and write down all obvious and apparent defects in the consignment note. Such an inspection is expected to be carried out carefully by means of an average carrier. Reservations made by the carrier on the bases of an inspection have to be acknowledged by the consignor in order to be binding for him. If no such reservation indicating defects is made in accordance with article 8, the goods are presumed to be in a good condition fulfilling all the characteristics stated in the consignment note. In addition to the consignment note, the sender is also responsible for acquiring all necessary permits and documents necessary for the transport, and is liable for damage and additional expenses to the carrier, which would be caused by omission of doing so.
Liability of the Carrier
The main obligations of any carrier, arising from the Convention and nature of his activity, are taking over the goods, making all necessary effort for preserving the goods during the carriage, and carrying the goods to their destination by a suitable means of transport, and delivering the goods to the consignee. Generally speaking, not fulfilling these obligations is a breach of contract on the part of the carrier which leads to his liability.
The matter of liability is covered entirely by the Convention and use of national legal systems is not permitted. Article 17(1) of the Convention sets the responsibility period during which the carrier is solely responsible for the goods. "The carrier shall be liable for the total or partial loss of the goods and for damage thereto occurring between the time when he takes over the goods and the time of delivery, as well as for any delay in delivery." Nevertheless, the following paragraph of the article 17 offers the carrier some escape possibilities. The article 17(2) states that "the carrier shall be relieved of liability if the loss, damage or delay was caused by the wrongful act or neglect of the claimant" or by his instruction or "by inherent vice of the goods" or by unpreventable and unavoidable circumstances. Furthermore, paragraph 4 of this article specifies particular types of transport and related circumstances which also avail the carrier from liability. The burden of proof still lies on the carrier, and therefore it is practically very difficult for the carrier to avail himself from liability on the bases of above mentioned provisions.
Delay is defined in article 19 of the Convention and occurs "when the goods have not been delivered within the agreed time-limit." In case of no agreed time-limit, delivery is considered to be delayed if the delivery time exceeds time period reasonably expected from a diligent carrier. Article 20 of the Convention establishes a legal fiction by stating that goods are considered lost if not "delivered within thirty days following the expiry of the agreed time-limit, or, if there is no agreed time-limit, within sixty days from the time when the carrier took over the goods." They can be still recovered and delivered within one year from the moment when the compensation is agreed upon. If the party, which is compensated for the loss, wants to be notified within one year in case the good are found, it should make a notification about it on the compensation receipt. If no such notification is made, "the carrier is entitled to deal with them in accordance with the law place where the goods are situated."
Limits of Liability
The very core of the Convention, and peculiarity at the same time, are provisions of article 23 of the Convention dealing with limits of liability of the carrier in case of loss, damage or delay, as well as with circumstances under which the liability limit can be broken. The compensation for the goods when carrier found liable for their damage or loss, both whole and partial, is calculated according to their commodity exchange price, or according to their current market price, or according to the value of goods of the same kind and quality, in this order, at time and place at which the goods were accepted for carriage.7 However, compensation is limited and shall not exceed 8,33 SDR8 per kilogram of gross weight short. In addition to the compensation, custom duties and other additional expenses paid should be recoverable. Nevertheless there are ways to break the limit and demand higher compensations. The first option is when the goods are of special interest or, for some other reason, of higher value exceeding the limit. This has to be declared beforehand in the consignment note. In addition to the compensation, article 27 states that "the claimant shall be entitled to claim interest on compensation payable."
Another way for the claimant to break the liability limit is rooted in the provisions of article 29 of the Convention. This article has appears to be the most controversial one, because its vague provisions allow for differing interpretations in various jurisdictions, which is often a cause of forum shopping on the part of the claimant. The article 29 states that the liability shall not be limited if the damage was caused by the carrier due to his "willful misconduct or by such default on his part as, in accordance with the law of the court or tribunal seized of the case, is considered as equivalent to willful misconduct." One cliché says that two lawyers usually have at least three legal opinions, and this applies also to interpretation of this article. Courts of states like Germany, France or Italy more often tend to break the limit on the bases of expressly stated willful misconduct, as well as on the bases of intentional recklessness, which they consider to be similar to willful misconduct. On the other hand, courts of Belgium interpret provisions of the article 29 rather restrictively and tend to be more hesitant in breaking the liability limit.9 It's necessary to add that burden of proof for such action lies on the carrier. Article 31 of the Convention gives parties to a dispute wide range of options where to bring the claim against the carrier. The claimant can decide whether to bring an action in a state of defendant's ordinary residence, or its principal place of business, or in states where goods were taken over, or at the place designed for delivery. There are at least two, but often more options, so it is obvious that a claimant will choose a court of a country which will more likely break the liability limit of the carrier. However, the Convention doesn't allow the claimant to bring more actions in the same matter, and the period of limitation is set to one year, respectively three years in case of a willful misconduct, and counts from the delivery date or differently under different circumstance defined in article 32(1) of the Convention. This fragmentation and lack of uniformity in application disadvantages the carrier and puts on him an additional financial burden.
Another uncertainty of the Convention arises when it comes to relation of the provisions of the article 23(4) and article 29. Some scholars say that duties and other charges are recoverable regardless of whether the liability limit is broken. On the other hand, some say that duties and other charges are recoverable only when the liability limit is broken on the bases of article 29. This question remains unanswered and opinions differ. Nevertheless, in the light of all provisions of the Convention, duties and other extra payments should be recoverable separately from compensation for the lost or damaged goods, and therefore regardless of the liability limit. Last but not least, disputes arising from carriage by road do not need to be referred only to national courts, but may be also subject to arbitration. The article 31 of the Convention states that an arbitration clause may be part of a contact of carriage. Such an arbitration clause must note that the tribunal shall apply the Convention.
It has become a common practice that goods are transported on very long distances by various means of transport and by many different carriers. Therefore it is very important to fairly distribute responsibility for the carried goods among all the firms contributing to the transport. So the last aspect of carriage by road covered by the Convention is the matter of successive carriage. The article 34 of the convention states that each of the carriers "shall be responsible for the performance of the whole operation." Nevertheless, article 36 allows claims for liability to be brought only against the first and last carrier, and against the carrier who performed the portion of the carriage during which the goods were either lost or damaged. Moreover, carrier which paid compensations shall be able to recover those from the carrier which caused the damage. If it is not possible to determine which carrier caused the damage or loss, they all should pay compensations accordingly and proportionally to their portion of the carriage.
The Convention is a complex document effectively regulating matters of transport of goods by road in all contracting states and beyond its borders within the scope of the Convention. Parties to a contract of carriage, which is subject to the Convention, are not allowed to alter any of its provisions. On the other hand, they are free to agree individually upon anything outside of the legal area covered and regulated by the Convention. Despite some peculiarities related to interpretation of some rather vague provisions of the Convention, it has been, along with other complementing legislature, for half a century, very important legal document unifying carriage of goods by road in the area of Europe and reaching all the way to Central Asia. Success of the Convention can be seen primarily in equal and fair distribution of rights, duties, responsibilities and liability of all parties to the contract of carriage.
1 CMR is an abbreviation of the French name of the Convention: "Convention relative au contrat de transport international de Marchandises par Route."
2 The Protocol was adopted by the Inland Transport Committee of the Economic Commission for Europe at its thirty-eighth (special) session held at Geneva on 5 July 1978. The Protocol is open for signature at Geneva from 1 September 1978 to 31 August 1979. (Source: https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XI-B-11-a&chapter=11⟨=en)
3 The European Agreement concerning the International Carriage of Dangerous Goods by Road, Geneva, September 30, 1957
4 Reservation notice: "The Republic of Turkey does not consider itself bound by article 47 of the Convention, under which any dispute between two or more Contracting Parties relating to the interpretation or application of the Convention which is not settled by negotiation or other means may, at the request of any of the Contracting Parties concerned, be referred to the International Court of Justice."
5 Article 4 of the CMR
6 Article 6(1k) of the CMR
7 Article 23(1, 2) and article 32(1) of the CMR
8 The maximum liability limit was raised in 1978 by a protocol which amended the Convention and is still subject to separate ratification. Turkey ratified the protocol on August 2, 1995 with a reservation to article 8 of the protocol, which is identical to reservation made to the Convention itself. Further more, the protocol altered the units in which the liability limit is calculated from Golden Franc to Special Drawing Rights (SDR). SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. (Source: https://www.imf.org/external/np/exr/facts/sdr.HTM)
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