UK: Carriage Of Goods By Road: Court Of Appeal Clarifies Jurisdiction Provisions Of The CMR Convention

Last Updated: 4 February 2014
Article by David McInnes and Liam Howard

British American Tobacco Switzerland S.A. and Others v. (1) Exel Europe Ltd; (2) H Essers Security Logistics B.V. and others; British American Tobacco Denmark A/S and Others v. (1) Exel Europe Ltd; (2) Kazemier Transport B.V. [2013] EWCA Civ 1319

The Court of Appeal has held that a cargo owner who had entered into a CMR contract of carriage with a carrier based in England, and who had agreed exclusive English jurisdiction for disputes arising out of the contract of carriage, could bring proceedings in England not only against that carrier, but also against successive carriers to whom the primary carrier had delegated the responsibility of the carriage in question. Those proceedings could be brought in England notwithstanding that the successive carriers were not parties to the contract of carriage between the cargo owner and the primary carrier, and notwithstanding that they had no connection with England, and notwithstanding that the cargo had no connection with England.

The background facts

The Claimants/Appellants were British American Tobacco Switzerland A/S and British American Tobacco Denmark A/S (together "BAT"). BAT contracted with Exel Europe Limited ("Exel") to carry cargoes of tobacco around Europe by road. In the present case, BAT Switzerland A/S contracted with Exel to move tobacco from Switzerland to Rotterdam, and BAT Denmark A/S contracted with Exel to move tobacco from Hungary to Denmark. The agreement contemplated that the CMR would apply to the movements. The agreement further provided that Exel – although primary carriers – could subcontract some or all of the movements to approved sub-contractors (or "successive carriers" using the wording of the CMR). Finally, the agreement expressly provided that all disputes arising out of the agreement would be subject to English law and to the jurisdiction of the English High Court.

In the event, Exel did sub-contract both movements. The Switzerland-Rotterdam movement was sub-contracted to H Essers Security Logistics B.V. and subsidiaries (together "Essers"), and the Hungary-Denmark movement was subcontracted to Kazemier Transport B.V. ("Kazemier"). The Switzerland-Rotterdam tobacco was loaded in Switzerland on 2 September 2011, and was allegedly stolen in an armed robbery on a motorway in Belgium the next day. The Hungary-Denmark tobacco was loaded in Hungary on 15 September 2011, and 18 pallets were stolen while the vehicle was parked overnight (it is alleged that instructions had been given that drivers were not to use overnight parking areas).

BAT duly commenced proceedings in the English High Court against Exel and Essers for losses suffered as a result of the Switzerland-Rotterdam movement robbery, and against Exel and Kazemier for losses suffered as a result of the Hungary-Denmark theft. Exel duly accepted proceedings, not least because of the English High Court jurisdiction provision contained in the BAT/Exel agreement. However, both Essers and Kazemier –although accepting that the CMR gave BAT the right to sue them directly – challenged the jurisdiction of the English High Court, on the basis of the jurisdiction provisions of the CMR.

In particular, Essers and Kazemier challenged jurisdiction on the basis of Article 31 of the CMR, which provides as follows:

"1. In legal proceedings arising out of carriage under this Convention, the plaintiff may bring an action in any court or tribunal of a contracting country designated by agreement between the parties and, in addition, in the courts or tribunals of a country within whose territory:

(a) The defendant is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made, or

(b) The place where the goods were taken over by the carrier or the place designated for delivery is situated."

Essers and Kazemier argued that in accordance with Article 31, BAT could sue them either where they were present (both in Holland), or where the goods were taken over (Switzerland or Hungary respectively), or where the goods were due to be delivered (Holland or Denmark respectively), but nowhere else, and in particular not in England. The Commercial Court agreed with Essers' and Kazemier's argument.

The Court of Appeal Decision

BAT made two arguments against the position adopted by Essers and Kazemier, which found favour with the Court of Appeal. The first was that Article 31 had to be read together with Article 36, which provides as follows:

"Except in the case of a counterclaim or a setoff raised in an action concerning a claim based on the same contract of carriage, legal proceedings in respect of liability for loss, damage or delay may only be brought against the first carrier, the last carrier or the carrier who was performing that portion of the carriage during which the event causing the loss, damage or delay occurred, an action may be brought at the same time against several of these carriers." [our emphasis]

BAT argued that the effect of the two Articles when read together was that – once jurisdiction had been established over one of the carriers in accordance with Article 31 – then an action could be brought at the same time (and in the same place) against the relevant successive carriers also, in accordance with Article 36. Lord Justice Rix, who gave the leading Court of Appeal Judgment, agreed with BAT.

Lord Justice Rix's starting point was that it was necessary to consider the Convention as a whole and give it a purposive interpretation, rather than to give each Article a narrow and literal interpretation. With the purposive approach in mind, Lord Justice Rix noted that the concept of "successive carriers" had not yet been introduced into the Convention by Article 31, and that the concept was only addressed from Article 34 onwards. As such, Lord Justice Rix took the view that Article 31 was silent on how successive carriers should be dealt with, and that the successive carrier articles were required to understand how the jurisdiction of successive carriers should be dealt with. On the basis that the successive carrier articles allowed one carrier to sue multiple other carriers in any jurisdiction where they were able to establish jurisdiction over one of the carriers, Lord Justice Rix held that the same principle should apply to cargo owners suing multiple carriers.

The second argument run by BAT which found favour with the Court of Appeal was that the Convention should be interpreted to promote rather than to undermine the principles of the European "Judgment Regulation" (the regulation dealing with rules regarding the jurisdiction of courts in civil and commercial matters). One of the principles of the Judgment Regulation is that dual proceedings in more than one jurisdiction should be avoided in order to avoid potentially inconsistent judgments.

After reviewing the authorities, His Lordship held that the CMR (or any specialist convention for that matter) should be construed purposively to bring it as far as possible into line with the Judgment Regulation principles, and that in the event of a conflict between the CMR principles and the Judgment Regulation principles, the CMR must give way to the Judgment Regulation. On the basis that he found that the CMR should be construed to allow multiple carriers to be sued by a cargo owner in any place where the cargo owner is able to establish jurisdiction (in accordance with the rules of Article 31) over any one of them, Lord Justice Rix held that the CMR could be construed in accordance with the Judgment Regulation principles.

Comment

Cargo owners have always been entitled to sue the party they contracted with to carry their cargo by road in the jurisdiction agreed between the parties (i.e. the primary carrier), even where that party did not actually cause the loss or damage to the cargo. This case provides the welcome clarification for cargo owners that if, for whatever reason, they consider it to be advantageous to also sue one or more of the successive carriers at the same time as the primary carrier, then they can sue those successive carriers in the same jurisdiction as the primary carrier.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.