In the recent matter of British American Tobacco Denmark A/S and others v (1) Kazemier Transport BV 1, the Supreme Court examined the question of choice of jurisdiction in a claim against successive road carriers under the CMR Convention2.
British American Tobacco (BAT), the goods owner, contracted with Exel Europe Ltd (Exel), a company registered in England, for the provision of warehousing and distribution services. The agreement between BAT and Exel was governed by English law and subject to exclusive English jurisdiction, and permitted Exel to sub-contract services to approved sub-contractors.
The goods in question consisted of two consignments of tobacco to be carried by road, one from Switzerland to Holland, and the other from Hungary to Denmark, and CMR notes were issued for each consignment.
Exel sub-contracted the transport of the goods to two Dutch carriers, H Essers Security Logistics BV (Essers) for the consignment to be loaded in Switzerland, and Kazemier Transport BV (Kazemier) for the carriage commencing in Hungary. Both sub-contracts contained an English law and jurisdiction clause, but neither made reference to Exel’s contract with the goods owner BAT.
During the transit, the first consignment was allegedly stolen in Belgium, and a substantial part of the second allegedly disappeared somewhere between Hungary and Denmark.
BAT started proceedings in the English court against Exel and the sub-contractors, Essers and Kazemier. The sub-contractors both challenged the jurisdiction of the English courts, invoking Art 31(1) of the CMR, and arguing that it should be read literally. Art 31(1) provides “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, and in no other courts or tribunals.”
Essers and Kazemier argued that England was neither their principal place of business, nor did they make the contract of carriage in an English branch or agency. Furthermore, they did not take over the goods in England, and the delivery place was not England. Consequently, they contended, the English court had no jurisdiction over them, and they could only be sued where they were present (Holland), where the goods had been taken over (Switzerland or Hungary), or where they were due to be delivered (Holland or Denmark).
The High Court agreed and ruled that the English court had no jurisdiction to hear the claims. An order was made to set aside the claim forms.
Court of Appeal
BAT appealed against the decision, insisting that there was jurisdiction over Essers and Kazemier by virtue of Art 36 of the CMR3.
The Court of Appeal held that it was necessary to consider the CMR Convention as a whole and give it a purposive, as opposed to a literal, interpretation. In that manner, jurisdiction could be obtained against successive carriers, pursuant to Art 36, in situations where jurisdiction was established under the contract of carriage against the primary carrier, under Art 31(1).
The Court of Appeal allowed the appeal and declared that the English court had jurisdiction over the claim against both sub-contractors.
The Supreme Court allowed the appeal and restored the High Court’s order setting aside the service of the claim forms. The Supreme Court judges based their decision on the following four reasons:
- The tobacco companies’ case was that once jurisdiction was established over one carrier under Art 31.1, the last sentence of that article (“…an action may be brought at the same time against several of these carriers.”) entitled them to join in any other carrier who was potentially liable, even though proceedings could not be brought against that carrier under Art 31.1. Such an extension to an otherwise carefully defined jurisdiction seemed unlikely to have been intended
- There was no basis upon which the appellants had become bound by the English jurisdiction clause in the primary contract
- The appellants had become party to the contract by virtue of statute and under the terms of the consignment note. They were not party to it by someone making a contract with them through a “branch or agency”. That phrase, as used in Art 31.1, meant a branch or agency of the relevant appellant
- Art 6(1) of the Judgment Regulation (previously the Brussels Convention)4 could not impact on the interpretation of arts 31, 34 and 36 of the Convention, and there was no gap in the Convention that it was required to fill. The Convention had been adopted across a wide range of states, only half of which were EU members. It did not impinge on any EU law principles
The Supreme Court has now provided final clarification on where proceedings can be commenced in circumstances where a principal carrier is based in England but the successive carriers are based in different jurisdictions and goods are not transited to or from England.
In such circumstances, the English Courts will have no jurisdiction and the EU Jurisdiction Regulations will not interfere.