In the matter of British American Tobacco Switzerland SA v (1) Exel Europe Ltd & (2) Ors 1, the Court of Appeal was asked to examine 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.
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), and Kazemier Transport BV (Kazemier). Both sub-contracts contained an English law and jurisdiction clause, but neither made reference to Exel’s contract with 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.
High Court proceedings
BAT started proceedings in the English court against Exel and the sub-contractors, Essers and Kazemier.
Essers and Kazemier, both challenged the jurisdiction of the English courts, invoking Article 31(1) of the CMR.
Article 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 with the Defendants’ arguments, and ruled that the English court had no jurisdiction to hear the claims brought by the cargo owners against the Dutch carriers.
Court of Appeal proceedings
BAT appealed, insisting that there was jurisdiction over Essers and Kazemier by virtue of Article 36 of the CMR. Article 36, they maintained, extended jurisdiction over successive carriers if there was jurisdiction over any carrier under Article 31(1). As there was undisputed jurisdiction in England over Exel, BAT argued that it followed that there should therefore be jurisdiction over the Dutch sub-contractors.
Article 36 of the CMR provides:
“… 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.”
In the alternative, BAT contended that the jurisprudence of the European Court of Justice required the CMR to be interpreted so as to promote the principles of the Judgment Regulation (previously the Brussels Convention)3 in terms of avoiding dual proceedings in more than one jurisdiction and potential inconsistent judgments.
The main issue the Court of Appeal had to consider was whether Article 31(1) of the CMR applied individually to each successive carrier being sued by a sender or consignee, and if so the sub-contractors could not be brought within the jurisdiction of the English court, or whether the provision of Article 36 of the CMR that “an action may be brought at the same time against several of these carriers” had the effect of extending jurisdiction over a first, last or performing carrier if there was jurisdiction under Article 31(1) over any one of them.
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 Article 36, in situations where jurisdiction was established under the contract of carriage against the primary carrier, under Article 31(1). Commenting on the relationship between the CMR Convention and the Judgment Regulation, the Court of Appeal held, first, that the Judgment Regulation would be available to fill in a gap left by the jurisdictional provisions of the CMR, secondly, that a purposive approach should be adopted to bring the CMR in line as far as possible with the Judgment Regulation and, thirdly, that in the event of a conflict, the Judgment Regulation should take precedence over the Convention.
In conclusion, the Court of Appeal allowed the appeal and declared that the English court had jurisdiction over the claim against both Dutch sub-contractors.
The Court of Appeal has provided much needed clarification in relation to 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 carried to or from England.
Under the CMR, cargo interests may simply pursue the principal carrier however, if there are tactical reasons to sue more than one of the carriers in England, this ruling now permits cargo interests to do so pursuant to Article 36 of the CMR.
Therefore, successive carriers will now not only face potential proceedings in the jurisdiction in which they are present, and where the goods are taken over or due to be delivered, but also in England if jurisdiction can be established against the principal carrier under Article 31(1) of the CMR.