Sir Bernard Rix:
- This appeal raises an issue as to jurisdiction under the Convention on the Contract for the International Carriage of Goods by Road (the "CMR"), which has been enacted into English law by being scheduled to the Carriage of Goods by Road Act 1965 (the "1965 Act"). Like many such issues arising under the CMR it is not without difficulty. Although there are some relevant dicta in English cases, there are no decided cases either here or in the courts of other state parties to the CMR.
- The question raised by this appeal, in a nutshell, is this: Can a cargo owner who has entered into a CMR contract of carriage with a carrier, based in England, who has agreed exclusive English jurisdiction for disputes arising out of the contract of carriage, bring proceedings in England not only against that carrier (that much is not in dispute) but also against successive carriers to whom the primary carrier has delegated the responsibility of the carriage in question?
- The expression "successive carrier" comes from the CMR. On the facts of these cases the successive carriers can be regarded as sub-carriers who performed the carriage in question.
- Two separate actions leading to two separate appeals are involved. The claimant cargo owners, here the appellants, are various companies within the British American Tobacco group. The principal claimant in one action is British American Tobacco Switzerland SA and the principal claimant in the second action is British American Tobacco Denmark A/S. I shall generally refer to "BAT" as the claimants, but where necessary may refer to BAT Switzerland and BAT Denmark respectively. The principal carrier in both actions is Exel Europe Limited ("Exel"). It contracted with BAT under either or both a Framework Agreement dated 9 October 2007 and a Local Agreement of the same date. Both agreements contained English law and exclusive jurisdiction clauses. The latter stated: "Each party irrevocably submits to the exclusive jurisdiction of the English Courts in relation to all matters arising out of or in connection with this…Agreement." The agreements expressly contemplated sub-contracting to approved sub-contractors. They also contemplated the application of the CMR to at least some of the services to be provided by Exel, and specified that their terms were to apply save to the extent that they were inescapably in conflict with the CMR.
- The successive carrier in the BAT Switzerland action was H Essers Security Logistics BV ("Essers Security") and/or H Essers Transport Company Nederland BV ("Essers Transport"). It appears that the sub-contract was made by Essers Security but performed by its sister-company Essers Transport. For the purposes of the arguments raised below or on appeal, no distinction has been made between these two companies, and it will be sufficient simply to refer to "Essers".
- The successive carrier in the case of the BAT Denmark action was Kazemier Transport BV ("Kazemier").
- Both Essers and Kazemier sub-contracted with Exel on the terms of Exel's Transportation Terms and Conditions. These contained their own English law and jurisdiction clauses. However, there was no direct contractual link between BAT and either sub-contractor.
- The copy of the CMR note in our bundles in the case of the Essers' sub-contract named BAT Switzerland as consignor, Maersk Shipping Lines Rotterdam as consignee, and "Essers" as "carrier" (not as successive carrier: separate boxes provide for carrier and successive carrier respectively). The tobacco cargo was loaded in Switzerland on 2 September 2011 and was due to be transported to Rotterdam. It was allegedly stolen in an armed robbery on a motorway in Belgium on 3 September.
- The copy of the CMR note in our bundles in the case of the Kazemier sub-contract named BAT Pecsi Dohanygyar Kft as consignor, British American Tobacco A/S (House of Prince A/S) as consignee and Kazemier as "carrier". The tobacco cargo was loaded in Hungary on 15 September 2011 and was due to be transported to Denmark. It is alleged that, despite a clear written instruction that drivers were not to use specified overnight parking areas, the driver did so and this resulted in the theft of 18 pallets of cigarettes while the vehicle was parked. Wilful misconduct within the meaning of the CMR's article 29 is alleged.
- BAT has sued both Exel and Essers in the first action and both Exel and Kazemier in the second action. Exel accepts English jurisdiction, as it is bound to do. It is both present here and has agreed to be sued here. However, Essers and Kazemier challenge English jurisdiction on the basis of the provisions of article 31.1 of the CMR. Only BAT and Essers and Kazemier have been represented in this court and below before Mr Justice Cooke (his judgment may be found at [2012] EWHC 694 (Comm)). Exel has not been represented.
- The structure of the CMR is to make primary carriers fully liable to both senders and consignees over the whole length of a CMR contract of carriage, and to enable primary carriers and sub-contracting carriers (CMR's "successive carriers") to dispute and/or share liability among themselves. However, at the same time it allows a sender or consignee to sue directly on the CMR's "contract of carriage" any of the second or successive carriers who becomes a party to that contract "by reason of his acceptance of the goods and the consignment note" (article 34). In the present appeals, it is common ground for present purposes that both Exel and its Essers and Kazemier sub-contractors are all parties to CMR contracts of carriage whom BAT can sue directly. The issue, however, is whether BAT can sue Essers and Kazemier in England. The sub-contractors submit that they cannot be sued in England, but only where they are present (in Holland) or where the goods were taken over (in Switzerland or Hungary respectively) or were due to be delivered (in Holland or Denmark respectively). That they submit is the effect of article 31.1 (set out under para [16] below), which lists the places where suit may be brought in such terms and concludes "and in no other courts or tribunals".
- The pragmatic question may be asked: If BAT can sue and recover from Exel in England, why need it bother with Essers and Kazemier? The pragmatic answer given by Mr Charles Priday on behalf of BAT is that it is desired to have both Exel and its sub-contractors in the same action in order to ensure that there can be a full investigation of exactly what went wrong, and why. In cases of joint and several liability, he submits, it is convenient to have everyone present. Otherwise there is the risk of inconsistent judgments in more than one forum. Moreover, BAT is unwilling to sue in continental countries such as, for instance, Holland, whose courts would not include duty paid on the lost cigarettes within recoverable damages, while England construes the CMR as permitting such recovery. Since duty is some 90% of the cost of the lost cigarettes, this is a meaningful consideration.
The provisions of the CMR
- The most relevant articles of the CMR are articles 31, 34, 35, 36 and 39 (see below). However, it is also convenient first to refer to some further provisions. Thus article 1 states that the CMR applies to every contract for the carriage of goods by road "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. There is no dispute that the contracts concerned between BAT and Exel for the carriage of the tobacco from Switzerland to Holland and from Hungary to Denmark respectively are such contracts within the CMR. Article 4 provides: "The contract of carriage shall be confirmed by the making out of a consignment note. The absence, irregularity or loss of the consignment note shall not affect the existence or the validity of the contract of carriage which shall remain subject to the provisions of this Convention". Similarly, article 9 states that the consignment note is "prima facie evidence of the making of the contract of carriage, the conditions of the contract and the receipt of the goods by the carrier". It is therefore accepted for present purposes that BAT and Exel are parties to the underlying contracts of carriage within the CMR, only some of the terms of which may have been expressly evidenced by CMR notes.
- In the present case we do not have in our bundles any original CMR notes naming Exel as the carrier, but no point has been taken on that score. We do have copies of the consignment notes to which Essers and Kazemier have added their names. Article 35 says: "A carrier accepting the goods from a previous carrier…shall enter his name and address on the second copy of the consignment note". The appeal has been argued on the basis that that is what Essers and Kazemier have done on the copies of the CMR notes before us. It has been argued on the basis therefore that Exel is the primary carrier under two CMR contracts of carriage, evidenced by CMR notes to which Essers and Kazemier have entered their names and thereby become parties respectively, as article 34 states "under the terms of the consignment note". In this respect article 34 speaks about "a single contract…performed by successive road carriers". These appeals have been mutually argued on the basis that they concern such single contracts of carriage.
- It may be important to note the chapter headings within the CMR. Thus chapter III is headed "Conclusion and Performance of the Contract of Carriage". It covers articles 4 to 16. It contains article 13 which gives to the consignee a right "to enforce in his own name against the carrier any rights arising from the contract of carriage". Chapter IV is entitled "Liability of the Carrier" and covers articles 17 to 29. So far, the CMR has only spoken of the "carrier" under a CMR contract of carriage. The concept of successive carriers has not yet been introduced. That will occur under chapter VI, entitled "Provisions relating to Carriage performed by Successive Carriers", covering articles 34 to 40. In between chapters IV and VI comes chapter V, entitled "Claims and Actions", covering articles 30 to 33. That includes the important article 31.
- I turn now to the articles which are at the core of the argument on these appeals:
"Article 31
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,
and in no other courts or tribunals.
2. Where in respect of a claim referred to in paragraph 1 of this article an action is pending before a court or tribunal competent under that paragraph, or where in respect of such a claim a judgment has been entered by such a court or tribunal no new action shall be started between the same parties on the same grounds unless the judgment of the court or tribunal before which the first action was brought is not enforceable in the country in which the fresh proceedings are brought.
Article 34
If carriage governed by a single contract is performed by successive road carriers, each of them shall be responsible for the performance of the whole operation, the second carrier and each succeeding carrier becoming a party to the contract of carriage, under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note.
Article 35
1. A carrier accepting the goods from a previous carrier shall give the latter a dated and signed receipt. He shall enter his name and address on the second copy of the consignment note…
Article 36
Except in the case of a counter-claim or a set-off 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.
Article 39
1. No carrier against whom a claim is made under article 37 and 38 shall be entitled to dispute the validity of the payment made by the carrier making the claim if the amount of the compensation was determined by judicial authority after the first mentioned carrier had been given due notice of the proceedings and afforded an opportunity of entering an appearance.
2. A carrier wishing to take proceedings to enforce his right of recovery may make his claim before the competent court or tribunal of the country in which one of the carriers concerned is ordinarily resident, or has his principal place of business or the branch or agency through which the contract of carriage was made. All the carriers concerned may be made defendants in the same action…"
- Article 39 goes on to apply to proceedings between successive carriers some of the provisions of articles 31 and 32 which otherwise would not seem to apply to such claims, such as the time limitation provisions of article 32.
- It may be noted that article 39 is concerned with a carrier's "right of recovery" against other carriers. That concept is introduced in article 37, which states that "A carrier who has paid compensation…shall be entitled to recover such compensation…from the other carriers who have taken part in the carriage…". The amount of the compensation cannot be disputed where it has been determined in judicial proceedings and the other carriers have been given due notice of the proceedings and afforded an opportunity of entering an appearance (article 39.1). Therefore, the CMR certainly contemplates the possibility of successive carriers becoming party to an action brought by a sender/consignee whatever the provisions of article 31.1. As for article 31.1(a), I will, for convenience, refer to the jurisdictional bases listed there as dependent on "presence" of the defendant. The expression "defendant" is used because it applies to cargo interests (sender or consignee) as well as to the carrier.
The issues and submissions
- The essential issue is whether the provisions of article 31.1 apply disjunctively to every successive carrier defendant sued by a sender or consignee, with the effect that Essers and Kazemier cannot be brought within the jurisdiction of the English court; or whether article 36's provision that "an action may be brought at the same time against several of these carriers" has the effect that jurisdiction is extended over a first, last or performing carrier if there is article 31.1 jurisdiction over any of them.
- In this connection, BAT makes four submissions. First, and its primary submission, there is jurisdiction by reason of article 36 over any of the three identified successive carriers if there is jurisdiction under article 31.1 over any of them. In the present case there is plainly jurisdiction in England over Exel, the first or primary carrier, pursuant to the agreed exclusive jurisdiction clause and because of its presence in England, and it therefore follows without more that there is jurisdiction over Essers and Kazemier, who were both performing carriers.
- BAT's second, third and fourth submissions are fall-back submissions in case it has to find a specific and separate article 31.1 jurisdiction against Essers and Kazemier themselves. Thus, secondly, BAT submits that Exel was the "branch or agency through whom the contract of carriage was made". For these purposes Mr Priday says that the contract of carriage in question is the primary contract. His essential point is that there is only one contract of carriage on which a sender or consignee sues and that it follows that a successive carrier who joins himself to that contract does so by using the first carrier as its branch or agency. It would be anomalous to look to the making of the sub-contract with which a consignor is not concerned.
- Thirdly, BAT submits that a jurisdiction clause contained in the primary contract of carriage does duty for all successive carriers who join themselves to that contract, whether they had specific notice of such a clause in the consignment note or not.
- Fourthly, BAT submits that the jurisprudence of the European Court of Justice (the "ECJ") requires that the CMR be interpreted so as to promote and not to undermine the principles of the Judgment Regulation (previously the Brussels Convention), in terms inter alia of the avoidance of dual proceedings in more than one jurisdiction and the danger of inconsistent judgments. It was for the sake of such principles that the Judgment Regulation contains its article 6.1 allowing parties to be joined in an action on what the English think of as a "necessary or proper" basis. Indeed, even if the CMR cannot prima facie be so interpreted, ECJ jurisprudence now gives the principles of the Judgment Regulation priority or paramountcy, despite the apparent sense of its own article 71.1 which states that –
"This Regulation shall not affect any conventions to which the Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments."
Thus, this fourth submission both goes in support of BAT's first submission (and perhaps its second and third submissions as well), and is also presented as a paramount, alternative, basis of jurisdiction.
- Essers and Kazemier have been jointly represented by Mr John Passmore of counsel. He submits that none of the four bases on which BAT seeks jurisdiction can succeed. In that he has the support of the judge below. He submits, firstly, that article 36 does not affect jurisdiction, it merely allows multiple defendants. He contrasts the language of article 39, which he says does make clear that jurisdiction over one successive carrier brings with it jurisdiction over all ("All the carriers concerned may be made defendants in the same action"). He submits that any interest in favour of canalisation of claims against several carriers in one set of proceedings is served by article 31.1(b)'s basis of jurisdiction set in terms of the place where the goods were taken over or designated for delivery. All three kinds of successive carriers contemplated as defendants in article 36 can be joined in such proceedings. It is nothing to the point that in this case BAT does not care to sue in Switzerland, Hungary, Denmark or Holland.
- Secondly, he submits that in respect to any defendant within article 31.1 the relevant branch or agency must be that of that defendant, and thus of the two sub-contractors in question. In any event, Exel's role was that of a principal, rather than an agent.
- Thirdly, he submits that a jurisdiction clause within a primary contract of carriage is irrelevant unless it is agreed to in turn by a sub-contractor, as it might do where it has been entered into a consignment note, for instance in box 19 which allows for special agreements or "conventions particuliers". After all, what article 31.1 calls for is a jurisdiction which has been "designated by agreement between the parties". At the very least, sub-contractors should not be affected by anything of which they have not had notice, of which there is no evidence. It is relevant that under the Judgments Regulation article 23 sets out stringent conditions for the agreement of a jurisdiction clause.
- Fourthly, he submits that there is neither room for interpretative influence nor need for paramount supervision coming from the Judgment Regulation. The CMR contains its own lis pendens provisions (article 31.2), and article 31.1(b) allows joinder of all carriers concerned at the courts of the place of taking over of the goods or of their designated delivery. In any event, the principles of the Judgment Regulation do not all pull in the same direction: predictability is one of its aspirations, and BAT's submissions would not assist in that respect since they would tend to upset the balance achieved by the exclusive and thus definitive menu contained in article 31.1.
The judgment below
- The judge agreed with similar submissions made below on behalf of the sub-contractors. As for BAT's primary point, he considered that the contrast between article 31.1, which expressly limits the courts in which a claim can be brought, and article 39, which allows a carrier to sue to enforce his right of recovery in the courts of any country in which any of the carriers are present and to join all other carriers in that action, as he said "regardless of their places of business", could not be gainsaid. He also considered that there is no room to construe article 31.1(a) in accordance with the principles underlying article 39 in the light of article 31.1.(b), which contained a different mechanism for permitting more than one carrier to be sued in the same courts.
- As for BAT's alternative submission based on the "branch or agency through which the contract of carriage was made", the judge considered that the "defendant" who is the subject-matter of article 31.1 is any successive carrier who can be sued pursuant to article 36, i.e. first, last or performing carrier. Therefore, it was that defendant's branch or agency and that defendant's contract or sub-contract of carriage which were in issue. Where a successive carrier comes into being on what has been called the "statutory contract" made by reason of acceptance of the goods and the consignment note, the judge observed that there can be no branch or agency in question. Therefore, "The only contract which can…be concluded through a branch or agency is the contract between carriers", i.e. the sub-contract.
- As for BAT's third submission concerning the application to the sub-contractors of the exclusive jurisdiction clause in the BAT-Exel contracts, the judge said that this argument foundered on article 34, which refers to a successive carrier becoming a party to the contract of carriage "under the terms of the consignment note". He also referred to article 31.1(a)'s language of "designated by agreement between the parties". He regarded any other result as contrary to principle because a carrier cannot be bound by a jurisdiction clause to which he had not agreed and of which he had had no notice. Article 23 of the Judgments Regulation reflected that principle.
- As for BAT's fourth submission concerning ECJ jurisprudence on the paramountcy of the Judgments Regulation, the judge regarded article 31.1(b) as a complete answer, for it provided the article 6.1 "necessary or proper party" jurisdiction on its own and thus made any invocation of the principles of the Regulation unnecessary.
BAT's primary submission: successive carriers may be sued where any may be
- Although there is no binding authority on this point, there are some dicta in English cases. There is also some guidance from treatises and commentaries.
- In Cummins Engine Co Ltd v. Davis Freight Forwarding (Hull) Ltd [1981] 2 Lloyd's Rep 402 (CA) the issue between the parties was as between carriers. The plaintiff sender sued carrier A, who in turn was seeking to join carriers B, C and D as third parties. The carriage was actually performed only by carrier D. Carriers B, C and D applied to set aside the third party notices. In the commercial court the proceedings against B, C and D were disallowed. A's appeal was dismissed.
- The first matter considered in Lord Justice Brandon's leading judgment was whether the CMR even permitted the consequential third party proceedings to be joined in the original action between sender and carrier A. He considered that it did. Brandon LJ cited the words of article 37 ("A carrier who has paid compensation…shall be entitled to recover…"), and continued (at 407 lhc):
"It seems to me, however, that where the procedure of the Court in which the first and main action is brought allows claims by a defendant for contribution or indemnity to be added to the main action by way of third party proceedings, as is the situation in the present case, there is no good reason in principle why what is contemplated by C.M.R. as the second and consequential action should not be brought by way of third party proceedings. It is only right to add that none of the defendants who are respondents to this appeal have sought to contend otherwise."
The final sentence just cited suggests that Brandon LJ considered this point of his own motion.
- The next matter to be determined was whether A had any claim against B and C at all. Article 37(a) stated that, as between successive carriers, "the carrier responsible for the loss or damage shall be solely liable for the compensation whether paid by himself or another carrier". Therefore, it followed that the third party proceedings "must fail" against them (at 407rhc).
- A further ground considered was whether A, B, C and D were all "carriers concerned" within article 39.2, or whether only B, C and D were. The importance of this issue was that only A had a presence in England, while B, C and D were present in Holland. If A, although a claimant successive carrier, was a "carrier concerned", then all the successive carriers could be sued here. If, however, A was not a "carrier concerned", then only Dutch carriers were being sued and there was no jurisdiction in England against them. They would have to be sued in Holland. This court held that only B, C and D were "carriers concerned". Carrier A was a plaintiff in the third party proceedings and as such was not a "carrier concerned" within the meaning of article 39.2. Therefore A's third party proceedings failed (at 407-408). Although article 39.2 appeared to be expressed permissively in terms of a claimant who "may" make his claim in the identified jurisdictions, it was one of those occasions where, in context, "may" meant "must" (at 408 rhc). Moreover, it was irrelevant that it was inconvenient for the secondary proceedings to be dealt with separately from the primary proceedings (ibid).
- It was in this context that this court gave more general consideration to the structure of the CMR and its jurisdictional provisions, both those concerned with actions by a sender or consignee against a carrier, and those concerned with actions between carriers. Thus Lord Justice Brandon, after setting out in extenso articles 31.1, 34, 36, 37, 38, and 39, said this (at 406-407):
"It is clear from the provisions of C.M.R. contained in chapters V and VI that it contemplates two kinds of legal proceedings arising out of a contract of carriage. The first kind of legal proceedings which it contemplates are actions brought by a sender or consignee of goods against one or more carriers. Where successive carriers are involved, the effect of art. 31, par. 1, combined with art. 34, is that the plaintiff can bring a single action against one, more than one, or all of the carriers concerned. Article 31, par. 1, further requires him to bring his action in certain Courts only. These Courts are, first, any Court of a contracting state which has been agreed between the parties; second, the Courts of the country where any of the carriers sued is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made; and, third, the Courts of the place where the goods were taken over for the carriage or the place where they were to be delivered.
It is on the basis of these provisions that, in the present case, Cummins issued a writ against four parties, Davis, Charterway, Graaf and Boers, although they have only served such writ on Davis."
- It is clear that Brandon LJ contemplated that the effect of articles 31.1, 34 and 36 (although he did not in terms mention that last article in the passage above) is that any one, more or all of the carriers concerned may be sued by a sender or consignee in a single action where "any" of those carriers is present. That is underlined by his recognition of the basis of the plaintiff's writ in that case.
- Lord Justice O'Connor, however, put the matter somewhat differently, and for present purposes crucially so. He said (at 409 lhc):
"It will be seen that the scheme of the Convention, starting in art. 31, is that normally, unless the parties otherwise agree, any legal proceedings are to be originated in the jurisdiction of the "defendant" (art. 31, par. 1(a)), and I am content, under the ordinary rules of interpretation, to read "defendant" for "defendants". The only alternative there given is the place where the goods were taken over or the place designated for delivery. The place where the goods were taken over by the carrier, in my judgment, refers to the place where the contract of carriage commenced (see art. 1 of the Convention) and cannot be repeated down the line where successive carriers have participated in the carriage at various stages. That in the present case was Scotland and the place of delivery was Holland. Therefore, Cummins were limited to bringing the action, as far as the jurisdiction in England of the defendant was concerned, either in England Davis or in Holland the other three."
- Lord Justice Eveleigh said that he agreed with the reasons given by Brandon LJ, but whether he intended to agree with the passage cited above is a moot point.
- It can be said that the passages cited from the judgments of Brandon and O'Connor LJJ are obiter, but they are entitled to be taken seriously into account for they are building blocks in their respective assessments of the structure of the CMR.
- The subject was revisited by this court a few years later in ITT Schaub-Lorenz Vertriebgesellschaft mbH v. Birkart Johann Internationale Spedition mbH [1988] 1 Lloyd's Rep 487 (CA). There the plaintiff was again the sender of the goods, and the defendants were a whole series of successive carriers who had sub-contracted the service one to the other. The carriage was from West Germany to England. The plaintiff only served the first carrier, who denied liability saying it was only a freight forwarder. The first carrier then sought to raise third party proceedings for an indemnity against another carrier, who challenged the proceedings inter alia on the basis that they could only be raised after the plaintiff had obtained judgment and been paid by the first carrier. That was essentially the same point Brandon LJ had raised and answered in Cummins, even if some of its rationalisation was new, and not surprisingly it was answered in the same way. The leading judgment was given by Lord Justice Bingham. He too set out the most relevant articles in extenso, being articles 34-39, and continued (at 494 lhc):
"The fourth defendants' argument here, if good, would have availed the third parties in Ulster Swift Ltd. v. Taunton Meat Haulage Ltd., [1975] 2 Lloyd's Rep. 502 and in the Cummins case, but the point was not taken, and in Cummins Lord Justice Brandon (in the absence of argument) expressed a view inconsistent with it (at pp. 406-407…)".
- Bingham LJ then set out the whole of Brandon LJ's exegesis, starting with the passage I have cited above at para [37] and continuing down to the end of the further passage I have cited above at para [34], and then reasoned:
"I do not in the circumstances think this passage can be regarded as having more than persuasive authority, but I think (with respect) that it is plainly right. A claim by the third defendants for a declaration that the fourth defendants are liable to indemnify them against the sum of any compensation properly paid by the third defendants to the plaintiffs would be permissible under O.16, r. 8 and could not offend art. 37(a). The same is in my view true, though less obviously, of a claim for an indemnity against any sum properly paid to the plaintiffs."
- Bingham LJ then went on to consider the discretionary aspects of third party proceedings at that stage, and concluded that they were useful and legitimate. As he observed (at 495):
"The common issues here may be limited. But it is highly undesirable, if the third defendants are held liable to the plaintiffs, that there should then be a long delay while the fourth defendants' liability to the third defendants is explored, with the third defendants out of pocket the while. It is also potentially advantageous to the fourth defendants to be entitled to be heard on the trial of the plaintiffs' claim without having to admit, in order to be heard, that they were carriers…"
Lord Justice Dillon and Lord Donaldson of Lymington MR agreed.
- It is true that the focus of Bingham LJ's judgment was the separate point arising under article 37, rather than the jurisdictional issue now being considered under article 31.1, and I would agree with Mr Passmore's submission that the citation and approval of Brandon LJ's judgment in Cummins was no more ratio than was the underlying citation. Nevertheless, Brandon LJ's careful exposition of the essential jurisdictional structure of the CMR with regard to proceedings by a sender against a carrier, and by a carrier against successive contractors, was approved by no less a judge than Bingham LJ as "plainly correct", with the additional agreement of Lord Donaldson MR and Dillon LJ. It is clear, moreover, from Bingham LJ's careful citation of the CMR's articles that he must have had regard to the overall structure of these provisions. It is well known, moreover, that Brandon LJ was not only a most distinguished commercial lawyer but famously fastidious about questions of jurisdiction. In all these circumstances, his approved views, although not binding on this court, are entitled to be treated with the greatest respect.
- Brandon LJ's passage from Cummins was considered again, by Mr Justice Colman, in Frans Maas Logistics (UK) Ltd v. CDR Trucking BV [1999] 2 Lloyd's Rep 179. That case was concerned with the lis pendens provisions of article 31.2, and resulted in a stay of the consignee's (assignees') claim against a carrier said to be responsible for the loss of the goods consigned. The prior foreign proceedings which gave rise to the lis pendens argument had been brought by the carrier concerned (the English defendant) against (inter alios) the consignee (the English plaintiff) for a negative declaration of non-liability. The argument raised by the consignee was that article 31.1 did not allow of a claim for a negative declaration, and therefore that article 31.2 did not bite. That argument was rejected. In the course of his judgment Colman J said this (at 184-185):
"Since reliance has been placed on the decision in Cummins Engine Co., it is right that I should indicate that there are two respects in which the reasoning in my judgment differs from certain observations made by Lord Justice Brandon in the course of his judgment. Firstly, he suggests…that the provisions of CMR in chapters V and VI contemplate "two kinds of legal proceedings arising out of a contract of carriage" – by the sender or consignee against one or more carriers and by one carrier against another. For reasons which I have given, art. 31.1 in my view also covers claims by a carrier against a sender or a consignee…Secondly, it is suggested…that the sender or consignee can sue all the successive carriers concerned by reason of the combined effect of art. 31.1 and art. 34. Whereas all the successive carriers are treated as responsible for the whole carriage under art. 34, the sender or consignee by reason of art. 36 can only bring legal proceedings against one or more of the first carrier, the last carrier and the performing carrier."
- Those supplementary qualifications are correct, but I would not consider that in this connection there is any real difference between Brandon LJ and Colman J. It is just that the latter has been somewhat fuller in his account of the ramifications of the CMR. Brandon LJ had cited article 36 in full and was no doubt aware of the limitation on a sender or consignee's suit to the first, last or performing carriers. At an early stage of proceedings, it might not be clear who fell into those categories, as for instance where there were more than one performing carrier and it was not clear which was performing when the damage, loss or delay occurred, and it might be possible that more than one performing carrier was each responsible for it, particularly for delay. Brandon LJ simply spoke of the carriers concerned. What is perhaps of more significance for present purposes is that, despite his careful analysis in Frans Maas, and his highlighting of these qualifications on Brandon LJ's observations, Colman J did not suggest that there was anything wrong with Brandon LJ's summary of the effect of article 31.1 in terms of the point currently under discussion in these appeals.
- With the exception of the observations of O'Connor LJ, therefore, there is general support in English jurisprudence for BAT's position.
- What is the position of treatises and jurists? Cooke J briefly referred to Hill and Messent, CMR: Contracts for the International Carriage of Goods by Road, 3rd ed, 2000, and Haak, The Liability of the Carrier under the CMR, 1986, as supporting the respondents' position. A fuller account is as follows.
- Professor Loewe was invited in his capacity as a member of the Governing Council of UNIDROIT to prepare a Commentary on the CMR. It was published under the auspices of the United Nations in 1975. Paragraph 1 of the Commentary states that it
"is not intended to represent an official interpretation of the Convention, but rather to assist all interested parties in the application of the Convention by giving useful information on certain aspects of its provisions."
- At paragraph 281 of his Commentary, where he is dealing with article 36, Professor Loewe expresses the view that article 36 does not qualify article 31.1's requirement (not otherwise referred to in the longer passage dealing with article 31 itself) that jurisdiction has to be obtained individually against all defendant carriers concerned. He states:
"An action may be brought against several carriers at the same time only where proceedings are instituted before a court or a tribunal to which all the defendants are subject."
That is in the respondents' favour, but it is a bald view and rather begs the question of what determines, in a multi-carrier-defendant situation, how jurisdiction is established.
- Haak (1986) is of the same view but sees it as a practical restriction on the principle of joint and several responsibility of successive carriers. He writes (at page 114):
"A second restriction of the principle of joint and several liability, viewed not so much from the material as from the practical point of view, is found by extension of the first restriction and is of a jurisdictional nature. The final clause of Article 36 of CMR, which was added at a later stage, provides that an action may be brought at the same time against several of these carriers. One should nevertheless realise that the action brought simultaneously against different carriers needs fall within the scope of the limits stipulated by Article 31(1) CMR under a. and b., as well as within the period of limitation (Art.32 CMR). If the carriers are sued before one forum, that court must be one that is competent to take cognisance of the action against each individual successive carrier. This will more often be so in the cases regulated by Article 31(1) CMR under a. The way in which Article 31 CMR is applied demonstrates that in practice there is a real restriction on liability."
However, there is no reference to Cummins and it is common ground that there is no other assistance on this question to be derived from foreign jurisprudence. I observe that no submission has been made concerning the CMR's travaux préparatoires, to which Haak briefly alludes at his footnote 128. It may be noted that Haak views his interpretation as amounting to a practical restriction on jurisdiction. No explanation is given as to the purpose or sense of such a restriction.
- Hill & Messent (2000) again does not discuss the problem of multiple defendants under article 31 (other than in the context of lis pendens), but considers it under article 36 and within a chapter concerned with successive carriers. Para 11.67 states:
"Although Article 36 specifies that an action can be brought concurrently against more than one of the carriers liable, it must not be forgotten that the question of jurisdiction as between the cargo interests and a carrier is regulated by Article 31(1). If reference is made to the discussion of that paragraph, it will be seen that the right to bring concurrent actions does not necessarily mean that those actions can be commenced in the same jurisdiction: such would indeed normally only be possible in the country where the goods were originally taken over for carriage or the place designated for delivery, which would not necessarily be the most convenient forum for the cargo interests. On the other hand, Article 31(2) would not operate to prevent concurrent actions in different jurisdictions against different carriers, since that paragraph only applies to actions between the same parties…"
- I would respectfully observe that an action against more than one defendant in a single jurisdiction is not what I would think of as a concurrent action. It is one action against several defendants and is expressly contemplated in article 36. A concurrent action is rather the subject-matter of lis pendens. In that connection, Hill & Messent makes the shrewd point that article 31.2 is a limited provision in that it only operates in terms of actions between the same parties. If therefore a claim against several successive carriers had to be carried on in separate jurisdictions, there would be nothing in article 31.2 to canalise them into a single jurisdiction. Compare in this connection the broader lis pendens provisions to be found in the Judgments Regulation in articles 27 and 28: the latter article widens its scope into "related actions". I would also observe that although the authors discuss Cummins and ITT elsewhere in their work, they do not do so in the present context.
- The most modern work on the CMR in English is Clarke, International Carriage of Goods by Road: CMR, now in its 5th edition, 2009. However, Professor Clarke does not appear to discuss the interrelationship of articles 31.1 and 36 for the purpose of the problem presently before the court. He does, however, in the separate context of article 39, which deals with jurisdiction in an action between successive carriers, express regret for what he considers to be the strict and insufficiently purposive view taken in Cummins and ITT as to the question of whether a claimant carrier can be one of the "carriers concerned": see at section 53a. In that context he explored the assistance which might be derived from section 14(2) of the 1965 Act.
- In sum, the treatises favour the respondents' submissions and the judge's conclusion on this issue, albeit the former pay no regard to Cummins and ITT, and there is an element of assertion in their underlying rationale that article 36 has nothing to say about jurisdiction. On that hypothesis, BAT's submission has nowhere to go. But is that hypothesis correct?
- Perhaps the first matter to consider is the general approach to interpretation of such a convention. The answer is clear, and can be taken from Hatzl v. XL Insurance Co Ltd [2009] EWCA Civ 223, [2010] 1 WLR 470, dealing as it does with the CMR itself. Lawrence Collins LJ there said:
"[33] The starting point for the interpretation of international conventions is to consider the natural meaning of the language of the provision in question. But it is necessary to consider the convention as a whole and give it a purposive interpretation. The language of an international convention should be interpreted unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation. The court may have regard to the decisions of foreign courts on the convention and the prevailing current of foreign opinion on its application: see, in particular, James Buchanan & Co Ltd v Babco Forwarding and Shipping (UK) Ltd [1978] AC 141, 152-154, 160-161; Fothergill v Monarch Airlines Ltd [1981] AC 251, 272-274, 281-281, 290-191 and In re Deep Vein Thrombosis and Air Travel Group Litigation [2006] 1 AC 495, paras 11 and 54."
Thus it is necessary to consider the convention as a whole and give it a purposive interpretation.
- In my judgment, the critical question is whether the introduction to the CMR, after article 31, of the subject-matter of successive carriers, and in particular article 36, dealing with claims by cargo interests against successive carriers, and especially the expression in article 36 that "an action may be brought at the same time against several of these carriers", have nothing to say about the scope of the jurisdictional provisions of article 31.1.
- It is possible, I acknowledge, to take the view that article 31.1 alone is concerned with jurisdiction and that jurisdiction has to be achieved individually within its terms against each separate defendant. On that hypothesis, it is also possible to say, as one would be bound on that hypothesis to say, that the words "an action may be brought at the same time against several of these carriers" have nothing to say about jurisdiction, but are merely there to discourage a view that cargo interests can sue one only of the successive carriers identified. It is also possible to say, in response to the practical argument that such a view would make it difficult to join in one action the successive carriers whom it is permitted to sue, that the provisions of article 31.1(b) would tend to alleviate the impracticality and inconvenience of that situation.
- However, I do not find that solution at all attractive in terms of the overall structure, sense and purpose of the CMR, and I see no reason as a matter of language why that solution is to be regarded as mandated. I would put the matter as follows.
- In its place in the CMR, article 31 is primarily concerned only with, on the one side, cargo interests in the form of the sender or consignee, and, on the other side, "the carrier", or with what Hatzl refers to as the parties to the contract of carriage (thus, as was there held, excluding assignees). The sender has been introduced, as has "the carrier" in the sense of the primary party with whom the sender has contracted, and the consignee: see Hatzl at para [46]. However, the concept of the "successive carrier" has not been introduced: that comes only in articles 34ff. Prima facie, therefore, in its place, article 31 is not addressed to the position of a successive carrier, who only becomes a party to the single contract of carriage by accepting the goods and the consignment note (article 34). That, as it has been called, is a special statutory contract.
- There are further signs in article 31 that it is not addressing the possibility of multiple carrier defendants. There is no express language in article 31.1 which begins to recognise that possibility. Significantly, article 31.1 refers to "the defendant", not "a defendant" or "defendants". Moreover, it is common ground that "the place where the goods were taken over by the carrier" looks only to where the primary carrier took over the goods under the primary contract, and not to where the goods may have been taken over by any sub-contractor in turn (Clarke at section 46(iv)). As article 1 says: "every contract…when the taking over of the goods and the place designated for delivery, as specified in the contract, are situated in two different countries".
- In this context, it is to my mind wrong to see in the article 31.1(b) alternatives an intention to permit canalisation of claims against multiple carriers. Successive carriers have not yet been introduced. The reason for the article 31.1(b) alternatives is to balance the procedural interests of claimants and defendants. Under article 31.1(a) jurisdiction may be founded either in a mutually selected forum, which is neutral between the parties because a matter of agreement, or in a forum where the defendant has a presence, either directly, or through a branch or agency related to the making of the contract, again a reference to the primary contract, not to any sub-contract. Those alternatives look to the interests of defendants. Article 31.1(b), however, looks to the interests of claimants: because it is likely that the place where the cargo is taken over is one where both parties do business, and the place designated for delivery answers the interests of a consignee. Moreover, if multiple defendants had been contemplated in article 31, then the lis alibi provisions found in article 31.2 would probably have extended to related actions and not been limited, as it is, to actions between the same parties on the same grounds.
- It follows to my mind that it ought to be in chapter VI of the CMR, containing articles 34 to 40 which set out the "Provisions relating to Carriage performed by Successive Carriers", that we learn about the jurisdictional requirements of claims against successive carriers other than the primary carrier or what article 36 calls "the first carrier". As Clarke states at section 50(a)(i):
"the first carrier is not necessarily the one who is the first to handle the goods, but the first to contract with a sender as carrier, whether he handles the goods physically or not. This proposition is disputed, but it has been held in England, as well as in Austria, Denmark, France, Germany and Switzerland that, if A contracts to carry but sub-contracts the entire operation to B, B is a carrier successive to A, who is also a carrier under the CMR. Both A, as first carrier, and B, as performing carrier, are liable to the goods interest on the basis of Article 34 of the CMR, provided that B accepts the goods and the consignment note as required by that Article. This interpretation reflects less the ordinary or obvious meaning of Article 34 than the courts' perception of the purpose of this part of the CMR, to give the claimant, sender as well as consignee, a choice of targets and hence a target which the claimant can spot and identify. The task should not be made more difficult because the initial carrier has sub-contracted."
Among the English authority cited by Clarke in support of this passage is Ulster-Swift v. Taunton Meat Haulage [1975] 2 Lloyd's Rep 502 (Donaldson J) and [1977] 1 Lloyd's Rep 346 (CA), and Arctic Electronics Co (UK) v. McGregor Sea & Air Services [1985] 2 Lloyd's Rep 510 (Hobhouse J).
- Articles 34ff contain provisions not only about claims between successive carriers but also about claims by cargo interests against successive carriers (to pick up Brandon LJ's distinction in Cummins between these "two kinds of legal proceedings"). So far as claims between successive carriers are concerned, it is common ground that article 39.2 contains jurisdictional provisions in relation to them; and that the effect of those provisions is that one successive carrier may sue all the successive carriers concerned where any one of them may be found or have jurisdiction asserted over him within the terms of article 39.
- If, therefore, article 39 contains jurisdictional provisions to this (or indeed any) effect, then it is only to be expected that chapter VI will also contain jurisdictional provisions with relation to a sender's or consignee's claim against successive carriers. After all, the concept of a claim against a CMR contracting party who has only been introduced for the first time in article 34 is new to the convention. And that is in fact what one finds in article 36, which on any view contains the important jurisdictional provision that the cargo interests' claim against successive carriers is limited to a claim against only three categories of such carriers, namely the first, the last and the performing carrier. I have already made the point that the category of performing carrier may be a wide category. The question immediately arises, given this new multiplicity of potential defendants, as to where they may be sued? Do they have to be sued in separate actions, or can they be sued in the same action? The answer is that they can all be sued in the same action: "an [i.e. one] action may be brought at the same time" against several of them. There is no suggestion that that can only be done if, separately from that provision, jurisdiction can be obtained against each successive carrier severally. That proviso could easily have been stated if that was what had been intended.
- It is suggested that the wording "an action may be brought at the same time against several of these carriers" is merely intended to rebut any suggestion that the cargo claimant is limited to only one defendant, or perhaps to one defendant per action. In my view, however, that is a fanciful suggestion. There is nothing in the language of articles 34 to 36 (which introduce the idea of each successive carrier being severally liable to the cargo claimant for the whole operation (see article 34's "each of them shall be responsible for the performance of the whole operation")) to suggest that only one of them may be sued at a time, and to do so even though article 36 goes out of its way to say that there are three separate categories of such successive carriers who may be sued, albeit only three. The suggested interpretation reduces these words to banality.
- Therefore serious consideration has to be given to the counter-submission that these words, found in an article which is concerned with jurisdictional concepts, where one would expect guidance on the very issue in question on these appeals, are intended to grant jurisdiction where there is jurisdiction against any one of them: and at least where there is jurisdiction against "the carrier", i.e. the primary carrier.
- In this connection, attention is necessarily drawn to the jurisdiction provisions in article 39.2, concerning claims between successive carriers. This provision, because it is dealing expressly with claims against potentially multiple defendants, which article 31.1 does not do and in its place in the convention would not be expected to do, understandably addresses expressly the concept of establishing jurisdiction in a country where "one of the carriers concerned" has presence. The wording then continues: "All the carriers concerned may be made defendants in the same action." If one begins with the hypothesis that jurisdiction has to be established by presence within the jurisdiction for each carrier defendant, then those words are neutralised. They merely say that all successive carriers may be joined in the same action. If, however, one keeps an open mind on the subject, then the more pragmatic interpretation is to understand them as confirming that jurisdiction against all can be achieved by establishing jurisdiction against one. In my judgment, a similar purposive pragmatism produces the same or a similar answer in relation to a cargo claim against successive carriers. If it were otherwise, there would arise the peculiar anomaly that whereas a carrier could sue successive carriers in any statutory jurisdiction where he can sue one of them, cargo interests could not. Mr Passmore was unable to give any satisfactory explanation for this anomaly.
- Mr Passmore nevertheless submits, and the judge below agreed, that article 31.1(b) deals with the pragmatic need for cargo interests to sue successive carriers by permitting suit in the place where the goods were taken over or the place designated for delivery. As discussed above, however, it would be strange to find such rationalisation underpinning an article which precedes the introduction of successive carriers and whose language makes no concession to them.
- It is for these reasons that I would conclude that a purposive interpretation of the CMR would allow jurisdiction to be obtained over the successive carriers against whom suit is permitted to the sender or consignee pursuant to article 36 at least in circumstances where jurisdiction can be obtained against the primary carrier under the contract of carriage pursuant to article 31.1, which is sufficient for our case; and probably also if jurisdiction can be obtained against any of the successive carriers whom it is permitted to sue, as Brandon LJ stated in Cummins but which it is unnecessary to decide here. If, in a well-founded suit against the primary carrier, the other successive carriers spoken of in article 36 can be joined in the same action, then I see no reason to doubt that the CMR's jurisdictional requirements are met. It would follow that jurisdiction had been obtained over each defendant in a jurisdiction permitted by article 31.1. There is no decision of any court to the contrary, the dicta and reasoning in Cummins, ITT and Frans Maas are highly supportive of this conclusion, and any other solution would make little sense, especially in the light of article 39.2. It is true that the concluding language of article 36 and article 39.2 are not identical: but in my view the effect of them is the same. That is not uncommon in the CMR. For instance, although article 36 uses the express language "and in no other courts or tribunals", whereas article 39.2 says that a successive carrier "may" make his claim in support of his right of recovery before the identified courts, the effect of that superficially permissive language is the same, namely a mandatory requirement as to where jurisdiction may be founded: see Clarke at section 53a, citing, at footnote 567, inter alia Cummins at 574 (although I recognise that that view is somewhat controversial, see Hill & Messent at paras 11.119-120).
- It is true that some commentators, beginning with Professor Loewe, have expressed a different view. However, that view is premised on the initial hypothesis that article 31.1 is the place to find a jurisdictional requirement that must be met quite separately in the case of each successive carrier sued under article 36. That is an initial hypothesis which is in issue in this case, and it does not seem to me to be justified without careful examination, coming as it does from an article which precedes the arrival on the scene of successive carriers. It makes more sense to find the jurisdictional requirements in the case of suit against more than one successive carrier in, or at least with the help of, the provisions of chapter VI, even if article 31 remains a factor in that enquiry. It seems to me that the examination of that hypothesis has not had to be performed before, and that it leads to a different conclusion as expressed herein.
- An alternative approach, although not canvassed in the arguments before the court, would arise if the concluding words of article 36 had to be regarded as entirely neutral on the question of jurisdiction, or, as I ventured to say above, were to be given a banal and thus essentially empty interpretation. In that case, it might be possible to say that, although article 31.1 provides the jurisdictional rules about suit against the primary carrier, or even any carrier, there is nothing in the CMR to say what is to be done in the case of successive carriers. On that basis, it would be open to each national court which is asked to extend jurisdiction over one party so as to embrace a linked jurisdiction over another party, as is done in England by the "necessary or proper party" concept or as is done under the Judgments Regulation by its article 6.1, to apply its own procedure.
- That is the learning to be taken from the decision in ITT (and from Cummins where the issue was discussed on an obiter basis). It will be recalled that the issue was whether third party proceedings could be commenced against successive carriers despite article 37 of the CMR speaking of "A carrier who has paid compensation…" (emphasis added). In his judgment, Bingham LJ agreed with the third party's submissions (i) that the ordinary English law of contribution was ousted by section 5 of the 1965 Act in favour of the provisions of article 37 of the CMR; (ii) that article 37 stipulates for the payment of compensation as a pre-condition of a successive carrier's right of recovery against another successive carrier; and (iii) that any inconsistency between the procedural rules of the CMR and of English law must be resolved in favour of the CMR. Nevertheless, there was nothing inconsistent in a claim for a declaration of a liability to indemnify. So, in the present case, it is perhaps possible to say that the CMR has nothing to say about the situation where jurisdiction has been properly obtained over the primary carrier pursuant to article 31.1 but the court has to consider whether that jurisdiction entitles it to exercise further jurisdiction over other successive carriers within article 34 whom the court is told, by article 36, may be joined in the same action ("an action may be brought at the same time against several of these carriers"). I am at present assuming that those words just cited say nothing about jurisdiction. In that case, the English court might be entitled to exercise its "necessary or proper party" or article 6.1 jurisdiction. I do not say that the claims against Essers and Kazemier have been commenced, even in the alternative, on that basis. In the circumstances, such an argument would have to wait for another day. It is in any event unnecessary on my reading of the CMR.
- In this connection, however, an analogous argument has been raised by reference to article 6.1 of the Judgments Regulation which in any event would, in the absence of or as an adjunct to the CMR, apply to Essers and Kazemier, who are each Dutch. That is BAT's fourth submission (see above under para [23]) to the effect that the Judgments Regulation, even if not paramount (which BAT also says that it is), both provides input into the interpretation of the CMR and can supply gaps in its coverage. It is therefore convenient to turn to BAT's fourth submission next.
BAT's fourth submission: the relevance of the Judgments Regulation
- BAT relies on the Judgments Regulation and ECJ jurisprudence for a three-pronged argument: it submits that the Regulation supports the interpretation of the CMR for which it contends under its first submission; that the Regulation may fill in gaps in the CMR; and that if necessary the Regulation is paramount in vindication of its own principles.
- For convenience I cite again article 71.1 of the Regulation, as well as its article 6.1 basis for jurisdiction.
- Article 71.1 states:
"This Regulation shall not affect any conventions to which the Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments."
Article 6.1 provides:
"A person domiciled in a Member State may also be sued: 1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
- In The Owners of the cargo lately laden on board the 'Tatry' v. The Owners of the ship 'Maciej Rataj' [1994] ECR 1-5439, [1999] QB 515 the question was whether the lis pendens provisions of the then Brussels Convention, articles 21 and 22, could supplement the specialist convention on the arrest of seagoing ships (the "Arrest Convention"). The ECJ held that it could and did, despite article 57 of the Brussels Convention (the predecessor of article 71.1). The reasoning of the ECJ displays the narrow distinctions possible:
"24. Article 57 introduces an exception to the general rule that the Convention takes precedence over other conventions signed by the Contracting States on jurisdiction and the recognition and enforcement of judgments. The purpose of that exception is to ensure compliance with the rules on jurisdiction laid down by specialized conventions, since in enacting those rules account was taken of the specific features of the matters to which they relate.
25. That being its purpose, Article 57 must be understood as precluding the application of the provisions of the Brussels Convention solely in relation to questions governed by the specialized convention. A contrary interpretation would be incompatible with the objective of the Convention which, according to its preamble, is to strengthen in the Community the legal protection of persons therein established and to facilitate the recognition of judgments in order to secure their enforcement. In those circumstances, when a specialized convention contains certain rules of jurisdiction but no provision as to lis pendens or related actions, Articles 21 and 22 of the Brussels Convention apply.
26. The cargo owners argue that the Arrest Convention contains provisions relating to lis pendens in Article 3(3), which provides: 'A ship shall not be arrested…more than once in any one or more of the jurisdictions of any of the Contracting States in respect of the same maritime claim by the same claimant'.
27. The cargo owners' argument cannot be accepted. Where an arrest has already been made in the jurisdiction of a Contracting State, Article 3(3) of the Arrest Convention prohibits a second arrest by the same claimant in respect of the same claim in the jurisdiction, in particular, of another Contracting State. Such a prohibition has nothing to do with the concept of lis pendens within the meaning of Article 21 of the Brussels Convention. That provision is concerned with the situation where proceedings are brought before two courts both of which have jurisdiction and it governs only the question which of those two courts is to decline jurisdiction in the case.
28. The answer to the third question therefore is that, on a proper construction, Article 57 of the Convention, as amended by the Accession Convention, means that, where a Contracting State is also a contracting party to another convention on a specific matter containing rules on jurisdiction, that specialized convention precludes the application of the provisions of the Brussels Convention only in cases governed by the specialized convention and not in those to which it does not apply."
- It follows from the Tatry that article 71.1 reflects an exception to the general principle of dominance for the Judgments Regulation. If therefore the provisions relating to jurisdiction of a specialised convention are to fall within that exception and oust the Judgments Regulation, then they will be carefully scrutinised for inconsistency.
- This issue was revisited more recently, with particular reference to the CMR, in TNT Express Nederland BV v. AXA Versicherung AG C-533-08, [2011] RTR 11. TNT was the carrier, AXA the insurer of the sender. Goods were carried from the Netherlands to Germany but did not arrive. TNT sought a declaration from the Dutch court that it was not liable for more than €138 (under the provisions of article 23 of the CMR), but failed to obtain it. TNT appealed. AXA then brought an action in Germany against TNT for full compensation. The German court rejected TNT's reliance on lis pendens (article 31.2) and ordered the full compensation sought. AXA then sought to enforce its German judgment in the Netherlands under article 31.3 of the CMR. Back in the Netherlands TNT contended that the German court lacked jurisdiction while its Dutch appeal was still pending, while AXA contended that article 35(3) of the Judgments Regulation precluded review of the jurisdiction of the German court. The issue for the ECJ was whether the CMR provisions for enforcement and recognition prevailed over the Regulation's. The ECJ gave a Delphic judgment. It had no jurisdiction, it said, to interpret article 31. As to the interrelationship between the CMR and the Regulation, both of which applied, the effect of article 71.1 was that the specialised convention, the CMR, prevailed over the Regulation only if they fulfilled the essential requirements of the Regulation in terms of predictability and enabling concurrent proceedings to be minimised. In other words, article 71.1 was interpreted to cede dominance to specialised conventions only to the extent that they fulfilled the essential principles on which the Regulation had been founded.
- Among the recitals to the Regulation cited by the ECJ were the following:
"(11) The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile and jurisdiction must always be available on this ground save in a few well-defined situations…
(12) In addition to the defendant's domicile, there should be alternative grounds of jurisdiction based on a close link between the court and the action or in order to facilitate the sound administration of justice…
(15) In the interests of the sound administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two Member States."
- The ECJ reasoned as follows:
"45. According to the wording of art.71 of Regulation 44/2001, where the dispute falls within the scope of a specialised convention the rules set out in that convention and not those laid down by Regulation 44/2001 should in principle be applied…
48. [The ECJ referred to the Tatry]
49. While it is apparent from the foregoing considerations that art.71 of regulation 44/2001 provides, in relation to matters governed by specialised conventions, for the application of those conventions, the fact remains that their application cannot compromise the principles which underlie judicial cooperation in civil and commercial matters in the European Union, such as the principles, recalled in recitals 6, 11, 12 and 15 to 17 in the preamble to the Regulation 44/2001, of having free movement of judgments in civil and commercial matters, predictability as to the courts having jurisdiction and therefore legal certainty for litigants, sound administration of justice, minimisation of the risk of concurrent proceedings, and mutual trust in the administration of justice in the European Union…
51. Article 71 of Regulation 44/2001 cannot have a purport which conflicts with the principles underlying the legislation of which it is part. Accordingly, that article cannot be interpreted as meaning that, in a field covered by the Regulation, such as the carriage of goods by road, a specialised convention, such as the CMR, may lead to results which are less favourable for achieving sound operation of the internal market than the results to which the Regulation's provisions lead…
53. It follows that the rules governing jurisdiction, including the lis pendens rule, set out in specialised conventions referred to in art.71 of Regulation 44/201 can be applied in the European Union only to the extent that, as is called for by recitals 11, 12 and 15 in the preamble to the Regulation, they are highly predictable, facilitate the sound administration of justice and enable the risk of concurrent proceedings to be minimised."
- The upshot was a ruling that article 31.3 of the CMR (dealing with the enforcement of judgments under the CMR) could only be applied so as to reproduce the general rule of the Judgments Regulation concerning enforcement of judgments within the EU, to the effect that the jurisdiction of the court pronouncing judgment could not be questioned in the enforcing court:
"55 … Therefore, art.31 (3) of the CMR can be applied in the European Union only if it enables the objectives of the free movement of judgments in civil and commercial matters and of mutual trust in the administration of justice in the European Union to be achieved under conditions at least as favourable as those resulting from the application of Regulation 44/2001."
- It appears therefore that, where the fundamental principles of the Judgments Regulation are concerned, which include the minimisation of the risk of concurrent proceedings, article 71.1 has to be read down with the effect that it is those principles of the Regulation that become dominant.
- In the light of these authorities of the ECJ it is probably possible to state three matters about the relationship of a specialist convention like the CMR and the Judgment Regulation. First, the underlying principles of the Regulation will be available to fill a gap left by the jurisdictional provisions of the CMR. In this connection, the jurisdictional provisions of the CMR will not readily be given a wider import conflicting with the principles of the Regulation, and a strict construction will therefore be applied to the question whether the principles of the Judgments Regulation are ousted. ITT is an analogous example of that approach in English law. Tatry is an example of that approach in European law.
- Secondly, as a result, where there is room for doubt, a purposive construction of the CMR, to bring it as far as possible into line with fundamental Regulation principles, is likely to be an appropriate construction. For in that case, there will be neither gap nor conflict.
- Thirdly, however, if there is a conflict with such fundamental principles, the lesson of TNT is that in such a case the specialist convention like the CMR has to give way to the Regulation.
- How does this operate in the present case? In my judgment, it supports the conclusion to which I have already subscribed that the better interpretation of articles 31.1 and 36 is that they permit jurisdiction over successive carriers within article 36 if they are made defendants in the same action as that in which the carrier under the primary contract of carriage is made defendant. Such a conclusion is a possible interpretation, a pragmatic interpretation, and would give to the CMR in the matter of successive carriers a jurisdictional approach which would limit the opportunity to find unnecessary gaps in the structure of the convention which fell to be closed elsewhere. It would also avoid the need to render the CMR's jurisdictional provisions subject to the Regulation's demand for the minimisation of the risk of concurrent proceedings, which its article 6.1 is there to achieve.
- In the circumstances, however, it is unnecessary to decide how Tatry or TNT would operate in the present case. I am content to decide these appeals on the basis that, on the true construction of articles 31.1 and 36 of the CMR, jurisdiction over Exel in England brings with it jurisdiction as well over Essers and Kazemier in BAT's respective actions against them.
BAT's second submission: Exel was the sub-contractors' branch or agency in England
- In the circumstances, it is unnecessary to make a decision about this, or BAT's third submission.
- I would merely opine that it is unlikely that article 31.1 is dealing with the branch of agency through which the "contract between carriers", i.e. the sub-contracts, was made, despite the judge's view otherwise. Article 31.1, for the reasons I have sought to give above, is focussed on "the contract of carriage", i.e. the contract between sender and primary carrier (see, for instance, article 4). That is the opinion of Clarke at section 46b(iii), citing Boyar v. Korean Airlines 664 F Supp 1481 (DC, 1987), a decision under article 28 of the Warsaw Convention. If "branch or agency" refers to the branch or agency of the sub-contractor, it is likely to be in terms of article 39.2 that that is so, but even there the language is difficult and I am by no means clear about that. Where the cargo interests are claiming, it is in principle not easy to see what the relevance of the place where any sub-contract has been made is. The link between cargo and sub-carrier is created by the article 34 procedure of acceptance of the goods and the consignment note. It is otherwise in the case of a cargo suit against a primary carrier, for in that case the place where the contract is made has mutual importance for both parties.
BAT's third submission: the jurisdiction clause in the BAT-Exel contracts binds Essers and Kazemier as well
- It is unnecessary to decide this point either. It is put forward as an alternative to BAT's first submission, but on my way of looking at the matter BAT's obtaining of jurisdiction against Exel under their English jurisdiction clause is one route through which jurisdiction is obtained against the articles 34 and 36 successive carriers, Essers and Kazemier, and that is so whether or not the clause binds them contractually, or whether they have notice or knowledge of it.
- The question arises, however, as to whether the clause binds the sub-contractors if that is necessary to obtain jurisdiction in England against them. In this connection it is interesting to note that Professor Loewe, despite his assumption that jurisdiction has to be found against each successive carrier separately under the terms of article 31.1, expresses the view that a jurisdiction clause in the contract of carriage between sender and primary carrier does bind each successive carrier, whether or not the successive carrier has notice of it. Thus, in paragraph 282 of his Commentary he says this:
"282. The designation of a jurisdiction, in accordance with the first sentence of article 31, paragraph 1, by the parties who originally concluded the contract of carriage produces its effect with respect to the successive carriers even where such designation does not appear on the consignment note. In cases where the first carrier has not informed the following carriers of the designation of jurisdiction, and where the latter would not have agreed to become parties to the contract if they had known of the designation, they may, according to the applicable law, bring an action for damages against the first carrier."
- Professor Loewe does not explain how this view is consistent with article 34's language that the successive carrier joins the single contract of carriage by becoming a party to it "under the terms of the consignment note". Article 23 of the Judgments Regulation underscores the requirement of true consent for the effectiveness of an agreed jurisdiction. Other commentators have tended to disagree with Professor Loewe, and require at least notice, although not necessarily in the express terms of the consignment note.
- Hill & Messent at para 10.28 discusses a French decision (App Par, 14.11.69 (1969) BT 363) denying a consignee the right to rely on the contract's jurisdiction clause against two successive carriers because it was not mentioned in the consignment note, but expresses its doubt about it. Mr Passmore has also relied on this decision, but on examination it appears that the real ratio was that the underlying contractual documents "are insufficient to prove that the disputed contract contained a similar clause." In any event, the carriers were sued in Paris, which is where the goods were due for delivery, and the argument was that the claim should have been brought in Germany pursuant to the jurisdiction clause. Since, however, Paris would always have been an additional jurisdiction under article 31.1, it is not easy to understand the flow of argument.
- It appears to be Professor Loewe's view that the contract of carriage to which a successive carrier joins himself is taken for better or worse by that carrier, at any rate so far as its jurisdiction clause is concerned. On my way of looking at article 31.1, that is a conclusion to which I can subscribe, even if my process of reaching that conclusion may differ. In effect, I consider that a successive carrier is always liable to be sued in a jurisdiction in which the primary carrier can and has been sued. That seems to me to be what the CMR has enacted, and it also seems to me to be an entirely sensible policy, given the structure of the convention and its interest in avoiding concurrent proceedings. It also seems to me to be entirely fair. If a sub-contractor joins himself to a single contract of carriage, he can legitimately expect to be sued in the same court where his fellow-carrier, the primary carrier, can be sued: he knows, or can make it his business to know, as well as any sender where that fellow-carrier can be found, and he can ask him about any jurisdiction clause that has been agreed. It may be noted that article 39.2 by implication excludes from any relevance any jurisdiction agreement contained in a successive carrier's sub-contract. However, it is not necessary in this case to say that jurisdiction is founded on the basis of BAT's invocation against Exel of the BAT-Exel jurisdiction clause, for it is sufficient that jurisdiction is founded on Exel's presence in England.
Conclusion
- For these reasons, I would allow both appeals and declare that there is English jurisdiction over BAT's claims against Essers and Kazemier respectively.
Sir Timothy Lloyd
- I agree with my Lord Sir Bernard Rix that these appeals should be allowed, for the reasons that he gives. In particular, I agree that, even without the additional support that the recent ECJ jurisprudence on the Judgments Regulation provides, the terms of the CMR ought to be construed so that articles 31.1 and 36 of CMR permit proceedings to be brought against successive carriers within article 36 in the same action as that brought against the primary carrier, the jurisdiction provisions being satisfied as regards that carrier whether by reason of a choice of forum clause or of the presence of that party in the relevant territory. With respect to the judge below, it seems to me that his reading is over-literal and fails to allow proper effect to a purposive reading of the relevant provisions of CMR.
- I see much force in the argument addressed to us by Mr Priday based on the Judgments Regulation, for the reasons set out by Sir Bernard, but it is not necessary to come to a firm conclusion as to that for the purposes of these appeals. It is also unnecessary to decide which of the rival arguments is correct as regards the second and third arguments addressed to us by Mr Priday for BAT, and I say nothing about either of those.
Lord Justice McFarlane
- I agree.
