United Kingdom Supreme Court

"I think that the correct approach is to interpret the English text, which after all is likely to be used by many others than British businessmen, in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation: Stag Line Ltd v Foscolo, Mango and Co Ltd·[1932] AC 328, per Lord Macmillan, at p 350. Moreover, it is perfectly legitimate in my opinion to look for assistance, if assistance is needed, to the French text. This is often put in the form that resort may be had to the foreign text if (and only if) the English text is ambiguous, but I think this states the rule too technically. As Lord Diplock recently said in this House the inherent flexibility of the English (and, one may add, any) language may make it necessary for the interpreter to have recourse to a variety of aids: Carter v Bradbeer [1975] 1 WLR 1204, 1206. There is no need to impose a preliminary test of ambiguity."

It appears that some 55 states have ratified, or acceded or succeeded to participation in CMR, of which half are states not members of the European Union, including states as wide-spread as Azerbaijan, Kazakhstan, Kyrgystan, Jordan, Mongolia, Moldova, Morocco, Syria, Tajikistan, the former Yugoslav Republic of Macedonia and Uzbekistan. There is no international court to which national courts may refer issues of interpretation of CMR.

The common ground about the CMR position

"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."

In the French version (equally authentic at an international level), that reads:

"Si un transport régi par un contrat unique est executé par des transporteurs routiers successifs, chacun de ceux-ci assume la responsabilité de exécution du transport total, le second transporteur et chacun des transporteurs suivants devenant, de par leur acceptation de la marchandise et de la lettre de voiture, parties au contrat, aux conditions de la lettre de voiture."

"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. Where applicable, he shall enter on the second copy of the consignment note and on the receipt reservations of the kind provided for in article 8, paragraph 2.

2. The provisions of article 9 shall apply to the relations between successive carriers."

"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."

Further provisions of CMR

"CHAPTER II

PERSONS FOR WHOM THE CARRIER IS RESPONSIBLE

Article 3. For the purposes of this Convention the carrier shall be responsible for the acts and omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own.

CHAPTER III

CONCLUSION AND PERFORMANCE OF THE CONTRACT OF CARRIAGE

Article 4. [See above, para 12]

...

Article 5. The consignment note shall be made out in three original copies signed by the sender and the carrier. ...

Article 6.1. The consignment note shall contain the following particulars:

(a) the date of the consignment note and the place at which it is made out;

(b) the name and address of the sender;

(c) the name and address of the carrier;

(d) the place and the date of taking over of the goods and the place designated for delivery;

(e) the name and address of the consignee;

(f) the description in common use of the nature of the goods and the method of packing, and, in the case of dangerous goods, their generally recognised description;

(g) the number of packages and their special marks and numbers;

(h) the gross weight of the goods or their quantity otherwise expressed;

(i) charges relating to the carriage (carriage charges, supplementary charges, customs duties and other charges incurred from the making of the contract to the time of delivery);

(j) the requisite instructions for Customs and other formalities;

(k) a statement that the carriage is subject, notwithstanding any clause to the contrary, to the provisions of this Convention.

2. Where applicable, the consignment note shall also contain the following particulars:

(a) a statement that transhipment is not allowed;

(b) the charges which the sender undertakes to pay;

(c) the amount of 'cash on delivery' charges;

(d) a declaration of the value of the goods and the amount representing special interest in delivery;

(e) the sender's instructions to the carrier regarding insurance of the goods;

(f) the agreed time-limit within which the carriage is to be carried out;

(g) a list of the documents handed to the carrier.

3. The parties may enter in the consignment note any other particulars which they may deem useful.

...

Article 8.1. On taking over the goods, the carrier shall check:

(a) the accuracy of the statements in the consignment note as to the number of packages and their marks and numbers, and

(b) the apparent condition of the goods and their packaging.

2. Where the carrier has no reasonable means of checking the accuracy of the statements referred to in paragraph l(a) of this article, he shall enter his reservations in the consignment note together with the grounds on which they are based. He shall likewise specify the grounds for any reservations which he makes with regard to the apparent condition of the goods and their packaging. Such reservations shall not bind the sender unless he has expressly agreed to be bound by them in the consignment note. ...

Article 9.1. The consignment note shall be 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.

...

Article 13.1. After arrival of the goods at the place designated for delivery, the consignee shall be entitled to require the carrier to deliver to him, against a receipt, the second copy of the consignment note and the goods. If the loss of the goods is established or if the goods have not arrived after the expiry of the period provided for in article 19, the consignee shall be entitled to enforce in his own name against the carrier any rights arising from the contract of carriage.

...

CHAPTER V

CLAIMS AND ACTIONS

Article 30.1 [Deals with checking of the goods by the consignee]

30.2. When the condition of the goods has been duly checked by the consignee and the carrier, evidence contradicting the result of this checking shall only be admissible in the case of loss or damage which is not apparent and provided that the consignee has duly sent reservations in writing to the carrier within seven days, Sundays and public holidays excepted, from the date of checking.

3. No compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within 21 days from the time that the goods were placed at the disposal of the consignee.

...

5. The carrier and the consignee shall give each other every reasonable facility for making the requisite investigations and checks.

Article 31.1

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 32: The period of limitation for an action arising out of carriage under this Convention shall be one year. Nevertheless, in the case of wilful misconduct, or such default as in accordance with the law of the court or tribunal seised of the case, is considered as equivalent to wilful misconduct, the period of limitation shall be three years.

...

Article 33. The contract of carriage may contain a clause conferring competence on an arbitration tribunal if the clause conferring competence on the tribunal provides that the tribunal shall apply this Convention.

CHAPTER VI

PROVISIONS RELATING TO CARRIAGE PERFORMED BY SUCCESSIVE CARRIERS

Articles 34 and 35 [See above, paras 10 and 11]

...

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 37. A carrier who has paid compensation in compliance with the provisions of this Convention, shall be entitled to recover such compensation, together with interest thereon and all costs and expenses incurred by reason of the claim, from the other carriers who have taken part in the carriage, subject to the following provisions:

(a) the carrier responsible for the loss or damage shall be solely liable for the compensation whether paid by himself or by another carrier;

(b) when the loss or damage has been caused by the action of two or more carriers, each of them shall pay an amount proportionate to his share of liability; should it be impossible to apportion the liability, each carrier shall be liable in proportion to the share of the payment for the carriage which is due to him;

(c) if it cannot be ascertained to which carriers liability is attributable for the loss or damage, the amount of the compensation shall be apportioned between all the carriers as laid down in (b) above.

Article 38. If one of the carriers is insolvent, the share of the compensation due from him and unpaid by him shall be divided among the other carriers in proportion to the share of the payment for the carriage due to them.

Article 39.1. No carrier against whom a claim is made under articles 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."

The issues

(i)                First, can article 31 and 36 be read together, so that, once a claimant has established jurisdiction against one defendant under article 31.1(a), it can then bring into that jurisdiction any other successive carrier potentially liable under article 36?

(ii)              Second, is it under article 31 sufficient to enable the BAT companies to sue Essers and Kazemier as successive carriers in England that the English courts were designated by agreement in the carriage contracts made between such BAT companies and Exel?

(iii)           Third, can the BAT companies sue Essers and Kazemier in the English courts, on the basis that "the branch or agency through which the contract of carriage was made" was in England?

(iv)            Fourth, do the provisions or principles of the Brussels I Convention on Civil Jurisdiction and Judgments, Council Regulation (EC) No 44/2001 of 22 December 2000 (OJ 2001 L12, p 1) either enable jurisdiction to be established over Essers and Kazemier or inform or dictate the answer to any of the previous questions?

"A person domiciled in a member state may also be sued: ...

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; ..."

"1. If the parties, regardless of their domicile, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that member state. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either:

(a) in writing or evidenced in writing;

(b) in a form which accords with practices which the parties have established between themselves; or

(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned."

Accordingly, Essers and Kazemier submit that, in so far as the BAT companies seek to rely against them upon jurisdiction clauses which were contained in the contract between BAT and Exel and to which they did not agree, CMR cannot and should not be interpreted as binding them by such clauses. The fact that, as it happened, the sub-contracts made by Exel with Essers Security and Kazemier were also subject to English choice of law and court clauses must, I accept, be legally irrelevant in this connection, however much it might be thought to diminish the attractiveness in non-legal terms of Essers' and Kazemier's position.

Article 31.1 - jurisdiction designated by agreement

Article 31.1 - further provisions

(i)                a provision enabling the enforcement of any jurisdiction clause in favour of the court or tribunal of a contracting state which was (a) agreed between the parties to the original carriage contract, or (b) to be taken, in the light of article 34, to be agreed as between the original goods interests and any successive carrier becoming party to that original contract on terms in the consignment note incorporating the jurisdiction clause, or (d) agreed in some other way between the parties to the litigation.

(ii)              provisions in paragraph (a) regarding ordinary residence and a principal place of business which can be relied upon as against any carrier or successive carrier liable to suit under article 36, as well as by a carrier bringing proceedings arising out of carriage under CMR against a consignor or consignee,

(iii)           a further provision in paragraph (a) which can only sensibly apply in proceedings between original parties to the carriage contract,

(iv)            further provisions in paragraph (b) which open up jurisdiction in any claim arising out of CMR carriage to cover the courts or tribunals of the place of taking over or designated for delivery of the goods.

The important corollary of these provisions is that, under the final words of article 31.1, a claimant may not bring an action arising out of carriage under CMR in any other courts or tribunals.

The relationship of articles 31.1, 36 and 39

(i)                Article 31.1 does not only offer a claimant the jurisdiction of any individual defendant's ordinary residence, principal place of business or branch or agency. It offers the additional advantage of jurisdiction against all carriers potentially liable under article 36 (the first, the last and the performing carriers) in the place either of taking over or designated for delivery of the goods. No such jurisdiction is available under article 39.2 to a carrier seeking recourse from another carrier.

(ii)              Article 39.2 concerns recourse claims which fall under articles 37 and 38 to be divided pro rata, potentially between all carriers and not just the first, last or performing carrier. This is so, having regard to the specific provisions covering cases where more than one carrier was responsible for the loss or damage, or where it cannot be ascertained who was responsible or where a carrier otherwise liable to contribute is insolvent. There is an obvious imperative under article 39.2 to enable a claimant to bring all such claims in one jurisdiction. The same imperative does not exist under article 31.1, since cargo interests are under article 36 entitled to look to any one of the relevant carriers (first, last or performing) to meet their full claim, each being liable 100%. Further, in so far as cargo interests do wish to pursue all such relevant carriers together, they are able to do so in the place either of taking over or designated for delivery as stated in point (i).

"It is clear from the provisions of CMR 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 article 31, paragraph 1, combined with article 34, is that the plaintiff can bring a single action against one, more than one, or all the carriers concerned. Article 31, paragraph 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; secondly, 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, thirdly, 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 will be seen that the scheme of the Convention, starting in article 31, is that normally, unless the parties otherwise agree, any legal proceedings are to be originated in the jurisdiction of 'the defendant' (article 31, paragraph 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 article 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 of the defendant was concerned, either in England (Davis) or in Holland the other three."

It is clear from this passage that O'Connor LJ did not accept that Cummins could under CMR properly bring English proceedings against any defendant other than Davis, which alone fell within article 31.1(a). That corresponds with the case advanced by Essers and Kazemier on these appeals.

The desirability of joining all possible defendants

"Article 28.1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the court having jurisdiction at the place of destination.

...

Article 30.1. In the case of carriage to be performed by various successive carriers and falling within the definition set out in the third paragraph of article 1, each carrier who accepts passengers, luggage or goods is subjected to the rules set out in this Convention, and is deemed to be one of the contracting parties to the contract of carriage in so far as the contract deals with that part of the carriage which is performed under his supervision.

...

3. As regards luggage or goods, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier who performed the carriage during which the destruction, loss, damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignee."

"A person domiciled in a member state may also be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled ...."

On Essers' and Kazemier's case, CMR contains no such provision. On BAT's case, the last sentence of article 36 of CMR has an effect which is similar - similar, but necessarily wider since it would expose any successive carrier potentially liable under article 36 to being sued by cargo interests in any jurisdiction anywhere in the world which happened to be that of the principal place of business of any other such successive carrier, or which happened to be that of the branch or agency through which the first carrier happened to make the carriage contract. A lesser point, not without all practical relevance, is that BAT's reading of the last sentence of article 36 would also provide an automatic ground of jurisdiction against any such carrier without the qualifying condition inserted into article 6.1 of the Brussels Regulation, that the claims should be "so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings". The absence of such a qualification could be significant if, for example, a claim was brought against a first carrier based on a special term included in the original carriage contract, but not binding on a successive carrier because it was not included in the consignment note.

Does article 6.1 of the Brussels Regulation prevail over article 31.1 of CMR?

"The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding states, before the date of their accession, between one or more member states on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties.

To the extent that such agreements are not compatible with the Treaties, the member state or states concerned shall take all appropriate steps to eliminate the incompatibilities established. Member states shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude.

In applying the agreements referred to in the first paragraph, member states shall take into account the fact that the advantages accorded under the Treaties by each member state form an integral part of the establishment of the Union and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other member states."

"1. 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.

2. With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner:

(a) this Regulation shall not prevent a court of a member state, which is a party to a convention on a particular matter, from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another member state which is not a party to that convention. The court hearing the action shall, in any event, apply article 26 of this Regulation;

(b) judgments given in a member state by a court in the exercise of jurisdiction provided for in a convention on a particular matter shall be recognised and enforced in the other member states in accordance with this Regulation.

Where a convention on a particular matter to which both the member state of origin and the member state addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of this Regulation which concern the procedure for recognition and enforcement of judgments may be applied."

"Article 71 of Regulation 44/2001 cannot have a purport that 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."

The court did not refer to article 307EC or article 351 TFEU, and the court's reasoning is essentially circular. It is the purpose of article 307EC, now 351 TFEU, to derogate from not only Regulations such as (EC) 44/2001, but also from the Treaties themselves.

"Article 351(1) TFEU allows a derogation from the principle of primacy of EU law but only in relation to agreements concluded prior to EU membership and, in principle, only to treaty relations between member states and third states (category 1 above). According to settled case law, the purpose of the provision is to establish that the application of EU law does 'not affect the duty of the member state concerned to respect the rights of non-member countries under a prior agreement and to perform its obligations thereunder'. The court has also recognized that article 351(1) TFEU may allow derogations from not only Union's secondary law but also its primary law, such as provisions of the TEU and the TFEU. The court has added that the provision would not achieve its purpose if it did not imply a duty on the part of the Union institutions not to impede the performance of the obligations of member states that stem from a prior agreement.

"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 Regulation 44/2001, of 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."

In TNT the court added:

"50. Observance of each of those principles is necessary for the sound operation of the internal market, which, as is apparent from recital 1 in the preamble, constitutes the raison d'être of Regulation 44/2001."

Conclusion

LORD SUMPTION: (with whom Lord Neuberger, Lord Clarke and Lord Reed agree)

"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."

This provision cannot be limited to claims against the first or primary carrier. It is in terms directed to claims "arising out of carriage under this Convention". It must therefore apply to any carrier whom the Convention makes potentially liable. I find it impossible to attach any importance to the fact that it appears earlier in the text than the provisions regulating the liability of second or subsequent carriers.

LORD CLARKE: