Amoco (UK) Exploration Company v Teesside Gas Transportation Ltd

This appeal raises some interesting questions concerning article 31 of the Convention for the International Carriage of Goods by Road, signed at Geneva on 19 May 1956 ("CMR"). In Cummins Engine Co v Davis Freight Forwarding (Hull) [1981] 2 Lloyd's Rep 106 at 109, Mocatta J described CMR as "notoriously difficult". Its reputation is intact.

The basic facts are swiftly stated. The claimant, Andrea Merzario Limited ("Merzario") was the contracting carrier for the carriage of a consignment of whisky from Scotland to Vienna. The contract of carriage was made on 15 March 1999. The defendant, Internationale Spedition Leitner Gesellschaft GmbH ("Leitner"), was Merzario's sub-contractor. Leitner is an Austrian company. Leitner in turn sub-contracted the carriage to a local Scottish carrier. The whisky was stolen on 17 March 1999, before it had left these shores, although whether it had already passed out of Scotland into England is uncertain. Merzario has paid a claim for the whisky's loss and seeks in these proceedings to recover an indemnity or contribution from Leitner pursuant to CMR.

This action was commenced by Merzario against Leitner on 15 October 1999. By then Leitner had already commenced its own action against Merzario in the Commercial Court of Vienna, which it did by issuing proceedings on 16 July 1999. However, the Viennese proceedings, although commenced first, were served second, for the English action was served on Leitner on 21 October, whereas the Austrian action was only served on Merzario on 22 December 1999.

In the meantime on 1 September 1999 the Austrian Supreme Court had, on Leitner's motion, designated the Commercial Court of Vienna as the local venue for the case, confirming the existence of jurisdiction in Austria as the country within whose territory the place designated for delivery under the contract was situated, pursuant to article 31(1)(b) of CMR.

Although this court was referred by Mr David Mildon QC on behalf of Leitner to the order made by the Austrian Supreme Court on 1 September 1999, he did not submit that that order marked any critical stage in the Austrian action. His submission was rather that the Austrian action became a "pending" action for the purpose of article 31(2) of CMR straightaway upon issue of those proceedings. On behalf of Merzario, on the other hand, Mr Robert Bright submitted that it was only upon service that an action became "pending" under article 31(2). Mr Mildon relied on the order of 1 September 1999 therefore as being indicative of the significance of issue and of the stage before service under Austrian law, rather than in its own right.

Merzario's claim form in England states that its claim is for damages or an indemnity in respect of breach of the contract of carriage or for negligent breach of duty in or about the handling of the whisky. Its particulars of claim were served in February 2000. They show that the claim is in respect of the value of the lost whisky in the sum of over £117,000.

Leitner's Austrian claim form is not before the court, but in its order of 1 September 1999 the Austrian Supreme Court refers to Leitner's allegation that it is not liable to Merzario by reason of article 17(2) of CMR (sc the provision there regarding "circumstances which the carrier could not avoid and the consequences of which he was unable to prevent") on the ground that "the driver has taken all reasonable security precautions"; and also to the allegation that Leitner is in any event not liable for that part of the claim represented by "excise duties". Whisky stolen in the UK, even if destined for export, attracts excise duty. The question whether a carrier is liable under CMR for such duties was the point which the House of Lords was called upon to decide in James Buchanan & Co Ltd v. Babco Forwarding & Shipping (UK) Ltd [1978] AC 141. It there held that "other charges incurred in respect of the carriage" within article 23(4) should be construed broadly to cover the duty. It appears that Leitner is contending that a different interpretation prevails or should prevail in Austria. It would also appear that Leitner's action in Austria takes the form of an action for a negative declaration of non-liability. It is as such that it has been treated in submissions in this court.

The question is whether article 31 does or does not bar Merzario's English action for damages on the basis of Leitner's action for a declaration of non-liability. This is a question of lis pendens, an expression which, although in Latin rather than the vernacular, I may perhaps be permitted to use since it has an international currency in an area of (private) international law. As will be seen, the expression "pending" is used in article 31(2).

Article 31 of CMR

Article 31 provides as follows:

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

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

(b) the place where the goods were taken over by the carrier or the place designated for delivery is situated, and in no other courts or tribunals.

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.

Where a judgment entered by a court or tribunal of a contracting country in any such action as is referred to in paragraph 1 of this article has become enforceable in that country, it shall also become enforceable in each of the other contracting States, as soon as the formalities required in the country concerned have been complied with. The formalities shall not permit the merits of the case to be re-opened.

The provisions of paragraph 3 of this article shall apply to judgments after trial, judgments by default and settlements confirmed by an order of the court, but shall not apply to interim judgments or to awards of damages, in addition to costs against a plaintiff who wholly or partly fails in his action"

Article 31 falls together with articles 30 and 32/33 in chapter V of CMR, which is headed "Claims and Actions". Article 30 is concerned with detailed provisions concerning loss, damage or delay to goods. Article 32 deals with periods of limitation. The basic limitation period is one year, but that period begins to run at slightly different times depending on whether there is a claim for partial loss, damage or delay, or total loss of goods, or some other claim. In the case of wilful misconduct, however, the period of limitation becomes three years. There is a special provision that a written claim against a carrier may suspend the period of limitation until the claim has been rejected (article 31(2)). Article 32(4) is of some interest –

"A right of action which has become barred by lapse of time may not be exercised by way of counter-claim or set-off."

I refer to that because it is a necessary corollary of Mr Mildon's submission that the effect of article 31(2) is to canalise claims into a single forum, even where the first action is merely that for a declaration of non-liability, that the defendant to such an action should have an appropriate opportunity to bring the substantive claim which he had started in the second forum by way of counterclaim in the first forum.

Article 33 is concerned with arbitration.

The four issues

The appeal raises four issues, of which one has been conceded at the hearing, and the other three are still live. They are:

(i) Is the English court a competent court for the purposes of article 31(1)(b) as the court "of a country within whose territory…the place where the goods where taken over by the carrier…is situated"?

(ii) Was the Austrian action "pending" when commenced but not yet served?

(iii) In any event, is an action in which the sole relief sought is a claim for a negative declaration such an action within the meaning of article 31(2) as may, if "pending", bar a further action ("no new action may be started") between the same parties on the same grounds?

(iv) Were the Austrian and English actions in any event "on the same grounds"?

In form this is an appeal from a judgment of Longmore J. In substance, however, the single point decided by Longmore J (issue (i) under article 31(1)) is no longer controversial, for it is now accepted, as Longmore J ruled, that any court within the territory of a contracting country is competent (subject possibly to considerations of forum non conveniens) for the purposes of article...