British American Tobacco Switzerland SA v Exel Europe Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Bernard Rix,Sir Timothy Lloyd,Lord Justice McFarlane |
| Judgment Date | 30 October 2013 |
| Neutral Citation | [2013] EWCA Civ 1319 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2012/0856 and 0858 |
| Date | 30 October 2013 |
[2013] EWCA Civ 1319
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
COMMERCIAL COURT
MR JUSTICE COOKE
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice McFarlane
Sir Bernard Rix
and
Sir Timothy Lloyd
Case No: A3/2012/0856 and 0858
Charles Priday (instructed by Gateley LLP) for the Appellants
John Passmore (instructed by Holman Fenwick Willan LLP) for the Respondents
Exel Europe Ltd was not represented
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"...
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