Huawei Technologies (UK) Ltd v DSV Solutions Ltd
| Jurisdiction | England & Wales |
| Judge | Simon Tinkler |
| Judgment Date | 23 June 2023 |
| Neutral Citation | [2023] EWHC 1505 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: LM-2022-00192 |
[2023] EWHC 1505 (Comm)
Simon Tinkler sitting as a Deputy High Court Judge
Case No: LM-2022-00192
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Sam Thomas (instructed by Azarmi & Company Ltd) for the Claimants
Michael Davey KC (instructed by Shoreside Law) for the Defendant
Hearing date: 26 April 2023
Approved Judgment
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 14:00 on Friday 23 rd June 2023.
Simon Tinkler sitting as a Deputy High Court Judge:
Background to the applications
These applications relate to mobile phones belonging to the First Claimant (“ Huawei”) that the Defendant (“ DSV”) contracted to transport from England to the Netherlands. The Second Claimant (“ China Pacific”) was the insurer of the First Defendant's mobile phones whilst they were being transported. Some 300 of the mobile phones went missing during the course of the transportation. It is presumed by all parties that those goods were stolen whilst they were in transit. It is not known by whom they were stolen.
There were two applications before me. The first, and most substantive, application was by the Defendant to strike out the claim, or alternatively to obtain summary judgement against the Claimants. The second application was to clarify the basis on which China Pacific should (or should not) be party to the proceedings. If the first application succeeded, then the second application would be academic. If the first application failed then the parties were in broad agreement that the claim should be brought by either Huawei as principal or, alternatively, by China Pacific having exercised its rights of subrogation but not by both; the parties would seek to agree the correct basis and make appropriate applications in due course to amend the pleadings.
I heard full legal argument in relation to the first application and I express my thanks to both counsel for the clarity of their submissions.
Key facts
A brief summary of the key facts is as follows:
i) Huawei and DSV entered into a contract under which DSV were to take phones belonging to Huawei from England to the Netherlands (the “ Contract”).
ii) The carriage of the phones under the contract was subject to the Convention on the Contract for the International Carriage of Goods by Road (the “ CMR Convention”). The CMR Convention was given effect in English law by the Carriage of Goods by Road Act 1965 (the “ 1965 Act”). The CMR Convention sets out key terms regarding liability for carriage of goods. It includes limitations and procedural rules.
iii) DSV took the consignment of Huawei's mobile phones from their warehouse in Feltham, England to the Netherlands. The consignment was delivered in Amsterdam on 24 November 2020 but around 300 of the phones, valued at some £150,000, were missing.
iv) On 7 June 2022, around 18 months after the delivery of the consignment in which the phones were missing, the Claimants wrote a letter before action to DSV threatening legal proceedings in the English courts.
v) On 5 July 2022 DSV issued and served proceedings in the courts in the Netherlands seeking a declaration that they had no liability to either Huawei or China Pacific.
vi) On 31 August 2022 China Pacific issued a claim in the English courts. On 21 September 2022 Huawei was added to the claim. The claim was served on 22 September 2022.
vii) On 2 November 2022 DSV applied for a declaration that the English courts have no jurisdiction (or should not exercise any jurisdiction they have) and to set aside the claim.
viii) On 22 February 2023 the court in the Netherlands handed down its judgement (the “ Netherlands Decision”). It held that under the CMR Convention the appropriate limitation period was one year. It did not exercise any discretion it had to extend that period. It also did not conclude that the three year limitation period for claims involving wilful default applied. This was because Huawei and China Pacific said that the case was time barred in the Netherlands and thus by implication the wilful default provision did not apply. The court in the Netherlands held that the underlying claim by Huawei was time barred. It held that the claim by DSV for the declaration was therefore also time barred.
DSV says that no claims can be made against it in this court by Huawei or China Pacific because the entire matter has been decided pursuant to the Netherlands Decision. It says that the terms of the CMR Convention therefore preclude any claim being brought in the English courts.
Huawei and China Pacific say, however, that they have claims that continue to exist notwithstanding the Netherlands Decision. The Claimants say they have claims pursuant to the Contract and that neither the Netherlands Decision nor the CMR Convention preclude the bringing of those claims (the “ Possible English Contractual Claim”) and (b) they have claims that can be brought in the English courts in tort that similarly are not limited by the Netherlands Decision or the CMR Convention (the “ Possible English Tortious Claim”). It is convenient to address those two grounds separately. There is no existing English case law to which I was referred that addresses the precise legal issues that arise in relation to the two grounds. There are, however, several cases which provide a useful framework for the analysis.
Possible English Contractual Claim
It was common ground that the CMR Convention applied to the Contract. The precise way it applied was not common ground. It is useful, therefore, to start by considering the actual terms of the CMR Convention.
Section 1 of the 1965 Act sets out that the CMR Convention has the force of law in the United Kingdom. The CMR Convention itself is set out in the Schedule to the 1965 Act.
Article 31 of the CMR Convention (“ Article 31”) provides as follows:
“Article 31
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.”
Article 31.1 in essence sets out where a party may bring proceedings under the Convention.in relation to the carriage of goods. In other words, Article 31 provides a selection of jurisdictions in whose courts or tribunals a contracting party may bring proceedings.
The effect of having brought proceedings in a forum permitted by Article 31.1 is set out in Article 31.2, as follows:
“ 31.2 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.”
It is common ground that the English courts and the Netherlands courts are both courts in which the parties would be entitled bring claims in relation to the Contract pursuant to Article 31.1. Accordingly, the courts in the Netherlands are “competent” for the purposes of Article 31.2.
The Claimants raised three key arguments in relation to Article 31.2 which they say individually or collectively mean that they are not precluded by the Netherlands Decision and CMR Convention from bringing their claim in contract in the English courts:
i) The Netherlands Decision is not a “judgment” for the purposes of Article 31.2 because it was a decision that the courts in the Netherlands did not have jurisdiction over the claim as the limitation period had expired (the “ Judgment Issue”);
ii) The grounds on which they seek to bring a claim in this court are not “the same grounds” as those in the Netherlands Decision (the “ Same Grounds Issue”); and
iii) The Netherlands Decision is not “enforceable” for the purposes of Article 31.2 (the “ Enforceability Issue”).
The Judgment Issue and the Enforceability Issue are in reality two parts of the same issue. Article 31.2 is couched in negative terms in that “no new action shall be started… unless the judgment… is not enforceable”. To make this judgment easier to follow I have avoided the use of double negatives contained in Article 31.2 and have phrased the question as whether the “judgment…is enforceable”.
The original claim in the Netherlands was by the Defendant for a declaration of non-liability. The question of whether a declaration of non-liability is a “judgment… that is enforceable” was considered by Colman J in Frans Maas Logistics (UK) Ltd v CDR Trucking BV 1 (“ Frans Maas”). He concluded that it was not. That decision and the underlying question were considered, but not decided, by the Court of Appeal in Merzario. 2 The majority (Chadwick LJ and Merritt VC) expressed the view that a declaration of non-liability was a “judgment… that is enforceable” and that Frans Maas had been wrongly decided. Rix LJ, on the other hand, concluded that the decision in ...
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