Royal & Sun Alliance Insurance Plc and another v MLK Digital FZE (Cyprus) Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,Lord Justice Maurice Kay,Lord Justice Auld |
| Judgment Date | 17 May 2006 |
| Neutral Citation | [2006] EWCA Civ 629 |
| Date | 17 May 2006 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2005/1422 |
[2006] EWCA Civ 629
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
MR JUSTICE AIKENS
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Auld
Lord Justice Rix and
Lord Justice Maurice Kay
Case No: A3/2005/1422
Mr Charles Graham QC (instructed by Messrs Hassan Khan & Co) for the Appellant
Mr Stephen Kenny (instructed by Messrs Hill Dickinson Llp) for the Respondent
Introduction
On 4 November 2004 a consignment of 18,000 Nokia mobile phones, loaded in a container, and on route from Charles de Gaulle airport, near Paris, to Calais in anticipation of carriage on to England, were stolen. Their transport was last seen near the Ressons motorway service station at about 6.30 to 6.45 pm that evening. Lorry, drivers, container and phones have disappeared. A further driver escorting the lorry in a separate vehicle was shaken off when the tyres of his vehicle were slashed during a motorway stop. The phones are said to have been worth some £3.3 million. They may have been uninsured.
The theft has led to legal proceedings both in England and in France between, among others, the owners of the phones, a Danish company called Hi-Tec Electronics A/S (" Hi-Tec") , and a French company charged with their carriage or with arranging it, called Exel Logistique SA (" Exel") . In England Exel is claimant and Hi-Tec defendant. In France Hi-Tec is claimant and Exel defendant. Exel claims here a declaration of non-liability. In France Hi-Tec claims to be indemnified against the loss of its phones. Exel's English claim form was issued on 11 November 2004, and served on Hi-Tec in Denmark on 4 February 2005. Meanwhile Hi-Tec's French action was issued and served on 2 December 2004. Thus Exel's English claim was issued first, but Hi-Tec's French action was served first.
There is a dislocation between the contract respectively alleged by Exel and by Hi-Tec. Here in England, Exel alleges that the contract between them is one for the international carriage of goods governed by the Geneva Convention on the Contract for the International Carriage of Goods by Road ("CMR") for delivery of the phones in England. In France, Hi-Tec alleges that the contractual relationship is that arising from Exel's role as a commissionnaire de transport, or what we would call a freight forwarder, instructed to arrange for the transport of the phones not to England but to Italy. It is to be noted, however, that unlike an English freight forwarder who may well be an agent only, a French commissionnaire undertakes personal liability and guarantees the safe delivery of the goods. It has not been suggested by either party that a commissionnaire can also be a CMR carrier. On the contrary, the parties have accepted that a commission de transport, the contract made by a commissionnaire with his principal, is not governed by CMR but by the relevant domestic French law.
This appeal is about whether the legal proceedings are to continue in England or France. In the meantime, the French proceedings have been stayed by the Cour d'Appel at Lyon, applying Council Regulation (EC) No 44/2001 (the "Judgments Regulation") on the basis that the French court was second seised, to await the outcome of this appeal. Here in the commercial court, Aikens J has held that there is jurisdiction in England under CMR (incorporated into English law by the Carriage of Goods by Road Act 1965) and that these proceedings have priority, under article 30 of the Judgments Regulation, on the basis that the court here was first seised upon issue of Exel's claim form.
5. The essential issue which has been argued before us is whether there is jurisdiction in England in respect of Exel's claim here against Hi-Tec for a declaration of non-liability in respect of the theft of the phones.
Exel has put its case on jurisdiction on three alternative bases. First, it submits that there is jurisdiction under CMR in that the phones were to be delivered in England, to a firm called Interken Freighters (UK) Limited ("Interken") based at Southall in Middlesex. Article 31.1 of CMR provides that the courts of the country within whose territory "the place designated for delivery" is to be found have jurisdiction. However, it is disputed whether Exel has a good arguable case that a CMR contract governs the parties' relationship. Secondly, Exel submits that there is jurisdiction under article 2 of the Brussels Convention (the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, Brussels, 27 September 1968) on the basis that Hi-Tec, although incorporated in Denmark, also has a domicile in England through its directors, who reside in Rochdale. Hi-Tec disputes any domicile in England. Thirdly, Exel submits that there is jurisdiction under article 5.1 of the Brussels Convention on the basis that England is "the place of performance of the obligation in question", viz the obligation to deliver the goods to Interken in Southall. Hi-Tec submits that delivery was to be in Italy; that the obligation in question related to the safe carriage of the phones up to the time of their theft and not to non-delivery at destination; and that in any event, if there was no good arguable case for a CMR contract, no relevant obligation under the commissionnaire de transport contract arose in these proceedings such as could amount to an "obligation in question".
Aikens J held that there was a good arguable case that Exel and Hi-Tec were parties to a CMR contract for delivery in England and that jurisdiction was therefore established by virtue of article 31.1 of CMR. He then applied article 30 of the Judgments Regulation to hold that Exel's claim had priority as the first proceedings to be issued. He did not reach, and given his view did not need to reach, the arguments about articles 2 and 5.1 of the Brussels Convention.
On the present appeal Hi-Tec has challenged the judge's conclusion about CMR and has gone on to seek to rebut Exel's reliance, under its respondent's notice, on articles 2 and 5.1 of the Brussels Convention.
This appeal is complicated by the fact that the legal relationship between the parties has been addressed in different terms in the English and French claim forms; and by the fact that although England and France are parties to the Judgments Regulation, which supersedes the Brussels Convention, Denmark is not. Of course all three countries remain parties to the Brussels Convention.
Thus three international conventions are in issue: CMR, the Brussels Convention and the Judgments Regulation. CMR contains its own jurisdictional code in its article 31, which is preserved by article 57 of the Brussels Convention and by article 71 of the Judgments Regulation. The Brussels Convention is in issue because Denmark remains a party to it, but has not joined up to the Judgments Regulation. This appeal has therefore been argued on the basis, in the main, that the Brussels Convention applies to questions whether, outside article 31 of CMR, Hi-Tec can be brought before the English courts, for instance under articles 2 and/or 5.1. Thirdly, the parties have been at common ground in arguing questions of lis alibi pendens—ie first seizure, prorogation of jurisdiction, stay etc—under the Judgments Regulation, on the basis that, although a Danish party, Hi-Tec, may be involved, nevertheless any issue as to the competing jurisdictions of France and England, any issue as to whether the English or French courts are first seised, and the consequences of such first seizure, are now for the Judgments Regulation, to which both France and the UK are party, even if Denmark is not.
The appeal is also complicated by a certain mystery surrounding the sale and transport of the phones, as will emerge below. However, I think that what I have stated so far is sufficient for present purposes to introduce the problems of the appeal to the reader.
Some further facts about the parties and the phones
Hi-Tec is a relatively new company. It was incorporated in Denmark on 5 March 2004. It trades in wholesale markets for electronic components including mobile phones. Its principal manager is Mr Arif Rashid, who, together with his two brothers, Adil and Asif, make up its board of directors. All three brothers reside at an address in Rochdale. Arif also has a home in Denmark.
Hi-Tec's first dealings with Exel were in October 2004. On 14 October 2004 Exel arranged three transports, using two different carriers, of mobile phones to Interken. Three CMR notes were issued by Exel in which Hi-Tec was described as the sender, and the actual transporters, TRS Univers Lines and TRS Chauvet, were described as carriers. Exel issued the notes under a box (box 22) calling for the "Signature and stamp of the sender" and subscribed their own. On 28 October 2004 Exel arranged a further two transports for Hi-Tec, again using two carriers, and issuing two CMR notes in similar form. Copies of these CMR notes were returned to Hi-Tec.
The consignment of 18,000 phones in question come on the scene as a sale to Hi-Tec by MK Digital FZE (Cyprus) Ltd ("Digital") . Digital is also a defendant to these proceedings, but it is not necessary to consider its position as such further. On 28 October 2004 there is a purchase order from Hi-Tec to Digital and a commercial invoice from...
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