England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		23/03/2012

Mr Justice Cooke:

Introduction

1. The claimants in the two actions with which I am concerned are companies in the British American Tobacco group who claim, as owners of tobacco consignments, against road hauliers in respect of the loss or theft of part or all of those consignments in the course of carriage across Europe. The second and fourth defendants in one action, to which I shall refer as Essers Security and Essers Transport (and together collectively as Essers), and the second defendant in the other action, to which I shall refer as Kazemier, seek to set aside service of the claim form upon them on the basis that the English court has no jurisdiction by reason of the provisions of Article 31.1 of CMR as scheduled to and made part of English law by the Carriage of Goods by Road Act 1965.
2. It is common ground between the parties that each of these defendants had its registered office and principal place of business in Holland. Service was effected upon each of them there, it being the claimants' assertion that such service was justified under the provisions of CMR.

The Contractual Structure

3. In the Essers action, the primary contract of carriage was made between one of the claimant companies (BAT) and Exel Europe Limited (Exel), an English registered company, and was contained in or evidenced by a Framework Agreement between BAT (Holdings) Limited and Exel and/or a Local Agreement between another BAT company and Exel. These long-term agreements regulate the relationship between various BAT companies (including all the claimants who fall within the definition of BAT Associates in the agreements) and Exel for the provision of warehousing and distribution services in Europe. The Framework Agreement imposed various liabilities on Exel in relation to the loss of goods being carried and in relation to the standard of care and security to be followed in such carriage. Such obligations were mirrored in the Local Agreement which also imposed further obligations on Exel to comply with a Security Manual and to ensure compliance with BAT security policies.
4. It was recognised in clause 39.9 of the Framework Agreement that CMR would apply to certain of the services to be provided by Exel, but agreed that the terms of the Framework and Local Agreements were to apply save to the extent that they were inescapably in conflict with CMR. Both the agreements contained an applicable law and jurisdiction provision under which disputes were to be referred to the exclusive jurisdiction of the English courts. Both also contained a clause allowing BAT Associates to enforce the provisions under the terms of the Contract (Rights of Third Parties) Act 1999.
5. There was a subcontract between Exel and Essers Security, where the position with regard to the contractual documents was more confused. Contracts of carriage entered into by Essers Security are said to be performed by Essers Transport though it is unclear whether there is a contract of carriage between them or whether there is an agency relationship. For the purposes of the current arguments, it matters not which is the case. What is clear is that Exel subcontracted the carriage to Essers and it is accepted that Exel's Transportation Terms and Conditions applied to that contract and that those terms and conditions also contained an English law and jurisdiction clause.
6. A CMR note was issued in respect of the consignment naming BAT Switzerland SA as consignor, Maersk Shipping Lines Rotterdam as consignee and "Essers" as carrier. The consignment was loaded in Switzerland on 2^nd September 2011 and was allegedly stolen in an armed robbery on a motorway in Belgium on 3^rd September 2011, on its way to Rotterdam.
7. In the other action, the contractual arrangements are materially identical since the BAT claimants contracted with Exel on the terms of the Framework and/or Local Agreements and Exel subcontracted to Kazemier on Exel's Transportation Terms and Conditions. There were thus agreed English law and jurisdiction clauses in both the contract between the BAT company and Exel and between Exel and Kazemier.
8. The claim in this second action relates to a loss of a substantial part of a consignment of cigarettes in the course of carriage from Hungary to Denmark by road in September 2011. It is alleged that, despite a clear written instruction that drivers were not to use specified overnight parking areas, the vehicle driver did so and that this resulted in the theft of 18 pallets of cigarettes whilst the vehicle was parked there. In this case, it is alleged that there is not only liability under Article 17 of CMR but also that there was wilful misconduct within the meaning of Article 29.
9. This consignment was also covered by a CMR note which named BAT Pecsi Dohanygyar Kft as consignor, British American Tobacco A/S (House of Prince A/S) as consignee and Kazemier as carrier.
10. As will be apparent from the above, whilst each of the relevant contracts between BAT and Exel on the one hand and Exel and the subcontractor, Essers or Kazemier, as the case may be, on the other hand, included an English law and jurisdiction clause, there was no direct agreement between the BAT company and the subcontractor, Essers or Kazemier, let alone one which included an agreed jurisdiction clause. BAT sues Exel, as the first defendant in each action in this country, being entitled to do so because of the exclusive jurisdiction clause. Exel is, in any event, an English registered company. Whether it was bound to sue Exel in this country is a matter of dispute because of the terms of Article 31.1 of CMR.
11. Self-evidently, it is convenient for BAT to sue both Exel and the other defendants in the same jurisdiction and BAT asserts that, if it is not permitted to do so, there is a risk of multiple actions and inconsistent decisions of courts in different jurisdictions. It submits that there are good policy reasons therefore why it should be allowed to do so and contends that the provisions of CMR and, to the extent that the Brussels Judgment the Regulation (The Regulation) is applicable, its provisions not only permit it to do so but reflect that policy. BAT draws attention to the consent in the relevant agreements of the sub-contractors with Exel to being sued in England at the behest of Exel, although it accepts that there is no direct jurisdiction agreement made between either sub-contractor and BAT. For their part, Essers and Kazemier do not accept, were Exel to seek to join them, as sub-contractors, in the respective actions in this country, that the English court would recognise the exclusive jurisdiction clauses as founding jurisdiction over those parties, because of the terms of Article 39 of CMR which, it is common ground, governs the jurisdictional position as between carriers. That argument may await another day.
12. What, however, in my judgment, is clear is that, where CMR applies, the parties cannot contract out of its provisions (see Article 1 of CMR). Neither party suggested otherwise. Thus the acceptance in an agreement between any parties of the jurisdiction of a particular court may add to the jurisdictions which are permitted by CMR but cannot detract from the parties' rights or obligations to make a claim in the courts for which CMR expressly provides.

The Issues

13. The question of jurisdiction turns upon the construction of Article 31 of CMR and its relationship with Articles 34, 36 and 39, the structure of CMR, and the inter-relationship between CMR and the Regulation which imposes a jurisdiction and enforcement scheme as a matter of EU Law and has direct effect in Member States such as the United Kingdom.
14. BAT submits that the scheme of CMR requires that, where a claimant can commence proceedings against any one carrier in accordance with the provisions of Article 31, it can also sue any other carrier which it is entitled to sue under Article 36, in the same action, in that jurisdiction. This is said to arise from the terms of those Articles and the policy which underlies Article 39 - the need to avoid multiple proceedings and the risk of inconsistent judgments by different courts in different jurisdictions. Alternatively, the wording of Article 31 must be construed flexibly to achieve this result, when considering "the branch or agency through which the contract of carriage is made" or "the court…designated by agreement between the parties". Ultimately, if the desired result cannot be achieved by construction, then the Court should apply the Regulation and the principles which underlie it to make good the deficiency in CMR in order to ensure the sound administration of justice, the minimisation of the risk of concurrent proceedings and the possibility of inconsistent judgments.
15. The argument based upon the Judgment the Regulation raises questions of policy which apply to all BAT's submissions in relation to the provisions of CMR. It was accepted that the Regulation could not influence the construction of CMR but it was suggested that the underlying policy was the same as that of CMR, and that policy should be reflected in the construction of CMR. If the construction advanced by BAT is wrong, then it contends that the Regulation must be applied.

The approach to interpretation of CMR

16. It is common ground between the parties that a purposive construction must be given to the provisions of an international convention such as CMR. |I was referred to the decision of the Court of Appeal in Hatzl v XL Insurance Co Ltd [2010] 1 WLR 470, where the construction of CMR was in issue. Lawrence Collins LJ (as he then was) at paras 33 and 34 stated that the starting point for the interpretation of international conventions was to consider the natural meaning of the language of the provision in question, but that it was also necessary to consider the convention as a whole and give it a purposive interpretation. Its language should be interpreted unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation. The court may have regard to the decisions of foreign courts on the convention and the prevailing current of foreign opinion on its application. The French text is a legitimate tool in the process of interpretation as the French and English texts of CMR carry equal weight.
17. Mr Priday for BAT submits that, bearing in mind these considerations, the Court must be flexible in construing the language of Article 31, because it specifically covers the position of a defendant, but does not expressly deal with the position of multiple defendants sued by a goods owner, whether sender or consignee.

The Structure of CMR

18. The structure of CMR has been the subject of comment in a number of authorities, including Cummins Engine Co v Davis Freight Forwarding [1981] 2 Lloyd's Rep 402, to which reference needs to be made, because the analysis of Brandon LJ, as he then was, was relied on by BAT, (as also cited by Bingham LJ in ITT Schaub–Lorenz v Birkart Johann Internationale Spedition G.m.b.H & Co. K.G [1988] 1 Lloyd's Rep. 487), whilst Essers and Kazemier pointed to the judgement of O'Connor LJ in Cummins as correctly stating the position.
19. Subject to the provisions of Article 17.2 in Chapter IV, a carrier is liable for the total or partial loss of goods and for damage thereto occurring between the time when he takes over the goods and the time of delivery. Under Article 3, for the purposes of CMR, the carrier is 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. The original carrier who contracts to effect the CMR carriage is therefore responsible to the sender/ consignee for his subcontractors, if he chooses to subcontract the whole or any leg of the carriage. There may thus be a succession of carriers.
20. The structure of CMR envisages a CMR Consignment Note (see Article 4). Although the absence of such a Consignment Note does not affect the existence or the validity of the contract of carriage which is still subject to CMR, Article 5 envisages three copies of such a Consignment Note, one of which is handed by the first carrier to the sender, the second of which accompanies the goods and the third is retained by the first carrier. The copy which accompanies the goods is to be handed over by each carrier to his successive carrier and then handed over at final delivery to the consignee (see Articles 13 and 35). Article 6.1 sets out the particulars which must be included in the Consignment Note whilst Article 6.2 sets out those particulars which should also be contained, where applicable. Article 6.3 provides that the parties may enter in the Consignment Note any other particulars which they consider useful. The Consignment Note is to 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 9) and the absence of notation on the Consignment Notes of any damage constitutes prima facie evidence of the condition of the goods at the time the relevant Consignment Note is handed over with the goods to another carrier (Article 8 and Article 9.2). The consignee is not only able to sue the carrier in his own name in respect of the statutory contract of carriage constituted or evidenced by the Consignment Note but is also liable to pay any charges shown to be due in that Note.
21. In the context of successive carriers Article 34 is the key provision of CMR. Each succeeding carrier is responsible for the performance of the whole operation covered by the original contract contained in the Consignment Note, which details the collection point and designated place for delivery. Each successive carrier, by the terms of Article 34 becomes 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".
22. Furthermore, Article 36 provides that an action can be brought by the sender/consignee for loss or damage to the goods against the first carrier, the last carrier and the carrier who was performing that part of the carriage during which the event occurred which caused the loss or damage, and recovery can be made in full from any one of them.
23. Where CMR refers to "the contract of carriage" it must be taken, generally, to refer to the statutory contract contained in the Consignment Note to which the sender, the first carrier, all successive carriers and consignee become parties. It does not have in mind, in the ordinary way, the terms of the contract between the goods owner and the primary carrier, save and insofar as those terms may be contained in the CMR Consignment Note. Nor does it have in mind the terms of any particular subcontract between carriers, save in so far as those terms appear in the Consignment Note.
24. The authorities recognise that CMR distinguishes two types of claim, namely that of the sender/ consignee against a carrier on the one hand, and that of a carrier against other carriers on the other. What CMR envisages is an action by those interested in the goods, under Article 36, against the first carrier, the last carrier or the carrier who was performing that part of the carriage when the event causing the loss or damage occurred, or against all such carriers who arguably fall into those categories. If the claim succeeds, this is to be followed by a claim under Article 37 between carriers to establish the carrier responsible for the loss or damage, if that has not been established in the action by the goods interests (because of success against, for example the first or last carrier).
25. The relevant Articles of CMR provides as follows:-

Article 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 34

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.

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 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."

26. Article 31, the key Article on which argument centred, comprises part of Chapter V of CMR which deals with claims and actions in respect of the liability of the carrier, which is dealt with in Chapter IV. Chapter VI of CMR contains "provisions relating to carriage performed by successive carriers" and includes Articles 34, 36 and 39.
27. Article 31 places a restriction on the courts where an action can be brought against a defendant, without specifying the identity or role of the defendant in question. It is plainly apt to cover any claim made against a sender or consignee in respect of freight due or expenses incurred in carrying dangerous cargo as well as a claim by a sender or consignee against a carrier. Articles 34, 36 and 39 specifically relate to the position where successive carriers are involved in the haulage, but it is Article 39.2 which sets out the courts in which one carrier may pursue another. The jurisdiction for the two types of claim (goods interests against carrier on the one hand and carrier against carrier on the other) are therefore catered for separately in CMR.
28. It was common ground between the parties that, when Article 31.1(b) referred to "the place where the goods were taken over by the carrier or the place designated for delivery", what was meant was the place of collection and the designated place of delivery of the goods for the complete CMR carriage for which the sender had contracted. There are two decisions of German Courts to this effect and O'Connor LJ specifically states in Cummins at p408 that this is the position, by reference to Article 1 of CMR, which provides that CMR is to apply "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 State". BAT accepts that it cannot bring itself within Article 31.1(b) since neither "the place where the goods were taken over by the carrier", nor "the place designated for delivery", was in England for either consignment.
29. Neither subcontracting defendant, Essers or Kazemier is ordinarily resident in England nor did either have a principal place of business or a branch or agency of its own in England through which the contract of carriage was made. They each submit that England is not a country designated by agreement between BAT and itself and, in these circumstances, BAT is not entitled to invoke the English court's jurisdiction against it.
30. BAT contends that because Article 34 provides for joint and several liability of successive carriers and Article 36 provides expressly that an action can be brought against specified carriers at the same time (the first, last or actual carrier at the time of damage), it must be enough to establish jurisdiction against one such defendant under Article 31. If that is done, all other defendants arguably or actually falling within Article 36 can be sued in that jurisdiction, even if the jurisdiction requirements of Article 31 cannot be satisfied by reference to their own individual situations. Thus BAT contends that jurisdiction can be established in England for its claims against the subcontractors Essers and Kazemier because Article 31 entitles it to bring legal proceedings in respect of loss or damage against the first carrier, Exel. It is said to follow that, if the court has jurisdiction over one carrier, other successive carriers can be joined in the same proceedings. It is submitted that, when Articles 31, 34 and 36 are read together, an action can be brought against several successive carriers in the forum where any one of them may be sued in accordance with the provisions of Article 31.1(a). Since Exel, the first carrier has its principal place of business in England, a single action can be brought against it and the successive carriers, which Essers and Kazemier undoubtedly are.
31. In support of this submission, BAT relies upon the decision of the Court of Appeal in Cummins Engine v Davis Freight Forwarding [1981] 2 Lloyds' Rep. 402 and in particular a dictum of Brandon LJ at page 406 which reads as follows:-

"Where successive carriers are involved, the effect of Article 31.1, combined with Article 34, is that the plaintiff can bring a single action against one, more than one, or all the carriers concerned. Article 31.1 further requires him to bring his action in certain courts only. Those courts are, first, any court of any contracting state which has been agreed between the parties; second, 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 third, the courts of the place where the goods were taken over for the carriage or the place where they were to be delivered."

32. This dictum appears in a case relating to jurisdiction in what Brandon LJ referred to as the "second kind of legal proceedings which CMR contemplates", namely proceedings as between successive carriers. The court was concerned there with Article 39.2 and held that a carrier who wished to take proceedings to enforce his right of recovery against other carriers could make his claim before the competent court of a country in which one of the other carriers concerned had its principal place of business but not in the country where the pursuing carrier, who had already been found liable, had its place of business.
33. O'Connor LJ, at page 409 construed the words "the defendant" in Article 31.1(a) to mean "the defendants" in the plural, from which it seems that he considered that jurisdiction could be established only against a particular defendant in the place where it was ordinarily resident or had its principal place of business. It was not possible to establish jurisdiction against all defendants on the basis of the principal place of business of one of them. He stated that Cummins was limited to bringing its action either in England, in respect of Davis, or in Holland, in respect of the other three, these being the territories in which Davis and the other three companies were based.
34. It is right to say that part of the judgment of Brandon LJ in Cummins was quoted with approval by Bingham LJ in ITT Schaub-Lorenz v Birkart Johann [1988] 1 Lloyds Rep. 487 at 494. The larger quotation includes the dictum of Lord Justice Brandon referred to above, although the issue in the ITT case was whether CMR prevented the bringing of proceedings as between successive carriers before the claimant carrier had paid the compensation which he was seeking to recover. An analysis of the issues raised in this action was not there required.
35. As Colman J pointed out in Frans Maas Logistics (UK) Ltd v CDR Trucking B.V. [1999] 2 Lloyd's Rep 179, Brandon LJ's analysis is not entirely full nor accurate, though he did not comment on the particular element with which I am concerned. Neither party suggested that the dictum of Brandon LJ was binding upon me. It is not part of the ratio of the Cummins decision and does not appear to me to consider the matter fully, and certainly not in the context of the issue which arises here.
36. Essers and Kazemier submit that there is no good argument that Article 31.1(a) can be construed so as to allow the sender or consignee to bring a single set of proceedings against all carriers on the footing that one defendant is ordinarily resident, or has its principal place of business, in England. Where Article 31.1(a) refers to "the defendant", it must mean the defendant in question, against whom the claimant is seeking to invoke the jurisdiction of the Court. The Article, it is submitted, is focused on the convenience of the defendant rather than the convenience of the claimant. Any potential inconvenience to the claimant caused by Article 31.1(a) could be resolved, if the claimant chose to do so, by bringing proceedings in accordance with Article 31.1(b) against all defendants in either action in the place where the goods were taken over by the carrier or the place which was designated for delivery, namely Switzerland or Holland in the Essers action or Hungary or Denmark in the Kazemier action.
37. Essers and Kazemier also rely upon Article 39 of CMR which, in their submission, is to be contrasted with Article 31, because it does make express provision for proceedings between one carrier and all other carriers to take place in a single jurisdiction in which any of the carriers concerned is ordinarily resident or has its principal place of business or where the branch or agency is located through which the contract of carriage was made. All carriers concerned can expressly be made defendants in the same action in these circumstances, even though some may have no such connection with the jurisdiction, as long as one such carrier does. The draftsmen of CMR drew a clear distinction between the jurisdictional provisions for goods owners suing carriers in Article 31 and those relating to claims between carriers in Article 39.
38. The cross-reference in Article 39.1 to Article 37 is said also to be significant. Under Article 37, a carrier who has paid compensation in compliance with the provisions of CMR is entitled to recover such compensation (together with interests and costs) from other carriers who have taken part in the carriage. The carrier responsible for the loss or damage is to be solely liable for the compensation paid and where the loss or damage is caused by the action of two or more carriers, each is to bear a proportionate share of the liability. If it is impossible to apportion liability, every carrier is liable in proportion to the share of payment for the carriage which is due to it. Article 39.1 makes it plain that, where a carrier is sued in one jurisdiction and then seeks to recover from other carriers subsequently, those other carriers are not entitled to dispute the validity of the payment made by the suing carrier if the amount of compensation has been determined by judicial authority in circumstances where the paying carrier has given notice of the proceedings to the other carriers and afforded them an opportunity of entering an appearance in the action in question. Thus, if Exel gave Essers or Kazemier such notice, so that they had the opportunity voluntarily to join in the proceedings in England, it would not be open to them to object to the quantum of the claim fixed by the court. Of course if Exel joined Essers or Kazemier, seeking a declaration of entitlement to indemnity (as the Court of Appeal decision in ITT Schaub–Lorenz (ibid) 487 permits them to do, subject to jurisdictional issues) they would in any event be bound by any judgment in the action.
39. Article 39 however envisages that a carrier is found liable to a goods owner under CMR in one jurisdiction and then will take proceedings to enforce his right of recovery against one or more carriers subsequently. He is, by Article 39.2, entitled to take proceedings to enforce that right of recovery in a competent court of any country in which any one of the carriers concerned has his principal place of business and can join all other carriers in that action, regardless of their places of business. Contrary to the submissions of BAT, the structure of CMR therefore weighs against their argument. Article 31, which contains no such provision enabling a claimant to bring proceedings against multiple defendants, located in various countries, in the jurisdiction where only one of them has its principal place of business, cannot be construed to allow that.
40. Essers and Kazemier also rely on two text books on the point. Hill and Messent in CMR: Contracts for the International Carriage of Goods by Road 3^rd Edition at para 11.36 and Haak: The Liability of the Carrier under the CMR at page 114 both state that the provisions of Article 36 say nothing about jurisdiction, when specifying that specific carriers can be sued in the same court. The requirements of Article 31 still need to be satisfied in relation to each defendant.
41. In my judgment, as a matter of straightforward construction of Article 31 and Article 39, Esser's and Kazemier's submissions are unanswerable. The contrast between Article 31 on the one hand and Article 39 on the other is striking and its effect cannot be countermanded. Article 31 expressly limits the courts in which a claim can be brought by a plaintiff (whether a goods owner or a carrier, against a defendant) whilst Article 39 makes express provision for the position where a carrier brings a claim against other carriers. Whilst Article 36 sets out the carriers against whom a goods owner can make a claim, it says nothing at all about the courts in which such a claim can be pursued. By Article 36 the goods owner can only proceed against the first carrier, the last carrier or the responsible carrier and although an action can be brought at the same time against several of these carriers, there is nothing in Article 36 which entitles the claimant goods owner to do so in one and the same jurisdiction when Article 31 specifically limits the courts in which he can pursue any such defendant.
42. There is no room for construing Article 31.1(a) in accordance with the principles underlying Article 39, when Article 31.1(a) is in such different terms from Article 39 and Article 31.1(b) does provide a place where the goods owner can sue all Article 36 carriers in the same jurisdiction. As Article 31.1(b), it is accepted, refers to the place where goods are first collected from the sender and the place where they are delivered to the consignee, there is no limitation relating to the location of any particular Article 36 carrier whom the goods owner may wish to join. The goods owner always has the option of suing in one of those jurisdictions where he can join all Article 36 carriers or to sue in another jurisdiction under Article 31.1(a) where he must establish the connection of any carrier he wishes to join in accordance with the terms of that subparagraph.

Article 31.1(a) – "An action … in the courts … of a country within whose territory … the branch or agency through which the contract of carriage was made".

43. BAT contends that, if contrary to its primary submission, the jurisdiction requirements of Article 31.1(a) must be read as applying to every successive carrier, the reference to "the contract of carriage made through a "branch or agency" must refer to the primary contract of carriage between the consignor and the first carrier. It is said that this must be the case because Article 34 only refers to carriage governed by a single contract, which is performed by successive road carriers. The contract of carriage in Article 31.1(a) cannot therefore refer to a subcontract, such as that between Exel and Essers on the one hand or Exel and Kazemier on the other. In consequence it is argued that jurisdiction can be founded against a successive carrier in a country in which the branch or agency of the primary carrier was located, through which the primary contract of carriage was made - here Exel's office in England.
44. It is said that the only way to make sense of a "branch or agency through which the contract of carriage [the single contract performed by successive carriers] is made" is to treat the first carrier who entered into that contract as the "intermediary" between the consignor and subsequent successive carriers. It is suggested that the French text of CMR supports that argument, but it does not, as both the English and French texts mean the same (la succursale ou l'agence par l'intermédiaire de laquelle le contrat de transport a été conclu,). There is no reference to the noun, "intermediary", in either text, but only to the branch or agency through the intermediation of which the contract was concluded. However it is said that the contract made by the first carrier is binding upon the later carriers and to adopt any other interpretation, such as to say that the "branch or agency" must be that of the successive carrier, would be wrong since Article 34 does not refer to the subcontract.
45. The difficulty with BAT's argument as to "branch or agency" is much the same as that which it faces in relation to its argument about the interrelationship of Articles 31, 34 and 36. Article 31 is directed to the basic position where a claimant wishes to bring an action against a particular defendant. The goods owner is limited by Article 36 to suing the first carrier, the last carrier or the responsible carrier, but what Article 31 has in mind is the defendant in question, against whom the claimant wishes to bring the action. It is the ordinary residence and the location of the principal place of business of that defendant which matters for Article 31.1(a) and equally it must be the branch or agency of that defendant that is relevant when considering whether "the contract of carriage" was made by it in any particular country. "The contract of carriage" in that provision can therefore only refer to the contract to which that defendant is a party and the branch or agency can only refer to its own branch or agency, which was authorised to enter into the contract on its behalf. It cannot refer to the office of another carrier with whom it made a contract as successive carrier, nor to the primary contract of carriage made by that earlier carrier with the goods owner. It can only refer to a contract of carriage to which it was party and the branch or agency which was authorised to commit it to that contract. The contract itself can only therefore be its subcontract with the earlier carrier. (The statutory contract on the terms of the consignment note only comes into being "by reason of his acceptance of the goods and the Consignment Note" and could not be made through a branch or agency.) The only contract which can therefore be concluded through a branch or agency is the contract between carriers.

Article 31.1 – "An action in any court of a contracting country designated by agreement between the parties"

46. BAT submits that, because later successive carriers become party to the single original contract of carriage under Article 34 by operation of law, it follows that they are bound by the same terms as the first carrier since any other interpretation would lead to successive carriers becoming party to a single contract, but each having different terms applicable to them. It is pointed out that there is no requirement or qualification in Article 34 to the effect that the successive carrier is bound only by those terms of which he had knowledge. Thus, it is said that each successive carrier in the chain for the two consignments in issue would be bound by the exclusive jurisdiction clause contained in the primary contract between BAT and Exel, whether or not the successive carrier had knowledge of that exclusive jurisdiction agreement and without any consent on its part.
47. This argument founders on the express words of Article 34 since the contract to which each successive carrier becomes a party is the contract set out in the Consignment Note. The Article expressly says that each succeeding carrier becomes a party to the contract of carriage "under the terms of the Consignment Note" on acceptance of the goods and the Note. If the Consignment Note contained an exclusive jurisdiction clause, which it could if the sender and the first carrier incorporated such a provision in it, as they are able to do under the terms of Article 6.3, then that clause would be binding upon all successive carriers who accepted the goods and the Consignment Note. If no such clause appears in the Consignment Note, it is not part of the contract of carriage to which the successive carriers are party.
48. Any other result would be entirely contrary to principle because a carrier cannot be bound by an exclusive jurisdiction clause to which he has not agreed and the wording of Article 31.1 requires there to be a "court … designated by agreement between the parties". There would be no such court designated by agreement between the parties, where one of the relevant parties had not agreed to designation.
49. It would be contrary to principle for any carrier to be subject to a jurisdiction clause to which he did not agree and of which he had no notice, both as a matter of English law and European law, as Article 23 of the Regulation shows. The policy which underlies the conferring of jurisdiction on a country which is "designated by agreement" between the parties, self-evidently requires there to be an agreement between the parties in question to that jurisdiction and in European and civil law there is a greater emphasis on "consensus" in the sense in which such law understands the concept.
50. As expressed by Rix LJ in Hatzl at para 64, the natural place to find an agreement of this kind, to which all carriers are parties, is in the contract of carriage itself and the box in the Consignment Note which is headed "special agreements"/ "conventions particuliers". Then each successive carrier would become a party to the terms of that agreement, as a term of the Consignment Note, under Article 34, by reason of acceptance of the goods and the Consignment Note.
51. Otherwise, as suggested by Clarke in International Carriage of Goods by Road 5^th Edition at para 46c and the French decisions referred to there, neither a consignee nor another carrier could be bound by a jurisdiction clause agreed between the sender and the primary carrier. Hill and Messent in CMR: Contracts for the Carriage of Goods by Road 3^rd edition at paras 10.26-28 and 11.67, suggest that it might bind a consignee whose rights are derived from the sender, even if not in the Consignment Note, but that it could not, absent inclusion in the Note, bind a carrier. Prof Loewe in his Commentary on the Convention at paras 235-282, differs on this, suggesting that both consignee and carriers would be bound but that a carrier who did not know of the jurisdiction agreement and did not consent to it would have a remedy against the first carrier, but no adequate reasoning is given for this and it is, in my judgment, contrary to principle. Article 13 provides that a consignee can enforce in his own name, against the carrier, "any rights deriving from the contract of carriage", but although the Consignment Note is only evidence of that contract as between sender and primary carrier, a consignee who has no notice of the jurisdiction agreement and cannot be taken to have consented to it, cannot, in my judgment, be bound by it. It is not however necessary for me to decide the position as between consignee and carrier. It is possible to draw a distinction between the position of the consignee and that of the carriers who only become party to the statutory CMR contract "under the terms of the Consignment Note", but in my judgment it is clear that the successive carrier cannot be bound by a jurisdiction clause to which it cannot be said individually to have given its consent, by acceptance of a Consignment Note with such a clause in it, or otherwise.

The Brussels Judgement Regulation

52. BAT relied upon the premises which underlie the Regulation, as set out in paragraphs 6, 10, 11, 12, 15 and 16 of the preamble. These read as follows :-

'(6) In order to obtain the objective of free movement of judgments in civil and commercial matters, it is necessary and appropriate that the rules governing jurisdiction and the recognition and enforcement of judgements be governed by a Community legal instrument which is binding and directly applicable.

(10) For the purposes of free movement of judgments, judgments given in the Member State bound by this Regulation should be recognised and enforced in another Member State bound by this Regulation, even if the judgment debtor is domiciled in a third state.

(11) The rules for jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile and jurisdiction must always be available on this ground save in a few well-defined situations in which the subject-matter of the litigation or the autonomy of the parties warrants a different linking factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.

(12) In addition to the defendant's domicile, there should be alternative grounds of jurisdiction based on a close link between the court and the action or in order to facilitate the sound administration of justice.

(15) In the interest of harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two Member States. There must be a clear and effective mechanism for resolving cases of lis pendens and related actions and for obviating problems flowing form national differences as to determination of the time when a case is regarded as pending. For the purposes of this Regulation that time should be defined autonomously.

(16) Mutual trust in the administration of justice in the Community justifies judgments given in a Member State being recognised automatically without the need for any procedure except in cases of dispute.

53. Article 71 of the Regulation provides that it is not to 'affect any conventions to which Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.'
54. The position is, therefore, that the jurisdiction provisions set out in CMR govern actions relating to the international carriage of goods by road, save insofar as there is any gap within those provisions, which can be made good by reference to the Regulation , or to the extent that the provisions of CMR are in conflict with the policy of the Regulation. This emerges from the decisions of the ECJ in the Maciej Rataj (commonly known as The Tatry), Case C-406/92 [1994] ECR 1 – 5439 and TNT Express v Axa Case C-533/08 [2011] R.T.R.11.
55. The Tatry was concerned with the interrelationship of the 1968 Arrest Convention and the predecessor to the Regulation, the Brussels Convention. The court held that the specialised Arrest Convention applied to all those circumstances for which it made express provision but, where there were gaps in the specialised code provided, those deficiencies could be made good by reference to the more general Brussels Convention (now the Regulation).
56. It has been held that there is such a gap in the jurisdiction provisions of CMR in relation to "related actions" within the meaning of Article 28 of the Regulation. Article 27 of the Regulation deals with 'proceedings involving the same cause of action between the same parties' and requires a stay to be imposed by the court which is not first seised of the matter. CMR contains its own code in relation to an 'action .. between the same parties on the same grounds'. Article 31.2 of CMR provides that where an action is pending before a competent court under Article 31.1, 'no new action shall be started between the same parties on the same grounds' save in limited circumstances. In Sony Computer Entertainment Limited v R H Freight Services Limited [2007] 2 Lloyd's Rep 463, Simon J stated that CMR 'provides all of the answers in relation to the same claims but none of the answers in relation to similar claims'. When an application was made to the English court to stay such similar claims (as opposed to a claim on the same grounds between the same parties) the English court then had to apply Article 28 of the Regulation because that filled the gap.
57. In the TNT decision, the paramountcy of the Regulation was affirmed at paragraphs 42- 56. At paragraph 49 the court stated :-

'While it is apparent from the foregoing considerations that art.71 of Regulation 44/2001 provides, in relation to matters governed by specialised conventions, for the application of those conventions, for 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 , recorded 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.'

58. In Mr Priday's submission, if the proper construction of Article 31.1(a) of CMR cuts across the sound administration of justice, the minimisation of the risk of concurrent proceedings and creates the possibility of inconsistent judgments, the terms of CMR are superseded by the terms of the Regulation, since Article 71 of the regulation, which otherwise gives priority to CMR, cannot be interpreted to create a conflict between CMR and the principles which underlie the Regulation. As stated in paragraph 53 in the TNT judgment, the rules governing jurisdiction set out in the specialised conventions (including CMR) can only be applied to the extent that they fit with the recitals in the preamble of the Regulation.
59. It is then contended by BAT that the construction of Article 31.1(a) advanced by Mr Passmore for the subcontractors does create a conflict with the underlying premises and policy of the Regulation, because it requires BAT to bring proceedings in multiple jurisdictions with the risk of inconsistent judgments and consequent damage to the sound administration of justice. The terms of Article 6.1 of the Regulation allowing for a claim brought against one defendant also to be brought against other defendants who are, in English terms, "necessary or proper parties", should be applied. However, as Mr Passmore points out, on the construction which he advances and which I accept, BAT had a choice. It could either bring proceedings under Article 31.1 against Exel in the jurisdiction designated by agreement between them, namely England, or it could bring proceedings under Article 31.1(b) in the country where the goods were taken over by the carrier or of the place designated for delivery. In such jurisdictions, in relation to each consignment, all of the relevant carriers, alleged to be liable under Article 36, could have been sued. In my judgment that is the complete answer to BAT's submission. The jurisdiction provisions in CMR do not in any way conflict with the premises upon which the Regulation is based and there is therefore no need to look to Article 6.1 of the Regulation as Mr Priday submits. There is no need to create a 'necessary or proper parties' rule by reference to that Article in order to allow all carriers to be sued in the same jurisdiction, when the claimant is already given that option by the terms of CMR itself.
60. BAT is not obliged to bring proceedings against Exel in England under CMR because no agreement between the parties can derogate from the terms of CMR, including an exclusive jurisdiction agreement. Article 31.1 gives options to a claimant as to where to sue and the exclusive jurisdiction clause agreed between BAT and Exel takes effect as providing for one jurisdiction (designated by agreement between the parties) in addition to those others which are listed in Article 31.1 (a) and (b). The choice lies with the claimant and if it chooses to sue in a jurisdiction where it can only meet the requirements of Article 31.1(a) in respect of one defendant, as opposed to suing in a jurisdiction falling within Article 31.1(b), where it could join all carriers, it cannot validly complain about the effect of its own choice.

Conclusion

61. In these circumstances, Essers and Kazemier are entitled to the relief that they seek. None of the arguments put forward for jurisdiction against them by BAT succeeds. The provisions of CMR are apt to provide for a number of different jurisdictions in which BAT could bring claims, including some jurisdictions where they could bring claims against all carriers. If however, as they did, they elect to sue Exel in England, that is not sufficient to bring other carriers within the reach of the court, without being able to satisfy the requirements of Article 31.1 in relation to each such defendant. Moreover the CMR code is sufficient and does not conflict or give a result less favourable than the Regulation and the premises in relation to which it falls to be interpreted.
62. For these reasons the service of the claim forms on Essers and Kazemier respectively must be set aside and, absent any special features, upon which the parties can, if necessary, address me, costs must follow the event.