Consignee’s rights and responsibilities

The consignee has the right to demand delivery of the goods and the consignment note (second copy) on arrival of the cargo at its destination against a receipt (Art 13(1)).The CMR does not state whether the receipt needs to be signed. However, since the receipt is likely to be of evidential value, it would be in the carrier’s best interests to require the consignee to sign and date the receipt on collection of the goods. There is no provision on the means of identification to be produced by the consignee. Presumably, this will depend on the practices in the trade.

Modification of contract

The consignee has the right to modify the contract where:

•the sender gives the right of disposal to the consignee (Art 12(3)) or

•the consignee obtains the second consignment note on arrival of the goods (Art 13(1)).

The formalities laid down for the modification of contract and the carrier’s rights in respect of charges, refusal to carry out the instructions and so on, laid down in Art 12(5), apply equally to the consignee.91 It must, however, be noted that any ‘new’ consignee named by the consignee will not have the right to modify the contract.

Freight and supplementary charges

The responsibility for paying freight and other charges to the carrier is generally a matter of agreement between the parties. However, the consignee, when he demands delivery of the cargo on arrival, may find he is liable to pay the charges to the carrier shown due on the consignment note. This applies even where the sender may have agreed to pay them. If there is a dispute, the carrier can refuse delivery until some form of security is furnished by the consignee (Art 13(2)).

Proceedings

By whom

There is no clear indication as to who is entitled to sue the carrier under the convention. Article 7(3) states that the carrier is answerable to the person entitled to dispose of the goods for failure to omit to include the paramount clause as required by Art 6(1)(k). Article 13(1), conversely, gives the consignee the right to sue in the event of delay or loss of cargo.92 It is not unsurprising that different jurisdictions have come to different solutions, guided by their national law, when it comes to the question of who has the right to sue the carrier under the CMR. Some jurisdictions favour the view that the party with the right of disposal has the right to sue the carrier.93 However, in the view of some commentators, this view totally ignores the fact that Art 13(1) gives a right to the consignee (albeit limited) to sue when the goods are delayed or lost.94 The alternative view, held in

91See ‘Carrier’s Liabilities and Rights’ and ‘Sender’s Responsibilities and Rights’, above.

92Texas Instruments Ltd v Nasan (Europe) Ltd [1991] 1 Lloyd’s Rep 146.

93(Germany) OLG Karlsruhe, ULC 289. See also CIM Rules in Chapter 11.

94See, eg, Glass and Cashmore, Introduction to the Law of Carriage, 1989, Sweet & Maxwell, also Cashmore, ‘Who are consignors and consignees for the purposes of a contract of carriage?’ [1990] JBL 377.

some jurisdictions, is that both the consignee and the sender have the right to sue the carrier since Art 13(1) in giving the consignee the right to sue does not take away rights that others may have.95 However, what if the owner of the goods is neither the sender nor the consignee? Presumably, in England, an action in bailment could be brought against the carrier.

Against whom

Article 36 lists the carriers against whom an action can be brought for loss, damage or delay. These are the first carrier, the last carrier, or the carrier who was performing the portion of carriage when the event causing the loss, damage or delay occurred.The words ‘first carrier’ suggest that the carrier must be the first to be physically involved in carrying the goods and excludes the carrier who has subcontracted the carriage. It has, however, been held that the first carrier is one who has contracted with the sender.96 As for the last carrier, this should cause no problem where the goods are delivered. However, where the goods are lost, who is the last carrier? Is it the carrier who would have been the last carrier had the goods been passed on to him, or the successive carrier who lost the goods? There are different views on this. According to some, the last carrier should be the one who is meant to deliver the goods, even if he never accepted the goods or the consignment note, since the CMR is modelled on the CIM Rules (Art 55(3)),97 and the consignee of the goods has a convenient defendant. The issue of a convenient defendant does not really make much sense since Art 31 allows an action to be brought at the place of delivery. This means that the consignee will not have any problems in suing the first carrier, or any of the other carriers at the destination any way. The alternative suggestion that the last carrier is the successive carrier who loses the goods seems more acceptable, since he is in possession of the goods and the consignment note at the time of the loss.

The convention also provides for the apportionment of liability between successive carriers in Art 37. In Rosewood Trucking Ltd v Balaam [2005],98 the court held that, for the purposes of Art 37, compensation paid by a carrier to another in compliance with his obligations under a sub-contract is not included.‘To allow the claimant to pass on that contractual liability would be doing something outside the scheme of the CMR, which is obviously intended to be self-contained’ (at para 13). However, successive carriers can derogate from the provisions of rules for apportionment laid down in Arts 37 and 38 (Art 40).

Jurisdiction

The CMR allows the plaintiff to bring his action99 in an appropriate court in the country where:

•the defendant is ordinarily resident (Art 31(1)(a)),100

•the defendant has his principal place of business (Art 31(1)(a)),

95See Clarke, International Carriage of Goods by Road: CMR, 2009, Informa, for an excellent account of the views in different jurisdictions.

96Ulster-Swift v Taunton Meat Haulage [1977] 1 Lloyd’s Rep 346. The same view has been held in other jurisdictions – see, eg, OGH 4.6.87 (1988) 23 ETL 714.

97See also Chapter 11.

98EWCA Civ 1461.

99The issue of starting a new action where an action is pending before a court or tribunal is dealt with in Art 31(2). In Andrea Merzario Ltd v Internationale Spedition Leitner Gesellschaft GMBH [2001] 1 Lloyd’s Rep 490, the Court of Appeal held for the purposes of Art 31(2) that proceedings will not be regarded as pending until they were served. See also Rüfner, ‘Lis alibi pendens under CMR’ [2001] LMCLQ 460. See also Frans Maas Logistics UK Ltd v CDR Trucking BV [1999] 2 Lloyd’s Rep 179.

100As for the meaning of the words ‘ordinarily resident’, see Chapter 10 Choice of forum.

•the branch or agency through which the contract of carriage was made (Art 31(1)(a)),

•the goods were taken over by the carrier (Art 31(1)(b)) or

•the place designated for delivery is situated (Art 31(1)(b)).

The parties are also free to agree to bring an action in a court or tribunal in a state that is a party to the convention (Art 31(1)). In this context, a number of interesting questions can be raised. For instance, where the parties agree that the jurisdiction of their choice is to be the exclusive jurisdiction, will this negate the options listed in Art 31(1)(a) and (b)? Will an agreement on jurisdiction between the sender and the carrier bind the consignee?

As for the first issue, it is unlikely that an exclusive jurisdiction clause will be tolerated since there is nothing in the wording of Art 31 to support it. Indeed, Art 31 specifically states that the options listed in Art 31(1) are available in addition to the court designated by agreement between the parties. Further, a clause nominating a jurisdiction as exclusive is likely to be regarded as null and void (Art 41) since it derogates from the provisions of the CMR.

As for the second question, majority opinion is that the consignee will not be affected by any agreement that exists between the sender and the carrier due to lack of notice.101 This view is in line with the general principles of contract law. However, the consignee would be bound where the agreement on jurisdiction appears on the consignment note or other document that has been accepted on delivery, or where the sender contracts with the carrier as agent of the consignee.

A procedural question likely to arise in the context of the convention is whether a court can decline jurisdiction on the basis of forum non conveniens. This is an issue that has seen judicial discussion in the context of the Warsaw Convention.102 The wording of Art 31(1) is similar to Art 28(1) of the Warsaw Convention, and the question of whether the word ‘brought’ in the CMR refers simply to commencement or commenced and pursued remains open. It is likely that the word will be interpreted as the latter since it is an international convention meant to achieve uniformity.103 Besides, it does not contain a provision on the rules of procedure (see Art 28(2) of the Warsaw Convention)104 and, therefore, leaves no scope for arguing that it is up to the court where the proceedings have been initiated whether or not to grant stay of proceedings on the grounds of forum non conveniens.

Some indication of how the courts might approach the issue of forum non conveniens can be gathered from Royal & Sun Alliance Insurance Plc and Another v MK Digital Fze (Cyprus Ltd) and Others105 (reversed by the Court of Appeal, CMR not applicable to contract). Nonetheless, what was said in the High Court regarding the availability of forum non conveniens in relation to CMR is interesting. Referring to Milor SRL v British Airways plc106 in the judge’s view Art 31(1) was ‘an exclusive code as to where proceedings “arising out of the carriage under this Convention” may be brought.The final words of that paragraph are “and in no other courts or tribunals”. As with the Warsaw Convention . . . article 31(1) leaves no scope for a challenge to the jurisdiction on the grounds of forum non conveniens’.107

Until recently, there had not been much debate about the meaning of ‘defendant’ in the context of Art 31. The issue is whether an assignee falls within the class of ‘defendant’. If he does,

101Loewe, ‘Commentary on the Convention of 19 May 1956 on the Contract for the International Carriage of Goods by Road (CMR)’ [1976] ETL 311, at para 242. See also Messent and Glass, Hill and Messent CMR, Contracts for the International Carriage of Goods by Road, 2000, LLP; Clarke, International Carriage of Goods by Road: CMR 2003, LLP.

102See Chapter 10, Choice of forum.

103See Glass, ‘CMR: putting practice into theory’ [1984] LMCLQ 30. See also Clarke, International Carriage of Goods: CMR, 2003, LLP.

104See Chapter 10, Choice of forum.

105[2005] EWHC 1408 (Comm). For Court of Appeal decision see [2006] EWCA Civ 629.

106[1996] QB 702. See also Chapter 10, Choice of forum.

107Para 72.

then it may result in enabling another jurisdiction (not originally envisaged) to hear the dispute. This question was addressed by the English courts in Hatzl and another v XL Insurance Co Ltd and others.108 Hatzl, an Austrian road haulage business, contracted with an Austrian company (Triumph) to carry goods to its sister company in Italy. En route, while the driver (the second claimant) was asleep in a parking bay, the goods were stolen. The companies had used an insurer based in England. The companies assigned all their ‘rights in respect of loss and/or damage to [the goods] including all rights of claim against the [first claimant] and third parties or others’. The insurers sought to recover from the haulage business the monies they had paid to the companies.The haulage business (the claimants) issued proceedings in England under Art 31(1)(a) against the insurers and the companies. The jurisdiction of the English courts was contested by the insurers on the basis that Art 31 did not apply to a defendant who was sued as an assignee of the rights of the consignor/ consignee. At first instance, the judge interpreted Art 31 literally and held that the English courts had jurisdiction since the insurer was a defendant and was based in England.

The insurers appealed, arguing that Art 31 should be interpreted in a purposive manner. To include the insurer who was not a party to the original contract as a defendant would go against the purpose of Art 31 since its aim was to limit available jurisdictions and prevent forum shopping. Further, as assignees, they argued, they took on the same conditions as assignors and, since the assignors could not have been sued in England, they too could not be sued in the English courts. The Court of Appeal, allowing the appeal, reasoned that, although the starting point for the interpretation, an international convention, was to consider the natural meaning of the words, it was also important to consider the convention as a whole and to adopt a purposive interpretation. On this basis, they concluded that, if the word ‘defendant’ in Art 31 was to be understood as including the insurer (as assignees of an original contracting party), the object of Art 31 would be frustrated. Hence, the English courts did not have jurisdiction. Further, to bring the assignee within the ambit of ‘defendant’ ‘assumes that the assignee may incur a new liability, to which his assignor was not himself subject, that is, to be sued in the place where the assignee resides or has his principal place of business but where the assignor could not have been sued. Such a new liability would not be consistent with the essential nature of assignment, which transfers rights, but not liabilities, save for such qualifications of transferred rights as are inherent in the latter. In circumstances where the claimants in these proceedings could not have sued Triumph Austria or Triumph Italy in England prior to the assignment, . . . they cannot sue their assignee, XL, here either’.109

Arbitration

Under the CMR, the parties are free to agree to submit their dispute to arbitration as long as the clause in the contract imparting competence to the arbitration tribunal provides that the tribunal is to apply the CMR (Art 33). As to whether a choice of law clause that attracts the application of the CMR is sufficient to fulfil the requirements of Art 33 has seen judicial discussion. In Bofors UVA v Skandia Transport,110 the arbitration clause read as follows:

Disputes between the freight forwarder and the customer shall with the exclusion of ordinary courtsoflawbereferredtoarbitrationinStockholmaccordingtotheSwedishlawonarbitrators and with the application of Swedish law.

108[2009] EWCA Civ 223.

109Para. 70

110[1982] 1 Lloyd’s Rep 410.

The defendants applied for a stay of proceedings in the English courts.The plaintiffs submitted that the arbitration clause under consideration was void (under Art 41)111 since, under Art 33, the clause must expressly provide that the tribunal should apply the CMR. For their part, the defendants argued that the goal of Art 33 is to guarantee the application of the CMR. An appropriate choice of law that would result in the application of the CMR would suffice.The court, however, found for the plaintiff on the basis the drafters would have worded the provision differently if indicators, such as the proper law of the contract, were acceptable.

Time limitation

The period of limitation for bringing an action under the CMR is one year (Art 32(1)), unless it is wilful misconduct, in which case it is three years.112 The limitation period applies to all actions, whether they be brought in contract or in tort, and applies to claims by and against carriers. According to Art 32(1), the limitation period is set to run:

(1)in the case of partial loss, damage or delay, from the date of delivery (Art 32(1)(a));

(2)in the case of total loss, from the 30th day after the expiry of the agreed time limit or where there is no agreed time limit from the 60th day from the date on which the goods were taken over by the carrier (Art 32(1)(b));

(3)in all other cases, on the expiry of a period of three months after the making of the contract of carriage (Art 32(1)(c)).

Despite its seeming clarity, much judicial discussion has centred around this provision, especially where goods have not been delivered to the consignee because of the extent of the damage. Should such a case be treated as attracting the application of Rule 1, since the goods are ‘delivered’ to the sender when they are returned? Or, does Rule 2 apply since the goods should be deemed to be lost since they are not delivered to the consignee within the period specified by Art 20(1)?113 Alternatively, is the situation covered by Rule 3 since it does not fall squarely within Rules 1 or 2? Or, is it a case of applying domestic law? Interestingly, all have either been endorsed or adopted by the courts. In Worldwide Carriers v Ardtran,114 the first three options were examined, and, according Parker J, all of them were acceptable, although he applied the second (i.e., Art 32(1)(b)) to the case at hand.115 As for the fourth, it was adopted in Moto Vespa v MAT.116 Mocatta J felt that the circumstances of the case were not covered by Art 32(1)(a), (b) or (c) and applied domestic law, thus giving a six-year limitation period. It must be said that the judgment in this case was not followed in any of the subsequent cases in England and is unlikely to be followed. Of the available options, the third seems, by far, the most sensible. Article 32(1)(c) is envisaged to cover all situations that do not fall neatly within Art 32(1)(a) or (b). To strain the concept of delivery in a manner so that the return of goods to the sender fits within Art 32(1)(a) is questionable. Likewise, to treat the goods as lost, when their existence and location can be established, so that Art 32(1)(b) can be applied, seems

111See Shell Chemicals UK Ltd v P and O Roadways Ltd [1993] 1 Lloyd’s Rep 114, where an indemnity clause in favour of the carrier in respect of the carrier’s liability to owners other than the contracting party was held to go against Art 41. Cashmore, ‘CMR. Delivery of wrong goods, rights of indemnity’ [1993] JBL 498 for a critical discussion of this case.

112See Jones v Bencher [1986] 1 Lloyd’s Rep 54.

113According to Art 20, if the goods have not been delivered within 30 days of the expiry of the agreed time limit, or within 60 days from the time the carrier took over the goods in the absence of an agreed time limit, they will be regarded as lost.

114[1983] 1 All ER 692.

115See also ICI Fibres Ltd v MAT Transport Ltd [1987] 1 Lloyd’s Rep 354.

116[1979] 1 Lloyd’s Rep 175. See also Hardingham, ‘Aspects of the limitation of actions under CMR’ [1979] LMCLQ 362.