CMR - uniformity or divergence

CMR - uniformity or divergenc

BY MAX SLOTTE, LAGERLOF & LEMAN, STOCKHOLM

 

The Convention on the Contract for the International Carriage of Goods by Road (CMR) came into force in July 1961, and has been ratified by a majority of European states. It has also influenced the implementation of statutory provisions on domestic road carriage in many of those states. Yet there is currently no predictability of decisions in the courts of contracting countries.

The convention was drafted in a transport environment when the lorry was the ordinary vehicle for conveyance of goods by road. For the long-distance carriage of goods, several independent carriers often participated and, during transit, the goods were transhipped from one lorry to another at one or several stages, with each lorry driver handing over the consignment note to the next driver for signature of due receipt. This type of carriage is defined in the convention as "successive carriage", and the provisions governing such carriage are to be found in Chapter VI.

With the introduction of the semi-trailer and the container into European road carriage, the performance of successive carriage started to change its technical structure. Freight forwarders started to build up large fleets of semi-trailers. For the towing of trailers, independent trucking companies with their prime movers were gradually employed by freight forwarders.

Instead of having several independent carriers performing their respective segments of the transportation, a contracting carrier appeared who had the financial capability to undertake the performance of the entire transport from the consignor to the consignee. The truckers towing the trailers became subcontractors of the contracting carrier.

International road carriage is thus no longer performed technically in the way envisaged by the convention. This has led to much uncertainty concerning the interpretation of several of the convention's provisions and has resulted in frequent litigation in the courts of convention states.

One issue which frequently arises in litigation relates to the time bar provisions in Articles 32.1 and 39.4.

Article 32.1 states, "The period of limitation for an action arising out of carriage under this convention shall be one year. Nevertheless, in the case of wilful misconduct, or such default as in accordance with the law of the court or tribunal seized of the case, is considered as equivalent to wilful misconduct, the period of limitation shall be three years.

"The period of limitation starts (a) in the case of partial loss, damage or delay in delivery, from the date of delivery; (b) in the case of total loss, from the thirtieth day after the expiry of the agreed time-limit or, where there is no agreed time-limit, from the sixtieth day from the date on which the goods were taken over by the carrier; (c) in all other cases, on the expiry of a period of three months after the making of the contract of carriage. The day on which the period of limitation begins to run shall not be included in the period".

In Chapter VI, in connection with provisions relating to carriage performed by successive carriers, limitation of time is dealt with in Article 39.4, which states "The provisions of Article 32 shall apply to claims between carriers. The period of limitation shall, however, begin to run either on the date of the final judicial decision fixing the amount of compensation payable under the provisions under this convention, or, if there is no such judicial decision, from the actual date of payment."
When two or more carriers have participated in the carriage, the question arises of whether the subsequent carriers should be deemed subcontractors of a contracting carrier or as successive carriers within the meaning of Chapter VI. This issue has been subject to consideration, inter alia, by the Court of Appeal in London and the supreme courts in Austria and Sweden in connection with time bar disputes. Their decisions vary from a narrow interpretation of Article 39.4, to application by analogy, and to adoption of supplementary provisions on time bar from national law.

In the Ulster-Swift case (Lloyd's Law Reports, 1977, Vol 1 p346), the Court of Appeal upheld a judgement by Mr Justice Donaldson in the Commercial Court in which one of the principle issues was whether the claim of the contracting carrier against the performing carrier was a claim between carriers in the meaning of Article 39.4.

The background was as follows.

Ulster-Swift wanted to have a consignment of pork carcases carried from its premises in Northern Ireland to Basle in Switzerland. For this purpose Ulster-Swift made a contract with the defendant, Taunton Meat Haulage Ltd. Taunton agreed to carry for reward the consignment but did not perform any part of the carriage itself. Taunton made a subcontract with a third party, Fransen, who performed the carriage. Its driver made out a consignment note to Ulster-Swift. Ulster-Swift sued both carriers and Taunton started recourse action against Fransen, who took the view that Taunton's claim was time-barred by virtue of the provisions of Article 32.1.

The Court of Appeal did not accept that there was sufficient reason for reading Article 39.4 as meaning only "claims between successive carriers" within the meaning of Article 34. Counsel for Fransen relied primarily on the heading of Chapter VI - "Provisions relating to Carriage performed by Successive Carriers".

As Fransen disputed that Taunton was the carrier, the Court of Appeal also stated that Taunton need not rely on Article 34 to make it a "carrier" and referred to Section 14 (2) ( c) of the Carriage of Goods by Road Act ,1965, which applies the act and the convention to any carrier who, in accordance with Article 34 or otherwise, is a party to the contract of carriage.

The Court of Appeal further found that, even if Article 39.4 only applies to claims between "successive carriers", Mr Justice Donaldson was right to conclude that Fransen was a "successive carrier" to Taunton within the meaning of Article 34.

The Austrian Supreme Court, however, did not follow the Court of Appeal in its decision of July 10, 1985 (OGH 10 7 1985 SZ 58 /122) in a recourse action between carriers involving Articles 32.1 and 39.4. No consignment note for the entire carriage had been issued, and the Austrian Supreme Court did not apply by analogy Article 39.4 of the convention but expressly stated that the reasoning of the Court of Appeal would not be followed. Instead the supreme court based its decision on a general principle of Austrian law on time limits, according to which the period of limitation does not begin to run until the point of time at which the right could have been exercised, meaning that the claim was no longer hindered by any factual legal obstacles.
In 1996, meanwhile, the Swedish Supreme Court considered, inter alia, the same issue of whether Article 32.1 or, at least by analogy, Article 39.4 in the CMR convention, was to be applied. (LKW Walter Int Transport Organisation AG v Atlantica Insurance Company Ltd, T 1067/95).

The contracting carrier was a Swedish freight forwarder who subcontracted to LKW Walter the performance of the carriage. LKW Walter employed a trucking company who performed the entire carriage. No consignment note had been issued by the contracting carrier.

The court found that, although the contracting carrier did not perform any part of the carriage itself, and the provisions of Chapter VI in the convention were therefore not directly applicable to such a contracting carrier, the provisions may nevertheless be deemed applicable by analogy.

The court, however, considered that a prerequisite for analogous application must be that a joint and several liability has been established between a contracting and a performing carrier by the latter taking into its custody the goods and the consignment note. As no consignment note had been issued, the court found no reasons to apply - not even by analogy -the special provisions on time limits according to Article 39.4 to any other situation but to one where the carriers are jointly and severally liable.

Three prominent courts in convention states have thus not been able to adopt a uniform approach to an important issue in their interpretation of some basic convention provisions.

In the English and Swedish cases the courts were initially on the same course with regard to application of the provisions of Chapter VI. But whereas the Swedish Supreme Court took a narrow view at the end, the English Court of Appeal held that the heading of the chapter could not read as meaning only "claims between successive carriers within the meaning of Article 34" and accepted that Fransen was a successive carrier to Taunton.

This judgment accords with the technical development of the road transport industry. When comparing the reasons of the Court of Appeal with those of the Swedish Supreme Court, it should be observed that in the Ulster-Swift case the consignment note was not handed over by Taunton to Fransen but made out independently by Fransen's driver direct to Ulster-Swift.

Finally, the Austrian Supreme Court seems to have taken a very broad and pragmatic view by its application of general Austrian statutory provisions on time-bar.

It has been reported that decisions of continental courts have produced no less than twelve different interpretations of provisions relating to the liability of a carrier in connection with Article. 17.4 (particularly sub-paragraph (c) ) and Article 18.2.

The situation is therefore highly unsatisfactory in international road carriage as court rulings in convention states are not predictable. Proposals for amendment of the convention have not succeeded so far, but a way to uniformity and predictability would be to agree some rules on interpretation of basic articles.