QCR Autumn 2018: EU law – Contract for multimodal carriage of goods between two member states - interpretation of Article 5(1)(b) of Regulation (EC) 44/2001 Brussels I – Jurisdiction of courts for the place of performance of the obligation – Place of pro
Zurich Insurance Plc And Another V Abnormal Load Services (International) Ltd - Case C-88/17, Court of Justice of the European Union, 11 July 2018
A request for a preliminary ruling had been brought by the claimants, Zurich Insurance Plc, an insurance company established in Ireland and its insured, Metso Minerals Oy, a company incorporated in Finland. The defendant, Abnormal Load Services (International) (ALS) in the originating proceedings was a transport company established in the UK.
The dispute in the main proceedings concerned a contract concluded between Metso as consignor and ALS as haulier for carriage of a cylindroconical crusher. The crusher was transported by lorry from Pori to Rauma (Finland), driven onto the ship and unloaded in Hull (UK). En route by lorry from Hull to Sheffield (UK), the crusher disappeared before it could be delivered to the consignee.
Zurich reimbursed Metso the value of the crusher, and subrogated to the claim of its insured, brought proceedings against ALS in the Finnish court. ALS objected to the jurisdiction. Following appeals, the Supreme Court referred the question of jurisdiction of the Finnish Court to the European Court of Justice.
The provision at issue, the second indent of Article 5(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters read: "the place of performance of the obligation in question shall be: … in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided". The question was whether in the context of a contract of carriage, this provision was capable of referring to more than one court.
Drawing on ECJ case law relating to air passenger transportation, the ECJ held that the provision meant that, in the context of a contract for the carriage of goods between member states in several stages, with stops, and by a number of means of transport, both the place of dispatch and the place of delivery of the goods constituted places where transport services are provided.
The ECJ reasoned that the place of dispatch is closely connected with the main part of the service resulting from the contract. That is because it is at the place of dispatch that the carrier has to perform a significant part of the agreed services. For instance, failing to load the goods adequately may lead to an incorrect performance of the contractual obligations at the place of destination of the carriage.
The ECJ justified the decision on the requirement of predictability, since it enables both the claimant and defendant to identify the courts of the places specified in the contract of carriage, of dispatch and delivery of the goods as the courts before which proceedings may be brought.
This is an important decision of the ECJ concerning jurisdiction in respect of a claim for contractual damages arising out of the multimodal transportation of goods across EU Member States.
The ECJ’s decision confirms that proceedings for damages arising out of a breach of contract for the international carriage of goods across EU member states can be brought in either the court of the country from where the goods were dispatched or in the court of the country where the goods were due to arrive. Both places are to be considered as places with a sufficiently close connection to the service provided.
Members may wish to consider whether to amend the terms on which they provide carriage so as to include an exclusive jurisdiction clause.
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The multimodal transportation of goods is inherently complex. This complexity is further complicated by the absence of internationally accepted rules governing the multimodal trade. While the shipowner is often the carrier or multimodal transport operator(MTO) under the multimodal transport contract, the rules applicable to the liability of the shipowner are embodied in a mosaic of International Conventions relating to the carriage of goods by sea, by air and by road.