Logistics And Frieght Forwarding

Question of jurisdiction for claim against carrier under Brussels I Regulation

Facts
Decision
Comment[1][2][3]
Facts A Danish company (S) sold a consignment of frozen chicken products to a German buyer on carriage and insurance paid terms.

The chicken products were stored at a Dutch terminal (V) in Hertogenbosch, the Netherlands. S booked transportation of the consignment to Pulheim, Germany, with a Danish carrier (T). T subcontracted the transportation to a Slovakian road carrier, which informed T of the registration number of the truck that would carry out the transportation.

A delivery instruction was issued to V on that basis, setting out that the chicken products should be released to that particular truck. Further, it was stated in the delivery instruction that delivery should not be made until delivery confirmation had been received. V issued and signed a Convention on the Contract for the International Carriage of Goods by Road consignment note for the transport.

It was stipulated in the consignment note that the transport should be performed by Rolli Frigo Speed with a different truck than that mentioned in the delivery instruction. On that basis, the consignment was delivered by V to Rolli Frigo Speed. The consignment subsequently went missing.

S’s cargo insurer paid compensation and issued legal proceedings against T and V in Denmark. In support of the claim against T, the cargo insurer submitted that the loss, subject to the hearing of evidence, was a result of the fact that T’s sub-carrier had subcontracted the carriage to another carrier, which had taken delivery of the consignment and unlawfully disposed of the cargo. In support of the claim against V, the cargo insurer submitted that the loss could also have been the result of the fact that V had wrongfully delivered the cargo to Rolli Frigo Speed.

On that basis, the cargo insurer submitted that the Danish court had jurisdiction to hear the proceedings against V pursuant to Article 8(1) of the Brussels I Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, as there would be a risk of irreconcilable judgments if the claims against T and V were heard separately. T submitted that V should hold it free of any liability which T might incur regarding the cargo insurer. In support, T argued that V was liable for wrongful delivery because:

  • it had delivered the products contrary to the instruction given; and
  • there was jurisdiction in Denmark for T’s indemnification claim pursuant to Article 8(2) of the Brussels I Regulation, as V was a third party to the proceedings before the court.

V contested that the Danish court had jurisdiction pursuant to Article 8(1) of the Brussels I Regulation and submitted that the claims against T and V were not so closely connected to make it expedient to hear them together to avoid the risk of irreconcilable judgments.

Further, V submitted that the court had no jurisdiction over T’s claim for indemnification with reference to Article 8(2) of the Brussels I Regulation, as V had already been made a party to the proceedings following the action brought against it by the cargo insurers.(1)[4] Decision The Maritime and Commercial Court found that Article 8(1) of the Brussels I Regulation could not establish jurisdiction for the cargo insurer’s claim against V, reasoning as follows:

The cargo insurer’s claim against T and V respectively is based on different legal grounds and if the claims are heard together before the Maritime and Commercial Court a choice of law must be made which may result in that the claims shall be decided on the basis of substantive laws of different states.

The Court does not find that it has sufficient basis for determining whether T and V may possibly be joint and severally liable. On that basis, and with reference to that Art 8(1) must be given a limited scope of application, the court does not find that the cargo insurer’s claim against T and V are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments. The point made by the cargo insurers that the claims are based on the same factual circumstances and that practical concerns speaks in favour of that the proceedings are consolidated cannot lead to another result.”

The court also found that it had no jurisdiction over T’s indemnification claim against V pursuant to Article 8(2) of the Brussels I Regulation. It reasoned as follows:

V was made a party to the proceedings by cargo insurers from the time when the proceedings commenced. Irrespective of the claim for indemnification made by T a situation as comprised by Art 8(2) of Brussels I-regulation does not exist.

Consequently, the Maritime and Commercial Court does not have jurisdiction pursuant to Art 8(2).” Comment It follows from the European Court of Justice decision in Freeport (C-98/06) that the application of Article 8(1) is not hindered by the fact that the claims brought against the defendants are based on different legal grounds.

Rather, the issue of whether there would be a risk of irreconcilable judgments if the claims were heard separately is decisive. When deciding this matter, emphasis should be placed on whether the court must, on the basis of hearing evidence, determine the same factual circumstances which must be determined in connection with the claim against the second defendant. If a risk exists that the court may base its decision on an irreconcilable understanding of the factual circumstances which form the basis for the claims, the conditions for applying Article 8(1) of the Brussels I Regulation may be fulfilled.

It is doubtful whether the proceedings brought by the cargo insurer against T and V mean that T would be barred from obtaining a separate decision by the court on the question of whether it may – independently of the question of whether Article 8(1) may be applied – rely on Article 8(2) and base its recourse claim against V on this article. The interpretation adopted by the court means that the cargo insurer should be able to deprive T of its rights to rely on Article 8(2), which appears questionable. The judgment has been appealed to the Supreme Court.

For further information on this topic please contact Jesper Windahl[5] at Windahl Sandroos & Co by telephone (+45 3525 3800) or email ([email protected][6]). The Windahl Sandroos & Co website can be accessed at www.wsco.dk[7].

Endnotes

(1) Maritime and Commercial Court judgment of January 6 2017 (Case H-77-15). The materials contained on this website are for general information purposes only and are subject to the disclaimer[8].

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References

  1. ^ Facts (www.internationallawoffice.com)
  2. ^ Decision (www.internationallawoffice.com)
  3. ^ Comment (www.internationallawoffice.com)
  4. ^ (1) (www.internationallawoffice.com)
  5. ^ Jesper Windahl (www.internationallawoffice.com)
  6. ^ [email protected] (www.internationallawoffice.com)
  7. ^ www.wsco.dk (www.wsco.dk)
  8. ^ disclaimer (www.internationallawoffice.com)



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