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International Carriage of Goods by Road – Supreme Court Ruling

It is sadly common for goods to be stolen in transit and, with consignments crossing continents via complex supply chains, it can be hard to discern where responsibility lies or even where resulting disputes should be adjudicated. However, the Supreme Court has tackled the latter issue in an important ruling.

The case arose from the hijacking of one container load of cigarettes in Belgium and the theft of 756 cartons of cigarettes from another whilst it was parked beside a road in Denmark. The owner of the goods sued the main carriage contractors and subcontractors who had actual custody of the goods when the losses occurred. The former played no active part in the proceedings.

The subcontractors argued that the English courts had no jurisdiction to rule upon the dispute. Their submissions prevailed before the High Court but the Court of Appeal reached the opposite conclusion. The issue hinged on interpretation of the Convention on the Contract for the International Carriage of Goods by Road 1956, which has force in England under the Carriage of Goods by Road Act 1965.

In allowing the subcontractors’ appeal, the Supreme Court noted that they were neither ordinarily resident in England nor did they have their principal places of business in this country. The goods had not been consigned in, or delivered to, England. In those circumstances, English jurisdiction could only be conferred by agreement between the parties.

By operation of the convention, the subcontractors had become parties to the main contract of carriage – which contained an English jurisdiction clause – on receipt of consignment notes. However, the notes made no mention of the jurisdiction clause and the subcontractors thus had no notice of it. To hold in those circumstances that the subcontractors were bound by the jurisdiction clause would be contrary to the general principle that contracts depend upon agreement.