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04 February 2015
The Rotterdam Court recently declined jurisdiction in proceedings in connection with a claim for damages between a carrier and its principal, because it considered an exclusive jurisdiction clause in a framework contract between the parties to be null and void under the Convention on the Contract for the International Carriage of Goods by Road (CMR). Although the decision appears to be rather odd, carriers should now be aware of the options available to them to avoid falling foul of this ruling, particularly bearing in mind the new EU Brussels I Regulation, which entered into force in January 2015.
The dispute before the Rotterdam Court involved a claim for damages of €111,646 by a Dutch multimodal carrier and its Italian subsidiary against their Italian principal. The damages allegedly resulted from the lack of customs documents required for the transport of goods by road from Italy to Russia.
The principal argued that the Rotterdam Court lacked jurisdiction to hear the claim, but the carriers maintained that the Rotterdam Court was competent pursuant to an exclusive jurisdiction clause in the framework contract between the parties. In an August 20 2014 judgment the court held, among other things, that insofar as the CMR applied to the claim, the exclusive jurisdiction clause in the contract was null and void pursuant to Article 41 of the CMR. As a result, the court declined jurisdiction.
This appears to be the first judgment in the Netherlands where Article 41 of the CMR has been applied in this way. Article 41 provides that:
"any stipulation which would directly or indirectly derogate from the provisions of this convention shall be null and void. The nullity of such a stipulation shall not involve the nullity of the other provisions of the contract."
Article 31.1 of the CMR is also relevant, as it stipulates that legal proceedings involving CMR cases can be brought before several courts, including a court:
The plaintiff can choose the court in which it wishes to commence legal proceedings against the defendant.
Despite the option to agree on the competence of a designated court, the Rotterdam Court held that the entire jurisdiction clause in the contract was null and void, since it referred to the exclusive competence of the Rotterdam Court, which was a derogation from Article 31.1 of the CMR within the meaning of Article 41 of the CMR. This appears to depart from previous Dutch case law on the subject. However, there are two simple solutions to prevent the Dutch courts from declaring themselves incompetent as the Rotterdam Court did in this case.
The first involves the incorporation of a non-exclusive jurisdiction clause valid under Article 31.1 of the CMR. However, Dutch carriers must act quickly to ensure that they start proceedings in the Netherlands before their principals begin proceedings in another jurisdiction. Here, the concept of 'declaratory proceedings' could be helpful in cases involving loss or damage during transport.
The second involves the incorporation of an exclusive arbitration clause which is valid under Article 33 of the CMR.
Meanwhile, the revised Brussels I Regulation may provide opportunities for carriers looking to secure Dutch jurisdiction for their CMR disputes. The Brussels I Regulation is the key European instrument on jurisdiction and enforcement issues in civil and commercial matters. It has undergone extensive review and from January 10 2015 the revised Brussels I Regulation will be applied by EU member state courts.
Article 31.2 of the revised Brussels I Regulation states:
"where a court of a member state on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another member state shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement."
Thus, contrary to the situation under the old Brussels I Regulation, the court mentioned in an exclusive jurisdiction clause can continue the proceedings even if another party has already started proceedings in another court. However, the unaltered Article 71 of the revised Brussels I Regulation states:
"This regulation shall not affect any conventions to which the member states are parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments."
It can be argued that Article 31 of the CMR should prevail over Article 31.2 of the revised Brussels I Regulation where that CMR applies to a particular dispute. This would mean that a court mentioned in an exclusive jurisdiction clause which was seised subsequent to another court competent under Article 31 of the CMR could not continue the proceedings on the basis of Article 31.2 of the revised Brussels I Regulation.
However, the party invoking the exclusive jurisdiction clause could in turn argue that this interpretation of the CMR and the revised Brussels I Regulation is invalid in view of European Court of Justice (ECJ) case law. In Nipponkoa v Inter-Zuid (December 19 2013) and TNT v AXA (May 4 2010) the ECJ held that Article 71 of the Brussels I Regulation precludes an international convention from being interpreted in a manner which fails to ensure – under conditions at least as favourable as those provided for by that regulation – that the underlying objectives and principles of the regulation are observed. Recital 15 of the preamble, for instance, provides that the rules of jurisdiction should be highly predictable. Recital 21 stipulates that, in the interests of the harmonious administration of justice, it is necessary to minimise the possibility of concurrent proceedings.
A claimant could argue that the objectives and principles of the revised Brussels I Regulation would not be observed if a court appointed under an exclusive jurisdiction clause would have to stay its proceedings pursuant to Article 31.1 of the CMR. Then the position of the claimant would be less favourable than would be the case under Article 31.2 of the revised Brussels I Regulation, and the claimant could invoke TNT v AXA and Nipponkoa v Inter-Zuid to argue that it may rely on its exclusive jurisdiction clause within the meaning of Article 31.2 of the revised Brussels I Regulation in CMR cases. In such an event, the court mentioned in the jurisdiction clause need no longer stay the CMR proceedings, even if another court has already been seised.
For further information on this topic please contact Annemieke Spijker at AKD by telephone (+31 88 253 5000), fax (+31 88 253 5400) or email (firstname.lastname@example.org). The AKD website can be accessed at www.akd.nl.
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