Transport Insurer of 'X' v. Freight Forwarder 'Y'
DMC Category Rating – Developed
Case Note contributed by BBL Bracker Boehlhoff & Luebbert. BBL is the International Contributor to this website for Germany
The plaintiff claimed compensation for the amount of USD 87,556.00 it had paid to its insured. The defendant argued that the action was not admissible because the company K had already initiated declaratory proceedings in Rotterdam, applying for a declaratory order that K was not liable for the loss of the cargo. The first and second instance courts (Regional and Higher Regional Court Hamburg) had held that the action was admissible. The defendant appealed to the Federal Court of Justice (BGH) and applied to dismiss the action as not admissible.
The admissibility of the action could not solely be derived from the last part of Art.31.2, which refers to the enforceability of the judgment. Although a declaratory order in itself was – apart from the order to pay costs – not enforceable, the same applied to a judgment dismissing an action for payment. It was generally acknowledged that a judgment dismissing an action for payment prevented a further action, just as a judgment in favour of the plaintiff did. The purpose of Art.31.2 was to avoid several proceedings in the same matter before different courts. Because of that, it was sufficient that a declaratory order was enforceable only in respect of the costs. Only if enforceability were prevented by the law of the enforcement state, could fresh proceedings be initiated there pursuant to the exception stated at the end of Art.31.2 CMR.
Although in this case, the declaratory order was enforceable in Germany, the country in which the fresh proceedings had been started, the underlying objective of Art.31 justified the conclusion that the two actions (the first for a declaration, the second for a payment) were not "on the same grounds" according to Art.31.2. The objective of Art.31 of CMR was to render the uniformity contemplated by the CMR even more effective by regulating certain procedural issues within the Convention. Art.31.2 was to be read in conjunction with Art.31.1, which deals with international jurisdiction. According to Art.31.1, there was no exclusive international jurisdiction. Instead, the plaintiff was given the option to choose, from among a number of competent courts, the court of the state that seemed favourable to him. On the other hand, the limitation in the number of competent courts and the rules on pending actions in Art.31.2 were meant to avoid the risk of a defendant being sued in different states for the same claim and, in consequence, conflicting decisions. If both a declaratory action and an action for payment had been initiated, the conflict was to be resolved in favour of the action for payment.
The objective of the freedom of choice granted to the plaintiff in Art.31.1 was to support the procedural enforcement of claims arising out of a contract of carriage subject to the CMR. Accordingly, it was meant to protect the party putting forward a claim under such contract. In court proceedings, this would normally be the plaintiff. This intended protection of the claimant was apparent from Art.31.1(b), which granted jurisdiction to the courts of the country where the goods were taken over by the carrier or the place designated for delivery was situated. It was obvious that the sender or receiver should get the chance to claim compensation from the carrier at the place where he has dealt with him, that is, the sender at the place where the goods were taken over and the receiver at the place of delivery. There were no indications that this freedom of choice was also meant to protect the potential debtor who initiated proceeding against the creditor by way of declaratory proceedings.
It would be contradictory to this construction if the potential debtor were at liberty to undermine the creditor’s freedom of choice by getting ahead of the creditor by way of initiating declaratory proceedings at a court favourable to him, and thus forcing the creditor to initiate his action for payment in that court.
On the other hand, the fact that several contracting states of the CMR acknowledge declaratory proceedings as pending actions raises the question as to how far the judgment serves the intended uniformity of the Convention and may infringe the sovereignty of other contracting states. Today there is indeed a risk of conflicting decisions in the same matter in different contracting states. Consequently, the problem will have to be dealt with when it comes to the execution of these conflicting judgments.
* Art.31.1 of CMR reads:
** Art.31.2 of CMR reads:
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