CMR: Contracts for the international carriage of goods by road

Andrew Messent and David A Glass

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CHAPTER 2 Combined transport

Scope

2.1 Combined transport, sometimes referred to as intermodal or multimodal transport, occurs where goods are transported successively by two or more different methods of transport. This may be either by transferring the goods from one method of transport to another, or alternatively by placing the one means of transport on to another for part of the transit. CMR only makes partial provision for combined transport operations in Article 2, since this provision only covers the latter variety of combined transport, so-called piggy-back operations. Partly as a result of this, Article 2 is not a satisfactory provision and is the source of considerable problems. These provisions are, of course, of particular significance for this country since, unlike other European countries, all shipments of goods to and from the United Kingdom must be subject to a combined transport operation, as the existence of the Channel and the North Sea means that all goods must be transported by sea, air or rail for at least some part of the transit.1 A more comprehensive regime for combined transport was established by the United Nations Convention on International Multimodal Transport of Goods,2 but this failed to enter into force and in any event would not have applied to such contracts for international carriage as are subject to the CMR Convention by virtue of Article 2.3 More recently the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2008 (The Rotterdam Rules) has been adopted. Similarly it would not apply to contracts covered by Article 2.4 However, should it come into force it will have implications for where part of a multimodal contract includes international carriage by road. The issues regarding this possibility will also be considered in this chapter. Initially, however, attention must turn to Article 2. 2.2 Article 2 provides as follows:

1. Where the vehicle containing the goods is carried over part of the journey by sea, rail, inland waterways or air, and, except where the provisions of article 14 are applicable, the goods are not unloaded from the vehicle, this Convention shall nevertheless apply to the whole of the carriage. Provided that to the extent that it is proved that any loss, damage or delay in delivery of the goods which occurs during the carriage by

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the other means of transport was not caused by an act or omission of the carrier by road, but by some event which could only have occurred in the course of and by reason of the carriage by that other means of transport, the liability of the carrier by road shall be determined not by this Convention but in the manner in which the liability of the carrier by the other means of transport would have been determined if a contract for the carriage of the goods alone had been made by the sender with the carrier by the other means of transport in accordance with the conditions prescribed by law for the carriage of goods by that means of transport. If, however, there are no such prescribed conditions, the liability of the carrier by road shall be determined by this Convention.
2. If the carrier by road is also himself the carrier by the other means of transport, his liability shall also be determined in accordance with the provisions of paragraph 1 of this article, but as if, in his capacities as carrier by road and as carrier by the other means of transport, he were two separate persons.

2.3 It should first be noted that Article 2 will apply irrespective of whether it is the first, the last or the middle part of the carriage in respect of which the road vehicle is carried on another mode of transport. Indeed, it is possible that what might otherwise merely be domestic carriage of goods could become subject to CMR by virtue of Article 2. For instance, if goods are to be carried by road from Birmingham to Dover and thence by ship on the road vehicle to Boulogne without being unloaded, the transit would be subject to CMR even if the vehicle never left the port area in Boulogne. Equally, it will make no difference whether the carriage by the other mode takes place during the road carriage by the first or any successive carrier. 2.4 On the face of it, a carrier by another mode will not himself be a successive carrier within the meaning of Article 34, since that Article is restricted to road carriers.5 However it may be that his taking over of the goods and consignment note, in accordance with the provisions of Article 34, amounts to an acceptance of responsibility in respect of the whole of the carriage by road and not merely for the period of carriage by sea.6 2.5 Turning to the detailed provisions of Article 2, it will be observed that Article 2(1) falls into two parts: the general rule, and the proviso to that rule. Each will be considered in turn.

The general rule

2.6 The general rule under Article 2(1) is that where goods are carried by another mode of transport and the goods are not unloaded from the vehicle, then the whole carriage will be governed by the Convention, notwithstanding the fact of that different mode of transport. So far as this aspect of Article 2(1) is concerned there are few difficulties. One, however, is that there may be room for argument as to what is meant by “unloaded from the vehicle” for the purposes of Article 2(1). In particular, in the French text the corresponding expression is “rupture de charge”, and it is possible that courts applying the French text may come to different conclusions from those which apply the English text, as the two expressions would seem to carry different nuances of meaning.7

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2.7 First of all, since the word “vehicle” is defined in Article 1(1) to include trailers and semi-trailers,8 it is clear that where a trailer or semi-trailer is detached from its tractor unit for the purposes of onward carriage by another mode, this will not amount to unloading from the vehicle for the purposes of Article 2(1).9 However, where actual unloading of the goods has taken place this would convert the operation into one of combined or intermodal transport which would not be covered by the Convention.10 For example, if goods are unloaded from the road vehicle on to the quay and then loaded into the ship on their own, whether accompanied by the road vehicle on the sea transit or not, then the operation will be outside Article 2. The operation of the CMR rules will therefore be excluded from that moment or else be precluded from applying at all if the road vehicle has not yet crossed an international frontier, unless a subsequent stage of the carriage involves an international carriage by road, in which case CMR could possibly apply to that part of the carriage.11

Carriage by container

2.8 Turning to the question of shipment by containers in circumstances where the container is separated from its carrying vehicle for the purposes of onward shipment by another mode, this would appear to be outside Article 2(1): for in such circumstances, as the container itself is not within the Convention’s definition of a “vehicle”,12 it must be regarded as “goods” and therefore, having been “unloaded from the vehicle”, Article 2(1) cannot apply.13 Given the vast increase in the use of containers since the Convention was drafted, this exclusion from the scope of the Convention is of obvious significance.14 It also has the more far reaching consequence in terms of the road transit which may take place either side of the transit by the other mode. If, for example, a container is to be carried by road from London to Paris, but is unloaded from the vehicle for the purposes of the sea transit, not only is the sea transit excluded from the Convention, but the road transit which takes place either side of the Channel is also excluded since there is no “international contract for the carriage of goods by road”.15 Only where the shipment is subsequently carried by road across another national frontier could it then be said that

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the onward transmission from the Channel port amounts to an international contract for the carriage of goods by road so that it might be possible to bring that segment of the carriage within the Convention.16 The carriage within this country and across the Channel would still be outside the terms of the Convention. 2.9 If this interpretation be correct, which in view of the wording of Article 2(1) would seem inescapable, this would mean that a considerable volume of short sea traffic will not be subject to the Convention at all.17 It may therefore be desirable to arrange that in such cases the contract of carriage should expressly incorporate the terms of CMR so as to avoid any uncertainty as to what rules as to liability are to apply.18 In the absence of such express incorporation, in the event of the carriage being outside the Convention, then it would be open to the carrier to rely on his standard trading conditions, assuming, of course, that those are incorporated into the contract. 2.10 In an important Danish decision, a carrier was held able to rely on his trading conditions in relation to container transport between Denmark and England.19 A freight forwarder claimed an indemnity for loss of the goods from the carrier, whose rates differed depending on whether a trailer or a container was used, the choice being determined by the carrier. CMR terms were offered in respect of transport by trailer, but if a container was used, terms derogating from CMR were to apply. The day before the transport took place, the forwarder was informed of the number of the transport unit, from which he could tell whether a trailer or a container was to be used, although the implications of the choice were not spelled out. In the event, a container was used and the court held that CMR was not applicable to the transport since the container was not carried continuously by road. Consequently, the carrier was free to rely on his standard trading terms. In a dissenting judgment, one of the judges considered that the carrier should have stated his choice and made sure that the forwarder knew the consequences of it. On his view, therefore, the contract should have been treated as one for carriage by road notwithstanding the use of a container which, in fact, involved unloading from a road vehicle.20 2.11 The difficulties which arise where unloading of the goods involves a breach of contract are considered below. However, where unloading is expressly or impliedly permitted, the interpretation so far suggested is that the effect of Article 2 is to take the contract outside of CMR altogether in circumstances where no continuous international road carriage occurs or, at least, is not contemplated by the carrier.21 An alternative interpretation might be to regard Article 2 as subject to Article 1 so that, notwithstanding the

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fact there is a change of mode which is permitted by the terms of the contract, if the contract is nevertheless properly to be regarded as a contract of carriage by road then CMR is compulsorily applicable to it.22 This view can be supported by a Dutch decision23 where a mobile crane was carried by road from Cairo to Alexandria, unloaded from the truck, carried by sea under a bill of lading to Antwerp and then finally by road to a destination in the Netherlands. The crane was damaged during the first stage of the journey, and the carrier sought to apply his trading conditions to that stage. The court held that CMR applied and displaced the conditions which derogated from it. The court accepted an interpretation whereby, although CMR did not apply to the sea leg, it did apply to the road leg since the conditions of Article 1 had been fulfilled.24

Unloading from the vehicle

2.11A Article 2 does not itself provide that where goods are unloaded and transferred on to another mode of transport, CMR no longer applies. This, however, necessarily follows from the fact that the goods are no longer being carried by road. It is the purpose of Article 2 to preserve the operation of the Convention in the limited circumstances therein provided for; in the absence of such circumstances, transfer of the goods on to another means of transport will mean (subject to the express or implied terms of the contract25) either that CMR ceases to apply, or, if a national frontier has not at that stage yet been crossed, that CMR is prevented from coming into operation at all.26 2.12 It should be noted, however, that an unloading will only be relevant for the purposes of Article 2(1) if it occurs immediately before, during or immediately after transportation by another mode of transport. Unloading of the goods at any other stage of the road transport will be of no relevance for the purposes of Article 2. Indeed it would seem, in the absence of any provision in the Convention, that unloading the goods otherwise than in connection with transportation by another mode will not have any significance at all on the application of CMR to the performance of the contract in question.27 Arguably, however, this is a matter of fact and degree. So, for example, if goods are unloaded from a vehicle into a warehouse as part of a normal transhipment pending loading onto another vehicle, these operations would presumably be covered by the Convention. If, on the other hand, the warehousing was for a more prolonged period of storage by the carrier in between two stages of an international road carriage, then arguably that part of

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the contract, being essentially a contract for storage rather than for the carriage of goods by road, would not be governed by CMR.28 2.13 Unloading the goods from the vehicle will not affect the operation of Article 2(1), however, where the unloading takes place in circumstances covered by Article 14. Article 14 is discussed in detail in , but, in brief, it makes special provision for circumstances where it is or becomes impossible to carry out the contract of carriage in accordance with the terms of the consignment note before the goods arrive at the place designated for delivery. In such cases, Article 14 provides for the carrier to obtain instructions from the person entitled to dispose of the goods; where the carrier is unable to obtain instructions from that person, he is entitled to take such steps as appear to him to be in the best interests of the person entitled to dispose of the goods. Where, therefore, Article 14 applies and the goods are unloaded, either as a result of instructions received from the cargo interests or as a result of steps taken by the carrier where unable to obtain those instructions, Article 2(1) will still operate to bring any subsequent carriage by another mode of transport within the orbit of the Convention. 2.14 One difficulty that arises in relation to the general rule in Article 2(1) is as to whether it can apply where the transport by another mode or the unloading is carried out on the initiative of the road carrier rather than where envisaged either expressly or impliedly by the original contract. Where carriage from this country is concerned, clearly carriage by another mode must at least be impliedly envisaged. This is not so, however, either in the case of unloading or for European transport operations, and in the case of both transport from this country and European transport operations, carriage by one alternative mode might be envisaged by the contract, whereas the road carrier in fact arranges carriage by another mode. It might be argued that for the purposes of the general rule under Article 2(1) the use of a different mode of transport causes no real problem, since the carriage will in any event be subject to CMR, but this argument ignores that such carriage might take the entire performance of the contract outside the cargo interests’ insurance policy. Further, if the carrier can unilaterally decide to vary the means of transport but is still able to rely on the CMR defences, the cargo interests might be severely prejudiced. Conversely, where the proviso to Article 2(1) comes into operation, the carriage may not be governed by CMR, and the cargo interests will in such circumstances find that their claim is subject to an unexpected regime, in respect of which they will probably not have made appropriate insurance arrangements. In cases where the goods have been unloaded by the carrier, again CMR would not apply in circumstances where the cargo interests were expecting the carriage to be governed by it. 2.15 On the one hand, Article 2(1) makes no express provision whereby the unloading or the use of the other mode of transport must be agreed, either expressly or impliedly, with the cargo interests. Further, it is provided by Article 6(2)(a) that, where applicable, the consignment note is to contain a statement that transhipment is not allowed. It can be argued from this that, in the absence of such a statement, transhipment is permitted. Although transhipment is not defined, it would seem wide enough to cover carriage by another mode, whether or not the goods are unloaded. On the other hand, the prejudicial nature of the factors put forward above would seem to militate strongly

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against the road carrier unilaterally deciding to unload the goods or utilise transportation by another mode, and Loewe is of the view that the carrier cannot arrange a different mode of carriage than that initially provided for.29 This view can be supported by a Belgian decision where it was held that a carrier who had undertaken an international road transport operation and then on his own initiative had unloaded the goods for carriage by sea without the consent of the shipper or the consignee could not rely on that unloading to release himself from the terms of CMR.30 On the other hand, in a Dutch decision31 it was held that the plaintiff could not maintain that the agreement was to carry solely by road, since ro-ro transport was a mode of transport in general use and the plaintiff was obviously aware of it, having previously complained of trailers being carried on deck.32 2.16 It would seem, therefore, that the better view is that unless the carriage by another mode, or the unloading, has been done with the prior consent of the cargo interests, then the carrier cannot evade his CMR responsibilities.33 From this it follows that the carrier is not permitted by Article 2 unilaterally to vary the mode of performance of the contract, so such variation would amount to breach of contract, and in the event of the cargo interests suffering losses by reason of that breach which are unrecoverable under CMR, such losses should be recoverable under the national law for that breach of contract. To the extent that the carrier attempts to rely on his CMR defences and limitations of liability in such circumstances, it can further be argued that the principle of deviation,

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well recognised in carriage by sea cases,34 should operate to deprive him of any such protection. Although the scope of this principle in anything other than carriage by sea cases must be a matter of some doubt since the decision of the House of Lords in Photo Production Ltd. v Securicor,35 it would seem that the reasoning behind the carriage by sea cases, namely that there has been a change of adventure and therefore a change of risk,36 is equally applicable to the present circumstances. Such reasoning would, at least, seem to be applicable to the defences in Article 17.37 On the other hand, application of this reasoning may only be permissible if consistent with the proper interpretation of the provisions of CMR, bearing in mind that CMR is an instrument of uniform law and should not be construed in the light of domestic concepts such as the principle of deviation.38 The possibility that the breach of contract by the carrier may also be considered as wilful misconduct would provide considerable protection for the cargo interests without the need to resort to the principle of deviation.39

The proviso to Article 2(1)

2.17 The greater part of the text of Article 2(1) is concerned with the position where the general rule, as outlined above, does not apply, so that the carriage by the other means will not be governed by CMR. In order to understand this part of Article 2(1) it is essential to realise that the relations between the road carrier and the carrier by the other mode will in most cases be governed by a legal regime which differs from the CMR Convention, applicable as between the cargo interests and the road carrier. The amount recoverable under that regime may be greater or less than under CMR according to the circumstances, but more importantly the defences available under that regime have been specifically designed to take account of risks particular to that method of transport.40 This

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may well mean, if the road carrier is forced to rely on CMR, that the CMR defences are inappropriate to protect him against a claim by the cargo interests but in circumstances where he cannot effect recovery from the other carrier under the regime applicable to that mode of transport. The basic purpose of this part of Article 2(1) would seem to be to avoid such difficulties for the road carrier in circumstances where loss, damage or delay has occurred during carriage by that other mode and without fault on his part. 2.18 There are thus two linked features: firstly, to bring the relationship between the cargo interests and the road carrier into line with the special rules developed for particular modes of transport, and secondly, to enable the road carrier’s recourse to be as close as possible to his own liability.41 A balance is struck between the interests of the two parties. The cargo owner’s recovery may be more limited than under CMR, but this is justified by the fact that there is no reason why he should recover more than if he himself had contracted with the carrier by the other means.42 On the other hand, the cargo owner is protected by the fact that his recovery is not to be subjected totally to the carrier’s need to match his recourse possibilities since CMR will only relinquish its hold as a mandatory regime to another mandatory regime. 2.19 With this in mind, if reference is made to the relevant part of Article 2(1), it will be observed that its scope can be broken down into three separate but cumulative requirements. Before it can apply,43 the loss, damage or delay must have occurred (a) during the carriage by the other means of transport; (b) without fault on the part of the road carrier; and (c) due to an event which could only have happened “in the course of and by reason of” the other mode of transport. Each of these requirements must be considered in turn.

“During the carriage by the other means of transport”

2.20 As to the first of these requirements, this raises no particular problem of interpretation, but rather one of proof,44 since it might be difficult to prove at which stage

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of a journey any particular loss or damage occurred.45 This aspect of Article 2(1) did, however, fall to be considered by an English court in Thermo Engineers Ltd. v Ferry-masters Ltd.,46 where a consignment of machinery which projected over the top of the trailer on which it was loaded was damaged when it struck the deckhead above the lower cargo deck when being loaded into a vessel for shipment across the Channel. Neill, J., indicated his agreement with the view that CMR must be viewed as having been intended to be consistent with other transport Conventions, so that as a general rule the question of when sea carriage begins would be determined according to the Hague Rules. Since under the Hague Rules carriage by sea includes loading operations,47 and as on the facts the trailer was across the line of the stern of the vessel at the time the damage occurred, he concluded that this amounted to damage occurring during carriage by sea for the purposes of Article 2(1). The plaintiffs’ contention that carriage by road only came to an end when the vehicle was secured on board the vessel, so that the load’s effective means of carriage had ceased to be the wheels of the trailer, was rejected.

“Not caused by an act or omission of the carrier by road”48

2.21 The main problem in relation to this second requirement concerns the application of Article 3. As will be seen, Article 3 renders the CMR carrier responsible for the acts and omissions of his servants, agents, and sub-contractors.49 The difficulty that arises is as to whether it is permissible to have regard to Article 3 in determining whether loss, damage or delay is due to “an act or omission of the carrier by road” for the purposes of Article 2(1). This question was discussed by Neill, J., in Thermo Engineers Ltd. v Ferrymasters Ltd.50 Having turned to consider whether the damage to the machinery was due to the fault of the road carrier, he observed that it was necessary to have regard to Article 3, and that as a general rule this meant that the carrier would be liable for the acts of sub-carriers who perform carriage by another mode. However, he continued:

I consider, however, that in art. 2 the words “carrier by road” have to be construed in such a way as to impose a narrower responsibility. A construction which imposed a wide responsibility on the carrier by road would, in my view, be contrary to the purposes which par. 1 of art. 2 seeks to achieve. It would also be inconsistent with par. 2 of that article.51

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