Place of performance of multimodal transport. Tanchev AG in Zurich Insurance seeks support in flightright, and in the CMR and Hamburg rules.

Not just my blog posts on both cases follow each other closely. Tanchev AG in his Opinion in C-88/17 Zurich Insurance v Metso, takes inspiration from the Court’s findings in flightright (which I reported this morning). He emphasises the objective of predictability of the Brussels I Recast Regulation.

The case concerns multimodal transport of goods from one Member State to another. Pursuant to an agreement entered into with a Finnish undertaking, a British haulier undertook to carry goods from Finland to the United Kingdom. After the goods concerned were lost while being transported in the United Kingdom, the Finnish undertaking and the insurer of the goods sued for damages before a Finnish court. Does that court have jurisdiction per Article 7(1)b, second indent ?: in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided.

ALS concluded a contract for the carriage of goods with Metso Minerals Oy (‘Metso’), a Finnish manufacturer of equipment for the mining and construction industries. A cylindroconical crusher was to be transported from Pori in Finland to Sheffield in the United Kingdom. The crusher was insured by Zurich Insurance plc (‘Zurich’). Both Metso and Zurich are the plaintiffs in the main proceedings.

ALS, with the help of subcontractors, transported the crusher as follows. It was first transported from Pori to Rauma in Finland by a lorry with a low loader. At Rauma, it was unloaded from the lorry and driven on to a ship under its own power. After transport by sea to the United Kingdom, the crusher was again driven under its own power off the ship in the port of Hull and loaded onto another lorry. As Metso’s consignee did not have sufficient or adequate storage capacity, it asked a sub-contractor of ALS to drive the crusher to its own warehouse and keep it there temporarily for a couple of days. However, the crusher was stored there for a longer period, and disappeared before it could be delivered to the consignee in Sheffield.

ALS argues that only the place of unloading may be deemed to be the place of performance, claiming that the place of performance can only be one single place and that the place of final destination is of considerably greater importance than the place of dispatch. This, according to ALS, is consistent with the determination of the applicable law in respect of contracts for the carriage of goods under Rome I, which gives a degree of preference to the place of delivery and is to be interpreted taking into account the Brussels I Regulation.

The Commission, referring to CJEU predecent RehderWood Floor Solutions Andreas Domberger and Color Drack, acknowledges that, in any event, the place of arrival is a place of performance, as it is the final place in the chain of transportation. The Commission further argues, however, that, bearing in mind the requirements of proximity, foreseeability and legal certainty, it would be appropriate to recognise in addition the place of dispatch as a place of performance.

The question of international jurisdiction arises in the main proceedings because the case has connections not only with Finland but also with other countries: Finland is the country in which the goods were dispatched and the consignor has its seat, whereas the destination of the goods being carried and the location of the haulier’s seat is in the United Kingdom, where, moreover, the goods were ultimately lost. Finally, in order to convey the crusher from Finland to the United Kingdom, it had to be transported through the waters of other Member States or waters under the sovereignty of no State. In ordinary language, the AG suggests (at 28) all these territories and waters are places where the contract was performed.

According to their wording, both sections (a) and (b) of Article 5(1) of the Brussels I Regulation refer to ‘the place of performance’ and, in the case of section (b), additionally to ‘the place in a Member State’. In consideration of the singular form employed, it seems,  the AG suggests at 30, that only one single place can be regarded as having special jurisdiction in respect of contractual matters. However, this conclusion is not borne out by the case-law.

In color Drack the Court ruled that, if it is not possible to determine one single principal place of performance, each of the places of performance has a sufficiently close link of proximity to the material elements of the dispute and, accordingly, a significant link as regards jurisdiction. In a dispute concerning the sale of goods, the Court has held that, in such a case, the plaintiff may sue the defendant at one of the places of performance — at his choice.

In flightright, as far as delayed flights are concerned, the Court considers both the place of departure and the place of the final destination to be equally significant under the contract, thereby establishing a sufficient territorial link between these places and any proceedings arising from the contractual situation.

(At 59) In the present situation, where the means used to transport the goods change as the journey progresses, particularly in harbours, the fact that the goods are carried in a number of different stages is also an inevitable feature of such transport. In the AG’s view, however, even the fact that it was necessary to unload heavy and bulky goods such as the crusher in question and transfer it across land under its own power, with the dangers in terms of loss or damage inherent in a procedure of that kind (including the possibility of theft), does not alter the situation in such a way as to give the places of reloading or transhipping an importance equal to that of the place of dispatch. Therefore, recognising the latter place, along with the place of destination, as one of two ‘places of performance’ does not enhance the number of available fora in a way as to give reason for concerns of forum shopping.

The AG clearly struggles between limiting forum shopping and enhancing predictability, and suitability of various places to assess the litigation at issue. The AG (at 60) finds support for his view that the intermediate stages should not so be given jurisdiction, in the fact that it is common practice not to mention the places of reloading or reshipping in contracts of the kind in issue in the main proceedings.

The AG concludes therefore that the place of dispatch and the place of destination are thus both ‘main places of performance’ under the second indent of Article 7(1)(b), whereas the loading places in general are not.

A good case to further complete analysis under Article 7(1).

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1

 

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  1. #1 by Ennio Piovesani on 17/05/2018 - 9:48 AM

    Dear Prof. Van Calster,

    in my country, Italy, there is no case-law on multimodal transport and contractual jurisdiction, but rather few decision on multimodal transport and choice-of-court agreements. I also checked the EU Pillar database to see if national courts have ever decided on the matter. Are you aware of any such decision?

    The case at hand shows the importance of preemting parallel proceedings and legal uncertainty by making recourse to choice-of-court agreements, especially in the field of international transport.

    Would things have been different, in your opinion, where – though unlikely – the parties had agreed in their contract the places of reloading?

    Kind regards,

    Ennio Piovesani

    • #2 by Geert van Calster on 17/05/2018 - 10:56 AM

      Thank you indeed, Ennio. I am not aware of any relevant decisions in the MSs. Your point on contractual identificaton of the places or reloading is a very valid one. I do not think identification of those (which would be contrary to the AG’s perception of normal practice) would not suffice to make them places of performance of the contract. For them to be so, they would expressis verbis need to refer to these places as ‘places of performance of the obligaiton’ (Which I have seen in quite a few contracts for sales of goods).

      • #3 by Ennio Piovesani on 17/05/2018 - 12:11 PM

        Dear Prof. van Calster,

        thank you for your quick reply and for sharing your view.

        I get your point and I agree with it!

        Actually, it is interesting to try an immagine what would happen in circumnstances that are not “normal practice” or “likelihood” in the minds of the AG and of the ECJ. For instance, in Saey Home, a recent case by the ECJ you too commented, the court made reference to the residual connecting factor of the place where the service provider has its seat. As you know, such residual connecting factor was a finding of the Woodfloor case, where the court stated that the place where the service provider (in that case, a commercial agent) has its seat “will in all likelihood” (or, in “normal practice”) be the place where a substantial part of services are provided… Now, apparently, in the Saey Home case, the portuguese distributor did not provide a substantial part of services in Portugal and thus, in my humble opinion, it is questionable whether recourse to the residual connecting factor in that case is in any case to be deemed appropriate.

        Best regards,

        Ennio Piovesani

  2. #4 by Geert van Calster on 17/05/2018 - 2:15 PM

    Agian a very good point!: these ‘in ordinary practice’ statements are a great point of entry for distinguishing CJEU precedent (e.g. in national litigation).

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