CARRIAGE BY LAND — International carriage of goods by road — Jurisdiction — Goods in transit between Austria and Italy — Consignee assigning rights to English insurers — Consignee’s insurers seeking to be indemnified by carrier’s insurer — Whether carrier’s insurer entitled to declaration of non-liability in England — Carriage of Goods by Road Act 1965 (c 37), Sch, art 31, para 1(a)

Hatzl and another v XL Insurance Co Ltd [2009] EWCA Civ 223; [2009] WLR (D) 99

CA: Rix, Jacob and Lawrence Collins LJJ: 19 March 2009

The word “defendant” in art 31(1)(a) of the Convention on the Contract for the International Carriage of Goods by Road should be interpreted purposively so as to extend to the parties to the contract and to other parties to whom the convention ascribed rights and duties, but not to include an assignee, even if he was also an insurer. An assignee of rights under the convention was to be treated as standing in the shoes of his assignor. He had no different rights to be sued in a particular forum than his assignor.
The Court of Appeal so held allowing an appeal by the defendant, XL Insurance Ltd, from a decision of Judge Simon Brown QC, sitting as a designated mercantile judge in the Birmingham District Registry on 2 July 2008, that because it was ordinarily resident in England, the defendant, as assignee of the consignee’s rights under the convention, was to be treated as a “defendant” under art 31(1)(a) and could be sued within the jurisdiction by the claimants, Emmerich Hatzl and Leopold Baumgartner. The defendant had sought a declaration that it was not liable in England.

LAWRENCE COLLINS LJ said the question on the appeal was whether the provisions of art 31(1)(a) applied only to those who were the natural defendants in a claim under the convention or whether they extended jurisdictional rights to assignees of the natural defendants. There was no agreement between the parties designating a jurisdiction and were it not for the assignment, the English court would have no jurisdiction over the matter. A broad and purposive approach to art 31(1)(a) showed that a purely literal approach was not necessarily appropriate. The article in its context was primarily concerned with jurisdiction in actions between the parties to whom the convention ascribed rights or liabilities. Those parties were the carrier, the sender and the consignee. To extend the meaning of “defendant” as sought by XL would frustrate the purpose of the article. The purpose of the article was to confer jurisdiction on the courts of a country which had some relationship with the dispute. England had no connection with any of the matters in dispute other than that it was the residence of the assignee of the consignee’s rights. If the appeal was dismissed, there would nothing to stop rights of suit being assigned by cargo interests to a party other than an insurer in order to open proceedings in a more favourable jurisdiction.

JACOB and RIX LJJ delivered judgments concurring in the result.

Appearances: Paul Toms (instructed by XL Services UK Ltd) for the defendant; John Kimbell (instructed by Cobbets LLP) for the claimant.

Reported by: John Spencer, barrister