CMR: Contracts for the international carriage of goods by road

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Derogation from the Convention

Derogation from the Convention

12.1 Article 41 provides as follows:
  • 1. Subject to the provisions of article 40, 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.
  • 2. In particular, a benefit of insurance in favour of the carrier or any other similar clause, or any clause shifting the burden of proof shall be null and void.
12.2 Article 41 is of fundamental importance, since in effect it means that it is not possible for parties to either decrease or increase the rights and liabilities of parties under a contract for the international carriage of goods by road which is subject to CMR.1 Any attempt to do so will be struck out, although the remainder of the terms of the contract will remain unaffected. This means that both the powerful consumer and the powerful carrier are prevented from dictating onerous terms to the weaker party in the bargain. Equally, it would seem that the terms of Article 41 prevent a consumer or carrier from offering terms more favourable than those contained in the Convention, so that unfair competition by large enterprises is thereby avoided.2 However, there are exceptions where the parties are given freedom of contract within the framework of the Convention. Firstly, Articles 37 and 38, which govern relationships between carriers, are subject to amendment if the parties so desire.3 Secondly, under Article 31 the parties have a limited freedom to select the forum in which disputes are to be adjudicated upon.4 Thirdly, Article 33 permits the parties to settle their disputes by arbitration if they so wish instead of by formal court action, provided that the arbitration agreement specifies that the rules of the Convention be applied.5

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12.3 Apart from these exceptions, Article 41 makes it impossible to avoid the operation of the Convention in any contract which falls within the scope of Article 1.6 The parties cannot therefore increase the liability of the carrier, and thus, by way of example, a contractual provision making the carrier liable for all loss resulting from defective loading or stowage which has been performed by the sender will be null and void.7 Similarly, where a carrier has undertaken to provide the documentation necessary for customs clearance of goods, and delay results from its inadequacy, he will not be liable in negligence for this, as it would constitute a derogation from Article 11(2).8 Conversely, any attempt by a carrier to restrict his liability will equally be null and void.9 However, any matter which is not provided for in CMR will be subject to the relevant domestic law.10 12.4 One area where problems relating to Article 41 are likely to arise is where a forwarder is involved in international road haulage and wishes to rely upon his standard trading conditions to restrict or limit his liability.11 Before the advent of CMR, in most countries the forwarder was free to restrict his liability, but under CMR it is necessary first to consider the precise status of the forwarder under the contract.12 If he is properly to be regarded not as forwarder but as carrier for the purposes of the Convention, then the Convention will mandatorily apply, and any attempt to introduce forwarding conditions into the contract will be null and void to the extent that they conflict with the Convention. There are decisions in most Continental countries on this point.13 Article 41 also precludes a carrier from relying on forwarding conditions for any ancillary operations which are covered by the Convention, such as selecting an operator to unload goods

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where delivery is not possible. Under Article 16(2) the carrier will be responsible for the unloading of the goods in such circumstances and cannot avoid CMR liability.14 12.5 In this country, a number of decisions have involved a consideration of the application of Article 41, invariably in the context of standard trading conditions. Thus in an early example, an attempt by the carrier to rely on the arbitration clause contained in the Nordic Conditions was rejected by the court on the basis of the failure of that clause to comply with Article 33.15 In Eastern Kayam Carpets Ltd. v Eastern United Freight Ltd.,16 forwarders sought to rely on their trading conditions to restrict their liability for having failed to carry out an instruction to deliver the goods only against certain documents. Since the forwarders were held to have contracted as carriers, they were therefore subject to the CMR Convention. However, having held that the instruction in question did not amount to an instruction to collect a “cash on delivery” charge within Article 21, this raised the question of whether the forwarders were therefore entitled to rely on their standard trading conditions, which would have limited their liability in such circumstances. Hirst, J., held that Article 41 rendered the conditions null and void for all purposes, including the case in issue. This may have been expressed rather too widely, since Article 41 does not prevent the parties from agreeing on terms dealing with matters not regulated by CMR, and indeed in a more recent case, coincidentally decided by Hirst, J.’s son, Jonathan Hirst, Q.C., it was held that although the RHA terms could not apply to the international carriage by virtue of Article 41, they were applicable to the period of storage following the termination of the international carriage.17 However, the earlier decision of his father would seem correct insofar as any trading condition which ex facie offended18 the provisions of CMR would automatically be rendered null and void regardless of the issue before the court.19 Similarly, in Noble v The R. H. Group 20 it was held by the Court of Appeal that Article 41 did not render null and void a clause which enabled a carrier to claim an indemnity in respect of its liability for personal injury to its own employee during the course of unloading the vehicle due to its own failure to properly secure the load. It was said that Article 41 does not invalidate provisions of a contract concerning matters which are not regulated by the Convention, and here the clause, on the facts of the case, did not derogate from the carrier’s responsibilities whether under Article 17 or Article 3. The position would have been otherwise if the claim had been in respect of damage to the claimant’s goods. Most recently it was held by the House of Lords in Datec Electronic Holdings Ltd. v United Parcels Service Ltd.21 that the fact that the carrier contracts on the basis that certain types of goods in packages will not be accepted for carriage and may be refused by him does not prevent CMR and, in consequence Article 41, from applying to the contract even though such goods are in fact carried without the carrier’s knowledge. The court

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therefore applied Article 41 to render a further clause excluding the carrier’s liability in such a case null and void. However, the court recognised that the Convention does not supersede all aspects of contractual relationships with carriers, so that it might be arguable that the carrier’s terms permit a cross-claim in respect of losses arising from the fact that non-conforming goods had been shipped without the carrier’s knowledge.22 CMR does not, however, regulate the parties’ agreement on the scope of the carriage to be performed,23 so that in other respects the restriction on acceptable goods can still be operative.24 12.6 As with any alleged contractual term, the initial question of whether that term is properly incorporated can give rise to difficulty. Thus in the case of Lacey’s Footwear (Wholesale) Ltd. v Bowler International Freight Ltd.,25 no less than three different conclusions were reached in the three judgments with regard to the defendants’ standard terms as they applied to a failure on their part to arrange insurance cover. It was held at first instance that the terms were not incorporated, then on appeal it was held by the majority that they did not apply as a matter of construction and by the minority that inadequate notice had been given of the particular term relied upon. It does not appear to have even been argued that Article 41 applied so as to invalidate the conditions in any event.26 12.7 Article 41(2) specifically provides that any clause giving the carrier the benefit of insurance will be void.27 This would in any event seem to fall within the general prohibition in Article 41(1) since if the cargo interest assigns his right to the insurance moneys to the carrier, the carrier is in effect relieved of all liability. However, presumably it was thought necessary to make separate provision because insurance is in many ways a distinct matter from that of the contract of carriage, and there may be attempts to evade the effect of Article 41(1) by way of provision in the contract of insurance between the cargo interest and their insurers, aimed at preventing the insurers from exercising their rights of subrogation. Thus in a Belgian case, a carrier inserted in his conditions of trading a clause which provided that he was not required to pay compensation if the cargo interests had not taken out an insurance policy and that such a policy must provide that the insurer abandoned any right of subrogation against the carrier. Either way, therefore, the carrier could not be claimed from, and it was held that this amounted to a derogation from the Convention under Article 41(2).28 There is also early Belgian authority to the effect that the result is the same even if the carrier does not attempt to obtain such a benefit through his general conditions of contract but where the insurer voluntarily abandons his rights of subrogation in the contract of insurance between the insurer and the cargo interests.29 Although such an interpretation is consistent with the wording of

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Article 41(2), which is not restricted to clauses in the contract of carriage, there is French authority to the contrary based on the view that the contract of insurance is not within the field of application of the Convention. It was therefore held that since the carriers had not influenced the agreement between the cargo interests and their insurers, they would be entitled to benefit from it.30 Given that Article 1 restricts the scope of the Convention to contracts for the carriage of goods, it would seem that the better view is that a provision in a contract of insurance which is wholly independent of the contract of carriage is outside the scope of the application, and that the French decision is therefore to be preferred. Such indeed would now appear to be the position in Belgium, where it has more recently been held by the Cour de Cassation that a clause contained in the contract of insurance between the consignee and his insurer whereby the insurer waived any right of recovery against the carrier was unaffected by Article 41.31 12.8 Article 41(2) also specifically provides that any clause shifting the burden of proof shall be null and void. This has two aspects. Firstly, where CMR makes provision as to the burden of proof, obviously any attempt to alter this would in any case derogate from the Convention and would be covered by the general provision in Article 41(1). Secondly, it is possible that Article 41(2) is relevant where CMR does not make any provision as to the burden of proof. In such a case it is arguable that the mere fact that a burden of proof is placed on a party where none existed before would constitute a derogation from the Convention. The question does not yet appear to have come before the courts in relation to the burden of proof,32 but in terms of general principle, it would seem that if the Convention makes no provision on any particular matter, contractual provision between the parties so as to cover that matter should not amount to derogation from the Convention.33