Lloyd's Maritime and Commercial Law Quarterly
THE INTERPRETATION OF CMR IN THE ENGLISH COURTS
Dr. D. J. Hill.
Although the Convention for the International Carriage of Goods by Road (CMR) came into operation in the United Kingdom in 1967, few disputes to date have actually come to court. Now two cases have at last come before the Court of Appeal.1
In the case of James Buchanan & Co. Ltd. v. Babco Forwarding & Shipping (U.K.) Ltd., the facts were that the plaintiffs, who were whisky distillers, agreed to sell a shipment of whisky to Iranian buyers. The whisky was sold on f.o.b. terms and was to be shipped from Felixstowe in a container. The container was loaded ex bonded warehouse in Glasgow on a box trailer belonging to the defendants for onward carriage to Felixstowe. The shipment was to be carried by road from Rotterdam to Teheran. Unfortunately, owing to a servant of the defendant leaving the load unaccompanied over the week-end in North Woolwich, the whisky was stolen and not recovered. The defendant did not dispute his liability for the loss. The sole question before the court was the quantum of damage. As the whisky had been stolen in the U.K. the Revenue authorities claimed excise duty from the plaintiffs, and the latter paid this as they were bound to do by law. If the whisky had been successfully exported no such duty would have been payable. The f.o.b. value of the whisky was approximately £7,000 and the excise duty almost £30,000.
It was not disputed that CMR was applicable in this case as the carriage had been undertaken subject to “CMR Conditions.” It was also agreed that if the matter had been decided at common law the defendant would have been liable for the full amount of the excise duty. Under CMR the matter had to be decided under art. 23, which provides as follows:—
Article 23(1). This states that “Compensation shall be calculated by reference to the value of the goods at the place and time at which they were accepted for carriage.”
Article 23(2). This states that “The value of the goods shall be fixed according to the commodity exchange price, or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality.”
Article 23(4). This states that “In addition, the carriage charges, Customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss, but no further damages shall be payable.”
The first question the court had to decide was how to establish the actual value of the goods. There was no recognised “commodity exchange price” for whisky in Glasgow, nor did the court consider that there was any “current market price” for whisky ex bonded warehouse, Glasgow (per Roskill, L.J.). The value of the goods had therefore to be fixed “by reference to the normal value of goods of the same kind
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