The Decision of the Court
In Hatzl v XL Insurance Co Limited [2009] All ER 212, the Court of Appeal considered the question of whether the English Court had jurisdiction to hear the claimant carrier's claim for negative declaratory relief. The only connection with England was the fact that the defendant, the subrogated cargo insurers, had their principal place of business in England. The claim itself arose out of the loss of goods carried between Austria and Italy, the consignor and carrier were Austrian and the consignee was Italian. On the face of it the only jurisdictions available under Art 31 CMR were Austria and Italy.
The Claimant argued that the word "defendant" in Art 31, should include not only the carrier, the consignee and consignor, but also any assignee of those parties, including insurers who were assignees under rights of subrogation, which on the facts of the case it was argued gave the English Court jurisdiction.
The Court agreed with the defendant's contrary argument that when construing an international convention a purposive approach must be adopted, which led to the conclusion that assignees (including subrogated cargo insurers) are not included within the expression "the defendant".
Commercial Impact
The Court's decision, both from a legal and commercial position, appears to be the correct one. Had the contrary decision been reached, it could potentially have resulted in a ridiculous situation where the parties to a dispute could simply assign their rights to parties based in more favourable jurisdictions.
The case simply clarifies the jurisdictions available for dealing with claims and has effectively and sensibly closed the door to further avenues of forum shopping. The decision provides certainty for parties to contracts of carriage and their insurers.
HFW Tip
If parties are keen to secure an exclusive jurisdiction for resolving disputes they should ensure that the contract contains an effective arbitration clause in accordance with Art 33 CMR.
In any claim where the issues involved are particularly complicated or where the sums in dispute are significant, parties should always make a very early assessment of the jurisdictions available to them and seek appropriate advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
