Forum shopping yields rewards: English Supreme Court's ruling on CMR transport

October 2023

In the case of JTI et al. v. Jakubowski et al., dated June 14, 2023,[1] the Supreme Court of the United Kingdom delivered a significant verdict addressing whether, under the CMR Convention, a carrier is obliged to compensate without limitation for uncleared excise duties. The outcome starkly contrasts with the Dutch interpretation of the CMR Convention on such matters. This further underscores the potential benefits of forum shopping in cases involving CMR transport.

This case centred around the following facts: JTI had been tasked by Jakubowski to transport a consignment of cigarettes from Poland to England by road, with the CMR Convention governing the transport. While the truck driver's vehicle was parked at a service station along the motorway in England, thieves absconded with 289 crates of cigarettes, with an estimated market value of £72,512. Due to the theft, the T-1 documents could not be cleared. Therefore, Jakubowski was obliged to pay £449,557 in excise duties.

Subsequently, Jakubowski sought compensation from carrier JTI for the excise duties under Article 23(4) of the CMR Convention. This article stipulates that, in the event of loss of goods, a party with an interest in the cargo may claim not only the value of the goods but also "the carriage charges, Customs duties and other charges incurred in respect of the carriage of the goods […] but no further damages shall be payable."

Across the different CMR member states there are roughly two interpretations of "other charges incurred in respect of the carriage of the goods". Member states that adhere to the 'broad interpretation' are of the opinion that article 23(4) CMR Convention allows for claims to encompass all import duties or excise duties incurred due to the inability to clear documents. Member states that have adopted the broad interpretation include Denmark, Italy, France, Belgium, the Czech Republic and Lithuania.

According to the member states that adhere to the 'narrow interpretation,' compensation is only due for costs directly associated with the transport as it was supposed to be conducted. As a result, those member states do not consider import duties or excise duties resulting from the inability to clear documents to fall under the scope of article 23(4) CMR Convention. Other countries that have adopted the narrow interpretation include Germany, Sweden and Austria.

In this recent ruling, the Supreme Court explicitly endorsed the broad interpretation. It follows that JTI is required to reimburse Jakubowski for the excise duties without limitation. This stance sharply contrasts with the prevailing doctrine in the Netherlands, where, since Phillip Morris/Van der Graaf II[2], it has been held that these costs arise from the loss of goods and are not connected to the transport itself.

In other words, had JTI been able to litigate this case in the Netherlands, it would likely have saved JTI around half a million pounds in excise duties. This illustrates the substantial disparities between CMR member states and underscores the significant advantages that can be gained through forum shopping.

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[1] JTI Polska Sp. Z o.o. and others v Jakubowski and others [2023] UKSC 19 On appeal from: [2021] EWHC 1465 (Comm) (“JTI”).
[2] Dutch Supreme Court 14 July 2006, ECLI:NL:HR:2006:AW3041 (Philip Morris/Van der Graaf II).