Ruling Says where the Rot sets in European Court

An action brought by the buyer of a damaged consignment of fruit against the carrier of the goods was not an action for breach of contract but an action for negligence or tort within the meaning of the Brussels Convention, the European Court of Justice ruled recently.

The case arose out of proceedings brought by nine insurance companies led by Reunion Europeenne over a damaged cargo of pears from Australia received by the insured, Brambi Fruits, a French company. The insurers attempted to sue the Australian company which issued the bill of lading, the Dutch company which carried the fruit (although it was not named in the bill of lading), and the master of the ship. The fruit had ripened prematurely because the ship's cooling system had failed.

The French court said it had jurisdiction in respect of the Australian shipper but declined jurisdiction over the Dutch carrier and the master. The Paris Court of Appeal confirmed that decision, but the Court of Cassation stayed proceedings pending a ruling from Luxembourg on the Brussels con­vention which covers jurisdiction and the recognition and enforcement of civil and commercial judgments in the European Union.

The Dutch carrier and the master argued that the dispute was 'a matter relating to a contract' under the convention because it was based on the bill of lading.

The Court said that the phrase was to be interpreted independently and could not be taken to refer to how the legal relationship in question was classified by the relevant national law.

Under the convention, the general principle was that the courts of the state in which the defendant was domiciled would have jurisdiction and it was only by way of derogation from that principle in certain cases that a defendant might or must be sued elsewhere.

The Court said the bill of lading did not disclose any contractual relationship between Brambi and the Dutch carrier and the master. The action against them was not therefore a 'matter relating to a contract' within the meaning of the convention. However the action was a matter relating to tort within the meaning of the convention. Therefore the carrier and the master could be sued in the courts of either the place where the damage occurred or the place where the event giving rise to the damage occurred.

In cases such as this involving international transport, the place where the damage occurred could only be the place where the carrier was to deliver the goods, it said. Accordingly, the place where the buyer merely discovered the existence of the damage could not serve to determine the place where the harmful event occurred within the meaning of the convention.

Legal brief

In this international dispute, the Court ruled that the case should be heard where the damage was discovered, in France, where the fruit was delivered. The Court also ruled that the case was not about contract law, but was a tort, technically another branch of the law.

A tort: the object of proceedings in tort is not punishment but compensation or reparation to the plaintiff for the loss or injury caused by the defendant. It is therefore a matter of civil law.

Breach of contract: in contract the duties are fixed by the parties themselves, who impose terms and conditions themselves by their agreement. In tort, on the other hand, the duties are fixed by law (common or statute).

Over to you

1. Imagine you are a buyer of fruit for a large restaurant. The last order you received was rotten and you lost business as a result. After leaving several messages on the phone, a week has passed without any apology or explanation from the supplier. You decide to write a letter of complaint. What details should you include in your letter? What proof can you offer that the fruit was rotten?

2. Work with a partner.

A: You are the buyer. You have not had a reply to your calls and letter for over two weeks. Visit the warehouse and ask to speak to the manager. Explain your story. Threaten to tell your story to the press.

B: You are the manager. This is the first time you have heard about this complaint. You know nothing about a letter. Try to make the customer realize that you need to have proof. Ask for some evidence. Warn A that if they libel the firm, you are prepared to take legal action. But if there is a genuine grievance, of course you will try to make up for the loss. But you need evidence.

 

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