The Finnish Supreme Court has provided a precedence in a transportation matter regarding jurisdiction of Finnish courts. The case has been ongoing for years. Now the European Court of Justice has also provided a preliminary ruling in this case regarding interpretation of the Brussels I Regulation.
In the case a company A had agreed with a carrier B regarding carriage of a machine from Finland to UK. Firstly, the machine had been carried by road within Finland from inland location to a harbour. Secondly, the machine had been driven at the Finnish harbour by using its own engine to the loading vessel. Thirdly, after the sea voyage the machine was loaded to a lorry in the UK. Finally, the machine had disappeared during a road carriage in England. The case was filed in Finland in the court having jurisdiction over the place of dispatch. Jurisdiction of the Finnish court was disputed in the matter.
The Finnish Supreme Court judged in the precedence that the carriage within UK did not fall under the applicability of the CMR Convention. Neither, were the Finnish Road Transport Acts’ rules regarding international transportation applicable to it. Therefore, the rules enacting jurisdiction under the above-mentioned legislation did not apply. Furthermore, it was not proven when presenting the case in front of the court that the parties had agreed on jurisdiction.
In the precedence the Finnish Supreme Court confirmed that the Finnish District Court having jurisdiction over the place of dispatch may review the matter under the Brussels I Regulation Article 5 paragraph 1. The precedence is based on the requirement of predictability which requires that the court before which the proceedings may be brought is that of dispatch or delivery according to the interpretation of the Brussels I Convention. This view corresponds to the European Court of Justice preliminary ruling provided in the matter and herein below reviewed in more detail.
First of all, we point out that in the matter Brussels I Regulation referred to is that of [(EC) No 44/2001] which is not currently valid anymore.
Secondly, the Finnish Supreme Court argued that as enacted in the Brussels I Regulation Article 71 paragraph 1, the Finnish Supreme Court can apply rules of CMR Convention regarding jurisdiction, if applicable. The wording of the Brussels I Regulation Article 71 paragraph 1 is as following:
“This Regulation shall not affect any conventions to which the Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.”
Furthermore, the Finnish Supreme Court stated that the CMR Convention is such convention as indicated in the Article 71. Moreover, the case law of European Court of Justice confirms that the domestic court can apply directly CRM Convention and its article 31 paragraph 1 enacting jurisdiction, when applicable (judgement 4.9.2014, Nickel & Goeldner Spedition, C-157/13, EU:C:2014:2145).
After thorough review of the matter the Finnish Supreme Court concluded that the first part of the carriage had ended at the port in Finland where the machine was loaded to the vessel by using the carried machine’s own engine.
Furthermore, the Finnish Supreme Court argued that the rules of CMR Convention regarding international carriage were not applicable to the part of carriage within UK. Moreover, the Finnish Transport Act corresponding to the CMR Convention is not applicable in the matter either. Therefore, the rules of these legislations regarding jurisdiction cannot be applied in the matter.
Finally, the Finnish Supreme Court concluded that the Brussels I Regulation is applicable and therefore enacts jurisdiction in the matter.
The Finnish Supreme Court presented clarifying question to the European Court of Justice. The European Court of Justice was inquired to present answer to the following question:
“Whether the second indent of Article 5(1)(b) of Regulation No 44/2001 must be interpreted as meaning that, in the context of a contract for the carriage of goods between Member States in several stages and by a number of means of transport, such as that at issue in the main proceedings, both the place of dispatch and the place of delivery of the goods constitute places where transport services are provided, for the purposes of that indent.”
The European Court of Justice provided the following answer to the question (decision C-88/17, EU:C:2018:558):
“The second indent of Article 5(1)(b) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that, in the context of a contract for the carriage of goods between Member States in several stages, with stops, and by a number of means of transport, such as that at issue in the main proceedings, both the place of dispatch and the place of delivery of the goods constitute places where transport services are provided, for the purposes of that indent.”
Moreover, the European Court of Justice argued in the preliminary ruling that the solution confirmed by the court complies with the requirement of predictability, since it enables both the applicant and the defendant to identify the courts of the places, specified in the contract for carriage, of dispatch and delivery of the goods as the courts before which proceedings may be brought (see, to that effect, judgment of 4 September 2014, Nickel & Goeldner Spedition, C‑157/13, EU:C:2014:2145, paragraph 41) as the European Court of Justice stated in the paragraph 24 of the ruling.
The Finnish Supreme Court argued in its precedence based on the interpretation of the Brussels I Convention that in the matter at hand, both the place of dispatch and the place of delivery of the goods, constitute places where transport services are provided in the case at hand.
Therefore, as the matter was filed in the first place to the Finnish District Court having jurisdiction over the place of dispatch the Finnish District Court had jurisdiction over the proceeding brought to it. Furthermore, the Appeal Courts decision in the matter was abolished. Having confirmed that, the Finnish Supreme Court returned the matter to the Appeal Court for a hearing.
For the sake of clarity, we point out that the matter was decided by five Supreme Court Justices including the President. The precedence was unanimous decision.
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We recommend that at the time of drafting and negotiation a contract the parties should also focus on contractual issues regarding dispute resolution and jurisdiction. Earlier in our article we pointed out that a well drafted agreement can save substantial amount of money and at the same time limit legal risks. This is essential in respect of international agreements where choice of law and jurisdiction clauses can become at the time of dispute extremely important and cost dearly if not given thorough thought at the time of drafting.
LKOS Law Office’s lawyers are available to assist and to clarify any questions you may have regarding the above precedence or your current business law issues. Please feel free to contact our Specialist Partner Oscari Seppälä in respect to international trade or transport law matters.
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*This article is for general information purposes only and does not constitute a legal advice.