International carriage of goods by vehicle forms an integral part of Bulgarian and European economy, with close to 12 700 transport companies employing over 42 000 people in the sector in 2019. This type of services is far from limited to simply transporting goods from point A to point B, however. The legal framework of automobile transport is incredibly diverse, with a number of applicable domestic, European and international legal acts, among which the Bulgarian Code of Private International Law, the Convention on the Contract for the International Carriage of Goods by Road (CMR), Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters etc.
Such overlay of legislation is representative of services which are typically international in character (such as carriage of goods) where the international framework became necessary (and was adopted) way before the EU was granted competence over such matters. This invariably leads to inconsistencies in the application of norms, including the applicable law and competent courts in cases where the parties to the contract for carriage of goods have neglected to explicitly agree on these matters.
I. Competent court:
The competent court is determined on the basis of Regulation (EU) No 1215/2012 and the CMR Convention which provide the party with virtually identical options.
Firstly, both documents allow the parties to choose the competent court by mutual consent (Art. 31, para. 1 of the CMR Convention and Art. 25 of the Regulation). The difference in regimes is that the choice of court is not exclusive under the CMR Convention, while under the Regulation it is exclusive unless the parties agree otherwise. The other rules for determining the competent court are applies insofar as the parties have reached an agreement regarding the competent court.
Secondly, in accordance with established court practice if both Regulation (EU) No. 1215/2012 and the CMR are applicable to a particular dispute, a Member State can apply the jurisdiction rules set out in art. 31, para. 1 of CMR pursuant to Art. 71, para. 1 of the Regulation, as well as the common rules of the Regulation (Order No. 1137 of 25.02.2020 on private commercial case No. 2812/2019 on the docket of Commercial Division of the Sofia City Court, VI-4 bench which cites a Judgment of the Court of the EU (First Chamber) of September 4 2014 in the Nickel & Goeldner Spedition GmbH v „Kintra“ UAB case).
Art. 31 of the CMR Convention (which was cited in the case(s)) prescribes competence to the following courts: 1. Chosen by mutual consent by the parties; 2. Where the defendant is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made; or 3. the place where the goods were taken over by the carrier or the place designated for delivery is situated. On the other hand, Art. 7, para. 1 and Art. 4 of Regulation (EU) 1215/2012 allow for the seizing of the courts in 1. the place in a Member State where, under the contract, the services were provided or should have been provided; 2. The domicile of the respondent; 3. the place where the branch, agency or other establishment which concluded the contract is situated. Obviously, the competent courts under the CMR convention match entirely with the ones acceptable under the Regulation – conflict between both documents exists only in theory, while in practice the claimants have the same choice of competent courts.
II. Applicable law:
The acts determining the applicable law to carriage of goods by vehicle within the EU are Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) and the CMR Convention. As evident by the name, the Regulation establishes the applicable law to all treaty obligations with particular attention to contracts for carriage of goods in Art. 5. Regardless, Rome I’s Art. 25 explicitly states that it „shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-of-law rules relating to contractual obligations.“ Thus the CMR Convention will be applied to the rules of entering into contracts, liability for damages and shortages, while Rome I will determine the applicable law for matters falling outside the scope of the CMR Convention (Judgment No. 95141 from 18.04.2017 in civil case No. 54586/2015 on the docket of the Sofia Regional Court; Decision No. 54 from 12.02.2015 in commercial case No. 81/2013 of the Burgas District Court). The Austrian Supreme Court also made the same findings..
It should be noted that Rome I elevates the choice of law to a fundamental principle coupled with the possibility that parties are allowed to subsequently change the applicable law by mutual consent. The choice of law is subject to limitations in one particular aspect – in cases where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen (for example where a Bulgarian and a Spanish company decide that Swedish law will be applicable to carriage of goods from France to the Czech Republic).
Regarding in particular the contracts for carriage of goods, Art. 5, para. 1 of Rome I provides that in the absence of explicit agreement, the law applicable shall be the law of the country of habitual residence of the carrier, provided that the place of receipt or the place of delivery or the habitual residence of the consignor is also situated in that country. If those requirements are not met, the law of the country where the place of delivery as agreed by the parties is situated shall apply (Czech law in the example given above).
Para. 3 of the same articles provides that where it is clear from all the circumstances of the case that the contract, in the absence of a choice of law, is manifestly more closely connected with a country other than the forementioned one, the law of that other country shall apply.
Evidently, Rome I relies often on the parties’ habitual residence to determine the applicable law. Thus, Art. 19 contains a definition of the notion – for legal persons in particular the habitual residence is the place of central administration, but where the contract is concluded in the course of the operations of a branch, agency or any other establishment, or if, under the contract, performance is the responsibility of such a branch, agency or establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence.
III. Issues of the existing legal framework:
Given the increasingly integrated intra-EU market for services, the legal framework causes seemingly illogical cases where the competent court must apply the CMR Convention together with the domestic law of another Member State. This situation is, however, far from foreign to traditional private international law, which generally provides the foundation for European legislation. In these cases the Bulgarian courts can refer to the Ministry of Justice or other administrations and to request positions by experts and specialized institutes (in accordance with Art. 43, para. 1 of the Bulgarian Private International Law Code). What is more, Art. 42, paras. 2-3 of the Code empower the parties with the right and duty to assist the court in determining what the foreign legislation contains. This guarantees that the case will be duly decided in accordance with a law which by definition is foreign to the deciding court.
Obretenovi Law Firm’s team includes lawyers with German, Russian, Spanish and English as working languages which allows us to freely advise our clients in the application of foreign legislation in carriage cases.