The House of Lords has recently considered for the first time some of the provisions of the Convention (known as CMR) scheduled to the Carriage of Goods by Road Act 1965, in the case of James Buchanan & Co. Ltd. v. Babco Forwarding & Shipping (U.K.) Ltd.1

Buchanans contracted with Babco for the carriage of a consignment of whisky from their bonded warehouse in Glasgow to their distributors in Teheran, and it was a term of the contract that it would be governed by CMR. As Lord Salmon remarked in his judgment, the driver must have taken a roundabout route because the consignment was stolen from a lorry park in North Woolwich. Babco did not dispute their liability for the loss, and it is the question of damages which has been argued all the way to the House of Lords.

This has involved detailed consideration of art. 23 of CMR, which provides, so far as material, as follows:

The ex-bonded warehouse price of the whisky to the distributors in Iran would have been about £7,000; in fact the actual selling price was slightly higher and was f.o.b. Felixstowe. However, the loss to Buchanans resulting from the theft of the whisky amounted to about £37,000 in all, including excise duty of about £30,000 which was exigible in the absence of evidence that the whisky had not been consumed domestically. The defendants’ contention was that damages should be limited to the ex-bonded warehouse value—about £7,000, while the plaintiffs sought to recover what they had indisputably lost—about £37,000.

The House of Lords found by a bare majority for the plaintiffs, on the ground that the excise duty was comprehended by the words “and other charges incurred in respect of the carriage of the goods” in art. 23(4). However, the five Lords of Appeal were, as the Court of Appeal had been, unanimous in rejecting the plaintiffs’ alternative argument that the wording of art. 23(1), as amplified by art. 23(2), entitled them to recover the duty as having been comprised within “the value of the goods at the time and place at which they were accepted for carriage.”