TT Talk - CMR - Application of 1978 Protocol confirmed for Russia by Supreme Arbitration Court

Article 23 (3) of CMR 1956 stipulates a liability limit of 25 francs per kilogram of goods lost or damaged. Franc is defined as the gold franc weighing 10/31 of a gramme and being of millesimal fineness 900 . However, 36 of the 51 CMR Member States have also signed the Protocol to the Convention on the Contract for the International Carriage of Goods by Road concluded on 5 July 1978 ( Protocol 1978 ), which introduced the modern liability limit of 8.33 SDR per kilogram.

Neither the Soviet Union nor the Russian Federation has ever signed the Protocol 1978. In spite of this, a number of lower Russian courts have applied the Protocol s liability limit of 8.33 SDR per kilogram. This created a situation of conflicting judgments and legal uncertainty.

On 14 December 2007 the Supreme Arbitration Court of the Russian Federation had the opportunity to rule on the question. It held that the CMR Protocol 1978 did in fact apply in Russia. The court acknowledged that neither the Soviet Union nor the Russian Federation had actually signed the Protocol 1978, but held that the Soviet Union, by signing CMR in 1983, had ratified CMR it in its entire existing form. This rationale was consistent with the need for consistency between the CMR Member States.

The Kaliningrad Arbitration Court had held at first instance that the carrier s liability was limited to 8.33 SDR per kilogram. This meant that a claim for 122,226 rubles (US$ 5015) was limited to 82,060 rubles (US$ 3367).

The Kaliningrad court was overruled by the 13th Arbitration Appeal Court, which instead applied the gold franc value. This meant that the claim for 122,226 rubles was not limited.

The decision of the Arbitration Appeal Court was reversed by the Federal Arbitration Appeal Court for the North West Region (the Cassation Court) which reinstated the SDR 8.33 limit. The Supreme Arbitration Court (at fourth instance) confirmed this finding.

Please note that the Arbitration Courts in the Russian Federation are not arbitration tribunals in the western sense, but specialised commercial courts.

The decision by the Supreme Arbitration Court is binding (under Article 16 of the Arbitration Procedural Code) on all Russian courts and central and local government authorities and is, for practical purposes, unappealable.

Please use the following web link for the full text of the arbitration award by the Supreme Arbitration Court of the Russian Federation of 14 December 2007 (in Russian language):

Staff Author

TT Club