Should excise duty be recoverable under Article 23(4) of the CMR? A response to JTI Polska Sp Zoo v Jakubowski

Recent court decisions have brought the question of recoverability of excise duty back to the fore in CMR circles. Much has been written about the interpretation of the category of damages that fall within the provision of article 23.4 of “other charges incurred in respect of the carriage of the goods”. The narrow and broad interpretations have been elaborated on in great depth in these works, as well as in the recent decision of the UK Supreme Court in JTI Polska Sp Zoo v Jakubowski. Despite the work that has been expended on this topic, no uniformity has been achieved amongst contracting states and the question whether excise duty is recoverable still depends on the jurisdiction deciding the matter. This has not changed, despite the recent Supreme Court decisions. Therefore, due to lack of uniformity in interpretation of the CMR convention on this point, it remains up to the national courts deciding each case at hand to seek the appropriate solution by interpretation.

This article proffers that the solution to the question on interpretation of “other charges” of article 23.4 of the CMR is not to ask: “Is excise duty recoverable?” but instead to ask: “Should excise duty be recoverable?”. This opens a pathway to engage in a systematic interpretation of the provision in light of the liability and limitation regime of transport conventions of which the CMR convention is but one. It will be seen that the core principles of the liability regimes throughout the carriage conventions are predictability and insurability of the exposure of the carrier and the delineation between the different business models and earning capacities of carriers and those of cargo interests . Excise duty as a tax on goods which have detrimental effect on public health and the potential to cause social harm should remain firmly on the cargo interests as the party who is benefitting from the goods’ nature.