Swedish Tobacco Duty Goes up in Smoke
The tobacco smokescreen has lifted in Sweden. After a long time of presumptions being made, it is now clear that a road carrier is not obliged to indemnify cargo interests for tobacco duty in connection with theft during a CMR carriage.
In a case from the Högsta Domstolen, the Swedish Supreme Court, a cargo owner had shipped a consignment of cigarettes from the Netherlands to Sweden, contracting a Dutch carrier. The cigarettes were stolen in Sweden, which triggered Swedish tobacco duty.
The first carrier paid the cargo owner the full loss including the value of the goods and the duty. It then claimed an indemnity of the full amount from the performing carrier before the Swedish courts. The question was, therefore, as follows: is the tobacco duty to be paid in addition to the value of the tobacco? Or does the duty form part of the value of the cargo so that payment of the CMR limit of liability settles the duty as well?
The Swedish Supreme Court found that there was no clear picture how this question was to be decided in the countries where it had been brought before the courts.
I some countries court practice was that the carrier was to pay the CMR limit and, in addition, freight, duty and other costs accruing due to the actual events during the carriage. If for example cigarettes are stolen and this triggers tobacco duty in the country where the theft occurred, the carrier must pay tobacco duty in addition to the cargo value.
In other countries the courts had found that only the freight, duty and costs that would arise from the carriage as planned had to be paid. Then it is of no consequence that the goods were stolen and so the tobacco duty is usually not payable.
The Swedish Supreme Court analysed the CMR and concluded that the basis of the convention, with its reverse burden of proof and limit of liability was an attempt at a fair distribution of risks between cargo interests and carriers. In this light, if the (very high) tobacco duty had to be paid as well, it would amount to indemnification of a consequential loss, which is also excluded in the CMR. Finally, a conclusion that the duty was not payable fit better into the CMR’s system.
The Swedish Supreme Court therefore agreed with the two previous instances of court that the defendant carrier was not obliged to pay the tobacco duty.
IUNO’s opinion
This case moves the boundaries in cases concerning high duty. In case of carriage between Denmark and Sweden it is now of great significance whether the case is decided in Denmark or Sweden, as the courts have come to opposite conclusions on this issue. IUNO recommends to both cargo interests and carriers to seek advice as quickly as possible when such a case occurs.
[Högsta Domstolen 14 June 2022 in Case no. T 3379-21]
In a case from the Högsta Domstolen, the Swedish Supreme Court, a cargo owner had shipped a consignment of cigarettes from the Netherlands to Sweden, contracting a Dutch carrier. The cigarettes were stolen in Sweden, which triggered Swedish tobacco duty.
The first carrier paid the cargo owner the full loss including the value of the goods and the duty. It then claimed an indemnity of the full amount from the performing carrier before the Swedish courts. The question was, therefore, as follows: is the tobacco duty to be paid in addition to the value of the tobacco? Or does the duty form part of the value of the cargo so that payment of the CMR limit of liability settles the duty as well?
The Swedish Supreme Court found that there was no clear picture how this question was to be decided in the countries where it had been brought before the courts.
I some countries court practice was that the carrier was to pay the CMR limit and, in addition, freight, duty and other costs accruing due to the actual events during the carriage. If for example cigarettes are stolen and this triggers tobacco duty in the country where the theft occurred, the carrier must pay tobacco duty in addition to the cargo value.
In other countries the courts had found that only the freight, duty and costs that would arise from the carriage as planned had to be paid. Then it is of no consequence that the goods were stolen and so the tobacco duty is usually not payable.
The Swedish Supreme Court analysed the CMR and concluded that the basis of the convention, with its reverse burden of proof and limit of liability was an attempt at a fair distribution of risks between cargo interests and carriers. In this light, if the (very high) tobacco duty had to be paid as well, it would amount to indemnification of a consequential loss, which is also excluded in the CMR. Finally, a conclusion that the duty was not payable fit better into the CMR’s system.
The Swedish Supreme Court therefore agreed with the two previous instances of court that the defendant carrier was not obliged to pay the tobacco duty.
IUNO’s opinion
This case moves the boundaries in cases concerning high duty. In case of carriage between Denmark and Sweden it is now of great significance whether the case is decided in Denmark or Sweden, as the courts have come to opposite conclusions on this issue. IUNO recommends to both cargo interests and carriers to seek advice as quickly as possible when such a case occurs.
[Högsta Domstolen 14 June 2022 in Case no. T 3379-21]
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