Practice Statement Makes Perfect: The Supreme Court Affirms Buchanan v Babco

• Published date: 16 June 2023
• Law Firm: Quadrant Chambers
• Author: Stewart Buckingham KC, Ben Gardner, John Kimbell KC and Maya Chilaeva

In a leapfrog appeal, JTI Polska Sp Z o.o. and Ors v Jakubowski & Ors [2023] UKSC 19, the Supreme Court was invited to overturn the majority decision of the House of Lords in Buchanan v Babco [1978] AC 141. The Court in that case held that excise duty was recoverable in addition to the value of the goods under Article 23.4 of the CMR Convention, which governs the international carriage of goods by road.

Lord Hamblen, giving the leading judgment, held that the interpretation of Article 23.4 in Buchananwas at least tenable and, as such, there was no basis under the 1996 Practice Statement to overturn that decision. In so doing, the Judge gave short shrift to an earlier suggestion by the Court of Appeal that Buchananshould be confined to its facts: that suggestion "should not have been made and should not be followed".

The Court's decision provides important clarification for the proper interpretation of the CMR Convention, but also helpful guidance for the proper approach to the 1966 Practice Statement and the travaux preparatoires to international conventions.

The decision

It has been clear since 1977 in the UK that senders of cigarettes and alcohol have been entitled to recover their excise duty liability to HMRC as "other charges" under Article 23.4 of the CMR, in addition to the market value of the cigarettes ex duty. This followed from the 3:2 majority decision of the House of Lords in Buchanan, adopting the broad interpretation of Article 23.4 adopted by the French Court rather than the narrow...