The plaintiff, a Germany company, sold 1,000 tons of fertiliser on CIF Amay terms to a Belgian company on 25 October 2018 at a price of EUR 208,000. The plaintiff commissioned the Belgian defendant carrier to transport the goods by inland waterway from Antwerp to Amay. Clause 5 of the carriage contract provided for the exclusive application of German law and Mannheim jurisdiction.

The defendant carrier loaded the cargo in Antwerp on 12 November 2018 in proper condition. Due to a collision with a convoy on the Albert Canal in Belgium on 13 November 2018, the transport ship sank along with its cargo. As a result, water entered the ship's holds and liquified the fertiliser. The plaintiff agreed with the buyer of the fertiliser to cancel the contract of sale.

The defendant carrier applied to the Antwerp Company Court for the establishment of a limitation of liability fund under Belgian law for the purpose of global liability limitation, naming the plaintiff as a possible creditor, among other things. The Antwerp Company Court granted the application by order of 14 November 2018. The plaintiff made no claims against this liability fund.

Instead, the plaintiff sued the defendant in the District Court of Mannheim for payment of an amount of EUR 208,000 plus interest. The District Court upheld the action. The Higher Regional Court rejected the defendant's appeal and ordered the defendant to pay a partial amount of EUR 188,000 plus interest to the plaintiff's transport insurer (OLG Karlsruhe, RdTW 2021, 309).

The defendant appealed to the Federal Supreme Court.

Held: The judgment of the Karlsruhe Higher Regional Court, 15th Civil Senate, of 31 March 2021 is reversed. The matter is referred back to the Court for a new hearing and decision.

The Court below assumed that the application for the establishment of a limitation of liability fund in Belgium was pending the determination of the existing liability claim for damages, since the application to limit damages and the liability claim for damages relate to different matters in dispute. It is true that the decision to set up the liability fund is a decision that is to be recognised in all Member States in accordance with art 36 of the Brussels Ia Regulation (the Regulation). According to the defendant's submissions, the establishment of a limitation of liability fund under Belgian law means that no action for performance of the carriage contract can be brought, but only that the reason for, and the amount of, the claim can be determined. However, it can only be clarified in a contentious process outside of the distribution proceedings whether the defendant relies on limitation of liability according to §§ 4-5m BinSchG or according to the LLMC 1976 (Federal Law Gazette 1986 II p 786) in the version of the 1996 Protocol (Federal Law Gazette 2000 II p 790, hereinafter LondonHBÜ). There is no room for this in the distribution process, because this presupposes limited liability. There is no exclusive relationship between the filing of claims in the distribution proceedings and the assertion of unlimited liability in the disputed proceedings. According to the case law of this Court, a legal dispute between a creditor and the shipowner because of a claim arising from the use of the ship can be continued, despite the opening of the maritime law distribution procedure, if the creditor claims the unlimited liability of the shipowner.

The plaintiff claims that the defendant has unlimited liability. This is for the trial Court to decide. The plaintiff argues that the parties had effectively agreed on German law and had ruled out the possibility of a limitation of liability under the provisions of inland navigation law, so that the defendant was prevented from invoking a possible limitation of liability under Belgian law. In view of this, there is no need to clarify whether the defendant is a charterer and whether the liability fund also works in its favour, nor what legal consequences this has under Belgian law. This assessment does not stand up to legal scrutiny.

However, the Court below rightly assumed that the admissibility of the action is not in conflict with art 29.1 of the Regulation. According to the Regulation, a court which is seised later stays proceedings ex officio if actions relating to the same claim between the same parties are pending before courts in different Member States. The proceedings before the Antwerp Company Court and the present legal dispute do not meet these requirements. The proceedings for the establishment of a liability fund before the Company Court of Antwerp and the present action for damages do not concern the same subject matter. While the liability action for damages aims to make a claim against the defendant, the application for the establishment of a liability fund is intended to limit the defendant's liability, if it should be triggered (cf Maersk Olie & Gas, judgment of 14 October 2004, C-39/02 [2004] ECR I-9686, IPRax 2006, 262 [35] (CMI2211)).

However, contrary to art 36.1 of the Regulation, the Court below did not make any findings on Belgian law justifying its conclusion not to attach any importance to the judicial decisions of the Antwerp Company Court. According to art 36.1 of the Regulation, decisions made in a Member State are recognised in the other Member States without the need for a special procedure. According to the definition in art 2.a of the Regulation, a 'decision' means any decision given by a court of a Member State, whatever its title such as judgment, order, order for payment, or writ of execution, including the order of a court officer fixing costs. The decision to set up a liability fund represents such a decision to be recognised (see Maersk Olie & Gas [47, 52]). This is not disputed in the appeal proceedings. According to the case law of the CJEU, the effects of a decision that are due to it in the State in whose sovereign territory it was issued must be settled by recognition in accordance with art 36.1. This also applies to decisions to set up a liability limitation fund under shipping law. The question of what procedural effects a decision to be recognised has in the State in whose territory it was made can only be answered according to the law of that State.

On the basis of these standards, it must be determined, if necessary with the help of experts, which effects the decision to be recognised has in the State in which it was made. Since in this case a Belgian court ruled on the establishment of the liability fund and extended the effect of the establishment of the liability fund to the defendant by a further decision, it must be assessed under Belgian law whether the establishment of the liability fund blocks a claim for performance by a creditor against a person protected by the fund. The Court below did not take these standards into account. Rather, it incorrectly referred to German law rather than Belgian law.

Submitting an expert opinion from a Belgian lawyer, the defendant asserted that the establishment of a liability fund under Belgian law had the effect that claims for performance against the debtor could no longer be brought, but rather that the creditor had to register claims with the liability fund in order for its claims to be satisfied from the distribution. According to Belgian law, only an action for a declaratory judgment is possible, on the basis of which a claim between the parties is established in terms of the merits and the amount. The Court below wrongly did not investigate this argument.

The agreement of the parties to apply German law to their contract does not change the fact that procedural effects must be attributed to the establishment of the limitation of liability fund by the Antwerp Company Court. The decision of the Antwerp Company Court covers the plaintiff's claim at issue here.