On 4 April 2010 there was a collision in Turkish waters between Odessa Star, owned by Sand Duke, and CMA CGM Verlaine, owned by BSB and time chartered to CMA. BSB and Sand Duke entered into a choice of forum agreement for the Rotterdam Court, after which Sand Duke was summoned by BSB to appear in that court. Sand Duke then submitted an application for limitation of its liability at the same court. In its initial judgment (see CMI78) the Rotterdam Court stated that it had jurisdiction to hear the application. In the claims verification meeting CMA disputed the jurisdiction of the Court, upon which the supervisory judge referred CMA and Sand Duke to claim validation proceedings.

Held: The LLMC 1976 does not contain an express provision on jurisdiction. But art 11 of the Convention does show the way to the person who wishes to limit his liability: limitation is possible ‘with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation’. However, that provision does not state which court has jurisdiction with regard to the action ‘in respect of claims subject to limitation’, which would include the action against Sand Duke brought before the Court of Rotterdam by BSB in May 2010. The jurisdiction with respect to that action has to be determined on the basis of the Brussels I Regulation. Sand Duke and BSB are after all established in EU Member States, while the action also falls within the scope of that regulation on other grounds. A valid choice of forum was agreed by Sand Duke and BSB, which refers exclusively to the Rotterdam Court. That Court would also have had jurisdiction in the absence of a choice of forum on the basis of art 24 of the Brussels I Regulation, because it can be assumed that Sand Duke would in that case also have entered an appearance without contesting the jurisdiction of the Court. According to art 11 of the LLMC 1976 Sand Duke was allowed to establish a limitation fund, and submit an application thereto, with the Court of Rotterdam. 

CMA argues that article 11 of the LLMC 1976, despite this wording, has to be explained and applied in such a way that constituting a fund in this country is not allowed, because other possible jurisdictions, with which the case has closer connections, have higher limits of limitation and  because the choice to bring the claim against the liable ship owner in this country is based on the wish to benefit from the lower limits for limitation, whereas one or more of other creditors would be financially disadvantaged by this, since they would benefit from higher limits. CMA therefore believes that, under those circumstances, the action brought before the Rotterdam Court by BSB against Sand Duke should not be regarded as legal proceedings instituted by one of Sand Duke's opponents. This view of CMA is not correct. The fact that the party who expects to be held liable and therefore wishes to exercise its right to limit its liability should not be able to choose by itself in which State Party it constitutes its limitation fund but has to await the initiative from potential opposing parties, does not mean that these potential opposing parties would be restricted in agreeing on a choice of forum. Nor would it mean that the initiative of the opposing party only counts if a choice is made for a forum with the highest limits for limitation. An interpretation following the criteria of the Vienna Convention on the Law of Treaties 1969 does not lead to such a restriction on the possibility to limit which is offered by the wording of art 11 of the LLMC 1976, the less so since the travaux préparatoires of the convention show that a proposal to incorporate the principle of forum non conveniens was dismissed.

The fact that BSB and Sand Duke have the same hull insurer which has an interest in limitation on the basis of the limits of the LLMC 1976, is not sufficient to conclude that the action started by BSB against Sand Duke should not be regarded as legal proceedings brought before the court on the initiative of one of Sand Duke's opponents within the meaning of art 11 of the LLMC 1976. Bringing an action and/or submitting an application for limitation in this country does not constitute an abuse of rights within the meaning of art 3:13 of the Dutch Civil Code. Even in so far it would be possible to oppose the exercising a right granted by a convention or a regulation on the basis of this national legal concept of abuse of rights, it is held that there was no such abuse in this case. Even if the sole purpose of exercising the right to limit liability would be to benefit from the lower LLMC 1976 limits, this still implies that this is not a case where the exercising of the right served no other goal than to injure another party (ie CMA). Nor is this a case where the right to choose a forum was exercised for a different purpose than for which it was given. Nor is there such disproportionality between, on the one hand, the interest of Sand Duke to apply for limitation in this country and, on the other hand, the interest of CMA that would be affected thereby that Sand Duke should reasonably have refrained from filing the application for limitation of liability.