On 5 April 2007, a Greek-owned and flagged cruise ship ran aground in shallow waters not indicated on the map while en route to its berthing point in the caldera of Santorini. The grounding caused a breach of its hull, and it lost power. It had to be towed for passengers to exit the vessel. The cruise ship was then towed to an area specifically designated for grounding or anchorage of the vessels in case of danger. The crew left the vessel. Thus, no-one was on board when the tug boat tried to attach the vessel and tow it towards the shore to avoid its sinking. As a consequence, the vessel sank.

The Greek State initiated civil proceedings against the shipowner, the managers, the captain, and the insurance company of the cruise ship. The first instance Court awarded the Greek State: 1) EUR 5 million for its non-pecuniary damage for pollution from the shipwreck, which should be jointly paid by the four first defendants; and 2) EUR 1 million for the damage suffered by it as a result of the defamatory act committed against it, which should be paid jointly by the first three defendants. The Court also decided that it did not have international jurisdiction regarding the fifth defendant. Both the Greek State and the first four defendants appealed the decision.

The defendants argued, among other things, that their liability should be limited pursuant to the LLMC 1976.

The Greek State appealed, asking for EUR 7 million as compensation for damage due to the environmental distraction of a unique habitat, its expenses for cleaning up the area, and for the damage to its reputation.

Held: The Court of Appeal accepts the sole appeal ground from the Greek State and the tenth reason for appeal from the defendants, rejecting the remaining eleven reasons. The Greek State is awarded EUR 6 million for its damage for the pollution from the shipwreck, to be paid by all the four defendants jointly. No defamatory act was committed against the Greek State, therefore the Court annuls the sum of EUR 1 million awarded by the first instance Court.

The Court of Appeal reviewed arts 1.1, 1.2, 1.4, 1.5, 1.7, 2, 2.1.a, 4, 6, 7, 11, 11.3, 13.1, and 15 of the LLMC 1976/1996. The constitution of a limitation fund is effected, and the legal consequences of this occur, by virtue of the public deposit of money or a guarantee and the declaration by a debtor that it wishes to limit its liability. The distribution of a constituted liability fund, as well as the satisfaction of the claimants by exhausting the liability limit where limitation is invoked, constitute an extinguishing reason for the debt, while if the person entitled to invoke the limitation of liability has a counterclaim against the creditor from the same incident, first the claims on both sides are set off, and then the limitation of liability takes up the remaining balance. The principle of concurrent satisfaction applies to all claims secured by a maritime lien. The Court concluded that the defendants inadmissibly and vaguely requested the application of the Convention to limit their liability, but did not claim that the proper procedure for the constitution of a limitation fund was followed. Furthermore, the Greek State's claim for compensation for non-material damage is not included in art 2 of the LLMC 1976/1996, whichrestrictively defines the claims which are subject to liability limitation. The first instance Court thus correctly applied the law.

In order to compensate for the moral damage suffered by the legal person of the Greek State, on the basis of all the evidence and taking into account the circumstances in which the tort was committed - a shipwreck for which the shipowner's servants and financial manager were solely responsible, and the subsequent conduct of the shipowner and its managers through its managing director, which contributed to a shipwreck in the port of the country's most important tourist destination without the possibility of recovery, with consequences that will continue for 420 years, and the solid economic and social situation of the defendants, the Court considers that the amount of the sum to be paid in compensation for the non-material damage to the Greek State resulting from the environmental destruction of a unique habitat, and in accordance with the principle of proportionality, amounts to EUR 6 million, rather than the EUR 4 million [sic: EUR 6 million] which was decided by the first instance judgment.