This was a reference for a preliminary ruling relating to the interpretation of the Brussels Convention. This reference was made regarding a dispute between Maersk Olie & Gas A/S (Maersk) and the partnership of Mr M de Haan and Mr W de Boer (the shipowners) concerning an action for damages in respect of damage allegedly caused to underwater pipelines in the North Sea by a trawler belonging to the shipowners.

Article 1.1 of the LLMC 1957 provides that the owner of a sea-going ship may limit its liability to a specified amount in respect of one of the claims there listed, unless the occurrence giving rise to the claim resulted from the actual fault of the owner. The claims listed include, under art 1.1.b, damage to any property caused by the act, neglect or default of any person on board the ship in connection with the navigation thereof.

Under art 3.1 of the Convention, the amount to which liability may be limited is calculated according to the ship's tonnage and will vary depending on the nature of the damage caused. Thus, in the case where the harmful event has resulted in damage only to property, the amount to which the shipowner may limit its liability corresponds to 1,000 francs Poincaré for each tonne of the ship’s tonnage.

In the case where the aggregate of the claims resulting from the same harmful event exceeds the limits of liability as thus defined, arts 2.2 and 2.3 of the Convention provide that a fund, corresponding to that limit, may be constituted for the purpose of being available only for the payment of claims in respect of which limitation of liability may be invoked. Article 3.2 provides that this fund is to be distributed 'among the claimants … in proportion to the amounts of their established claims'.

Article 1.7 of the Convention provides: 'The act of invoking limitation of liability shall not constitute an admission of liability'.

Article 4 of the Convention provides as follows: 'the rules relating to the constitution and distribution of the limitation fund, if any, and all rules of procedure shall be governed by the national law of the State in which the fund is constituted'.

The Netherlands was bound by the LLMC 1957 at the time of the events in issue in the main proceedings.

According to its Preamble, the purpose of the Brussels Convention is to facilitate the reciprocal recognition and enforcement of judgments of courts or tribunals, and to strengthen in the Community the legal protection of persons therein established. The Preamble also states that it is necessary for that purpose to determine the international jurisdiction of the courts of the Contracting States.

Article 2 of the Brussels Convention lays down the general rule that jurisdiction is vested in the courts of the State in which the defendant is domiciled. Article 5 of the Convention, however, provides that, 'in matters relating to tort, delict or quasi-delict', the defendant may be sued 'in the courts for the place where the harmful event occurred'.

Article 6.a of the Brussels Convention adds:

Where by virtue of this Convention a court of a Contracting State has jurisdiction in actions relating to liability from the use or operation of a ship, that court, or any other court substituted for this purpose by the internal law of that State, shall also have jurisdiction over claims for limitation of such liability.

The Brussels Convention also seeks to prevent conflicting decisions being delivered. Thus, art 21, dealing with lis pendens, provides:

Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. A court which would be required to decline jurisdiction may stay its proceedings if the jurisdiction of the other court is contested.

Article 22 of the Brussels Convention provides as follows:

Where related actions are brought in the courts of different Contracting States, any court other than the court first seised may, while the actions are pending at first instance, stay its proceedings. A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

With regard to recognition, art 25 of the Convention states as follows:

For the purposes of this Convention, 'judgment' means any judgment given by a court or tribunal of a Contracting State, whatever the judgment may be called, including a decree, order, decision or writ of execution, as well as the determination of costs or expenses by an officer of the court.

The first para of art 26 of the Brussels Convention provides: 'A judgment given in a Contracting State shall be recognised in the other Contracting States without any special procedure being required.'

In May 1985, Maersk laid oil and gas pipelines in the North Sea. In the course of June 1985, a trawler belonging to the shipowners was fishing in the area in which those pipelines had been laid. Maersk established that the pipelines had been damaged. Maersk informed the shipowners that it held them responsible for that damage.

On 23 April 1987, the shipowners lodged with the Arrondissementsrechtbank (District Court) of Groningen (the Netherlands), the place in which their vessel was registered, an application for limitation of their liability. That Court made an order on 27 May 1987, provisionally fixing that limitation at NLG 52,417.40 and enjoining the shipowners to lodge that sum together with NLG 10,000 to cover the legal costs.

On 20 June 1987, Maersk brought an action for damages against the shipowners before the Vestre Landsret (Western Regional Court of Denmark). On 24 June 1987, Maersk appealed to the Gerechtshof (Court of Appeal) Leeuwarden (Netherlands) against the decision of the Arrondissementsrechtbank Groningen on the ground that the latter Court did not have jurisdiction. On 6 January 1988, the Gerechtshof upheld the decision delivered at first instance. Maersk did not lodge an appeal to have the decision of the Gerechtshof quashed.

By registered letter of 1 February 1988, the administrator notified Maersk's lawyer of the order of the Arrondissementsrechtbank establishing the liability limitation fund and, by letter of 25 April 1988, requested Maersk to submit its claim. Maersk did not accede to that request, choosing instead to pursue its action before the Danish courts. In the absence of any claims submitted by injured parties, the sum lodged with the Arrondissementsrechtbank in the Netherlands was returned to the shipowners in December 1988.

By decision of 27 April 1988, the Vestre Landsret held that the rulings of the Netherlands Courts of 27 May 1987 and 6 January 1988 had to be treated as being judgments within the terms of art 25 of the Brussels Convention in view of the fact that Maersk had had the opportunity to defend its position during the corresponding proceedings. It took the view that the proceedings brought in the Netherlands and in Denmark were between the same parties, had the same subject-matter and related to the same cause of action, and that this finding could not be invalidated by the fact that Maersk had not defended its interests in the proceedings relating to the limitation of liability. The Vestre Landsret thus ruled that the conditions governing a finding of lis pendens pursuant to art 21 of the Brussels Convention had been satisfied. The Vestre Landsret, acting pursuant to the second para of art 21 of the Brussels Convention, declined jurisdiction in favour of the Netherlands courts.

Maersk appealed to the Højesteret (Danish Supreme Court). That Court decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:

1. Does a procedure to establish a liability limitation fund pursuant to an application by a shipowner under the LLMC 1957 constitute proceedings within the meaning of art 21 of the Brussels Convention where it is evident from the application, where the relevant names are stated, who might be affected thereby as a potential injured party?

2. Is an order to establish a liability limitation fund under the Netherlands procedural rules a judgment within the meaning of art 25 of the Brussels Convention?

3. Can a limitation fund which was established by a Netherlands Court pursuant to Netherlands procedural rules then in force without prior service on an affected claimant now be denied recognition in another Member State in relation to the claimant concerned pursuant to art 27(2) of the Brussels Convention?

4. If Question 3 is answered in the affirmative, is the claimant concerned deprived of its right to rely on art 27(2) by virtue of the fact that in the Member State which established the limitation fund it raised the matter of jurisdiction before a higher court without having previously objected to default of service?

Held: 1. An application to a court of a Contracting State by a shipowner for the establishment of a liability limitation fund, in which the potential victim of the damage is indicated, and an action for damages brought before a court of another Contracting State by that victim against the shipowner do not create a situation of lis pendens within the terms of art 21 of the Brussels Convention.

2. A decision ordering the establishment of a liability limitation fund, such as that in the main proceedings in this case, is a judgment within the terms of art 25 of that Convention.

3. A decision to establish a liability limitation fund, in the absence of prior service on the claimant concerned, and even where the latter has appealed against that decision in order to challenge the jurisdiction of the court which delivered it, cannot be refused recognition in another Contracting State pursuant to art 27(2) of that Convention, on condition that it was duly served on or notified to the defendant in good time.

It is common ground that proceedings relating to the establishment of a liability limitation fund, such as those brought before the Netherlands Court, are intended to allow a shipowner who could be declared liable under one of the heads of claim listed in art 1.1 of the LLMC 1957 to limit its liability to an amount calculated in accordance with art 3 of that Convention, such that claimants cannot recover from the shipowner, in respect of the same harmful event, amounts other than those to which they would be entitled under such proceedings.

An application of this kind for the establishment of a liability limitation fund undoubtedly constitutes proceedings for the purposes of art 21 of the Brussels Convention. It is, however, also necessary to examine whether it involves the same subject-matter and cause of action as an action for damages brought by the victim against the shipowner before a court of another Contracting State and whether those sets of proceedings have been brought between the same parties. Those three cumulative conditions must be satisfied before there can be a situation of lis pendens within the terms of art 21 of the Brussels Convention.

The applications under consideration clearly do not have the same subject-matter. Whereas an action for damages seeks to have the defendant declared liable, an application to limit liability is designed to ensure, in the event that the person is declared liable, that such liability will be limited to an amount calculated in accordance with the LLMC 1957, bearing in mind that, under art 1.7 of that Convention, 'the act of invoking limitation of liability shall not constitute an admission of liability'.

Nor do the applications under consideration involve the same cause of action. The action for damages is based on the law governing non-contractual liability, whereas the application for the establishment of a liability limitation fund is based on the LLMC 1957 and on the Netherlands legislation which gives effect to it.

In the light of the foregoing, the answer to the first question must be that an application to a court of a Contracting State by a shipowner for the establishment of a liability limitation fund, in which the potential victim of the damage is indicated, and an action for damages brought before a court of another Contracting State by that victim against the shipowner do not create a situation of lis pendens within the terms of art 21 of the Brussels Convention.