Collision on 4 April 2010 in Turkish waters between the MS Odessa Star, property of Sand Duke, and the MS CMA CGM Verlaine, property of BSB and time chartered to CMA. BSB and Sand Duke concluded a choice of forum agreement in favour of the Court of Rotterdam (Rechtbank Rotterdam), after which BSB served a summons on Sand Duke to appear before said court. Sand Duke then commenced limitation proceedings before the same court in order to limit its liability. The court declared itself competent. At the claims verification meeting, CMA argued that the court lacked jurisdiction, whereupon CMA and Sand Duke were referred to the claim validation proceedings to have the issue decided. 

Held: It can be assumed that art 11.1 of the LLMC 1976 has the effect that any person alleged to be liable for a claim subject to limitation cannot immediately constitute a limitation fund in a State Party of his choice, but has to wait for a creditor to take the initiative and institute legal proceedings in respect of that claim. 

According to the Hoge Raad (Dutch Court of Cassation) 20 December 1996, Schip en Schade 1997/38 (‘Sherbro’), the term ‘legal proceedings’ must be given a broad interpretation. However, contrary to CMA’s argument, it is not forbidden for the debtor to enter into a jurisdiction agreement after an incident, in order to elicit proceedings in the Netherlands to be able to constitute a low value fund of his choice. 

CMA has not contested that, at the time the LLMC was concluded, it was proposed to allow a court to refuse jurisdiction regarding the limitation if this would be ‘inconvenient’ for the creditors, but that proposal was explicitly rejected. 

In so far as a right to choose a forum could be abused – in the present case abuse cannot be determined as BSB is not represented – if the choice of forum is based on arts 23 and 24 of the Brussels I Regulation, a reasonable interest for that choice is not necessary. 

Since the jurisdiction of this court is not in dispute otherwise in the proceedings between BSB and Sand Duke, the proceedings come within the text and scope of art 11.1 of the LLMC 1976, giving the court jurisdiction with regard to Sand Duke’s application for limitation.