In March 2022, a fire broke out at a shipyard, damaging the premises and ships stored there. This fire might have originated aboard the ocean-going sailing vessel Seven. Several parties held the owner of the sailing vessel liable, and the insurance company Achmea Schadeverzekeringen NV (Achmea) initiated proceedings against its owner for damages. The shipowner submitted an application to the Rechtbank Rotterdam for limitation of liability to SDR 100,000, and for the constitution of a limitation fund.

Held: Limitation of liability set at SDR 200,000.

This is an international matter because not all the owners of the ships damaged by the fire are resident in the Netherlands.

European Regulation No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I recast) contains no provision on jurisdiction with respect to an application for limitation of liability or for the constitution of a limitation fund, respectively, except as provided in art 9.

The parties having suffering damage (whether or not residing or established in the Netherlands) can issue proceedings against the owner of the sailing vessel for compensation for their damage resulting from the incident in one of the courts in the Netherlands that has jurisdiction, in particular the Rechtbank Rotterdam, because the incident falls within the category of matters referred to in art 625 Dutch Code of Civil Procedure (DCCP). Accordingly, Achmea summoned the shipowner before this Court in order to determine liability with regard to the incident. This is a situation referred to in art 9 European Regulation No 1215/2012. Therefore, this Court has international jurisdiction to rule on the application for limitation of liability in respect of the incident. The Court also has national jurisdiction under Article 624a DCCP.

The Seven is a sailing yacht of the type Dufour 30 Classic and is not registered in any shipping register. It follows from the Owner's Manual that the Seven is a small seagoing vessel intended for passenger transport. Bureau Veritas' Attestation states that (the prototype of) the Dufour 30 Classic has been tested against the standards for Boat Type B of European Directive 94/25/EC on the approximation of the laws, regulations, and administrative provisions of the Member States relating to recreational craft. This category concerns seagoing vessels with a hull length of less than 12 m, designed for offshore voyages where conditions up to, and including, wind force 8 and significant wave heights up to, and including, 4 m may be experienced. It is therefore a seagoing vessel. The Owner's Manual and Bureau Veritas' Attestation also show that the vessel, according to its construction, is exclusively or primarily intended for the transport of persons. The Customs Declaration shows that the sailing vessel has a length of 9.04 m and a tonnage of 7.93. Thus, the Seven is a seagoing vessel constructed to carry persons and has a tonnage of less than 300. This means that the LLMC 1996 is applicable.

The owner of the Seven belongs to the category of persons entitled to limitation of liability within the meaning of art 1 LLMC 1996 and art 8:750 Dutch Civil Code (DCC).

Achmea has summoned the shipowner before this court in order to have the liability in respect of the fire determined. Thus the requirement of art 11.1 LLMC 1996 has been fulfilled.

Upon accession to the LLMC 1976, the Netherlands made use of the option provided in art 15.2, and specifically 15.2.b, LLMC 1976 to exclude from the application of the Convention vessels which according to their construction are intended to carry persons and have a tonnage less than 300. For that category of small vessels, a liability limit for property damage of SDR 100,000 was established by the Implementing Decree.

When the provisions in Book 8 DCC concerning limitation of liability of owners or operators of seagoing and inland vessels entered into force in 1997, the limit of liability for property damage for that category of small vessels remained at SDR 100,000, which limit was taken from the 1988 Strasbourg Convention on Limitation of Liability in Inland Navigation (the CLNI).

In 1996, the LLMC was amended by Protocol, mainly to adjust liability limits that were perceived as too low. Under the Protocol, the possibility of a different national regulation simply remained, and art 8:755.2 DCC was not amended. Although in 2009 the legislature expressed an intention to adjust the limitation amount established under this provision in proportion to the amounts resulting from the Protocol, this was not followed up. Thus, for property damage for that category of small vessels, the liability limit of SDR 100,000, derived from the CLNI 1988, continued to apply.

The CLNI 1988 was replaced in 2012 by the CLNI 2012, partly for the purpose of increasing liability limits. These limits were doubled in the process. Like the CLNI 1988, the CLNI 2012 applies to inland vessels. The relevant provisions in Title 8.12 DCC [Limitation of Liability of Owners of Inland Vessels] was thereby amended, as was the Implementing Decree based on art 8:1065 DCC. In doing so, the minimum liability limit for property damage was set at SDR 200,000.

The Implementing Decree, which was intended to ensure that all pleasure craft, regardless of whether they are seagoing or inland vessels, are treated equally for the limitation of liability for property damage, was not amended. Thus, since July 2019, the liability limit for a small inland vessel is at least SDR 200,000, but that for a small seagoing vessel is still SDR 100,000.

On 1 June 2024, the Central Commission for the Navigation of the Rhine revised the liability limits upwards under art 20.2 CLNI 2012 due to the monetary depreciation that has since occurred. In doing so, the minimum limit for property damage was set at SDR 225,200. These new limits take effect on 1 March 2025.

For small seagoing pleasure craft, such as the Seven, the liability limit of SDR 100,000 dating from 1990 still applies. From all appearances, that old limit does not apply because of a deliberate choice, but because of an omission by the legislature, which, after all, announced in 2009 that it would raise that limit, but has not yet done so.

The schemes of (global) limitation of liability aim to achieve an acceptable balance between, in short, costs, revenues, risks and insurability of the use of ships (HR 18 May 2018, ECLI:NL:HR:2018:729, Schip en Schade 2018/85 (Mathilda)). Limitation of liability usually means curtailment of recovery for injured parties. If a limit of liability does not keep pace with monetary depreciation, limitation of liability is all the more disappointing for injured parties.

The Implementing Decree does not constitute legislation in the formal sense (primary legislation). The ban on constitutional review of art 120 Dutch Constitution does not apply to it. The Court may review such legislation on the basis of general legal principles and (other) unwritten law. In that review, it is not the Court's task to determine the value or social weight to be attached to the interests in question as it sees fit. Furthermore, both the nature of the legislative function and the position of the court in the Dutch constitutional system imply that the Court must also otherwise exercise restraint in this review (HR 18 May 2018, ECLI:NL:HR:2018:729, Schip en Schade 2018/85 (Mathilda)).

The Court may disapply a rule or regulation in a Royal Decree, such as this Implementing Decree, on the ground that reliance on such rule or regulation is unacceptable by the standards of reasonableness and fairness, among other things, in the case of special circumstances that have not or not fully been taken into consideration by the legislature.

By the standards of reasonableness and fairness, it is unacceptable that the owner of a seagoing sailing vessel would be entitled to rely on the more than 30-year-old minimum liability limit for property damage of the Implementing Decree. After all, the legislature intended the minimum limits to apply equally to all small pleasure craft, whether they are seagoing or inland vessels. Over the course of more than 30 years, internationally the (minimum) limits have been adjusted to monetary depreciation, while nationally the minimum limit for property damage for inland vessels has been raised to SDR 200,000, but that of the Implementing Decree has not. The legislature announced that it would adjust the minimum limit of the Implementing Decree, but apparently forgot to do so. For the injured parties, application of the Implementing Decree's limit therefore amounts to an unacceptable curtailment of their rights of recovery by the standards of reasonableness and fairness. Fulfilling the intent of the legislature to treat the minimum limits for all small pleasure craft, whether seagoing or inland vessels, on an equal footing, the limit of liability in this case should therefore be set at the same amount as would apply to an inland vessel, ie SDR 200,000.