Thursday, 29 May 2014

International jurisdiction issues in the aftermath of the Sea Diamond accident

This is a case regarding a ship accident occurred near the island of Santorini in 2007. The incident raised international interest and spiraled serious debate involving domestic political parties, due to its environmental dimension. The judgment has been rendered very recently [Piraeus 1st Instance Court 464/2014], and is still unreported. It is a very lengthy one, dealing with a number of issues, such as civil liability, conflict of laws, environmental law, and domestic Civil Procedure. I will focus on the international jurisdiction issue, which has been raised by one of the respondents. The court examined thoroughly the possible bases of jurisdiction with respect to the insurer of the ship, which was a foreign company with its seat in Luxemburg. The Piraeus court concluded that none of the provisions of the Brussels I Regulation can establish the international jurisdiction of Greek courts in regards to the foreign insurer. 

The facts: On April 6, 2007, the Sea Diamond, a ship under Greek flag, sank into the Aegean Sea, at the Caldera Gulf, in close proximity to the island of Santorini [for details see]. The claimant is the Municipality of Santorini. It initiated proceedings against the ship owner, the technical and financial administrator, and the insurer. The claimant filed an action early March 2012. It sought damages for environmental and tortious liability. It also asked the court to oblige the respondents to proceed to the raising of the ship, so as to cease the ongoing ecological disaster taking place in the region. Finally, it asked the sum of 10 m € for pain and suffering, caused by the defamation of the island in the international community. 

The ruling: The court ordered the respondent to take the steps necessary, in order to remove Sea Diamond from the sea bottom on their own expenses. It also granted an 8 m € relief to the Municipality for pain and suffering caused by the accident and the omission of the respondents to remove the ship from the sea bottom.

However, with regard to the foreign insurer, the court declined its international jurisdiction on the basis of the following conclusions: 

a.   Art. 5.3 Brussels I Reg. is not to be applied, because the chapter on insurance [Art. 8-14] prevails over the former provision.

b.  Art. 5.5 Brussels I Reg. is not to be applied, because the subject matter of litigation was not a dispute arising out of the operation of a branch, agency or other establishment. This point was made by the court because the claimant tried to establish international jurisdiction on the grounds of the existence of a branch of the foreign insurer in Greece, which the latter actually denied.

c.  Art. 9.1 b & 10 Brussels I Reg. are not to be applied, and therefore a direct action by the injured party against the insurer is not possible, because the provisions aforementioned allow such an action only if the applicable law provides for such a remedy. In light of the fact that English law is to be applied, which does not provide for a direct action, there are no grounds for applying the above rules.

d.   Art. 6.1 Brussels I Reg. is not to be applied, because no close connection of the claims has been proven. In particular, the claim against the respondents from 1-3 focused on the tortious liability issue, whereas the claim against the respondent under 4 (insurer) dealt solely with the insurance liability issue. Therefore, no risk of irreconcilable judgments could result from separate hearings and decisions.

Comments: No doubt this case will continue to the second instance, and reach the Greek Supreme Court. I will follow the developments and report on the following steps of the dispute. Prima facie, I think the court was right in declining its jurisdiction. What I cannot confirm, is whether English law actually does not provide for a direct action by the injured party against the insurer. If anyone wants to enlighten me / the followers of this blog, her / his comment would be very welcome.