AMBIGUOUS AND ‘HIDDEN’ JURISDICTION CLAUSE CAN LEAD TO ANTI-SUIT INJUNCTION AND SUBSTANTIAL SALVAGE REWARD

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Introduction

Salvage rewards awarded in judicial (and arbitral )procedures in England and Wales are substantially higher in comparison with courts in continental Europe, even though the same criteria are applied.[1] London has a reputation for being favourable to salvors. It is therefore not surprising that if after a salvage operation with a useful result, the parties involved cannot agree upon the amount of the salvage reward, the salvors will want to submit their dispute to the courts of England and Wales (or to arbitration in London). Owners are – for the opposite reason – not keen to submit any dispute to the Courts of England and Wales (or to arbitration in London). Nowadays, Dutch salvors frequently include ‘hidden’ jurisdiction clauses in Certificates of Safe Delivery, thereby attempting to make the courts of England and Wales competent to hear the matter and thus trying to secure a substantial salvage reward. This article mainly focuses on the consequences that may result from such a ‘hidden’ jurisdiction clause, in particular the anti-suit injunction, whereby this is considered from a Dutch law perspective.[2]

 

Background

The most widely used salvage contract on a no-cure, no-pay basis in the marine industry is the Lloyd’s Open Form of Salvage Agreement (“LOF”). On 1  June 2024, the Lloyd’s Salvage Arbitration Branch launched an updated edition of the LOF.[3] The LOF stipulates that the remuneration shall be determined by arbitration in London. Owners and their insurers are known with the consequences of the said arbitration clause and often refuse to sign an LOF.

The same applies to other agreements that include a dispute settlement provision that leads to jurisdiction of the Courts of England and Wales (or to arbitration in London). In case of provided salvage services, and without agreeing upon a dispute resolution provision, jurisdiction can often be found in another jurisdiction than England and Wales.[4]

As salvors are aware that Owners and their insurers may refuse to submit possible disputes to the Courts of England and Wales or to arbitration in London – provided that this is clearly communicated – salvors tend to include such a clause in a standard Certificate of Safe Delivery without making Owners and their insurers in any way aware of the inclusion of such a clause. Immediately after the vessel is delivered safely to its Owners, the Master of the vessel is informed by the salvor that the Certificate of Safe Delivery must be signed for administrative purposes. The Master may feel compelled and/or pressured to sign such a Certificate of Safe Delivery. Three cases are currently known to us, in which a Certificate of Safe Delivery was signed and included an ambiguous and ‘hidden’ jurisdiction clause. We suspect that this is just the tip of the iceberg. The jurisdiction clause reads as follows: ‘Any dispute arising out of the services performed by the tug will be settled in London, in accordance with English law.’[5]

This clause is ambiguous. It does not mention whether the dispute must be submitted to the courts of England and Wales or to arbitration. Neither does it refer to London as the exclusive jurisdiction.

Such a clause is ‘hidden’, because it is very unusual for a Certificate of Safe Delivery to contain such wording. A Certificate of Safe Delivery is usually just a record of the completion of the salvage services. However, such a ‘hidden’ clause may have potentially major consequences for Owners, such as an anti-suit injunction order granted by the courts of England and Wales.[6]

 

Anti-suit injunctions in the United Kingdom

The Recast Brussels Regulation is the core instrument unifying private international law at the European Union level.[7] It offers a unified set of rules on international jurisdiction and on the recognition and enforcement of judgments in the EU. One of these rules stipulates that where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seized is established. If Owners bring legal proceedings in the Netherlands first, any other court should stay its proceedings. However, the United Kingdom left the European Union on 31 January 2020 and the Recast Brussels Regulation remained applicable in and for the United Kingdom until the end of the transition period on 31 December 2020. Subsequently, the salvor may now commence proceedings in the Courts of England and Wales as well, despite the fact that legal proceedings were brought in the Netherlands first by Owners. In addition, the salvor may also request an anti-suit injunction against the debtor. Such an order may be granted by the courts of England and Wales and reads as follows:

“The First Defendant is hereby restrained from (in any manner and in any jurisdiction) advancing, commencing, pursuing, continuing, maintaining or assisting in any proceedings, suit or other form of claim (whether legal, arbitral or otherwise) against the Second Claimant relating to the Disputes otherwise than by way of proceedings in London.”

If this order is disobeyed a party may be held to be in contempt of court and may be fined or have its assets seized.

Pursuant to a judgment of the Court of Justice of the European Union of 7 September 2023 , Charles Taylor Adjusting, C590/21, ECLI:EU:C:2023:633, anti-suit injunctions undermine access to justice for persons on whom such injunctions are imposed. As such a Member State (such as the Netherlands) may refuse to recognise and enforce a judgment of a court or tribunal of another Member State on the ground that it is contrary to public policy, where that judgment impedes the continuation of proceedings pending before another court or tribunal.[8]

However, an anti-suit injunction usually has a deterring effect on a party against whom such an injunction is imposed. For Owners it means that vessels e.g. should no longer call ports in the United Kingdom and/or outside the European Union in order not to leave those vessels exposed to an arrest.

 

Comments

Owners and their insurers should be warned. To avoid being involuntarily tied to a jurisdiction or arbitration clause, no documents should be signed by Owners, unless one fully understands and accepts the consequences of such a clause.[9] Owners do good to make their Masters and chief officers who sign certification of safe delivery aware of this.

 

For more information, please contact:

DAAN KOMEN

Telephone          : +31 10 217 77 20

Mobile                 : +31 6 37 47 05 56

Email                     : komen@caland.nl

Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice and no rights can be derived from it.

 

[1] The United Kingdom and many countries in continental Europe are a party to the International Convention on Salvage, 1989 (https://verdragenbank.overheid.nl/en/Verdrag/Details/003805).

[2] Special compensation remunerations are beyond the scope of this article.

[3] https://www.lloyds.com/resources-and-services/salvage-arbitration-branch/forms-documents.

[4] In which jurisdiction the case can be brought to court is beyond the scope of this article.

[5] The legal effect of such a clause in accordance with English law is beyond the scope of this article. However, the key question appears to be whether a Certificate of Safe Delivery amounts to a binding jurisdiction agreement. This may include consideration of: (1) whether it was intended to be a legally binding agreement; (2) whether the Master had authority to enter into a jurisdiction agreement; and (3) whether it amounts to a jurisdiction agreement and, if so, what its terms are.

One may also ask whether the Courts of England and Wales should refuse to exercise its jurisdiction on the basis that England and Wales is not the appropriate forum. There is little or no connection between the dispute and the jurisdiction of the courts of England and Wales other than the terms of the Certificate of Safe Delivery.

[6] In the matter at hand the High Court of Justice, Business and Property Courts of England and Wales, Admiralty Court (KBD) (https://www.judiciary.uk/courts-and-tribunals/kings-bench-division/work-3/).

[7]Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast Brussels Regulation) [2012] OJ L351/1.

[8] Case C-590/21 Charles Taylor Adjusting [2023].

[9] It is a common misconception that a signed document would be required for a salvor to claim a salvage reward.

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Two year collision time limit set aside by the Dutch Court

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In two recent judgments Dutch courts have rejected the 2 year collision time bar defense.

Read here the latest article from Richard Van ‘t Zelfde on the topic.

2 year collision time limit

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Appointment of maritime court surveyors in the Netherlands

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Click on the link below to read the full article:

Appointment of maritime court surveyors in the Netherlands

 

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CISG regularly remains unknown to contracting parties

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Practice shows that the United Nations Convention on Contracts for the International Sale of Goods (CISG) regularly remains unknown to contracting parties. A recent judgment of 06 November 2019 by the District Court Noord-Nederland (https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBNNE:2019:4743) is an example of such.

A Belgian company (‘the Buyer’) purchased a state of the art ‘LED screen’ from a Dutch company (‘the Seller’) for its new office building. The contract between the parties provided that the Seller was to install the LED screen at the premises of the Buyer. To this contract the Seller’s general terms & conditions applied. The LED screen was delivered in parts at the premises of the Buyer. According to the Buyer the LED screen was not in conformity with the contract. When the Seller also failed to install the LED screen timely, the Buyer gave the Seller written notice in which the Buyer declared the contract null and void. Subsequently the Seller promised to install the LED screen ultimately before a specific date and considered the notice in which the Buyer declared the contract null and void as withdrawn. However, the Seller again did not keep its promise. The Buyer therefore gave the Seller further notice in which the Buyer declared the contract null and void and served a writ to the Seller to appear at the District Court Noord-Nederland to pay back the purchase price of the LED screen.

The Buyer justified its claim to declare the contract null and void on four legal grounds: (1) the LED screen was not in conformity with the contract, (2) no physical installation had taken place, (3) the software of the LED screen was not installed and (4) the mere lapse of time in which the software and physical installation of the LED screen had not taken place.

The CISG applies in general to contracts of sale of goods between parties whose places of business are in different states that are a party to the CISG, such as the Netherlands and Belgium. However, the Seller argued that the CISG was not applicable on two grounds: (1) the CISG was excluded due to the choice for Dutch law in the general terms and conditions and (2) the contract between the parties had to be considered as a contract for services and not as a contract for the sale of goods. The District Court ruled that (1) the mere choice for Dutch law in the general terms and conditions does not mean that the CISG is excluded and (2) that the CISG only does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or other services. In the matter at hand it was clear from the invoice of the Seller that only a small part of the contract consisted of labour or other services. Hence, the CISG applied to the contractual relationship between the parties and the case was further assessed by the District Court on the basis of the CISG.

The District Court further considered that the promise of the Seller to install the LED screen before a specific date is a strict deadline. The District Court based its decision on judgments of courts from Switzerland, Germany and the Netherlands. Therefore the second notice in which the Buyer declared the contract null and void was valid. Both parties were discharged from their obligations under the contract. This means that the Seller has to pay back the purchase price to the Buyer and the Buyer needs to return the LED screen back to the Seller. This return should take place at the premises of the buyer.

The second notice in which the Buyer declared the contract null and void was key in this matter. It is important before concluding an agreement or in case of a dispute to determine what rights a Buyer and/or the Seller have under the CISG. The assessment whether a contract can be declared null and void and the notice to declare a contract null and void must be considered and drafted carefully.

 

For more information, please contact:

DAAN KOMEN

Telephone       : + 31 10 217 77 20

Mobile             : +31 6 37 47 05 56

Email               : komen@caland.nl

 

Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.

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Dutch repairyard not liable for damage to Noah’s Ark

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On 16 October 2019 the Rotterdam Court rendered an interesting judgment on the Dutch General Yardconditions “VNSI” (ECLI:NL:RBROT:2019:8389).

The Owners of a 70 meter long wooden replica of the Ark of Noah contracted with a Dutch shiprepair yard for some repairwork. To the repaircontract the Dutch General Yardconditions “VNSI” applied.

During the execution of the work fire broke out causing severe damage to the vessel, for which the ship owners held the repairyard liable.

Art. 13.2 of the Dutch General Yardconditions “VNSI”read as follows:

The yard shall not be liable for damages, except if and insofar as the yard shall inflict damages intentionally or through gross negligence. However, except in the case of intent on the part of the yard, liability of the yard for loss of profit, consequential or indirect damages is, at all times excluded. In this clause gross negligence or intent of the yard means gross negligence or intent of the yard’s officers and of managing officials identifiable with the yard.

This art 13.2 is clear: in principle the repairyard is not liable unless the damage has been caused intentionally or through gross negligence.

The Owners did not argue that the damage had been caused intentionally, but did argue that the damage had been caused through gross negligence. The court held that the Owners did not succeed in proving the gross negligence (which is indeed often difficult under Dutch law).

Therewith there remained for the Owners to argue that, shortly put, under the principles of reasonableness and fairness the repairyard should not be allowed to rely on the exoneration contained in art. 13.2 of the Dutch General Yardconditions “VNSI”.

There is Dutch case law in which it has been held, shortly put, that a party which is in principle entitled to invoke a (contractual) right, can nonetheless be denied such invocation where, in the given circumstances of the case, such would conflict with the Dutch principles of fairness and reasonableness.

In the subject judgment of NOAH’s ARK, the Rotterdam Court referred to its earlier judgment of 13 December 2006 (ECLI:NL:RBROT:2006:BD6181) in which it had held in a similar case, that invocation by the yard of art. 13.2 (in that case) did not conflict with the principles of fairness and reasonableness.

In that earlier judgment the Rotterdam Court held that invoking art. 13.2 Dutch General Yardconditions “VNSI” was not unreasonably onerous for the Shipowner:

  • since both the repairyard and the Owners were professional parties working in the shipping industry in which using general terms and conditions is common practice;
  • since the Dutch General Yardconditions “VNSI” are used by many Dutch ship repairyards;
  • since the repair contract clearly refers to the Dutch General Yardconditions “VNSI” which had been printed on the reverse side of the contract;
  • the Owners could have read the conditions and could have commenced negotiations with the repairyard in an effort to exclude art. 13.2 from applicability;
  • since an exclusion / limitation of liability is not unreasonable taking into account the possible liability and the price payable to the yard for the repair work;
  • the Owners were insured themselves against the suffered damage.

Since this remaining argument failed also, the Rotterdam Court rejected the Owners claims. This case confirms that in principle Dutch shipyards are able to rely on the Dutch General Yardconditions “VNSI” if applicable.

(Mr Richard van ‘t Zelfde, publication 06.11.2019)

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Liability for stevedore damage under Dutch law

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The Dutch courts regularly deal with cases in which shipowners / charterers hold stevedores liable for damage to a vessel.

In some cases, the liability of the stevedore can be based (quite easily) on provisions of the Terminal Service Agreement in place with the stevedore.

In other cases, in particular when having to base the claim on tort (f.i. where the claiming party does not have the contract with the stevedore) the claim can prove more difficult to pursue, one reason being that it is a principal of Dutch law that “careless or otherwise unlawful acts cannot be deduced automatically from the mere fact of damage to property.”

Put more simply: where it is established that the stevedore caused damage to a vessel, the damage itself does not automatically prove that the stevedore has (also) commited a tortious act and therefore does not automatically lead to his liability for the damage.

A claimant will need to state and prove that the stevedore committed a tortious act for the tort claim to be able to succeed.

This was (first) held by the Dutch Supreme Court in its longstanding judgment HR 06.03.1953, NJ 1953/791 NICOLAS PATERAS and has been upheld in much lower case law ever since, also earlier this week by the Rotterdam (Maritime) Court in its judgment of 30.10.2019 (ECLI:NL:RBROT:2019:8469): “Now that Peak Shipping has not disputed that discharge was performed in the usual machinal manner, the crane operator will only be deemed to have acted unlawfully if he has not proceeded with the care that can be reasonably expected of him during machinal unloading.”

Being able to prove that a toritous act has been committed, is a factual question and it might be necessery, for instance, to (preliminary) hear witnesses such as the cranedriver and crewmembers to obtain evidence. Also the instruction of surveyors is often necessary.

In the above recent case, the Rotterdam Court rejected the claims by the vessels’ charterers, shortly put, on the grounds that the charterers had not sufficiently proven their standpoint that the stevedore committed a tortious act.

Mr Richard van ‘t Zelfde (posted on 03.11.2019)

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OBTAINING DATA REEFER CONTAINERS WITHOUT VOLUNTARY COOPERATION OF CARRIERS

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With a total TEU of 14,512,661 incoming and outgoing containers by sea in 2018, the container segment pushed the port of Rotterdam to a new high. This trend continued in 2019. An ever increasing number of these are temperature controlled containers to transport perishable cargo. Temperature controlled containers are commonly referred to as ‘reefer containers’. When perishable cargo appears to be damaged upon arrival, or such is feared, cargo interest may wish to obtain the data of the reefer container in order to determine whether the cargo damage arose during the carriage. This article will set out the legal tools for cargo interests to obtain such data without voluntary cooperation of the carrier pursuant to Dutch civil law.

 

General considerations

There are various types of reefer containers, such as the Controlled Atmosphere (CA) containers. CA containers are commonly used to transport fruits and vegetables, delaying the ripening process and to increase the post-harvest life of the fruits and vegetables. The basic principle of the CA container is mainly to remove the oxygen from the air and to replace it with a different type of gas, in most cases CO2. During transport i.a. the temperature, oxygen- and carbon dioxide levels in the CA container are monitored and the data saved on a data carrier, which is normally located near the control unit of the CA container. With this control unit the settings of the CA container can be adjusted. CA containers are often provided by the carriers, so that the data remains in custody of the carrier. When cargo is delivered damaged or is feared to be damaged, the cargo interests and the carrier usually both instruct their own surveyor. It is common in the Netherlands that surveyors try to make mutual agreements about the time and place of a survey to be conducted. To ascertain the cause of the damage the container data can be of importance. A request for this data is often refused by the carrier. Without knowing the whereabouts of the container the data can practically never be retrieved anymore and furnishing of proof will be more difficult for cargo interests. If cargo interests directly booked the CA container with the carrier, they may be able to track and trace the container with the use of a booking number and the B/L. If the container can be located, cargo interests may be able to obtain the data with the legal tools as will be discussed below. On 2 October 2019 the Port of Rotterdam launched an online container track & trace app for shippers and forwarders to see where their containers are located at any given moment.

 

Transparent data

It is worth mentioning that Maersk made their data transparent as from last year. Shippers can monitor and download these data. To my best knowledge, till date other carriers have not done so. Therefore the question remains topical what cargo interests can do to legitimately obtain such data.

 

Electronic data loggers

A shipper may decide to place electronic data loggers in the container. Electronic data loggers are used when transporting perishable cargo, such as fruits and vegetables, in a temperature controlled environment (i.e. a reefer container). The cost of using a recorder is negligible. The recorded data is useful in providing cargo interests with data as evidence against the carrier. However, carriers may argue that the data logger was placed in an unsuitable location in the container. When choosing where to place these loggers, care should be taken to ensure that they are placed in temperature-critical locations in the container so that they measure the actual cargo temperature.

 

Pre-judgment order to preserve data

On 13 September 2013, the Dutch Supreme Court rendered a judgment that has a wider application in respect of pre-judgment orders attaching documents for the purpose of preserving evidence (including digital evidence) in non-IP cases. Data can be arrested pursuant to an arrest order. The actual arrest of the data in itself does not grant the arrestor the right to the seized data. The arrest is meant for preservation purposes only. A legal action to obtain the evidence must follow. The arrest application needs to be submitted to the Judge in Interlocutory Proceedings. Pursuant to Article 843a of the Dutch Civil Code of Procedure the Judge will have to assess:

 

  • whether the petitioner has a legitimate interest;
  • whether the application concerns specific documents and;
  • and whether there is a legal relationship between the parties.

 

It is an ex-parte procedure. The applicant needs to demonstrate i.a. that such evidence will be destroyed or lost in the absence of such a remedy for preservation of evidence being granted. The Judge may order that security is provided by the applicant. The bailiff has the right to demand access to any place, insofar as this is reasonably necessary for the performance of his duties. If a carrier is unwilling to hand over the data, the bailiff must include this in its report of seizure. The judge has the power to impose an incremental penalty payment in the event the carrier does not cooperate. In case the Dutch court is competent in the substantive proceedings, the court may at its own discretion proceed to a final judgment if the data is not provided by the carrier. In most cases that would result in a judgment against the party who has failed to provide the data. Each party always has the opportunity to apply for a summary order for withdrawal of a pre-judgment attachment.

 

Maritime court surveyor

Dutch law provides parties an adequate legal basis to request the court to appoint a court surveyor, which can be an effective fact finding tool and should balance the unequal position from an evidential point of view between parties in maritime matters. In practice this tool is not often made use of due to concerns of different nature. A working group has made joint investigations to address these concerns and to ensure that the court surveyor will become a more effective tool for fact finding.

 

The articles 8:494 – 8:495 Dutch Civil Code (DCC) provide the legal basis to appoint a maritime court surveyor. Article 8:494 DCC gives the right to carriers and cargo interests to request the Judge in Interlocutory Proceedings to have a judicial survey held into the condition or the state of the cargo. A petition can be filed at the time of the delivery of the cargo.

Article 8:495 DCC gives the right to carriers and cargo interests to request the Judge in Interlocutory Proceedings to have a judicial survey held into the cause of the condition the cargo is in. A petition can be filed at the time of the delivery of the cargo and even prior to delivery of the cargo, when loss of or damage to cargo is (merely) suspected.

Similar provisions can be found in the articles 8:958 – 8:960 DCC for carriage of goods by inland waterways and 8:1134 – 8:1135 DCC for road transport.

 

Production of documents in civil proceedings

Dutch law does not provide for general discovery of documents during trial. However, article 22 of the Dutch Code of Civil Procedure provides that in civil proceedings, the court may order a litigant party to submit certain documents (e.g. the data of the reefer container) it deems relevant to the case at hand. A party may only refuse to do so for compelling reasons. The court will decide whether the reasons cited are justified and if not, it may draw conclusions from this refusal as it deems fit.

 

Concluding remarks

Timing can be key when applying for a pre-judgment order to preserve data or requesting the court to appoint a court surveyor. Given the fact that containers are sometimes shipped again already on the day of arrival it is recommended to act quickly.

 

For more information, please contact:

DAAN KOMEN

Telephone       : + 31 10 217 77 20

Mobile             : +31 6 37 47 05 56

Email               : komen@caland.nl

 

Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.

 

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Preserving evidence under Dutch law

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On 13 September 2013, the Dutch Supreme Court issued a judgment that has a wider application in respect of pre-judgment orders attaching documents for the purpose of preserving evidence (including digital evidence) in non-IP cases. After a hesitant start it appears that Dutch courts are prepared to grant these interim measures for the purpose of preserving evidence. This affects Shipowners directly, given that data (e.g. logbooks) on board the vessel may be subject to seizure pursuant to such an order.

 

General comments

An interim order for attachment of documents does not grant a party the right to the seized data. It is meant for preservation purposes only. A claim to obtain the evidence must follow. A pre-judgment attachment can by initiated by submitting a petition to the Judge in Interlocutory Proceedings.

 

Procedure

Pursuant to Article 843a of the Dutch Civil Code of Procedure the Judge will have to assess three things:

(1) whether the petitioner has a LEGITIMATE INTEREST;

(2) whether the application concerns SPECIFIC documents and;

(3) whether there is a LEGAL RELATIONSHIP between the parties.

It is an ex-parte procedure. The party applying for the order for seizure of evidence will be required to demonstrate a well-founded fear that such evidence will be destroyed or lost in the absence of such a remedy for preservation of evidence being granted. The Judge may order that security is provided by the applicant.

 

During seizure

During seizure, questions may arise, for example whether specific evidence may, or may not, fall under the attachment. In that case the bailiff enforcing the order may, in the event of uncertainty, approach the Judge who will start interim injunction proceedings by telephone immediately. The bailiff has the right to demand access to any place, insofar as this is reasonably necessary for the performance of his duties. If a person is unwilling to hand over data he carries, the bailiff must include this in its report of seizure. The judge has the power to impose an immediately payable fine upon the party in default. If the data is not provided by the party against whom the interim attachment order is made, the court may at its own discretion proceed to a final judgment. In most cases that would result in a judgment against the party who has failed to provide the data.

 

Lifting the attachment

Each party always has the opportunity to apply for a summary order for withdrawal of a pre-judgment attachment.

 

For more information, please contact:

DAAN KOMEN

Telephone       : + 31 10 217 77 20

Mobile             : +31 6 37 47 05 56

Email               : komen@caland.nl

 

Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.

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Legal commentary regarding ‘fault of the vessel’ under Dutch law

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Legal commentary regarding ‘fault of the vessel’ under Dutch law

It is worth mentioning the recent judgment of the Court of Appeal Arnhem-Leeuwarden of 16 October 2018.[1] On 16 July 2015, an explosion took place aboard the motor yacht ‘A’. The yacht burned down completely. A few hours prior to the explosion, the owner of the yacht had switched on the gas-powered refrigerator. One of the experts involved suspected that the explosion was caused by a gas leak, given the lack of other highly flammable substances on board. However, investigation was no longer possible because the yacht had been fully lost in the fire. As a result of the explosion, motor yacht ‘B’, which was moored at the same jetty, was also fully destroyed by the fire.

 

Legal basis for a claim by owner yacht B

The owner of yacht B appeals to the owner of yacht A on the basis of (i) wrongful act (article 6:162 of the Dutch Civil Code) and (ii) of a defective good (article 6:173 of the Dutch Civil Code).

After the subdistrict court judge had awarded the claim(s) of the owner of yacht B, the owner of yacht A lodged an appeal.

 

Judgment of the Court

Regarding basis (i), the Court of Appeal ruled that the mere fact of the presence of the gas installation was not wrongful towards the owner of yacht B. This would only be the case if the mere presence of such an installation made the probability of a gas explosion so great that the owner of yacht A should have abstained from having it present based on the principles of due care. Furthermore, it did not appear to be that there were any defects in the gas installation in yacht A and/or that the owner of yacht A had taken insufficient precautionary and safety measures because – according to the Court of Appeal – due to the complete loss of motor yacht A, the cause could not be determined.

Regarding basis (ii), the Court of Appeal ruled that the liability of the owner of yacht A cannot be based on article 6:173 of the Dutch Civil Code, which article creates a strict liability for the owner of a movable property, because pursuant to article 6:173 paragraph 3 of the Dutch Civil Code, this article does not apply to vessels.

The Court of Appeal consequently dismissed any claim(s) of the owner of yacht B. An unpleasant outcome for yacht owner B.

 

Book 8 of the Dutch Civil Code

Should the owner of yacht B have taken a different approach and based its claim(s) on the collision provisions in book 8 of the Dutch Civil Code?

Articles 8:1005 and 8:544 of the Dutch Civil Code, regarding an inland vessel and a seagoing vessel, respectively, establish that if the damage is caused by the fault of the vessel, the owner of this vessel is obliged to compensate the damages.

 

‘Casuele’/’De Toekomst’

On 30 November 2001, the Dutch Supreme Court issued a standard judgment in which the term ‘fault of the vessel’ is explained.[2] According to that judgment, the probable cause was a short circuit in an electrical heater in the motor compartment of the ‘Casuele’. Should that fact be established, then that is a defect of the vessel, for which the owner is liable. The Supreme Court applies blame theory here. This means that a claimant must prove the cause of the fire. Then, based on one of the criteria below, it must be determined whether that cause is borne by the owner of the vessel. According to the Supreme Court, there is ‘fault of a vessel’ if the damage is the result of:

(a)   an error of a person for whom the owner of the vessel is responsible according to articles 6:169-6:171 of the Dutch Civil Code;

(b)   an error of a person or persons who perform(ed) work for the benefit of the vessel of the load, which occurred during the performance of the work;

(c)   the realisation of a special danger to persons or goods that was created because the vessel did not meet the requirements that could be imposed in the given circumstances.

Although article 6:173 of the Dutch Civil Code (the provision establishing a strict liability for the owner of a movable property) does not apply to vessels, the Supreme Court was able to channel it in via the above criterion (c), provided that the cause of the damage can be determined. If the cause is unknown, the owner of the ‘causing’ vessel is not liable. Therefore, it is generally of great importance to the owner of an adjacent vessel and its insurer(s) to immediately appoint an expert to investigate the cause of the fire.

Before the ‘Casuele’/’De Toekomst’ judgment, risk theory was applied. In that case, the claimant of motor yacht B could suffice with the evidence that the explosion originated aboard yacht A. What exactly that cause was is then no longer of importance. The Advocate-General who wrote an advice to the Supreme Court in the ‘Casuele’/’De Toekomst’ applies an ‘intermediate theory’, which is based on the primacy of the fault supplemented by the defect of the ship.

 

Evidence

Whatever the case, in the present case, based on the prevalent (blame) theory, the owner of yacht B must prove the cause of the explosion aboard motor yacht A.

Although the Supreme Court does not allow a judge to decide whether based on the factual situation, a suspicion of guilt may be assumed, the provision of evidence does not require the cause brought forward by the owner of yacht B to be established with scientific certainty. A reasonable degree of certainty that the stated cause of damage (explosion due to a leak in the gas connection) is indeed the cause of damage is sufficient.[3] A probability percentage of at least 75% should be applied as a guideline here.[4] Considering that (i) the owner of yacht A had switched on the gas-powered refrigerator themselves a few hours before the explosion and (ii) no other highly flammable substances were present on board, there seems to be no other (plausible) cause conceivable. The question is whether this meets the probability percentage of at least 75%. Had that cause been determined by the Court of Appeal, then that is a defect in yacht A, for which the owner of yacht A would be liable. That outcome would have been just.

 

[1] Court of Appeal Arnhem-Leeuwarden 16 October 2018, ECLI:NL:GHARL:2018:9083.

[2] Supreme Court 30 November 2001, ‘Casuele’/’De Toekomst’, ECLI:NL:PHR:2001:AD3922, NJ 2002, 143.

[3] Court of Appeal Arnhem-Leeuwarden, among others, 13 November 2018, ECLI:NL:GHARL:2018:9848.

[4] I. Giessen, Bewijs en aansprakelijkheid. A comparative law study into the burden of proof, the risk of evidence and the risk of reversal in liability law, 2008, section 4.5.

 

For more information, please contact:

DAAN KOMEN

Telephone       : + 31 10 217 77 20

Mobile             : +31 6 37 47 05 56

Email               : komen@caland.nl

 

Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.

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General overview of the exclusion of liability by Terminal Operators in the Netherlands

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The purpose of this article is to provide the reader with a practical and brief overview of the current legal situation in the Netherlands regarding the exclusion of liability by means of a sign at the entrance before entering a terminal operator’s premises by land or water.

Terminal operators may exclude their liability in general by (i) incorporating specific provisions in the (stevedore) agreements they conclude with their contractual counterparties, (ii) using General Terms and Conditions and (iii) by placing a sign at the entrance before entering a terminal operator’s premises.

In the Netherlands the following General terms and Conditions are applied by terminal operators:

(1) General Terms and Conditions of the Rotterdam Terminal Operators’  Association (VRTO). The VRTO are deemed to be the most recent version of the General Terms and Conditions of the Association of Rotterdam Stevedoring Companies 1976;

(2) General Terms and Conditions for Tank Storage in the Netherlands (VOTOB-conditions);

(3) and the related Jetty Conditions of the Association of Dutch Tank Storage Companies (VOTOB-jetty conditions).

The exclusion of liability by placing a sign at the entrance before entering a terminal operator’s premises creates an “entry”agreement between the visitor (e.g. a lorry driver) and the terminal operator or a “mooring” agreement between the shipowner and the terminal operator. This dogma has often been the subject of dispute in legal proceedings.

 

Starting point

Starting point is a Casebook judgment of the Court of Appeal The Hague of 1 February 2006 (S&S 2009, 74). The Court of Appeal ruled that by passing the sign the (lorry) driver is deemed to have read the text on the sign and accepted the exoneration. The Court of Appeal based that judgment on the following considerations: (i) it is inherent in a port area that goods are being handled. The entry of a port site involves special risks due to the activities involved in the relocation of goods by cranes and vehicles, (ii) the sign identifies these dangers by means of text and icons and links regulations to the entry of the premises, (iii) the text of the sign is simple in nature and the exoneration is therefore presented in a clear manner and (iv) the driver has been on the terminal’s premises several times. The Court of Appeal allowed the exclusion of liability by means of a sign at the entrance before entering a port area (e.g. the premises of a terminal operator).

 

Further explanation

A judgment of the District Court Rotterdam on 24 August 2012 (ECLI:NL:RBROT:2012:BZ6370) contains a further explanation on this dogma. The Court considers regarding the applicability of the exclusion of liability by means of sign that (i) it will be necessary that the text for the visitor in question must be  sufficiently known and clear, (ii) this does not give the terminal a license to cause damage to visitors or to allow to continue an unnecessary dangerous situation that cannot reasonably be expected by the visitor, (iii) the exclusion of liability also applies when the injured party institute an action arising from an unlawful act (tort) and (iv) a terminal operator is not able to exclude liability if it acts contrary to the principles of reasonableness and fairness (e.g. when the terminal acted with intent or recklessness or it allowed a continued unnecessary dangerous situation).

 

MV “ALLEGONDA”

On 25 February 2014 the Court of Appeal The Hague rendered judgment in the MV “ALLEGONDA” case (S&S 2014/72).

According to the judgment, the text at the entrance of the terminal operator premises reads as follows:

“ATTENTION

Anyone who is located or moored at our yard:

is there, with its means of transport and goods belonging to him, entirely AT HIS OWN RISK, so that our company or the persons employed by our company are not liable at all for any damage;

hereby acknowledges and accepts the contents of this notice, as well as accepting that, as far as necessary, we may also apply to the Rotterdam Terminal Operators’ Association Condtions, as deposited at the District Court of Rotterdam.”

The captain had moored the MV “ALLEGONDA” alongside the pier to load containers. After the containers were placed in the ship, the crane engineer disconnected the spreader from the container and pulled it up. Consequently the spreader has hit the wheelhouse, which caused damage to the top of the wheelhouse.

The parties to the proceedings disagreed on the scope of the relevant notice on the sign. The text of the sign (the words: “for any damage”) must therefore be interpreted. The Haviltex standard is the main rule in the Netherlands to interpret a written contract in the Netherlands (HR 13 maart 1981, NJ 1981/635). According to the Court of Appeal (i) it is first of all important that the text of the sign is in general terms (no specific risks are mentioned). Therefore the text is suitable for general exclusion of liability, but not for exclusion of liability under the circumstances in the matter at hand, (ii) the damage in the matter at hand does not occur on a regular basis and (iii) the MV “ALLEGONDA” did not have freedom of choice to moor alongside the quay of the terminal. The vessel was there to carry out a contract of affreightment.

The Court of Appeal concludes therefore that the captain would not understand the notice on the sign as a complete exclusion of liability. The Court of Appeal consequently upheld the claim against the terminal operator.

It is worth mentioning that the Court of Appeal considered that the reference to the VRTO Conditions was valid, motivated by the fact that the respondent did not contest the applicability of the reference to the VRTO conditions.

 

MV “CHALLENGER”

The last judgment involves the MV “CHALLENGER” (District Court Zeeland-West-Brabant 25 June 2016 (ECLI:NL:RBZWB:2016:5128). On November 9, 2012, the MV “CHALLENGER” collides with a sinkable dock, which resulted in a hole in the hull of the vessel. The location of the dock was not marked and there were no signs or marks indicating where the dock was located.

On a crane on the quay in the harbor a sign was attached with the following text:

 

“Attention !! Limited depth because of a sinkable doc”

 

At the entrance gate of the shipyard, which gives access to the site from the land, a sign is placed with the following text:

 

“Warning! Being on the site or in the water of this site of persons or business is entirely at the sole discretion of any liability of the site and any resulting from injury, death, accident, loss or damage to business and delay, or for any reason whatsoever is also excluded.”

The sign was not visible when entering the yard from the water side.

According to the District Court the sign on the quayside is not a sign to exclude liability. This is only a sign with a warning purpose. This may only lead to a division of liability between the parties. As to the sign on the landside the court considers that this was not visible from the MV “CHALLENGER” and therefore not applicable.

The last argument of the claimant was that a “mooring” agreement was established between the parties because the owner of the MV “CHALLENGER” entered the landside several times during the construction of the MV “CHALLENGER” at the shipyard. However, the Court considered that the text of the sign cannot be read from a distance. The text is also general in nature and does not warn for specific risks that need to be considered more carefully. Consequently, no “mooring” agreement has been established between the owner of the MV “CHALLENGER” and the shipyard.

 

Conclusions

Excluding liability by means of a sign is possible and can be effective. A “mooring” agreement or “entry” agreement will be created between the shipowner respectively (lorry) driver and the terminal operator. In order to establish such an agreement, the text for the relevant visitor to the terminal operator must be sufficiently visible and clear. Generally speaking, a visitor may understand from the general terms of the text on the sign that this excludes liability for the general risks at the terminal. Excluding liability for damage caused by the terminal to the visitor through loading and unloading of goods may have effect, but then the text of the sign must clearly indicate for what risks the visitor is liable. Reference to General Terms and Conditions on a sign appears to be possible, although that has not yet been contested in court. The exclusion of liability also applies if the terminal operator is sued on the basis of tort. A terminal is not able to exclude its liability if it acts contrary to the principles of reasonableness and fairness (e.g. intent or recklessness or to allow to continue unnecessarily dangerous situations).

 

For more information, please contact:

DAAN KOMEN

Telephone       : + 31 10 217 77 20

Mobile             : +31 6 37 47 05 56

Email               : komen@caland.nl

 

Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.

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