RINA case: European court's ruling on state immunity and ship registration
RINA case: European court’s ruling on state immunity and ship registration
A&L Goodbody's Dr Vincent Power was recently invited to write for the Maastricht Journal of European and Comparative Law on the important EU shipping law case of LG and others v. Rina SpA, Ente Registro Italiano Navale (Case C-641/18 before the Court of Justice of the European Union). This is a summary of Vincent's paper (a full copy of which is available from Vincent directly).
More than 1,000 passengers drowned on a Panamanian-registered ferry in the Red Sea.
Some survivors and relatives of some of the victims sued the classification and certification ship society which had surveyed the ferry – this classification and certification form part of the set of authorisations which allow vessels to sail lawfully.
Relying on the Brussels I Regulation (the EU measure which allocates jurisdiction between courts across the EU), the plaintiffs sued the defendants in the latter’s "seat" (i.e. in Italy where the defendant was based).
The defendants claimed sovereign immunity as they were acting on behalf of Panama (that is, the flag state of the vessel) – in essence, they said that the Italian courts has no jurisdiction over the defendants because they were doing the work of a sovereign state (i.e. Panama) in terms of whether or not to allow it to fly the Panamanian flag.
The plaintiffs counter-argued that the immunity did not cover activities governed by non-discretionary technical rules unrelated to a State’s political decisions and prerogatives.
The CJEU considered the Regulation in the context of: (a) the Charter of Fundamental Rights of the European Union, (b) the European Convention for the Protection of Fundamental Rights and Freedoms; (c) the 1982 United Nations Convention on the Law of the Sea; (d) the International Convention for the Safety of Life at Sea ('SOLAS Convention’); as well as (e) the European Union’s Ship Inspection and Survey Directive.
The CJEU ruled that, generally, Article 1(1) of the Regulation means that an action for damages, brought against private-law corporations engaged in the classification and certification of ships on behalf of, and upon delegation from, a non-EU Member State, falls within the concept of ‘civil and commercial matters’ in the Regulation. The defendants were therefore not immune from the jurisdiction of the Italian courts
The CJEU qualified its ruling by saying that this is conditional on the activity being not exercised under ‘public powers’ (within the meaning of EU law) because then it would then be a sovereign and not a commercial activity.
The CJEU’s analysis was the correct one (based on what is presented in the ruling). Anything else would have been bad law and bad policy. First, it would have been unfortunate and wrong for the CJEU to take an expansive view simply to find jurisdiction in Italy so that claims could proceed and victims be potentially compensated. Warping the law in that way would have brought it into disrepute. It is welcome that there could be potential protection for the victims but it is important that the CJEU did not seek in this case (or ever) to protect all victims at all costs but only where there is a sound legal basis for its interpretation. Secondly, this finding is in keeping with the law on this area generally. The law and practice in various jurisdictions globally (including the EU) are now clear that a sovereign immunity claim is not absolute and would not succeed where it relates to a commercial or non-sovereign activity. The CJEU was thus applying a well-established principle in this case in a sensible and rational way.
The CJEU made it clear that the Regulation may apply in a dispute such as the present one in the main proceedings, where the court seised finds that the classification and certification organizations at issue have not had recourse to public powers. This means that the ruling has relevance not only for maritime law but also international law generally.
The ruling will probably deter further claims of sovereign immunity unless there is a credible claim. While the claim might have been more potent in the 1970s and 1980s before the Doctrine of Sovereign Immunity was limited by various courts and parliaments, it will be increasingly difficult to make the claim in the future. Member State courts should be slightly more sceptical of such claims in the aftermath of this ruling.
One must recall, with some sadness from the perspective of the victims and their dependents that the sinking occurred more than 14 years before this preliminary ruling which (as the CJEU always says in preliminary rulings) is just ‘a step in the action pending before the national court’ so it may well be a case of 'justice delayed is justice denied' but that is not the EU’s fault. Indeed, this case demonstrates the value of the preliminary reference procedure because plaintiffs taking comparable proceedings some years earlier over the same issue had been told that the Italian courts had no jurisdiction because of the doctrine of sovereign immunity
While the case is about the activities of ship classification and certification societies, it also has a wider significance in terms of the CJEU’s recognition that sovereign immunity claims will have to be well-founded so as to avoid the Brussels I Regulation applying. Perhaps a revision of the Regulation might codify the position of sovereign immunity and put the issue beyond doubt.
The case is obviously significant for the global shipping industry because the casualty occurred outside the EU but a court in the EU could have jurisdiction. It may well be that further claims will now be made in the EU in other non-EU located maritime casualties but also in other regulated sectors given the CJEU’s narrowing of the sovereign immunity doctrine.
In essence, the CJEU ruled that the customary public international law principle that foreign states have immunity from jurisdiction does not preclude an EU Member State court seised of a dispute from exercising jurisdiction under the Regulation in these circumstances.