Immunity of jurisdiction defence rejected in compensation claim

Facts
Decision
Comment


Facts

The Al-Salam Boccaccio 98 was a ro-ro passenger ferry that sank in February 2006 in the Red Sea while en route from Saudi Arabia to Egypt, resulting in the death of 1,031 people and the total loss of the vessel.

At the time of the accident, the vessel was registered under the flag of Panama and classed by the Italian companies Rina SpA and Ente Registro Italiano Navale (RINA companies), which had also issued the relevant statutory certificates on behalf of the flag state, acting as their recognised organisation.

Survivors and relatives of the deceased brought proceedings in Italy before the Court of Genoa, where the RINA companies have their seat, with the aim of establishing their liability and seeking compensation. The claimants argued that the vessel had sunk due to the classification and certification operations carried out by the RINA companies.

The defendants argued that the Court of Genoa lacked jurisdiction and invoked jurisdictional immunity, arguing that the classification and certification operations had been carried out on delegation from Panama and were a manifestation of the sovereign powers of the delegating state.

The claimants counterargued that since the RINA companies had their registered addresses in Italy and the dispute concerned civil and commercial matters, the Court of Genoa had jurisdiction under Article 2(1) of the EU Brussels Regulation (44/2001). Moreover, the claimants argued that the defence of immunity from jurisdiction raised by the RINA companies did not cover activities governed by non-discretionary technical rules, which are unrelated to the political decisions and prerogatives of a state.

The Court of Genoa stayed the proceedings and referred the matter for a preliminary ruling to the European Court of Justice (ECJ), asking whether the Court of Genoa should decline to hear the case on the basis of said immunity exception or whether it must apply the EU Brussels Regulation (44/2001) and exercise jurisdiction as the judicial authority where the subjects against which the claim had been brought had their principal place of business.

Decision

First, the ECJ investigated the meaning of 'civil and commercial matters' in Article 1(1) of the EU Brussels Regulation (44/2001) to ascertain whether the ship classification and certification activities carried out by the RINA companies on behalf of Panama fell within the scope of said provision.

To this end, the court made a distinction between:

• the actions of a public authority in the exercise of its public powers (iure imperii), which do not fall within the scope of the EU Brussels Regulation (44/2001); and
• actions taken without exercising public powers (iure gestionis), which fall within the regulation's scope.

In this respect, the ECJ stated that the fact that particular powers are delegated to a private individual by a public authority or that this individual carries out activities on behalf and in the interest of the public authority does not automatically imply that such powers are exercised iure imperii or that such activities are an expression of public powers.

The court stated that actions can be considered to have been carried out in the exercise of public powers only when such powers are outside the scope of the ordinary legal rules applicable to the relationship between private individuals.

Further, the ECJ clarified that it was a task for the referring court to establish whether the acts carried out by the RINA companies fell into either the iure imperii or the iure gestionis category. However, the ECJ decided to provide an answer to the referring court: by applying the above principle to the classification and certification activities delegated by Panama to the RINA companies, the ECJ stated that they had been carried out under direct state supervision and within the precise framework of the applicable legislative technical provisions. As a result, such activities could not be regarded as having been carried out by the RINA companies in the exercise of public powers within the meaning of EU law.

Therefore, the ECJ held that the action for damages brought against the RINA companies on behalf of Panama fell within the scope of 'civil and commercial matters' under Article 1(1) of the EU Brussels Regulation (44/2001) and, therefore, within the scope of that regulation.

Second, the court examined whether the objection raised by the RINA companies based on the principle of customary international law concerning immunity from jurisdiction may affect the applicability of the EU Brussels Regulation (44/2001) to the dispute between the parties.

In this respect, the ECJ underlined that the immunity of states from jurisdiction is generally recognised where a dispute involves sovereign acts done iure imperii, but it may be excluded if the legal proceedings concern acts which do not involve the exercise of public powers.

To the same extent, the court stated that entities of private law such as the RINA companies cannot avail themselves of the immunity from jurisdiction when the classification and certification operations for ships have not been carried out iure imperii within the meaning of international law.

Consequently, the ECJ concluded that the principle of immunity does not prevent the application of the EU Brussels Regulation (44/2001) in the dispute pending before the Court of Genoa, where the judge had found that the classification operations had not exercised public powers within the meaning of international law.

Comment

The Court of Genoa will have the final word on the jurisdiction of the claims against the RINA companies brought by survivors and relatives of passengers who died on board the Al-Salam Boccaccio 98. The court will have to establish whether the acts carried out by the RINA companies are to be deemed iure imperii or iure gestionis.

Only in the former case will the Court of Genoa be allowed to uphold the RINA companies' lack of jurisdiction defence in favour of the courts of Panama (in the latter case, the RINA companies will have to face judicial proceedings before the court where they have their principle seat).

However, it will be a difficult task for the referring court to reject the ECJ's precise and detailed argument that the activities carried out by the RINA companies cannot be deemed an expression of public powers within the meaning of EU law.

For further information on this topic please contact Marco Manzone or Luca Di Marco at Dardani Studio Legale by telephone (+39 010 576 1816) or email (marco.manzone@dardani.it or luca.dimarco@dardani.it). The Dardani Studio Legale website can be accessed at www.dardani.it.