This was an appeal in cassation from the judgment of the Aix-en-Provence Court of Appeal, 5 October 2011. Algérie Télécom (AT) arranged with CMA CGM, the time charterer of the vessel CMA CGM Maghreb, owned by Squad Shipping Ltd (Squad), to carry containers of telephone cables from Beirut, Lebanon, to Algiers. The ship ran aground on 22 January 2004 off the port of Lattaquié, Syria. Wijsmuller Salvage (Wijsmuller) provided salvage assistance. After having received a claim from Lucifer Magic Creation (Lucifer) in its capacity as recipient of other goods transported on the ship, CMA CGM applied on 4 November 2004 to the President of the Commercial Court of Marseille for the constitution of a limitation fund, which was granted the following day. The fund was constituted by means of a letter of guarantee issued on 29 November 2004 by the ship's P&I club. AT and Compagnie Algérienne des Assurances et Transports (CAAT), the insurer of the goods, who had paid various sums to the salvor Wijsmuller and to the shipowner Squad, contested the constitution of the fund.

First, AT and CAAT criticised the judgment for having retained the jurisdiction of the Marseille Commercial Court on, amongst others, the ground that the provisions of an international treaty took precedence over those of internal law when both have the same object. Article 11 of the LLMC 1976, which designates as competent the judge of the State in which an action is brought for claims subject to limitation, and art 59 of Law n° 67-967 of 27 October 1967, which designates the judge of the ship's home port, or the judge of the French port where the accident occurred or of the first French port reached after the accident, or the judge of the place of the first seizure or of the first security, both have the same purpose, namely to identify the competent judge to establish or confirm the existence of the limitation fund. By ruling out the application of art 11 of the Convention in favour of art 59 of Law n° 67-967, the trial Judges violated art 55 of the Constitution of 4 October 1958, together with art 11 of the LLMC 1976.

Secondly, AT and CAAT complained that the judgment subjected CAAT's claim to limitation for the sums paid by it to the salvor Wijsmuller. They argued that under art 3.a of the LLMC 1976, claims linked to salvage are excluded from the limitation fund. In the present case, CAAT paid the costs of the salvage operations to the third party which had ensured the salvage of the ship and the cargo. By including this claim in the limitation fund although it was related to salvage, the trial Judges violated art 3 of the LLMC 1976. If, under art 2.1.c of the Convention, claims for compensation resulting from damage caused to third parties during salvage operations do fall within the scope of the limitation, the situation is different under art 3.a regarding contractual claims representing the cost of the salvage operation, which are excluded from the limitation fund. In any case, the trial Judges could not rule as they did without first investigating whether, CAAT having paid the price of the rescue, it was not subrogated in the rights of the salvor. By refraining from doing so, the trial Judges at the very least deprived their decision of a legal basis with regard to arts 2.1.c and 3.a of the LLMC 1976.

Thirdly, AT and CAAT criticised the judgment for having subjected to limitation an expenditure that could be subsidised in general average. In dismissing CAAT's application to seek to establish the existence of a contribution debt in general average against CMA CGM, the trial Judges simply noted that CMA CGM is not the owner of the vessel but only its charterer and the carrier. By ruling thus, without indicating the rule of law which they intended to apply by these findings, the trial Judges did not specify the legal basis of their decision. By setting aside the subsidised claim of contribution in general average of CAAT against CMA CGM on the grounds that the latter has only the capacity of charterer and carrier, the Judges on the merits violated arts 28 and 29 of Law n° 67-545 of 7 July 1967, together with art 3.a of the LLMC 1976.

Fourthly, AT and CAAT criticised the judgment for having dismissed all responsibility of CMA CGM in the grounding of the ship. Contrary to what the Judges stated on the merits in the context of examination of commercial fault, the existence of recurring breakdowns revealing the defective condition of the vessel did not take the form of simple allegations. AT and CAAT referred expressly to the findings made by the International Maritime Bureau. By considering that they were dealing with a simple allegation, exonerating them from providing a response, when they were in reality dealing with a plea corroborated by evidence, the trial Judges violated art 455 of the Code of Civil Procedure.

Held: Appeal dismissed.

First, far from refusing to apply art 11.1 of the LLMC 1976, the Court of Appeal did so. The Court interpreted the provision correctly, stating that the limitation fund can be set up preventively at the initiative of any person, such as the maritime carrier, whose liability may be called into question, without it being required that this has been sought at a previous legal action initiated for this purpose. Article 14 of the Convention refers the determination of the procedural rules relating to the constitution of the limitation fund to the law of the State party in which it is constituted. The Court of Appeal correctly referred to the rules of territorial jurisdiction fixed in art 59 of the Law of 27 October 1967 relating to the Status of Ships. Without taking into account either the head office of CMA CGM, or the place where the claim of Lucifer was addressed to it, the Court of Appeal retained as the sole criterion of competence of the Commercial Court of Marseilles the fact that it was in this city that the first security within the meaning of art 59.b of the Law of 27 October 1967 was provided. It does not matter that the letter of guarantee was issued only after the filing of the application for the constitution of the fund.

Secondly, if salvage claims are excluded from the limitation by art 3 of the Convention, this is only where the compensation is due, as remuneration, to the salvor itself. Article 2 of the Convention limits claims for loss or damage to any property or for any other damage directly related to salvage operations. Having noted that CAAT's claim was intended to reimburse an advance made to Wijsmuller to obtain the release of the seizure of the goods transported, and that this was not the claim of the salvage company, the Court of Appeal correctly deduced that this claim was subject to limitation.

Thirdly, the ship had been declared in general average, not by CMA CGM, but by Squad. AT and CAAT contested before the Algerian courts whether the grounding incident was subject to general average. The Court of Appeal did not have to determine whether the expenditure invoked by CAAT had to be compensated in general average and excluded, consequently, from the limitation, since it was not seized on this point.

Fourthly, in order to exonerate the maritime carrier from its liability, on the basis of the excepted case provided for in art 4.2.a of the Hague Rules, the judgment holds that, if the master committed a fault that caused the grounding of the vessel, no commercial fault liable to neutralise this nautical fault is established against CMA CGM. The vessel was provided with the required certificates and seaworthiness documents, and no technical element demonstrated a weakness or insufficiency of the anchor chain. The Court of Appeal thus rejected this argument.