This case arose out of a maritime collision in 2012 in the Dutch Exclusive Economic Zone between the claimant's vessel, the Baltic Ace, and the Corvus J, a vessel owned and bareboat chartered by the fifth and sixth defendants (the Corvus defendants). At the time of the collision the Baltic Ace was carrying a cargo of 1,417 cars. As a result of the collision the Corvus J was damaged and the Baltic Ace sank. Eleven crew members on board the Baltic Ace died.

The master of the Baltic Ace (the first defendant in these proceedings) commenced proceedings against the claimant in the Isle of Man for the loss of his personal effects as a result of the collision. The claimant sought a general limitation decree pursuant to the Convention of Limitation of Liability for Maritime Claims 1976 as amended by the 1996 Protocol (the LLMC 1996) as given effect by the Merchant Shipping (Convention on Limitation for Maritime Claims) Application Order 2000 (SD 386/00) made under s 5 of the Merchant Shipping Act 1995 (Act of Tynwald). The declaration was sought against all persons who might have a claim against the claimant. The claim was brought in the Isle of Man because the claimant is domiciled in the Isle of Man by way of incorporation. On 3 May 2013 the limitation fund was constituted in the Isle of Man. The order permitted the limitation fund to be constituted by the provision of an irrevocable letter of undertaking by NEPIA which was provided on 29 May 2013.

The Corvus defendants challenged the jurisdiction of the High Court of Justice of the Isle of Man to determine the claimant's limitation claim and applied for a stay of proceedings. They argued that the Netherlands was the clearly most appropriate forum for the determination of the claimant's limitation action.

Held: Application by the Corvus defendants dismissed. (1) The Manx High Court has jurisdiction to hear the limitation claim; (2) there are no good reasons to decline to exercise that jurisdiction; (3) there is no jurisdiction to stay the limitation claim on the basis of an application by the Corvus defendants alone; and (4) if the Court has jurisdiction it is not appropriate to stay the proceedings.

The limitation claim is brought by a shipowner for a decree of limitation valid against all possible claimants against it. The limitation claim seeks a decree of entitlement to limit and subsequently the setting of the limit against all claimants collectively. The limitation defendants have no rights to assert in the limitation claim. They may either contest the right to limit (virtually unknown) or accept the right to limit and address their proved claims to the fund when adjudged or admitted. The limitation claim consists in effect of the assertion by the shipowner of an international Convention defence against the world. The limitation defence is necessarily asserted against the pool of all potential claimants together and not just against any single person who may have a claim and be a member of that pool.

The claimant is domiciled in the Isle of Man. The claimant is entitled to bring the limitation claim in the forum of its incorporation. The Isle of Man is the claimant's place of incorporation. This court has jurisdiction over the limitation claim pursuant to schedule 1 of the High Court Act 1991. It is settled practice that the shipowner has the right to choose the forum of its limitation claim.

If the Court has jurisdiction, it has power to order a stay of proceedings on the basis that the Isle of Man is an inappropriate forum if: (1) The Corvus defendants show that there is another court with competent jurisdiction which is clearly or distinctly more appropriate than the Manx High Court for the trial of the limitation claim; (2) It is not unjust that the claimant be deprived of the right to trial of the limitation claim in the Isle of Man.

The Dutch Court is not clearly a more appropriate forum than the Manx High Court to determine the Manx claimant's Manx limitation claim. The shipowner's right to choose the forum for its limitation claim is a weighty factor to be taken into account in considering the question of the appropriate forum for the determination of the limitation issues (as opposed to any liability issues). Only the Corvus defendants have disputed jurisdiction and applied for a stay of the Manx limitation proceedings. The master has commenced his claim in the Isle of Man. All other potential claimants can sue the claimant in the Isle of Man. Various defendants have already acknowledged service of proceedings, accepted that the Court has jurisdiction over the claimant's limitation claim and admitted the right of the claimant to limit liability in accordance with the LLMC 1996. The seventh defendant (the Kingdom of the Netherlands Rijkswaterstaat Directie Noordzee) is not challenging the Manx jurisdiction.

The fact that the underlying liability claim has a connection with the Netherlands and the fact that there are other proceedings underway in the Netherlands does not significantly detract from the justifications for allowing the claimant shipowner to bring its limitation claim in the Isle of Man. In any event, the Dutch connecting factors on which the defendants seek to rely are not compelling in the context of the Manx limitation claim. The Corvus defendants refer to numerous factors connected with evidence, witnesses, domicile, convenience and expense and other factors which they say connects the matter to the Netherlands. They do not, however, point to the Netherlands as the natural forum ie that with which the limitation claim has the most real and substantial connection. The Dutch proceedings are not considering the same issues as will arise in the claimant's limitation claim in the Isle of Man. The issue in the limitation proceedings before this court is whether the claimant is entitled to limit its liability under the LLMC 1996. That issue is not the subject of any of the Dutch proceedings. The Dutch limitation proceedings concern the rights of the Corvus defendants to limit their own liability. The Dutch liability proceedings concern who was at fault for the collision. The Dutch survey proceedings concern a proposal for an underwater survey of the Baltic Ace.

The Manx High Court may have to consider evidence as to the underlying facts of the collision if the Corvus defendants seek to break limitation and this attempt is not struck out at summary judgment stage. It is well established that the test for breaking limitation under art 4 of the LLMC 1996 is extremely difficult to meet and a somewhat formidable hurdle. However, even if the Court has to consider and/or determine the question of liability for the collision, the key witnesses are not all located in the Netherlands and neither are all of the parties. The claimant is domiciled in the Isle of Man. This, in the context of the limitation claim, is the single most important connecting factor. The significant connecting factors in respect of the claimant's limitation claim do not point to the Netherlands. It is correct that lawyers have been engaged in the Netherlands, but lawyers have also been engaged in the Isle of Man.

It is not unusual for limitation proceedings and liability proceedings to take place in different jurisdictions. Whilst there can be no distribution of the fund while liability is still in issue there is no reason in principle why the Manx High Court cannot grant a limitation decree before liability is determined. There will be no damaging fragmentation of proceedings in this case. The proceedings in the different jurisdictions are of a different nature. This is not an unusual or unique situation. The Dutch proceedings can be determined in the Netherlands subject to any jurisdictional challenges. The Manx limitation proceedings can be determined in the Isle of Man and relevant evidence obtained in the Netherlands (if any) can be adduced in the Isle of Man subject to the consent of the relevant parties and if need be the approval of the relevant courts.

There is also no real risk of conflicting judgments to the extent that the Court should decide the jurisdictional issues in favour of the Corvus defendants. The apportionment of liability can be dealt with in the appropriate jurisdictions without any real risk of conflicting judgments. In practice, any claimants against the Manx limitation fund will come to the Court with a judgment on liability from the court dealing with liability and file their claim against the fund accordingly whereupon there will be a distribution. As regard the inter-ship claims under art 5 of the LLMC 1996, the respective claims have to be set off against each other first and the provisions of the LLMC only apply to the balance after set off.

The claimant is not able to obtain the same relief in the Netherlands as in the Isle of Man as these two jurisdictions have ratified the LLMC in different ways. In the Netherlands, wreck removal costs are excluded from limitation under the LLMC, but if the limitation claimant wishes to limit its liability for wreck removal costs it can set up a second limitation fund under Dutch law to respond to any claims for wreck removal costs. In the Isle of Man, any claims for wreck removal expenses are not excluded from limitation and any such claims would have to be made against a single physical damage limitation fund for all the claims. Thus, if the claimant had to limit in the Netherlands, it would have to set up a second fund of over GBP 9 million. This is a significant factor to weigh in the balance.