On 12 May 1999, an Antigua and Barbuda-flagged cargo vessel owned by D & A Shipping Ltd sank while it was berthed at Piraeus. The defendant insurer had insured the vessel for civil liability for marine pollution. The claimant initiated legal proceedings against the defendant for its expenses for averting and minimising harmful consequences from the cargo of the sunken vessel and waste or oil leaking from it.

The shipowner constituted a limitation of liability fund under the LLMC 1976. The claimant brought its claims against the fund. The Court of Appeal held that the claimant’s claims fell within arts 2.1.e and 2.1.f of the LLMC 1976, and by bringing them against the fund, the claimant had accepted that its disputed claims were subject to limitation of liability.

The claimant appealed to the Supreme Court.

Held: The appeal is dismissed.

The Supreme Court reviewed the case in the light of the arts 1, 1.2, 1.3, 1.6, 2, 2.1.e, 2.1.f, 9, 9.1.a, 9.1.b, 9.1.c, 9.2, 11, 11.1, 11.2 , 11.3, and 13.1 of the LLMC 1976 and concluded the following:

Greece ratified the LLMC 1976 by Law 1923/1991, which since its entry into force constitutes, according to art 28.1 of the Constitution, an integral part of domestic national law and prevails over any other contrary provision of law. The Convention provides for limitation of liability for maritime claims. Article 1 lists the persons entitled to limit liability, while art 2 lists the claims subject to limitation.

Persons entitled to limit their liability are the shipowner and the salvor, which, according to arts 1.2 and 1.3, include the owner of the ship, the charterer, the operator, and the manager of a seagoing ship, as well as persons directly connected with marine salvage operations. Furthermore, according to art 1.6, the insurer of liability for claims subject to limitation in accordance with the rules of the Convention is also entitled to the benefits of the Convention to the same extent as the insured. The purpose of the latter provision is ensure that the insurer is not placed in a worse position than the insured with regard to the limitation of liability, and therefore the insurer's right of limitation is to the same extent as that of the insured. Furthermore, under arts 2.1.e and 2.1.f, 'claims in respect of the removal, destruction or the rendering harmless of the cargo' and 'claims of a person other than the person liable in respect of measures taken in order to avert or minimize loss for which the liable person may limit his liability in accordance with this Convention, and further loss caused by such measures' are subject to limitation.

Moreover, art 11 of the Convention refers to the establishment of the limitation fund. According to art 13.1 of the Convention, where a limitation fund has been established in accordance with art 11, any person who has made a claim against the fund may not exercise any other rights in respect of that claim against any other assets of a person by or on behalf of whom the fund has been constituted. From the latter provision, in conjunction with that of art 11.3, it follows that if the owner or owner-operator of a ship, exercising its rights under the LLMC 1976, establishes in Greece a fund to limit its liability, claimants who have made claims against the fund may not exercise in parallel not only other rights in respect of that claim against other assets of the person by or on behalf of whom the fund was established, but also against another debtor who, under the same Convention, would be entitled to establish a limitation fund itself in respect of the same incident.

In particular, the insurer, apart from being one of the other persons who can establish a limitation fund, is entitled under art 1.6, in the event of limitation of liability, to the benefits of the Convention to the same extent as the insured itself.

The Court of Appeal did not violate the substantive provisions of arts 13.1 and 11.3 of the LLMC 1976. Therefore, the claimant's arguments that the insurer is not included among the persons for whom the limitation fund is deemed to have been established must be rejected as inadmissible.