On 27 October 2020, the Portuguese-flagged and German-owned container ship ML collided with the Greek Navy minesweeper K south of Psytalleia. As a result, part of the minesweeper's stern was sheered off, and it sank. Two crew members were slightly injured, and minor pollution was caused.

The Greek State initiated legal proceedings against the shipowner and other defendants. On 28 December 2020, the Court of First Instance ordered the arrest of the ML for claims up to EUR 70 million.

On 8 January 2021, the shipowner applied successfully to the Court of First Instance for an order constituting a limitation fund for all claims arising from the collision, except those related to loss of life and personal injury, and submitted a cash deposit of EUR 33,250,000. It asked the Court to decide the exact amount of the limitation fund and order the remaining balance to be returned to it. It also applied for the release of the ML pursuant to arts 11 and 13 of the LLMC 1996. The Greek State appealed this decision. The Court of Appeal dismissed the appeal. The defendant was entitled to limit its liability under arts 1.1, 1.2, 1.5, 2, 6, 6.1.b, 8, and 11 of the LLMC 1996, and had lawfully constituted a limitation fund. Furthermore, the Court rejected the Greek State's argument regarding conduct barring limitation under art 4 of the LLMC 1996.

The Greek State appealed against the One Member Court of Appeal of Piraeus (Maritime Division) Decision 48/2022 (CMI2365) to the Supreme Court.

Held: The appeal is dismissed.

The Supreme Court reviewed the decision of the Court of Appeal in the light of arts 1.1, 1.2, 1.4, 1.5, 2, 2.1.a, 2.1.e, 4, 6, 7, 8, 11, 11.2, 14, and 15 of the LLMC 1996 and concluded the following.

Greece ratified the LLMC 1976 by Law 1923/1991. Since 1 November 1991, it is an integral part of Greek law and prevails over any other contrary provision of law (art 28.1 of the Constitution). The LLMC introduced a system of limiting the liability of the owner, operator, manager, and charterer of a seagoing ship to a certain amount, which differs from that in arts 84 ff of the CPML. As per art 15 of the LLMC, it applies directly to both international and domestic legal relationships, since Greece did not enter any reservations to the Convention. The previous national regime of Law 1892/1990 regulating the limitation of shipowner's liability has been implicitly repealed (Supreme Court, A1 Civil Division, Decision 2263/2013 (CMI338)).

Since ships used for State purposes are not excluded from the scope of the LLMC, limitation of liability also applies to State maritime claims which are subject to limitation. This is because the justification for limitation of liability exists for the claim irrespective of who the claimant is. Because the LLMC introduces limitation of liability in favour of certain persons and claims, and does not regulate the legal grounds for substantive liability, the latter is determined by applying the provisions of the CPML.

Furthermore, from the provisions of arts 1.1, 1.2, 1.4. 1.5, 2.1.a, 2.1.e, 6, 7 and 11 of the LLMC 1996, it follows that the shipowner, which includes the operator, owner, charterer, and manager of a seagoing ship, as well as persons for whose acts or omissions the shipowner is responsible, may limit their liability for the relevant claims. They may establish a fund in a court or other competent authority in any State party in which legal proceedings are brought in respect of claims subject to limitation. This fund should cover the total of the amounts determined by arts 6 and 7 of the LLMC with interest, and may be constituted either by deposit of the amount or by the provision of a guarantee acceptable under the law of the State party in which the fund is established, which is deemed to be a guarantee for the limitation (Supreme Court, A1 Civil Division, Decision 2263/2013 (CMI338)).

Moreover, it follows from the combination of arts 6, 7, 8, and 11 of the LLMC 1996 that the exact amount of the limitation fund is provided by the Convention itself, which contains in detail all the elements for its objective determination, from which it is derived as a result of mathematical calculations. Accordingly, there is no need for the Court to intervene in order to determine the amount of that fund, either provisionally or definitively, and the Convention therefore leaves no scope for such intervention. Intervention by the Court is reserved for the constitution of a limitation fund by provision of a guarantee under art 11.2, since it is necessary to obtain a judicial decision as to the nature of the guarantee and its adequacy to secure the critical requirements, in accordance with the provisions of the law of the State party where the fund is constituted (art 14).

Article 14 also provides that the rules relating to the constitution and distribution of the limitation fund and all relevant rules of procedure shall be governed by the law of the State party in which the fund is constituted (the law of the forum). Greek law has not established specific procedural provisions for the constitution and distribution of LLMC funds. Special provisions have been enacted by Presidential Decree 666/1982 (as amended by Presidential Decree 494/1989) implementing the CLC 1969 (ratified by Greece by Law 314/1976), but this concerns only matters of compensation for marine pollution. It is more consistent from a systematic point of view to fill this gap by applying arts 90-104 of the CPML, because the provisions of the LLMC supplement or amend the liability regime of the CPML, which is otherwise fully applicable in so far as it does not contradict the provisions of the LLMC (Supreme Court, A1 Civil Division, Decision 2263/2013 (CMI338)).

Article 91 CPML provides that the only document accompanying a declaration of limitation of liability is proof of public deposit of the amount of money to which liability is limited. The procedure for limitation of liability commences with a unilateral declaration by the shipowner and continues with the liquidation of the fund. The fund constitutes separate property, which is available only for the satisfaction of claims arising out of the same incident and in respect of which liability may be limited. Consequently, the establishment of a limitation fund in Greece requires a declaration by the debtor before the competent Court of First Instance, accompanied by evidence of the public deposit of the prescribed amount or of the security specified by the competent Court. From that moment the effects of the establishment of the fund, in particular the suspension of individual proceedings against the debtor, take effect (Supreme Court, A1 Civil Division, Decision 2263/2013 (CMI338)).

Moreover, art 4 of the LLMC 1996 introduces a form of culpability at the level of fraudulent intent and gross negligence, which is proved by the party invoking it, ie the creditor whose claim is subject to limitation of the debtor's liability. Within the meaning of this provision, the loss of the right to limitation presupposes fraud (whether actual or potential) or wilful negligence on the part of the debtor. It refers to wilful misconduct which occurs when that person is aware of the probable occurrence of the damage for which the limitation referred to in art 2 of the LLMC 1996 is sought, and despite that acts out of negligence (Supreme Court, A1 Civil Division, Decision 1470/2017 (CMI2385)).

The Court of Appeal correctly found that the maritime accident was due to the fault of the master in command of the vessel, but that the shipowner had selected suitable personnel with the necessary formal and substantive qualifications. Consequently, the legal representatives of the shipowner were not personally liable for any form of fault. The appellant's objection under art 4 of the LLMC was unfounded.