The Municipality of Magdalena, Argentina, commenced proceedings against Shell Compañía de Petróleo SA, the owner of the BT Estrella Pampeana, and Schiffarts-Gessell-Schaft and Projex Schiffahrts-Gesellschaft mbH & Co, the owner and operator respectively of the MV Primus (ex Sea Parana). The claim was for pollution damage resulting from a collision between these two vessels. This lawsuit was filed in the courts of Ciudad de la Plata, while the collision proceedings were to be heard in Buenos Aires. Boston Compañía de Seguros SA, a third-party intervener, applied for a stay of proceedings in favour of the Court in Buenos Aires that had cognisance of the collision proceeding. The petition was based on art 552 of the Navigation Act, which provides that all claims resulting from a collision must be accumulated to the collision proceedings, and must be decided as incidental claims.

The first instance Court dismissed the petition. Among other reasons, the Court invoked art 1.1.c of the Collision (Civil Jurisdiction) Convention 1952, ratified by the Republic of Argentina by Law 15.787. This article states that an action for collision can be brought in the Court of the place of the collision when it has occurred within the limits of a port or in inland waters. Furthermore, the Court stated that it was the Court conducting proceedings for the pollution produced by the collision. Considering the importance of the marine environment, it would be unreasonable to transform this action into an incidental claim. The National Chamber of Civil Appeals and Commercial Federal de la Ciudad de la Plata affirmed the decision. The petitioner appealed to the Supreme Court (SC).

Held: The SC admitted the recourse, reversed the decision, and sent the case to the Court in Buenos Aires.

The SC adopted the opinion of the Attorney-General (A-G). The A-G stated that the first instance Court, in denying the application of art 552 of the Navigation Act, based its decision on a consideration of the rules applicable to pollution cases, which focus on the origin of the action and the determination of what type of liability applies. This aspect, without a doubt, was the subject matter of a final decision. If this recourse was not admitted, this decision by the first instance Court might not able to be modified through the ordinary recourse process, as it would have acquired the authority of res iudicata.

The doctrine of universal proceedings, apart from contributing to the procedural efficiency mentioned by the lower Courts as the only argument that would benefit the appellant's claim, was a sufficient and valid foundation for staying the case in favour of the collision forum. It not only aims to achieve an effective administration of justice, but finds essential support in the primary and substantial principle of legal certainty. Its objective is to submit all claims resulting from the same event to the oversight of only one judge. Thereby, the concentrated consideration of the facts, the evidence, and the applicable rules in each case tend to avoid contradictory interpretations and decisions and the consequent legal scandal that would result from this. It must be observed that, save for the vicinity of the Court to the place where the event occurred, and the collection of evidence to prove the action for pollution, no substantial damage is caused to the plaintiff for staying the case in favour of the collision forum. That Court is competent by reason of the subject matter of the case, and the proceedings of the actions attracted must not necessarily be processed as incidental.

Furthermore, the claim was directed against Shell CAPSA, not only in its capacity as the owner of the polluting substance, but also as the operator and shipowner of the BT Estrella Papeana, and against the operators and owners of the MV Primus. This aspect indicates that the action is not only based on the strict liability of the owner of the polluting substance, but also on the liability of the parties involved in the collision, of whom it could not be said that they were the owner of the polluting substance.

The lower Court decision also referred to the possible jurisdiction of the Court of Ciudad de la Plata regarding the collision proceedings. This aspect, however, was not the subject of the petition submitted. The application submitted dealt only with whether consolidation of jurisdiction applied to the collision proceedings. The Courts of Buenos Aires are competent because both parties to the collision are domiciled there. They are competent to decide the collision and, consequently, all claims against the ships and their owners. The text of art 552 of the Navigation Act requires a broad literal interpretation, as opposed to a restrictive construction, because the norm is supported on public policy reasons pursuing legal certainty, the extension of the res iudicata principle, and the defence of rights in the proceedings.