This case involved damage to a sheet pile wall at the Nuon power plant in the Eemshaven, possibly caused by dredging activities undertaken by the cutter suction dredger Seine, which was owned by Boskalis Nederland (BKN) and leased by Baggermaatschappij Boskalis (BMB). BMB and BKN (collectively referred to as Boskalis) constituted a property fund in order to limit their liability. Nuon and Groningen Seaports contested the right to limitation and argued that there was deliberate recklessness.

Held: Judgment for the defendants.

In accordance with arts 1.1 and 1.2 of the LLMC 1996 (art 8:750 paras 1 and 2 of the Dutch Civil Code (DCC)) the owner, charterer, manager and operator of a ship can limit its liability for the claims set out in art 2 of the LLMC 1996 (art 8:752 DCC). BMB as owner and BKN as charterer fall within the circle of persons as referred to in arts 1.1 and 1.2 of the LLMC 1996 (art 8:750 paras 1 and 2 DCC).

It follows from the categories of claims listed in art 2 of the LLMC 1996 (art 8:752 DCC) that are subject to limitation, that for limitation of liability it is necessary but also sufficient if there is a claim for compensation of damage to property arising in direct connection with the operation of the ship. A claim falls under art 2.1 of the LLMC (art 8:752 DCC) if the cause of action can be brought under the categories of the article, regardless of the legal basis of the claim. Given that Nuon and Groningen Seaports contend that damage to property has been caused by dredging activities involving Boskalis’ use of the Seine, this matter concerns claims for damages incurred in direct connection with the operation of the ship (the Seine). For that claim, Boskalis can in principle invoke limitation of liability.

As the legal basis of liability is irrelevant to the question whether limitation is possible, it is also irrelevant whether the incident that caused the damage can be qualified as a marine incident, provided that the claim is related to the compensation of damage arising in direct connection with the operation of the ship. The circumstance that the damage (possibly) cannot be qualified as a ‘collision’ or an ‘allision’ (as referred to in art 8:540 ff DCC) is therefore not relevant either. Nor is it relevant whether Boskalis could have done the dredging work from shore, or that the damage occurred during dredging activities.

This matter is to be distinguished from the judgment in Liander v KWS (Hoge Raad 21 November 2014, S& S 2015/74), since that case did not concern the question whether limitation of liability was possible for the claim concerned but whether the time bar provisions for collisions were applicable to that claim. One could imagine a case where (according to an agreement) a certain activity is to be carried out on or from the shore and that, if the activity is nevertheless carried from a ship, and damage occurs, it would therefore not be correct to allow the operator of that ship to invoke limitation of liability. This is not such a case, however, as it was clear from the start that the dredging activities would be carried out with a ship. It is not important to determine precisely to what extent that would be the case.

The criterion for the (im)possibility to limit liability is laid down in art 4 of the LLMC 1996 (art 8:754 DCC): no party is entitled to limit its liability if it is proved that the loss resulted from its personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. It therefore concerns personal intent or deliberate recklessness. It follows from the wording of art 4 of the LLMC 1996 (art 8:754 DCC) that limitation of liability is barred due to the behaviour of the (legal) person held liable, when it is established (i) that the loss is the result of (ii) the behavior of the concerned (legal) person.

Where the provisions of Dutch law are based on the LLMC 1996, this is a case of interpretation of that Convention. The interpretation of the treaty provisions must be based on the criteria of arts 31-33 of the Vienna Convention on the Law of Treaties 1969 (VCLT): (i) a treaty must be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose (art 31.1); (ii) together with the context, any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation shall be taken into account, which means that the prevailing view in case law and literature from the State Parties also forms a primary means of interpretation of the treaty (art 31.3); (iii) for the interpretation one can rely on the travaux préparatoires (art 32); and (iv) when the comparison of the authentic treaty texts discloses a difference of meaning which the application of arts 31-32 of the VCLT does not remove, the meaning which best reconciles the texts, having regard to the object and purpose of the treaty, shall be adopted (art 33.4).

According to the wording of art 4 of the LLMC 1996 it concerns ‘personal’ acts or omissions. This wording indicates that it is about none other than the (legal) person that is held liable itself. The travaux préparatoires do not specifically answer the question on the interpretation. However, it does appear that the drafters of the LLMC 1976 envisaged making the Convention regulation practically unbreakable and to allow the breaking of limits only when the type and degree of fault is such that a liability insurer no longer would have to offer any coverage.

R Cleton, who was part of the Dutch delegation when the LLMC 1976 was concluded, states in his De Beperkte Aansprakelijkheid van de Scheepseigenaar that where the shipowner is a legal person, there needs to be an act or omission of one of the bodies of the legal person or of someone whose conduct is to be regarded in society as conduct of the legal person.

In a judgment dated 11 October 2016 (Atlantik Confidence), the English Admiralty Court ruled that, in that case, limitation of liability was barred on the basis of art 4 of the LLMC 1976 because the 'alter ego of the owners' of the ship had requested the scuttling of the ship, so that the loss of the cargo was inevitable and therefore had to be considered to be intentional.

The conclusion is that limitation is only barred if it is established that the alleged damage is the result of conduct of the management of Boskalis, or of one or more natural persons whose conduct is to be regarded in society as the conduct of the legal person, that is to be qualified as intent or deliberate recklessness. Intent or deliberate recklessness of persons who cannot be regarded as such is not sufficient for this.

The circumstances that: (i) Boskalis chose not to carry out the dredging work from shore but from a ship; (ii) Boskalis did not carry out the work in accordance with the agreed dredging profile; (iii) Boskalis did not deploy the agreed type of dredger; (iv) a risk analysis showed that Boskalis not deploying the agreed type of dredger increased the risk of damage and was ‘not acceptable’; (v) Boskalis allowed the cutter suction dredger to dredge too close to the sheet pile wall; (vi) the mate of the Seine allowed the cutter head and arm to dredge too close to the dam wall and too deep, and did not pull it up high enough, cannot support the conclusion that the alleged damage is the result of the behaviour of the management of Boskalis, or of natural persons whose conduct is to be regarded in society as the conduct of that legal person.

There is no room for a test under national law as to whether Boskalis’ invoking of limitation is unacceptable by standards of reasonableness and fairness (good faith). This case concerns the application of the possibility of limitation of liability as laid down in the LLMC 1996, an international Convention. The circumstance that this international possibility of limitation of liability has been incorporated into Dutch legislation does not change that. In the context of this international regulation, there is no room for deviation on the ground that a certain possibility or result may be unacceptable by the standards of reasonableness and fairness.