A fire in Ibiza, Spain, destroyed the Olympia (owned by the claimant), the Timbali II (owned by the first defendant) and other yachts (owned by the second and subsequent defendants). It was alleged that a fire on the Timbali II caused the damage to the Olympia.

The claimant sought to limit its liability and served the limitation claim form on the appellant in Germany. The appellant acknowledged service, applied to set aside service of the claim form and commenced liability proceedings against the respondent in Spain. Since ‘any applicable Convention’ under the CPR 61.11(5)(c) covered the LLMC 1976, the remaining question was whether the Supreme Court of Gibraltar had jurisdiction over the claim.

The first defendant applied to set aside the judge’s earlier order for lack of jurisdiction. That application had two limbs. The first was on domicile. The judge made an earlier finding on this in the claimant’s favour. The second was that the LLMC 1976 did not give the court jurisdiction to entertain limitation proceedings in the absence of liability proceedings. This was the subject of the present appeal.

Held: Appeal dismissed.

The second sentence of art 10.1 of the LLMC 1976 could not alter the meaning of the phrase 'action is brought' in art 10.3 - the second sentence of art 10.1 had not been adopted in Gibraltar.

The construction of the first sentence of art 11 was considered in The Western Regent [2005] 2 Lloyd’s Rep 359. Even if art 11 was construed as such, it did not mean that limitation could not be invoked under art 10 in any other State where no fund had been constituted. Even though a decision of the English Court of Appeal is only of persuasive value in the Supreme Court of Gibraltar, such a decision is of significant persuasive value.