LG and Others v Rina SpA

• Jurisdiction: European Union
• Judge: Bonichot,Silva de Lapuerta,Safjan,Bay Larsen,Toader,Szpunar
• Judgment Date: 07 May 2020
• Docket Number: (Case C-641/18)
• Court: Court of Justice of the European Union

Court of Justice of the European Union (First Chamber)

(Bonichot, President; Silva de Lapuerta, Vice-President; Safjan, Bay Larsen and Toader (Rapporteur), Judges; Szpunar, Advocate General)

(Case C-641/18)

LG and Others

and

Rina SpA, Ente Registro Italiano Navale 1

State immunity — Jurisdictional immunity — Action for damages against ship classification and certification company acting upon delegation from Republic of Panama — Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters — Article 2(1) — Whether Italian court having jurisdiction under Regulation — Article 1(1) — Scope of civil and commercial matters — Operations of ship classification and certification societies — Public powers — Whether classification and certification operations conducted in exercise of public powers — Immunity from jurisdiction — Whether customary international law principle of jurisdictional immunity of States precluding court from exercising jurisdiction under Regulation — The law of the European Union

Summary:2The facts: — In 2006, the Al Salam Boccaccio'98, a ship sailing under the flag of the Republic of Panama (“Panama”), sank in the Red Sea, causing the death of more than a thousand people. Relatives of the victims and survivors (“the applicants”) filed a suit in the Tribunale di Genova, a district court in Genoa, Italy, against the companies Rina SpA and Ente Registro Italiano Navale (“the respondents”), which carried out the classification and certification of the ship. The applicants argued that the respondents' classification and certification operations led to the ship's lack of stability and safety at sea, causing it to sink; and claimed compensation for pecuniary and non-pecuniary losses.

The respondents contested the applicants' claims and pleaded immunity from jurisdiction, arguing that those classification and certification operations were conducted upon delegation from a foreign sovereign State, namely Panama, under whose flag the ship was sailing. According to the facts in the main proceedings, the respondents performed those operations on the basis of a 1999 agreement with Panama, under which the respondents were to carry out ship certification and classification operations as delegates of the State. In that context, and against remuneration, the respondents concluded another contract with the owner of the ship Al Salam Boccaccio'98, pursuant to which they carried out the inspections and surveys required for the classification and certification of the vessel, and issued the corresponding certificates.

The respondents contended that the classification and certification operations constituted a manifestation of Panama's sovereign powers because they were carried out on behalf of and in the interests of the State, in performance of its international obligations concerning maritime safety and the prevention of marine pollution, under the United Nations Convention on the Law of the Sea, 1982 (“UNCLOS”) and the International Convention for the Safety of Life at Sea, 1974 (“the SOLAS Convention”). States were obliged, under those Conventions, to (i) exercise jurisdiction and control over ships flying their flag, in administrative, technical and social matters, and (ii) ensure the safety at sea of those ships, in relation to their construction, equipment and seaworthiness (Article 94 of UNCLOS).3 Under Regulation 6, Chapter I of the SOLAS Convention, States could delegate ship inspections and surveys to surveyors nominated for that purpose, or organizations recognized by the State, but were required to take measures to guarantee the completeness and efficiency of the inspections and surveys.4

The applicants objected to the respondents' plea of immunity from jurisdiction, arguing that the international law principle of the jurisdictional immunity of States, on which the respondents relied, did not cover activities governed by non-discretionary technical rules that were unrelated to a State's prerogatives. The applicants also contended that since the respondents' seat was in Italy, and the dispute was civil in nature, the Italian courts had jurisdiction under Article 2(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Regulation No 44/2001”),5 within the meaning of its Article 1(1),6 under which jurisdiction in civil and

commercial matters was based on the domicile of the entity against which the claim was brought.

The Tribunale di Genova stayed the proceedings and referred the question of its jurisdiction to the Court of Justice of the European Union (“the Court”). It requested the Court to issue a preliminary ruling on whether an action for damages, against a private law body engaged in the classification and certification of ships as delegates of a State, fell within the scope of “civil and commercial matters” under Article 1(1) of Regulation No 44/2001; and, if so, whether the plea of immunity from jurisdiction precluded the court from exercising jurisdiction under that Regulation.

The respondents objected to the request for a preliminary ruling, arguing that the interpretation of Regulation No 44/2001 was irrelevant for the purposes of a decision on the plea of immunity from jurisdiction under customary international law, which the referring court ought to have ruled upon before requesting the Court for a preliminary ruling on jurisdiction. They also argued that Regulation No 44/2001 was not applicable ratione materiae to the dispute in the main proceedings, because the case concerned a claim based on an act of public authority, which excluded the action from the scope of that Regulation.

Opinion of the Advocate General

Held:—(1) The questions referred for a preliminary ruling were admissible, despite the plea of immunity, because the Court had been requested to interpret Regulation No 44/2001. Questions on the interpretation of European Union law, referred by a national court, enjoyed a presumption of relevance. The Court would only decline to provide an answer in rare cases, such as where it was obvious that the interpretation sought bore no relation to the facts in the main action, which could not be said of the matter before the Court. Further, the respondents' argument that Regulation No 44/2001 did not apply to the dispute in the main proceedings prejudged the Court's answer on whether the classification and certification operations fell under Article 1(1) of Regulation No 44/2001, which was far from obvious (paras. 28–32).

(2) According to the Court's case law, jurisdictional immunity of States, under customary international law, was not absolute. The Court had recognized the doctrine of relative immunity, which distinguished between acts performed jure gestionis, i.e. private or commercial acts of State, and acts performed jure imperii, i.e. sovereign or public acts of State. Jurisdictional immunity was generally recognized when the dispute concerned acts performed in the exercise of public powers, but excluded where acts were performed jure gestionis. Accordingly, the respondents' claim for immunity was based on functional immunity, i.e. the nature of activities carried out and whether they were performed in the exercise of public powers (paras. 34–9).

(3) It was unnecessary to refer to the international law principle on jurisdictional immunity of States when considering the scope ratione materiae of Regulation No 44/2001. The question of whether that Regulation applied ratione materiae in a dispute was, a priori, to be distinguished from the question of whether the jurisdiction derived from that Regulation could be exercised with regard to the specific dispute. Additionally, the distinction between disputes that were civil or commercial in nature and those that were not, under the Regulation, was to be drawn by reference to the independent criteria of European Union law identified in the Court's case law (paras. 40–8).

(4) The scope of “civil and commercial matters” under Article 1(1) of Regulation No 44/2001 was broad, as evidenced by the wording of recital 7 of that Regulation7 and the fact that, with a few exceptions, every action for damages fell under that provision. Therefore, in order to define the scope of the Regulation, it was necessary to clarify what did not constitute civil and commercial matters. Article 1(1) stipulated that the Regulation did not extend, in particular, to revenue, customs or administrative matters. That list was not exhaustive, and although the provision did not expressly exempt acts carried out in the exercise of public powers, a successor Regulation, namely Regulation No 1215/2012, which was equivalent in scope, did.8 One common factor among the matters exempted from the scope of Regulation No 44/2001 was that they were acts carried out in the exercise of public powers. Based on that reasoning, the Court had repeatedly held that the exercise of public powers by a party to the dispute excluded the case from the ambit of civil and commercial matters under Article 1(1), in so far as the powers exercised fell outside the scope of the ordinary legal rules applicable to relationships between private individuals. Therefore, in order to determine whether the Regulation applied to the case in the main proceedings, it was necessary to establish whether the classification and certification operations were carried out in the exercise of public powers (paras. 49–60).

(5) The classification and certification operations could not be regarded as proceeding from the exercise of public powers.

(a) The fact that the operations were performed upon delegation from the State did not, by itself, mean that they were carried out in the exercise of public powers. Where there were multiple relationships between parties — one involving a public authority and a person governed by...