Zurich Insurance Company Limited (trading as Navigators and General) & Ors v Halcyon Yacht Charter LLP & Ors

In a limitation claim, the forum for the limitation proceedings is distinct from the forum for the underlying tort claims. The court should not assume that the tort jurisdiction is clearly or distinctly more appropriate for determining limitation. A speculative and improbable defence under Article 4 of the 1976 Convention does not justify a stay. The established practice permits a shipowner to choose its domiciliary court to constitute a limitation fund. Differences between competing limitation regimes, including a higher foreign limit, do not alone establish that substantial justice requires a stay where the foreign forum has not been shown to be clearly more appropriate.

The claimants sought a limitation decree in England following a marina fire in Corfu. The owner of a damaged vessel subsequently brought substantive proceedings in Greece and applied to stay the English limitation claim for forum non conveniens.

The parties accepted that Greece was available and was the natural forum for the underlying tort claims. The dispute concerned whether Greece was clearly or distinctly more appropriate for the separate limitation claim, having regard to the possible Article 4 defence, witnesses and evidence, the competing limitation limits, the risk of conflicting decrees, and the alleged tactical choice of an English forum.

1. Application refused. The English limitation proceedings were not stayed.
2. Applying the principles in The Spiliada, the limitation claim was separate and distinct from the underlying claims. It ordinarily involved the amount of the limitation fund and any Article 4 defence. The fact that Greece was the natural forum for the tort claims did not make it clearly or distinctly more appropriate for the limitation claim.
3. The Article 4 defence was speculative and improbable. The cause of the fire was unknown, eighteen months had elapsed, and there was no supporting evidence of deliberate or reckless conduct. That possibility could not establish that England was an inappropriate forum. It was unnecessary to decide which jurisdiction would be appropriate if such a defence were raised.
4. The established practice recognised that a shipowner may choose its domiciliary court to constitute a limitation fund. Limitation proceedings and substantive claims may be tried separately and in different jurisdictions. The international and multi-national character of the potential claims provided no sufficient reason to disturb that practice.
5. The prospect that a Greek court might not recognise an English limitation decree was no basis for treating Greece as the more appropriate forum. Nor was the lower English limitation fund an improper juridical advantage or a reason to deny substantial justice in England. The court was not required to prefer the Greek regime as objectively more just.

The judge left open the separate threshold argument, based on The Falstria, that a stay application by only one anticipated claimant might be misconceived. That issue was expressly reserved for another case.