We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
23 December 2020
The Supreme Court recently ruled in a case concerning the defence of lack of jurisdiction due to state immunity claimed by Rina SpA in the matter concerning the sinking of the Al-Salam Boccaccio 98.
The Al-Salam Boccaccio 98 was a ro-ro passenger ferry that sank in February 2006 in the Red Sea while en route from Saudi Arabia to Egypt, resulting in the death of 1,031 people and the total loss of the vessel (for further details please see "Immunity of jurisdiction defence rejected in compensation claim").
At the time of the accident, the vessel was registered under the flag of Panama and classed by the Italian company Rina, which had also issued the relevant statutory certificates on behalf of the flag state, acting as their recognised organisation.
Survivors and relatives of the deceased persons involved in the accident had brought different proceedings before the Genoa Tribunal, the place in which Rina has its seat, claiming damages resulting from the classification and certification activity carried out by Rina on behalf of Panama, the flag state of the Al-Salam Boccaccio 98. Both the tribunal and the Genoa Court of Appeal had granted the lack of jurisdiction of the Italian court defence that Rina pleaded, explaining that in issuing the relevant statutory certificates for the Al-Salam Boccaccio 98, Rina had acted as a recognised organisation of the flag administration and had thereby benefited from Panama's state immunity.
The claimants appealed the Genoa Court of Appeal's decision before the Supreme Court, arguing that Rina could not benefit from state immunity as its activity concerned a non-discretionary technical scope of action, unrelated to the decisional functioning of a sovereign state.
Further, the claimants demanded that the matter be decided by the unified sections of the Supreme Court given the importance of the issue at stake and claimed that the Supreme Court should have demanded a preliminary ruling from the European Court of Justice (ECJ) based on the application of the jurisdiction rules concerning civil and commercial matters with regard to Rina's activities.
The Supreme Court granted the claimants' motion to have the matter decided by its unified courts' section. However, it did not authorise a preliminary ruling to the ECJ because as separated proceedings had been brought by different claimants, the Genoa Tribunal had already requested a preliminary ruling from the ECJ on the same question. Therefore, the Supreme Court decided to wait for the outcome of the ECJ's case before rendering its decision.
After the ECJ's judgment was published on 7 May 2020 (C-641/18), the Supreme Court issued its decision.
The Supreme Court overturned the Genoa Court of Appeal's decision and rejected Rina's defence of lack of Italian jurisdiction for state immunity, thereby confirming the Genoa Tribunal's jurisdiction.
The Supreme Court held that the Genoa Court of Appeal was wrong in considering that Rina could benefit from state immunity by simply relying on its lato sensu governmental functions, as the principle of state immunity is not absolute and should be limited to sovereign acts performed iure imperii. To this end, the Supreme Court referred to the ECJ's decision, according to which only the exercise of public power falls outside the scope of the ordinary commercial and private legal rules of law applicable to relationships between individuals. Therefore, for delegated governmental functions, it must be determined whether:
The court also recalled Article 1 of the EU Brussels Recast Regulation (1215/2012/EU) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, in light of which the scope of the regulation excludes the "liability of the State for acts and omissions in the exercise of State authority (acta iure imperii)".
The court argued that a restrictive construction of the state immunity principle is also sustained under the Constitutional Act and, in particular, those principles entailing the rights of an effective judicial remedy (Article 24) and the right to a fair trial (Article 111).
Delving into the specific activity carried out by Rina, the Supreme Court noted that in general, classification and certification activities carried out by a classification society on behalf of sovereign states do not come with decisional powers. Further, the court established that in the specific matter, the state of Panama conferred no authority to Rina to interpret the grounds according to which statutory certificates are issued. Rina had to carry out a technical activity driven by instructions and rules already set out and the findings before the court did not reveal that Rina's powers went beyond such limited scope of action.
The Supreme Court concluded that a similar activity cannot be considered an exercise of a typical sovereign public power able to benefit from jurisdictional state immunity, thereby affirming the jurisdiction of the Italian courts to decide the claimants' claim to seek compensation from Rina resulting from its activity of classification and certifications carried out on the Al-Salam Boccaccio 98.
Finally, the Supreme Court expressed an obiter dictum on Recital 16 of EU Directive 2009/15/EC on common rules and standards for ship inspection and survey organisations and for the relevant activities of maritime administrations. Although the directive and the cited recital were not patently applicable in this specific matter, the court held that the express words used by the EU legislature, that state immunity cannot be delegated to third parties, not only confirm EU law on the state immunity principle applicable to classification societies, but also support the exclusion of the existence of a customary international law principle which aims to extend immunity from jurisdiction with regard to classification and certification of ships.
The decision of the unified sections of the Supreme Court combined with the previous ECJ ruling on the matter provide the final ruling on the immunity from jurisdiction defence raised by Rina not only in these specific proceedings but, most probably, also in the separate proceedings already started before the Genoa Tribunal by other claimants against Rina for the sinking of the Al-Salam Boccaccio 98. Further, the Supreme Court decision contains precise guidance as to immunity from jurisdiction with regard to the classification and certification of ships, thereby making it improbable that any such defence will be successfully pleaded in the future by a classification society before an Italian court.
For further information on this topic please contact Marco Manzone or Luca Di Marco at Dardani Studio Legale by telephone (+39 010 576 1816) or email (firstname.lastname@example.org or email@example.com). The Dardani Studio Legale website can be accessed at www.dardani.it.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.