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Baros v. Embrica Maritim Hotelschiffe

2009 April 15
by Hein Kernkamp

Court: Netherlands Supreme Court

Date: October 17th, 2008

LJN number: BE7628

Case: In 1998 Embrica as Owner and Baros as charterer entered into a charter party for the lease and hire of the hotel boat "Embrica Marcel", the vessel to be delivered and placed at the disposal of the Charterer in Bremen, Germany. The vessel was subsequently sublet to the Dutch state, who used it as an asylum boat in The Netherlands. On the expiration of the charter, the charterers failed to re-deliver the vessel in the same good order as when delivered. Embrica claimed damages. The court dismissed the claim, but this decision was overruled by the court of appeals, which partially awarded the claim. The applicable law remained an issue and apparently had an influence on the award. In its decision, the court of appeals recognized that under Article 4 section 2 of the Rome Convention the contract is presumed to be most closely connected to Germany, since the characteristic performer (Embrica) has its principal place of business in Germany. But the court of appeals nevertheless decided to apply Article 4 sections 3 and 5, noting that in this particular case the charter did not have a real significant connection with Germany, since (a) the hotel boat was leased and hired with the intention to use it as housing at a permanent location in the Netherlands, (b) during the full term of the charter the hotel boat was permanently connected to the shore by means of a jetty and a footbridge, (c) the hotel boat was not intended or suited as a means of transport and did not avail over own means of propulsion, (d) the Charter obliged Owners to keep the hotel boat at the disposal of charterers in the Netherlands for the full term of the charter, (e) Embrica knew that Baros intended to sublet the hotel boat to the Dutch state, (f) the Charter provided for redelivery in The Netherlands. Based thereon, the court of appeals ruled that Dutch law was applicable as the most closely connected law.

Held: The Netherlands Supreme Court adheres a strict interpretation of Article 4 section 2 of the Rome Convention and ruled that none of the grounds set forth by the court of appeals justifies an exception from the general rule of Article 4 section 2, following which German law applies as the law of the principal place of business of owners. Hence, German law should be applied and the case is sent back to another court of appeals to further decide upon the case.

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