Superyacht dispute provides helpful guidance on applicable jurisdiction

Weco Projects APS v (1) Mr. Pier Luigi Loro Piana; (2) Credem Leasing SPA; and (3) Peters and May Limited [05.08.2020]

Peters & May S.R.L v (1) Mr. Pier Luigi Loro Piana; and (2) Credem Leading SPA [05.08.2020]

On 5 August 2020, the High Court handed down its judgment on applications to set aside service of two sets of English proceedings for lack of jurisdiction. The judgment provides useful guidance on the jurisdictional rules applicable to consumers under European law, especially in the context of transport-related contracts.


MY SONG was a 130’ sailing superyacht (the Yacht). Although owned by Credem Leasing SPA, it was leased back to Italian billionaire and enthusiastic amateur yachtsman, Mr Loro Piana (Mr LP). In November 2018, Mr LP’s representative approached Italian company Peters & May S.R.L (PMS) to arrange for the carriage of the Yacht on its own cradle from Antigua to Genoa with or through PMS’ English principals, Peters & May Ltd (PML).

The contract between Mr LP and PML was set out in a Booking Note containing among other things:

  • An Exclusive Jurisdiction Clause (EJC) in favour of the English courts
  • A Himalaya Clause extending the benefit of “every exemption, limitation, condition … Liberty … Right … Of whatsoever nature applicable to [PML]” to PML’s servants or agents who were deemed to be parties to the contract “to this extent
  • A term incorporating the standard BIFA terms (which include an EJC of their own).

PML chartered the BRATTINGSBORG, owned by Weco Projects APS (Weco), to perform the carriage. Shortly after leaving Palma, the BRATTINGSBORG encountered heavy weather during which the Yacht was lost overboard and irreparably damaged.

Proceedings issued

  • Despite the EJC, Mr LP issued proceedings against PMS and PML in Milan in both contract and tort for the value of the Yacht.
  • Thereafter, Weco issued proceedings in the Commercial Court against Credem, Mr LP and PML seeking a declaration of no liability.
  • PML then brought identical claims against Mr LP and Credem under CPR Part 20 in those proceedings.
  • PMS issued separate proceedings for the same relief against Mr LP and Credem.
  • Mr LP also issued proceedings against Weco in Genoa.

Mr LP and Credem challenged the London Court’s jurisdiction to hear any of the claims against them.

“Consumer” Issues: Brussels I (Recast) Regulation and the Consumer Rights Act 2015

Mr LP argued that he contracted as a consumer such that he was entitled to the protections in Article 17-19 of the Brussels I (Recast) Regulation (the Regulation), including an entitlement under Article 18(2)to be sued only in Italy.

By Article 17(3), consumer protection is not available to parties to a “Contract of Transport”. However, Mr LP disputed that the Booking Note was a “Contract of Transport” but rather a contract to arrange transportation. By way of alternative, Mr LP invoked the Consumer Rights Act 2015 (CRA 2015), arguing that the EJC was an unfair term and therefore null and void under section 62(1) of the Act.

Contract of Transport

The important issue is the predominant purpose of the contract. The purpose of the contract was to be judged at the time it was made, without regard to how it was in fact performed. The judge, Christopher Hancock QC, found that the Booking Note was “clearly” a “Contract of Transport” under Article 17(3) because:

  1. The contract went beyond merely arranging the carriage and gave PML the liberty to perform or sub-contract that carriage.
  2. Remuneration was in the form of freight rather than commission.
  3. PML chartered the BRATTINSBORG in to perform their obligations and paid its owners a separate rate of freight for that.
  4. The Booking Note clearly contemplated the charter of the carrying vessel and the application of USCOGSA, being a statute for international carriage.
  5. A large number of provisions within the booking note contemplated that PML might actually provide the carrying vessel (even if in fact they did not do so).

“Consumer” under the Regulation

Although the Contract of Transport finding was sufficient to determine that the consumer protections in the Regulation did not extend to Mr LP, the Judge nevertheless found on the facts that Mr LP did not contract as a consumer in any event, at least for the purposes of the Regulation. The relevant test under Article 17 was that set out in Gruber v Bay Way AG [2006], namely whether the extent of the business purposes of that contract was more than merely negligible. The evidence before the court was that the Yacht had been used in the Caribbean, and would be used again upon arrival in Genoa, for promotional activity for a company in which Mr Loro Piana was an ambassador and minority shareholder, such that Mr LP did not contract for its carriage as a consumer for the purposes of the Regulation.

“Consumer” under the CRA 2015

Mr LP sought to argue that even where consumer protection was not available to him under the Regulation, he could still avail himself of domestic consumer protection laws, as set out in the CRA 2015. The Act defines a consumer as a person acting “for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession” and renders null and void any terms of a consumer contract that are unfair inasmuch as they create “a significant imbalance in the parties’ rights and obligations to the detriment of the consumer”. 

The judge found that Mr LP was a consumer under the CRA 2015 because the transport of the Yacht, while having a non-negligible business element, was nevertheless mainly for non-business purposes. However, he also found that in all the circumstances of the case the EJC was binding in that it did not create any imbalance between the parties, still less a serious imbalance.

Having reached that conclusion, the judge did not then have to grapple with the difficult prior question of principle, namely whether, having already decided that Mr LP was not a consumer under the Regulation, he could nevertheless still rely in the alternative on the consumer protections set out in the CRA 2015. Consideration of whether it is permitted to have “two bites of the cherry” in this way or whether that would drive a coach and horses through the Regulation regime and the harmonisation of such matters that it was intended to create will be for another day.

The position of WECO

It was common ground that the EJC was binding as between Weco and PML. In order to establish English jurisdiction for their claims against Mr LP and Credem, Weco sought to rely on (a) Article 8(1) of the Regulation; and (b) the Himalaya clause in the Booking Note.

Article 8(1) of the Regulation

This provides that where a person domiciled in a Member State is one of a number of defendants, s/he may be sued in the courts of the place where any of the defendants (the “anchor defendant”) is domiciled, provided that the claims are so closely connected that it is expedient to hear and determine them together to avoid the risks of irreconcilable judgments. What must be shown is a close connection between the claims against the various defendants.

On the basis that the factual material relating to the cause of the casualty is likely to play a substantial part in the process of decision making, and will be common to both sets of claims, the Judge found that there was clearly a close connection between the claims and it was desirable that these factual issues be determined in the same forum. Further, it was not an abuse of process for Weco to advance an arguable claim for negative declaratory relief against PML thereby establishing them as an “anchor defendant”, allowing them to bring claims against Mr LP and Credem in the same jurisdiction.

Himalaya Clause

In light of the finding under Article 8(1), it was not strictly necessary for the Judge to deal with Weco’s alternative argument that by virtue of the Himalaya Clause in the Booking Note they are entitled to rely on the EJC. Nonetheless, the Judge held that, on its true construction, and on the authority of the Privy Council in The Makhutai [1996], the wording of the Himalaya Clause was not apt to extend the benefit of the EJC to Weco.

The Judge concluded that while Weco had clearly been acting as PML’s servant or agent, nevertheless Weco was unable to rely on the Himalaya Clause to found jurisdiction.

The position of PMS: The “Conditional Benefit” principle

Mr LP argued that as there was no binding EJC as between himself and PMS, leaving him free to pursue his claims against PMS in Italy. However, PMS submitted that as Mr LP had sought to enforce contractual claims arising out of the Booking Note in the Italian court, he should not be able to “take the plums without the duff” and should be required to respect the jurisdiction clause within that contract (i.e., the “conditional benefit” analysis).

Despite protestations from Mr LP’s Italian lawyer that Mr LP was not in fact suing it Italy under the Booking Note contract, the judge accepted the conditional benefit analysis. He found that that having regard to what was said in the Italian writ of summons, there was a good arguable case that PMS was “clearly” entitled to the benefit of the EJC.


The case provides useful guidance on the jurisdictional rules applicable to consumers under European law, especially in the context of transport-related contracts. However, the extent to which a party denied the status of a consumer under the Regulation can resort to domestic consumer protection laws will have to wait for another day.

Kennedys acted for PML and PMS in these proceedings (who deny all responsibility for the loss).

Read others items in London Market Brief - November 2020

Read others items in Marine Brief - November 2020