3 The Eimskip decision -the facts
It is now time for a more detailed description of the Eimskip case:
A contract for employment as a mate, between a Norwegian citizen and a Norwegian shipping company, Eimskip, was concluded in 2010 and renewed in 2012. The 2010 contract was on a standard form prepared by the Norwegian Maritime Directorate; at the top of the document was inserted: “According to Seamen’s act of 30 May 1975 §3 with regulations.” From the renewed contract of 2012, which was not on a standard form, I mention the first clause, which related to the mate’s duty to serve on the ship designated by Eimskip. Further, I quote (my translation):
“2. LEGAL REGULATION
With the limitations which are explicitly stated in this agreement the employment is subject to the wage agreement between the Small Vessel Owners’ Association and the respective unions, the Norwegian Marine Officers’ Association for NOR [NOR = The Norwegian Ordinary Ship Register], the Norwegian Seamen’s Union and the Norwegian Engineers’ Union to the extent appropriate.
10. CHOICE OF LAW AND JURISDICTION
Disputes in connection with this agreement or otherwise in the employment relationship shall be brought before a Norwegian Court. The accepted venue is Vesteraalen District Court.”
The mate served on two vessels, both Antiguan registered. At the time of dismissal he worked on board MS Svartfoss (gross tonnage 2.990, built in Norway in 2004-2005).
The vessel was, as already mentioned, bare boat chartered to a company on the Faroe Islands, and this company was required to crew and run the ship. These tasks were - as regards manning and technical operations - outsourced to an Icelandic company. As part of fulfilling such tasks, the Icelandic company hired the services of the mate from Eimskip. In this way, the mate came to work on board MS Svartfoss, which traded in Norwegian waters, with some voyages to England and the Netherlands while he was on board.
This set-up was basically Islandic: The Faroe Islands company, as well as the Norwegian company, were owned by the Icelandic company.(1) In “Technical and Crew Management Agreement” between the Faroe company and Eimskipafelag Islands, article 4 says: “Since both Faroe Ship and Eimskip are owned fully by Eimskipafelag Islands hf. no agent fee is payable under this Agreement”. I add that the names Svartfoss and Eimskip clearly have an Icelandic “flavour”.
When the mate did not accept his dismissal and instigated court proceedings before a Norwegian District Court, in conformity with the quoted jurisdiction clause, the question arose: which country’s law should govern? In an intermediate decision, the District Court held that it was the law of the flag.(2) TVTRA-2016-808. The Court of Appeal agreed and also rejected an assertion that Norwegian law had been agreed.(3) LH-2015-95334. The Supreme Court was solely asked to decide on the choice of law question, and it came - as already indicated - to the same conclusion as the lower courts.