Compensation claim against German ship engine manufacturer not governed by Norwegian law

The bankruptcy estate of the Norwegian shipping company IMSK SE claimed compensation from the German company MAN Energy Solutions SE related to the delivery of ship engines in the early 2000s. IMSK was not a party to the purchase agreements, and the compensation claim is based on the non-statutory rules of non-contractual liability. The basis was that companies in the MAN group had manipulated test results over many years, making the engines' fuel consumption appear lower than it actually was. In the District Court and the Court of Appeal, IMSK was awarded compensation based on Norwegian legal rules.

 MAN appealed to the Supreme Court on several grounds. The Supreme Court decided that the issue of choice of law – whether the compensation claim was governed by Norwegian law – should be addressed first.

 The Supreme Court concluded that the case was not governed Norwegian law, and that the Court of Appeal's judgment had to be set aside. In a new hearing, the Court of Appeal must reconsider the choice of law and decide the case based on this.

 The Supreme Court emphasised the international aspects of the case. All relevant contractual relationships were between parties in countries other than Norway. The ships were built abroad to operate outside Norway, and the engines were built and delivered outside Norway. The loss asserted by IMSK as the basis for the claim was, in the Supreme Court's view, an indirect consequence of MAN's actions, which cannot provide a basis for applying Norwegian law.

A minority of two justices partially dissented. The minority agreed that Norwegian law was not applicable to the part of the total claim transported to IMSK from foreign companies, but found that Norwegian law was applicable for the part of the claim related to loss allegedly suffered by IMSK itself. 

The judgment clarifies the content of the conflict-of-law rules for non-contractual obligations.

Read the judgment from the Supreme Court (PDF)

Areas of law: International private law. Choice of law for non-contractual claim for compensation. 

Key paragraphs: 89-92, 96-97, 101

Justices: Øie, Falkanger, Bergh, Sæther, Lund