NORWAY Trends and Developments Contributed by: Lilly Kathrin Relling, Kristian Lindhartsen, Miriam Myhre and Tobias Kilde, Kvale Advokatfirma DA
The main issue for the Norwegian Supreme Court was which country’s law should be used to assess IMSK’s claim against MAN. In simple terms, the court had to decide where the damage really happened in legal terms. Earlier Norwegian cases had moved towards the idea that, in non‑contractual (tort) cases, you nor - mally use the law of the country where the damage occurs, not where the wrongful act was carried out. One later Supreme Court judgment explained that for non‑contractual obligations, the main rule is that the case must be decided according to the law of the place of damage – lex loci delicti. In this case, the court also stressed that not every knock‑on financial effect counts. The focus should be on the immedi - ate and direct damage, and more remote or indirect economic consequences should not usually decide which country’s law applies. As the court put it, not every effect of a harmful act occurring in a country can serve as the basis for choosing that country’s law. When the court applied this approach to the facts, the majority found that the engines were produced, tested and delivered abroad, and that the companies which directly owned the ships were also foreign. IMSK’s loss in Norway was therefore seen as an indirect loss arising through its ownership in these foreign com - panies, rather than the place where the damage itself occurred. The court noted that no financial loss arose for anyone until the engines were delivered, and that MAN’s harmful act had no immediate and direct effect in Norway. On that basis, Norwegian law could not be used as the governing law for the claim, and the lower court’s ruling on the matter (Court of Appeal) was set aside. The case was sent back so that the Court of Appeal could choose the correct foreign law and decide the case accordingly. This ruling is important because it clarifies which coun - try’s law Norwegian courts will use when a tort case has links to several jurisdictions, especially where the economic loss is felt through ownership in foreign companies. The Supreme Court itself says that the judgment clarifies the content of the conflict‑of‑law rules for non‑contractual obligations. At the same time, the judgment explains how this “place of damage” rule fits together with both the EU Rome II Regulation and Norway’s older, more flex -
ible Irma Mignon doctrine. The court pointed out that modern Norwegian practice is strongly inspired by the EU Rome Regulations, even though Norway is not bound by them, and that the system in Rome II must clearly apply as Norwegian law today for non‑con - tractual claims. New Shipbuilding Contract Standard – SHIP25 SHIP25 replaces SHIP 2000 SHIP25 is the new Norwegian shipbuilding standard replacing SHIP 2000. SHIP 2000 has seen widespread use and has been regarded as the go‑to contract for new ship builds in the northern hemisphere and, to some extent, in Asia. The new SHIP25 is based on the same premises as SHIP 2000, but is designed for a market characterised by more complex and expensive designs, greater pro - ject risk and marked price volatility. A key aim was to update the allocation of risk on issues such as design, subcontractors, price adjustment, refund guarantees, compliance and ownership, and to create a standard form that is more in touch with the current market, so that it can be used with confidence as a standard for international ship building. Key changes A key change concerns design responsibility. Under SHIP 2000 the yard effectively carried full responsibil - ity for the vessel’s compliance with the design, even where the design was ordered by the buyer, which meant that the yard had to price in a significant and open‑ended design risk. SHIP25 allows the parties, through Appendix I and a separate design agreement, to limit the builder’s liability for design errors and to place residual design risk more clearly on the party in control of the design. The regulation concerning subcontractors has also been rebalanced. Under SHIP 2000 the builder was generally liable for delays in its supply chain, even where the buyer had effectively dictated the choice of supplier, which in practice pushed prices up and created difficult negotiation positions where there were no realistic alternatives. SHIP25 introduces the concept of “Buyers Elected Items” via Appendix V, under which delay risk for buyer‑nominated equip - ment is shifted to the buyer and the yard is expressly
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