Maritime Employment Law
Shipowner’s Liability for Unpaid Crew Wages
The crew of a cargo ship is left without their wages. Their employer, the ship manager, is insolvent, and a chain of bareboat and sub-bareboat charters allows each company to point to the next as the one liable. The seafarers’ claims are left without an addressee.
The firm also directed the claims against the shipowner, on the basis of the Merchant Shipping Code, under which crew wages are an operating expense of the vessel and are for the shipowner’s account.
The cases were heard by the courts in the country’s maritime center, where settled case law had formed on this issue holding that the shipowner is not liable for crew wages. The first instance dismissed the claim in each of the cases, and the appellate court upheld the dismissals, a total of forty-six judicial acts issued by all the panels that heard the cases.
The firm did not abandon a single one of the cases and took them all the way to the Supreme Court of Cassation.
Result: Twenty-three cassation proceedings, all concluded in favor of the seafarers. The Supreme Court of Cassation, sitting in both of its civil divisions and in various panels, reversed the appellate judgments and upheld the claims against the shipowner. The courts' previous case law on the issue was overturned.
Commercial and Company Law
Shareholder Rights Disputed After a Capital Increase
Two shareholders in a Bulgarian joint-stock company are left without the documents evidencing their rights: after a capital increase, the company refuses to issue them interim certificates for the newly acquired shares and to enter them in the register of shareholders.
In the course of the dispute, they were confronted with a register of shareholders that had been missing for years and was produced only at a later stage of the proceedings, an assertion that in the meantime their entire holding had been transferred to a third party, and a notarial protocol certifying the destruction of the originals of their certificates. Each of these objections was refuted.
Result: The claims were upheld in full, and the Supreme Court of Cassation did not admit the case for cassation review. The shareholder interest protected exceeds EUR 20 million.
Property and Inheritance Law
Recognition of Ownership in a Purchase Made Through a Nominee
In 2010, the client purchases a production facility in an industrial zone, a plot with warehouses and storage buildings. He negotiates the deals personally with the sellers and pays them the price, but because of attachments then imposed on his property, a close relative of his is entered as the buyer in the notarial deeds. No counter-letter is drawn up between the two of them.
Eight years later, the person entered as the buyer dies. The remaining heirs claim that the properties form part of the estate. The client brings claims to be recognized as owner, maintaining that the contracts were concluded under a personal simulation as to the buyer, and that the person entered as buyer was merely a front.
The only written evidence consists of receipts from the day of the transactions, by which some of the sellers certify that they received the price from the client himself. Their authenticity and the time they were drawn up were established through forensic handwriting expert examinations.
The first instance and the appellate court dismissed the claims on the same ground: they held that, for witness testimony to be admissible to disclose a personal simulation, two commencements of written evidence are required, one concerning the relations with the sellers and a second concerning the internal arrangement with the front person. A second document of that kind, by its very nature, rarely exists. The testimony of the sellers who were examined was therefore held inadmissible, and the claims were held unproven.
The firm took the case to the Supreme Court of Cassation, which admitted it for cassation review on this issue, as a question of importance for the development of the law. The Court held that a single document rendering the simulation probable is sufficient, and that the requirement concerns only the admissibility of witness testimony, not the ultimate conclusion as to whether the simulation is proven.
Instead of remanding the case for a new hearing, the Supreme Court of Cassation decided the dispute on the merits: it examined the sellers’ testimony, compared it with the expert examinations and the other evidence in the case, and held the simulation proven.
Result: The judgments of the two preceding instances were set aside, and the claims were upheld in full, with costs awarded for all three instances. The judgment is final, and the answer to the question raised has become part of the case law of the Supreme Court of Cassation.
