“Norwegian Gannet” case verdict: “The decision must be invalid because it is grossly unreasonable”

Stian Olsen, Aslak Berge

Hav Line, represented by Chairman Carl-Erik Arnesen, said he was is satisfied with the verdict over processing vessel.

Last year, Hav Line filed a lawsuit against the Norwegian state after the shipping company complained regarding domestic sorting of farmed salmon according to fish quality regulations.

The Norwegian Food Safety Authority’s decision to approve “Norwegian Gannet” and the Hav Line method was correct, while the government’s decision to overturn and reject Hav Line’s exemption from the requirement to sort production fish domestically, was invalid.

That was the main conclusion in the Bergen District Court judgment. The court called the decision, made by Royal Decree of June 21, 2019, “grossly unreasonable.”

The state, on the other hand, won fully the second part of the case, where Hav Line had demanded a judgment on the invalidity of regulations 24 April 2019 no. 538 on changes in regulations on the quality of fish and fish products. This was rejected by the court.

May have implications for others than Hav Line
In April 2019, five months after the harvest vessel “Norwegian Gannet” was handed over to Hav Line, the quality regulations for salmon were changed. In the judgment, Bergen District Court concluded that this change in regulations was legal according to section 12 of the Food Act.

The court then considered whether the change in regulations in reality constituted a single decision against Hav Line, which the shipping company claimed.

“Although the change in regulations was initiated by a specific case and at the time of the decision did not affect the subject of the court other than Hav Line, the court has doubted that the decision is not a single decision, but a regulation”, the judgment stated.

The court believes that the change in regulations may have had or has an impact on more businesses than the shipping company Hav Line, which may have refrained from further planning of a similar boat as “Norwegian Gannet”.

Hav Line’s lawyer Karl O. Wallevik in court. PHOTO: Aslak Berge

“The change in regulations will thus have implications for an indefinite circle of persons”, the court believed.

“Sudden and unexpected “
In the conclusion of the judgment, it says:

“The court has nevertheless concluded that the decision (from the government) is invalid on the basis of gross incongruity as a result of Hav Line having justified expectations that the Norwegian Food Safety Authority and political management would approve “Norwegian Gannet” for its planned use.

In this assessment, the court has emphasised that Hav Line could not have undertaken anything more than it did to reduce the risk of the investments made by the company with subsidiaries in “Norwegian Gannet” and in Denmark. The change in the political assessment of the company’s activities appeared as sudden and unexpected for Hav Line. This also includes the proceedings related to this,” it was written in the judgment.

Furthermore, the following is concluded by the court:

“The court has further emphasised the wide-ranging economic consequences of the decision for Hav Line. In addition to the investments in “Norwegian Gannet” … the risk of losses on investments in Denmark. In total, investments totalling NOK 1 billion (EUR 93 million) and the size of the loss will therefore be significant. The consequences of the decision for the Hav Line Group would be very large and it is nearby that the company would have to file a petition.

“Norwegian Gannet”. PHOTO: Preben Andersen

After an overall assessment, the court has therefore concluded that the consequences for Hav Line intertconding with the expectations made in trust are so extraordinarily large that the decision must be felt invalid because it is grossly unreasonable.”

The government must pay EUR 390,000 Hav Line’s legal costs.

Trond Hatland of the law firm Thommessen, which represents Hav Line in the case, also demanded a judgment on the invalidity of regulations 24 April 2019 no. 538 on changes in regulations on the quality of fish and fish products.

Hav Line did not win here, and the state has been awarded EUR 23,000 in legal costs.

“In this dispute, the court has concluded that none of Hav Line’s submissions to the regulatory change may result, and thus that the regulatory changes are valid. As the court has understood Hav Line’s submissions, Hav Line agrees that Hav Line in this case does not have a appropriate need for a special judgment for the validity of the regulation change”, the court wrote.

The court also added that the judgment was not handed down within the legal deadline because of the scope of the case.

The verdict is not yet enforceable due to it can be appealed.

Carl-Erik Arnesen. PHOTO: Trine Forsland

Hav Line, represented by Chairman Carl-Erik Arnesen, said he was is satisfied with the verdict.

“The District Court has ascertained abuse of authority. In addition to the fact that the royal decree was recognised invalidly,” Arnesen told SalmonBusiness.

So what does the verdict mean for Hav Line?

“Hav Line operates under the temporary exemption until 1. Retrieved 30 July 2020. The state’s decision is known invalid. In practice, the state is required by the court to reconsider the Hav Line case. This time, the state must deal with the matter without breaking basic state abuse rules. The Court has notified the state’s main arguments from spring 2018. The District Court ruled that Hav Line operated fully in line with previous section 17 and that the Ministry of Trade, Industry and Fisherie’s change to section 17 was a change of reality. In addition, the states’s control and supervision argument is notified. This argument is further undressed after the Danish authorities have actively stated that the control aspect is fully possible to resolve,” Arnesen continued.

Torje Sunde, Advocate, Office of the Attorney General, has not taken a position on an appeal of the verdict.

“The state is satisfied that the fish quality regulation of production fish has been found valid. The decision ensures that farmed fish must be sorted and corrected in Norway, and is important for the sake of Norwegian fish’s reputation. We are also pleased that the District Court has rejected that (former) Minister Nesvik was in a conflict of interest, and the regulations were not legally in the act. However, the District Court deemed the royal decree against Hav Line invalid because it was grossly unreasonable. The state does not agree with this and believes the decision here is based on several errors. The state will use the time ahead to assess the judgment, and whether it should be appealed at this point,” Sunde told SalmonBusiness.


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