Limitation of Liability for Maritime Claims [4 ed.] 1843113201, 9781843113201

Table of contents :
Cover
Title Page
Copyright Page
Preface
Table of Contents
Table of Cases
Table of Legislation
Table of Conventions
Part A: A Commentary on the 1976 Limitation Convention and Other Relevant Regimes
Chapter 1: Introduction
Chapter 2: Historical Overview of Limitation in the United Kingdom
Chapter 3: The 1976 Limitation Convention and Its 1996 Protocol
Explanatory Note
Chapter I—The Right of Limitation
Article 1: Persons entitled to limit liability
Article 1 [Text]
(a) Shipowners
(b) Salvors
(c) Seagoing ships and hovercraft
(d) Other persons
(e) Owner/master
(f) Liability insurer
(g) Summary
Excluded persons/excluded vessels
Harbour authorities: right of limitation
Article 2: Claims subject to limitation
Article 2 [Text]
Article 2(1)
Article 2(1)(a)
Article 2(1)(b)
Article 2(1)(c)
Article 2(1)(d)
Article 2(1)(e)
Article 2(1)(f)
Article 2(2)
Loss of or damage to valuables; loss or damage by fire
Article 3: Claims excepted from limitation
Article 3 [Text]
Article 3(a)
Article 3(b)
Article 3(c)
Article 3(d)
Article 3(e)
Summary
Article 4: Conduct barring limitation
Article 4 [Text]
I. The effect of Article 4
(a) ‘‘Personal’’ act or omission
(b) The ‘‘person liable’’
(c) ‘‘Loss’’
(d) (i) ‘‘Such loss’’
(ii) ‘‘Intent to cause such loss’’
(iii) ‘‘or recklessly and with knowledge that such loss would probably result’’
II. Onus of proof under Article 4
III. The overall effect of the changes
IV. Vestiges of section 502 of the MSA 1894
Article 5: Counterclaims
Article 5 [Text]
Chapter II—The Limits of Liability under LLMC and the 1996 Protocol
Article 6: The general limits [Text]
Article 7: The limit for passenger claims [Text]
Article 8: Unit of account [Text]
Article 6: The general limits
Article 6(1)
Article 6(2)
Article 6(3)
Article 6(4)
Article 6(5)
Calculation of limitation tonnage
Transitional provisions
Article 7: The limit for passenger claims
The position in the United Kingdom
Summary of limits
For loss of life/personal injury claims only
Other claims
Total potential exposure where there are personal and property claims
Passenger claims
Article 8: Unit of account
Article 9: Aggregation of claims
Article 9 [Text]
Comment
Introduction to Articles 10–14
Article 10: Limitation of liability without constitution of a limitation fund
Article 10 [Text]
Article 10(1)
Article 10(2)
Article 10(3)
The position in the United Kingdom
Notes on procedure
Chapter III—The Limitation Fund
Article 11: Constitution of the fund [Text]
Article 12: Distribution of the fund [Text]
Article 13: Bar to other actions [Text]
Article 14: Governing law [Text]
Article 11: Constitution of the fund
Article 11(1)
Article 11(2)
Article 11(3)
Article 12: Distribution of the fund
Article 12(1)
Article 12(2)
Article 12(3)
Article 12(4)
Costs
Legal costs of a limitation action under CPR
Liens or other rights in respect of any ship or property—effect on distribution
Article 13: Bar to other actions
Article 13(1)
Article 13(2)
General aims of the subsection
The mechanics of the subsection
Article 13(3)
Article 14: Governing law
Forum shopping
Jurisdiction in the EU
Chapter IV—Scope of Application
Article 15 [Text]
Article 15(1)
Article 15(2)
(a) Non-sea-going ships
(b) Ships of less than 300 tons
Article 15(3)
Article 15(3) bis
Article 15(4)
Article 15(5)
Chapter V—Final Clauses
Article 16: Signature, ratification and accession [Text]
Article 17: Entry into force [Text]
Article 18: Reservations [Text]
Article 19: Denunciation [Text]
Article 20: Revision and amendment [Text]
Article 21: Revision of the limitation amount and of unit of account or monetary unit [Text]
Article 22: Depositary [Text]
Article 23: Languages [Text]
Article 17: Entry into force
Article 17(1)
Article 17(4)
Article 18: Reservations
Article 18(1)
Article 18(1) as amended by the 1996 Protocol
Article 20: Revision and amendment, and Article 21: Revision of the limitation amount and of unit of account or monetary unit
Chapter 4: Limitation: Passenger Claims
The passenger contract: general principles
The Athens Convention 1974
The position in the United Kingdom
Article 1: Definitions
Article 1 [Text]
(a) Carrier/performing carrier
(b) Contract of carriage
(c) Ship
(d) Passenger
(e) Luggage/cabin luggage
(f) Loss of or damage to luggage
(g) Carriage
(h) International carriage
Article 2: Application
Article 2 [Text]
Article 3: Liability of the carrier
Article 3 [Text]
Article 4: Performing carrier
Article 4 [Text]
Article 5: Valuables
Article 5 [Text]
Article 6: Contributory fault
Article 6 [Text]
Articles 3–6 [Comment]
Article 7: Limit of liability for personal injury
Article 7 [Text]
Article 8: Limit of liability for loss of or damage to luggage
Article 8 [Text]
Article 9: Units of account and conversion
Article 9 [Text]
Article 10: Supplementary provisions on limits of liability
Article 10 [Text]
Articles 7–10 [Comment]
Article 11: Defences and limits for carriers’ servants
Article 11 [Text]
Article 12: Aggregation of claims
Article 12 [Text]
Articles 11 and 12 [Comment]
Article 13: Loss of right to limit liability
Article 13 [Text]
Article 14: Basis for claims
Article 14 [Text]
Articles 13 and 14 [Comment]
Article 15: Notice of loss or damage to luggage
Article 15 [Text]
Article 16: Time bar for actions
Article 16 [Text]
Articles 15 and 16 [Comment]
Article 17: Competent jurisdiction
Article 17 [Text]
Article 17 [Comment]
Article 18: Invalidity of contractual provisions
Article 18 [Text]
Article 18 [Comment]
Article 19: Other conventions on limitation of liability
Article 19 [Text]
Article 19 [Comment]
Article 20: Nuclear damage
Article 20 [Text]
Article 21: Commercial carriage by public authorities
Chapter 5: Athens Protocol 2002
Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974
Article 1: Definitions
Article 1 [Text]
Article 2 (Article 1(1)) [Text]
Article 2 [Comment]
Article 3 (Article 1(10) and (11))
Article 3 [Text]
Article 3 [Comment]
Article 4: Liability of the carrier
Article 4 (Article 3) [Text]
Article 4 [Comment]
Article 5 (Article 4 bis) Compulsory insurance
Article 5 [Text]
Article 5 [Comment]
Article 6 (Article 7) Limitation of liability
Article 6 [Text]
Article 6 [Comment]
Article 7 (Article 8)
Article 7 [Text]
Article 7 [Comment]
Article 8 (Article 9) Units of account
Article 8 [Text]
Article 8 [Comment]
Article 9 (Article 16(3)) Time bar for actions
Article 9 [Text]
Article 9 [Comment]
Article 10 (Article 17) Competent jurisdiction
Article 10 [Text]
Article 10 [Comment]
Article 11 (Article 17 bis) Recognition and enforcement
Article 11 [Text]
Article 11 [Comment]
Article 12 (Article 18) Invalidity of contractual provisions
Article 12 [Text]
Article 12 [Comment]
Article 13 (Article 20) Nuclear damage
Article 13 [Text]
Article 13 [Comment]
Article 14 (Article 1 bis): Certificate of insurance
Article 14 [Text]
Article 14 [Comment]
Article 15: Interpretation and application
Article 15 [Text]
Article 15 [Comment]
Article 16: Final clauses
Article 16 [Text]
Article 16 [Comment]
Article 17: Signature, ratification, acceptance, approval and accession
Article 17 [Text]
Article 17 [Comment]
Article 18: States with more than one system of law
Article 18 [Text]
Article 18 [Comment]
Article 19: Regional economic integration organizations
Article 19 [Text]
Article 19 [Comment]
Article 20: Entry into force
Article 20 [Text]
Article 20 [Comment]
Article 21: Denunciation
Article 21 [Text]
Article 21 [Comment]
Article 22: Revision and amendment
Article 22 [Text]
Article 22 [Comment]
Article 23: Amendment of limits
Article 23 [Text]
Article 23 [Comment]
Article 24: Depositary
Article 24 [Text]
Article 24 [Comment]
Article 25: Languages
Article 25 [Text]
Article 25 [Comment]
Resolutions
Implementation
Chapter 6: Limitation: Carriage of Goods
History
Relationship between the Hague, Hague-Visby and Hamburg Rules and the 1976 Limitation Convention
Example
Package limitation
(i) Hague Rules
(a) ‘‘Per package or unit’’
(b) Bulk cargo
(c) Containerised cargo
(d) Cargo lost or damaged
(e) ‘‘£100’’
(ii) Hague-Visby Rules
Example 1—Light cargo
Example 2—Heavy cargo
Goods lost or damaged
Containerised cargo
‘‘Said to contain’’ ‘‘STC’’
Delay
(iii) Hamburg Rules
Article 6: Limits of liability [Text]
Article 7: Application to non-contractual claims [Text]
Article 8: Loss of right to limit liability [Text]
(iv) Can the carrier of goods rely on lower ‘‘package’’ limits?
(v) No ‘‘package’’ limit
(vi) Loss of right to rely on package limitation
(a) Hague Rules
(b) Hague-Visby Rules
(c) Hamburg Rules
(vii) Persons who can limit liability
(1) Owners and charterers
(a) Hague/Hague-Visby/Hamburg Rules
(b) 1976 Convention
(2) Other ‘‘carriers’’
(a) Hague/Hague-Visby/Hamburg Rules
(b) 1976 Convention
(3) Servants and agents of a carrier
(a) Hague Rules
(b) Hague-Visby Rules
(c) Hamburg Rules
(viii) Claims which are subject to limitation
(a) Hague and Hague-Visby Rules
(b) Hamburg Rules
(c) 1976 Convention
Part B: Country Analysis for Limitation of Liability for Maritime Claims
Chapter 7: Argentina
Chapter 8: Australia
Chapter 9: Belgium
Chapter 10: Brazil
Chapter 11: Canada
Chapter 12: Chile
Chapter 13: People's Republic of China
Chapter 14: Crotia
Chapter 15: Denmark
Chapter 16: Finland
Chapter 17: France
Chapter 18: Germany
Chapter 19: Greece
Chapter 20: Hong Kong
Chapter 21: India
Chapter 22: Ireland
Chapter 23: Israel
Chapter 24: Italy
Chapter 25: Japan
Chapter 26: Korea
Chapter 27: Malta
chapter 28: Mexico
Chapter 29: Netherlands
Chapter 30: New Zealand
Chapter 31: Nigeria
Chapter 32: Norway
Chapter 33: Pakistan
Chapter 34: Philippines
Chapter 35: Poland
Chapter 36: Singapore
Chapter 37: Slovenia
Chapter 38: South Africa
Chapter 39: Spain
Chapter 40: Sweden
Chapter 41: Turkey
Chapter 42: USA
Chapter 43: Venezuela
Appendices
I: Section 503 of the Merchant Shipping Act 1894 as amended by (a) Merchant Shipping (Liability of Shipowners and Others) Act 1958; (b) section 12 of the Merchant Shipping Act 1984
II: Sections 153, 154, 183, 184, 185, 186 and 191 of the Merchant Shipping Act 1979
III: Merchant Shipping Act 1995, Schedule 6, Parts I and II; 1976 Protocol and 1990 Protocol to amend the Athens Convention 1974
IV: Merchant Shipping Act 1995, Schedule 7, Parts I and II and 1996 Protocol to amend the Limitation Convention 1976
V: Tonnage-based International Limitation Conventions—Ratifications and Accessions
VI: Statutory Instruments
1. Carriage of Passengers and their Luggage By Sea (United Kingdom Carriers) (Amendment) Order 1989
2. Carriage of Passengers and their Luggage By Sea (United Kingdom Carriers) Order 1987
3. Carriage of Passengers and their Luggage By Sea (Interim Provisions) Order 1980
4. The Merchant Shipping (Liability of Shipowners and Others) (Rate of Interest) Order 2004/931
5. The Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998—SI 1258
6. Carriage of Passengers and their Luggage By Sea (Interim Provisions) (Notice) Order 1980
7. The Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987
8. Hovercraft (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998
VII: Carriage of Goods By Sea Act 1971 (The Hague-Visby Rules)
VIII: United Nations Convention on the Carriage of Goods By Sea 1978 (The Hamburg Rules)
IX: Limitation of Liability for Maritime Claims: Contracting States
X: 1. Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974
2. Consolidated text of the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 and Protocol of 2002 to the Convention
XI: Extracts from Civil Procedure Rules Part 61 and Practice Direction 61
XII: Section 20 of the Supreme Court Act 1981
Index

Citation preview

L I M I TAT I O N

OF LIABILITY

FOR MARITIME

CLAIMS

By

PATRICK GRIGGS CBE Past President, Comit´e Maritime International; Consultant, Ince & Co.

RICHARD WILLIAMS, LL.B., LL.M. Partner, Ince & Co.

and

JEREMY FARR Partner, Ince & Co.

FOURTH EDITION

First published 1986 by Informa Professional Second edition 1991 Third edition 1998 Fourth edition 2005 Published 2013 by Informa Law from Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Informa Law from Routledge 52 Vanderbilt Avenue, New York, NY, 10017, USA Informa Law is an imprint of the Taylor & Francis Group, an informa business © Patrick Griggs, Richard Williams 1986, 1991, 1998, 2005 © Jeremy Farr 2005 All rights reserved. No part of this book may be reprinted or reproduced or utilised In any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Product or corporate names may be trademarks or registered trademarks and are used only for identification and explanation without intent to infringe. Whilst every effort has been made to ensure that the information contained in this book is correct, neither the author, nor Informa Law can accept any responsibility for any errors or omissions or for any consequences arising therefrom. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN-13: 978-1-843-11320-1 (hbk) Text set in 10/12 Times by Interactive Sciences, Gloucester

Preface to the Fourth Edition In the seven years since publication of the third edition there have been major develop­ ments in the law relating to the limitation of liability for maritime claims, both at an international level—the coming into force of the 1996 Protocol being the most sig­ nificant—and in English Law with decisions of the courts in cases such as Aegean Sea and CMA Djakarta. The fourth edition tackles these new developments. Since the 1996 Protocol is now in force we have dispensed with the separate chapter recording its existence and have now incorporated comment within the main body of Chapter 3 on the 1976 Convention. This edition also includes a new chapter in which we set out and comment upon the 2002 Athens Protocol to the Athens Convention 1974 which, although probably some years away from coming into force, nevertheless warrants analysis. We have also expanded the foreign law section, now covering 37 jurisdictions. We are grateful, as ever, to our international colleagues for contributing chapters to this work. There is an additional author of this fourth edition. Jeremy Farr was research assistant on the first edition of this work and has now joined Richard and Patrick as co-author. We also wish to express our gratitude to Rebekah Coleman, Julian Davies, Alex Shuttleworth and James Trumble, all lawyers at Ince & Co, for their research, comment and editing assistance and to Helen Jopson for meeting some entirely unreasonable secretarial demands. July 2005

J.R.F. R.W.W. P.J.S.G.

iii

L L O Y D ’ S S H I P P I N G L AW L I B R A RY

The Ratification of Maritime Conventions edited by The Institute of Maritime Law

University of Southampton

(1990) (looseleaf)

EC Shipping Law second edition by Vincent Power (1998) Limitation of Liability for Maritime Claims third edition

by Patrick Griggs and Richard Williams

(1998)

Shipping and the Environment—

Law and Practice

by Colin de la Rue and Charles B. Anderson (1998) P. & I. Clubs: Law and Practice third edition

by Steven J. Hazelwood

(2000)

Enforcement of Maritime Claims third edition

by D. C. Jackson

(2000)

Berlingieri on Arrest of Ships third edition

by Francesco Berlingieri

(2000)

The Law of Ship Mortgages by Graeme Bowtle and Kevin McGuinness (2001) Voyage Charters second edition

by Julian Cooke,

Timothy Young, Q.C., Andrew Taylor,

John D. Kimball, David Martowski

and LeRoy Lambert

(2001)

Ship Registration: Law and Practice by Richard M. F. Coles with Nigel P. Ready (2002)

London Maritime Arbitration second edition

by Clare Ambrose

and Karen Maxwell

(2002)

The Law of Shipbuilding Contracts third edition

by Simon Curtis

(2002)

The Law of Tug and Tow second edition by Simon Rainey (2002) Ship Sale & Purchase fourth edition

by Iain Goldrein, Q.C., and Paul Turner

(2003)

Time Charters fifth edition

by Michael Wilford, Terence Coghlin

and John D. Kimball

(2003)

Admiralty Jurisdiction and Practice third edition

by Nigel Meeson

(2003)

Merchant Shipping Legislation second edition

by Aengus R. M. Fogarty

(2004)

Laytime and Demurrage fifth edition

by John Schofield

(2005)

Marine War Risks third edition

by Michael D. Miller

(2005)

Bareboat Charters second edition by Mark Davis (2005)

Contents

Preface Table of Cases Table of Legislation Table of Conventions

iii

xvii

xxvii

xxxv

PA RT A : A C O M M E N TA RY O N T H E 1 9 7 6 L I M I TAT I O N C O N V E N T I O N

A N D O T H E R R E L E VA N T R E G I M E S

1. I N T R O D U C T I O N

3

2. H I S TO R I C A L O V E RV I E W O F L I M I TAT I O N I N T H E U N I T E D

KINGDOM

5

3. T H E 1 9 7 6 L I M I TAT I O N C O N V E N T I O N A N D I T S 1 9 9 6 P R O TO C O L

7

Explanatory Note

7

C H A P T E R I — T H E R I G H T O F L I M I TAT I O N

7

Article 1: Persons entitled to limit liability

7

Article 1 [Text] (a) Shipowners (b) Salvors (c) Seagoing ships and hovercraft (d) Other persons (e) Owner/master (f) Liability insurer (g) Summary Excluded persons/excluded vessels Harbour authorities: right of limitation

7

12

12

13

14

15

16

16

17

Article 2: Claims subject to limitation

17

Article 2 [Text]

Article 2(1) Article 2(1)(a) Article 2(1)(b) Article 2(1)(c) Article 2(1)(d) Article 2(1)(e)

18

18

21

22

22

24

v

vi

CONTENTS

Article 2(1)(f) Article 2(2) Loss of or damage to valuables; loss or damage by fire

24

25

26

Article 3: Claims excepted from limitation

26

Article 3 [Text] Article 3(a) Article 3(b) Article 3(c) Article 3(d) Article 3(e) Summary

26

27

29

29

29

30

Article 4: Conduct barring limitation

31

Article 4 [Text] I. The effect of Article 4 (a) ‘‘Personal’’ act or omission (b) The ‘‘person liable’’ (c) ‘‘Loss’’ (d) (i) ‘‘Such loss’’ (ii) ‘‘Intent to cause such loss’’ (iii) ‘‘or recklessly and with knowledge that such loss would probably

result’’ II. Onus of proof under Article 4 III. The overall effect of the changes IV. Vestiges of section 502 of the MSA 1894

31

31

33

34

35

35

37

37

39

40

41

Article 5: Counterclaims

41

Article 5 [Text]

41

C H A P T E R I I — T H E L I M I T S O F L I A B I L I T Y U N D E R L L M C A N D T H E 1 9 9 6 P R O TO C O L

43

Article 6: The general limits [Text] Article 7: The limit for passenger claims [Text] Article 8: Unit of account [Text]

44

44

45

Article 6: The general limits

48

Article 6(1) Article 6(2) Article 6(3) Article 6(4) Article 6(5) Calculation of limitation tonnage Transitional provisions

48

49

50

50

50

51

52

Article 7: The limit for passenger claims

52

The position in the United Kingdom Summary of limits For loss of life/personal injury claims only

55

56

56

CONTENTS

Other claims Total potential exposure where there are personal and property claims Passenger claims

vii 56

57

57

Article 8: Unit of account

57

Article 9: Aggregation of claims

57

Article 9 [Text] Comment

57

58

Introduction to Articles 10–14

58

Article 10: Limitation of liability without constitution of a limitation fund

58

Article 10 [Text] Article 10(1) Article 10(2) Article 10(3) The position in the United Kingdom Notes on procedure

59

59

59

59

59

62

C H A P T E R I I I — T H E L I M I TAT I O N F U N D

Article Article Article Article

11: 12: 13: 14:

Constitution of the fund [Text] Distribution of the fund [Text] Bar to other actions [Text] Governing law [Text]

Article 11: Constitution of the fund Article 11(1) Article 11(2) Article 11(3) Article 12: Distribution of the fund Article 12(1) Article 12(2) Article 12(3) Article 12(4) Costs Legal costs of a limitation action under CPR Liens or other rights in respect of any ship or property—effect on distribution Article 13: Bar to other actions Article 13(1) Article 13(2) General aims of the subsection The mechanics of the subsection Article 13(3)

64

65

65

65

66

66

69

69

69

69

70

71

71

72

73

73

74

74

76

76

77

78

Article 14: Governing law

78

Forum shopping Jurisdiction in the EU

80

82

viii

CONTENTS

C H A P T E R I V — S C O P E O F A P P L I C AT I O N

86

Article 15 [Text] Article 15(1) Article 15(2) (a) Non-sea-going ships (b) Ships of less than 300 tons Article 15(3) Article 15(3) bis Article 15(4) Article 15(5)

86

87

87

88

88

88

89

89

89

CHAPTER V—FINAL CLAUSES

91

Article 16: Signature, ratification and accession [Text] Article 17: Entry into force [Text] Article 18: Reservations [Text] Article 19: Denunciation [Text] Article 20: Revision and amendment [Text] Article 21: Revision of the limitation amount and of unit of account or monetary unit

[Text] Article 22: Depositary [Text] Article 23: Languages [Text]

91

91

91

92

92

Article 17: Entry into force

93

Article 17(1) Article 17(4) Article 18: Reservations Article 18(1) Article 18(1) as amended by the 1996 Protocol Article 20: Revision and amendment, and Article 21: Revision of the limitation

amount and of unit of account or monetary unit

92

93

93

93

93

94

94

94

94

4. L I M I TAT I O N : PA S S E N G E R C L A I M S

95

The passenger contract: general principles The Athens Convention 1974 The position in the United Kingdom

95

95

95

Article 1: Definitions

96

Article 1 [Text] (a) Carrier/performing carrier (b) Contract of carriage (c) Ship (d) Passenger (e) Luggage/cabin luggage (f) Loss of or damage to luggage

96

97

98

98

99

99

99

CONTENTS

(g) Carriage (h) International carriage

ix 100

100

Article 2: Application

100

Article 2 [Text]

100

Article 3: Liability of the carrier

101

Article 3 [Text]

101

Article 4: Performing carrier

101

Article 4 [Text]

101

Article 5: Valuables

101

Article 5 [Text]

101

Article 6: Contributory fault

102

Article 6 [Text] Articles 3–6 [Comment]

102

102

Article 7: Limit of liability for personal injury

103

Article 7 [Text]

103

Article 8: Limit of liability for loss of or damage to luggage

103

Article 8 [Text]

103

Article 9: Units of account and conversion

103

Article 9 [Text]

103

Article 10: Supplementary provisions on limits of liability

103

Article 10 [Text] Articles 7–10 [Comment]

103

104

Article 11: Defences and limits for carriers’ servants

104

Article 11 [Text]

104

Article 12: Aggregation of claims

105

Article 12 [Text] Articles 11 and 12 [Comment]

105

105

Article 13: Loss of right to limit liability

105

Article 13 [Text]

105

Article 14: Basis for claims

105

Article 14 [Text] Articles 13 and 14 [Comment]

105

105

x

CONTENTS

Article 15: Notice of loss or damage to luggage

106

Article 15 [Text]

106

Article 16: Time bar for actions

107

Article 16 [Text] Articles 15 and 16 [Comment]

107 107

Article 17: Competent jurisdiction

108

Article 17 [Text] Article 17 [Comment]

108 108

Article 18: Invalidity of contractual provisions

108

Article 18 [Text] Article 18 [Comment]

108 108

Article 19: Other conventions on limitation of liability

109

Article 19 [Text] Article 19 [Comment]

109 109

Article 20: Nuclear damage

109

Article 20 [Text]

109

Article 21: Commercial carriage by public authorities

109

5. AT H E N S P R O TO C O L 2 0 0 2

111

Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 Article 1: Definitions

111

Article 1 [Text] Article 2 (Article 1(1)) [Text] Article 2 [Comment]

111 112 112

Article 3 (Article 1(10) and (11))

112

Article 3 [Text] Article 3 [Comment]

112 112

Article 4: Liability of the carrier

113

Article 4 (Article 3) [Text] Article 4 [Comment]

113 114

Article 5 (Article 4 bis) Compulsory insurance

116

Article 5 [Text] Article 5 [Comment]

116 118

CONTENTS

xi

Article 6 (Article 7) Limitation of liability

120

Article 6 [Text] Article 6 [Comment]

120

120

Article 7 (Article 8)

120

Article 7 [Text] Article 7 [Comment]

120

121

Article 8 (Article 9) Units of account

121

Article 8 [Text] Article 8 [Comment]

121

121

Article 9 (Article 16(3)) Time bar for actions

121

Article 9 [Text] Article 9 [Comment]

121

122

Article 10 (Article 17) Competent jurisdiction

122

Article 10 [Text] Article 10 [Comment]

122

123

Article 11 (Article 17 bis) Recognition and enforcement

123

Article 11 [Text] Article 11 [Comment]

123

124

Article 12 (Article 18) Invalidity of contractual provisions

124

Article 12 [Text] Article 12 [Comment]

124

124

Article 13 (Article 20) Nuclear damage

124

Article 13 [Text] Article 13 [Comment]

124

125

Article 14 (Article 1 bis): Certificate of insurance

125

Article 14 [Text] Article 14 [Comment]

125

125

Article 15: Interpretation and application

125

Article 15 [Text] Article 15 [Comment]

125

125

Article 16: Final clauses

126

Article 16 [Text] Article 16 [Comment]

126

126

Article 17: Signature, ratification, acceptance, approval and accession

126

Article 17 [Text] Article 17 [Comment]

126

126

xii

CONTENTS

Article 18: States with more than one system of law

127

Article 18 [Text] Article 18 [Comment]

127 127

Article 19: Regional economic integration organizations

127

Article 19 [Text] Article 19 [Comment]

127 128

Article 20: Entry into force

128

Article 20 [Text] Article 20 [Comment]

128 128

Article 21: Denunciation

128

Article 21 [Text] Article 21 [Comment]

128 129

Article 22: Revision and amendment

129

Article 22 [Text] Article 22 [Comment]

129 129

Article 23: Amendment of limits

129

Article 23 [Text] Article 23 [Comment]

129 130

Article 24: Depositary

131

Article 24 [Text] Article 24 [Comment]

131 131

Article 25: Languages

131

Article 25 [Text] Article 25 [Comment] Resolutions Implementation

131 131 131 132

6. L I M I TAT I O N : C A R R I A G E O F G O O D S

133

History Relationship between the Hague, Hague-Visby and Hamburg Rules and the 1976 Limitation Convention

133 134

Example Package limitation (i) Hague Rules (a) ‘‘Per package or unit’’ (b) Bulk cargo (c) Containerised cargo (d) Cargo lost or damaged

135 136 136 137 137 137 140

CONTENTS

(e) ‘‘£100’’ (ii) Hague-Visby Rules Example 1—Light cargo Example 2—Heavy cargo Goods lost or damaged Containerised cargo ‘‘Said to contain’’ ‘‘STC’’ Delay (iii) Hamburg Rules Article 6: Limits of liability [Text] Article 7: Application to non-contractual claims [Text] Article 8: Loss of right to limit liability [Text] (iv) Can the carrier of goods rely on lower ‘‘package’’ limits? (v) No ‘‘package’’ limit (vi) Loss of right to rely on package limitation (a) Hague Rules (b) Hague-Visby Rules (c) Hamburg Rules (vii) Persons who can limit liability (1) Owners and charterers (a) Hague/Hague-Visby/Hamburg Rules (b) 1976 Convention (2) Other ‘‘carriers’’ (a) Hague/Hague-Visby/Hamburg Rules (b) 1976 Convention (3) Servants and agents of a carrier (a) Hague Rules (b) Hague-Visby Rules (c) Hamburg Rules (viii) Claims which are subject to limitation (a) Hague and Hague-Visby Rules (b) Hamburg Rules (c) 1976 Convention

xiii

140

140

142

142

142

142

144

145

146

147

147

147

149

151

151

151

153

154

155

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156

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PA RT B : C O U N T RY A N A LY S I S F O R L I M I TAT I O N O F L I A B I L I T Y F O R

MARITIME CLAIMS

7. A R G E N T I N A

163

8. A U S T R A L I A

169

9. B E L G I U M

181

10. B R A Z I L

191

11. C A N A D A

199

12. C H I L E

205

13. P E O P L E ’ S R E P U B L I C O F C H I N A

213

xiv

CONTENTS

14. C R O AT I A

219

15. D E N M A R K

223

16. F I N L A N D

229

17. F R A N C E

237

18. G E R M A N Y

245

19. G R E E C E

251

20. H O N G K O N G

259

21. I N D I A

265

22. I R E L A N D

271

23. I S R A E L

275

24. I TA LY

279

25. J A PA N

281

26. K O R E A

295

27. M A LTA

301

28. M E X I C O

313

29. N E T H E R L A N D S

317

30. N E W Z E A L A N D

327

31. N I G E R I A

339

32. N O RWAY

343

33. PA K I S TA N

351

34. P H I L I P P I N E S

361

35. P O L A N D

367

36. S I N G A P O R E

371

37. S L O V E N I A

391

38. S O U T H A F R I C A

395

39. S PA I N

409

40. S W E D E N

417

CONTENTS

xv

41. T U R K E Y

427

42. U S A

447

43. V E N E Z U E L A

461

APPENDICES I. Section 503 of the Merchant Shipping Act 1894 as amended by (a) Merchant Shipping (Liability of Shipowners and Others) Act 1958; (b) section 12 of the Merchant Shipping Act 1984 II. Sections 153, 154, 183, 184, 185, 186 and 191 of the Merchant Shipping Act 1979 III. Merchant Shipping Act 1995, Schedule 6, Parts I and II; 1976 Protocol and 1990 Protocol to amend the Athens Convention 1974 IV. Merchant Shipping Act 1995, Schedule 7, Parts I and II and 1996 Protocol to amend the Limitation Convention 1976 V. Tonnage-based International Limitation Conventions—Ratifications and Acces­ sions VI. Statutory Instruments 1. Carriage of Passengers and their Luggage By Sea (United Kingdom Carriers) (Amendment) Order 1989 2. Carriage of Passengers and their Luggage By Sea (United Kingdom Carriers) Order 1987 3. Carriage of Passengers and their Luggage By Sea (Interim Provisions) Order 1980 4. The Merchant Shipping (Liability of Shipowners and Others) (Rate of Inter­ est) Order 2004/931 5. The Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998—SI 1258 6. Carriage of Passengers and their Luggage By Sea (Interim Provisions) (Notice) Order 1980 7. The Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987 8. Hovercraft (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998 VII. Carriage of Goods By Sea Act 1971 (The Hague-Visby Rules) VIII. United Nations Convention on the Carriage of Goods By Sea 1978 (The Hamburg Rules) IX. Limitation of Liability for Maritime Claims: Contracting States X. 1. Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 2. Consolidated text of the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 and Protocol of 2002 to the Convention XI. Extracts from Civil Procedure Rules Part 61 and Practice Direction 61 XII. Section 20 of the Supreme Court Act 1981 Index

471 473 479 493 505 509 509 510 511 513 514 517 518 520 523 531 545 549

561 575 581 583

Table of Cases

United Kingdom Abadesa, The (No. 2) [1968] 1 Lloyd’s Rep. 493 ..................................................................................... 65, 404

Aegean Sea Traders Corporation v. Repsol Petroleo S.A. and Another (The Aegean Sea) [1998] 2 Lloyd’s

Rep. 39 ...........................................................................................9, 10, 19–23 passim, 27, 28, 159, 174, 415

Algrete Shipping Co. Inc. and Another v. International Oil Pollution Compensation Fund and Others (The

Sea Empress) [2003] 1 Lloyd’s Rep. 327 .................................................................................................. 28

Aliakmon, The [1986] 2 Lloyd’s Rep. 1 ........................................................................................................ 146

Amalia, The (1863) B. & L. 151 .................................................................................................................... 61

American, The, and the Syria (1874) L.R. 6 P.C. 127 .................................................................................. 176

Anglo Saxon Petroleum Co. Ltd. v. Adamastos Shipping Co. Ltd. [1958] 1 Lloyd’s Rep. 73 ................... 158

Annie Hay, The [1968] 1 Lloyd’s Rep. 141 .............................................................................................. 14, 378

Athelvictor, The [1945] 78 Ll.L.Rep. 529 ..................................................................................................... 376

Atlas, The [1996] 1 Lloyd’s Rep. 642 ........................................................................................................... 143

Att.-Gen. of Ceylon v. Scindia [1962] A.C. 60 ............................................................................................. 143

Beauchamp v. Turrell [1952] 2 Q.B. 207 ....................................................................................................... 60

Bekol v. Terracina, 13 July 1988, unreported ................................................................................................ 137

BOS 400, The—see Caspian Basin Specialized Emergency Salvage Shareholders Co. v. Bouygues Off­ shore SA

Botany Triad, The and Lue Shan [1993] 2 Lloyd’s Rep. 259 ...................................................................... 385

Bouygues Offshore S.A. v. Caspian Shipping Co. and Others—see Caspian Basin Specialized Emergency

Salvage Shareholders Co. v. Bouygues Offshore SA

Bowbelle, The [1990] 3 All E.R. 476 ............................................................................. 39, 74, 77–78, 175, 380

Bradlaugh v. Clarke [1882] 8 App. Cas. 354 ................................................................................................. 107

Bramley Moore, The [1964] P.211 ............................................................................................................. 12, 176

Breydon Merchant, The [1992] 1 Lloyd’s Rep. 373 ......................................................20, 23, 25, 27, 145, 159

Caltex v. BP [1996] 1 Lloyd’s Rep. 286 .......................................................................61, 80, 81, 397, 400, 402

Capitan San Luis, The [1994] 1 All E.R. 1016 ........................................................................................... 39, 73

Captain Gregos, The [1990] 1 Lloyd’s Rep. 315 .................................................................................... 146, 158

Caspian Basin Specialized Emergency Salvage Shareholders Co. v. Bouygues Offshore SA (The BOS 400)

[1997] 2 Lloyd’s Rep. 507; [1998] 2 Lloyd’s Rep. 461 .....................18, 19–20, 24, 61, 77, 80, 81, 84, 397

Caspiana, The—see Renton (G.H.) & Co. Ltd. v. Palmyra

Chanda, The [1989] 2 Lloyd’s Rep. 494 .................................................................................................. 152, 153

Chyebassa, The [1966] 2 Lloyd’s Rep. 193 ................................................................................................... 148

CMA CGM S.A. v. Classica Shipping Co. Ltd. (The CMA Djakarta) [2003] 2 Lloyd’s Rep. 50; [2004] 1

Lloyd’s Rep. 460 .......................................................................... 9, 10, 11, 19, 23, 25, 27, 70, 156, 159, 174

CMA Djakarta, The—see CMA CGM S.A. v. Classica Shipping Co. Ltd.

Countess, The [1923] A.C. 345 ...................................................................................................................... 73

Dairy Containers Limited v. Tasman Orient Line CV (The Tasman Discoverer) [2004] UKPC 22 ..... 139, 150

Darfur, The (2004) 2 Lloyd’s Rep. 469 ......................................................................................................... 174

Denise, The [2004] EWHC 3305 (Admty) .................................................................................................... 84

Domansa and Others v. Derin Shipping and Trading Co. Inc. [2001] 1 Lloyd’s Rep. 362 ......................... 82

Dundee, The (1830) 2 Hag. Adm. 137 ........................................................................................................... 72

Empire Jamaica, The [1955] 2 Lloyd’s Rep. 1090 (C.A.) ............................................................................ 39

European Enterprise, The [1989] 2 Lloyd’s Rep. 191 .................................................. 11, 33–34, 106, 149, 153

Eurymedon, The [1975] 2 Lloyd’s Rep. 534 ................................................................................................. 156

Eurysthenes, The [1976] 2 Lloyd’s Rep. 171 .............................................................................................. 32, 41

Falcon Bridge (1969) 2 Lloyd’s Rep. 227 ..................................................................................................... 360

Falstria, The [1988] 1 Lloyd’s Rep. 495 ........................................................................................................ 333

Fanti, The, and The Padre Island [1990] 2 Lloyd’s Rep. 191 ...................................................................... 15

xvii

xviii

TA B L E O F C A S E S

Funabashi, The [1972] 1 Lloyd’s Rep. 371 ................................................................................................... 68

Garden City, The (No. 2) [1984] 2 Lloyd’s Rep. 37 .....................................................................68, 70, 78, 385

Giacinto Motta, The [1977] 2 Lloyd’s Rep. 221 ....................................................................................... 71, 332

Glaholm v. Barker (1866) L.R. 2 Ex. 598 ...................................................................................................... 136

Goldman v. Thai Airways International Ltd. [1983] 1 W.L.R. 1186; [1983] 3 All E.R. 693 (C.A.) ...36–40 passim,

154, 379

Grand Champion Tankers Ltd. v. Norpipe AS and Others (The Marion) [1984] 2 Lloyd’s Rep. 1 ....... 31, 378

Great Northern Railway v. Shepherd (1852) L.J. Ex. 114 ............................................................................ 99

Gurtner v. Beaton [1993] 2 Lloyd’s Rep. 369 ............................................................................................... 38

Hain S.S. Co. v. Tate and Lyle (1936) 41 Com.Cas. 350

Happy Fellow, The [1997] 2 Lloyd’s Rep. 130 ........................................................................................... 40, 85

Happy Ranger, The [2002] 2 Lloyd’s Rep. 357 ............................................................................................ 152

Harlow, The (1922) 10 Ll.L.Rep. 66 .......................................................................................................... 58, 176

Herceg Nova and Ming Galaxy [1998] 2 Lloyd’s Rep. 454 ............................................................... 80–82, 397

Heron II, The [1969] 1 A.C. 350 ................................................................................................................... 145

Himalaya, The [1954] 2 Lloyd’s Rep. 267 .................................................................................................... 8

Hollandia/Morviken, The [1983] 1 Lloyd’s Rep. 1 ................................................................................. 149, 408

ICL Shipping Ltd. and Steamship Mutual Underwriting Association (Underwriting) Ltd. v. Chin Tai Steel

Enterprise Co. Ltd. and Others (The ICL Vikraman) [2004] 1 Lloyd’s Rep. 21 .....................63, 66, 78, 322

ICL Vikraman, The—see ICL Shipping Ltd. and Steamship Mutual Underwriting Association (Under­ writing) Ltd. v. Chin Tai Steel Enterprise Co. Ltd. and Others

Ismejli [1982] 2 Lloyd’s Rep. 74 ................................................................................................................... 176

K.H. Enterprise, The [1994] 1 Lloyd’s Rep. 593 .......................................................................................... 146

Kapitan Petko Voivodo [2003] 2 Lloyd’s Rep. 3 .......................................................................................... 152

Kapitan Shvetsov, The [1998] 1 Lloyd’s Rep. 199 ....................................................................................... 81

Karo, The (1887) 13 P.D. 24 ........................................................................................................................... 61

Kenya Railways v. Antares [1987] 1 Lloyd’s Rep. 424 ................................................................................ 152

Kirknes, The [1956] 2 Lloyd’s Rep. 651 ....................................................................................................... 18

Kulmerland, The [1973] 1 Lloyd’s Rep. 319 ................................................................................................. 138

Lady Gwendolen, The [1965] 1 Lloyd’s Rep. 335 .................................................................................... 31, 378

Leerort, The—see Schiffahrtsgesellschaft MS ‘‘Merkur Sky’’ m.b.H. & Co. K.G. v. MS Leerort NTH

Schiffahrts G.m.b.H. & Co. K.G.

Lennard’s Carrying Co. v. Asiatic Petroleum Co. Ltd. [1914] 1 K.B. 419; [1915] A.C. 705 ................. 31, 378

Lion, The [1990] 2 Lloyd’s Rep. 144 .....................................................................33–34, 39, 96, 106, 153, 154

Lucullite, The (1929) 33 Ll.L.Rep. 186 ......................................................................................................... 58

McDermid v. Nash Dredging and Reclamation Co. Ltd. [1986] 2 Lloyd’s Rep. 24 ................................... 8, 13

McEwan v. Bingham (t/a Studland Watersports) unreported ......................................................................... 99

MacWilliam, JI, Co. Inc. v. Mediterranean Shipping Co. SA (The Rafaela S) [2005] 1 Lloyd’s Rep. 347 ...... 155

Mahkutai, The [1996] 3 W.L.R. 1 .................................................................................................................. 146

Margolle and Another v. Delta Maritime Co. Ltd. and Others (The Saint Jacques II) [2003] 1 Lloyd’s Rep.

203 ..................................................................................................................................................35, 37, 38, 40

Marinor, The [1996] 1 Lloyd’s Rep. 301 ....................................................................................................... 159

Marion, The—see Grand Champion Tankers Ltd. v. Norpipe AS and Others Mecca, The [1968] 2 Lloyd’s

Rep. 17

Mecca, The—see United Arab Maritime Co. v. Blue Star Line Ltd. and Others

Messier Dowty v. Sabena [2000] 1 W.L.R. 2040 .......................................................................................... 66

Mormaclynx, The [1971] 2 Lloyd’s Rep. 276 ............................................................................................... 138

Motis v. Dampskibsselskabet [2000] 1 Lloyd’s Rep. 211 ............................................................................. 20

MSC Mediterranean Shipping Co. S.A. v. Delumar BVBA and Others (MSC Rosa M) [2000] 2 Lloyd’s

Rep. 399 ................................................................................................................................ 36, 37, 39, 63, 380

MSC Rosa M—see MSC Mediterranean Shipping Co. S.A. v. Delumar BVBA and Others

Muncaster Castle The [1961] A.C. 807 ...................................................................................................... 13, 153

Norman, The [1960] 1 Lloyd’s Rep. 1 (H.L.) ............................................................................................... 39

Nugent and Killick v. Michael Goss Aviation Ltd. [2000] 2 Lloyd’s Rep. 222 ..................................36, 38, 40

Owusu v. Jackson and Others [2005] 1 Lloyd’s Rep. 452 ............................................................................ 86

Padre Island, The, and The Fanti—see The Fanti

Pembroke, The [1995] 2 Lloyd’s Rep. 290 ........................................................................................38, 152, 153

Photo Production v. Securicor Transport Ltd. [1980] 1 Lloyd’s Rep. 545 ................................................... 152

Port Jackson v. Salmond [1980] 3 All E.R. 257 ............................................................................................ 156

Port Jackson Stevedoring Pty Ltd. v. Salmond and Sporaggon (Australia) Pty Ltd. (The New York Star)

(1981) 1 W.L.R. 138 ................................................................................................................................... 178

Putbus, The [1969] P 136 ............................................................................................................................... 78

TA B L E O F C A S E S

xix

Pyrene Co. Ltd. v. Scindia Steam Navigation Co. Ltd. [1954] 1 Lloyd’s Rep. 321; [1954] 2 Q.B. 402 ... 151

R. v. Caldwell [1982] A.C. 354 ...................................................................................................................... 37

R. v. G. and another [2003] 3 W.L.R. 1060 ................................................................................................... 37

R. v. Lawrence (Stephen) (1982) A.C. 520 .................................................................................................... 37

Rafaela S, The—see MacWilliam, JI, Co. Inc. v. Mediterranean Shipping Co. SA

Re Elgindata Ltd. No. 2 [1992] 1 W.L.R. 1207 ............................................................................................ 73

Renton, G.H. & Co. Ltd. v. Palmyra Trading Corporation (The Caspiana) [1956] 2 Lloyd’s Rep. 379;

[19957] A.C. 149 (H.L.) ....................................................................................................................... 158, 159

River Gurara, The [1996] 2 Lloyd’s Rep. 53; [1998] Q.B. 610 ............137–138, 139, 143, 144, 149–150, 408

Rosa S, The [1988] 2 Lloyd’s Rep. 574 .................................................................................................. 140, 359

Schiffahrtsgesellschaft MS ‘‘Merkur Sky’’ m.b.H. & Co. K.G. v. MS Leerort NTH Schiffahrts G.m.b.H. &

Co. K.G. [2001] EWCA Civ 1055 ............................................................................................................. 36

Saint Jacques II, The—see Margolle and Another v. Delta Maritime Co. Ltd. and Others

Saipem SPA v. Dredging VO2 BV and Geosite Surveys Ltd. (The Volvox Hollandia) [1988] 2 Lloyd’s Rep.

361 ................................................................................................................................................................ 80

Satya Kailash, The [1984] 1 Lloyd’s Rep. 588 ....................................................................................... 158, 159

Sea Empress, The—see Algrete Shipping Co. Inc. and Another v. International Oil Pollution Compensation

Fund and Others

Seismic Shipping Inc. and Westerngeco Ltd. v. Total E&P IL Plc (The Western Regent) [2005] EWHC 460

(Comm) 22 March 2005 ................................................................................................................66, 67, 83, 84

Sir Joseph Rawlinson, The [1973] Q.B. 285 ............................................................................................. 12, 176

Sisters, The (1876) 2 Asp. M.L.C. 589 .......................................................................................................... 61

Standard Electrica S.A. v. Hamburg Sudamerikanische Dampfschiffahrts-Gesellschaft [1967] 2 Lloyd’s

Rep. 193 ................................................................................................................................................. 137, 138

Star Sea, The [1995] 1 Lloyd’s Rep. 651 .................................................................................................. 34, 378

Starsin, The [2003] 1 Lloyd’s Rep. 571 ......................................................................................................... 156

Steelton, The, (No. 2) [1972] 1 Lloyd’s Rep. 431 ........................................................................................ 333

Steedman v. Scofield and Another [1992] 2 Lloyd’s Rep. 163 ..................................................................... 99

Stonedale (No. 1), The v. Manchester Ship Canal Co. [1956] A.C.1 ......................................................... 18, 22

Studebaker Distributors Ltd. Charlton Steam Shipping Company Ltd. (1937) 59 Ll.L.Rep. 23 ................. 137

Swiss Bank Corp. v. Brink’s MAT Limited [1986] 2 All E.R. 188 ............................................................ 70, 72

TFL Prosperity, The [1984] 1 Lloyd’s Rep. 123 .................................................................................20, 27, 145

Tatton v. Ferrymasters [1974] 1 Lloyd’s Rep. 206 ........................................................................................ 154

Tojo Maru, The [1971] 1 Lloyd’s Rep. 341 .....................................................10, 12, 19, 42–43, 329, 373, 376

Troll Maple, The, 26 July 1990, unreported ............................................................................137, 138, 140, 143

Tychy, The [1999] 2 Lloyd’s Rep. 11 ........................................................................................................ 11, 352

Ultisol Transport Contractors Ltd. v. Bouygues Offshore SA and Comite D’Etudes et de Services des

Assureurs Maritimes et Transports de Frances [1996] 2 Lloyd’s Rep. 140 ............................................. 397

United Arab Maritime Co. v. Blue Star Line Ltd. and Others [1968] 2 Lloyd’s Rep. 17 ........................... 404

Vessel SA v. CP Ships (UK) Ltd. (The Denise) [2004] EWHC 3305 (unreported) 3 December 2004 ...... 67

Visha Abha [1990] 2 Lloyd’s Rep. 312 ......................................................................................................... 397

Waltraud, The [1991] 1 Lloyd’s Rep. 389 ..................................................................................................... 60

Western Regent, The—see Seismic Shipping Inc. and Westerngeco Ltd. v. Total E&P IL Plc

Whaite v. Lancs & Yorks Railway (1874) L.R. 9 Ex. 67 .............................................................................. 137

Wheeler v. London & Rochester Trading Co. Ltd. [1957] 1 Lloyd’s Rep. 69 ............................................. 60

White Rose, The [1969] 2 Lloyd’s Rep. 52 ................................................................................................... 13

Wladyslaw Lokietek, The [1978] 2 Lloyd’s Rep. 520 .............................................................................. 76, 175

World Mermaid, The—see Giacinto Motta, The

Australia Ballast Trailing NV v. Decca Survey Australia Ltd, unreported, NSW Supreme Court 1980 .................... 176

Barameda Enterprises Pty Limited v. Patrick O’Connor and KFV Fisheries (QLD) Pty Limited [1987] 2

Lloyd’s Rep. 666 ......................................................................................................................................... 171

Barde A.S. v. ABB Power Systems AB and ors (1995) 132 ALR 358 ........................................................ 174

BHP v. Hapag Lloyd (1980) 2 NSWLR 572 ................................................................................................. 178

Bistricic v. Rokov (1976) 135 CLR 552 ........................................................................................................ 169

El Greco (Australia) Pty Ltd. and another v. Mediterranean Shipping Co. SA [2004] 2 Lloyd’s Rep. 537 ..... 143,

144, 177

Dillon and Others v. Baltic Shipping Co. (The Mikhail Lermontov) (Supreme Court of NSW Admiralty

Division)(1989) 92 ALR 331; [1990] 1 Lloyd’s Rep. 579 ................................................................... 99, 170

James Patrick & Co. Ltd. v. Union Steamship Co. of New Zealand Limited (1938) 60 CLR 650 ............ 171

Kirmani v. Captain Cook Cruises Pty Limited (1985) 159 LR 351 ............................................................. 173

xx

TA B L E O F C A S E S

New Holland Australia Pty Ltd. v. TTA Australia Pty Ltd, NSW Supreme Court, unreported, 6 Dec 1994 .... Newcastle Port Corporation v. Pevitt and Ors (2003) NSWC 888; [2004] 2 Lloyd’s Rep. 47 ................... PS Chellaram & Co. Pty Limited v. China Ocean Shipping Co. [1989] 1 Lloyd’s Rep. 43 ....................... Sanko Steamship Co. Limited and anor v. Sumitomo Australia Limited (1995) 131 ALR 490 ................. SS Pharmaceutical Co. Ltd. v. Qantas Airways Limited [1991] 1 Lloyd’s Rep. 288 ....................176, 359, Sellers Fabrics Pty Ltd. v. Hapag-Lloyd AG NSW Supreme Court, unreported, 29 Oct 19998 ................. Victrawl Pty Limited v. Telstra Corporation Limited .................................................................................... Belgium Cass.

23 November 1962, JPA 1963, 306 ............................................................................................................ Commissie van Beroep, Antwerp

3 December 1954, JPA 1958, 248 .............................................................................................................. Court of Appeals, Antwerp

24 April 1991, R.H.A. 1992, 327 ............................................................................................................... 22 February 1994, European Transport Law, 1994, 432, R.H.A., 1995, 15 ............................................. 5 March 1996, R.H.A. 1996 ....................................................................................................................... 4th Chamber, 5 February 2002, I.T.L., 2002, vol. 2, 231 ......................................................................... Court of Appeals, Brussels

9 March 1957, JPA 1957, 224 .................................................................................................................... Court of Appeals, Liege

` 21 December 1995, R.H.A., 1996, 20 ........................................................................................................ Court of Commerce Antwerp

10 May 1994, R.H.A., 1994, 357 ............................................................................................................... Kh. Antwerpen, 12 Jan 1995, R.H.A. 1996, 26 .........................................................................................

178

176

177

172

379

178

172

186

187

182

188

186

186

187

188

184

182

Canada Falconbridge v. Chimo [1969] 2 Lloyd’s Rep. 277 ....................................................................................... 137

Gypsum Carriers v. The Queen (1978) 78 D.L.R. 175 Fed Ct; [1978] 4 Current View 706 ....................... 22

Rhone, The, and The Peter A.B. Widener (Supreme Court) [1993] 1 Lloyd’s Rep. 600 ............................ 12

Steelton, The (No. 2) [1979] 1 Lloyd’s Rep. 431 ......................................................................................... 333

Finland Case ND 1978 p. 353, Swedish Sup. Ct. ....................................................................................................... Case ND 1981 p. 152, Halogaland Ct. of Appeal ......................................................................................... Case ND 1983 p. 82, Helsinki Court of First Instance ................................................................................. Case 1993 II 166, Sup. Ct. .............................................................................................................................

233

233

231

231

France Cass Com Bull No. 39, Pourvoi 98–18–617 .................................................................................................. 239

Heidberg, The, Tribunal de Commerce de Bordeaux, 23 September 1993, D.M.F. 1993 731; Cour d’Appel

de Bordeaux No. 93/06135, 13 May 2005 ................................................................................................. 40

Greece Greek Supreme Court

869/1999 (First Div.) Epitheoresi Nautiliakou Dikaiou (ENautD) 391 .................................................... 388/2004 (First Div.) ENautD 2004, 340 ............................................................................................. 252, Judgment 241/1966 Sup. Ct. (1st Div.) NoB 1966, 1113 et seq. .................................................................. Piraeus Single-member Court of First Instance

2505/1991, ENautD 1992, 83 et seq.; noted Revue hellenique ´ de droit international 1992, 253–258 ... 1949/1992, ENautD 1992, 437 ............................................................................................................. 253, 2539/1992, ENautD 1993, 24 ..................................................................................................................... 906/1995, unreported ................................................................................................................................... Piraeus Court of Appeal

33/1996, ENautD 1997, 140 ....................................................................................................................... 1023/1997, ENautD 1998, 13 ..................................................................................................................... 97/2004, ENautD 2004, 41 ......................................................................................................................... 161/2004, ENautD 2004, 3 ......................................................................................................................... 162/2004, ENautD, 2004, 32 ...................................................................................................................... 248/2004, unreported ................................................................................................................................... 149/2005, unreported ............................................................................................................................. 252,

252

253

253

253

254

254

255

257

257

257

255

256

256

254

TA B L E O F C A S E S

xxi

Piraeus Multi-member Court of First Instance

3248/1999, unreported ........................................................................................................................... 252, 253

India Millie, The (1940) 19 Asp. M.L.C. 324 ......................................................................................................... 000

Shipping Corp. of India v. Hindustan Shipyard Ltd. 1990(3) Bom C.R. 496 .............................................. 268

World Tanker Carrier Corporation v. SNP Shipping Services Pvt. Ltd. AIR 1998 SC 2330 ...................... 269

Japan Nipponkoa Insurance Company Ltd. v. H. Kimura, Receiver of the Limitaton Fund et al (the Buen

Viento) .......................................................................................................................................................... 287

Tokyo East Credit Bank v. SKB Marine Co. Ltd. (The ROKKO), Tokyo Superior Court, 25 Feb 2000 ... 283

Korea Korean Supreme Court

24 March 1995, Case 94Da2431 ................................................................................................................ 6 December 1996, Case 99Da31611 .......................................................................................................... 25 March 1998, Case 97Da2758 ................................................................................................................ 22 August 2000, Case 99Da9646 ............................................................................................................... Seoul District Court

11 September Case 96KaHap44704 ........................................................................................................... Malta Cutajar v. Portughes noe et, 24/1/51—XXXV.iii.528 .................................................................................... Farrugia noe v. Mizzie et noe. Commercial Ct., 18/4/77 .............................................................................. Mizzi noe v. Sorotos et noe, 12/02/2004, First Hall Civil Court .................................................................. Zammit v. Petrococchino noe. 25/2/52—XXVI.i.319 .................................................................................... Netherlands ECJ

14 October 2004, C–39/02 Maersk Olie and Gas A/S v. Firma M. de Haan and W. de Boer, The Cornelis

Simon; 1 Lloyd’s Rep. 210 .....................................................................................................84, 85, 86, Gerechtshof’s-Gravenhage

13 March 2001, S&S 2002, 82 The Quo Vadis ......................................................................................... 22 February 2002, S&S 2002, 60, The Pioner Onegi ............................................................................... 15 March 2005, S&S 88 The Seawheel Rhine and The Assi Eurolink ..................................................... Hoge Raad

28 February 1992, S&S 1992, 61, The Sylt ............................................................................................... 1 July 1992, S&S 1992, 102, The Volvox Hollandia .....................................................................84, 323, 20 December 1996, S&S 1997, 38 The Sherbro ....................................................................................... 5 January 2001, S&S 2001, 61 & 62 ......................................................................................................... 22 February 2002, S&S 2002, 94 ............................................................................................................... 11 October 2002, S&S 2003, 61 ................................................................................................................ Rechtbank Amsterdam

12 May 2004, S&S 2004, 88 The Arcturus ................................................................................................ Rechtbank Rotterdam

23 March 1982, S&S 1984, 105 ................................................................................................................. 6 November 1997, S&S 2002, 37 The MSC Samia and The Carina ....................................................... 12 March 2002, S&S 2002, 119 The Eglantiersgracht ............................................................................. 30 October 2002, S&S 2003, 26 The Mighty Servant II ..................................................................... 323, Voorzieningenrecher Rechtbank Rotterdam

24 April 2003, S&S 2003, 126 The Seawheel Rhine and The Assi Eurolink ........................................... New Zealand Dairy Containers Limited v. Tasman Orient Line CV (The Tasman Discoverer) [2002] 2 Lloyd’s Rep. 528;

[2002] 3 NZLR 353 (CA); [2002] 2 Lloyd’s Rep. 647; [2005] 1 NZLR 433 (PC) ................................ Lovegrove v. The Un-named Ship, Kerr J., 31 May 1996, Whangarei M55/96, unreported ....................... Mitrovanova v. The Ship Kursa [1996] 3 NZLR 215 ................................................................................... Nelson Pine Forests Ltd. v. Seatrans New Zealand Ltd. (The Pembroke) [1995] 2 Lloyd’s Rep. 290 ...... Sea Tow Ltd. v. The Ship Katsuei Maru No. 8, Salmon J., 8 May 1996, AD736 Auckland, unreported ......... Tasman Orient Line CV v. Alliance Group Limited and others (The Tasman Pioneer) [2003] 2 Lloyd’s Rep.

713; [2004] 1 NZLR 650 ............................................................................................. 328, 329, 330, 331,

297

298

297

296

299

309

310

310

309

323

326

319

323

317

324

322

319

319

319

319

319

323

323

324

323

335

333

334

335

331

336

xxii

TA B L E O F C A S E S

Tasman Orient Line CV v. Alliance Group Limited and others (The Tasman Pioneer) (No. 2) Unreported,

12 May 2005, Auckland AD31–SD02 ................................................................................................. 327, 332

Nigeria Nigerian National Shipping Law v. Gilbert Emenike (1987) 3 NSC 163 (C.A.) ................................... 340, 341

Norway Green Ålesund ................................................................................................................................................. 344

Pakistan Asian Queen, The, PLD 1982 Karachi 749 ................................................................................................... Flying Foam, PLD 1983 Karachi 29 .............................................................................................................. Premier Insurance Company Ltd. v. China National Shipping, Qua Jaing, 1999 Yearly Law Report 781 ....... Terni SPA v. Peco, 1992 Supreme Court Monthly Review 2238 ..................................................................

355

360

359

356

Singapore Clarke Beryl Claire (as personal representative of the estate of Eugene Francis Clarke) & Ors v. SilkAir

(Singapore) Pte Ltd. [1983] 1 W.L.R. 1186 ............................................................................................... 379

Evergreen International SA v. Volkswagen Group Singapore Pte Ltd. and 73 Others [2004] 2 S.L.R. 457 .......383,

385

Felda Oil Products Snd. Bhd. v. Owners of ship mv Maritime Prudence (The Maritime Prudence) [1996]

1 S.L.R. 168 ................................................................................................................................................. 376

Kin Yuen Co. Ltd. v. Lombard Insurance Co. Ltd. & Ors [1994] 2 S.L.R. 887 .......................................... 379

Kota Sejarah, The [1991] 1 M.L.J. 136 (C.A.) .............................................................................................. 374

Maritime Prudence, The—see Felda Oil Products Sdn. Bhd. v. Owners of ship mv Maritime Prudence

National Jaya Pte Ltd. v. Hong Tai Marine Shipping Pte Ltd. [1979] 2 M.L.J. 6 ....................................... 387

Parker Distributors (Singapore) Pte. Ltd. v. AS DS Svenborg [1983] 2 M.L.J. 26 ..................................... 387

Patraikos 2, The [2002] 4 S.L.R. 232 ............................................................................................................ 386

Pirelli General Plc and Others v. PSA Corporation Limited and Others [2003] SGHC 31 ......................... 388

Sarathi Co. v. Owners of the Vishva Pratibha [1982] 2 M.L.J. 265.2 .......................................................... 389

Seaway, The [2005] 1 S.L.R. 435 ............................................................................................................ 374, 375

Shell Eastern Petroelum (Pte) Ltd. v. The Owners of the ship or vessel The Seaway [2004] 2 S.L.R. 577 ...... 375

Soctek Sendirian Berhad and Tekoil Trading Pte Ltd. v. Temuka Navigation Co. Pte Ltd. [1995] SGHC

136 ................................................................................................................................................................ 376

Sunrise Crane, The [2004] 4 S.L.R. 715 ........................................................................................................ 371

Vishva Pratibha, The—see Sarathi Co. v. Owners of the Vishva Pratibha

South Africa Atlantic Harvesters of Namibia v. Unterweser Reederei 1985 (4) SA 865 (C) ............................................ Barclays Bank of Zimbabwe v. Air Zimbabwe Corp. 1994 (1) SA 639 (ZHC) .......................................... Caltex Singapore Pte. Ltd. and Others v. BP Shipping [1996] 1 Lloyd’s Rep. 286 .................................... Heartland, The SS, v. SS President Angst (1972) 7 Euro. Transport Law 933 ............................................ Mediterranean Shipping Col v. Speedwell Co. Ltd. and Another 1986 (4) SA 329 (D) ............................. Nagos Shipping Ltd. v. Owners, Cargo Laden on board MV Nagos, and Another 1996 (2) SA 261

(D&CLD) ...................................................................................................................... 395, 397, 398, 400, Olympic Airways v. Zacopulos (1972) LATA ACLR No. 461 ..................................................................... Owners of Cargo lately laden on board MV Kairos transhipped into MV Jelsa v. MV Alka 1994 (4) SA 622

(D) ................................................................................................................................................................ Peros v. Rose 1990 (1) SA 420 N .................................................................................................................. SAR & H v. Smith’s Coasters (Prop.) Ltd. 1931 AD 113 ............................................................................ Transol Bunker BV v. MV Andrico Unity & Others; Grecian Mar SRL v. MV Andrico Unity & Others

1989 (4) SA 325 (A) ................................................................................................................................... Wave Dancer Nel, The, v. Toron Screen Corp. Pty. 1996 (4) SA 1167 (SCA) ........................................... Weissglass NO v. Savonnerie Establishment 1992 (3) SA 928 (A) ..............................................................

402

405

400

404

397

404

404

398

396

400

399

396

396

Spain A.P. Barcelona (seccion 15)

20 July 1999 ................................................................................................................................................ 411

A.P. Orense (seccion unica)

20 October 1999 .......................................................................................................................................... 411

Aegean Sea, The, St. A.P. La Coruna ˜ (Seccion ´ 3) of 18 June 1997 ............................................................ 410

TA B L E O F C A S E S

xxiii

Supreme Court Judgment (Criminal Docket) 19 January 1992 .......................................................................................... Judgment 387/1995 (Civil Docket) 24 April ............................................................................................. Judgment 905/1995 (Civil Docket) 24 October ......................................................................................... Judgment 32/1998 (Civil Docket) 28 January ...................................................................................... 413, United States Aegis Spirit, The [1977] 1 Lloyd’s Rep. 93 (Seattle Ninth Circuit) ............................................................ Alcoa S.S. Co. Inc. v. MV Nordic Regent, 654 F.2d 147 (2d Cir.) (en banc), cert. denied, 449 U.S. 890 (1980) ........................................................................................................................................................... Alter Barge Line, Inc. v. Consol. Grain & Barge Co., 272 F3d 396, 2002 AMC 472 (7th Cir. 2001) ...... Alva S.S. Co., In re, 262 F.Supp. 328 (S.D.N.Y. 1966) ................................................................................ Am. Comm’l Lines, Inc. v. United States, 746 F.2d 1351, 1985 AMC 1892 (8th Cir. 1984) ..................... Am. Cyanamid Co. v. China Union Lines Ltd., 306 F.2d 135 (5th Cir. 1962) ............................................ Am. President Lines & Hanjin Shipping Corp., In re, 890 F.Supp. 308, 1995 AMC 2296 (S.D.N.Y. 1995) .... Am. Tobacco Co. v. Goulandris, 173 F.Supp. 140 (S.D.N.Y. 1959), aff’d 281 F.2d 179 (2d Cir. 1960) .... Amoco Cadiz, In re, 1984 AMC 2123 (N.D. III 1984) aff’d 1992 AMC 913 (7th Cir. 1992) ................... Amoco Cadiz Limitation Process, In re, 1979 AMC 1017 (N.D. III 1979), aff’d 1992 AMC 913 (7th Cir. 1992) ............................................................................................................................................................ Barracuda Tanker Co., In re, 281 F.Supp. 228, 1969 AMC 1781 (S.D.N.Y. 1968), rev’d 409 F.2d 1013, 1969 AMC 1442 (2d Cir. 1969) ........................................................................................................................... Bernstein, In re, 81 F.Supp. 2d 176, 2000 AMC 760 (D. Mass. 1999) ........................................................ Billiot v. Dolphin Servs., 225 f.3d 515, 2001 AMC 259 (5th Cir. 2000) ............................................... 448, Birmingham Southeast, LLC v. M/V Merchant Patriot, 124 F.Supp. 2d 1327, 2000 AMC 1015 (S.D. Ga. 2000) ............................................................................................................................................................ Bisso Marine Co., In re, 2003 U.S. Dist. LEXIS 5279 (E.D. La. 2003) ...................................................... Black Diamond Steamship Corp. v. Robert Stewart & Sons Ltd. (The Norwalk Victory), 336 U.S. 386, 1949 AMC 393 (1949) ................................................................................................................................ Bloomfield S.S. Co., In re, 422 F.2d (2d. Cir. 1970) .................................................................................... Bowfin, In re M/V, 339 F.3d 1137, 2003 AMC 2274 (9th Cir. 2003) .......................................................... Bowoon Sangsa Co., In re, 720 F.2d 595, 1984 AMC (9th Cir. 1983) ........................................................ Brister v. A.W.I. Inc., 946 F.2d 350, 1993 AMC 1990 (5th Cir.), reh’g denied, 949 F.2d 1160 (5th Cir.

1991) ............................................................................................................................................................ Brown & Root Marine v. Zapata Offshore Co., 377 F.2d 724, 1967 AMC 2684 (5th Cir. 1967) .............. Cargo Carriers Inc. v. Brown S.S. Co., 95 F.Supp. 288 (S.D.N.Y. 1950) ..................................................... Carr v. PMS Fishing Corp., 191 F.3d 1, 1999 AMC 2958 (1st Cir. 1999) ............................................ 451, Caribbean Sea Transp., In re, 748 F.2d 622, 1985 AMC 1995 (11th Cir. 1984, amended in part, 753 F.2d

948 (11th Cir. 1985) ......................................................................................................................455, 456, Chadade S.S. Co. (The Yarmouth Castle), In re, 266 F.Supp. 517, 1967 AMC 1843 (S.D. Fla. 1967) ..... Chinese Maritime Tr. Ltd., In re, 478 F.2d 1357 (2d Cir. 1972), cert. denied, 414 U.S. 1143 (1974) ....... City of Norwich v. Norwich & N.Y. Transp. Co., 118 U.S. 468 (1886) ................................................ 455, Clearsky Limitation Proceedings, In re, 1998 AMC 102 (E.D. La. 1997) ................................................... Companhia de Navegacao Lloyd Brasileiro v. David G. Evans Coffee Col (The Pelotas), 66 F.2d 75 (5th Cir. 1939) ..................................................................................................................................................... Compania Gijonesa de Navegacion (The Cimadevilla), 590 F.Supp. 241, 1985 AMC 1469 (S.D.N.Y. 1984) ............................................................................................................................................................ Complaint of Bay View Charter Boats, Inc., 692 F.Supp. 1480, 1989 AMC 1289 (E.D.N.Y. 1988) ......... Complaint of Caribbean Sea Transp. Ltd., 748 F.2d 622, 1985 AMC 1995, 2000 (11th Cir. 1984) .......... Complaint of Connecticut National Bank, In re, 687 F.Supp. 111, 1989 AMC 791 (S.D.N.Y. 1988) ........ Complaint of Mike’s Inc., In re, 317 F.3d 894, 2003 AMC 192 (8th Cir. 2003); 337 F.3d 909 (8th Cir.

2003) ............................................................................................................................................................ Consumers Import Co. v. Kawasaki Kisen Kabushiki Kaisha, 133 F.2d 781 (2d Cir. 1943), aff’d 320 U.S. 249 (1943) .................................................................................................................................................... Continental Oil Co. v. Bonanza Corp., 706 F.2d 1365, 1983 AMC 1059 (5th Cir. 1983) .................... 452, Coryell v. Phipps (The Seminole), 317 U.S. 406, 1943 AMC 18, (1943) .................................................... Cullen Fuel Co. v. W.E. Hedges, Inc., 290 U.S. 82 (1933) ........................................................................... D. & L. Marine Transp. Inc. v. Smand Barge Serv., 2002 U.S. Dist. LEXIS 2448 (E.D. La. 2002) .......... Dammers & Vanderheide & Scheepvaart Maats Christina B.V., In re, 836 F.2d 750, 1988 AMC 1674 (2d Cir. 1988 ...................................................................................................................................................... Daniel Ball, The, 77 U.S. 557, 563 (1870) .................................................................................................... Dickenson, In re, 780 F.Supp. 974, 1992 AMC 1660 (E.D.N.Y. 1992) ....................................................... Doxsee Sea Claim Co. v. Brown, 13 F.3d 550, 1994 AMC 305 (2d Cir. 1994) ..........................................

412

414

413

414

139 458 449 456 449 456 458 455 452 450 450 447 451 451 448 457

449

451

449

454

451

455

452

458 457 454 456 456 453 458

450

455

449

449 454

453

452

454

456 450

448

448

448

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Earle & Stoddart Inc. v. Ellerman’s Wilson Line Ltd., 287 U.S. 420 (1932) .............................................. Edmund Fanning, The, 105 F.Supp. 353 (S.D.N.Y. 1952), aff’d in part, 201 F.2d 281 (2d Cir. 1953 ....... Exxon Shipping Col v. Cailleteau, 869 F.2d 843, 1989 AMC 1422 (5th Cir. 1989) ................................... Falcon Island, In re, 1998 U.S. Dist. LEXIS 5640 (E.D. La. 1998) ............................................................. Falkiner, In re, 716 F.Supp. 895 (E.D. Va. 1988) .......................................................................................... Farrell Lines, Inc. v. Jones, 530 F.2d 7 (5th Cir. 1976), reh’g denied, 532 F.2d 1375 (5th Cir. 1976) ...... Federazione Italiana dei Corsorzi Agrari v. Mandask Compania de Vapores S.A., 388 F.2d 434 (2d Cir.), cert. denied, 393 U.S. 828 (1968) .............................................................................................................. Fetch v. Makowski, 406 F.2d 721, 1969 AMC 144 (5th Cir. 1969) ............................................................. Flink v. Paladini, 279 U.S. 59 (1928) ............................................................................................................. Frederick Luckenback, The, 15 F.2d 241 (S.D.N.Y. 1926) ........................................................................... Geophysical Serv. Inc., In re, 590 F.Supp. 1346, 1984 AMC 2413 (S.D. Tex. 1984) ................................. Glacier Bay, In re, 741 F.Supp. 800, 1990 AMC 1614 (D. Alaska 1990), aff’d, 944 F.2d 577, 1992 AMC

448 (9th Cir. 1991) ...................................................................................................................................... Great Atl. & Pac. Tea Co. v. Brasileiro, 159 F.2d 661 (2d Cir.), cert. denied, 331 U.S. 836 (1947), cert. denied, 358 U.S. 933 (1959) ................................................................................................................. 451, Great Lakes Dredge & Dock Co. City of Chicago, 3 F.3d 225 (7th Cir. 1993), aff’d sub nom Grubart v. Great Lakes Dredge & Dock Co., 115 DS.Ct. 1043, 1995 AMC 913 (1995) ................................... 447, Grindle v. Fun Charters, 962 F.Supp. 1284, 1997 AMC 2791 (D. Haw. 1996) ........................................... Guillot v. Cenac Towing Co., 366 F.2d 898 (5th Cir. 1960) ......................................................................... Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) ............................................................................................. Hanjin Container Lines Ltd., In re, 1988 AMC 1230 (W.D. Wash. 1987) ................................................... Hanjin Container Lines v. Tokio Marine & Fire Ins. Co., 499 U.S. 961 (1991) ......................................... Hartford Accident & Indem. Co. v. S. Pac. Co., 273 U.S. 207 (1927) ........................................................ Hellenic Inc. v. Bridgeline Gas Distrib. LLC, 252 F.3d 391, 2001 AMC 1835, 1840 (5th Cir. 2001) ....... Hellenic Lines Ltd. v. Prudential Lines Inc., 730 F.2d 159, 1984 AMC 57 (3d Cir. 1984) ........................ Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970) ................................................................................... Hercules Carriers, Inc. v. Claimant State of Florida, 768 F.2d 1558 (11th Cir. 1985) ................................ Jahre Spray II, In re, 1997 AMC 845 (D.N.J. 1996) ..................................................................................... Jefferson Barracks Marine Serv. Inc. v. Casey, 763 F.2d 1007, 1986 AMC 374 (8th Cir. 1985) ............... Karim v. Finch Shipping Co., 265 F.3d 258, 2001 AMC 2618 (5th Cir. 2001) ........................................... Kloeckner v. A.S. Hakedal (The Western Farmer), 210 F.2d 754, 1954 AMC 643 (2d Cir.) ..................... Korea Shipping Corp., In re, 596 F.Supp. 1268, 1985 AMC 722 (D. Alaska 1984) ................................... Korea Shipping Corp., In re, 1990 AMC (C.D. Cal. 1989), aff’d 919 F.2d 601, 1991 AMC (9th Cir. 1990) ... Kreta Shipping S.A. v. Pressag Int’l Steel Corp., 192 F.3d 41, 1999 AMC (2d Cir. 1999) ........................ Kreta Shipping, S.A. Limitation Proceedings, 1997 AMC 1676, 1679 (S.D.N.Y. 1997) ............................ Lake Tankers Corp. v. Henn, 354 U.S. 147 (1957), reh’g denied, 453 U.S. 945 (1957) ............................ Langnes v. Green, 282 U.S. 531, 1931 AMC 511 (1931) ............................................................................. Lauritzen v. Larsen, 345 U.S. 571 (1953) ...................................................................................................... Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 121 St. Ct. 993 (2001) ............................................. Lewis, In re, 190 F.Supp. 2d 885, 888 (M.D. La. 2002) ............................................................................... Linea Sud-Americana v. 7,295.40 Tons of Linseed, 29 F.Supp. 210 (S.D.N.Y. 1939), aff’d, 108 F.2d 755

(2d Cir.), cert. denied, 309 U.S. 672 (1940) .............................................................................................. Liverpool, In re, & Great W. Steam Co., 3 Fed. 168 (S.D.N.Y. 1880) ......................................................... Liverpool, Brazil & River Plate Steam Nav. Co. v. Brooklyn E. Dist. Terminal, 251 U.S. 48 (1919) ....... Magnolia Marine Transp. Co., In re, 1987 AMC 1167 (D. Kan. 1986) ....................................................... Main, Them v. Williams, 152 U.S. 122 (1894) .............................................................................................. Mapco Petroleum Inc. v. Memphis Barge Line, Inc., 849 S.W.2d 312, 1993 AMC 2113 (Tenn. 1993) .... Marine Sulphur Queen, In re, 460 F.2d 89 (2d Cir.), cert. denied, 409 U.S. 982 (1972) ........................... Maryland Cas. Co. v. Cushing, 347 U.S. 409, 415 (1954) ............................................................................ Mediterranean Shipping Co. S.A. Geneva v. POL-Atl., 229 F.3d 397, 2001 AMC 1, 7 (2d Cir. 2000) .... Moore-McCormack Lines, Inc. v. Armco Steel Corp. (The Mormackite), 272 F.2d 873 (2d Cir. 1959), cert. denied, 362 U.S. 990 (1960) ....................................................................................................................... Morania Barge No. 190 Inc, In re, 690 F.2d 32, 34, 2982 AMC 2679 (2d Cir. 1982) ............................... Murray v. N.Y. Central R.R., 171 F.Supp. 80 (S.C.N.Y. 1959), aff’d 287 F.2d 152 (2d Cir.), cert. denied, 366 U.S. 945 (1961) .................................................................................................................................... N. Am. Trailing Co., In re, 763 F.Supp. 152 (E.D. Va. 1991) ...................................................................... N.Y. Marine Managers Inc. v. Helena Marine Serv., 758 F.2d 313, 1986 AMC 662 (8th Cir.), cert. denied, 474 U.S. 850 (1985) .................................................................................................................................... Norfolk Dredging Co., In re, 240 F.Supp.2d 532, 2002 AMC 1608 (E.D. Va. 2002) ................................. Norwich & N.Y. Trans. Co. v. Wright, 80 U.S. 104 (1872) .......................................................................... Norwich Co. v. Wright, 80 U.S. 104 (1872) ............................................................................................ 455,

454 454 456 455 452 451 455

452

450

453

458

454 454 452

450

456

458

456

458

456

452

453

458

452

454

450

458

457

457

458

449

449

449

450

458

450

448

453 453 451 451 455 450 452 447 454 453 448 454

455

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449

447

458

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xxv

O’Brien v. Miller, 168 U.S. 287 (1897) ......................................................................................................... 455 Oceanic Steam Nav. Co. v. Mellor (The Titanic), 233 U.S. 718 (1914) ...................................................... 457 Odeco Oil & Gas Co. Drilling Div. v. Bonnette, 4 F.3d 401, 1994 AMC 506 (5th Cir. 1993), cert. denied, 114 S. Ct. 1370 (1994) ................................................................................................................................ 450

Offshore Specialty Fabricators Inc., In re, 2002 AMC 2055 (E.D. La. 2002) ............................................. 455

Okeanos Ocean Research Found. Inc., In re, 704 F.Supp. 412, 1989 AMC 1677 (S.D.N.Y. 1989) ........... 448

Pac. Coast Co. v. Reynolds, 114 F. 877 (9th Cir.), cert. denied, 187 U.S. 640 (1902) ............................... 455

Pac. Far E. Line Inc., In re, 472 F.2d 1382, 1970 AMC 1592 (9th Cir. 1970) ........................................... 454

Patton-Tully Transp. Co., In re, 797 F.2d 206 (5th Cir.), reh’g denied, 800 F.2d 262 (5th Cir. 1986) ...... 451

Peacock Limitation Process, In re, 1983 AMC 1200 (N.D. Cal. 1983) ........................................................ 450

Pendleton v. Benner Line, 246 U.S. 353 (1918) ............................................................................................ 454

Pennzoil Co. v. Offshore Express, Inc., 943 F.2d 1465, 1994 AMC 1034, 1045 (5th Cir. 1991) ............... 452

Rationis Enterprises Inc. v. Hyundai Merchant Marine Co., 201 F.3d 432 (2nd Cir. 1999) ....................... 449£

Red Star Barge Line Inc., In re, 683 F.2d 42, 1983 AMC 2141 (2d Cir. 1982) .......................................... 456

Republic of France v. United States, 290 F.2d 395 (5th Cir. 1961), cert. denied, 369 U.S. 804 (1962) .... 455

Richardson v. Harmon, 222 U.S. 96 (1911) ................................................................................................... 453

Rodco Marine Servs., Inc. v. Migliaccio, 651 F.2d 1101, 1985 AMC 605 (5th Cir. 1981) ........................ 457

Scotland, The, 105 U.S. 24 (1881), 105 U.S. (15 Otto) 24, 26 L.Ed. 1001 (1882) .............................. 454, 457

Seuss Bros. Ocean Towing, In re, 1992 AMC 1858 (D. Or. 1992) .............................................................. 449

Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990) ............................................................................... 447

Skibs AS Jolund v. Black Diamond S.S. Corp., 250 F.2d 777 (2d Cir. 1957), cert. denied, 356 U.S. 933

(1958) ........................................................................................................................................................... 455 Spencer Kellogg & Sons Inc. v. Hicks (The Linseed King), 285 U.S. 502 (1932) ..................................... 451 Stand. Dredging Co. v. Kristensen, 67 F.2d 548, 1933 AMC 1621 (2d. Cir.) cert. denied, 290 290 U.S. 704 (1933) ........................................................................................................................................................... 451

Stand. Oil Co. v. S. Pac. Co., 269 U.S. 146 (1925) ...................................................................................... 450

States C.C. Co. v. United States, 259 F.2d 458, 466, 1957 AMC 1181 (9th Cir. 1957) ............................. 451

Suzuki of Orange Park, Inc. v. Shubert, 86 F.3d 1060, 1997 AMC 457 (11th Cir. 1996) .......................... 451

Ta Chi Nav. Corp. Limitation Process (The Euryplus), In re, 416 F.Supp. 371, 1976 AMC 1895 (S.D.N.Y.

1976) ............................................................................................................................................................ 457

Tex. Gulf Sulphur Co. v. Blue Stack Towing Co., 313 F.2d 359 (5th Cir. 1963) ........................................ 449

Texas Co. (The Washington), In re, 213 F.2d 479 (2d Cir.), cert. denied, 348 U.S. 829 (1954) ................ 456

Texaco Inc., In re, 570 F.Supp. 1272, 1985 AMC 1650 (E.D. La. 1983) .................................................... 452

Texaco Inc., In re, 1991 AMC 2624 (E.D. La. 1991) ................................................................................... 448

Thomassen v. Whitwill, (The Great Western) 12 F. 891, aff’d, 118 U.S. 520 (1892) ........................... 452, 455

Three Buoys Houseboat Vacations, U.S.A. v. Morts, 921 F.2d 775, 1991 AMC 1356 (8th Cir. 1990) cert.

denied, 502 U.S. 898 (1991) ....................................................................................................................... 448 Tug Allie-B Inc. v. United States, 273 F.3d 936, 2002 AMC 49 (11th Cir.) 2001 ...................................... 454 Univ. of Tex. Med. Branch v. United States (The Ida Green) 557 F.2d 438 (5th Cir. 1977), cert. denied, 439 U.S. 820 (1978) ..................................................................................................................................... 447, 454 William J. Riddle, The, 111 F.Supp. 657, 1953 AMC 531 (S.D.N.Y. 1953), amended in part 753 F.2d 948 (11th Cir. 1985) ........................................................................................................................................... 455

Wyandotte Transp. Co. v. United States, 389 U.S. 191, 1967 AMC 2553 (1967) ....................................... 454

Table of Legislation

(Page numbers in bold indicate where the text of the legislation is set out)

United Kingdom Administration of Justice Act 1956 ................... 332

Carriage By Air Act 1961 .................................. 90

Carriage of Goods by Sea Act (COGSA) 1924 .... 4, 6,

133, 135

s. 6(1) .............................................................. 41

Carriage of Goods by Sea Act (COGSA)

1971 .................................................. 6, 133, 135

s. 1 ................................................................... 4

(2) .............................................................. 149

(3) .............................................................. 149

(6) .............................................................. 149

s. 6(4) ......................................................... 41, 134

Carriage of Passengers and their Luggage by Sea

(Domestic Carriage) Order 1987 (S.I.

1987/670) ....................................... 96, 100, 108

Carriage of Passengers and their Luggage by Sea

(Interim Provisions) Order 1980 (S.I.

1980/1092) ......................................... 6, 96, 100

Carriage of Passengers and their Luggage by Sea

(Notice) Order 1987 (S.I. 1987/703) ......... 96

Carriage of Passengers and their Luggage by Sea

(United Kingdom Carriers) Order 1987

(S.I. 1987/855) ............................................ 104

Carriage of Passengers and their Luggage by Sea

(United Kingdom Carriers) Order 1998

(S.I. 1998/2917) .......................................... 104

Civil Jurisdiction and Judgments Act 1982 ....... 82

Civil Jurisdiction and Judgments Act 1991 ....... 82

Civil Jurisdiction and Judgments Order 2001

(S.I. 2001/3929) .......................................... 82

Contracts (Rights of Third Parties) Act 1999

s. 1 ................................................................... 157

Criminal Damage Act 1971 ............................... 37

Hovercraft Act 1986—

s. 1(1)(i) ........................................................... 89

Hovercraft (Civil Liability) Order 1986 ... 13, 89, 90

Hovercraft (Civil Liability) (Amendment) Order

1987 (S.I. 1987/1835) ................................. 89

Hovercraft (Convention on Limitation of Liabili­ ty for Maritime Claims) (Amendment)

Order 1998 .................................................. 13

Marine Insurance Act 1906

s. 39(5) ............................................................ 32

s. 55(2) ............................................................ 15

(a) ........................................................ 41

Merchant Shipping Act 1894 ................ 5, 7, 31, 169

s. 502 ............................................................ 26, 41

Merchant Shipping Act 1894—cont. s. 503 .................................................... 5, 7, 31, 76

(1) ................................................... 7, 18, 21

Merchant Shipping Act 1979

s. 14 ................................................................ 6, 95

s. 17 .................................................................. 5, 6

s. 19(4) ............................................................ 4

s. 35 ................................................................. 30

Sched. 4, Part I ............................................... 93

Sched. 5 .......................................................... 4

Sched. 6 .......................................................... 96

Merchant Shipping Act 1979 (Commencement

No. 10) Order (S.I. 1986/1052) ................. 4

Merchant Shipping Act 1979 (Commencement

No. 11) Order (S.I. 1987/635) ................... 4

Merchant Shipping Act 1981

s. 25 ................................................................. 142

Merchant Shipping Act 1995 ...................... 3, 12, 16

s. 153, 154 ....................................................... 28

s. 183 ............................................................... 6

(1) .......................................................... 96

s. 185 ........................ 5, 23, 29, 49, 51, 52, 75, 88

(1) .......................................................... 69

(4) .......................................................... 30

s. 186 .......................................................... 26, 134

(1) .......................................................... 12

(3) .......................................................... 41

Sched. 6

Part I .......................................................... 4, 96

Part II ................................................. 4, 96, 104

para. 3 ..................................................... 102

para. 9 ..................................................... 98

para. 12 ................................................... 55

para. 13 ................................................... 41

Sched. 7

Part I ............................... 13, 16, 17, 41, 51, 89

Part II .......................................................... 12

para. 2 .................................................. 12, 21

para. 3 .................................................. 23, 24

bis ................................................. 21

para. 4(1) ................................................. 30

(2) .............................................. 28, 30

(3) .............................................. 29, 30

para. 5 .................................................. 48, 88

(2) ................................................. 51

(3) ................................................. 51

para. 6(1) ................................................. 52

para. 7 ..................................................... 49

para. 8 ..................................................... 68

xxvii

xxviii

TA B L E O F L E G I S L AT I O N

Merchant Shipping Act 1995—cont. Sched. 7—cont. para. 8(3) ................................................. 75 para. 12 ........................................... 12, 89,90 para. 13 ................................................... 66 para. 39(1) ............................................... 12 Merchant Shipping and Maritime Security Act 1997 s. 15 ................................................................. 6 Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amend­ ment) Order 1998, (S.I. 1998/1258) ... 21, 27, 48, 55 Art. 5(b) ........................................................... 21 Art. 7(d) ........................................................... 48 (e) ........................................................... 99

Merchant Shipping (Liability of Shipowners and Others) Act 1958 .................. 3, 5, 8, 9, 74, 169 s. 1(1) .............................................................. 88

s. 2 ................................................................... 18

(1) .............................................................. 22

(2)(a) .......................................................... 22

s. 5 ................................................................... 22

s. 3 ................................................................... 8

(1) .............................................................. 8

s. 5 .................................................................. 5, 76

Merchant Shipping (Liability of Shipowners and Others) (Calculation of Tonnage) Order 1986 (S.I. 1986/1040) ................................. 52 Merchant Shipping (Liability of Shipowners and Others) (Rate of Interest) Order 1999 (S.I. 1999/1922) .................................................. 68 Merchant Shipping (Liability of Shipowners and Others) (Rate of Interest) Order 2004 (S.I. 2004/931) .................................................... 68 Merchant Shipping (Oil Pollution) Act 1971 .... 28, 30 Merchant Shipping (Tonnage) Regulations 1982 (S.I. 1982/841) ............................................ 51 regs 4–6 ........................................................... 52 The Merchant Shipping (Tonnage) Regulations 1997 (S.I. 1997/1510) .............................. 51, 52 Nuclear Installations Act 1965 ........................... 29

ss. 7–11 ........................................................ 29, 39

s. 14(1) ............................................................ 29

s. 16 ................................................................. 29 Responsibility of Shipowners Act 1733 ............ 5 Supreme Court Act 1981 s. 20 ................................................................. 84

(1)(b) and (c) ........................................... 66

Third Parties (Rights Against Insurers) Act 1930 .......................................................... 15, 35 s. 1(1) ............................................................ 15–16

Unfair Contract Terms Act 1977 ....................... 95

O T H E R N AT I O N A L I T I E S

Argentina Navigation Act (No. 20.094) ....................... 163–168

ss. 175–182 ..................................................... 164

s. 175 ........................................................ 164, 165

s. 177 ........................................................ 164, 166

Argentina—cont.

Navigation Act (No. 20.094)—cont.

s. 178 ............................................................... s. 179 ............................................................... s. 181 ............................................................... s. 278 ............................................................... s. 561 ............................................................... ss. 561–577 ..................................................... s. 562(b) .......................................................... s. 564 ............................................................... s. 572 ............................................................... s. 575 ...............................................................

164

165

164

166

166

164

165

165

165

165

Australia Admiralty Act 1988 ...................................... 171–173

s. 6 ................................................................... 173

s. 25 .......................................................... 171, 175

Admiralty Rules Part VIII .......................................................... 176 rr. 61, 72 .......................................................... 176 r. 73 ................................................................. 177

Carriage of Goods by Sea Act 1991 .......... 169, 177

s. 10 ................................................................. 178

s. 11 ................................................................. 178

Part 3 ............................................................... 169 Civil Liability Act 2002 ..................................... 169 Civil Liability Act 2002 (NSW) ........................ 179 Civil Liability Amendment (Personal Responsi­ bility) Act 2002 .......................................... 170 Civil Liability Amendment (Personal Responsi­ bility) Act 2002 (NSW) ............................. 179 Foreign States Immunity Act 1985 .................... 171 Income Tax Assessment Act 1997 ..................... 179 International Maritime Conventions Amendment Act 2001 ..................................................... 173 Limitation of Liability of Maritime Claims Act 1989 ............................................................. 171 Navigation Act 1912 ................................... 171, 174 s. 59B .............................................................. 174 Navigation Amendment Act 1979 ..................... 169 Taxation Laws Amendment (Structured Settle­ ments and Structured Orders) Act 2002 .... 179 Trade Practices Act 1974 ................................... 170 s. 5 ................................................................... 170

s. 7 ................................................................... 171

s. 8 ................................................................... 171

s. 9 ................................................................... 171

(5) .............................................................. 171

s. 74 ................................................................. 170 Trade Practices Amendment (Liability for Rec­ reational Services) Act 2002 ...................... 179

Western Australia Marine Act (1982) ................ 170

s. 6 ................................................................... 170

s. 84 ................................................................. 170

Belgium Act of 28 November 1928 ................................. Code of Procedure Art. 627, 10° ................................................... Maritime Code Art. 1 ............................................................... Art. 46 ............................................................. Art. 48(5) .........................................................

187 185 187

188

186

TA B L E O F L E G I S L AT I O N

xxix

Belgium—cont. Maritime Code—cont. Arts 48–52 ...................................................... 185

Statute of 11 April 1989

Art. 10 ............................................................. 187

Chile—cont.

Commercial Code (Book Three)—cont.

Art. 1245 ......................................................... 208

Navigation Law .................................................. 207

Art. 145 ........................................................... 209

Brazil Civil Code

Art. 750 .................................................... 195, Commercial Code 1850 ............................... 191, Art. 494 .................................................... 191, Decree 350 .......................................................... Decree 1.563 of 19 July 1995 ............................ Law 9.611 of 19 February ................................. Arts 1 & 2 ....................................................... Art. 17 ............................................................. Art. 20 ............................................................. Mercosur Partial Agreement for the Facilitation

of Multimodal Transport of Goods ............ Art. 16 ............................................................. Art. 18 .............................................................

Croatia Maritime Code, 8 December 2004 .................... Art. 385 ........................................................... Art. 388 ........................................................... Art. 389 ........................................................... Art. 391 ........................................................... Art. 394 ...........................................................

196

193

192

191

195

195

197

197

197

196

197

197

Canada Canada Shipping Act ................................... 199, Carriage of Goods by Water Act ................ 199, Marine Liability Act ............................ 199, 200, s. 25(1)(b) ........................................................ s. 26 ................................................................. s. 28 ................................................................. s. 29 ................................................................. (1) ............................................................ (2) ............................................................ s. 31(1) ............................................................ s. 46 ................................................................. ss. 32, 33, 34 ................................................... Part I ............................................................... Part II .............................................................. Part V ..............................................................

201

202

201

199

199

201

202

201

201

199

203

201

202

202

202

Chile Commercial Code (Book Three) ................. 205, Art. 882 ........................................................... Art. 889 ........................................................... Art. 890 ........................................................... Art. 891 ........................................................... Art. 894 ........................................................... Art. 895 ........................................................... Art. 901 ........................................................... Art. 902 ........................................................... Art. 903 ........................................................... Arts 979, 980 .................................................. Arts 984, 987 .................................................. Arts 992, 993, 994, 995 .................................. Art. 998 ........................................................... Arts 1001, 1002 .............................................. Art. 1039 ......................................................... Art. 1065 ......................................................... Art. 1210 ......................................................... Art. 1213 ......................................................... Arts 1220–1222 ............................................... Art. 1230 ......................................................... Art. 1244 .................................................. 207,

208

205

206

209

205

206

207

205

205

206

211

209

210

211

210

211

209

207

208

208

209

208

219

219

219

219

220

220

Denmark Merchant Shipping Act 1994 ...................... 223, 224

Finland Maritime Code 1994 ...................................... 72, Chapter 9 .................................................. 229, §1 ................................................................ §2 ......................................................... 229, §3 ................................................................ §4 ................................................................ §5 ......................................................... 231, §6 ................................................................ §7 ......................................................... 232, §8 ................................................................ §9 ................................................................ §10 .............................................................. §11 .............................................................. Chapter 10

§2 ................................................................ Chapter 12

§14 .............................................................. Chapter 13 ....................................................... §2 ................................................................ §4 ................................................................ §30 .............................................................. §31 .............................................................. §33 .............................................................. Chapter 15

§15 .............................................................. Chapter 32

§2 ................................................................ France Decree of 27 October 1967

Arts 59–60 ...................................................... Art. 65 ............................................................. Art. 67 ...................................................... 238, Art. 84 ............................................................. Chapter VII ..................................................... Decree of 23 December 1986 ............................ Law of 18 June 1966 ......................................... Art. 16 ............................................................. Art. 28 ............................................................. (a) ......................................................... (b) ......................................................... Law of 3 January 1967

Art. 58 ............................................................. Arts 59, 60 ......................................................

229

233

229

231

230

231

234

232

233

233

232

233

233

230

233

234

235

235

235

235

235

234

231

239

241

464

241

239

237

242

244

243

243

243

237

238

xxx

TA B L E O F L E G I S L AT I O N

France—cont.

Law of 3 January 1967—cont.

Art. 61 ............................................................. Art. 62 ...................................................... 239, Art. 63 ............................................................. Art. 64 ............................................................. Art. 65 ............................................................. Art. 67 ............................................................. Art. 69 ............................................................. Art. 69 bis ....................................................... Art. 82 ............................................................. Law of 7 July 1967

Art. 21 bis ....................................................... Law of 21 December 1984 ................................ Law of 15 December 1986 ................................ Germany Code of Civil Procedure (Zivilprozess­ ordnung) ...................................................... Commercial Code (Handelsgesetzbuch) ............ s. 486 ............................................................... s. 487 ............................................................... Procedural Code on Limitation Proceedings

s. 50 ................................................................. Greece Act 551/1915, Workmen’s Compensation Act .... Act 1922/1991, Govt. Gaz. A15/15.2.1991 ....... Act 1923/1991, Govt. Gaz. A13/14.2.1991 ....... Act 2107/1992, Govt. Gaz. A203/29.12.1992 ... Art. 2 §1 .......................................................... Act 2251/1994, Govt. Gaz. A191/16.11.1994 ... Act 1892/1990, Govt. Gaz. A101/31.7.1999—

Art. 77 §6(a) ................................................... (b) ................................................... Code of Civil Procedure ..................................... Art. 780 ........................................................... Code of Private Maritime Law (Act 3816/1958,

Govt. Gaz. A32/28.2.1958) ................. 251, Art. 1 §1 .......................................................... Art. 87 §2 ........................................................ Art. 90 §2 ........................................................ Art. 187 ........................................................... Art. 188 ........................................................... Art. 289 & 291 ............................................... Fifth Title (Arts 84–106) ................................ Constitution of 1975—

Art. 28 §1 ........................................................ Legislative Decree 117/1974, Govt. Gaz.

A310/23.10.1974—

Art. 1 ............................................................... Presidential Decree 425/1995, Govt. Gaz.

A245/24.11.1995 ......................................... Hong Kong Hong Kong Special Administrative Region

(HKSAR)—

Basic Law

Art. 8 ............................................................... Art. 82 ............................................................. Art. 84 ............................................................. Art. 151 ...........................................................

238

241

240

240

241

241

237

238

240

237

238

238

248

245

254

249

249

258

255

251

256

256

256

253

255

254

255

256

252

258

253

256

256

258

251

Hong Kong—cont. Carriage of Goods by Sea Ordinance (COGSO)— s. 3 ................................................................... Merchant Shipping (Liability and Compensation

for Oil Pollution) Ordinance [Cap 414]—

s. 6 ................................................................... s. 16 ................................................................. Merchant Shipping (Limitation of Shipowners’

Liability) Ordinance [Cap. 434]—

s. 3 ................................................................... s. 4 ................................................................... s. 5 ................................................................... s. 6 ................................................................... s. 7 ................................................................... s. 8 ................................................................... s. 9 ................................................................... s. 10 ................................................................. ss. 3–11 .................................................... 262, s. 12 ................................................................. ss. 12–23 .................................................. 262, ss. 13–30 ......................................................... s. 14 ................................................................. s. 15 ................................................................. Sched. 1 .......................................................... Sched. 2 .......................................................... Merchant Shipping (Limitation of Shipowners’

Liability) (Amendment) Ordinance 2005 .... Merchant Shipping (Liability of Shipowners and

Others) (Calculation of Tonnage) (Hong

Kong) Order [Cap 434A], 30 June 1997 ... Merchant Shipping (Limitation of Shipowners’

Liability) (Rate of Interest Order) [Cap

434D], 31 May 2002 .................................. Merchant Shipping (Tonnage) Regulations [Cap

415] ............................................................. Nuclear Materials (Liability for Carriage) Ordi­ nance [Cap 479]—

ss. 3, 4 ............................................................. India Merchant Shipping Act 1958 ............................. s. 352A(2) ........................................ 266, 267, s. 352B ............................................................ Chapter XA .............................................. 265, 2002 Amendments to Merchant Shipping Act

1958 .............................................. 266, 268,

264

260

260

262

262

263

263

263

263

263

263

263

260

264

260

260

260

262

260

262

261

261

261

260

265

268

268

268

269

253

252

257

259

259

259

259

Ireland Adaptation of Enactments Act 1922 .................. Instrument of Accession (to the Limitation Con­ vention 1976) Feb 1998 ............................. Art. 18 ............................................................. Merchant Shipping Act 1947 ............................. Merchant Shipping (Liability of Shipowners and

Others) Act 1996 ........................................ s. 11 ................................................................. s. 25(1) ............................................................ s. 34 ................................................................. s. 37 ................................................................. Merchant Shipping (Salvage and Wreck) Act

1993 .............................................................

271

271

271

273

271

271

272

273

273

271

TA B L E O F L E G I S L AT I O N

Israel Maritime Court Law, 5712–1952 ....................... Art. 1(4) ........................................................... Shipping (Limitation of Liability of Owners of

Vessels) Law, 5725–1965 ........................... Art. 5 ............................................................... Art. 7 ............................................................... Art. 9(a) ...........................................................

275

275

276

276

Italy Code of Navigation

Art. 7 ............................................................... Art. 275 .................................................... 279, Art. 256 ........................................................... Art. 620 ........................................................... Art. 622 ...........................................................

280

280

279

280

279

277

277

Japan Carriage of Goods by Sea Act, January 1958,

amended 1992 ............................................. 290

Art. 2 ............................................................... 291

(4) ........................................................... 290

Art. 12–2 .................................................. 290, 291

Art. 13 ............................................................. 290

Art. 13–2 ......................................................... 292

Art. 20–2 ................................................... 292–293

Law concerning Limitation of Liability of Ship­ owners etc ................................................... 281

Art. 2(1)(i) ....................................................... 281

(1)(7) ...................................................... 285

Art. 3(1)(i) ....................................................... 281

(iii) ..................................................... 282

(3) ........................................................... 284

(4) ........................................................... 290

Art. 4 ......................................................... 283–284

Art. 4–2 .................................................... 283, 289

Art. 5 ............................................................... 284

Art. 6(1)–(3) ............................................. 285, 287

Art. 7(1) ..................................................... 289–290

Art. 7(1)–(5) .................................................... 284

(5) ........................................................... 289

(6) ........................................................... 287

Art. 9 ............................................................... 286

Art. 12(1) ......................................................... 287

Art. 19(1) ......................................................... 287

Art. 20 ............................................................. 287

Art. 23 ............................................................. 288

Art. 25(3) ......................................................... 286

Art. 26 ............................................................. 286

Art. 33 ............................................................. 288

Art. 34, 35, 36 ................................................. 288

Art. 47(2) ......................................................... 287

(3) ......................................................... 287

Art. 56 ............................................................. 288

Art. 96 ...................................................... 288, 289

Art. 98 ............................................................. 281

Korea Act on Procedure for Limitation of Shipowners’ Liability ....................................................... 295

Commercial Code ............................................... 295

Arts 746–752–2 .............................................. 295

xxxi

Korea—cont.

Commercial Code—cont.

Art. 748 ........................................................... 296

Limitation Procedure Act ................................... 298

Malta Carriage of Goods by Sea Act, Act XI of 1954 ... Art. 3 ............................................................... Civil Code ........................................................... Commercial Code ............................................... Interpretation Act ................................................ Art. 14 ............................................................. Merchant Shipping Act of Malta—

Art. 375 .................................................... 301, (2)(a) .................................................. Arts 349–358 .................................................. Art. 350 ........................................................... Arts 359–362 .................................................. Art. 359 ........................................................... Art. 360 ........................................................... Art. 362 ........................................................... Art. 374(4) ....................................................... Art. 375(1) ....................................................... Part IX ............................................................. Merchant Shipping (Limitation of Liability)

Order 1975 .................................................. Merchant Shipping (Limitation of Liability for

Maritime Claims) Regulations 2003 .......... Schedule .......................................................... Reg. 1(1) ......................................................... Reg. 2(2) ......................................................... Reg. 3 .............................................................. Reg. 4(1) .................................................. 301, (2) ......................................................... Reg. 5 .............................................................. Reg. 6 .............................................................. Reg. 7 .............................................................. Reg. 11(1) ....................................................... (2) ....................................................... (3) ....................................................... Reg. 13(3) ....................................................... Reg. 15 ............................................................ Merchant Shipping (Tonnage) Regulations

2002 ............................................................. Reg. 8 .............................................................. (1) ......................................................... Reg. 9(4) ......................................................... Reg. 10(2) ....................................................... Reg. 12(1), (2), (3) ......................................... Reg. 13 ..................................................... 307, Reg. 14 ............................................................ Statute Law Revision Act 1980 ......................... Mexico Commercial Code 1854, 1884, 1998 ................. Fortune de Mer ................................................... Navigation Act

Art. 104 ........................................................... Navigation and Maritime Code 1963 ................ Ordenanzas de Bilbao ........................................

309

310

307

311

303

303

309

301

301

302

301

302

302

302

303

301

311

302

301

301

301

303

301

303

301

303

303

302

305

304

305

304

302

305

309

305

306

306

308

308

308

310

313

313

315

313

313

xxxii

TA B L E O F L E G I S L AT I O N

Netherlands Act on Civil Liability for Oil Pollution

Damage ....................................................... 318

Art. 10a ..................................................... 318–319

Dutch Civil Code

s. 8:2 ................................................................ 318

s. 8:371 ............................................................ 325

s. 8:388 ............................................................ 326

ss. 8:750–8:759 ............................................... 317

s. 8:750 ..................................................... 318, 323

s. 8:752 ............................................................ 318

s. 8:753 ............................................................ 322

s. 8:754 ............................................................ 319

s. 8:755 ............................................. 318, 320, 320

s. 8:756 ............................................................ 320

s. 8:758 ............................................................ 321

s. 8:759 ............................................................ 320

Dutch Code of Civil Procedure .................. 317, 324

s. 642a ............................................................. 324

a–z ......................................................... 317

c ...................................................... 321, 324

e, f .......................................................... 321

g ...................................................... 324, 325

l .............................................................. 325

q ............................................................. 325

s ............................................................. 325

t .............................................................. 320

w ............................................................ 325

New Zealand Admiralty Act 1973 ..................................... 332, Carriage of Goods Act 1979 ............... 328, 334, Maritime Transport Act 1994—

s. 83 ................................................................. s. 84 ................................................................. s. 85(1) ............................................................ (2) ............................................................ s. 86 ................................................................. (1) & (2) .................................................. (2)(b) ........................................................ (3) ............................................................ (4) ............................................................ s. 87 .......................................................... 329, s. 88 ................................................................. (1)(a) ........................................................ s. 89 .......................................................... 331, s. 91 .......................................................... 331, Part VI (ss. 208–213) ..................................... s. 209 ............................................................... s. 210 ............................................................... Part VII ........................................................... Sea Carriage of Goods Act 1940 ....................... Shipping and Seamen Act 1952 .........................

333

337

332

333

328

329

332

329

329

330

329

330

330

330

332

332

335

328

336

327

335

333

Nigeria Admiralty Jurisdiction Act 1991 ........................ 341

s. 9(2) ........................................................ 341–342

Admiralty Jurisdiction Procedure Rules 1993 ... 341

Order 13 .......................................................... 342

Carriage of Goods Act ....................................... 340

Carriage of Goods by Sea Act ........................... 341

s. 2 ................................................................... 341

Nigeria—cont.

Decimal Currency Act 1971 .............................. Laws of the Federation of Nigeria 1990 ........... Chapter 44 ....................................................... Chapter 224 ..................................................... s. 363 ........................................................ 340, (2) .......................................................... Legal Notice 94 of 1964 .................................... Merchant Shipping Act 1962

s. 383 ............................................................... Norway Maritime Code 1994 ........................................... Chapter 9 .................................................. 344, Chapter 12 ....................................................... s. 170 .......................................................... s. 171 .......................................................... s. 172 .......................................................... (a) ............................................... 345, s. 174 .......................................................... s. 175 ................................................... 345, s. 176 .......................................................... s. 177 ................................................... 349, s. 178 .......................................................... s. 183 ................................................... 344, s. 184 ................................................... 345, s. 185 .......................................................... s. 186 ................................................... 349, s. 191 .......................................................... s. 207 .......................................................... s. 422 ........................................... 345, 346, s. 423 ..........................................................

340

339

341

339

341

340

340

339

344

350

349

350

344

344

348

345

346

350

350

349

345

346

350

350

345

345

347

347

Pakistan Admiralty Jurisdiction of the High Courts Ordi­ nance XLII 1980 ......................................... 356

Carriage of Goods by Sea Act 1925 .. 351, 356, 358

Schedule, Art. IX ............................................ 359

Art. IV(5) .................................................... 359

Code of Civil Procedure ..................................... 353

Merchant Shipping Ordinance LII of 2001 ........ 351,

355, 356, 357

Chapter XLI (ss. 534–548) ............................. 351

s. 535 .......................................................... 351

(2) ...................................................... 352

s. 536 .......................................................... 352

s. 537 .......................................................... 352

s. 541 .......................................................... 353

s. 542 .......................................................... 357

s. 545 .......................................................... 354

Philippines Civil Code ........................................................... Art. 1733 ......................................................... Art. 1738 ......................................................... Art. 1747 ......................................................... Art. 1752 ......................................................... Art. 1753 ......................................................... Art. 1755 ......................................................... Art. 1766 ......................................................... Art. 1758 ......................................................... Art. 1759 .........................................................

364

366

366

366

366

365

364

365

364

365

TA B L E O F L E G I S L AT I O N

Philippines—cont.

Civil Code—cont.

Art. 1763 ......................................................... Code of Commerce ...................................... 361, Art. 586 ........................................................... Art. 587 ............................................ 361, 362, Art. 590 ............................................ 361, 362, Art. 837 ............................................ 361, 362, Commonwealth Act No. 65 1936 ......................

365

365

362

364

364

364

361

Poland Maritime Code 1986 .................................... 367, Maritime Code 2001 .................................... 367, Art. 97 §1 ........................................................ §2 ......................................................... Art. 98 §2 ........................................................ Art. 100 ........................................................... Art. 101 §2 ...................................................... Art. 167 §1 ...................................................... Art. 181 §1 ...................................................... Art. 182 ...........................................................

368

368

367

367

367

367

367

368

368

368

Singapore Act 7 of 1996 ..................................................... 372 Carriage of Goods by Sea Act (Cap. 33) ... 372, 386 s. 3(2), (3), (4) & (6) ...................................... 386 Carriage of Goods by Sea (Singapore Currency Equivalents) Order 1982 (No. S172/82) .... 388 Merchant Shipping Act (Cap. 179), Act 19 of 1995 ...................................................... 371, 372 s. 2(1) .............................................................. 371

s. 135 ................................................ 373, 374, 375

s. 136 ................................ 373, 375, 380–381, 383

(1) .......................................................... 374

(d) ............................................... 375, 376

(c) & (d) ........................................... 376

(2) .......................................................... 381

s. 137 ............................................................... 383

(1) .......................................................... 382

(b) ...................................................... 384

(2) .......................................................... 383

(3) ................................................... 383, 385

s. 138 ............................................................... 382

s. 139(1) .......................................................... 386

(2) .......................................................... 384

(3) ................................................... 384, 386

s. 140 ............................................................... 384

s. 142(1) .......................................................... 382

s. 143 ............................................................... 383

s. 144 ............................................................... 372 Part VIII ................................................... 371, 372 Merchant Shipping (Amendment Act) 2004 ...... 371, 372 s. 2 ................................................................... 371

s. 3 ................................................................... 372 ss. 3 & 4 .......................................................... 371 Part VIII (ss. 134–144) ................................... 371 Schedule .......................................................... 371 Merchant Shipping (Limitation of Liability) (Singapore Currency Equivalents) Order 1983, No. S22/83 ........................................ 381 Merchant Shipping (Tonnage) Regulations ....... 383

xxxiii

Singapore—cont. Order 70 (Admiralty Proceedings) of the Rules of Court ....................................................... 383 rule 36 ............................................................. 383 Vide Act Supplement No. 6, 1995 ..................... 386 Slovenia Constitution of the Republic of Slovenia .......... Maritime Code .................................................... Part V, Arts 382–422 ...................................... Art. 383 ........................................................... Art. 385 ........................................................... Art. 386 ........................................................... Art. 388 .................................................... 392, Art. 389 .................................................... 392, Art. 392 ...........................................................

391

391

391

392

392

392

393

393

393

South Africa Act 16 of 1995 ................................................... 400

s. 4(b) ....................................................... 400, 404 Admiralty Court Act 1861 ................................. 399 Admiralty Jurisdiction Regulation Act 105 of 1983 .............................................. 395, 396, 401 s. 1(1)(g) .......................................................... 398

(h) .......................................................... 398

s. 2 ................................................................... 395

(1)(w) ......................................................... 395

s. 5 ................................................................... 395

s. 6 ................................................................... 399

(2) .............................................................. 399

(5) .............................................................. 399

s. 7(1)(a) .................................................... 396–397

Carriage of Goods by Sea Act 1 of 1986 ......... 398

s. 1(1) .............................................................. 406

s. 3 ................................................................... 398

Schedule, Art. IV(5) ....................................... 399

Colonial Courts of Admiralty Act 1890 ............ 399

Merchant Shipping Act 57 of 1951 ............ 395, 400

s. 2 ................................................................... 400

s. 261 ....................... 397, 399, 400, 401, 402, 403

(1) .......................................................... 401

(b) ....................................... 395, 397, 402

(2) ................................................... 401, 405

(3) .......................................................... 406

(4) .......................................................... 405

(5) ................................................... 403, 404

s. 263(2) .......................................................... 401 Shipping General Amendment Act 23 of 1997 .... 400, 407 s. 11 .................................................. 400, 403, 405

(1) ............................................................ 403

(a) ........................................................ 406

(b) ........................................................ 405

(2) ............................................................ 402

Art. IV(5) ........................................................ 408

Spain Civil Code ........................................................... 409

Art. 1911 ......................................................... 409

Code of Commerce ...................................... 409, 410

Art. 587 .................................................... 410, 411

Art. 837 ............................................ 409, 411–412

xxxiv

TA B L E O F L E G I S L AT I O N

Spain—cont.

Constitution 1978 ............................................... Art. 96 ............................................................. Criminal Code 23 November 1995 ............. 409, Law of 22 December 1949 (Ley de transporte

mar´ıtimo de mercanc´ıas en regimen ´ de con­ ocimiento de embarque) ............................. State Ports Act 1992 (Ley 27/1992 de Puertos

del Estado y de la Marina Mercante) ....... Art. 107 ........................................................... Sweden Maritime Code (TSMC) ..................................... Chapter 9 Limitation of Liability .................. s. 1 .............................................................. s. 2 .............................................................. (2) .......................................................... s. 3 .............................................................. s. 4 .............................................................. s. 5 .............................................................. s. 12 Limitation Funds and Limitation

Proceedings ............................................. s. 13 Carriage of General Cargo ............. 417, s. 14 Chartering of vessels ............................. s. 15 Carriage of Passengers and Luggage .... ss. 17–28 .........................................................

409

409

410

416

414

414

417

417

417

418

419

418

418

419

417

424

417

417

422

Turkey Civil Act ...................................................... 427, 428

Forceful Execution and Bankruptcy Act, 24

April 1929, No. 1424 ................................. 428

Art. 23 ............................................................. 428

Commerce Act, 29 June 1956, No. 6762 .. 428, 431,

433, 435

Art. 766 ........................................................... 440

Art. 817/I ......................................................... 441

Art. 817/II ....................................................... 441

Art. 946/I .................................................. 431, 433

Art. 946/II ................................................. 431–432

Art. 947 .................................................... 434, 436

Art. 948 .................................................... 434, 436

Art. 948/I ......................................................... 437

Art. 1019 ......................................................... 439

Art. 1019/I ....................................................... 441

Art. 1028 ......................................................... 439

Art. 1029 ......................................................... 439

Art. 1061 .......................................... 439, 441, 443

Art. 1062 .................................................. 441, 443

Art. 1062/1 ...................................................... 440

Art. 1062/II ..................................................... 442

Art. 1063 ......................................................... 442

Art. 1064/1 ...................................................... 441

Art. 1091 ......................................................... 439

Art. 1112 .................................................. 441, 443

Art. 1112/I ....................................................... 443

Art. 1113 .................................................. 441, 443

Art. 1130 ......................................................... 440

Art. 1234/I ....................................................... 437

Constitution of Turkey ....................................... 444

Art. 90 ............................................................. 444

Turkey—cont. Obligations Act, 22 April 1926, No. 818 ..... 427, 428,

429, 430, 435, 442

Art. 41 ............................................................. 430

Art. 55 ...................................................... 431, 434

Art. 99 ...................................................... 430, 438

Art. 100 ............................................ 430, 434, 438

United States Carriage of Goods by Sea Act 1936 .. 361, 365, 366

s. 4(5) .............................................................. 137

s. 1308 ............................................................. 453

Federal Rules of Civil Procedure ....................... 448

Supp. Rule F ................................................... 448

F(3) ............................................................. 449

F(4) ............................................................. 449

F(9) ............................................................. 449

Harter Act— s. 196 ............................................................... 453

Limitation of Vessel Owner’s Liability Act. ..... 447

ss. 181–189 ............................................... 447–456

s. 182 ............................................................... 454

s. 183 ................................................ 450, 455, 457

(a) ........................................................... 451

(b) .......................................................... 456

(e) ........................................................... 453

s. 185 ............................................................... 448

s. 188 ............................................................... 451

s. 189 ............................................................... 453

Oil Pollution Act 1990 ....................................... 454

Park System Resources Protection Act ............. 454

Rivers and Harbours Act (The Wreck Act) ...... 454

Venezuela Marine Commerce Law ...................................... Art. 8 ............................................................... Art. 37 ............................................................. Art. 41 ............................................................. Art. 42 ...................................................... 461, Art. 43 ............................................................. Art. 44 ...................................... 462, 463, 464, Art. 46 ............................................................. Art. 49 ............................................................. Art. 50 ............................................................. Art. 51 ............................................................. Section IV (Arts 52–74) ................................. Art. 52 ......................................................... Art. 54 ......................................................... Art. 56 ......................................................... Art. 59 ......................................................... Art. 60 ......................................................... Art. 61 ......................................................... Art. 66 ......................................................... Art. 68 ......................................................... Art. 210 ....................................................... Art. 211 ....................................................... Art. 291 ....................................................... Art. 298 ....................................................... Art. 299 ....................................................... Title V, Ch V .................................................. Ch III ...........................................................

461

463

461

462

465

462

466

464

461

461

462

464

464

464

465

465

463

465

465

465

467

466

466

466

466

466

466

Table of Conventions Page numbers in bold indicate where text of the Convention is set out

Arrest Convention 1952 ..................................... 83

Athens Convention 1974 ... 4, 6, 33, 34, 53, 95–109,

166, 179, 194, 196, 205, 221, 223, 234,

242, 255, 256, 262, 272, 306, 309, 327,

341, 351, 368, 391, 415, 422, 466

Art. 1 ............................................ 96–97, 192, 262

(1) ........................................................... 112

(1)–(5) .................................................... 194

(6)–(8) .................................................... 194

(9) ........................................................... 99

(10) and (11) ......................................... 112

(bis) ........................................................ 125

2 .......................................... 99, 100, 193, 263

(1) ........................................................... 193

(2) ........................................................... 101

3 ........................................ 101, 102, 113–116

(1) ........................................................... 102

(3) ........................................................... 102

4 ............................................................... 101

4 bis ................................................... 116–119

5 ........................................................ 101, 103

(5)(c) ...................................................... 102

6 ........................................................ 102, 120

3–6 ..................................................... 102–103

7 ........ 99, 103, 120, 154, 194, 195, 263, 368

(1) ...................................................... 53, 248

8 ............................... 103, 120, 121, 154, 368

9 ................................................ 103, 121–122

10 ...................................... 103–104, 122–123

7–10 ......................................................... 104

11 .............................................. 104, 105, 123

12 .............................................. 105, 124, 263

(2) ......................................................... 105

(3) ......................................................... 105

13 ......................... 36, 53, 105, 124, 154, 195

14 .............................................. 105, 109, 125

15 .............................................. 106–107, 125

16 .............................................. 107, 126, 263

(3) ................................................... 121–122

17 ............................... 83, 108, 122, 126, 263

(bis) ...................................................... 123

18 ...................................... 108, 124, 127, 263

19 ................................................ 54, 109, 127

20 .............................................. 109, 124, 128

21 ...................................................... 109, 128

22 ............................................................. 129

(bis) ...................................................... 126

23 ....................................................... 129–130

24 ............................................................. 131

Athens Convention 1974—cont.

Art. 25 ............................................................. 131

Sched. 7, Part II .............................................. 98

Athens Convention 1976 Protocol (PAL Prot.

1976) ........................... 242, 255, 272, 368, 415

Athens Convention, 1990 Protocol (PAL Prot.

1990) ............................................ 221, 223, 242

Athens Convention 2002 Protocol ... 4, 95, 111–132,

227, 242, 343

Art. 1 ............................................................... 111

2 ............................................................... 112

3 ............................................................... 112

4 ............................................................... 113

5 ......................................................... 116–118

6 ............................................................... 120

7 ............................................................... 120

8 ............................................................... 121

9 ......................................................... 121–122

10 ............................................................. 122

11 ............................................................. 123

12 ............................................................. 124

13 ....................................................... 124–125

14 ............................................................. 125

15 ............................................................. 125

16 ............................................................. 126

17 ............................................................. 126

18 ............................................................. 127

19 .............................................................

127–128 20 ............................................................. 128 21 ............................................................. 128 22 ............................................................. 129 23 ....................................................... 129–130 24 ............................................................. 131 25 ............................................................. 131 Bill of Lading Convention 1924—see Hague Rules Brussels Convention 1957—see Limitation Con­ vention 1957 Brussels Convention 1961—see International Convention for the Unification of certain rules rating to Carriage of Passengers by Sea 1961 Brussels International Convention for the Uni­ fication of certain rules of law relating to Bills of Lading, 25 August 1924—see Hague Rules British Protocol 1968—see Hague-Visby Rules

xxxv

xxxvi

TA B L E O F C O N V E N T I O N S

Bustamante Code on Conflicts of Private Inter­ national Law ............................................... 465 Art. 279 ........................................................... 465 Civil Liability Convention 1969 (CLC) ... 27, 28, 213, 246, 251, 297, 304, 341, 415, 461 Civil Liability Convention, Protocol 1992 ... 230, 260, 267, 280, 297, 318, 461 CLC Convention—see Civil Liability Conven­ tion 1969 Collision Convention 1952 ................................ 83 Art. 7 ............................................................... 83 Convention of Strasbourg on the Limitation of Liability in Inland Navigation (CLNI), 4 November 1998 .......................................... 318 Convention on the International Regulations for Preventing Collisions at Sea 1972 ............. 31 Convention on the liability of Operators of Nu­ clear Ships 1962 ......................................... 29 Convention relating to the Carriage of Passen­ gers and their Luggage by Sea, Athens 1974—see Athens Convention 1974 Draft International Convention for the Unifica­ tion of Certain rules relating to Carriage by Sea of Passengers and their Luggage, Tokyo 1969 ................................................. 422 EEC Convention on Jurisdiction and the En­ forcement of Judgments in Civil and Com­ mercial Matters, Brussels 1968 ..... 82, 184, 254 Art. 6a ............................................................. 184 6 bis ......................................................... 184 EFTA Convention on Jurisdiction and the En­ forcement of Judgments in Civil and Com­ mercial Matters, Lugano 1988 .............. 82, 254 European Regulation (EC) 44/2001 of 22 De­ cember 2000 on Jurisdiction and Enforce­ ment of Judgments in Civil and Commer­ cial Matters (EC Regulation) ...... 254, 255, 323 Art. 2 ............................................................... 83 3 ............................................................... 83 5 ............................................................... 83 (3) ........................................................... 84 7 .......................................................... 83, 254 23 ............................................................. 83 27 ............................................................. 85 28 .......................................................... 85, 86 32 ............................................................. 255 59 ............................................................. 83 71 ............................................................. 8 Hague Protocol 1955—see Warsaw Convention, Hague Protocol 1955 Hague Rules 1924 ..... 4, 6, 133, 166, 222, 243, 250, 315, 325, 340, 341, 356, 368, 393, 394, 400, 416, 466 Art. I(a) ........................................................... 156 (b) ........................................................... 155

(i) ............................................................ 156

III(1) .................................................. 153, 441

(2) ......................................................... 153

(3) ......................................................... 144

(3), (4) and (5) .................................... 143

(4) .................................................. 139, 143

(8) .................................................. 149, 310

Hague Rules 1924—cont. Art. IV(1) ........................................................ 441 (2) ........................................................ 152

(5) ....... 136, 140, 149–155, 158, 159, 166, 310, 335, 341, 389 (a) ..................................... 142, 145, 177

(c) ............................. 142, 143, 144, 177

(d) .................................................... 142 (bis) ........................................... 145–146 V .............................................................. 310 IX ............................................................. 310 X .............................................................. 178 Hague-Visby Rules 1968 ... 4, 6, 33, 34, 35, 61, 133, 136–140, 223, 226, 234, 243, 250, 256, 264, 299, 315, 324, 343, 368, 372, 386, 391, 394, 416, 424, 428, 466 Art. I ................................................................ 4 I(b) ........................................................... 155 III ............................................................. 467 (1) .................................................... 13, 441

(e) ........................................... 32, 35, 36

(8) ......................................................... 149

IV(1) ........................................................ 441

(2) ................................................. 152, 386

(q) .................................................... 148

bis (2) ........................................... 157, 386

(5) ........ 141, 149–155, 325, 335, 386, 387

(a) .................... 158, 159, 264, 387, 388

(b) .................................................... 202

(c) .................................................... 142

(e) ..................................... 153, 202, 387

(g) .................................................... 388

(h) .................................................... 151 V(c) .......................................................... 138 VIII .......................................................... 134 IX ............................................................. 325 X ................................................... 4, 325, 386 Hague-Visby Rules, SDR Protocol 1979 ... 173, 234, 243, 245, 275, 315, 324, 368, 394, 424 Hamburg Rules (United Nations Convention on the Carriage of Goods by Sea 1978) ..... 4, 33–34, 133, 146–149, 209, 234, 243, 341, 389, 466 Art. 1(1) ........................................................... 155 (2) ............................................ 148, 155, 156

5(5) ........................................................... 467

6 ........................................................ 147, 155

(1) ........................................................... 159

(a) ...................................................... 148

(2) .................................................... 148, 159

(a) ...................................................... 138

(3) ........................................................... 148

7 ............................................................... 147

(1)(i) ....................................................... 148

(2) .................................................... 148, 158

(3) ........................................................... 148

8 ......................................................... 147–148

(1) ...................................................... 32, 155

10 ...................................................... 148, 155

(1) ......................................................... 13

(2) ......................................................... 158

(3) ......................................................... 148

TA B L E O F C O N V E N T I O N S

Hamburg Rules (United Nations Convention on the Carriage of Goods by Sea 1978)—cont. Art. 10(4) ......................................................... 149 21 ........................................................ 83, 203 22 ............................................................. 203 23(1) ......................................................... 149 25(1) ......................................................... 134 26 ............................................................. 148 HNS Conventions 1996—see International Con­ vention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea 1996 International Convention for the Unification of certain rules relating to Carriage of Pas­ sengers by Sea, Brussels 1961 ................... 242 International Convention on Civil Liability for Bunker Oil Pollution Damage ............... 28, 343 International Convention on Carriage of Passen­ gers and their Luggage, Athens 1974—see Athens Convention 1974 International Convention on Civil Liability for Oil Pollution Damage, 29 November 1969 (CLC Convention—see Civil Liability Convention International Convention on Civil Liability for Oil Pollution Damage 1992 ....................... 249 International Convention relating to Civil Liabil­ ity in the Field of Maritime Carriage of Nuclear Material (NUCLEAR 1971) ......... 415 International Convention on Liability and Com­ pensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea 1996 (the HNS Convention) .................................... 43, 305, 343 International Convention for the Safety of Life at Sea (SOLAS) .............................................. 34 International Convention on Salvage 1989—see Salvage Convention 1989 International Convention on Tonnage Measure­ ments of Ships 1969—see Tonnage Con­ vention 1969 International Fund for Compensation for Oil Pollution Damage (Fund) 1971 (IOPC) ..... 461 IOPC 1992 Protocol .................... 251, 260, 415, 461 IOPC 2000 Protocol ........................................... 343 Limitation Convention, 1924 (Brussels) ..... 3, 5, 191 Art. 1 ................................................ 192–193, 194 2 ......................................................... 192–193 7 ........................................................ 194, 195 12 ...................................................... 191, 196 13 ............................................................. 195 Limitation Convention 1957 (Brussels) ......... 3, 5, 8, 14–15, 169, 188, 195, 205, 237, 275, 339, 372, 379, 400, 459, 461 Art. 1 .......................................................... 18, 275 (1) ................................................ 12, 21, 275

(a) ...................................................... 402

(2) ........................................................ 10, 11

(4) ........................................................... 175

(b) ...................................................... 29

xxxvii

Limitation Convention 1957 (Brussels)—cont. Art. 1(5) ........................................................ 41, 42 (6) ........................................................ 39, 79

2 ............................................................... 65

3 .......................................................... 49, 275

(2) ........................................................... 276

(4) ........................................................... 71

(5) ........................................................... 277

4 .................................................... 79, 80, 383

5 ............................................................... 76

(1) ........................................................... 80

(4) ........................................................... 80

(5) ........................................................ 79, 80

6(2) ........................................................ 8, 13

(3) ........................................................... 14 8 ............................................................... 88 Limitation Convention 1976 (Brussels) Chapter I ......................................................... 7–94 Arts 1–15 ........................................................ 199 Art. 1 ..... 7, 62, 98, 109, 192, 260, 303, 313, 412, 459 (1) .................................................... 9, 50, 88

(2) ..... 9–14, 16, 88, 156, 173–174, 252, 303 (3) ...................................................... 12, 373

(4) .................................. 9, 13, 157–158, 352

(6) .................................................... 15, 35, 7

(7) ...................................................... 61, 384 (bis) ........................................................ 125 2 ... 9, 17, 24, 26, 35, 55, 72, 84, 160, 199, 219, 237, 260, 272, 303, 313, 318, 378, 392, 414 (1) .................................... 18–21, 23, 39, 255

(a) ........................................... 18–21, 159

(b) ......................................... 21, 159, 377

(c) ..................................... 22, 23, 28, 377

(d) ............ 22–24, 50, 252, 344, 373, 414

(d), (e), (f) .................................... 12, 317

(e) ........................ 24, 252, 344, 373, 414

(f) .......................................... 24, 230, 377

(2) ........................... 24, 25, 25–26, 173, 329 3 .... 17, 26, 200, 219, 260, 272, 304, 313, 329, 377, 414 (a) .................................. 25, 26–27, 182, 377

(b) ................................ 27–28, 182, 284, 377

(c) ...................................... 29, 182, 284, 377

(d) .............................................. 29, 182, 377

(e) ................................................ 29–31, 377 4 ..... 3, 14, 17, 31, 32–41, 79, 154, 175, 200, 268, 305, 314, 319, 329, 375, 377, 379, 459 5 .... 41, 42, 62, 182, 200, 284, 314, 322, 329 Chapter II ...................................................... 43–64 Art. 6 ..... 12, 17, 44, 49, 52, 69, 220, 254, 261, 305, 314, 381, 392 (1) ................................................ 48, 57, 385

(a) ................................................. 49, 285

(b) ................................................. 49, 318

(2) ......................................................... 49–50

(3) ........................................ 50, 80, 367, 381

(4) ...................................................... 50, 382

(5) .................................................. 51, 50–52

xxxviii

TA B L E O F C O N V E N T I O N S

Limitation Convention 1976 (Brussels)—cont. Art. 7 ... 17, 21, 44–45, 52–57, 69, 109, 120, 220, 254, 306, 315, 320, 382, 385, 392 (1) .................................................. 53, 55, 56

8 .................................................. 45, 120, 367

(1) ................... 49, 57, 61, 80, 320, 330, 344

(4) ............................................................... 80 9 ..... 10, 57–58, 69, 105, 121, 200, 220, 306, 314 10 ....................... 58–64, 66, 67, 84, 184, 314 (1) .................................................... 59, 384

(2) ......................................................... 59

(3) .............................................. 59, 80, 324

10–14 ..................................................... 58–86 Chapter III ..................................................... 64–86 Art. 11 ..... 10, 64, 66–69, 78, 174, 200, 201, 253, 261, 307, 314, 322, 384, 512 (1) .............................................. 66–69, 385

(2) ......................................................... 69

(3) ......................................................... 69

12 ......................... 65, 78, 200, 261, 308, 314

(1) ...................................... 69–70, 331. 385

(2) .............................................. 70–71, 332

(3) ......................................................... 71

(4) .................................................... 71, 332

13 ... 61, 65, 74, 78, 186, 200, 255, 262, 308, 314, 321, 322, 332 (1) ...................................... 74–76, 288, 384

(2) ...................................... 76–78, 308, 384

(3) .................................................... 78, 175 14 ..... 65–66, 71, 78, 79, 200, 308, 314, 324, 464 Chapter IV .................................................... 86–91 Art. 15 ...... 17, 86–87, 86–90, 173, 174, 186, 255, 314, 367 (1) ............................. 16, 87, 252, 309, 413

(2) ......... 16, 87–88, 90, 200, 309, 318, 414

(3) .................................................... 88, 413

(bis) ...................................................... 89

(4) ......................................................... 89

(5) .................................. 13, 16–17, 89, 414

(b) ............................................. 252, 318

Chapter V ...................................................... 91–94

Art. 16 ............................................................. 91

(3) ......................................................... 121

17 .......................................... 91, 93, 122–123

(1) ......................................................... 93

(4) .................................................... 93, 188

(bis) ................................................ 123–124

18 ......................... 91, 94, 124, 252, 304, 319

(1) .................................................... 94, 182

19 ............................................................. 92

20 .................................................. 92, 94, 124

21 .......................................................... 92, 94

22 ............................................................. 93

(bis) ...................................................... 126

Limitation Convention 1976 (Brussels)—cont. Art. 23 ........................................................ 93, 412 25 ............................................................. 255 Limitation Convention 1976—1996 Protocol (London Convention) .... 4, 5, 6, 7–94, 88, 173, 200, 223, 237, 245, 314, 343, 346, 347 Art. 1 ............................................................... 246 (2) ........................................................... 223

2(1) ........................................................... 245

(c) ...................................................... 245

(d) ............................................... 245, 246

(d) & (e) ............................................ 224

(e) ...................................................... 246

(f) ....................................................... 245

3 ............................................................... 231

(a) ........................................................... 27

(b) ........................................................... 224

4 .......................................... 54, 224, 231, 246

6 .................................................. 46, 200, 351

(1)(a) ............................................... 247, 249

(b) ...................................................... 247

(3) ........................................................... 225

7 ............................................ 46, 92, 200, 202

(1) .................................................... 248, 249

(e) ...................................................... 55

8 ...................................................... 46–47, 94

10 ...................................................... 248, 256

13 ............................................................. 249

15 ............................................................. 249

(2)(a) .................................................... 246

(b) .................................................... 247 18 ............................................................. 246 London Convention 1976—see Limitation Con­ vention 1976, 1997 Protocol Lugano Convention 1988—see EFTA Conven­ tion on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Mat­ ters, Lugano 1988 Salvage Convention 1989 Art. 14 .......................................... 26, 27, 170, 304 SDR Protocol 1979—see Hague-Visby Rules, SDR Protocol 1979 SOLAS—see International Convention for the Safety of Life at Sea Tonnage Convention 1969 ..... 51, 52, 305, 382, 405 Annex I ............................................ 231, 261, 383 United Nations Convention on the Carriage of Goods by Sea Act 1924—see Hamburg Rules Vienna Convention on the Law of Treaties Art. 28 ............................................................. 173 30(4) ......................................................... 187 Visby Protocol—see Hague-Visby Rules 1968 Warsaw Convention 1929 ............... 33, 35, 196, 334 Art. 25 .......................................................... 32, 38 Warsaw Convention, Hague Protocol 1955 Art. 13 ............................................................. 32 25 ...................................................... 176, 379

PART A

Limitation of Liability: A Commentary on the 1976 Limitation Convention and other relevant regimes

CHAPTER 1

Introduction

The International Conference on the Limitation of Liability for Maritime Claims took place in London between 1 and 19 November 1976 under the auspices of the International Maritime Organisation (IMO). It was generally accepted by those attending the Con­ ference that the rules relating to the limitation of liability for maritime claims enshrined in the 1924 and 1957 Limitation Conventions required updating. It was agreed at the Conference that the limitation figures contained in the 1957 Convention needed to be increased and that the new limitation figures should be accompanied by a mechanism to accommodate problems of inflation. It was also agreed that the circumstances in which the right to limit should be forfeit needed reviewing. It was recognised that the previous system of limitation had given rise to too much litigation and there was a desire that this should be avoided in future. There was agreement that a balance needed to be struck between the desire to ensure on the one hand that a successful claimant should be suitably compensated for any loss or injury which he had suffered and the need on the other hand to allow shipowners, for public policy reasons, to limit their liability to an amount which was readily insurable at a reasonable premium. The solution which was finally adopted to resolve the competing requirements of claimant and defendant was (a) the establishment of a limitation fund which was as high as a shipowner could cover by insurance at a reasonable cost, and (b) the creation of a virtually unbreakable right to limit liability. The text of the 1976 Convention finally adopted by the Conference therefore represents a compromise. In exchange for the establishment of a much higher limitation fund claimants would have to accept the extremely limited opportunities to break the right to limit liability. Under the 1976 Convention the right to limit liability is lost only when the claimant can prove wilful intent or recklessness on the part of the person seeking to limit (Article 4). International Conventions have no independent life of their own. They require adoption as part of the national law of participating countries before they become effective. The 1976 Convention itself provided that certain of its provisions should be optional insofar as adoption is concerned. It follows that when problems of limitation arise in practice it is always essential to consult the national legislation which gives domestic effect to the Convention in the country concerned. Thus the 1957 Limitation Convention was originally given domestic effect in the United Kingdom by the Merchant Shipping (Liability of Shipowners and Others) Act 1958 (the 1958 Act). Now, by virtue of section 185 of the Merchant Shipping Act 1995 (the 1995 MSA), the 1976 Limitation Convention (as set out in Schedule 7, Part I, of the 1995 MSA) applies in the United Kingdom subject to the reservations contained in Part II of the same schedule. 3

4

INTRODUCTION

As a matter of history, it was in accordance with the provisions of the Merchant Shipping Act 1979 (Commencement No. 10) Order 1986 (S.I. 1986/1052) that the terms of the 1976 Limitation Convention came into force in the United Kingdom on 1 December 1986, and by virtue of section 19(4) of the 1979 MSA, that the new limitation regime applied to liability arising out of post 1 December 1986 occurrences. By virtue of section 19(1) the provisions of six other statutes were amended as from 1 December 1986 in the manner specified in Schedule 5 to the 1979 MSA. At a Diplomatic Conference held at the IMO Headquarters in London in April/May 1996 the text of a Protocol to the 1976 Limitation Convention was agreed. This Protocol of 1996 to amend the Convention on Limitation of Liability for Maritime Claims 1976 entered into force internationally and in the U.K. on 13 May 2004, but has so far only been adopted by 18 countries, of which the United Kingdom is one. The main purpose of this book is to examine how the changes wrought by the 1976 Convention at the 1996 Protocol apply in the United Kingdom. Some space is also devoted to considering how the provisions of the 1976 Convention relate to the limitation provisions contained in the Athens Convention and the Hague, Hague-Visby and Hamburg Rules. The 1974 Convention relating to the Carriage of Passengers and Their Luggage by Sea (the Athens Convention) was originally given domestic effect in the United Kingdom by the Merchant Shipping Act 1979. In accordance with the terms of the Merchant Shipping Act 1979 (Commencement No. 11) Order 1987 (S.I. 1987/635) the terms of the Athens Convention came into force in the United Kingdom on 30 April 1987. Now, by virtue of section 183 of the Merchant Shipping Act 1995, the Convention as set out in Part I of Schedule 6 shall have the force of law in the United Kingdom. Part I of Schedule 6 takes effect subject to the provisions of Part II of Schedule 6. At a Diplomatic Conference in November 2002, held once again at the IMO head­ quarters in London, the text of a Protocol of 2002 to the Athens Convention was agreed. The Protocol is not yet in force. The Hague Rules were given domestic effect in the United Kingdom, primarily in relation to exports, by the Carriage of Goods by Sea Act 1924. That Act was repealed in 1971 and the Carriage of Goods by Sea Act 1971 gave instead the force of law to the Hague-Visby Rules in the United Kingdom in the circumstances set out in section 1 of the Act and Article X of the Rules as set out in the Schedule to the Act. The Hamburg Rules came into force internationally on 1 November 1992 and comment is made on the provisions of the Rules by way of comparison with the Hague and HagueVisby Rules. For a critical analysis of the concept of limitation of liability the reader should study ‘‘Ships are different—or are they?’’ by Lord Mustill,1 and ‘‘Limitation of Liability in Maritime Law: an anachronism’’ by Dr. G. Gauci.2 For a defence of the right to limit, ‘‘Ships are different: the case for Limitation of Liability’’ by D. Steel Q.C.3 should be considered.

1. [1993] LMCLQ 490. 2. Marine Policy, Vol. 19, No. 1 pages 65–74, 1995, Elsevier Science Ltd. 3. [1995] LMCLQ 77.

CHAPTER 2

Historical Overview of Limitation in the United

Kingdom

Legislation in the United Kingdom relating to limitation of liability for maritime claims had its roots in the Responsibility of Shipowners Act 1733, which allowed a shipowner to limit his liability in respect of theft by a master or crew to the value of the ship and freight. This was an early example of legislation designed to promote the development of the merchant fleet. The right to limit was extended in 1786 to include any act by the master or crew occurring without the privity of the shipowner. Further statutes followed, but the principal consolidating statute was the Merchant Shipping Act 1894, which drew together in section 503 earlier legislation relating to the limitation of liability for maritime claims. The United Kingdom was a signatory to the 1924 and 1957 International Limitation Conventions and adopted many of the provisions of those Conventions. This was done not by incorporating the Conventions en bloc into domestic legislation but by amending section 503 of the 1894 Act. Thus the Merchant Shipping (Liability of Shipowners and Others) Act 1958 incorporated into United Kingdom law many of the provisions of the 1957 Limitation Convention by amending section 503 of the 1894 MSA. This ‘‘patch­ work’’ approach produced a number of problems in the United Kingdom over the years because the amendments made to section 503 did not always accurately mirror the Convention provisions on which they were based. Nor did the approach lend itself easily to judicial interpretation, Lord Denning complaining in 1969 that section 5 of the 1958 Act which amended section 503, was ‘‘not a piece of English. It is only a collection of word-symbols’’.1 The en bloc adoption by the United Kingdom of the 1976 Limitation Convention (originally by section 17 of the Merchant Shipping Act 1979 and now by section 185 of the Merchant Shipping Act 1995) to replace the much-amended provisions of section 503 of the 1894 MSA was designed to ensure that issues of limitation would, as between the United Kingdom and other countries adopting the Convention, receive uniform treatment (subject to ‘‘reservations’’ which will be discussed hereafter and to the probability that the courts of different countries will continue to produce their own highly individual inter­ pretations of the Convention wording). It should be noted that the Merchant Shipping Act 1979 has been repealed and replaced by the Merchant Shipping Act 1995. A Protocol to the 1976 Convention was adopted on 3 May 1996 and entered into force on 13 May 2004, 90 days after ratification by the tenth state.2 This Protocol makes a radical difference to the amount to which owners of small tonnage can limit, increasing the 1. The ‘‘Putbus’’ [1969] P. 136, at page 149 2. As at 1 October 2005 Albania, Australia, Bulgaria, Denmark, Finland, Germany, Jamaica, Malta, Norway, the Russian Federation, Sierra Leone, Samoa, Spain, Sweden, Syrian Arab Republic, Tonga and the United Kingdom have ratified the Protocol.

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potential exposure of some owners by several-fold. The Government took powers by section 15 of the Merchant Shipping and Maritime Security Act 1997 to give effect to the 1996 Protocol by Order in Council and the Protocol was ratified by the United Kingdom in 1999. In 1924 the United Kingdom gave effect to the Hague Rules in relation to exports from this country by virtue of the Carriage of Goods by Sea Act. With the adoption of the Hague-Visby Rules in the late 1960s this Act was repealed and replaced by the Carriage of Goods by Sea Act 1971 which gave effect to the Hague-Visby Rules. In 1974 the Athens Convention relating to the Carriage of Passengers and Their Luggage by Sea was signed but did not come into force internationally until 28 April 1987. The Athens Convention had been given effect in limited circumstances in the United Kingdom under Statutory Instrument 1980 No. 1092 but was given full effect on 30 April 1987 by virtue of section 14 of the Merchant Shipping Act of 1979. The MSA 1979 has been repealed and the Athens Convention is now incorporated into United Kingdom law by virtue of section 183 of the MSA 1995. In 1990 a Protocol to the Athens Convention was agreed which was to have the effect of increasing the per passenger limitation fund to 175,000 Units of Account and increasing the funds in respect of claims for damage to the luggage or vehicles of passengers. In addition, the Unit of Account in the Convention was defined as the SDR. The 1990 Protocol has not yet entered into force.3

3. See further Chapter 4.

CHAPTER 3

The 1976 Limitation Convention and its 1996

Protocol

EXPLANATORY NOTE There follows the full text of the 1976 Limitation Convention together with comments on each Article. The Convention itself is incorporated into the law of the United Kingdom by section 185 of the Merchant Shipping Act 1995 (the 1995 MSA) and the text of the Convention itself is set out in Part I of Schedule 7 to that Act. However, there are certain provisions in the Convention which do not appear in Schedule 7. The omissions are set in italics. Where the 1976 Convention is amended by the 1996 Protocol, the amended articles are also shown and discussed. C H A P T E R I — T H E R I G H T O F L I M I TAT I O N Article 1: Persons entitled to limit liability 1. Shipowners and salvors, as hereinafter defined, may limit their liability in accordance with the rules of this Convention for claims set out in Article 2. 2. The term ‘‘shipowner’’ shall mean the owner, charterer, manager and operator of a seagoing ship. 3. Salvor shall mean any person rendering services in direct connection with salvage operations. Salvage operations shall also include operations referred to in Article 2, para­ graph 1(d), (e) and (f). 4. If any claims set out in Article 2 are made against any person for whose act, neglect or default the shipowner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this Convention. 5. In this Convention the liability of a shipowner shall include liability in an action brought against the vessel herself. 6. An insurer of liability for claims subject to limitation in accordance with the rules of this Convention shall be entitled to the benefits of this Convention to the same extent as the assured himself. 7. The act of invoking limitation of liability shall not constitute an admission of liability.1

Comment follows below on the different categories of ‘‘persons’’ who are entitled to limit their liability under the 1976 Convention. (a) Shipowners Under section 503(1) of the Merchant Shipping Act 1894 (in its unamended form) only the owners of a ship were entitled to limit their liability. However, the right to limit applied to a ‘‘registered’’ or a ‘‘beneficial’’ owner and applied whether the ship was British or foreign. 1. See page 61 below.

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As time has passed and new legislation and international conventions have come into force the definition of ‘‘owner’’ has been extended and other persons have been added to the list of those entitled to limit their liability. The 1957 Brussels Convention extended the class of persons entitled to limit liability. Thus Article 6, paragraph 2, provides: ‘‘Subject to paragraph 3 of this Article, the provisions of this Convention shall apply to the charterer, manager and operator of the ship, and to the master, members of the crew and other servants of the owner, charterer, manager or operator acting in the course of their employment, in the same way as they apply to an owner himself . . . ’’

The primary reason for extending the class of persons entitled to limit was to overcome the problem first encountered in the case of The ‘‘Himalaya’’,2 namely, attempts by a claimant, in order to circumvent the effects of limitation of liability, to bring a claim against some person other than the owner for example, the master of the vessel. The Merchant Shipping (Liability of Shipowners and Others) Act 1958 sought to give domestic effect to the 1957 Convention in this country. The class of persons whose liability could be limited is set out in section 3 of that Act. Section 3(1) provides that the persons entitled to limit liability included ‘‘any charterer and any person interested in or in possession of the ship, and, in particular, any manager or operator of the ship’’. The right of a charterer to limit liability in respect of claims brought by third parties is clearly appropriate. However it is not clear whether a charterer can limit in respect of a claim for indemnity pursued by the owners. If, for example, the ship is lost as a result of being ordered to an unsafe port, should the charterer be able to rely on his right to limit? In theory, he can, though it may be questioned whether such a loss could be described as ‘‘loss or damage to the property . . . occurring on board or in direct connection with the operation of the ship’’. It is not clear what, if any, restriction is to be placed on the interpretation of the words—‘‘person interested in . . . the ship’’. In McDermid v. Nash Dredging and Reclama­ tion3 the House of Lords held, that a legal or equitable interest in the ship was required. However, the Court of Appeal distinguished this case in C.F. Turner v. Manx Line Ltd.,4 holding that the words should be construed in a broad sense and could be sufficiently wide to include the operation of a ship. But clearly a shipbuilder or ship repairer or even a mortgagee in possession was by reason of these words entitled to limit his liability. As to the types of ‘‘managers’’ who could limit under the Act it may well be that the Act was restricted in its application to managers who were actually operating the vessel—the point was never tested in court. The words ‘‘manager’’ and ‘‘operator’’ appear together and may simply be particular examples of ‘‘any person interested in or in possession of the ship’’. If this interpretation is wrong and the expression ‘‘person interested in . . . the ship’’ is to be given a liberal interpretation it could extend the class of persons entitled to limit to any person who has or has had dealings with the vessel. The authors have never favoured such a liberal interpretation.5

2. [1954] 2 Lloyd’s Rep. 267. 3. [1987] A.C. 906. 4. [1990] 1 Lloyd’s Rep. 137. 5. See pages 13–14 for further discussion of a mortgagee’s right to limit.

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Looking at the definition of ‘‘shipowner’’ in paragraph 2 of Article 1 of the 1976 Convention it would appear that certain classes of person who under the 1957 Convention and 1958 Act were entitled to limit their liability, such as persons merely in possession but not operating the vessel, e.g. a ship-repairer or shipbuilder or mortgagee, are no longer able to limit unless they can show that one of the class of persons who is given the right to limit under Article 1(1) was ‘‘responsible’’ for their ‘‘act, neglect or default’’ so as to bring themselves within paragraph 4 of Article 1.6 Unfortunately there is still no clarifica­ tion as to the types of ‘‘managers’’ who may limit liability. Although the word ‘‘manager’’ itself is not qualified as it is in the 1958 Act by the words ‘‘person interested in . . . the ship’’, the remainder of the persons named in paragraph 2 are those who would normally operate the ship. It has been suggested that an independent crewing agent might not be able to limit liability in circumstances where his negligent employment of an incompetent officer leads to an accident in respect of which the agent is sued and seeks to limit. If the word ‘‘manager’’ in Article 1(2) is restricted to one who is involved in the operation of the ship, it seems likely that a crewing agent would not be covered. Because a crewing agent is an independent contractor he is not one ‘‘for whose act, neglect or default’’ the shipowner is vicariously responsible. The crewing agent’s limitation plea would thus fail under both Article 1(2) and 1(4). C H A RT E R E R S

Charterers are within the definition of ‘‘shipowner’’ in Article 1(2) and are clearly entitled to limit when acting in the capacity of shipowner. However, the issue as to whether charterers could also limit in respect of claims brought against them by the shipowner where they were not themselves acting in the capacity of shipowner has now twice come before the English Court, in The ‘‘Aegean Sea’’7 and in The ‘‘CMA Djakarta’’.8 The first of those cases was the ‘‘Aegean Sea’’, which concerned a charter to Repsol Oil Inter­ national Ltd (ROIL) for the carriage of a cargo of crude oil. La Coruna was nominated as discharge port. Whilst proceeding to berth, the vessel grounded, broke in two and exploded. The vessel and most of her cargo was lost and there was significant pollution and property damage. Claims were brought against shipowners and they sought to recover from ROIL these sums together with the value of the vessel, the bunkers on board and freight. The legal basis of the claim against ROIL was either that ROIL had nominated an unsafe port or that the loss was sustained as a consequence of complying with ROIL’s orders as charterers and that shipowners were entitled to an implied indemnity. ROIL denied liability but contended that, in the event that they were liable, they were entitled to limit their liability under the 1976 Convention. The Court took as preliminary issues the questions of whether ROIL as charterers were entitled to limit and whether shipowners’ claims were within the scope of Article 2 of the 1976 Convention. Thomas J.’s analysis on the first point proceeded by way of an observation that the Convention identified two categories of person entitled to limit, shipowners and salvors. The distinction was introduced into the 1976 Convention in order to overcome the effect 6. See further page 13. 7. Aegean Sea Traders Corporation v. Repsol Petroleo S.A. and Another (The ‘‘Aegean Sea’’) [1998] 2 Lloyd’s Rep. 39. 8. CMA CGM. S.A. v. Classica Shipping Co. Ltd. (The ‘‘CMA Djakarta’’) [2004] 1 Lloyd’s Rep. 460.

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of the decision in The ‘‘Tojo Maru’’ and thereby ensure that a salvor could limit whether or not a shipowner and whether or not acting in that capacity. No such distinction was made for a charterer, which suggested to the judge that a charterer should be entitled to limit when acting in the capacity of shipowner, for example, when issuing bills of lading. The judge also referred to Article 9 of the 1976 Convention which provides for the aggregation of claims against all those within Article 1(2) if they arose on one distinct occasion, and Article 11, which provides for one fund to be constituted on behalf of the shipowner and the other entities identified in Article 1(2). The judge concluded that the 1976 Convention does not provide (and is not intended to provide) an entitlement to charterers to limit for these types of claims brought against them by shipowners. To conclude otherwise would mean that the limitation amount or fund could potentially be depleted by claims by the shipowners against charterers when the intent had been for it to be available for cargo and other third party claimants external to the operation of the ship. At first instance in The ‘‘CMA Djakarta’’,9 David Steel J. adopted similar reasoning to conclude also that the charterer had to be acting qua owner in order to come within Article 1(2). The facts of that case concerned an explosion and fire on board the vessel caused by containers of bleaching powder. At arbitration the charterers were held liable to the owners for breach of a time charterparty providing that the vessel was to be employed in carrying lawful merchandise excluding any goods of a dangerous, injurious, flammable or corrosive nature. The charterers sought to limit their liability, which was refused by the arbitrators. The charterers appealed to the High Court on the issue of limitation of liability and David Steel J. held, in relation to Article 1(2) that before a charterer was entitled to limit his liability he must be acting as shipowner, which he defined as undertaking an activity usually associated with ownership to the extent that he operated or managed the vessel. The Court of Appeal disagreed with this, and with the decision of Thomas J. in The ‘‘Aegean Sea’’ on the same point. Longmore L.J. stated in relation to Article 1: ‘‘Two matters are immediately noticeable. First, two classes of persons are accorded the right to limit, shipowners and salvors; secondly the word ‘shipowner’ is defined and is said to mean ‘the owner, charterer, manager or operator of a seagoing ship’. This dichotomy was relied upon by both Mr. Justice Thomas and Mr. Justice David Steel by way of assisting them to their conclusion that a charterer could only limit his liability when he was acting as if he were a shipowner or, in other words, if he was acting in the management or operation of the vessel. Failure to prevent the loading of a dangerous cargo was then said by Mr. Justice David Steel not to be an act of managing or operating a ship under time charter so that the right to limit could not arise. To my mind this places a gloss on the word ‘charterer’ which is by no means apparent from the words used. Of course, the dichotomy relied on exists but the mere fact that ‘charterer’ is part of the definition of the word ‘shipowner’ cannot of itself mean that a charterer (an expression otherwise unqualified) has to be acting as if he were a shipowner before he can limit his liability. To my mind the ordinary meaning of the word ‘charterer’ connotes a charterer acting in in his capacity as such, not a charterer acting in some other capacity. . . . ’’10

The final word on this now awaits the House of Lords, which is expected to consider the matter in late 2005.

9. CMA CGM. S.A. v. Classica Shipping Co. Ltd. (The ‘‘CMA Djakarta’’) [2003] 2 Lloyd’s Rep. 50. 10. CMA CGM. S.A. v. Classica Shipping Co. Ltd. (The ‘‘CMA Djakarta’’) [2004] 1 Lloyd’s Rep. 460, at page 465.

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S L O T C H A RT E R E R S

An interesting question arises whether the words in Article 1(2) (‘‘charterer . . . and operator . . . of a seagoing ship’’) are sufficient to afford the right to limit to a ‘‘slot charterer’’, that is to say a party who has the right to use a specified part [but not the whole] of the cargo carrying capacity of a vessel on a particular voyage and who often issues his own bills of lading. Such a party is described in common parlance as a ‘‘charterer’’ and it is not straining language to say that he is an operator. However, he is arguably not a charterer or operator of the whole ship but merely of a part of the ship. All the other parties referred to in Article 1(2) have an interest in the whole ship and the limit of their liability is calculated by reference to the tonnage of the whole ship. There is no provision which allows a slot charterer to limit his liability proportionately to the space which he has chartered, and accordingly the choice would seem to be between allowing the slot charterer to limit his liability according to the full tonnage of the vessel, despite the fact that his contract allows him to use merely part of it, or not allowing him to limit at all on the basis that he is not a charterer or operator of ‘‘a ship’’. The authors prefer the former view as this is more in keeping with the public basis for limitation11 and the professed aim of the 1976 Convention.12 Furthermore, it is true to say that whilst the slot charterer’s contract limits the cargo space which is available to him he is in fact paying for the use of the rest of the vessel to ensure the safe carriage of ‘‘his’’ cargo to the discharge port. The above definition of ‘‘slot charterer’’ was quoted with approval by the Court of Appeal in The ‘‘Tychy’’.13 Although that case primarily involved ship arrest and not specifically the limitation of liability, it was held that the expression ‘‘the charterer of the ship’’ can include a slot charterer and that a slot charterer can properly be described as the charterer of the ship (not merely the charterer of part of the ship). Although there was some argument before the court in The ‘‘CMA Djakarta’’ as to whether ‘‘charterer’’ includes a part or slot charterer, the Court of Appeal did not need to decide the point and Longmore L.J. did no more than observe that the Court of Appeal had already held in The ‘‘Tychy’’ in the ‘‘not entirely dissimilar’’ context of the Arrest Convention that ‘‘charterer’’ does include ‘‘slot charterer’’.14 It is worth noting that the Maritime Code of the Nordic Countries incorporates a legislative commentary which reveals that under the Code not only can a ‘‘part charterer’’ limit but also a shipper. However, it is evident from an examination of the Travaux Preparatoires to the 1976 Limitation Convention that the drafters were restricting the right to limit to those controlling the whole of the ship—a fact apparently ignored by the Nordic States when incorporating the Convention into their domestic law. In the interests of achieving international uniformity on this issue, it may be that that the definition of ‘‘shipowners’’ in the Convention should be reviewed. If part charterers (and maybe shippers) are to be allowed to limit under the Convention, it will also be necessary to prescribe whether the fund should be restricted by reference to the proportion of the ship’s space which the part charterer or shipper is using at the material time. 11. For a more detailed consideration see [1997] IJOSL 118–121. 12. See the comments of Steyn J. in The ‘‘European Enterprise’’ [1989] 2 Lloyd’s Rep. at page 191. 13. [1999] 2 Lloyd’s Rep. 11 at pages 21–22. 14. CMA CGM. S.A. v. Classica Shipping Co. Ltd. (The ‘‘CMA Djakarta’’) [2004] 1 Lloyd’s Rep. 460, at page 466.

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(b) Salvors The most significant innovation introduced by Article 1 of the 1976 Convention was the extension of the benefit of limitation to salvors (Article 1(1) and (3)) and to any person for whose act, neglect or default a salvor is responsible (Article 1(4)). This extension was made in response to pressure from international salvage interests following the decision of the House of Lords in The ‘‘Tojo Maru’’.15 In that case it was held that a salvor was not entitled to limit his liability in respect of damage caused by the negligent act of a diver who, although assisting in the salvage, was working away from the salvor’s vessel at the time the damage occurred. The House of Lords held that the diver’s negligent act was not an act done ‘‘in the management’’ of the salvor’s tug nor an act done ‘‘on board’’ that tug. By Article 1, the benefit of limitation is conferred on salvors engaged in direct connec­ tion with salvage services, which services are defined in Article 1(3) as including in addition to salvage, as strictly defined, wreck or cargo removal or other services described in Article 2(1)(d)16 (e) and (f). The Convention provides by Article 6 that the liability of the person entitled to limit shall be calculated by reference to the tonnage of the ship. It is implicit that it is the tonnage of the ship in relation to which the liability arises which is to be used to calculate the limitation fund. The operations of salvors often involve numerous craft. Where negligence in the performance of a salvage service is proved and the salvor pleads limitation, the fund would, it is submitted, be calculated by reference to the tonnage of the vessel in relation to which the causative negligence is proved. Where causative negligence is proved for more than one vessel the tonnages would be aggregated.17 Where the negligent salvor is not operating ‘‘from any ship’’ or is ‘‘operating solely on the ship to, or in respect of which he is rendering salvage services’’ the limit of his liability will be calculated on the basis of a deemed tonnage of 1,500 tons.18 (c) Seagoing ships and hovercraft19 Article 1(2) of the 1976 Convention is similar in effect to Article 1(1) of the 1957 Convention in that it confers the right to limit in respect of ‘‘a seagoing ship’’. However, section 503 of the 1894 Act granted the right to limit in the United Kingdom to ships whether seagoing or not. In other words, the U.K. courts have, since 1894, recognised the right of the owner of a ship, whether seagoing or not, to limit his liability. Paragraphs 2 and 12 of Part II to Schedule 7 and section 185(1) of the 1995 MSA make it clear that in the United Kingdom the limitation provisions of the 1976 Convention are to continue to be applied in relation to any ship whether seagoing or not and that the word ‘‘ship’’ shall include ‘‘any structure (whether completed or in the course of completion) launched and intended for use in navigation as a ship or part of a ship’’.20

15. [1971] 1 Lloyd’s Rep. 341. 16. But see reservation in para. 39(1) of Sched. 7, Part II, of the 1995 MSA. 17. The ‘‘Bramley Moore’’ [1964] P. 211, The ‘‘Sir Joseph Rawlinson’’ [1973] Q.B. 285 and The ‘‘Rhone’’ and ‘‘Peter A. B. Widener’’, Canada Supreme Court, [1993] 1 Lloyd’s Rep. 600. 18. See Article 6(4) page 44. 19. See page 89–90. 20. See Appendix.

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Article 15(5) provides that the Convention shall not apply to ‘‘aircushion vehicles’’ (hovercraft). However, this provision does not appear in Schedule 7, Part I, to the 1995 MSA and, therefore, does not have the force of law in the United Kingdom. By the Hovercraft (Civil Liability) Order 1986 as amended by The Hovercraft (Convention on Limitation of Liability for Maritime Claims (Amendment)) Order 1998 certain provisions of the Convention are made applicable to hovercraft in the United Kingdom. (For details see commentary on Article 15 on page 86 et seq.) (d) Other persons Article 1(4) of the 1976 Convention extends the right to limit to ‘‘any person for whose act, neglect or default the shipowner or salvor is responsible’’. (See (a) Shipowners, above.) This wording appears to extend the class of those entitled to limit liability. Whereas Article 6(2) of the 1957 Limitation Convention and section 3(2) of the 1958 Act afforded the right to limit to the ‘‘Master, members of the crew and other servants of the Owner . . . acting in the course of their employment’’, Article 1(4) of the 1976 Convention is apparently wide enough to encompass agents and independent contractors such as steve­ dores provided that the shipowner is responsible for their actions as a matter of law.21 It is by no means clear what is meant by the word ‘‘responsible’’. Given a restricted interpretation it could mean that, for example, a stevedore must show, contrary to The ‘‘White Rose’’,22 that he is a ‘‘servant’’ of the shipowner before he can establish an independent right to limit.23 Given a wider interpretation it may only be necessary for the stevedore to show that the shipowner was ‘‘responsible’’ for him being involved. In the context of claims for damage to cargo, Article III, rule 1, of the Hague-Visby Rules places an obligation on the shipowner before and at the beginning of the voyage to exercise due diligence to make the ship seaworthy. In The ‘‘Muncaster Castle’’24 the House of Lords held that, as far as this obligation is concerned, the shipowner is liable if the vessel was unseaworthy as a result of the acts or omissions of independent contractors whom he has engaged. It would seem to follow that an independent contractor who renders a ship unseaworthy by his act, neglect or default will be able, if he is sued by the owners of the damaged cargo, to limit his liability under the 1976 Convention. Similarly, in the context of the Hamburg Rules, Article 10(1) provides expressly that: ‘‘The carrier is responsible in relation to the carriage performed by the actual carrier, for the acts and omissions of the actual carrier and of his servants and agents acting within the scope of their employment.’’

However, the wording of Article 1(4) may, in one respect, reduce the class of persons who were entitled to limit their liability under the 1958 Act. Thus section 3(1) of the 1958 Act refers to any ‘‘persons interested in or in possession of a ship’’. The question is whether mortgagees in possession can be said to actually ‘‘operate’’ or ‘‘manage’’ the ship so that they qualify under Article 1(2) of the 1976 Convention. There is also a question as to 21. See the discussion on pages 155–158 in relation to the Hague-Visby and Hamburg Rules. 22. [1969] 1 Lloyd’s Rep. 52. 23. See McDermid v. Nash Dredging & Reclamation Co. Ltd. [1986] 2 Lloyd’s Rep. 24. 24. [1961] 1 Lloyd’s Rep. 57.

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whether a shipowner could be said to ‘‘be responsible’’ (within the meaning of Article 1(4)) for the acts of a mortgagee in possession who does not operate the ship. There is therefore an argument that the mortgagee in possession has inadvertently lost the right to limit under the 1976 Convention and the 1995 MSA. However, a standard form English law Deed of Covenant would give the mortgagee the power, if an event of default occurs, to take possession of the ship and to manage, insure, maintain, repair and employ it in such manner and for such period as the mortgagee considers expedient. This may be sufficient to bring the mortgagee within Article 1(2). Article 1(4) may be more problematic, however usually the Deed of Covenant would also give the mortgagee the power to appoint a receiver and/or manager of the ship who will be the agent of the borrower, who bears sole responsibility for the receiver’s and/or manager’s acts or defaults. In relation to the mortgagee itself, the Deed would usually contain an irrevocable appointment of the mortgagee and any receiver as the borrower’s attorney (exercisable upon an event of default) to do all things ‘‘for and in the name and on behalf of the borrower’’ which may be required for the full exercise of all the rights, powers or remedies conferred by the security documents, together with exclusions and indemnities in favour of the mortgagee to the effect that the mortgagee shall not be liable for, and the borrower shall indemnify the mortgagee against, any loss of any nature whatsoever howsoever arising in connection with the ship or the exercise or purported exercise of any powers contained within the Deed of Covenant. This might be sufficient for the mortgagee or receiver to qualify as ‘‘persons for whose act, neglect or default the shipowner is responsible’’.

(e) Owner/master Article 6(3) of the 1957 Convention provides that, where the master or member of the crew is at the same time the owner, charterer, manager or operator of the vessel, such person will only be entitled to limit his liability if he commits the act, neglect or default in his capacity as master or as a member of the crew. This point arose in the United Kingdom in The ‘‘Annie Hay’’.25 The owner of the Annie Hay was acting as master and in sole charge of navigation when the vessel was in collision with a yacht. The yacht was so damaged that it sank. There was no dispute that the cause of the collision was, in the main, the negligence of the owner/master. The owner claimed to be entitled to limit his liability under section 3(2) of the 1958 Act (which enacted Article 6(3) of the 1957 Convention) on the ground that the claim arose out of his negligence in his capacity as master. It was held that he was so entitled. There is no equivalent express provision in the 1976 Convention. However, Article 1 gives the shipowner a general entitlement to limit his liability which is only restricted by the provisions of Article 4 (conduct barring limitation). Thus, the prospects for a master/ owner seeking to limit liability have been improved by the 1976 Convention and the 1995 MSA since, subject to the provisions of Article 4, it would not seem to be relevant under the new regime whether at the material time the act in question was committed in the individual’s capacity as master or as owner.

25. [1968] 1 Lloyd’s Rep. 141.

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(f) Liability insurer Article 1(6) of the 1976 Convention introduces an innovation. Where a person entitled to limit liability is insured, the insurer is entitled to the benefits of the Convention ‘‘to the same extent’’ as the assured himself. There is no such provision in either the 1957 Convention or the 1958 Act. The intention of this provision appears to be to place the liability insurer in no worse position than the assured, insofar as limitation is concerned, should a direct action be brought against the insurer. It follows that the liability insurer should not be able to limit his liability if the assured cannot. This provision raises an interesting question under the law of the United Kingdom. A direct action can be brought in certain circumstances by a third party against the insurer in the United Kingdom under the Third Parties (Rights Against Insurers) Act 1930. Thus where the assured has failed to satisfy a judgment and has been wound up, the unsatisfied creditor ‘‘steps into the shoes’’ of the assured and takes over whatever rights the assured has against the insurer under the liability policy. Such ‘‘rights’’ are likely to be restricted either by the terms of the policy itself or by the terms of the Marine Insurance Act 1906 which provides inter alia that the insurer is not liable if the assured is in breach of an express or implied warranty in the policy, ‘‘whether it be material to the risk or not’’.26 It was held by the House of Lords in The ‘‘Fanti’’/The ‘‘Padre Island’’27 that a third party claimant stepping into the shoes of the assured under the 1930 Act and thereby taking over the assured’s rights under a P&I policy could not recover from the P&I insurer under the Act unless and until the assured had complied with the P&I Club’s Rules and first paid the claim (which would, of course, have rendered the third party’s claim against the insurer unnecessary). The third party claimant’s rights under the Act were, therefore, held to be restricted by the express provisions of the insurance cover. However, it is arguable that the terms of Article 1(6) of the 1976 Convention have inadvertently prejudiced the liability insurer’s rights in this respect. The conduct necessary to debar the shipowner from limiting liability may well also be conduct which would prevent him from successfully prosecuting a claim against his liability insurer, by reason of the express terms of the insurance policy or section 55(2) of the Marine Insurance Act. However, by virtue of section 185 of the 1995 MSA the terms of the 1976 Convention are given the force of law in the United Kingdom. Therefore, as the insurer, by Article 1(6), is afforded the right to limit ‘‘to the same extent’’ as the assured, he may not be entitled to rely upon those provisions of the policy or the Marine Insurance Act 1906 which have the effect of restricting his liability to the assured and may have to meet the claim of the third party claimant in full if the assured has forfeited his right to limit liability. Such result cannot have been intended by the drafters of the Convention or by the United Kingdom legislature since it flies in the face of the Convention’s declared aim that the new limitation regime should be based on a foundation of stable affordable insurance cover. A way around the problem may lie in the wording of section 1(1) of the 1930 Act itself which provides that:

26. Section 33(3). 27. [1990] 2 Lloyd’s Rep. 191.

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‘‘ . . . his (the assured’s) rights against the insurer under the contract in respect of the liability shall, notwithstanding anything in any act or rule of law to the contrary be transferred to and vest in the third party to whom the liability was so incurred.’’

It is therefore possible to argue that, if the assured is fully liable to the third party, notwithstanding the provisions of the 1995 MSA, it is only those limited rights which the assured has against the insurer under the liability policy which are to be transferred to the third party under the 1930 Act. In other words, the 1930 Act defines the liability of the insurer to the third party and Article 1(6) of the 1976 Convention only comes into play when that liability has been determined. (g) Summary The persons entitled to limit their liability are:

Q Shipowners Charterers (but not against Shipowners) P of a seagoing ship (in UK Managers N not restricted to seagoing) Operators S Any person for whose act, neglect or default the parties identified in 1–4 inclu­ sive is responsible. (6) Salvors. (7) Any person for whose act, neglect or default the salvor is responsible. (8) Insurers of liability of the parties identified in 1–7 inclusive. (1) (2) (3) (4) (5)

Excluded persons/excluded vessels (i) Non-seagoing ships (Article 1(2)). However, state parties may, under Article 15(2) of the 1976 Convention, make specific provisions of national law regulating the system of limitation to be applied to vessels which, according to the law of that state, are ships intended for navigation on inland waterways. In the case of the United Kingdom, the legislature has decreed by paragraph 2 of Part II of Schedule 7 and section 185 of the 1995 MSA that the provisions of the 1976 Convention shall have the force of law in the United Kingdom in relation to any ship whether seagoing or not.28 (ii) Article 15(1) of the 1976 Convention accords the right to State Parties to exclude wholly or partially from the application of the Convention any person referred to in Article 1 who does not, at the time when the rules of the Convention are invoked, habitually reside in or have his principal place of business in a State Party and any ship which does not fly the flag of a State Party. However, the United Kingdom does not seem to have made any such reservation in this respect and the relevant part of Article 15(1) is not included in Part I of Schedule 7 to the 1995 MSA. (iii) Article 15(5) provides that the Convention shall not apply to: (a) aircushion vehicles;

28. See page 12 above and 88, below.

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(b) floating platforms constructed for the purpose of exploring or exploiting the natural resources of the seabed or the subsoil thereof.29 Article 15(5) is not included in Part I of Schedule 7 to the 1995 MSA and thus does not have the force of law in the United Kingdom. Therefore, so far as the United Kingdom is concerned, aircushion vehicles and floating platforms30 are, prima facie, entities to which the provisions of the 1976 Convention do apply. (For an analysis of the rights of the owners of aircushion vehicles to limit liability please see the commentary in relation to Article 1531.) Harbour authorities: right of limitation The list of persons entitled to limit liability does not include harbour authorities, con­ servancy authorities, owners of docks or canals. By section 191 of the 1995 MSA32 all these bodies are accorded the right of limitation in the United Kingdom in respect of claims for damage caused to ships, goods, merchandise ‘‘or other things whatsoever on board any ship’’. The limitation fund is to be calculated by applying Articles 6 and 7 of the 1976 Convention to the tonnage of the largest U.K. flag ship which has been within the area over which the authority has control within the five years preceding the date of the incident giving rise to the claim for damages. Article 2: Claims subject to limitation 1. Subject to Articles 3 and 4 the following claims, whatever the basis of liability may be, shall be subject to limitation of liability: (a) Claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to naviga­ tion), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; (b) Claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage; (c) Claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations; (d) Claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship; (e) Claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship; (f) Claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures. 2. Claims set out in paragraph 1 shall be subject to limitation of liability even if brought by way of recourse or for indemnity under a contract or otherwise. However, claims set out

29. See pages 89–90, below. 30. But see page 12 and Part II, para. 12 of Sched. 7 to the 1995 MSA where the definition of ‘‘ship’’ is extended to cover ‘‘any structure . . . launched and intended for use in navigation as a ship . . . ’’, which limits the type of floating platform in respect of which the right to limit applies. 31. See pages 87–90, below. 32. See Appendix II for the full text of section 191.

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under paragraph 1(d), (e) and (f) shall not be subject to limitation of liability to the extent that they relate to remuneration under a contract with the person liable.

The range of claims in respect of which the right to limit liability is available is sig­ nificantly greater than under the 1957 Convention. The two principal differences are: (1) Claims qualify for limitation whatever the basis of liability may be. (2) Claims qualify for limitation if they arise on board or in direct connection with the operation of the ship or with salvage operations. A RT I C L E 2(1) Article 2(1) of the 1976 Convention applies to ‘‘ . . . claims whatever the basis of liability may be . . . ’’. Article 1(1) of the 1957 Convention applied to ‘‘ . . . claims arising from . . . ’’ a list of specified ‘‘occurrences’’. However, the position in the United Kingdom has always been that the right to limit liability is restricted to claims for which the shipowner is liable in damages. (See section 503(1) of the 1894 MSA as amended by the 1958 Act.) For example in The ‘‘Stonedale No. 1’’33 it was held that an owner could not limit his liability for wreck removal expenses payable under statute since such expenses were in the nature of a debt rather than damages. Similarly in the case of The ‘‘Kirknes’’34 it was held that the owners of a towed vessel could not limit their liability for damage caused to the tug since the tow’s liability arose not from any breach of contract or duty but from the strict covenant in the towage contract to indemnify the tug. In other words, the tow was not liable in ‘‘damages’’. The effect of the 1976 Convention and the 1995 MSA is to remove altogether the requirement that the claim must sound in damages. Limitation is now available in respect of claims ‘‘whatever the basis of liability may be’’, and (pursuant to Article 2(2)) ‘‘even if brought by way of recourse or for indemnity under a contract or otherwise . . . ’’, subject to certain exclusions. It is the nature of the claim for financial relief that is important, not the legal basis for that claim or the way in which it is pleaded (see, for example Caspian Basin Specialised Emergency Salvage Administration v. Bouygues Offshore SA (No. 4), where a claim based on alleged misrepresentation was held to be within the 1976 Convention).35 A RT I C L E 2(1)(a) Under the previous limitation regime the benefit of limitation was available in respect of injury or damage caused to a person or to property on board, or if they were not on board, only if such injury or damage was caused by a person on board or by a person not on board in the course of specific activities which were laid down by Article 1 of the 1957 Convention and which were enacted into English law by section 2 of the 1958 Act. Thus, limitation was restricted to acts or omissions done by a person on board or in the navigation or management of the ship, or in the loading, carriage or discharge of its cargo, or in the embarkation, carriage or disembarkation of its passengers. 33. [1956] A.C. 1. 34. [1956] 2 Lloyd’s Rep. 651. 35. [1997] 2 Lloyd’s Rep. 507 at page 522, Rix J., [1998] 2 Lloyd’s Rep. 461.

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These restrictions have, from time to time, resulted in unfortunate decisions such as that in The ‘‘Tojo Maru’’36 where the House of Lords held that the salvors were not entitled to limit their liability since the negligent act of the diver was not an act done either in the ‘‘management’’ of or ‘‘on board’’ the tug. The 1976 Convention seeks to deal with this problem by replacing the list with a wider definition of claims which are subject to limitation. The Convention refers in Article 2(1)(a) to events occurring ‘‘on board or in direct connection with the operation of the ship, or with salvage operations, and consequential loss resulting therefrom’’. The extent to which the right to limit has been extended by this wording has been the subject of litigation. In 2004, the Court of Appeal in CMA CGM S.S. v. Classica Shipping Co Ltd37 held, in agreement with both Thomas J. in The ‘‘Aegean Sea’’38 and David Steel J. at first instance in the case under appeal, that the ordinary meaning of Article 2(1)(a) does not extend the right to limit to a claim for damage to the vessel by reference to the tonnage of which limitation is to be calculated. In The ‘‘Aegean Sea’’ Thomas J. held that loss of the ship was not the loss of ‘‘property . . . occurring in direct connection with the operation of the ship’’ where the claim is in respect of the ship brought by a group of persons in the category of shipowners since it is the operation of the very ship which must cause the loss of property; the ship cannot be the object of the wrong.39 This can be contrasted with the position where, for example, a claim lies against salvors for the loss of a ship which they were trying to salve since the loss of the ship being salved would occur in direct connection with the operation of the salvor’s ship. Article 2(1)(a) includes claims in respect of loss of bunkers where they are lost in consequence of a ship, for example, being ordered to an unsafe port since this would arise in direct connection with the operation of the ship. Thomas J. held in The ‘‘Aegean Sea’’ that the phrase ‘‘operation of the ship’’ encompasses all that goes to the operation of the ship including the selection of a port and the ascertainment of its safety and suitability for the vessel and the provision of what might be necessary for the vessel to use it safely such as chart and tugs. Similarly, payment of pollution claims for property damage and property clean up would fall within Article 2(1)(a), as being incurred in direct connection with the operation of the ship, if the result of a decision to order the vessel to an unsafe port or by virtue of the way in which she was navigated. Indeed, it is possible that the words ‘‘in connection with the operation of the ship’’ have wider application. Rix J. held in the Caspian Basin case that: ‘‘‘In direct connection with the operation of the ship’ is the way in which the Convention expresses the necessary linkage between loss of or damage to property on the one hand and the ship in respect of which the claim to limit is made on the other.’’40

This conclusion was subsequently upheld by the Court of Appeal.41 Therefore, so long as there is that necessary linkage between any of the heads of loss or damage which are itemised in Article 2(1)(a) and the ship against which the claim is made it would appear that the right to limit liability for such claim is established. 36. [1971] 37. [2004] 38. [1998] 39. [1998] 40. [1997] 41. [1998]

1 1 2 2 2 2

Lloyd’s Lloyd’s Lloyd’s Lloyd’s Lloyd’s Lloyd’s

Rep. Rep. Rep. Rep. Rep. Rep.

341. 460. 39. 39 at page 51. 507 at page 522. 461 at page 473.

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Therefore, in the Caspian Basin case the owners of a tug were entitled to limit their liability for loss of the barge which it was towing. In the prior edition of this book it was debated whether a carrier of cargo who has delivered cargo without surrender of the original bills of lading would be entitled to limit his liability in respect of a claim brought against him by the party which was entitled to take delivery. However, the manner in which the court has construed the words ‘‘in connection with the operation of the ship’’ in the Caspian Basin case appears to have opened the way for such carriers to limit their liability provided that they are not guilty of the conduct described in Article 4 and provided that claims for misdelivery can be correctly categorised as ‘‘claims in respect of . . . loss or damage to property’’.42 It is also noteworthy that unlike the other subsections of Article 2(1), Article 2(1)(a) expressly allows claims for consequential losses to qualify for limitation purposes. In The ‘‘Aegean Sea’’, Thomas J. found that loss of profit claims by fishing boat owners and others may be consequential loss claims falling within Article 2(1)(a), as may a claim for an indemnity for amounts paid to salvors in respect of the cargo since that could properly be characterised as a consequential loss resulting from the loss of cargo. This is consistent with Sheen J.’s judgment in The ‘‘Breydon Merchant’’43 that the owner could limit in respect of a claim by cargo owners for compensation in relation to the amount which the cargo owners had been required to pay to salvors, albeit there had been no physical loss or damage.44 In that case, the judge observed that the intention of the 1976 Convention was to extend the right to limit, not to restrict it. He concluded that the cargo owners’ claim fell within Article 2(1). The wording might be sufficiently broad, for example, to have the effect of enabling a shipowner to limit his liability in respect of claims for personal injury or property damage caused by a person for whose act, neglect or default he is responsible in a situation where the vessel is in drydock and the damage is caused by such a person whilst ashore in the performance of an act directly connected with the operation of the ship. It might also encompass external repair and maintenance work and would probably cover the provision of bunkers or supplies since such services would be directly connected with the operation of the ship. Thomas J. held in The ‘‘Aegean Sea’’ that loss of unearned freight is not within Article 2(1)(a) since that was consequent on the loss of the ship which, the judge found, was not itself a claim capable of limitation.45 It is not clear how far (if at all) the wide wording of this provision will be restricted in the United Kingdom by the doctrine of remoteness of damage. Thus in recent years there has been a trend towards allowing claims for damages for psychiatric injuries where the claimant has witnessed a disaster (or its aftermath) in which a close relative has been 42. It was held in Motis v. Dampskisbskelskabet [2000] 1 Lloyd’s Rep. 211 that a misdelivery of the cargo was not included in the words ‘‘any loss or damage to the goods while in its (the carrier’s) actual or constructive possession . . . after discharge over ship’s rail’’ in a bill of lading exception clause. However, it is submitted that this conclusion is the result of special requirements relating to the construction of exception clauses and is not binding in relation to the limitation (as opposed to exclusion) of liability. Indeed, Mance L.J. observed at page 217 that in another context the submission that a misdelivery would amount to a ‘‘loss or damage to the goods’’ had ‘‘some force’’. 43. [1992] 1 Lloyd’s Rep. 373. 44. However, see The ‘‘TFL Prosperity’’ [1984] 1 Lloyd’s Rep. 123 in relation to the meaning of ‘‘loss of or damage to’’ in another context. 45. Nor does loss of freight fall within Article 2(1)(c); see page 22 below.

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killed or injured. It is submitted that if the disaster in question was a maritime one there would be a right to limit liability in respect of a claim of this nature on the basis that it is a claim for ‘‘personal injury . . . occurring . . . in direct connection with the operation of the ship . . . ’’ and is a ‘‘consequential loss resulting from . . . ’’ such operation. The Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998,46 which came into force on 13 May 2004, and is the means by which the 1996 Protocol has been brought into force in the United Kingdom, makes a significant change to the scope of claims subject to limitation in the United Kingdom. Article 5(b) of the Statutory Instrument inserts a new paragraph 3 bis in Part II of Schedule 7 to the Merchant Shipping Act 1995 which itself derives from Article 6 of the 1996 Protocol and becomes Article 15 paragraph 3 bis of the 1976 Convention. This pro­ vides: ‘‘Notwithstanding the limit of liability prescribed in paragraph 1 of article 7, a State party may regulate by specific provisions of national law the system of liability to be applied to claims for loss of life or personal injury to passengers of a ship, provided that the limit of liability is not lower than that prescribed in paragraph 1 of article 7. A State party which makes use of the option provided for in this paragraph shall inform the Secretary-General of the limits of liability adopted or of the fact that there are none.’’

In exercise of this right the United Kingdom government has excluded from the list of ‘‘claims subject to limitation’’ set out in Article 2 of the 1976 Convention claims for ‘‘loss of life or personal injury’’ suffered by passengers on ‘‘seagoing ships’’.47 At a stroke, the right of the shipowner to further limit his liability by applying the global limit under Article 7 of the 1976 Convention is removed. In effect this means that all claims for loss of life or injury to passengers on seagoing ships will be covered by the Athens Convention to the exclusion of Article 7 of the 1976 Convention (as amended by the 1996 Proto­ col). Part II Article 2 of Schedule 7 to the Merchant Shipping Act 1995 provides that the 1976 Convention shall apply to ‘‘any ship whether seagoing or not’’. There is no similar provision in Part II of Schedule 6 to the Merchant Shipping Act 1995 which gives effect to the Athens Convention in the United Kingdom. The combined effect of Schedules 6 and 7 and the Statutory Instrument is that Article 7 of the 1976 Convention will continue to have effect only in relation to claims for loss of life and personal injury involving nonseagoing ships.

A RT I C L E 2(1)(b) A further apparent innovation introduced by this subsection is the extension of the benefit of limitation to claims resulting from delay in the carriage of cargo, passengers or their luggage. However, the innovation may be more apparent than real in that a claim for recoverable financial loss consequent on delay would in any event be a ‘‘claim’’ within Article 1(1) of the 1957 Convention or ‘‘damages’’ within section 503(1) of the 1894 MSA as amended by the 1958 Act and thus subject to the right to limit under the old regime. 46. S.I. 1998/1258. 47. S.I. 1998/1258, Article 7(b) and (e).

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A RT I C L E 2(1)(c) Both Article 1(1)(b) of the 1957 Convention and section 2(1) of the 1958 Act allowed the benefit of limitation where ‘‘rights’’ had been ‘‘infringed’’. The draftsmen of the 1976 Convention preserved this benefit but restricted the scope of limitation to non-contractual ‘‘rights’’. Examples of the type of claims which have been found to come within Article 2(1)(c) are those for loss of use and loss of profits made by fishing boat owners, yacht owners, fish and shellfish farm owners, shell fish harvesters, fishing net and fishing pot owners, shop owners, local municipalities, local government and the state itself con­ sequent upon pollution.48 The draftsmen of the 1976 Convention may also have had in mind circumstances in which a claimant had a statutory right of easement which was capable of being damaged by a ship. One example of such a right is the wayleave or right of passage enjoyed by a railway company over a bridge spanning a river.49 On the other hand loss of the shipowner’s right to earn freight under the charterparty was held in The ‘‘Aegean Sea’’ to be a claim for infringement of contractual rights, and therefore not within the scope of Article 2(1)(c).50 So long as the right being infringed is not contractual the precise legal nature of the right and the nature of the legal liability incurred by its infringement does not seem to be relevant in view of the wording of the introductory paragraph to Article 2(1). A RT I C L E 2(1)(d) This subsection confers the right to limit in the case of claims for the cost of removal or destruction of wrecks except where the claims relate to remuneration under a contract with the person liable (Article 2(2)). As The ‘‘Stonedale No. 1’’51 (referred to above52) demonstrated, a shipowner could not limit in the United Kingdom in respect of a claim for wreck removal expenses put forward by a harbour authority which had raised the wreck pursuant to statutory powers. With the intention of giving a shipowner the right to limit in such circumstances the 1957 Conven­ tion extended the right to limit to ‘‘liability imposed by any law relating to removal of wreck’’ (Article 1(1)(c)). This provision was incorporated into the 1958 Act as section 2(2)(a). However section 2(5) of the 1958 Act provided that section 2(2)(a) would not come into force in the United Kingdom until such day as the Secretary of State might appoint by statutory instrument. No date has ever been appointed and accordingly this provision has never been effective in the United Kingdom. Article 2(1)(d) of the 1976 Convention includes provisions confirming the right to limit in respect of claims for the raising, removal or destruction of a ship which is sunk, wrecked, stranded or abandoned including anything on board such ship. It also extends the right to any obligation or liability relating to the rendering harmless of a ship which has been sunk, stranded, abandoned or wrecked, and to anything that is or has been on board 48. Aegean Sea Traders Corporation v. Repsol Petroleo S.A. and Another (The ‘‘Aegean Sea’’) [1998] 2 Lloyd’s Rep. 39. 49. See Gypsum Carriers Inc. v. The Queen (1978) 78 D.L.R. 175 Fed. Ct. and [1978] 4 Current Law para. 706. 50. At page 52. 51. [1956] A.C. 1. 52. See page 18, above.

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the ship. Therefore if, after sinking, a part of the ship or her cargo53 escapes or breaks loose and steps are taken to recover it or render it harmless it seems that the shipowner can limit his liability for such costs—see The ‘‘Aegean Sea’’ in which it was held that claims for pollution caused by bunkers and by cargo fell within Article 2(1)(d) in so far as they related to clean up or pollution prevention.54 However in keeping with its policy of unlimited liability for wreck removal expenses the United Kingdom has, by paragraph 3 of Schedule 7, Part II, and section 185 of the 1995 MSA, made a reservation in respect of Article 2(1)(d) of the 1976 Convention.55 Consequently, liability for claims for the cost of wreck removal remains unlimited insofar as the operation is performed pursuant to statutory powers. (Indeed it appears that as a result of the wording in the introductory paragraph to Article 2, to the effect that the listed claims are to be the subject of limitation ‘‘whatever the basis of liability’’, the reservation exercised by the United Kingdom may have inadvertently taken out of limitation in the United Kingdom any claims (whether statutory or otherwise) relating to wreck removal, including claims for recourse, provided that the liability does not relate to remuneration under a contract with the person liable). Whether or not this is the case remains unresolved and there is an argument that a claim for recourse in respect of wreck removal can come within one of the more general headings in Article 2(1) and thus qualify for limitation ‘‘through the back-door’’. This approach draws heavily on the fact that the public policy considerations which the Government had in mind, namely ensuring that harbour author­ ities etc did not have to foot all or part of the bill for wreck removal, ought to have no application to claims in respect of the cost of wreck removal brought against a third party, that is, the ship which caused the sinking. Indeed, it could be said that a wreck removal claim is a ‘‘claim in respect of . . . damage to property . . . occurring . . . in direct connection with the operation of the ship . . . and consequential loss resulting therefrom’’ within the meaning of Article 2(1)(a). The non-limiting ship is ‘‘property’’ for these purposes.56 Such a claim might also fall within Article 2(1)(c). It is also, perhaps, relevant that there are categories of loss, for example the cost of repairs arising in consequence of a collision, suffered by ship A and which are not limitable by ship A under Article 2 but are limitable by ship B when faced by ship A’s recourse action. It may be said that there is something incongruous about ship B being able to limit in respect of the cost of repairs to ship A but not for the cost of wreck removal. Similarly, although direct claims for salvage contribution and general average are specifically excluded from limitation by Article 3, nevertheless claims for reimbursement of salvage and general average have been held to be subject to the right to limit.57 Against this, it would be strange if a claim 53. See Article 2(1)(e) and below. 54. [1998] 2 Lloyd’s Rep. 39 at page 53. 55. Para. 3, Sched. 7, Part II of MSA 1995 provides: ‘‘(1) Paragraph 1(d) of article 2 shall not apply unless provision has been made by an order of the Secretary of State for the setting up and management of a fund to be used for the making to harbour or conservancy authorities of payments needed to compensate them for the reduction, in consequence of the said paragraph 1(d), of amounts recoverable by them in claims of the kind there mentioned, and to be maintained by contributions from such authorities raised and collected by them in respect of vessels in like manner as other sums so raised by them. (2) . . . .’’ Section 185 provides: ‘‘(1) The provisions of the Convention on Limitation of Liability for Maritime Claims 1976 as set out in Part I of Schedule 7 (in this section and Part II of that Schedule referred to as ‘‘the Convention’’) shall have the force of law in the United Kingdom. (2) The provisions of Part II of that Schedule shall have effect in connection with the Convention, and subsection (1) above shall have effect subject to the provisions of that Part. . . . ’’ 56. CMA CGM S.S. v. Classica Shipping Co. Ltd. [2004] 1 Lloyd’s Rep. 460. 57. The ‘‘Breydon Merchant’’ [1992] 1 Lloyd’s Rep. 373.

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which is specifically described in a sub-paragraph of Article 2(1) and specifically excluded by parliament, should find its way back in through more general wording in another sub­ paragraph. Further, it is the subject matter of the particular claim which is relevant when determining whether or not it falls within Article 2, not the way it is pleaded or advanced.58 Yet further, the opening words of Article 2(2) emphasise that Article 2(1)(d) is normally (if included) to be treated as including recourse or indemnity claims for wreck removal costs. The position remains unclear, with meritorious arguments both in favour and against limitation in respect of recourse claims for wreck removal expenses.59

A RT I C L E 2(1)(e) By virtue of Article 2(1)(e) of the 1976 Convention, limitation is expressly available in respect of certain claims relating to the removal, destruction or rendering harmless of cargo except where such claims relate to remuneration under a contract with the person liable (Article (2)(2)). Conflicts may therefore arise between the provision of Articles 2(1)(d) and 2(1)(e). Under Article 2(1)(d) the expression ‘‘anything that is or has been on board such ship’’ could include cargo. But limitation is not available under 2(1)(d)60 in the United Kingdom. It may therefore be that in the United Kingdom, claims in respect of cargo removal, qualify for limitation before the ship is sunk, wrecked, stranded or aban­ doned but not after that event has occurred.

A RT I C L E 2(1)(f) This subsection as originally submitted to the 1976 Conference by the Drafting SubCommittee read as follows: ‘‘(f) claims in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with this Convention and further loss caused by such measures.’’

The effect of this original draft wording seems clear; if the shipowner (the person liable) would be able to limit his liability in respect of a particular category of loss, he is also entitled to limit his liability in respect of claims made against him by third parties for expenses incurred in taking measures to avert or minimise that loss. This right is extended to claims for further loss caused in the course of taking those measures to avert or minimise. For example, if there is a threat of chemical pollution following a stranding and measures are taken by third parties to minimise the damage caused thereby, the subsequent claim against the shipowner (the person liable) to recover the cost of taking such measures will be subject to limitation; and if in the course of taking those measures further loss is caused, claims arising will also be subject to limitation. Examination of the Official Records of the 1976 Conference suggests that the delegates’ principal concern regarding the subsection as originally drafted, was that a contractor brought in by the shipowner (the person liable) to effect measures to avert or minimise the 58. Bouygues Offshore S.A. v. Caspian Shipping Co. and Others [1998] 2 Lloyd’s Rep. 461. 59. See the Editorial in Journal of International Maritime Law, volume 11 (Jan.–Feb. 2005), pages 5–7. 60. Para. 3 of Sched. 7, Part II, of the 1995 MSA and page 22 above.

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loss, could find himself faced with a plea of limitation when submitting his account. This problem was overcome by inserting the rider in Article 2(2) to the effect that the person limiting cannot limit against his own contractor. Of further significance is the introduction by Conference delegates in line 1 of subsection (f) of the words ‘‘ . . . of a person other than the person liable . . . ’’. The introduction of these extra words appears to emphasise the fact that the right to limit arises solely in relation to a claim made against a shipowner (the person liable) to recover the costs of steps taken by a third party to prevent or minimise a loss. The effect of Article 2(1)(f) was considered by Sheen J. in The ‘‘Breydon Merchant’’.61 In that case cargo owners claimed damages from shipowners for breach of the contract of carriage. The losses in respect of which they claimed compensation included sums paid to salvors for services rendered in the saving of the cargo. Sheen J. held that the claim of cargo owners was a claim presented by a ‘‘person other than the person liable’’ (the shipowners) and was ‘‘in respect of measures taken to minimise loss (damage to cargo) for which (the shipowners) may limit their liability’’ and accordingly fell within the meaning of the words in sub-paragraph (f). The situation would, of course, have been different if the salvors had had the right to claim for salving cargo direct against the shipowners. In those circumstances a plea of limitation would have failed by reason of the terms of Articles 3(a) and 2(2). The combined effect of subsections 2(1)(f) and 2(2) can be summarised as follows: 1. The loss in respect of which the measures to avert or minimise are taken must be one in respect of which the right to limit liability arises. 2. The claim must be in respect of either (i) expenses incurred by persons other than the shipowner (the person liable) to avert or minimise loss or (ii) further loss caused by the taking of such measures. 3. Where the claim is in respect of measures taken by a third party by virtue of a contract with the shipowner (the person liable) such claim is not subject to limitation (rider in Article 2(2)).

A RT I C L E 2(2) The intention of this subsection is to ensure that the claims listed in 2(1) at all times maintain their character. To take one possible example of how this might work in practice: assume that a tug which is towing a barge comes into collision with another vessel and is found liable to that vessel. If under the terms of the tug and tow contract, the tow is to indemnify the tug, such indemnity claim would retain its character as a liability in damages in respect of which limitation can be claimed (under Article 2(1)(a)) and the barge owner would be entitled to limit. Accordingly, the claim remains a claim for collision damages and does not become a mere claim in contract. Similarly, it was held in The ‘‘CMA Djakarta’’62 that a charterer would be entitled to limit his liability to an indemnity claim brought by the owners of the ship in relation to payments made by the owners in settlement of cargo claims brought against them as carriers under bills of lading. 61. [1992] 1 Lloyd’s Rep. 373. 62. [2004] 1 Lloyd’s Rep. 460 at page 469.

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The intention of the second sentence of Article 2(2) is to prevent the shipowner (or the person liable) seeking to limit his liability to his own contractor. Thus, although a shipowner can limit in respect of a claim for wreck removal costs incurred by a third party (e.g. a harbour authority) under Article 2(1)(d),63 he could not limit his liability to pay the invoice of his own contractor employed to remove the wreck. Loss of or damage to valuables; loss or damage by fire64 By virtue of section 186 of the 1995 MSA the owners of a British ship still have the right originally granted in section 502 of the 1894 MSA to exclude their liability totally in the United Kingdom in certain circumstances where there has been a fire on board or loss of valuables by theft. Under section 502 this right only existed if the loss did not result from the actual fault or privity of the person seeking to limit. However, since by virtue of section 186 the conduct now necessary to defeat the right to limit is wilful intent or recklessness rather than fault or privity, this right is now even more valuable to a British shipowner. Article 3: Claims excepted from limitation The rules of this Convention shall not apply to: (a) Claims for salvage or contribution in general average;65 (b) Claims for oil pollution damage within the meaning of the International Convention on Civil Liability for Oil Pollution Damage, dated November 29th 1969 or of any amendment or Protocol thereto which is in force; (c) Claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage; (d) Claims against the shipowner of a nuclear ship for nuclear damage; (e) Claims by servants of the shipowner or salvor whose duties are connected with the ship or salvage operations, including claims of their heirs, dependants or other persons entitled to make such claims, if under the law governing the contract of service between the shipowner or salvor and such servants the shipowner or salvor is not entitled to limit his liability in respect of such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 6.

A RT I C L E 3(a) This subsection of the 1976 Convention retains the provisions of Article 4(a) of the 1957 Convention insofar as it excludes application to claims for salvage and contribution in general average. However, it should be remembered that, if a cargo interest pays his salvage or general average contribution he may seek to claim such contribution back from the ship by way of damages if it is proved that the incident resulted from breach of the contract of carriage by the shipowner. In such circumstances the shipowner has the right to limit his liability under Article 2 because Article 3(a) excludes the right to limit only 63. But not in the United Kingdom, see page 23. 64. For further discussion see page 41, below. 65. The 1996 Protocol to the 1976 Convention extends this exclusion to cover ‘‘any claims for special compensation under Article 14 of the International Convention on Salvage 1989’’.

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in respect of a direct claim by a salvor or a direct claim by a party who has incurred a general average loss or sacrifice.66 However, the shipowner will still have to establish that the claim is one in respect of which he is entitled to limit under one of the specific provisions of Article 2. If the salvage services occurred before there was no ‘‘loss of or damage to cargo’’ there were doubts expressed as to whether there was a right to limit under Article 2(1)(a). These doubts appear to have been laid to rest by the decision of Sheen J. in The ‘‘Breydon Merchant’’.67 (It is worth noting, if this case is correct, that in addition to the right to limit in respect of this type of indemnity claim under Article 2(1)(a), the shipowner may also have a right to limit under the Hague and Hague-Visby Rules to the extent that they apply to the contract of carriage.68) It should be noted that the 1996 Protocol to amend the 1976 Limitation Convention provides a revised text for Article 3(a), and that this now has the force of law in the United Kingdom in respect of claims arising out of occurrences which take place after 13 May 2004:69 ‘‘Claims for salvage, including, if applicable, any claim for special compensation under Article 14 of the International Convention on Salvage 1989, as amended, or contribution in General Average.’’

Article 14 of the Salvage Convention, which is expressly incorporated into Lloyd’s Open Form of Salvage Agreement, provides that if a salvor has carried out salvage operations in respect of a ship which threatened damage to the environment but has failed to earn a reward for those services he is entitled to special compensation from the owner of the salved vessel, calculated in accordance with a formula set out in Article 14. Delegates to the 1996 Diplomatic Conference, at which the Protocol was drafted, were unanimous in concluding that compensation payable to a salvor who has contributed to the prevention of pollution but who has not received an adequate reward because of the loss of the ship, should be regarded as a payment for salvage in respect of which no right of limitation should be allowed. In the United Kingdom statutory effect had already been given to the special compensa­ tion exclusion by paragraph 4(1) of Part II, Schedule 7 to the 1995 MSA and to ‘‘corre­ sponding claims under a contract’’.

A RT I C L E 3(b) It is assumed the draftsman intended simply that a shipowner’s right of limitation for oil pollution claims should remain governed by the 1969 Civil Liability Convention (CLC), and not by the 1976 Convention. It seems likely, however, that Article 3(b) has a wider effect than intended: provided that the claim is of its nature for ‘‘oil pollution damage’’ as 66. Aegean Sea Traders Corporation v. Repsol Petroleo S.A. and Another (The ‘‘Aegean Sea’’) [1998] 2 Lloyd’s Rep. 39 at page 55 and CMA CGM. S.A. v. Classica Shipping Co. Ltd. (The ‘‘CMA Djakarta’’) [2004] 1 Lloyd’s Rep. 460 at page 469 (CA). 67. [1992] 1 Lloyd’s Rep. 373. However, see also the decision of the House of Lords in ‘‘TFL Prosperity’’ [1984] 1 Lloyd’s Rep. 123 where it was concluded in a different context that the words ‘‘for loss or damage to goods’’ in clause 13 of the Baltime form of charter was restricted to physical rather than financial damage. 68. See Chapter 6, below. 69. The Merchant Shipping (Convention on Limitation of Liability for Maritime Claims)(Amendment) Order 1998, S.I. 1998/1258.

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defined in the CLC, then irrespective of whether the claim is actually made under the CLC, and irrespective of whether it is made against the shipowner (who is the only party entitled to limit under CLC) or some other party, no right of limitation will exist under the 1976 Convention. This could mean that where pollution claims are brought against parties other than a shipowner (such as the ship manager or operator) neither the CLC nor the 1976 Convention will provide any right of limitation. This is recognised as a defect in the Convention which needs to be addressed in the domestic legislation which incorporates the Convention. In the United Kingdom this problem is solved by paragraph 4(2) of Part II of Schedule 7 to the MSA 1995 which provides that: ‘‘The claims excluded from the Convention by paragraph (b) of Article 3 are claims in respect of any liability incurred under section 153 of this Act.’’70

The words in italics make it clear that for the purposes of English law, Article 3(b) applies only to liabilities actually incurred under CLC. Furthermore, it does not exclude a claim for limitation of liability in respect of an oil pollution claim by any person other than the owner (e.g. a charterer or salvor). Indeed, this provision is intended to dovetail with section 7 of the Merchant Shipping (Oil Pollution) Act 1971 (incorporating the CLC into the law of the United Kingdom) which envisages that proceedings can be taken against a person other than a shipowner for oil pollution liability incurred otherwise than under section 1 of the Merchant Shipping (Oil Pollution) Act 1971 and that such person may be entitled to limit his liability in connection with the ship by virtue of the MSA 1995. It should be noted that liability for pollution caused by bunker spills from non-tankers is not covered by the CLC.71 It follows that the CLC exclusion under Article 3(b) does not embrace such bunker spills. It is the view of the authors that the terms of Article 2(1) would enable a shipowner to limit in relation to property damage caused by such bunker spills (e.g. fishing boats and gear), and for associated consequential economic loss (e.g. loss of fishing). The same goes for the actual cost of reasonable measures for reinstate­ ment of the environment. It seems also that Article 2(1)(c) could afford rights of limitation in respect of claims for pure economic loss (e.g. loss of fishing without damage to gear, loss of hotel trade), see The ‘‘Aegean Sea’’ in which the parties did not dispute that such claims resulted from the infringement of rights other than contractual rights.72 By analogy, The ‘‘Sea Empress’’ should also be noted, in which the Court of Appeal recognised the possibility of a claim for pure economic loss brought by fishermen being recoverable from the International Oil Pollution Compensation Fund.73 Whilst a shipowner could limit under Article 2(1)(f) in respect of claims by third parties for the cost of measures ‘‘to avert or minimise loss’’ caused by bunker spills, he could not do so if he took those same measures himself. (In the United Kingdom the problem of bunker pollution has been resolved by imposing strict liability on all shipowners for the escape of all types of oil whether carried as cargo or as bunkers.74)

70. Emphasis added. 71. In March 2001 the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, which will enter into force 12 months after ratification by 18 states. To date only Jamaica, Samoa, Slovenia, Spain and Tonga have ratified it. 72. The ‘‘Aegean Sea’’ [1998] 2 Lloyd’s Rep. 39 at p. 52. 73. Algrete Shipping Co. Inc. and Another v. International Oil Pollution Compensation Fund and Others [2003] 1 Lloyd’s Rep. 327. 74. 1995 MSA sections 153 and 154.

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A RT I C L E 3(c) This subsection provides that there is no right to limit in respect of claims which are the subject of an international convention or national legislation governing or prohibiting limitation of liability for nuclear damage. Thus, if there is no relevant convention or other legislation as to limitation, limitation will, prima facie, be available. By virtue of section 185 and paragraph 4(3) of Schedule 7, Part II, of the 1995 MSA, the United Kingdom legislature has provided that the claims which are to be excluded from the Convention as applied in the United Kingdom are those claims ‘‘made by virtue of any of sections 7 to 11 of the Nuclear Installations Act 1965’’. This does not represent any change in the law in the United Kingdom since section 14(1) of the Nuclear Installations Act 1965 itself expressly excluded the right to limit contained in section 503 of the 1894 MSA. (The Nuclear Installations Act 1965 itself has provisions allowing limitation in certain circum­ stances—section 16.)

A RT I C L E 3(d) This subsection excludes any claim for nuclear damage caused by a nuclear ship. Whilst liability for such damage cannot therefore be limited under the 1976 Convention, the Convention on the Liability of Operators of Nuclear Ships 1962 has provisions allowing limitation for such damage.

A RT I C L E 3(e) This subsection provides that the limits set out in the 1976 Convention shall not be available in respect of claims arising under certain contracts of service where the law governing the particular contract of service imposes a higher financial limit than those set out in the 1976 Convention or provides that there shall be no right to limit at all. It is also noteworthy that the exclusion applies only if the law governing the contract of service imposes a higher limit; the exclusion does not necessarily apply merely because the contract itself provides for a higher limit. The subsection therefore follows the basic principles set out in the 1957 Convention and the 1958 Act. However, the wording of Article 3(e) of the 1976 Convention is, on the face of it, more restrictive than the wording of either Article 1(4)(b) of the 1957 Convention (‘‘ . . . claims by the Master, by members of the crew, by any servants of the Owner on board the ship or by servants of the Owner whose duties are connected with the ship . . . ’’) or section 2(2)(4) of the 1958 Act (‘‘ . . . any liability in respect of loss of life or personal injury caused to, or loss of or damage to any property or infringement of any right of, a person who is on board or employed in connection with the ship . . . ’’). Nevertheless, since in all cases it is claims arising under a contract of employment which are excluded it does not seem that the change in terminology will be of material effect. Article 3(e) of the 1976 Convention does however, introduce an innovation in that it expressly extends the exclusion of the right to limit to claims by or on behalf of the servants of salvors under a contract of service between them and the salvors. This express

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exclusion is necessary as a result of the inclusion of salvors as ‘‘persons entitled to limit liability’’ in Article 1 of the 1976 Convention. The position in the United Kingdom insofar as claims arising under contracts of employment are concerned is covered by section 185(4) of the 1995 MSA. This section provides that if the contract of service is governed by the law of any part of the United Kingdom and the liability arises from an occurrence which takes place ‘‘after the com­ mencement of this Act’’, liability is unlimited. The 1995 MSA came into force on 1 January 1996 and in this regard replaced section 35 of the 1979 MSA.

Summary The claims which are excepted from limitation are: (1) Direct claims by salvors for salvage remuneration and claims for special com­ pensation under Article 14 of the Salvage Convention 1989—Article 3(a) as amended by the 1996 Protocol. (In the United Kingdom paragraph 4(1) of Part II, Schedule 7 to the 1995 MSA already gave effect to such exclusion. See Appendix IV below.) (2) Direct claims for general average contribution by a party incurring a general average expenditure or sacrifice—Article 3(a). (3) Contractual claims for remuneration by a third party engaged in the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned including anything that is or has been on board such ship—Article 2(2). (4) Contractual claims for remuneration by a party engaged in the removal, destruc­ tion or the rendering harmless of cargo on a ship—Article 2(2). (5) Contractual claims for remuneration by a third party engaged in attempts to avert or minimise a loss in respect of which the person liable could limit his lia­ bility—Article 2(2). (6) Claims for oil pollution damage within the meaning of the International Conven­ tion on Civil Liability for Oil Pollution Damage—Article 3(b). (In the case of the United Kingdom the excluded claims are those for ‘‘any liability incurred’’ under the Merchant Shipping (Oil Pollution) Act 1971—paragraph 4(2) of Schedule 7, Part II, of 1995 MSA.) (7) Claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage—Article 3(c). (In the case of the United Kingdom the excluded claims are those arising under sections 7–11 of the Nuclear Installations Act 1965—paragraph 4(3) of Schedule 7, Part II, of 1995 MSA.) (8) Claims for nuclear damage against the owner of a nuclear ship—Article 3(d). (9) Claims by or on behalf of servants of shipowners or salvors under contracts of service where limitation is either denied or limited to an amount higher than that set out in the 1976 Convention by the law governing the contract of service—Article 3(e). (In the case of the United Kingdom section 185(4) of the 1995 MSA excludes claims arising under contracts of service which are governed by the law of any part of the United Kingdom and where the liability arises from an occurrence which took place after the 1995 MSA came into effect.)

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N.B.: In the case of the United Kingdom claims (quaere all claims) in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked or abandoned including anything that is or has been on board such ship are exempted from limitation until a fund is established by the Secretary of State—paragraph 3(1) of Schedule 7, Part II, of the 1995 MSA. Article 4: Conduct barring limitation A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or reck­ lessly and with knowledge that such loss would probably result.

I. The effect of Article 4 Article 4 of the 1976 Convention is a product of the most radical change in the philosophy underlying the concept of a shipowner’s right to limit the extent of his liability for his acts and those of his servants. Under the 1957 Convention limitation was available in accordance with the provisions of the Convention except where ‘‘the occurrence giving rise to the claim resulted from the actual fault or privity of the owner’’. The meaning of ‘‘actual fault or privity of the owner’’ has been the subject of much litigation before the courts in the United Kingdom. The primary problem has been to establish who, in law, constituted the ‘‘owner’’. This was a particularly difficult question where the vessel concerned was owned by a company. The problem was solved in most countries that adopted the Convention by the develop­ ment of the concept of the ‘‘alter ego’’. This concept first saw light of day in the United Kingdom in the Lennard’s Carrying Co. case75 where the court was required to consider the problem in the context of the Merchant Shipping Act 1894. The court held that, upon the true construction of section 503 of the MSA 1894, the ‘‘fault or privity’’ must be the fault or privity of somebody who is not merely a servant or agent for whom the company is liable but somebody for whom the company is liable because his action is the very action of the company itself. In The ‘‘Lady Gwendolen’’,76 the assistant managing director of a brewing company who, although not specifically authorised by resolution to act in the board’s name, was ultimately responsible for the traffic department, was held to be the alter ego of the company in matters of ship management. Consequently, the failure by the traffic depart­ ment to train the vessel’s master in the use of radar and in particular a failure to check the master’s compliance with the Collision Regulations and to warn him that radar would not permit him to travel safely at full speed in fog, were omissions for which the assistant managing director and hence the company was responsible. It followed that, the collision, which resulted from the vessel’s excessive speed in fog, did not take place without the actual fault or privity of the owner and that the owning company was barred from limiting its liability. Similarly, in The ‘‘Marion’’,77 the ship’s managers failed to ensure that the ship was equipped only with adequate up-to-date charts on board. In consequence of using an 75. [1915] A.C. 705. 76. [1965] 1 Lloyd’s Rep. 335. 77. [1984] 2 Lloyd’s Rep. 1.

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obsolete chart which had been allowed to remain on board, the vessel’s anchor fouled an oil pipeline on the seabed. It was held that the managers were at fault and that that fault was, as a matter of law, the actual fault of the shipowners. Again, the shipowners could not show that the damage occurred without their ‘‘actual fault’’ and therefore they were not entitled to limit their liability. The meaning of ‘‘privity’’ has been considered in the context of the Marine Insurance Act 1906, section 39(5). The ‘‘Eurysthenes’’78 was entered with a P. & I. Club for Class 1 risks and suffered a stranding in the course of a voyage. The P. & I. Club alleged that the vessel was unseaworthy and further that the club was not obliged to indemnify the shipowner if it could be shown that the vessel was sent to sea in an unseaworthy condition with the privity of the shipowner within section 39(5) of the Marine Insurance Act 1906. The Court of Appeal held that, in this context, ‘‘privity’’ meant ‘‘with knowledge and consent’’. Under the 1976 Convention the test no longer involves the actual fault or privity of the owner. The new definition requires proof of loss resulting from the ‘‘personal act or omission’’ of the person liable for the loss which was ‘‘committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result’’. Whilst the words of Article 4 have been derived from and bear a distinct resemblance to the words of other Conventions, they differ in small but material respects. Article 25 of the Warsaw Convention 1929 as amended by Article 13 of the Hague Protocol 1955 provides that: ‘‘The limits of liability specified in Article 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier, his servants or agents done with intent to cause damage or recklessly and with knowledge that damage would probably result provided that, in the case of such act or omission of a servant or agent, it is also proved that he was acting within the scope of his employment.’’

Article 13 of the Athens Convention provides that: ‘‘The Carrier shall not be entitled to the benefit of the limits of liability prescribed in Articles 7 and 8 and paragraph 1 of Article 10 if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause such damage, or recklessly and with knowledge that such damage would probably result.’’79

Article IV Rule 5(e) of the Hague-Visby Rules provides that: ‘‘Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage or recklessly and with knowledge that damage would probably result.’’80

Article 8 Rule 1 of the Hamburg Rules provides that: ‘‘The Carrier is not entitled to the benefit of the limitation of liability provided for in Article 6 if the loss, damage or delay resulted from an act or omission of the carrier done with intent to cause such loss damage or delay or recklessly and with knowledge that such loss damage or delay would probably result.’’81

Article 4 of the 1976 Convention provides that: 78. [1976] 2 Lloyd’s Rep. 171. 79. See pages 105–106. 80. See page 141. 81. See pages 147–148.

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‘‘A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.’’

The following differences seem to exist: (a) The 1976 Convention speaks of the ‘‘personal’’ act or omission of the person liable. The Athens Convention, Hague-Visby and Hamburg Rules merely speak of the act or omission of ‘‘the Carrier’’ whilst the Warsaw Convention speaks of the acts or omissions of ‘‘the Carrier, his servants or agents’’. (b) The Warsaw Convention, the Athens Convention, the Hague-Visby Rules and the Hamburg Rules speak of the ‘‘carrier’’ being unable to limit liability whereas the 1976 Convention speaks of the ‘‘person liable’’ being unable to limit liability. However, each of the other Conventions and Rules have definitions of ‘‘Carrier’’ and in some instances the ‘‘Carrier’’ includes parties who would be ‘‘persons liable’’ under the 1976 Convention. (c) The Warsaw Convention, the Athens Convention and the Hague-Visby Rules speak of ‘‘damage’’ caused by the act or omission of the carrier. The Hamburg Rules speak of ‘‘loss damage or delay’’ so caused whilst the 1976 Convention speaks only of ‘‘loss’’. (d) The Warsaw Convention and the Hague-Visby Rules, when speaking of the intent to cause ‘‘damage’’ or of acts done ‘‘recklessly’’ and with knowledge of ‘‘dam­ age’’, refer to ‘‘damage’’ in the abstract whereas the Athens Convention, the Hamburg Rules and the 1976 Convention speak in each case of ‘‘such’’ damage (Athens Convention), ‘‘such’’ loss, damage or delay (Hamburg Rules) or ‘‘such’’ loss (1976 Convention). In The ‘‘European Enterprise’’,82 Steyn J. commented upon the different wording of the Warsaw Convention and the Hague-Visby Rules. He used the fact that the Warsaw Convention refers expressly to the acts of ‘‘the Carrier, his servants or agents’’ as an aid to construction in determining that the use of the mere word ‘‘Carrier’’ in the Hague-Visby Rules illustrated that it was only the personal acts of the carrier which would debar him from limiting under those rules. However, in The ‘‘Lion’’83 Hobhouse J. stated that: ‘‘In my judgment it is clearly important and correct that there should be a consistent approach to the construction of similar Maritime Conventions using similar terms and expressing similar ideas.’’

The court will therefore attempt wherever possible to give a consistent construction. Nevertheless, there may be circumstances where this is not possible and consideration is now given to different words and phrases: (a) ‘‘Personal’’ act or omission The Athens Convention, Hague-Visby Rules, Hamburg Rules and the 1976 Convention differ fundamentally from the Warsaw Convention since the latter provides expressly that

82. [1989] 2 Lloyd’s Rep. at page 192. 83. [1990] 2 Lloyd’s Rep. at page 149.

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misconduct on the part of the carrier’s servants or agents acting within the course of their employment will result in the loss of the right to limit. The Athens Convention, Hamburg Rules and Hague-Visby Rules on the other hand speak blandly of ‘‘acts or omissions of the carrier’’ defeating the right to limit without further reference. It seems from the travaux preparatoires to these Conventions that it is only misconduct on the part of the carrier himself which is meant to defeat the right to limit.84 This interpretation has now been accepted by the English court in The ‘‘European Enterprise’’85 in relation to the Hague-Visby Rules and in The ‘‘Lion’’86 in relation to the Athens Convention and it is likely that the Hamburg Rules would be construed in a similar manner.87 The 1976 Convention expressly provides that it is only the ‘‘personal’’ act or omission of the person liable which will defeat the right to limit. Lord Phillips M.R. in The ‘‘Leerort’’88 drew attention to the fact that this is in contrast to position under the Warsaw Convention. He emphasised that the shipowner would only lose his right to limit if it were proved that he personally misconducted himself in the necessary manner. However, it is still necessary to consider in the case of corporations whose act or omission will be treated as the ‘‘personal’’ act or omission which may defeat the right to limit. Thus it seems that the concept of the alter ego co-opted from the law developed from the limitation provisions of the 1894 MSA will have to be applied in order to ascertain whose ‘‘action is the very action of the company itself’’.89 The IMO’s International Safety Management Code requires every shipowner to develop, implement and maintain a Safety Management System (‘‘SMS’’) covering a whole range of safety, environmental and related matters.90 Shipowners are required to appoint a ‘‘designated person’’ who has direct access to the highest level of management within the owning/operating company and a reporting obligation to go with it. Central to the Code is a verification, reporting and auditing system, much of which must be recorded in writing. The authors anticipate that the existence of a designated person with access, and obligations to report, to senior management and the ‘‘paper trail’’ that is an integral part of the ISM Code will give much greater opportunities for challenging the right to limit in reliance on the terms of Article 4. (b) The ‘‘person liable’’ Article 4 of the 1976 Convention speaks of the ‘‘personal’’ act or omission of a ‘‘person liable’’ which term presumably encompasses all the various parties identified in Article 1 which is headed: ‘‘Persons entitled to limit liability’’. Therefore a ‘‘person liable’’ could be the shipowner, the charterer, manager, operator, salvor or liability insurer of the vessel 84. See Diamond [1978] LMCLQ 225, 244–245 and page 21 of Diamond on Hamburg Rules (lecture for Lloyd’s of London Press on 28 September 1978). 85. [1989] 2 Lloyd’s Rep. 195. 86. [1990] 2 Lloyd’s Rep. 144. 87. See the dictum of Hobhouse J. in The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. at pages 149–150. 88. [2001] 2 Lloyd’s Rep. 291. 89. On the issue of alter ego see The ‘‘Star Sea’’ [1995] 1 Lloyd’s Rep. 651. 90. On 1 July 1998, the ISM Code became mandatory under the International Convention for the Safety at Life at Sea (SOLAS) and from that date it applied to passenger ships, including passenger high-speed craft, oil tankers, chemical tankers, gas carriers, bulk carriers and cargo high-speed craft of 500 gross tonnage and above. For other cargo ships—including general cargo ships and container ships and mobile offshore drilling units of 500 gross tonnage and above, the Code came into force on 1 July 2002.

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or a further class of person defined as ‘‘any person for whose act, neglect or default the shipowner or salvor is responsible’’. Whose ‘‘personal’’ act will therefore defeat the right to limit? Presumably the personal act of any one of the different persons identified in Article 1 will prevent him from limiting his own liability in the event of a claim against him but will not necessarily defeat the right to limit of any other ‘‘persons’’ in the same group in the event of a claim against them. Therefore, if, for example, loss arose as a result of the personal act of a ship’s manager he would not be able to limit liability in the event of a successful claim against him whereas the shipowner might be able to limit since the act or omission would not necessarily be ‘‘personal’’ to him. However, bearing in mind the close relationship which frequently exists between the management and ownership structures the distinction may not be so clear cut since the alter ego of both ‘‘persons’’ might well be the same. Where the owner/master was alleged to have been asleep in his cabin in the minutes leading up to a collision, Gross J. was prepared to find (if the case had turned on that alone, which it did not) that there was no evidential basis for an allegation of ‘‘any personal act or omission’’ on the part of the owner.91 In view of the express provisions of Article 1(6) the right of a liability insurer to limit liability is presumably debarred not so much by ‘‘personal’’ misconduct on his part as by ‘‘personal’’ misconduct on the part of his assured. However interesting arguments could well arise in the case of P. & I. insurance where an owner, demise charterer and manager are frequently entered members in respect of the same ship. It may be that in such circumstances one assured is able to limit liability whereas another is not. Then the right of the P. & I. insurer to limit may depend on which member is sued.92 (c) ‘‘Loss’’ Article 2 of the 1976 Convention refers in various places to loss of life, personal injury, loss of or damage to property etc., whereas Article 4 speaks merely of ‘‘loss’’. Whilst this is not particularly happy drafting it is submitted that the word ‘‘loss’’ is plainly intended to encompass all the various types of loss or damage or injury or expense to which Article 2 refers.93 (d) (i) ‘‘Such loss’’ The provisions of the Warsaw Convention and the Hague-Visby Rules would seem to suggest that the carrier’s right to limit liability is lost if he intended to cause any damage or acted recklessly and with knowledge that any damage would probably result whether 91. The ‘‘Saint Jacques II’’ [2003]1 Lloyd’s Rep. 203, in which the owner/master (the first claimant) deliberately navigated the vessel in flagrant breach of the Collision Regulations in order to attain commercial advantage. Gross J. upheld the Admiralty Registrar’s decision to refuse summary judgment of the claimants’ claim to limit, finding that there was a real prospect of the defendants succeeding at trial in defeating the claimants’ right to limit. 92. For a discussion of the link between the liability insurer’s rights under Article 1(6) and his rights under the Third Parties (Rights Against Insurers) Act 1930, see pages 15–16. 93. Article IV, Rule 5(e), of the Hague-Visby Rules speaks merely of ‘‘damage’’ and it is submitted that such usage is far more restrictive than the use of the word ‘‘loss’’ in Article 4 of the 1976 Convention. See page 154. By way of contrast the mere use of the word ‘‘damage’’ in Article 13 of the Athens Convention can probably be construed in a far more liberal fashion, see pages 105–106.

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or not the intended or foreseeable damage was the same as the damage actually inflicted.94 This was the view adopted by Chapman J. at first instance in the case of Goldman v. Thai Airways International Ltd.95 when construing the provisions of the Warsaw Conven­ tion as amended by the Hague Protocol. He concluded that so long as a pilot envisaged that a glass of wine would be spilled as a result of his act or omission the carrier could not limit liability if the damage actually suffered by the plaintiff was personal injury. How­ ever, on appeal to the Court of Appeal,96 Eveleigh, O’Connor and Purchas L.JJ. all held that this was incorrect. Despite the use of the general word ‘‘damage’’ rather than the more specific words ‘‘the damage’’, the Court of Appeal held that: ‘‘ . . . the Article requires the plaintiff to prove the following (1) that the damage resulted from an act or omission (2) that it was done with intent to cause damage (3) that it was done when the doer was aware that the damage would probably result but he did so regardless of that probability (4) that the damage complained of is the kind of damage known to be the probable result.’’ (page 698)

However, Eveleigh L.J.’s leading judgment went on to say at page 700 that: ‘‘It is with rather less confidence that I have said that the damage anticipated must be of the same kind of damage as that suffered. I have reached my conclusion because Article 25 is designed to cover cases of damage both to the person, in other words, injury, and to property.’’97

More recently, the Court of Appeal in Nugent v. Michael Goss Aviation Ltd.98 reiterated in relation to Article 25 of the Warsaw Convention that knowledge that the type of damage caused would probably result is the correct test under the Warsaw Convention. It is submitted that similar considerations apply to the 1976 Convention. Not only does the Convention apply to both physical loss and personal injury (as does the Warsaw Convention) but more importantly, the use of the words ‘‘such loss’’ in Article 4 seem to underline the fact that the right to limit is barred only if the type of loss intended or envisaged by the ‘‘person liable’’ is the actual loss suffered by the claimant.99 Indeed, it is arguable that the use of the words ‘‘such loss’’ imports an added safeguard to the ‘‘person liable’’. Whereas under the fourth limb of the test set down by Eveleigh L.J. in Goldman v. Thai Airways, it must be proved that the damage complained of is the kind of damage known to be the probable result, the use of the words ‘‘such loss’’ suggests that in order to defeat the right to limit under the 1976 Convention it must be proved that the damage complained of is the same damage known to be the probable result. This is the approach taken by the English Courts in several subsequent cases. For example, in The ‘‘MSC Rosa M’’100 the cargo claimants seeking to challenge the demise charterers’ right to limit had to prove that, at the time of the acts and omissions alleged to have caused a capsize, the alter ego of the demise charterers actually knew that a capsize would probably result. They were unable to do so. Similarly, in The ‘‘Leerort’’,101 the Court of Appeal held 94. Contrast the Athens Convention, Hamburg Rules and the 1976 Convention all of which have the prefix ‘‘such’’. 95. [1983] 1 W.L.R. 1186. 96. [1983] 3 All E.R. 693. 97. Query, therefore, whether a similar construction would be afforded to the similar words in Article IV, Rule 5(e), of the Hague-Visby Rules, since those Rules do not cover injury to the person. See page 154. 98. [2000] 2 Lloyd’s Rep. 222. 99. Similar considerations apply to Article 13 of the Athens Convention. 100. MSC Mediterranean Shipping Co. S.A. v. Delumar BVBA and Others [2000] 2 Lloyd’s Rep. 399. 101. Schiffahrtgesellschaft MS ‘‘Merkur Sky’’ m.b.H. & Co. K.G. v. MS Leerort NTH Schiffahrts G.m.b.H. & Co. K.G. [2001] EWCA Civ 1055.

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that foresight was required of the very loss which occurred, not merely of the type of loss that occurred. Lord Phillips M.R. stated at page 295: ‘‘The words ‘such loss’ in that article [Article 4] clearly refer back to the loss that has actually resulted and which is the subject matter of the claim in which the right to limit is asserted. . . . It seems to me that where the loss in respect of which a claim is made resulted from a collision between ship A and ship B, the owners of ship A, or cargo in ship A, will only defeat the right to limit liability on the owner of ship B if they can prove that the owner of ship B intended that it should collide with ship A, or acted recklessly with the knowledge that it was likely to do so.’’

Reference is also made to The ‘‘Saint Jacques II’’,102 in which Gross J., found that foresight of the very loss which occurred was necessary for the shipowner’s right to limit to be defeated. (d) (ii) ‘‘Intent to cause such loss’’ It is clear from these words that in order to deprive the ‘‘person liable’’ of the right to limit, it must be proved that the ‘‘person liable’’ had the subjective intent (or mens rea) to cause the loss. It is not sufficient to prove that a reasonably competent person could not have failed to conclude that his act or omission would cause the loss. It must be shown that the ‘‘person liable’’ himself actively intended the loss. (d) (iii) ‘‘Or recklessly and with knowledge that such loss would probably result’’ In The ‘‘MSC Rosa M’’, David Steel J. stated: ‘‘ . . . absent, as in the present case, any allegation of intent, the person challenging the right to limit must establish both reckless conduct and knowledge that the relevant loss would probably result.’’103

The meaning of the word ‘‘recklessly’’ or ‘‘recklessness’’ has been construed by the courts in the United Kingdom in a number of cases such as R. v. Caldwell104 and R. v. Lawrence (Stephen).105 It connotes either carelessness or utter heedlessness of consequence with the result that the perpetrator is deemed to have considered neither the probability or even the possibility of a likely result. Notably, the House of Lords has now departed from Caldwell, holding in R v. G, (in the context of the Criminal Damage Act 1971, section 1) that there is also a subjective element to the test whereby a defendant would not be regarded as culpable if due to his age or other personal characteristics he genuinely did not perceive the risks involved in his actions.106 It should also be noted that, in Goldman v. Thai Airways107 Eveleigh L.J. cautioned against the dangers of proceeding on the basis of constructions drawn from English statutes when construing an international convention drawn up in a number of lan­ guages. 102. Margolle and Another v. Delta Maritime Co. Ltd. And Others (The ‘‘Saint Jacques II and ‘‘Gudermes’’) [2003] 1 Lloyd’s Rep. 203. 103. MSC Mediterranean Shipping Co. S.A. v. Delumar BVBA and Others [2000] 2 Lloyd’s Rep. 399 at page 401. 104. [1982] A.C. at 354. 105. [1982] A.C. at 520. 106. In R. v. G and another [2003] 3 W.L.R. 1060. 107. [1983] 3 All E.R. 693.

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The Court of Appeal in the Goldman case emphasised that the word ‘‘recklessly’’ had to be construed in Article 25 of the Warsaw Convention in conjunction with the words ‘‘and with knowledge that damage would probably result’’. Eveleigh L.J. stated at page 700 that: ‘‘An act may be reckless when it involves a risk, even though it cannot be said that the danger envisaged is a probable consequence. It is enough that it is a possible consequence, although there comes a point when the risk is so remote that it would not be considered reckless to take it. We look for an element of recklessness which is perhaps more clearly indicated in the French term ‘temer­ airement’. Article 25 however, refers not to possibility, but to the probability of resulting damage. Thus something more than a possibility is required. The word ‘probable’ is a common enough word. I understand that to mean something is likely to happen. I think that is what is meant in Article 25. In other words, one anticipates damage from the act or omission.’’

This was revisited in Nugent and Killick v. Michael Goss Aviation Ltd.108 Auld L.J. described recklessness at page 227 as involving: ‘‘ . . . an obvious risk of damage and failure to give any thought to the possibility of it or recognition of the risk and going on to take it . . . ’’

and at page 229 he made clear that the ‘‘knowledge’’ required is actual knowledge: ‘‘The key, as Lord Justice Neill said in Gurtner,109 is the state of mind of the pilot at the time of the material conduct. In my judgment, the additional ingredient is actual knowledge, in the sense of appreciation or awareness at the time of the conduct in question, that it will probably result in the type of damage caused. Nothing less will do.’’

In The ‘‘Saint Jacques II’’ recklessness was admitted and the issue before Gross J. was whether the owner/master had the requisite knowledge that a collision would probably result. Gross J., having considered Nugent and The ‘‘Leerort’’, and grappled with the claimant’s argument that ‘‘as the first claimant had ‘‘got away with’’ such navigation in the past, there was, as a matter of logic, no or no real prospect of the inference at trial of the actual probability of a collision’’,110 was satisfied that ‘‘it simply cannot be assumed of a man sufficiently reckless to navigate in the manner described that he could not have done so with knowledge that a collision would probably result’’. He found that the defendants had ‘‘a real prospect of demonstrating at trial that what was involved here was the taking of a ‘‘stupid risk’’ or a ‘‘reckless manoeuvre . . . by a non-suicidal’’ mariner sufficient to bring the matter within art. 4’’. The question of the extent to which inferences can be drawn as to state of knowledge was considered in both Nugent and R v. G. In Nugent, the Court of Appeal felt that the more obvious the risk, the more appropriate it would be to infer recklessness and knowl­ edge. In R v. G, Lord Bingham emphasised that such inferences as to state of mind as appear proper in the circumstances could be drawn from all the evidence. Lord Steyn went further, stating that someone who closes his mind to a risk must in fact appreciate that there is a risk. In The ‘‘Pembroke’’,111 the New Zealand court held that a carrier was not entitled to limit liability under the very similar wording of Article IV, Rule 5(e) of the Hague-Visby 108. [2000] 2 Lloyd’s Rep. 222. 109. Gurtner v. Beaton [1993] 2 Lloyd’s Rep. 369. 110. Margolle and Another v. Delta Maritime Co. Ltd. and Others (The ‘‘Saint Jacques II and ‘‘Gudermes’’) [2003] 1 Lloyd’s Rep. 203 at page 210. 111. [1995] 2 Lloyd’s Rep. 290. However, see pages 153–154 for a general commentary on the correctness of the decision.

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Rules in circumstances in which goods were carried on deck without the consent of the goods owner. II. Onus of proof under Article 4 Under Article 1(6) of the 1957 Convention the onus of proving the facts necessary to defeat the right to limit of the person seeking to limit liability was to be determined in accordance with the law of the court considering the matter (lex fori). In the case of the U.K. the onus of proof was on the person who sought to limit his liability.112 The ‘‘Working Group on Basic Issues relating to the Limitation System’’ submitted a report to the 1976 Limitation Conference suggesting that a provision should be included in Article 4 making it clear that the determination of who should have the burden of proof should continue to be made in accordance with the lex fori (see page 134 of the Official Records). However, the suggestion does not seem to have been accepted and there is no provision in the 1976 Convention decreeing how the onus of proof is to be determined. Nevertheless, Article 2(1) of the 1976 Convention stipulates that: ‘‘Subject to Articles 3 and 4 the following claims . . . shall be subject to limitation of liability’’. These words reflect the basic philosophy underlying the new system to the effect that the right to limit applies automatically unless evidence is produced proving that the party claiming limita­ tion is guilty of conduct barring limitation within the terms of Article 4. Additionally the wording of Article 4 itself makes it plain that the right to limit exists unless the person challenging the right to limit proves conduct barring limitation. It is clear from the decision of the Court of Appeal in Goldman v. Thai Airways113 that the onus of proving the facts necessary to debar the carrier’s right to limit liability in the case of the Warsaw Convention also lies on the claimant. Similar views have been expressed in respect of the relevant provisions of the Hague-Visby Rules114 and the Athens Convention.115 A consistent approach has been adopted in the case of the 1976 Convention and the onus is thus placed upon the person challenging the right to limit.116 In commenting on the overall effect of Article 4, Mr. Justice Clarke, in The ‘‘Capitan San Luis’’117 said: ‘‘The Shipowner merely has to establish that the claim falls within Article 2 of the Convention. Once he establishes that, he is entitled to a decree limiting his liability, unless the claimant proves the facts required by Article 4.’’

In The Bowbelle, Sheen J. observed that the Convention conferred on the shipowner an ‘‘almost indisputable right to limit’’. In The ‘‘MSC Rosa M’’, David Steel J. held that, absent any allegation of intent, the person challenging the right to limit must establish both reckless conduct and knowledge that the relevant loss would probably result, drawing 112. The ‘‘Empire Jamaica’’ [1955] 2 Lloyd’s Rep. 109 (C.A.); The ‘‘Norman’’ [1960] 1 Lloyd’s Rep. 1 (H.L.). 113. [1983] 3 All E.R. 693. 114. See Diamond [1978] LMCLQ at 245. 115. The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. 144. 116. See the comments of Hobhouse J. in The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. at pages 149–150. In The ‘‘Bowbelle’’ [1990] 3 All E.R. 476 Sheen J. held that the court is not obliged to investigate whether or not the person liable has been guilty of conduct barring limitation when that person commences a limitation action. 117. [1994] 1 All E.R. 1016.

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upon the Warsaw Convention authorities.118 In The ‘‘Leerort’’119 Lord Phillips stated, at page 295, that ‘‘when a claim is made for damage resulting from a collision it is virtually axiomatic that the defendant shipowner will be entitled to limit his liability’’. Although the burden is not insurmountable, ‘‘it is likely that only truly exceptional cases will give rise to any real prospect of defeating an owner’s right to limit’’.120

III. The overall effect of the changes The effect therefore of the 1976 Convention is to transform the law in relation to the rights of shipowners (and others) to limit liability. Under the 1957 Convention, a successful plaintiff was entitled to full reimbursement of his claim unless the party limiting was able to prove his right to limit liability by satisfying the court that there was no ‘‘fault or privity’’ on his part. As a result of the 1976 Convention, the party limiting is entitled to limit his liability unless the person challenging the right to limit proves that the ‘‘person liable’’ is guilty of ‘‘conduct barring limitation’’ under Article 4.121

118. Goldman v. Thai Airways Ltd., [1983] 1 W.L.R. 1186; Nugent v. Goss Aviation [2000] 2 Lloyd’s Rep. 222. 119. [2001] 2 Lloyd’s Rep. 291. 120. The ‘‘Saint Jacques II’’ [2003] Lloyd’s Rep. 203], in which Gross J. dismissed the claimants’ appeal against the Admiralty Registrar’s refusal to grant summary judgment under CPR Part 24.2 in respect of their claim for a limitation decree. 121. The ‘‘Heidberg’’, Tribunal de Commerce de Bordeaux, 23 September 1993, DMF 1993 731; Cour d’Appel de Bordeaux, No. 93/06135 31 May 2005 . In this case the Tribunal de Commerce de Bordeaux was presented with an extraordinary set of facts. The Heidberg left her anchorage to enter the port of Pauillac with a river pilot on board. The pilot and the master were both on the bridge. At the time of leaving the anchorage the Heidberg was still in the process of ballasting. When entering the river the master left the bridge in sole charge of the pilot and went to the engine room to close the valves on the ballast pump. He was absent for a period of six minutes. During his absence the pilot realised that the vessel was heading for the Shell jetty but was unable to alter the heading of the vessel despite various helm movements. He summoned the master to return to the bridge. By the time the master returned and had put the engines full astern it was too late to avoid a collision with the jetty. It was found, as a matter of fact, that had the engines been put astern when the danger of collision was first identified the accident could have been avoided. The only other officer on board was asleep, having worked excess hours due to a shortage of qualified officers. It was found that the principal cause of the accident was the insufficient number of crew. It was also found that the owners knew that they were taking a risk by employing insufficient crew and that the probable (if not the certain) outcome was an accident of the sort which occurred. The court examined the terms of Article 4 of the 1976 Convention and concluded that it did not create an unconditional right to limit liability but merely granted a privilege of which the owner could take advantage only if he took proper steps to comply with the law and common maritime usage in order to ensure that the vessel was properly and safely operated. The court concluded that the shipowner’s behaviour prevented him from exercising the privilege of limitation. In reaching this conclusion the court stated that public opinion increasingly required the senior executives of companies whose employees caused accidents to be held responsible for their actions—this particularly in the field of employment and transportation. For all these reasons it was judged appropriate to deny the owners of the Heidberg the right to limit liability in accordance with the 1976 Convention. The approach adopted by the Court was debated in The ‘‘Happy Fellow’’ [1997] 2 Lloyd’s Rep. 13. This case was held ‘‘in suspension’’ until April 2005 before the Cour d’Appel de Bordeaux pending a decision on certain criminal charges brought against the owner in relation to the same incident. In May 2005 the Cour d’Appel upheld the decision of the Tribunal de Commerce, concluding that, while the master was certainly at fault, this was a result of his lack of confidence in his fellow seamen and more generally a lack of cohesion among the two officers and their fellow seaman, a state of affairs which was known, or should have been known, to owners. Owners’ obligation is to be satisfied that, as between master and crew, there is sufficient confidence and cohesion to enable them to face unexpected, but not ‘‘unexpectable’’ events.

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A person seeking to limit liability who is guilty of ‘‘conduct barring limitation’’ loses the benefits of limitation. He may also lose the benefits of his liability insurance cover. Section 55(2)(a) of the Marine Insurance Act 1906 provides that: ‘‘The insurer is not liable for any loss attributable to the wilful misconduct of the assured’’. (It is generally accepted that in this context the word ‘‘wilful’’ means ‘‘reckless’’.) It would seem that the combined effect of Article 4 of the 1976 Convention and the Marine Insurance Act122 is that where there has been wilful intent or recklessness the right to limit will be lost along with the right to make any recovery from liability insurers. IV. Vestiges of section 502 of the MSA 1894 This section provided in effect that the owner of a British ship was not to be liable for any loss or damage to property caused by a fire on board ship or to valuables by reason of theft where the nature and value of the valuables was not declared to the owner at the time of shipment, in each case provided that the loss or damage did not result from his actual fault or privity. Whilst section 502 of the 1894 Act has been repealed by Part 1 of Schedule 7 to the 1979 Act, the wording of section 502 is substantially restated in section 186 of the 1995 MSA. However by virtue of section 186(3) the conduct which was formerly necessary to defeat the shipowner’s right to deny liability (namely fault and privity) is replaced by the conduct barring limitation as set out in Article 4 of the 1976 Convention. Therefore, in the case of loss or damage to property (not death or personal injury) caused by fire on board or theft of valuables the right of an owner of a British ship to escape liability totally seem to have been further improved.123 However, this provision does not enable such an owner to escape liability which he incurs under the Athens Convention as incorporated into the municipal legislation of the United Kingdom.124 Article 5: Counterclaims Where a person entitled to limitation of liability under the rules of this Convention has a claim against the claimant arising out of the same occurrence, their respective claims shall be set off against each other and the provisions of this Convention shall only apply to the balance, if any.

This Article is very similar in terms and effect to the equivalent provision of the 1957 Convention (Article 1(5)). Thus it remains the case that claims and counterclaims arising out of the same occurrence must be set off against each other and limitation is to be applied only to the balance, if any, payable. The only change is in the identity of the persons to whom the provision applies. The phrase ‘‘ . . . owner of a ship . . . ’’ in Article 1(5) of the 1957 Convention is replaced in

122. ‘‘Conduct barring limitation’’ may also enable insurers to deny liability under section 39(5) of the Marine Insurance Act 1906. (See The ‘‘Eurysthenes’’ [1976] 2 Lloyd’s Rep. 171 and pages 31–33, above.) 123. Article VIII of the Hague and Hague-Visby Rules states that nothing in the Rules ‘‘affects the rights and obligations of the carrier under any statute for the time being in force relating to the limitation of the liability of owners of sea-going ships’’. Section 6(1) of COGSA 1924 (giving effect to the Hague Rules and now repealed) and section 6(4) of COGSA 1971 (giving effect to the Hague-Visby Rules) provide that this right of the British shipowner is to be treated as a ‘‘provision relating to the limitation of liability’’. 124. Para. 13 of Part II of Sched. 6 to the 1995 MSA.

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Article 5 of the 1976 Convention by the phrase ‘‘ . . . person entitled to limitation of liability under the rules of this Convention . . . ’’. Persons entitled to limit liability by Article 1 of the 1976 Convention now include salvors as well as charterers, managers and operators of ships. It is to be assumed that one of the aims of this extension is to deal with the situation where a shipowner has a counterclaim against a salvor for negligence in the performance of salvage services. If Article 5 applied it would have the effect of enabling the salvor to set off his claim for remuneration for salvage services against the shipowners’ counterclaim for negligence before applying his right to limit liability to any balance due to the shipowner. It was argued in the second edition of this book that if this was the intention it may not have been achieved by the wording adopted in Article 5. It was pointed out that Article 5 refers to ‘‘a claim . . . arising out of the same occurrence’’ and that this would cover a claim and counterclaim arising, for example, out of a collision. However, could it be said that a salvor’s claim for salvage remuneration arises out of ‘‘the same occurrence’’ as that which gives rise to the shipowner’s claim for negligence? It was argued that the ship­ owner’s claim arises out of the salvor’s negligent act but that the salvor’s claim for remuneration arises out of a quite separate salvage contract or engagement with the result that Article 5 does not apply where a salvor has been negligent. This line of argument has been criticised by a number of writers and arbitrators and was described by one writer as ‘‘unattractively refined and unconvincing’’. The authors accept that a court would strive to apply the terms of Article 5 to circumstances in which a claim for salvage remuneration is met by a claim for damages for negligence on the part of the salvor. That said, there remains a further obstacle. The operation of Article 5 is by implication restricted to cases in which there are two claims, both of which are subject to limitation under Article 2. However, a salvor’s claim for remuneration is not subject to limitation (Articles 2 and 3(a)) and Article 5 should not, it is argued, be applied. Another argument is to say that Article 5 applies ‘‘the provisions of this Convention’’ to the balance of two claims, but it is made clear by Article 3 that ‘‘the rules of this Convention shall not apply to . . . claims for salvage’’. It should follow that Article 5 has no application to a claim for salvage. The problem of the negligent salvor, his right to limit liability and to set off his claim for salvage remuneration against counterclaims for negligence arose in acute form in the United Kingdom in the case of The ‘‘Tojo Maru’’.125 In that case the arbitrator (who found, erroneously, that the salvors were entitled to limit their liability) held that limitation was to be applied after set-off. In contrast, Willmer L.J. (who found that there was no right of limitation) expressed the opinion that the arbitrator was wrong. The Court of Appeal held that if limitation were available, which it was not, then limitation would have to be applied before set-off. The House of Lords did not find it necessary to express an opinion on the issue but Lord Reid commented that he was not convinced that the courts below had reached a correct conclusion on this matter. Article 1(5) of the 1957 Convention was not considered at any stage in The ‘‘Tojo Maru’’ because that particular Article was never incorporated in the 1958 Act. Even if it had been, it would not, it is submitted, have affected the outcome of that case because, for reasons explained above, the claim and counterclaim did not arise out of ‘‘the same occurrence’’ or, alternatively, Article 5 does not apply unless both the claim and the 125. [1971] 1 Lloyd’s Rep. 341.

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counterclaim are subject to the right to limit. Should another ‘‘Tojo Maru’’ case arise in the United Kingdom the courts may well find that Article 5 of the 1976 Convention does not solve that particular problem and will simply continue to apply the reasoning of Willmer L.J. at first instance in The ‘‘Tojo Maru’’126 with the result that the salvor’s right to limit will be applied before the balance is struck. CHAPTER II—THE LIMITS OF LIABILITY UNDER LLMC 1976 AND THE 1 9 9 6 P R O TO C O L Explanatory Note

The 1996 Protocol to the Limitation Convention (which came into force internationally and in the UK on 13 May 2004) substantially increases the limits of liability for all tonnages of vessel. It should be borne in mind that the 1996 Protocol was being considered at the same Diplomatic Conference as the Hazardous and Noxious Substances Convention (HNSC). The capacity for small ships to carry dangerous chemicals capable of doing dispropor­ tionate damage has long been recognised and it was therefore decided that the minimum tonnage for limitation purposes in relation to HNS claims should be 2,000 tons. Thus, for the purposes of an HNS claim, whether the vessel is 201 tons (vessels below 200 tons are excluded from the Convention) or 2,000 tons, the limitation fund will be the same. In the interests of uniformity it was decided that the 2,000 tons minimum tonnage for the purposes of HNS claims should be carried over into the limitation regime for general maritime claims. The minimum tonnage for limitation purposes under the 1976 Convention is 500 tons127 and it follows that operators of small ships up to 2,000 tons are now, under the 1996 Protocol, exposed to much higher levels of liability than they were under the 1976 Convention. It can be calculated that, applying the new minimum tonnage and the increased limits under the 1996 Protocol, the owner of a 500 ton vessel will see his total liability for loss of life, personal injury and property claims increase from approximately £500,000 to £3 million. This represents a six-fold increase. Above the 2,000 tons minimum tonnage both the loss of life/personal injury and the property damage funds increase on a per ton incremental basis. At limitation tonnages above the 2,000 ton minimum it will be found that, on average, limitation amounts under the 1996 Protocol will increase by a factor of 2.3. Figures produced at the Diplomatic Conference based on the basket of currencies used in the valuation of the SDR revealed that it would be necessary to apply a factor of three in order to restore the purchasing power of the limitation amounts fixed in the 1976 Convention. On the face of it, therefore, the increases are less than were necessary to restore the value of the limitation funds. However, at the Diplomatic Conference, it was vigorously argued on behalf of shipowners and insurance interests that, in deciding on the amount of the increase, some account should be taken of the fact that a separate free-standing HNS fund was being established which would take HNS-type claims out of the general limitation regime. This, so the argument ran, would reduce the call on the general limitation fund and it would therefore not be appropriate to adjust the 1976 Convention figures to the extent required to restore the value of the limitation funds. The increases agreed, at least in relation to larger vessels, suggest that this line of argument was accepted. 126. [1970] P. 21 at 48–49. 127. But see page 48 for the position in the United Kingdom prior to 13 May 2004.

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Article 3 of the Protocol sets out replacement wording for paragraph 1 of Article 6 of the 1976 Convention. Article 4 contains the text which replaces paragraph 1 of Article 7. Article 5 contains the text which replaces paragraph 2 of Article 8. There is now set out the text of the original Articles 6, 7 and 8 followed by the new Articles in full. Article 6: The general limits 1. The limits of liability for claims other than those mentioned in Article 7, arising on any distinct occasion, shall be calculated as follows: (a) in respect of claims for loss of life or personal injury, (i) 333,000 Units of Account for a ship with a tonnage not exceeding 500 tons, (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): for each ton from 501 to 3,000 tons, 500 Units of Account; for each ton from 3,001 to 30,000 tons, 333 Units of Account; for each ton from 30,001 to 70,000 tons, 250 Units of Account; and for each ton in excess of 70,000 tons, 167 Units of Account. (b) In respect of any other claims (i) 167,000 Units of Account for a ship with a tonnage not exceeding 500 tons, (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): for each ton from 501 to 30,000 tons, 167 Units of Account; for each ton from 30,001 to 70,000 tons, 125 Units of Account; and for each ton in excess of 70,000 tons, 83 Units of Account. 2. Where the amount calculated in accordance with paragraph 1(a) is insufficient to pay the claims mentioned therein in full, the amount calculated in accordance with paragraph 1(b) shall be available for payment of the unpaid balance of claims under paragraph 1(a) and such unpaid balance shall rank rateably with claims mentioned under paragraph 1(b). 3. However, without prejudice to the right of claims for loss of life or personal injury according to paragraph 2, a State Party may provide in its national law that claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have such priority over other claims under paragraph 1(b) as is provided by that law. 4. The limits of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which he is rendering salvage services, shall be calculated according to a tonnage of 1,500 tons. 5. For the purpose of this Convention the ship’s tonnage shall be the gross tonnage calculated in accordance with the tonnage measurement rules contained in Annex I of the International Convention on Tonnage Measurements of Ships, 1969.

Article 7: The limit for passenger claims 1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 46,666 Units of Account multiplied by the number of passengers which the ship is author­ ised to carry according to the ship’s certificate, but not exceeding 25 million Units of Account. 2. For the purpose of this Article ‘‘claims for loss of life or personal injury to passengers of a ship’’ shall mean any such claims brought by or on behalf of any person carried in that ship: (a) under a contract of passenger carriage, or

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(b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods. Article 8: Unit of Account 1. The Unit of Account referred to in Articles 6 and 7 is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Articles 6 and 7 shall be converted into the national currency of the State in which limitation is sought, according to the value of that currency at the date the limitation fund shall have been constituted, payment is made, or security is given which under the law of that State is equivalent to such payment. The value of a national currency in terms of the Special Drawing Right, of a State Party which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect at the date in question for its operations and transactions. The value of a national currency in terms of the Special Drawing Right, of a State Party which is not a member of the International Monetary Fund, shall be calculated in a manner determined by that State Party. 2. Nevertheless, those States which are not members of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 may, at the time of signature without reservation as to ratification, acceptance or approval or at the time of ratification, acceptance, approval or accession or at any time thereafter, declare that the limits of liability provided for in this Convention to be applied in their territories shall be fixed as follows: (a) in respect of Article 6, paragraph 1(a) at an amount of: (i) 5 million monetary units for a ship with a tonnage not exceeding 500 tons; (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): for each ton from 501 to 3,000 tons, 7,500 monetary units; for each ton from 3,001 to 30,000 tons, 5,000 monetary units; for each ton from 30,001 to 70,000 tons, 3,750 monetary units; and for each ton in excess of 70,000 tons, 2,500 monetary units; and (b) in respect of Article 6, paragraph 1(b), at an amount of: (i) 2.5 million monetary units for a ship with a tonnage not exceeding 500 tons; (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): for each ton from 501 to 30,000 tons, 2,500 monetary units; for each ton from 30,001 to 70,000 tons, 1,850 monetary units; and for each ton in excess of 70,000 tons, 1,250 monetary units; and (c) in respect of Article 7, paragraph 1, at an amount of 700,000 monetary units multiplied by the number of passengers which the ship is authorised to carry according to its certificate, but not exceeding 375 million monetary units. Paragraphs 2 and 3 of Article 6 apply correspondingly to sub-paragraphs (a) and (b) of this paragraph. 3. The monetary unit referred to in paragraph 2 corresponds to sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. The conversion of the amounts referred to in paragraph 2 into the national currency shall be made according to the law of the State concerned. 4. The calculation mentioned in the last sentence of paragraph 1 and the conversion mentioned in paragraph 3 shall be made in such a manner as to express in the national currency of the State Party as far as possible the same real value for the amounts in Articles 6 and 7 as is expressed there in units of account. State Parties shall communicate to the depositary the manner of calculation pursuant to paragraph 1, or the result of the conversion in paragraph 3, as the case may be, at the time of the signature without reservation as to ratification, acceptance or approval, or when depositing an instrument referred to in Article 16 and whenever there is a change in either.

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Article 6 as replaced by the 1996 Protocol 1. The limits of liability for claims other than those mentioned in article 7, arising on any distinct occasion, shall be calculated as follows: (a) in respect of claims for loss of life or personal injury, (i) 2 million Units of Account for a ship with a tonnage not exceeding 2,000 tons, (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): for each ton from 2,001 to 30,000 tons, 800 Units of Account; for each ton from 30,001 to 70,000 tons, 600 Units of Account, and for each ton in excess of 70,000 tons, 400 Units of Account, (b) in respect of any other claims, (i) 1 million Units of Account for a ship with a tonnage not exceeding 2,000 tons, (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): for each ton from 2,001 to 30,000 tons, 400 Units of Account; for each ton from 30,001 to 70,000 tons, 300 Units of Account; and for each ton in excess of 70,000 tons, 200 Units of Account. 2. Where the amount calculated in accordance with paragraph 1(a) is insufficient to pay the claims mentioned therein in full, the amount calculated in accordance with paragraph 1(b) shall be available for payment of the unpaid balance of claims under paragraph 1(a) and such unpaid balance shall rank rateably with claims mentioned under paragraph 1(b). 3. However, without prejudice to the right of claims for loss of life or personal injury according to paragraph 2, a State Party may provide in its national law that claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have such priority over other claims under paragraph 1(b) as is provided by that law. 4. The limits of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which he is rendering salvage services, shall be calculated according to a tonnage of 1,500 tons. 5. For the purpose of this Convention the ship’s tonnage shall be the gross tonnage calculated in accordance with the tonnage measurement rules contained in Annex I of the International Convention on Tonnage Measurements of Ships, 1969. Article 7 as replaced by the 1996 Protocol 1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 175,000 Units of Account multiplied by the number of passengers which the ship is author­ ised to carry according to the ship’s certificate. 2. For the purpose of this Article ‘‘claims for loss of life or personal injury to passengers of a ship’’ shall mean any such claims brought by or on behalf of any person carried in that ship: (a) under a contract of passenger carriage, or (b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods. Article 8 as replaced by the 1996 Protocol 1. The Unit of Account referred to in Articles 6 and 7 is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Articles 6 and 7 shall be converted into the national currency of the State in which limitation is sought, according to the value of that currency at the date the limitation fund shall have been

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constituted, payment is made, or security is given which under the law of that State is equivalent to such payment. The value of a national currency in terms of the Special Drawing Right, of a State Party which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect at the date in question for its operations and transactions. The value of a national currency in terms of the Special Drawing Right, of a State Party which is not a member of the International Monetary Fund, shall be calculated in a manner determined by that State Party. 2. Nevertheless, those States which are not members of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 may, at the time of signature without reservation as to ratification, acceptance or approval or at the time of ratification, acceptance, approval or accession or at any time thereafter, declare that the limits of liability provided for in this Convention to be applied in their territories shall be fixed as follows: (a) in respect of Article 6, paragraph 1(a) at an amount of: (i) 30 million monetary units for a ship with a tonnage not exceeding 2,000 tons; (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): for each ton from 2,001 to 30,000 tons, 12,000 monetary units; for each ton from 30,001 to 70,000 tons, 9,000 monetary units; and for each ton in excess of 70,000 tons, 6,000 monetary units; and (b) in respect of Article 6, paragraph 1(b), at an amount of: (i) 15 million monetary units for a ship with a tonnage not exceeding 2,000 tons; (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): for each ton from 2,001 to 30,000 tons, 6,000 monetary units; for each ton from 30,001 to 70,000 tons, 4,500 monetary units; and for each ton in excess of 70,000 tons, 3,000 monetary units; and (c) in respect of Article 7, paragraph 1, at an amount of 2,625,000 monetary units multiplied by the number of passengers which the ship is authorised to carry according to its certificate. Paragraphs 2 and 3 of Article 6 apply correspondingly to sub-paragraphs (a) and (b) of this paragraph. 3. The monetary unit referred to in paragraph 2 corresponds to sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. The conversion of the amounts referred to in paragraph 2 into the national currency shall be made according to the law of the State concerned. 4. The calculation mentioned in the last sentence of paragraph 1 and the conversion mentioned in paragraph 3 shall be made in such a manner as to express in the national currency of the State Party as far as possible the same real value for the amounts in Articles 6 and 7 as is expressed there in units of account. State Parties shall communicate to the depositary the manner of calculation pursuant to paragraph 1, or the result of the conversion in paragraph 3, as the case may be, at the time of the signature without reservation as to ratification, acceptance or approval, or when depositing an instrument referred to in Article 16 and whenever there is a change in either.

The 1976 Convention follows the existing law in that it treats: (a) loss of life or personal injury claims; and (b) any other claims;

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on a separate but interlinked basis. It also maintains the system whereby the quantum of the fund is calculated by reference to the vessel’s tonnage. However, it differs from the old regime in many important ways. Article 6: The general limits A RT I C L E 6(1) Whereas the 1957 Convention established a flat rate for each ton of the vessel’s tonnage, there is under the 1976 Convention a sliding scale with various layers of limitation depending on the vessel’s tonnage. (See pages 56–57, below.) Under the 1976 Convention small ships pay comparatively more per ton than large ships. The Convention itself provides for a minimum fixed level of limitation for all ships up to 500 tons. However, by virtue of paragraph 5 of Schedule 7, Part II, and section 185 of the 1995 MSA, there is a lower minimum fixed level of limitation in the United Kingdom for vessels of less than 300 tons. Paragraph 5 of Schedule 7 Part II to the Merchant Shipping Act 1995 provides: ‘‘(1) In the application of article 6 to a ship with a tonnage less than 300 tons that article shall have effect as if— (a) paragraph 1(a)(i) referred to 166,667 Units of Account; and (b) paragraph 1(b)(i) referred to 83,333 Units of Account.’’

This has been preserved by The Merchant Shipping (Convention on Limitation of Liabil­ ity for Maritime Claims)(Amendment) Order 1998128 which enacted in the United King­ dom the amendments to the 1976 Convention made by the 1996 Protocol. Article 7(d) of the Statutory Instrument does, however, raise the limits significantly for a ship with a tonnage of less than 300 tons. Article 7(d) provides: ‘‘(d) in paragraph 5, in sub-paragraph (1)(a) for ‘166,667’ there shall be substituted ‘1,000,000’ and in sub-paragraph (1)(b) for ‘83,333’’ there shall be substituted ‘‘500,000’;’’

Generally, on the figures, it should be noted that with the increase in the minimum tonnage occasioned by the 1996 Protocol the opportunity has been taken to remove one step in the incremental per ton increase. The tonnage steps are now: 0 tons—2,000 tons 2,001 tons—30,000 tons 30,001 tons—70,000 tons in excess of 70,000 tons. Four steps replace five steps. Under the 1976 Convention the incremental per ton increase for loss of life and personal injury claims was always based on four tonnage steps rather than five. It follows that under the new regime the per ton incremental increases are calculated on the basis of the same tonnage steps for loss of life/personal injury claims on the one hand and property damage claims on the other. 128. S.I. 1998/1258, in force from 13 May 2004.

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Whereas the 1957 Convention expressed the limitation amounts in Poincare francs (which units were then converted into the national currency of the country concerned) the 1976 Convention provides in Article 8 that the unit of account is to be the Special Drawing Right (SDR), the value of which is to be determined in terms of national currencies at the date the limitation fund is constituted, payment is made or security is given (whichever is relevant). Paragraph 7 of Schedule 7, Part II, and section 185 of the 1995 MSA provide, so far as the United Kingdom is concerned, that the sterling value of the SDR is to be the value fixed by the International Monetary Fund (IMF). The introduction of the SDR was not an innovation insofar as the law in the United Kingdom is concerned, since under the existing law, the value of the Poincare franc was already expressed for limitation purposes in terms of SDR which were in turn converted into sterling (section 1 of MSA 1981). The changing value of the SDR in relation to most major currencies can be monitored daily on the currency page of the Financial Times. The rate published in the F.T. is that prevailing at close of business in Washington on the working day preceding publica­ tion. In the case of states which are not members of the IMF specific provisions are made in Article 8129 allowing for the replacement of the SDR as the unit of account for limitation purposes by a monetary unit corresponding to 65.5 milligrammes of gold of millesimal fineness 900 (i.e. 1 Poincare franc) which unit is in turn to be converted into the national currency of the state in question. (The relationship between the SDR and the Poincare franc is 1 SDR: 15 Poincare francs as will be seen from a comparison between the limitation figures appearing in Articles 6 and 8.)

A RT I C L E 6(2) Article 3 of the 1957 Convention (section 503(1)(d)(i) and (ii) of the 1894 MSA (as amended)) provided different limits (a) for loss of life and personal injury claims either alone or together with property claims (francs 3,100) and (b) for property claims alone (francs 1,000). It is specifically provided that where the occurrence gives rise to both personal and property claims the fund is limited to the aggregate figure of francs 3,100 per ton of which francs 2,100 is reserved exclusively for personal claims. Where the fund reserved exclusively for personal claims is insufficient to satisfy all the claims the unpaid balance of such claims ranks rateably with the property claims against the property fund. Under Article 6 of the 1976 Convention the problem is approached somewhat differ­ ently. Separate limitation funds are provided for the two categories of claim. However, where the event gives rise to both death and/or personal injury claims and property claims and the fund calculated under Article 6(1)(a) for loss of life or personal injury claims is not sufficient to satisfy such claims in full then the fund calculated under Article 6(1)(b) (‘‘other claims’’) is available to meet the unsatisfied balance of the loss of life or personal

129. Article 8(1) (apart from the first sentence thereof) (2) (3) and (4) are not included in Schedule 7, Part I, to the 1995 MSA as provisions of the 1976 Convention which ‘‘have the force of law’’ in the United Kingdom by section 185(1) of that Act.

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injury claims. However, in so doing the balance of the loss of life or personal injury claims rank rateably with the ‘‘other claims’’ (Article 6(2)). It is apparent from the travaux preparatoire130 that the intention of the Convention is to allow the balance of death or personal injury claims (to the extent that they exceed the fund available in Article 6(1)(a)) to be levied against the fund for ‘‘other claims’’ in Article 6(1)(b) whether or not the occurrence has given rise to both death or personal injury claims and other claims. Where the occurrence did not give rise to ‘‘other claims’’ the reference to death or personal injury claims ranking rateably with ‘‘other claims’’ can have no application. A RT I C L E 6(3) It is to be observed in passing that Article 6(3) of the 1976 Convention is not incorporated into the law of the United Kingdom by the 1995 MSA (see Schedule 7, Part I). This Article preserves the right of State Parties to legislate to give priority in respect of claims for damage to harbour works etc. over ‘‘other claims’’ (Article 6(1)(b)). A State Party may not, however, grant priority to such claims over loss of life and personal injury claims (Article 6(1)(a)). The assumption must be that the United Kingdom legislature has no intention of taking advantage of this saving (but see Article 2(1)(d)131). A RT I C L E 6(4) The 1976 Convention provides by Article 1(1) that salvors may limit their liability and Article 6(4) provides that a salvor who is ‘‘not operating from any ship’’ or who is ‘‘operating solely on the ship to or in respect of which, he is rendering salvage services’’ shall be entitled to calculate the limit of his liability by reference to a deemed tonnage of 1,500 tons. This deemed tonnage has not been increased by the 1996 Protocol to the Limitation Convention despite the fact that under the Protocol the minimum tonnage for limitation purposes has been increased from 500 to 2,000 tons. It is, perhaps, curious that, with the new minimum tonnage under the 1996 Protocol, a salvor operating from a small tug of less than 2,000 tons is now exposed to a higher level of liability than a salvor not operating from a salvage vessel who will still have the advantage of the deemed tonnage of 1,500 tons. By the time this anomaly had been identified at the Diplomatic Conference it was too late to do anything about it. Interesting questions will arise when damage is caused by salvage personnel as to whether or not they are ‘‘operating from a vessel’’ or, if so, from which vessel (if there is a salvage flotilla), since the applicable limit of liability will depend on the conclusion reached.132 A RT I C L E 6(5) Under the old regime the tonnage of a vessel for the purposes of limitation was to be her ‘‘registered tonnage’’ with the addition of any engine room space ‘‘deducted for the 130. LEG/CONF.5/C.1/SR.27, at pages 411 to 413. 131. See pages 22–24, above. 132. See page 12.

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purpose of ascertaining that tonnage’’. By virtue of Article 6(5) of the 1976 Convention the tonnage of a vessel for purposes of limitation is to be calculated in accordance with the tonnage measurement rules contained in Annex 1 of the International Convention on Tonnage Measurement of Ships 1969. Article 6(5) is not included in Schedule 7, Part I, of the 1995 MSA and therefore does not have ‘‘the force of law’’ in the United Kingdom by virtue of section 185(1) of that Act. However, paragraphs 5(2) and (3) of Schedule 7, Part II, and Section 185 of the 1995 MSA provide that similar rules are to be applied in the United Kingdom.

Calculation of limitation tonnage Article 6(5) of the 1976 Convention provides: ‘‘For the purposes of this Convention, the ship’s tonnage shall be the gross tonnage calculated in accordance with the tonnage measurement rules contained in Annex I of the International Convention on Tonnage Measurement of Ships, 1969.’’

(For the position in the United Kingdom see paragraphs 5(2) and (3) of Schedule 7, Part II, and section 185 of the 1995 MSA). The International Convention on Tonnage Measurement of Ships 1969 was imple­ mented in England by the Merchant Shipping (Tonnage) Regulations 1982, S.I. 1982/841. (The 1982 Regulations have now been replaced by The Merchant Shipping (Tonnage) Regulations 1997 (S.I. 1997/1510).) The 1982 Regulations came into operation on 18 July 1982 replacing the Merchant Shipping (Tonnage) Regulations 1967. As from that date, all United Kingdom registered vessels of more than 24 metres in length which are new and older vessels which, through modification, suffer a ‘‘substantial variation in their existing gross tonnage’’, had to be measured according to the new regulations. Ships built before that date could be re-measured according to the new regulations at the owners’ request, but with effect from 18 July 1994 all ships, whenever built, were required to be measured according to the new regulations. Under the 1997 Tonnage Regulations every ship is assigned a gross tonnage and a net tonnage. Unlike the previous method of tonnage measurement the gross tonnage gives a realistic indication of the ship’s size. Calculation is based on the moulded volume of the entire ship (hull, deck structures and all enclosed spaces) and there are no deductions, exemptions or special allowances. On the other hand, the net tonnage is intended to give a general indication of the ship’s earning capacity. The net tonnage is derived from a formula based upon the moulded volume of the cargo spaces, the moulded depth of the ship, the summer draught and, in the case of passenger carrying vessels, the number of passengers which can be carried. The regulations contain special provisions for segregated ballast oil tankers and vessels carrying deck cargoes. Insofar as vessels (including pleasure yachts and fishing boats) of less than 24 metres in length are concerned, the pre-1982 system of measurement remains in force (regulation 12, M.S. (Tonnage) Regulations 1982). It is only possible to generalise regarding the effect which re-measurement has had on the gross (limitation) tonnage. Thus single deck ships, for example tankers and bulk carriers, find their tonnage very largely unchanged whereas the effect on ro-ro ships has been to increase the gross tonnage substantially.

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For example, a tanker which under the old regulations had a gross tonnage of 36,825 now has a gross tonnage of 35,017 under the new regulations. On the other hand a vehicle carrier of 14,480 tons gross finds her gross tonnage increased to 53,800. The 1997 Tonnage Regulations and the Convention upon which they are based con­ template the issue of International Tonnage Certificates by the governments of contracting states. It is further contemplated that such International Tonnage Certificates will be accepted as valid by the governments of other contracting states.

TRANSITIONAL PROVISIONS

Paragraph 2(1) of the Merchant Shipping (Liability of Shipowners and Others) (Calcula­ tion of Tonnage) Order 1986 (S.I. 1986/1040) which came into effect on 1 December 1986 (the same day as the 1976 Limitation Convention came into force in the United Kingdom) provided that for the purposes of Article 6 of the Limitation Convention ‘‘the gross tonnage of the ship be calculated in accordance with regulations 4 to 6 of the Merchant Shipping (Tonnage) Regulations 1982’’. Paragraph 2(2) of the statutory instrument pro­ vides that: ‘‘In the case of a ship of which, at the time when limitation is claimed, the tonnage has not been and cannot be ascertained in accordance with paragraph (1) above, the best evidence available of the measurements of the ship shall be used in calculating the tonnage of the ship according to those regulations.’’

As indicated above the Tonnage Convention and the Limitation Convention both came into effect on 1 December 1986 and by July 1994 all vessels were required to have been re-measured. It follows that these transitional provisions are now of largely historic interest. They will only be relevant if limitation remains an issue in relation to a pre-July 1994 incident. The safe rule of thumb is that for all incidents prior to 1 December 1986 the old limitation provisions and the old tonnage regulations apply and for all incidents after 1 December 1986 the new limitation provisions and the new tonnage regulations apply.

Article 7: The limit for passenger claims The 1976 Convention introduces by Article 7 a completely separate limitation fund for claims for loss of life or personal injury to passengers as defined in Article 7(2). This limitation fund is not calculated by reference to the vessel’s tonnage but is ascertained by multiplying 46,666133 Units of Account (SDR) by the number of passengers which the ship is certificated to carry. (As to the relevant certificate in the United Kingdom see paragraph 6(1) of Schedule 7, Part II, and section 185 of the 1995 MSA.) This special fund

133. The 1996 Protocol to the Limitation Convention increases the figure of 46,666 to 175,000 SDR. See page 54 below.

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applies on any distinct occasion and is subject to a maximum of 25,000,000 SDR.134 It must be emphasised that this separate limitation fund is available only when there are claims for loss of life or personal injury to passengers. The International Convention on the Carriage of Passengers and their Luggage, Athens 1974 (the Athens Convention) came into force internationally on 28 April 1987 and was given the force of law in the United Kingdom by virtue of section 14 of the Merchant Shipping Act 1979 and was annexed as Schedule 3 to that Act. Section 14 brought the Convention into force in the United Kingdom on 30 April 1987.135 (Prior to that date the United Kingdom gave the Convention the force of law domestically with effect from 1 January 1981.136) The Athens Convention is now incorporated into U.K. law by section 183 of the 1995 MSA and the text of the Convention is set out in Schedule 6 to that Act. A summary of the limitation aspects of the Athens Convention will be found in Chapter 4. A Diplomatic Conference held in November 2002 at the IMO adopted the text of a Protocol to the Athens Convention137 which is not yet in force internationally. A consoli­ dated text has been produced, which is known as the Athens Convention—2002. An analysis of the Protocol is to be found in Chapter 5. Article 7(1) of the Athens Convention provides that: ‘‘The liability of the carrier for the death of or personal injury to a passenger shall in no case exceed 700,000 francs per carriage.’’

By virtue of a Protocol of 19 November 1976 the limit of 700,000 francs138 referred to in Article 7(1) is to be substituted by the limit of 46,666 SDR which is the same figure as is found in Article 7(1) of the 1976 Convention. Furthermore, Article 13 of the Athens Convention provides that the conduct which will debar the right to limit under that Convention is the same as the conduct which will debar the right to limit under Article 4 of the 1976 Convention. However, despite these apparent similarities the provisions of the Athens Convention and the 1976 Convention differ in the following respects: (a) The limit of 46,666 SDRs in Article 7(1) of the Athens Convention is to apply to each passenger claiming. Therefore the extent of an owner’s liability under the Athens Convention will vary depending on the number of passengers claiming. In the case of a catastrophe involving the death of or personal injury to all the passengers, the maximum exposure limit may be calculated by multiplying 46,666 SDRs by the number of passengers actually on board. However, the limit of liability set out in Article 7(1) of the 1976 Convention is fixed at an amount calculated by multiplying 46,666 SDRs by the number of passengers which the vessel is certificated to carry. Therefore, the limit of liability under the 1976 134. The 1996 Protocol to the Limitation Convention removes this 25 million SDR cap. The global fund available under Article 7 will therefore be calculated simply by multiplying the number of passengers which the vessel is certificated to carry by 175,000 SDR. 135. Merchant Shipping Act 1979 (Commencement No. 11) Order 1987 (S.I. 1987/635). 136. S.I. 1980/1092. 137. Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974. 138. In the United Kingdom this figure was increased in relation to U.K. carriers to 1,525,000 francs with effect from 1 June 1987 (S.I. 1987/855) and with effect from 10 November 1987 the figure of 100,000 SDR was substituted for the figure of 1,525,000 Francs (S.I. 1989/1880).

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Convention is not related to the number of passengers claiming or to the number of passengers actually on board. (b) The limit fixed by Article 7(1) of the Athens Convention applies per ‘‘carriage’’ which is defined in Article 1(8) as the whole period during which the passenger is being transported. The limit fixed by Article 7(1) of the 1976 Convention applies ‘‘on any distinct occasion’’. Therefore, if a passenger is injured twice during the course of a voyage, the limit of liability set out in Article 7(1) of the Athens Convention would only apply once whereas the limit set out in Article 7(1) of the 1976 Convention would probably apply twice as there would be two ‘‘distinct occasion(s)’’. Article 4 of the 1996 Protocol replaces paragraph 1 of Article 7 of the 1976 Covention with the following text: ‘‘1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 175,000 Units of Account multiplied by the number of passengers which the ship is author­ ized to carry according to the ship’s certificate.’’

Within this text there are two important changes. In the first place, the Units of Account for purposes of calculating the limitation fund are increased from 46,666 to 175,000. This represents an increase by a factor of approximately four and is clearly justified having regard to the drop in the purchasing power of the currencies which go into the SDR basket since the limits were fixed in 1976. Of potentially greater significance is the removal from Article 7 of the 1976 Convention of the words ‘‘but not exceeding 25 million Units of Account’’. It is not unusual for a cruise ship to be certificated capable of carrying a thousand or more passengers. For a certificated capacity of one thousand passengers, a global fund for passenger claims of 175 million SDRs would be available under the new regime. If the cap of 25 million SDRs had been maintained, the fund would have been capped at that amount. For the operators of cruise ships and large ferries, this represents a significant increase in their exposure. It is calculated that vessels certificated to carry more than 143 passengers will be affected by the removal of the cap. There will be cases in which the passenger limitation provisions of both the 1976 Convention and the Athens Convention apply. Where injuries have been serious the claimants may find that the per passenger limits under the Athens Convention are insuffi­ cient to meet their claims in full whereas a global fund calculated in accordance with the provisions of Article 7 of the 1976 Convention would be sufficiently large to enable all claimants to be paid in full. In this connection the terms of Articles 14 and 19 of the Athens Convention are important. Article 14 of the Athens Convention provides that: ‘‘No action for damages for the death of or personal injury to a passenger, or for loss of or damage to luggage, shall be brought against a carrier or performing carrier otherwise than in accordance with this Convention.’’

Article 19 of the Athens Convention provides that: ‘‘This Convention shall not modify the rights or duties of the carrier, the performing carrier, and their servants or agents provided for in international conventions relating to the limitation of liability of Owners of seagoing ships.’’

It is submitted that the combined effect of these two articles is to require all passengers to present their claims in accordance with the provisions of the Athens Convention when

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55

this is applicable to the incident giving rise to the claims. On the other hand it gives the carrier the right to further limit his liability where the total amount payable to all claimants after application of the limitation provisions of the Athens Convention exceeds the global fund calculated in accordance with the terms of Article 7 of the 1976 Convention. The relationship between Article 7 of the 1976 Convention and the limitation provisions of the Athens Convention is examined on pages 98–99. This relationship is potentially rendered more complicated by the 2002 Protocol to the Athens Convention (see page 120). The substantial increases in limits under the 2002 Protocol to 400,000 SDRs per passenger per incident, the introduction of strict liability up to 250,000 SDRs for loss of life or personal injury arising from ‘‘shipping incidents’’ and the imposition of compulsory insurance makes it more likely that in a major incident involving a cruise liner the total of payments under the Athens Convention (up to 400,000 SDRs per passenger) will exceed the global limit under the amended Article 7 of the 1976 Convention (175,000 SDRs multiplied by the number of passengers which the vessel is certificated to carry). If the authors’ analysis of the way in which the 1976 Convention and the Athens Convention relate to each other is correct, this will enable the shipowner to apply the 1976 Convention global fund to cap claims under the Athens Convention. Some State Parties may take this opportunity to amend their domestic law to tackle this problem of double limitation (see below).

The position in the United Kingdom Paragraph 12 of Part II of Schedule 6 to the 1995 MSA provides that: ‘‘It is hereby declared that nothing in the Convention (the Athens Convention) affects the operation of Section 185 of this Act (which limits a shipowner’s liability in certain cases of loss of life, injury or damage).’’

This provision appears to be no more than a restatement of Article 19 of the Athens Convention but including specific reference to the limitation provisions of the 1976 Convention (as incorporated into United Kingdom law) which are not to be modified by the operation of the limitation provisions of the Athens Convention. As discussed on page 21 in relation to Article 2 of the 1976 Convention, the U.K. Government has taken the opportunity of eliminating the apparent conflict between the passenger limitation provisions of the Athens Convention and those found in Article 7 of the 1976 Convention. In future, the Athens Convention will apply to passengers on sea­ going ships and Article 7 of the 1976 Convention will apply to passengers on non sea­ going ships. The Merchant Shipping (Convention on Limitation of Liability for Maritime Claims)(Amendment) Order 1998,139 which enacted in the United Kingdom the amend­ ments to the 1976 Convention made by the 1996 Protocol, provides at paragraph 7(e): ‘‘In paragraph 6, for sub-paragraph (1) there shall be substituted— ‘6.—(1) Article 7 shall not apply in respect of any seagoing ship; and shall have effect in respect of any ship which is not seagoing as if, in paragraph 1 of that article— (a) after ‘‘thereof’’ there were inserted ‘‘in respect of each passenger,’’; (b) the words from ‘‘multiplied’’ onwards were omitted.’.’’

Article 7(1) of the 1976 Convention thus amended in the United Kingdom provides: 139. S.I. 1998/1258, in force from 13 May 2004.

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‘‘1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof in respect of each passenger shall be an amount of 175,000 Units of Account.’’

Summary of limits Loss of life/Personal injury claims only 1976 Tonnage

1996 SDR

UK

Tonnage

SDR

Tonnage

SDR

< 500

333,000

< 300

1 million

501–3,000

+500/ton

< 2,000

2 million

301–2,000

2 million

3,001–30,000

+333/ton

2,001–30,000

+800/ton

2,001–30,000

+800/ton

30,001–70,000

+250/ton

30,001–70,000

+600/ton

30,001–70,000

+600/ton

> 70,000

+167/ton

> 70,000

+400/ton

> 70,000

+400/ton

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

833,000

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

2 million

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

2 million

Other claims 1976 Tonnage

1996 SDR

< 500

167,000

501–3,000

+167/ton

Tonnage

UK SDR

Tonnage

SDR

< 300

500,000

< 2,000

1 million

301–2,000

1 million

2,001–30,000

+400/ton

2,001–30,000

+400/ton

30,001–70,000

+125/ton

30,001–70,000

+300/ton

30,001–70,000

+300/ton

> 70,000

+83/ton

> 70,000

+200/ton

> 70,000

+200/ton

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

334,000

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

1 million

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

1 million

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A RT I C L E S 8 – 9

Total potential exposure where there are personal and property claims 1976 Tonnage

1996 SDR

UK

Tonnage

< 500

500,000

501–3,000

+667/ton

< 2,000

3,001–30,000

+500/ton

30,001–70,000

+375/ton

> 70,000 Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

SDR

Tonnage

SDR

< 300

1,500,000

3 million

301–2,000

3 million

2,001–30,000

+1,200/ton

2,001–30,000

+1,200/ton

30,001–70,000

+900/ton

30,001–70,000

+900/ton

+250/ton

> 70,000

+600/ton

> 70,000

+600/ton

1,167,000

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

3 million

Salvor not operating from any ship or operating solely on ship being salved (fixed tonnage of 1,500)

3 million

Passenger claims 1976 Certificated No. of passengers x

1996 46,666 to max 25 million

Certificated No. of passengers x

UK 175,000 (no max)

Certificated No. of passengers x

175,000 (no max) (non­ seagoing vessels only)

Article 8: Unit of Account Only the first two sentences of Article 8(1) are included in Part I of Schedule 7 of the 1995 MSA and accordingly have the force of law in the United Kingdom. For further comment on this Article see the discussion on pages 48–49, above, in relation to Article 6(1). Article 9: Aggregation of claims 1. The limits of liability determined in accordance with Article 6 shall apply to the aggre­ gate of all the claims which arise on any distinct occasion: (a) against the person or persons mentioned in paragraph 2 of Article 1 and any person for whose act, neglect or default he or they are responsible; or (b) against the shipowner of a ship rendering salvage services from that ship and the salvor or salvors operating from such ship and any person for whose act, neglect or default he or they are responsible; or (c) against the salvor or salvors who are not operating from a ship or who are operat­ ing solely on the ship to, or in respect of which, the salvage services are rendered and any person for whose act, neglect or default he or they are responsible. 2. The limits of liability determined in accordance with Article 7 shall apply to the aggre­ gate of all claims subject thereto which may arise on any distinct occasion against the

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person or persons mentioned in paragraph 2 of Article 1 in respect of the ship referred to in Article 7 and any person for whose act, neglect or default he or they are responsible.

Whilst the provisions for aggregation of claims in the 1976 Convention are lengthy by reason of the need to incorporate special rules to govern claims against salvors and by passengers they in fact introduce no changes of substance. The equivalent provision in the 1957 Convention is Article 2(1) the terms of which were incorporated into the law of the United Kingdom by section 8(2) of the 1958 Act. A shipowner is entitled to limit his liability in respect of the aggregate of all claims which arise on any ‘‘distinct occasion’’. The 1976 Convention differs from the 1957 Convention in that whereas the 1957 Convention refers in general terms to ‘‘ . . . the aggregate of personal claims and property claims . . . ’’, the 1976 Convention expressly lists the types of claims which are to be aggregated on each ‘‘distinct occasion’’. The meaning of ‘‘distinct occasion’’ has often been the subject of litigation in the United Kingdom. An example of a finding that two collisions were not ‘‘one distinct occasion’’ is to be found in the case of The ‘‘Lucullite’’.140 The Lucullite had been negligently moored alongside another vessel in heavy weather. The rough seas caused the Lucullite to range against the other vessel causing serious damage to that vessel. The Lucullite cast off and, in the course of manoeuvring, struck another vessel which sank. The owners of the Lucullite asserted that the damage to the two vessels arose on one distinct occasion. The court held that the second collision was not the necessary consequence of the first and that, therefore, the two collisions arose on two distinct occasions and that the two claimants could not be required to prove their claims against one limitation fund. On the other hand in The ‘‘Harlow’’141 a tug, with five barges in tow, collided with the vessel Dalton in the River Thames due to the negligent navigation of the Harlow. The Dalton sustained serious damage. The collision caused the Harlow’s steering gear to jam and, with her engines still running at full speed, she attempted to make a turn in the river. In so doing she collided with a second vessel. The court held that the second collision occurred on the same occasion as the first and, accordingly, both claims for damages would have to be proved against the same limitation fund. INTRODUCTION TO ARTICLES 10–14 These Articles deal with the practical aspects of limitation. By express reservation and by implication much is left to the individual state parties to arrange on a domestic basis. In the High Court of England and Wales the Civil Procedure Rules Part 61 and Practice Direction 61 regulate the practical aspects of limitation. These replace the old Order 75 of the Rules of the Supreme Court. In the comments which follow the terms of the 1976 Convention are examined in the light of CPR Part 61 and its accompanying Practice Direction. Practical guidance can also be obtained from the Guide to Commercial Court Practice. Article 10: Limitation of liability without constitution of a limitation fund 1. Limitation of liability may be invoked notwithstanding that a limitation fund as men­ tioned in Article 11 has not been constituted. 140. (1929) 33 Ll.L.Rep. 186. 141. (1922) 10 Ll.L.Rep. 66.

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However, a State Party may provide in its national law that, where an action is brought in its courts to enforce a claim subject to limitation, a person liable may only invoke the right to limit liability if a limitation fund has been constituted in accordance with the provisions of this Convention or is constituted when the right to limit liability is invoked. 2. If limitation of liability is invoked without the constitution of a limitation fund, the provisions of Article 12 shall apply, correspondingly. 3. Questions of procedure arising under the rules of this Article shall be decided in accordance with the national law of the State Party in which action is brought.

A RT I C L E 10(1) This subsection provides that a person may invoke limitation of liability notwithstanding that a limitation fund has not been established. However, it also goes on to provide that a State Party may opt to provide by its national law that where an action is brought in its courts to enforce a claim ‘‘subject to limitation’’ a fund must be established if limitation is to be invoked.

A RT I C L E 10(2) This subsection provides that the terms of Article 12 (which deals with distribution of the Fund) are to apply even if limitation of liability is invoked without the constitution of a fund.

A RT I C L E 10(3) This subsection provides that rules of procedure to be applied where limitation is invoked without the constitution of a fund are to be laid down by the national law of the country where the action is brought.

THE POSITION IN THE UNITED KINGDOM The second sentence of Article 10(1) does not appear in Schedule 7, Part 1, to the 1995 MSA and does not therefore have the force of law in the United Kingdom by virtue of section 185(1) of the Act. The implication is therefore, that the United Kingdom Govern­ ment does not intend to place restrictions on a person’s right to invoke limitation of liability without constitution of a fund. This is made clear by reference to CPR Part 61.11(19) which states: ‘‘A limitation fund may be established before or after a limitation claim has been started.’’142

Under the law of England and Wales as it existed prior to the coming into force of the 1976 Convention a person could invoke limitation in two ways: 142. RSC Order 75, rule 37A(1) was phrased in permissive, not mandatory, terms, viz ‘‘The plaintiff may constitute a limitation fund . . . ’’. CPR Part 61.11.18 maintains the permissive approach: ‘‘The Claimant may constitute a limitation fund by making a payment into court’’.

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(a) Pleaded by way of defence in an action. In such a case where the damages which would otherwise be recoverable exceed the limit of liability, judgment is given for the limit.143 If limitation is invoked in this manner it has never been necessary for any limitation fund to be constituted before judgment. The reason for this is that, if the person liable is adjudged entitled to limit his liability, the judgment does not establish his right to limit as regards all claims in respect of that occurrence but merely establishes his right against the plaintiff in that particular action.144 It is therefore possible that if another claimant brings a further action in respect of loss or damage arising out of the same occurrence for a sum in excess of the limit of liability, the person liable would effectively have to pay the limit again (assuming he could again prove his right to limit in the further action).145 It is submitted that nothing in the 1976 Convention or the 1995 MSA varies a person’s right to limit liability by way of defence in the manner outlined above. CPR Part 61.11(22) recognises this right: ‘‘A limitation claim for— (a) a restricted146 decree may be brought by counterclaim; and (b) a general decree may only be brought by counterclaim with the permission of the court.’’

(b) By commencing a limitation action. Such action, if successful, entitles the person liable to limit his liability against ‘‘all and every person or persons whatsoever claiming or being entitled to claim in respect of damage or loss’’ resulting from the particular incident. It has not been necessary in England and Wales when commencing a limitation action to deposit the fund with the court. The English Rules of the Supreme Court (RSC) (and, currently, the Civil Procedure Rules) proceeded on the premise that a person liable is not entitled to limit his liability until he proves his right so to do to the satisfaction of the court. Accordingly, the obligation to constitute a limitation fund arose only after the Admiralty Registrar or judge had decreed that the person liable was entitled to limit his liability and had calculated the quantum of the fund. Whilst the obligation to constitute a fund did not arise in the United Kingdom until a later stage in the proceedings, it was often desirable for a person seeking to limit his liability to pay the amount of his limitation fund into court at an early stage after invoking limitation. If he did not, and between the date of invoking limitation and the date of the 143. Beauchamp v. Turrell [1952] 2 Q.B. 207 Wheeler v. London & Rochester Trading Co. Ltd. [1957] 1 Lloyd’s Rep. 69. 144. See Atkin’s Court Forms 3 (Admiralty and Commercial Courts) 2003, page 139. 145. In The ‘‘Waltraud’’ [1991] 1 Lloyd’s Rep. 389 Sheen J. gave summary judgments in two separate actions by various cargo claimants. He observed that it would be sensible for the defendants to commence a limitation action rather than plead limitation by way of defence in two separate actions where the total damages might well exceed the 1976 limitation fund. On an application for interim payments the plaintiffs, relying on this paragraph, argued that the court should order interim payments up to the limitation fund in each action. Mr. Justice Sheen rejected this argument and ordered interim payments in both actions not exceeding the global tonnage limitation of the vessel. 146. A restricted decree may be obtained against any named defendant who fails to file a defence within the time specified for doing so (CPR Part 61.11(10)(a) or who admits the claimant’s right to limit liability (CPR Part 61.11(9)).

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decree the limitation unit suffered one of its periodic revaluations, the amount which he was ultimately ordered to pay into court could be higher than the sum he would have been obliged to pay at any earlier date. The position was maintained under the 1976 Convention, thus: (i) Under Article 8(1) of the 1976 Convention the value of the SDR is fixed ‘‘at the date the limitation fund shall have been constituted, payment is made or security is given . . . ’’147 The person liable therefore runs the risk that the quantum of his limitation fund will increase the longer he waits; (ii) the various rights contained in Article 13 designed to protect the other assets of the person invoking limitation apply only after ‘‘a limitation fund has been constituted.’’ In consequence the ‘‘person liable’’ will still have to reach an informed decision as to whether he should constitute the limitation fund at an early stage and thereby (a) protect himself against subsequent increases in the fund and (b) obtain the benefit of the rights afforded by Article 13 or wait until the claims have been proved. It is noteworthy that Article 1(7) of the 1976 Convention clarified a principle of law which had hitherto been unclear in the United Kingdom. The traditional view148 was that a person could commence a limitation action before admitting liability but that liability had effectively to be admitted before a limitation decree could be made.149 However, this was doubted by Sir C. Butt in The ‘‘Karo’’.150 Article 1(7) of the 1976 Convention now provides that ‘‘the act of invoking limitation of liability shall not constitute an admission of liability’’. However, this still appeared to leave open the question whether liability has to be admitted before a decree of limitation can be made. Mr Justice Rix in Caspian Basin Specialised Emergency Salvage Shareholders Com­ pany v. Bouygues Offshore S.A. (The ‘‘BOS 400’’)151 held that there is no requirement for: ‘‘an admission or determination of liability as a condition precedent to the commencement of a limitation action or the granting of a decree in that action.’’

Rix J. further held that the Court has the discretion to determine the owner’s right to limit even when liability is still in issue. The Court of Appeal confirmed that a limitation action can properly be started before liability is established152 but did not address whether that was a prerequisite for the granting of a decree. However, in Caltex v. BP153 Mr. Justice Clarke doubted, in an obiter section of his judgment, whether a shipowner could in practice obtain a decree of limitation without admitting liability in an amount greater than the limit.

147. Under the Hague-Visby Rules the relevant date for calculating the value of the SDR is the date of judgment—section 2(5) of the Merchant Shipping Act 1981. 148. The ‘‘Amalia’’ (1863) B. & L. 151 The ‘‘Sisters’’ (1876) 2 Asp. M.L.C. 589. 149. See Temperley, The Merchant Shipping Acts, 7th ed., page 181, Note 1. 150. (1888) 13 P.D. 24. 151. [1997] 2 Lloyd’s Rep. 507. 152. Bouygues Offshore S.A. v. Caspian Shipping Co. and Others [1998] 2 Lloyd’s Rep. 461 at p. 473. 153. [1996] 1 Lloyd’s Rep. 286.

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These two decisions (one obiter) appear to be inconsistent. Per Rix J., determination or admission of liability need not precede either the commencement of a limitation action or the granting of a decree therein. Per Clarke J., an admission of liability is a prerequisite to the granting of a decree if not to the commencement of a limitation action. CPR Part 61.11.19 (‘‘A limitation fund may be established before or after a limitation claim has been started’’) and the notes to CPR Part 61 (‘‘ . . . a limitation decree or declaration can be granted before liability is established. The establishment of liability either by trial or agreement is not a pre-condition to the seeking and granting of a limitation decree or declaration’’) support the Rix J. approach. It is submitted that the court may be relied upon, in each case, to make a direction which suits the circumstances of the case. For commentary on the relationship between Article 10(1) and Article 11 please see pages 66–67. NOTES ON PROCEDURE

The procedure for a claim to limit liability is set out in CPR Part 61.11 and Practice Direction—Admiralty Claims 61.11.10. A claim for limitation is started in the Queen’s Bench Division, Admiralty Court by issuing Claim Form ADM 15 to one or more named defendants.154 It must be accompanied by a declaration setting out the facts on which the claimant relies, stating the names and addresses (if known) of all persons whom the claimant knows to have claims against him, and be verified by a statement of truth.155 At least one defendant must be named in the claim form but all other defendants may be described.156 The claim form must be served on all named defendants and any other defendant who asks to be served,157 but may not be served out of the jurisdiction of the English Court unless the requirements of Part 61.11(5) are met. Where a defendant is domiciled in an EU Regulation State, there is, however, an inconsistency between CPR Part 61.11.5(c) (‘‘The claim form may not be served out of the jurisdiction unless— . . .; or (c) the Admiralty Court has jurisdiction over the claim under any applicable conven­ tion; and the court grants permission in accordance with Section III of Part 6.’’) and CPR Part 6.19 (Service out of the jurisdiction where the permission of the court is not required). There are two potentially applicable conventions: the 1976 Limitation Convention and the Brussels Convention, now EU Regulation 44/2001. Art.7 of EU Regulation 44/2001 provides: ‘‘Where by virtue of this Regulation a court of a Member State has jurisdiction in actions relating to liability from the use or operation of a ship, that court, or any other court substituted for this purpose by the internal law of that Member State, shall also have jurisdiction over claims for limitation of liability.’’

Accordingly, if English jurisdiction can be founded under Article 1 (domicile) or Article 5 (place of performance of the relevant contractual obligation) of the Regulation, the English Court automatically has jurisdiction over any claim by a relevant claimant to 154. CPR Part 61.2(1)(c). 155. PD61.11.10.1. 156. Part 61.11(3). 157. Part 61.11(4).

NOTES ON PROCEDURE IN THE UNITED KINGDOM

63

limit.158 That should mean that the shipowner does not need to obtain permission to serve outside the jurisdiction on a defendant domiciled in an EU Regulation State or otherwise falling within CPR Part 6.19(1) or (1A). The requirement under Part 61.11(5)(c) that the court give permission to serve out of the jurisdiction is therefore plainly inconsistent with Part 6.19 in such circumstances. Colman J. resolved this problem in The ‘‘ICL Vikraman’’ by construing ‘‘the claim’’ as being ‘‘the claim to limit’’ (as opposed to the underlying claim) and by treating ‘‘any applicable convention’’ as covering the 1976 Limitation Convention.159 If a defendant upon whom the claim form is served wishes to dispute the jurisdiction of the court or argue that the court should not exercise its jurisdiction, then it must file an acknowledgement of service in form ADM16B within 14 days of service (or the period specified in rule 6(22) if the claim form has been served out of the jurisdiction).160 The defendant must then apply under Part 11 within 14 days after filing the acknowledgement of service. If it fails to do so it will be deemed to accept that the court has jurisdiction.161 If jurisdiction is not challenged, it is not necessary to acknowledge service of the claim form,162 but defendants upon whom it is served must, within 28 days of service, either file a notice in form ADM16 admitting that the claimant has a right to limit, or serve a defence in form ADM16A.163 The response of the defendant will determine how the claimant then proceeds: — if one or more of the named defendants admits the right to limit, the claimant may apply to the Court for a restricted limitation decree in form ADM17.164 The decree will limit liability only against those defendants who have admitted the claimant’s right.165 A decree can also be obtained against those named defendants who fail to file a defence.166 A restricted decree need not be advertised but must be served on those defendants to whom it applies;167 — if all the named defendants upon whom the claim form has been served admit the right to limit, the claimant may apply for a general limitation decree in form ADM17A from the Admiralty Registrar.168 The claimant may also apply for a general limitation decree where one or more of the defendants upon whom the claim form has been served does not admit the claimant’s right to limit;169 — if a limitation decree is granted, the court may stay any proceedings relating to any claim arising out of the occurrence, order the claimant to establish a limita­ tion fund, make arrangements for payment of claims against which liability is

158. See further pages 80–86 in relation to forum shopping and the EU. 159. ICL Shipping Ltd. and Steamship Mutual Underwriting Association (Underwriting) Ltd. v. Chin Tai Steel Enterprise Co. Ltd. and Others (The ‘‘ICL Vikraman’’) [2004] 1 Lloyd’s Rep. 21 at pages 32 to 33. 160. Part 61.11(7)(b) and PD61.11.10.4. It is for the defendant to prove that the claimant does not have a right to limit, citing one of the reasons under Article 4 of the 1976 Convention, see The ‘‘Rosa M’’ [2000] 2 All E.R. (Comm) 458 161. Part 61.11(8). 162. Part 61.11(6). 163. Part 61.11(7)(a) and PD61.11.10.2 and 3. 164. PD61.11.10.5. 165. Part 61.11(9). 166. Part 61.11(10)(a). 167. Part 61.11(10)(b). 168. Part 61.11(11) and PD61.11.10.6. 169. Part 61.11(12).

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admitted, or (if the decree is a restricted limitation decree) distribute the limita­ tion fund;170 — a general limitation decree must be advertised by the claimant in the manner set out in Practice Direction 61.11.10.1;171 — any person other than a defendant upon whom the claim form has been served may apply to the court within the time fixed in the decree to have a general limitation decree set aside.172 The decree will set a time within which claims must be filed. Each defendant who wishes to assert a claim must file and serve its statement of case on the limiting party and the other defendants within that period.173 If a limitation claim is not commenced within 75 days after the limitation fund is established the fund will lapse and all money in court will be repaid to the person who made the payment into court.174 The fact that a limitation fund has lapsed does not prevent the establishment of a new fund.175 A limitation fund must be the sterling equivalent of the number of SDRs to which the claimant claims to be entitled to limit his liability under the MSA 1995 together with interest from the date of the occurrence giving rise to his liability to the date of payment into court.176 PD61.11.10.11 deals with the situation where the claimant does not know the sterling equivalent on the date of payment into court and provides for the claimant to be able to make up any deficiency in the amount paid into court. The claimant must give notice in writing to every named defendant of any payment into court specifying the amount paid in, including the rate, amount and period of interest and the date of payment in.177 A claim against the fund must be in form ADM20.178 C H A P T E R I I I — T H E L I M I TAT I O N F U N D Article 11: Constitution of the fund 1. Any person alleged to be liable may constitute a fund with a Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation. The fund shall be constituted in the sum of such of the amounts set out in Articles 6 and 7 as are applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. Any fund thus constituted shall be available only for the payment of claims in respect of which limitation of liability can be invoked. 2. A fund may be constituted, either by depositing the sum, or by producing a guarantee acceptable under the legislation of the State Party where the fund is constituted and considered to be adequate by the Court or other competent authority. 3. A fund constituted by one of the persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2 of Article 9 or his insurer shall be deemed constituted by all persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2, respectively.

170. Part 61.11(13)(a). 171. Part 61.13(b) and Part 61.14. 172. Part 61.11(16) and (17). 173. Part 61.11(15). 174. Part 61.11(20). 175. PD61.11.10.9. 176. PD61.11.10.10. 177. PD61.11.10.13. 178. PD61.11.10.14.

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Article 12: Distribution of the fund 1. Subject to the provisions of paragraph 1, 2 and 3 of Article 6 and of Article 7, the fund shall be distributed among the claimants in proportion to their established claims against the fund. 2. If, before the fund is distributed, the person liable, or his insurer, has settled a claim against the fund such person shall, up to the amount he has paid, acquire by subrogation the rights which the person so compensated would have enjoyed under this Convention. 3. The right of subrogation provided for in paragraph 2 may also be exercised by persons other than those therein mentioned in respect of any amount of compensation which they may have paid, but only to the extent that such subrogation is permitted under the applic­ able national law. 4. Where the person liable or any other person establishes that he may be compelled to pay, at a later date, in whole or in part any such amount of compensation with regard to which such person would have enjoyed a right of subrogation pursuant to paragraphs 2 and 3 had the compensation been paid before the fund was distributed, the Court or other competent authority of the State where the fund has been constituted may order that a sufficient sum shall be provisionally set aside to enable such person at such later date to enforce his claim against the fund. Article 13: Bar to other actions 1. Where a limitation fund has been constituted in accordance with Article 11, any person having made a claim against the fund shall be barred from exercising any right in respect of such claim against any other assets of a person by or on behalf of whom the fund has been constituted. 2. After a limitation fund has been constituted in accordance with Article 11, any ship or other property, belonging to a person on behalf of whom the fund has been constituted, which has been arrested or attached within the jurisdiction of a State Party for a claim which may be raised against the fund, or any security given, may be released by order of the Court or other competent authority of such State. However, such release shall always be ordered if the limitation fund has been constituted: (a) at the port where the occurrence took place, or, if it took place out of port, at the first port of call thereafter; or (b) at the port of disembarkation in respect of claims for loss of life or personal injury; or (c) at the port of discharge in respect of damage to cargoes; or (d) In the State where the arrest is made. 3. The rules of paragraphs 1 and 2 shall apply only if the claimant may bring a claim against the limitation fund before the Court administering that fund and the fund is actually available and freely transferable in respect of that claim. Article 14: Governing law Subject to the provisions of this Chapter the rules relating to the constitution and the distribution of a limitation fund, and all rules of procedure in connection therewith, shall be governed by the law of the State Party in which the fund is constituted.

Article 2 of the 1957 Convention provided that when the aggregate of claims exceeded the limits of liability the total sum representing such limits might be constituted as one distinct limitation fund. However, the 1957 Convention gave no guidance as to how and where the fund was to be constituted. This was all left to the domestic law of each country.179 The 179. See for example The ‘‘Abadesa’’ (No. 2) [1968] 1 Lloyd’s Rep. 493.

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1976 Convention, on the other hand, provides in Articles 11 and 12 detailed guidelines for the constitution and distribution of the fund and it is only where the guidelines are not specific to certain situations that reference is to be made to the national law of the State Party where the fund is constituted (Article 14). The specific provisions of Articles 11 and 12 of the 1976 Convention follow generally the rules which were applied in England and Wales before the coming into force of the 1976 Convention in relation to the constitution and distribution of the fund. These rules are contained in CPR Part 61.11 and Practice Direction 61.11.10. Article 11: Constitution of the fund A RT I C L E 11(1) This provision establishes that a fund may be constituted with the court or other competent authority of a State Party180 in which legal proceedings are instituted in respect of claims subject to limitation. Legal proceedings include arbitration.181 The effect of this provision is to give the claimant the opportunity to choose the jurisdiction in which to pursue his claim. For example if, following a collision on the high seas, one of the vessels involved puts into a port in Turkey, the owners of the other vessel might be tempted to arrest for jurisdiction and security. However, Turkey still applies the 1924 Limitation Convention with its low limits. It may be better to refrain from arresting and await the vessel’s arrival in the port of a state which applies the 1976 Convention with its higher limits or a port in one of the states which has ratified the 1996 Protocol where the limits are even greater.182 It was suggested in the previous edition of this book that the owner of a vessel, anticipating arrest, could do nothing to force a claimant into a jurisdiction of his own choice.183 This comment was cited by counsel for the claimant in support of the proposi­ tion that the 1976 Convention is a jurisdictional convention which only confers jurisdic­ tion to commence a limitation claim in circumstances where the claimant can constitute a limitation fund under Article 11(1), which itself only contemplates a fund being set up in a state in which legal proceedings have been instituted in respect of the claim which is the subject of limitation.184 In The ‘‘Western Regent’’ the claimant had commenced proceedings in respect of the claim in Texas and the shipowner sought to bring limitation proceedings in England. Mr Julian Flaux Q.C., sitting as Deputy High Court Judge, rejected the claimant’s submissions, holding that Article 10 creates a free-standing entitle­ ment to limit irrespective of whether there is ever a fund constituted and that it follows from that, that the court has subject-matter jurisdiction by virtue of section 20(1)(b) and (3)(c) of the Supreme Court Act 1981 which provide that the jurisdiction of the Admiralty 180. Defined in the United Kingdom by para. 13, Sched. 7, Part II, to the 1995 MSA. 181. ICL Shipping Ltd. and Steamship Mutual Underwriting Association (Underwriting) Ltd. v. Chin Tai Steel Enterprise Co. Ltd. and Others (The ‘‘ICL Vikraman’’) [2004] 1 Lloyd’s Rep. 21 at pages 30 to 32. 182. As at 1 October 2005 Albania, Australia, Bulgaria, Denmark, Finland, Germany, Jamaica, Malta, Norway, Russian Federation, Sierra Leone, Samoa, Spain, Sweden, Syrian Arab Republic, Tonga and the United Kingdom have ratified the 1996 Protocol. 183. For example, it was common ground in Messier-Dowty v. Sabena [2000] 1 W.L.R. 2040 that the mere application by Sabena to the Tribunal de Commerce in Paris for the appointment of a panel of experts under Article 145 of the Civil Code was held not to amount to the commencement of proceedings. 184. Seismic Shipping Inc. and Westerngeco Limited v. Total E&P UK PLC (The ‘‘Western Regent’’) [2005] EWHC 460 (Comm) 22 March 2005.

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Court includes ‘‘any action by shipowners or other persons under the Merchant Shipping Act 1995 for the limitation of the amount of their liability in connection with a ship or other property’’. The Deputy Judge found that an ability to constitute a limitation fund under Article 11(1) is neither a pre-condition of the jurisdiction to hear and determine a limitation claim nor of the power of the court to grant a limitation decree. He held that there is nothing in the wording of the Convention which suggests that the entitlement to limit only arises where the claimant can constitute a limitation fund within the meaning of Article 11(1).185 The judgment has been upheld by the Court of Appeal.186 Lord Justice Clarke analysed the position in the following way: Articles 1 and 2 confer the right to limit, which can be invoked either without constituting a fund (Article 10) or after constituting a fund (Article 11). There is no general jurisdiction provision in the Convention stating where the right of limitation must be invoked, thus in principle a party may seek to limit its liability in any Contracting State which has personal jurisdiction over the defendant. There is no express restriction on the invocation of the right to limit and no basis for the implication of such a restriction. By Article 10(1), the right to invoke limitation of liability does not depend on the constitution of a limitation fund under Article 11. The second sentence of Article 10(1) in the Convention, which has not been adopted in the United Kingdom, states that a State Party may provide in its national law that where an action is brought in its courts to enforce a claim subject to limitation, a person liable may only invoke the right to limit if a limitation fund has been constituted. It is clear from that sentence that where, as in the United Kingdom, a State Party does not so provide, limitation may be invoked even where an action has not been brought by a claimant to enforce a claim subject to limitation. As at first instance, the claimant’s argument against this was based on the first sentence of Article 11(1) (‘‘Any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation’’). It was argued that this applies by analogy also to the situation where no fund is constituted. Lord Justice Rix listed five reasons why he did not agree with the argument. First, Article 11 is not concerned with jurisdiction; on the contrary all questions of procedure are expressly left to the national law of the State Parties (Articles 10(3) and 14). Second, Article 11 is permissive and does not contain the word ‘‘only’’, unlike the second sentence of Article 10(1) (‘‘a State Party may provide in its national law that . . . a person liable may only invoke the right to limit if a limitation fund has been constituted’’). Third, the existence of the option contained in Article 10(1) (the second sentence—not adopted by the United Kingdom) breaks or at least seriously weakens the argument by way of analogy from Article 11. Fourth, there is an unresolved debate as to whether the language of Article 11(1) (‘‘legal proceedings . . . in respect of claims subject to limitation’’) is restricted to legal proceedings against the party invoking limitation, or may include legal proceedings brought by the party invoking limitation. Fifth, Article 10, and not Article 11 deals with limitation of liability without constitution of a limitation fund, and there is nothing in the article expressly restricting the circum­ stances in which limitation may be invoked to those where legal proceedings have first been invoked by a claimant against a party who may wish to limit. 185. See also Vessel SA v. CP Ships (UK) Ltd (The ‘‘Denise’’) [2004] EWHC 3305 (unreported) 3 December 2004 in which Mr. Justice David Steel reached the same conclusion. 186. Seismic Shipping Inc. and Westerngeco Limited v. Total E&P UK PLC (The ‘‘Western Regent’’) [2005] EWCA Civ 985 29 July 2005.

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Thus, the current approach of the English courts is to allow a shipowner to make a pre­ emptive strike by commencing limitation proceedings prior to the institution of claim proceedings. It is a matter for comment that the HNS Convention of 1996 requires the owner of the ship responsible for the incident to lodge his limitation fund in one of a limited number of specified jurisdictions. The inability of the owner of a ship to set up a limitation fund under the 1976 Convention to pre-empt arrest undoubtedly creates problems, although it may be felt that the claimant in a civil action should have the choice of jurisdiction. In the case of England and Wales the fund is to be constituted with the Admiralty Court.187 The amount of the fund is the total of such of the amounts set out in Article 6 (loss of life, injury and property claims) and Article 7 (passenger claims) as are applicable to the claims against them and is to include (in accordance with the traditional practice in England and Wales188) interest from the date of the occurrence giving rise to the liability until the date of constitution of the fund. The Convention does not stipulate the rate at which interest is payable; that is left to national legislation. In the case of England and Wales the necessary machinery is set out in Paragraph 8 of Schedule 7, Part II, to the 1995 MSA which provides that the Secretary of State may prescribe the rate of interest to be applied.189 Where there is only one claimant, the defendant may decide to rely upon Article 10(1) and invoke limitation without constituting the fund. In these circumstances the question arises whether, when payment to the claimant eventually takes place, this should include interest on the fund ‘‘from the date of the occurrence’’ as specified in Article 11(1). The answer is to be found in Article 10(2) which provides that if limitation of liability is invoked without the constitution of the limitation fund ‘‘the provisions of Article 12 shall apply correspondingly’’. Article 12, Distribution of the fund, directs that ‘‘the fund shall be distributed among the claimants in proportion to their established claims against the fund’’. In this context ‘‘a fund’’ must mean the fund as defined in Article 11 itself, namely, ‘‘the amounts set out in Articles 6 and 7 . . . together with interest’’. Only by this rather roundabout route can a case be made out for requiring the defendant to add interest to the fund calculated in accordance with Article 6 or 7 before paying out to the claimant. The provision finally restates Article 2(3) of the 1957 Convention to the effect that the fund so constituted shall be available only for payment of claims in respect of which limitation can be invoked. The effect of this provision seems to be that if a claimant has a claim in respect of which the person liable cannot limit, the claimant cannot participate in the limitation fund. His claim is entirely separate. However it is possible that if he

187. See para. 11 of Sched. 7, Part II, to the 1995 MSA and section 20(1)(b) and (3)(c) of the Supreme Court Act 1981. 188. See The ‘‘Funabashi’’ [1972] 1 Lloyd’s Rep. 371. But see also The ‘‘Garden City’’ (No. 2) [1984] 2 Lloyd’s Rep. 37. 189. A rate of 12% is prescribed in relation to occurrences taking place prior to 1 January 1995 where the fund is constituted on or after that date. The prescribed rate on and after 1 January 1995 until 31 August 1998 is 6.75%, 8.5% from 1 September 1998 until 31 August 1999, from 1 September 1999 to 30 December 2003 1% above the base rate quoted by the Committee of London Clearing Banks, from 31 December 2003 and thereafter 1% above the base rate quoted by the Bank of England. See the Merchant Shipping (Liability of Shipowners and Others) (Rate of Interest) Order 1999 (S.I. 1999/1922) amended by the Merchant Shipping (Liability of Shipowners and Others) (New Rate of Interest) Order 2004 (S.I. 2004/931).

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makes such a claim against the fund he may run the risk of being unable to enforce his claim against the other assets of the person liable.190

A RT I C L E 11(2) This subsection provides that the fund may be constituted in the form of cash or by a guarantee acceptable under the legislation of the State Party191 where the fund is consti­ tuted and considered to be adequate by the court or other competent authority. Prior to the coming into force of the 1976 Convention, the law of England and Wales did not allow for constitution of a fund other than by a cash deposit and there is nothing in the 1995 MSA to indicate that this situation has changed. However, most other jurisdictions will accept either a cash deposit or a guarantee. Therefore, whilst the courts of England and Wales still require cash deposits, they do nevertheless (since the Convention has the ‘‘force of law’’ in the United Kingdom by virtue of section 185(1) of the 1995 MSA) have to accept as sufficient a fund constituted in another State Party192 by deposit of a guarantee acceptable to the court or other competent authority of that State Party (Article 13).

A RT I C L E 11(3) The fund may be constituted by ‘‘any person alleged to be liable’’ who is entitled to the benefit of limitation (Article 11(1)). Where the fund is constituted by any one of the several persons mentioned in Article 9 or by an insurer of one of those persons, the fund will be regarded as having been constituted ‘‘by all persons mentioned’’ in Article 9. The wording of Article 11(3) is curious in this respect since, despite the fact that the fund may be set up by an insurer on behalf of an assured, the fund is not on the face of it deemed to have been constituted on behalf of the insurer himself (the insurer not being ‘‘a person mentioned’’ in Article 9193). Article 12: Distribution of the fund A RT I C L E 12(1) This subsection provides that ‘‘the fund’’ is to be distributed among the claimants in proportion to their established claims against the ‘‘fund’’. ‘‘The fund’’ as strictly construed is that referred to in the second and third sentences of Article 11(1), namely, the total of the applicable sums set out in Articles 6 and 7 ‘‘together with interest thereon from the date of the occurrence . . . until the date of the constitution of the fund’’. There is nothing 190. See Article 13(1), pages 74–76, below. The wording of Article 13(1) suggests that so long as a limitation fund has been constituted and the claimant has ‘‘made a claim against the fund’’ that claimant is estopped from pursuing his claim against any other asset of the person seeking to limit even if the claim is disallowed in the limitation proceedings. It would seem to be wise for a person who has a claim which does not qualify for limitation purposes not to submit his claim against the limitation fund if he wishes to pursue the claim against any other asset of the person liable. 191. See footnote 179 on page 65. 192. See footnote 179 on page 65. 193. See pages 57–58, above.

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therefore in Article 12(1) to indicate whether interest earned by the fund after its constitu­ tion is to be distributed among the claimants. However, in the case of England and Wales there is authority194 to the effect that interest earned on a fund paid into court is divisible between the claimants against that fund and it is probable, in view of the provisions of Article 14 that this rule continues to apply now that the 1976 Convention is in force.195 This subsection echoes Article 3(2) of the 1957 Convention and emphasises that the fund is distributed in proportion to ‘‘established’’ claims. In other words, the subsection restates the existing rule that the fund is not distributed in proportion to the quantum of claims as submitted but in proportion to the quantum of claims as ultimately allowed by the court. The assessment of claims and distribution of the fund in England and Wales is performed by the Admiralty Registrar under CPR Part 61.11, and on the continent, generally by adjusters appointed by the court. An interesting further point arises in relation to Article 12(1). Can a person who is liable for one or more of the claims arising out of a distinct occasion bring a claim himself against the fund set up in respect of that distinct occasion? The authors submit that he probably can: Article 11(1) provides that the fund is available ‘‘for the payment of claims in respect of which limitation of liability can be invoked’’ and Article 9 states that the limits apply to the aggregate of all claims which arise on any distinct occasion against the person or persons identified in Article 1(2). Take, for example, cargo damage in respect of which both shipowner and charterer face claims from third parties, all of which are subject to limitation. The shipowner constitutes a fund and liability is established in relation to all third party claims. At the same time the charterer is found liable to the shipowner in the total amount of its exposure to third parties (the amount of the limitation fund). On the basis of the Court of Appeal decision in CMA CGM S.S. v. Classica Shipping Co Ltd,196 there is no reason why the shipowner cannot himself be a claimant against his own fund, thus entitling the shipowner to share the limitation fund rateably with the third party claimants.

A RT I C L E 12(2) This subsection restates in different wording Article 3(3) of the 1957 Convention. It provides in effect that if a person liable (or his insurer) settles a claim before the fund is distributed he acquires by subrogation the rights which the person compensated would 194. The ‘‘Garden City’’ (No. 2) [1984] 2 Lloyd’s Rep. 37. 195. In Swiss Bank Corp. v. Brink’s-MAT Limited [1986] 2 All E.R. 188 Bingham J. (a judge of the English Commercial Court) held in the context of a claim arising under the Warsaw Convention that the limit of liability imposed by Article 22(2)(a) of that Convention was all-embracing and that interest could not be awarded in addition to the sum calculated under Article 22(2)(a). However, it is plain from the report that Bingham J. was much influenced by the fact that Article 22(4) of the Warsaw Convention expressly provided that the limits imposed by Article 22 did not prevent the relevant court from awarding costs in addition to the said limits. He argued therefore that Article 22(4) was unnecessary unless there was a presumption that the sum calculated under Article 22(2)(a) would otherwise have been all-embracing. But for Article 22(4) it seems that the judge would have followed the ‘‘inclination’’ of ‘‘any English judge’’ to award interest in addition to the limit. There is no provision in the 1976 Convention similar to that of Article 22(4) of the Warsaw Convention and it is submitted that the decision in the Swiss Bank Corp. case will not be followed in England and Wales in cases arising under the 1976 Convention. 196. [2004] 1 Lloyd’s Rep. 460.

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otherwise have had to share in distribution of the limitation fund under the 1976 Conven­ tion. In other words if the person liable settles a claim for £100, when for contractual or other legal reasons the claim would only prove at £80 before the court in which the fund is constituted, his subrogated right to prove against the fund is limited to £80.197

A RT I C L E 12(3) This subsection extends the right of subrogation in Article 12(2) to persons other than those mentioned in 12(2) (that is, to persons other than ‘‘the person liable or his insurer’’) but only to the extent that such right of subrogation is permitted by ‘‘the applicable national law’’. This subsection is an innovation and is presumably intended to apply to payments made by persons who are not ‘‘liable’’ for a claim in the strict sense but are nevertheless not volunteers in that they are allowed the right of subrogation by ‘‘the applicable national law’’. It is also unclear whether the ‘‘applicable national law’’ is a reference to the law of the country where the fund is constituted or the law of the country which has jurisdiction in respect of the transaction giving rise to the right of subrogation. Article 3(3) of the 1957 Convention refers in a slightly different context to the ‘‘national law of the State where the fund has been constituted’’. It is submitted that in view of the different wording of Article 14 the reference in 12(2) may be to the law of the country which has jurisdiction in respect of the transaction giving rise to the right of subrogation.

A RT I C L E 12(4) This subsection restates the rules set out in Article 3(4) of the 1957 Convention and section 7(1) of the 1958 Act. It is designed to protect a person who contemplates an additional future liability and does not wish to be prejudiced by the distribution of the fund before the future liability materialises. The addition of the words ‘‘or any other person’’ in the first line seems to be intended to protect the persons referred to in Article 12(3).

197. The ‘‘World Mermaid’’; see The ‘‘Giacinto Motta’’ [1977] 2 Lloyd’s Rep. 221. The two vessels had been in collision with liability agreed to be 50/50. The claim in respect of the cargo on The ‘‘Giacinto Motta’’ had been settled and it was accepted that the owners of The ‘‘World Mermaid’’ were entitled to have the cargo claim which they had paid taken into account, by way of credit to them, in the distribution of their limitation fund. The dispute was as to the amount of the notional claim against the fund in respect of which such credit should be given. It was held by Brandon J. that the credit should be based on the amount which the cargo claimant would have notionally been entitled to claim against the fund but subject to a limit of the amount actually paid by the shipowner to settle the cargo claim. This case did not deal with the situation where the amount notionally claimable against the fund by cargo claimants is less than the amount in fact paid out by the shipowner. The authors consider that the same reasoning should apply in this situation also, such that the credit to which the shipowner is entitled is the notional sum claimable by cargo interests from the fund up to the amount in fact paid out by the shipowner. This requires the words ‘‘up to the amount he has paid’’ in Article 12(2) to be construed as limiting the credit to which the shipowner is entitled to the sum actually paid in settlement of the claim, not the notional sum which would have been payable. The authors submit that this approach is in keeping with the spirit of the Convention.

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Costs The Convention is silent on the question of legal costs incurred (i) in establishing the claim in respect of which a plea of limitation is made and (ii) in contesting the right to limit.

(i) Costs incurred in establishing the claim Article 2 of the Convention lists the claims in respect of which there is a right to limit liability and Article 14 provides that the rules relating to the constitution and distribution of the limitation fund shall (except to the extent that express provision is made in Articles 11, 12 and 13) be governed by the law of the State Party in which the fund is constituted. If, as in England, no express provision has been made in relation to costs, it is submitted that the question of whether or not costs of proving the claim are recoverable depends on whether, as a matter of law, (a) recoverable costs do or do not form part of the claim and (b) if they do not form part of the claim, to what extent they are recoverable on collection from the fund. Whilst there appears to be no relevant authority on this issue under the Convention, the traditional rule in England was that those seeking to limit their liability were liable for costs given or awarded against them, in addition to the full amount payable as damages under the statutory limitation.198 In the opinion of the authors, the same rule applies under the 1976 Convention. It would be an odd result if the recovery of legal costs incurred by a claimant in proving his claim against the fund could have the effect of reducing the recovery from the fund of a claimant who chose not to instruct a lawyer. Therefore, it is submitted that if costs are recoverable at all then they are recoverable not as part of the claim against the fund but in addition to the fund to the extent that a court, in exercising its inherent discretion in relation to costs, determines what costs shall be paid and by whom.199

(ii) General costs of limitation It is submitted that in all cases involving limitation the claimant will need to establish liability, the size of the limitation fund and the amount of the likely claim before deciding whether it is necessary (or feasible) to challenge the defendant’s right to invoke limitation. The reasonable costs of this important initial investigative work should be recoverable from the defendant. The claimant will be exposed in relation to his own costs and those of the defendants if he pursues the issue of limitation beyond that point.200

198. The ‘‘Dundee’’ (1830) 2 Hag. Adm. 137; Ex parte Rayne (1841) 1 QB 982. See also Marsden (13 edition), Collisions at Sea, para. 16–19. 199. A similar view seems to have been adopted by Bingham J. in relation to a claim under the Warsaw Convention. See Swiss Bank Corp. v. Brink’s-Mat [1986] 2 All E.R. at 190–191. 200. It is interesting to note that in Finland, which has adopted the 1976 Convention, the terms of Article 3 of the Convention have been extended to exclude from limitation ‘‘claims for interest or compensation for legal costs’’. Interest and costs are thus recoverable in addition to the limitation fund: Finnish Maritime Code (1994); Chapter 16, para. 3.

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(iii) Costs of contesting the right of limit It was held by Mr Justice Clarke in The ‘‘Capitan San Luis’’201 that: ‘‘The 1976 Convention . . . conferred upon the shipowner a right to limit his liability which can only be defeated if certain facts are proved . . . the right to limit under the 1976 Convention is a legal right, exercisable in circumstances which can readily be established and which can only be defeated if the claimant discharges what Sheen J. rightly described as a ‘heavy burden’.’’

The judge directed that the shipowner should bear in any event the costs of proving those matters which he needs to prove in order to obtain a limitation decree but that if the claimant chooses to contest the right to limit, the costs should follow the event in the usual manner. Therefore, if the claimant fails to establish the facts necessary to prove the conduct necessary to debar the right to limit under Article 4, he must bear his own costs and pay those additional costs incurred by the shipowner in defeating the claimant’s challenge. Legal costs of a limitation action under CPR Under CPR costs still follow the event202 but the court, in the exercise of its discretion must take account of issues won and lost. Whereas pre-CPR the court would usually award costs to a successful party without regard to the issues lost,203 the court may now make a different order204 taking into account factors such as the conduct of the parties and the extent of success.205 Conduct includes conduct before the proceedings, the reasonable­ ness of allegations or issues raised, the manner in which proceedings are pursued and whether a claimant has failed on part of his case even if he has been successful overall. The orders which the court may make are set out in CPR 44(6)(a) to (g). The court is encouraged206 when considering whether to make an order relating to a distinct part of the proceedings207 to instead make an order to pay a proportion of another party’s costs208 or costs from or until a certain date only.209 The court may order a payment on account to be made before costs have been assessed.210 Liens or other rights in respect of any ship or property-effect on distribution In the case of the United Kingdom, paragraph 9 of Schedule 7, Part II, to the 1995 MSA (which is given the force of law by virtue of section 185 of that Act) provides that no lien or other right in respect of any ship or property shall affect the proportions in which the fund is distributed among several claimants. This provision restates section 17(2) of the 1958 Act and is intended to override the decision in The ‘‘Countess’’211 where the House of Lords held that if one claimant had a possessory lien over the ship, effect had to be 201. (1994) 1 All E.R. 1016. 202. CPR 44.3(2)(a). 203. See for example Re Elgindata Ltd No. 2 [1992] 1 WLR 1207. 204. CPR 43.3(2)(b). 205. CPR 43.3(4). 206. CPR 43.3(7). 207. CPR 43.3(6)(f). 208. CPR 43.3(6)(a). 209. CPR 43.3(6)(c). 210. CPR 43.3(8). 211. [1923] A.C. 345.

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given to his superior right even to the extent of depriving other claimants of all right of recovery against the limitation fund. Article 13: Bar to other actions The intention of this Article is to ensure that when a limitation fund has been constituted under the 1976 Convention the other assets of a ‘‘person liable’’ should not be exposed to separate action in respect of claims arising out of the occurrence in respect of which the fund has been constituted which are also ‘‘subject to limitation’’ under the 1976 Conven­ tion. In this respect, the 1976 Convention follows the philosophy underlying the 1957 Convention which is also reflected in the MSA 1958 in the United Kingdom.

A RT I C L E 13(1) This subsection substantially restates Article 2(4) of the 1957 Convention which was in turn reflected in slightly different terms in the United Kingdom in section 6 of the 1958 Act. Subsection 13(1) provides that where: (a) a limitation fund has been constituted ‘‘in any State Party’’212 in accordance with Article 11 of the 1976 Convention; and (b) a person has ‘‘made a claim’’ against the fund; he is debarred from ‘‘exercising any right’’ in respect of that same claim against any other assets of a person by or on behalf of whom the fund has been constituted. In The ‘‘Bowbelle’’213 Sheen J. made the point that ‘‘ . . . common sense dictates that there should be some machinery by which warning can be given to would-be arrestors that they should not arrest any of the ships belonging to the owners of the Bowbelle’’ (because the owners had already set up a limitation fund). This was subsequently done by RSC, Order 75, rule 6(1A), which required the person who is seeking to limit his liability to file in the Supreme Court (Admiralty and Commercial Court) Registry a praecipe stating: (a) that a limitation fund in respect of damage arising from the relevant incident has been constituted; and (b) an undertaking to acknowledge service of any writ issued against the owners of the vessels in question. Thereafter a caveat against the arrest of the vessels named in the praecipe was to be issued. The current practice is to be found in CPR Part 61.7. Under CPR Part 61.7(1) any person may file a request for a caution against arrest which, under Part 61.7(2), the court will enter onto the register provided that he: (a) states that a limitation fund has been constituted; and (b) undertakes that the claimant will acknowledge service of the claim form by which any claim may be begun against the property described in the request for a caution. 212. For the position in the United Kingdom see para. 13 of Sched. 7, Part II, and section 185 of the 1995 MSA. 213. [1990] 3 All E.R. 476.

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A caution against arrest is valid for 12 months and can be renewed for a further 12 months. A caution against arrest does not prevent arrest but, under Part 61.7(5) the court has power to discharge the arrest and to order the party arresting the vessel to pay compensation to other persons interested in the property arrested. Because of this procedure any individual seeking to arrest a vessel in England would be placed on notice by the existence of the caveat and, in theory, courts should not find themselves hearing applications to free a vessel from arrest where a limitation fund has already been constituted. The aim of the subsection is therefore to protect the assets of the person seeking limitation; it does not on the face of it prevent a party from pursuing an action on the merits against the person seeking limitation. However, in the case of the United Kingdom, the legislature has decreed214 that where a fund has been established in one of the courts of the United Kingdom that court may (not ‘‘must’’) stay any proceedings relating to any claims arising out of that occurrence which are pending against the person by whom the fund has been constituted. This provision restates the discretion which the courts of the United Kingdom had enjoyed in slightly different circumstances since 1894 by virtue of section 504 of the 1894 Act. It is not certain whether Article 13(1) has effectively prevented attachment of the assets of an insurer after a limitation fund has been established by that insurer on behalf of his assured. The subsection protects the assets of a ‘‘person’’ by or on behalf of whom the fund has been established under Article 11. Article 11(3) seems to say that even if a fund is constituted by an insurer on behalf of one of the ‘‘persons’’ mentioned in Article 9(1)(a), (b) or (c) or (2) (which do not include an ‘‘insurer’’) the fund is nevertheless deemed to be constituted by all those ‘‘persons’’ but not by the insurer. This result can certainly not have been intended by those drafting the Convention but a possible answer to this problem lies in the wording of Article 1(6) which provides that an insurer ‘‘shall be entitled to the benefits of this Convention to the same extent as the assured himself’’. Alternatively, the insurer may seek to constitute a fund both on behalf of the assured and on his own behalf. (If he is ‘‘alleged to be liable’’ he is presumably entitled to establish the fund on his own behalf under Article 11(1).) He would therefore qualify as a person by whom the fund has been constituted for the purposes of Article 13(1). As has already been noted, Article 11 of the Convention provides that where a limita­ tion fund has been constituted by the owner, charterer, manager or operator etc. of a ship, it shall be deemed to have been constituted on behalf of all the persons entitled to limit in accordance with Article 1 of the Convention. Assume that a vessel sails on a cargo-carrying voyage, with part of the cargo shipped under shipowners’ bills and part under time charterers’ bills. If the time charterer, follow­ ing a loss due to the unseaworthiness of the vessel, is faced with proceedings issued by cargo interests, he might contemplate constituting a limitation fund to cover all claims. Before doing so he would be wise to consider what happens to his indemnity claim over against the shipowner whose fault gave rise to the claim. If he puts up the limitation fund it will be deemed to have been constituted on behalf of, inter alia, the shipowner. If the indemnity claim is pursued by the time charterer against the owner it is likely that the shipowner will seek to rely on Article 13 of the Convention and assert that the fund was put up, inter alia, on its behalf with the result that no further action is permitted. 214. Para. 8(3) of Sched. 7, Part II, and section 185 of the 1995 MSA.

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It may be that this is a situation in which Article 5 of the Convention provides the solution and enables the time charterer to take credit in the distribution of the fund which he has constituted in respect of his own claims. There is no doubt, however, that in the circumstances postulated, the time charterer would be in a better position if the fund were constituted in the first instance by the shipowner rather than himself; a point to be borne in mind by time charterers should this situation arise in practice.

A RT I C L E 13(2) General aims of the subsection This subsection is intended to ensure that when a limitation fund has been constituted under the 1976 Convention, the vessels or other property of the person on whose behalf the fund has been constituted should be protected from arrest or detention. The subsection essentially restates the rules set out in Article 5 of the 1957 Convention which principles had in turn been incorporated in slightly different language into the domestic legislation of the United Kingdom by section 5 of the 1958 Act. However, difficulties have arisen in the United Kingdom in relation to the wording of section 5 of the 1958 Act and the English court has held215 that even if a limitation fund was established in another court, the English court would not release from arrest in the United Kingdom a vessel owned by a person who had established the foreign limitation fund unless that person could satisfy the English court that ‘‘there was no serious question to be tried in relation to absence of actual fault or privity on his part’’. The difficulty arose as a result of a combination of two factors: (1) the wording of section 5 of the 1958 Act (and also Article 5 of the 1957 Convention) provided that a court could release a vessel after a limitation fund or security had been established only if the court was satisfied that the shipowner was entitled to limit his liability. (2) Article 1(6) of the 1957 Convention provided that the burden of proving whether or not the right to limit was available was to be determined by the lex fori. In the United Kingdom the presumption was that a person could not limit his liability under section 503 of the 1894 MSA (as amended by the 1958 Act) unless he proved to the satisfaction of the court that there was no fault or privity on his part. This was extremely difficult to prove in interlocutory proceedings relating to an arrest and was normally not resolved until after a full hearing of the merits following full discovery. These difficulties have been resolved by Article 13(2) of the 1976 Convention since the subsection provides expressly that the right (or obligation in certain circumstances) of the court to release a vessel or other property is triggered not so much by proof that the owner of the vessel or other property can limit his liability but by the establishment by or on behalf of such person of a limitation fund in accordance with Article 11 of the Conven­ tion.216 Furthermore, the presumption which existed under the previous limitation regime that a person was not entitled to limit his liability unless he proved such entitlement has been displaced by the presumption that a person is entitled to limit his liability under the 215. The ‘‘Wladyslaw Lokietek’’ [1978] 2 Lloyd’s Rep. 520. 216. See pages 66–69, above.

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1976 Convention unless some other party proves that he is guilty of the conduct described in Article 4.217 The mechanics of the subsection Article 13(2) is effectively in two parts: (1) the factors which must be satisfied before the court can act to release a vessel or property which has been arrested in its jurisdiction. These factors are: (a) A limitation fund must have been established, by or on behalf of the person to whom the ship or property arrested belongs, in a State Party218 in which legal proceedings have been instituted in respect of the claims in question. (This State Party does not have to be the same State Party as that in whose territory the ship or property has been arrested.) (b) The vessel or property must have been arrested or attached for a claim which may be made against the limitation fund which has been established. Therefore the governing factor is the nature of the claim and it is not a requirement that the claim has actually been made against the limitation fund. (2) Once it is established that the court can act to release a vessel or property which has been arrested, the court has to determine whether circumstances exist in which it is obliged to release or whether the circumstances are such that it has a discretion whether to release: (a) The court m ust release the vessel or property if the limitation fund has been constituted: (i) at the place where the occurrence took place, or, if it took place out of port, at the first port of call thereafter; or (ii) at the port of disembarkation in respect of claims for loss of life or personal injury; or (iii) at the port of discharge in respect of damage to cargo; or (iv) in the State where the arrest is made. (b) The court has a discretion whether to release the vessel or property in circum­ stances other than these set out in (a). In the case of the United Kingdom, the legislature has decreed219 that when an order is made by any court of the United Kingdom under Article 13(2) releasing a vessel or property from arrest, the person applying for such relief is deemed to have submitted to the jurisdiction of that court to adjudicate on the claim for which the ship or property was arrested or attached. Article 13(2) has been construed, in an obiter passage, by one member of the Court of Appeal in Bouygues Offshore S.A. v. Caspian Shipping Co. and Others (Nos 1, 3, 4 and

217. See pages 39–40, above. In The ‘‘Bowbelle’’ [1990] 3 All E.R. 476 Sheen J. held (at page 480) that the court is not required to investigate the question whether the shipowner has been guilty of conduct barring limitation at the time when the shipowner constitutes the limitation fund in accordance with Article 11. 218. See Article 11(1). For the position in the United Kingdom see para. 13 of Sched. 7, Part II, and section 185 of 1995 MSA. 219. See para. 10 of Sched.7, Part II, and section 185 of the 1995 MSA.

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5)220 as only being triggered if the shipowner has obtained a limitation decree and admitted liability for the underlying claim. The authors submit that this is not correct: the reason for the introduction of the words ‘‘freely transferable’’ is a strong indication that Article 13(3) is concerned with the physical availability of the fund, rather than the obtaining of a decree at all. Further, the Court of Appeal was not referred to The ‘‘Bowbelle’’,221 nor to The ‘‘Putbus’’222 where the Court of Appeal ordered the release of security despite liability for the underlying claim still being in issue. In The ‘‘ICL Vikraman’’223 Colman J., to whom The ‘‘Bowbelle’’ and The ‘‘Putbus’’ were cited, con­ cluded that a limitation fund established in the English court is actually available, even though there may be no limitation decree at the relevant time, and that it remains available until a claimant establishes that the shipowner is not entitled to a decree of limitation.224 The judge also held that the protection afforded by Article 13(2) works only by reference to the State Party in which the ship or some other property has been attached or other form of security given.225 Nor can the Convention be construed so as to create a power in the courts of one State Party to interfere by order with the disposition of property or other security within the jurisdiction of a state which is not a party; the security regime provided by the Convention is clearly confined to State Parties.226 A RT I C L E 13(3) This subsection emphasises that the rights contained in Article 13(1) and (2) apply only where (a) the claimant may bring a claim against the limitation fund before the court administering that fund and (b) that fund is available and ‘‘freely transferable’’ in respect of that claim. The words ‘‘freely transferable’’ were not in the original draft articles submitted to the Legal Committee of the IMO and were introduced apparently227 to ensure that the constitution of a limitation fund would only bar actions in other countries provided that currency regulations did not prevent transfer out of the State in question of any sums to be distributed from the fund. Article 14: Governing law This section establishes that to the extent that the provisions of Articles 11, 12 and 13 do not provide specific guidance, rules relating to the ‘‘constitution and distribution of a limitation fund and all rules of procedure in connection therewith’’ shall be governed by the law of the State Party in which the fund is constituted. Therefore, for example, the courts of the United Kingdom will probably, in the absence of specific guidance in Article 12, continue to rule that interest earned on a limitation fund after it has been established in the United Kingdom is to be distributed together with the fund.228 220. [1998] 2 Lloyd’s Rep. 461, 473 (Knox L.J.). 221. [1990] 1 Lloyd’s Rep. 532, 535–536. 222. [1969] P. 136. 223. ICL Shipping Ltd. and Steamship Mutual Underwriting Association (Underwriting) Ltd. v. Chin Tai Steel Enterprise Co. Ltd. and Others (The ‘‘ICL Vikraman’’) [2004] 1 Lloyd’s Rep. 21. 224. The ‘‘ICL Vikraman’’ [2004] 1 Lloyd’s Rep. 21, at pages 35 to 37. 225. The ‘‘ICL Vikraman’’ [2004] 1 Lloyd’s Rep. 21, at page 34. 226. The ‘‘ICL Vikraman’’ [2004] 1 Lloyd’s Rep. 21, at page 34. 227. See page 99 of the Official Records of the International Conference 1976. 228. The ‘‘Garden City’’ (No. 2) [1984] 2 Lloyd’s Rep. 37. See page 68, above.

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The reference to rules relating to the ‘‘constitution and distribution’’ of a limitation fund arguably restricts the application of the law of the state in which the fund has been established to matters contained in Articles 11 and 12 and not in Article 13 (see the headings to the various Articles). However, it is submitted that the earlier reference in Article 14 to the ‘‘provisions of this chapter’’ (which includes Article 13) and the use of the words ‘‘and all rules of procedure in connection therewith’’ are plainly intended to apply the law of the State Party in which the fund is constituted to all matters contained in Articles 11, 12 and 13. Since the coming into force of the Convention, the authors have, on several occasions, been asked to advise whether the provisions of the Convention are substantive or pro­ cedural. The 1976 Convention, and the Conventions which preceded it, limit the extent of a claimant’s rights to recover damages. The 1957 Convention was always regarded by analysts as ‘‘procedural’’ in nature rather than ‘‘substantive’’. This conclusion was based on the following three important Articles of that Convention: Article 1(6): ‘‘The question upon whom lies the burden of proving whether or not the occurrences giving rise to the claim resulted from the actual fault or privity of the Owner shall be determined by the lex fori.’’

Article 4: ‘‘Without prejudice to the provisions of Article 3, Paragraph (2) of this Convention the rules relating to the constitution and distribution of the limitation fund, if any, and all rules of procedure shall be governed by the national law of the State in which the fund is constituted.’’

Article 5(5): ‘‘Questions of procedure relating to actions brought under the provisions of this Convention and also the time limit within which such action shall be brought or prosecuted shall be decided in accor­ dance with the national law of the contracting State in which the action takes place.’’

None of the above Articles are exactly duplicated in the 1976 Convention. By taking each of the 1957 Convention Articles in turn and contrasting them with their approximate counterparts in the 1976 Convention it is possible to assess whether there has been a substantial change in the provisions on which the above analysis of the 1957 Convention was based. Article 1(6) of the 1957 Convention is reflected in Article 4 of the 1976 Convention which provides: ‘‘A person shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.’’

It should be noted that there is no longer any mention of the system of law by reference to which the onus of proof should be determined. Under the 1957 Convention the question was to be determined in accordance with the lex fori. The 1976 Convention has reversed the burden of proof and in practice the meaning of Article 4 would be likely to be based on the lex fori. Article 4 of the 1957 Convention is reflected in Article 14 of the 1976 Convention which provides:

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‘‘Subject to the provisions of this Chapter [emphasis supplied] the rules relating to the constitution and distribution of a limitation fund, and all rules of procedure in connection therewith, shall be governed by the law of the State Party in which the fund is constituted.’’

The word ‘‘Chapter’’ refers to Chapter III of the Convention which contains Article 11: Constitution of the Fund, Article 12: Distribution of the Fund and Article 13: Bar to Other Actions. Therefore, Article 14 of the 1976 Convention establishes that, to the extent that the provisions of Articles 11, 12 and 13 do not provide specific guidance, rules relating to the matters in those Articles should be governed by the law of the State Party in which the fund is constituted. This leaves room for the view that those matters on which specific guidance is given within Chapter III extend beyond procedural rules and indicate a substantive role. Article 5(5) of the 1957 Convention has no equivalent in the 1976 Convention. Article 13 of the 1976 Convention is a successor to Articles 5(1) to 5(4) and the similarities between Article 14 in the 1976 Convention and Article 5(5) in the 1957 Convention are striking. However, Article 5(5) of the 1957 Convention refers to ‘‘the provisions of this convention’’ whereas Article 14 refers to ‘‘the provisions of this Chapter’’, thereby much reducing the scope of the wording. This may indicate that the remainder of the provisions not covered by Article 14 or other references to ‘‘national law’’/‘‘lex fori’’ are in fact substantive. However, there is no authority on which to base this view. Article 10(3) of the 1976 Convention also uses similar wording and provides that the rules of procedure to be applied where limitation is invoked are to be laid down by the national law of the country where the action is brought. Article 10(3) specifically applies to the provisions of Article 10(1) and (2) which allow for national laws to provide for limitation to be invoked without establishment of a fund and all questions of procedure are to be governed by that law. The Merchant Shipping Act 1995 allows for a limitation action to be brought prior to the constitution of a fund. There are other references to ‘‘national law’’ in the 1976 Convention. For example, in Article 8(1) and (4) and Article 6(3). None of these provisions was in fact incorporated into U.K. law, either because they were expressed to be optional, or because they con­ flicted with pre-existing U.K. law. It does follow, however, that the matters referred to in these Articles are in fact matters for English law as the lex fori. Whilst it is difficult to be dogmatic on this issue, on balance the authors consider that English law would characterise the 1976 Convention as procedural in nature, rather than substantive. Indeed, Clarke J. in Caltex v. BP229 expresses the view (obiter) that the right to limit liability is still procedural rather than substantive under the 1976 Convention as it is as under the 1924 and 1957 Conventions. Forum shopping The generally accepted view in the English Courts was that a shipowner had a prima facie right to choose the jurisdiction in which to bring his limitation proceedings.230 However, the English Court of Appeal in The ‘‘Herceg Novi’’231 stayed proceedings commenced by 229. [1996] 1 Lloyd’s Rep. 286 at page 294. 230. Saipem S.P.A. v. Dredging VO2 B.V. and Geosite Surveys Ltd (The ‘‘Volvox Hollandia’’) [1988] 2 Lloyd’s Rep. 361; Bouygues Offshore S.A. v. Caspian Shipping Co. and Others (Nos. 1, 3, 4 and 5) [1998] 2 Lloyd’s Rep. 461. 231. The ‘‘Herceg Novi’’ and ‘‘Ming Galaxy’’ [1998] 2 Lloyd’s Rep. 454.

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the owners of the Herceg Novi in England in favour of proceedings commenced in Singapore by the owners of the vessel with which it had been in collision, the ‘‘Ming Galaxy’’.232 The reason why the owners of the ‘‘Ming Galaxy’’ wished to proceed in Singapore, not England, was to take advantage of the lower limits available in Singapore, which had ratified only the 1957 Convention, not the 1976 Convention. At first instance, Clarke J. decided that Singapore was clearly and distinctly the more appropriate forum than England. On that basis, the English proceedings should be stayed unless to do so would deprive the owners of the ‘‘Herceg Novi’’ of a legitimate juridical advantage so as to justify the refusal of a stay. Having reviewed the authorities, including his own judgment in Caltex v. BP,233 he refused to stay the English proceedings. Although he accepted that he had been wrong in Caltex to refer to public policy, nevertheless he found that: ‘‘given the provisions of the 1976 Convention and the development of international maritime law which it represents (as evidenced by the support of IMO), it is in principle appropriate to hold in an appropriate case that, viewed objectively, the interests of all parties and the ends of justice may best be served by refusing a stay in an appropriate case and allowing the plaintiffs to proceed.’’234

Amongst the authorities considered was the contrary judgment of Wuang J. at first instance in the Hong Kong courts whose reasoning was, in part, that: ‘‘the fact that the 1976 Convention is a development from the 1957 Convention does not make the 1976 more widely acceptable objectively or more desirable objectively. There are pros and cons in respect to the two Conventions and a country’s preference for one Convention over another is a very complicated matter . . . ’’235

That decision was overturned by a majority of the Court of Appeal of Hong Kong. Clarke J.’s judgment was given shortly after Rix J.’s judgment in Caspian Basin Specialised Emergency Salvage Administration v. Bouygues Offshore S.A.236. Rix J. expressed the view that a court is entitled: ‘‘to say that the 1976 Convention represents not merely English law but an internationally sanc­ tioned and objective view of where justice is now viewed as lying, and that in such circumstances the advantages of the 1976 Convention (whichever way they fall on the facts of any case) are a relevant and legitimate consideration in the overall question of where a case may be tried for the interests of all the parties and the ends of justice.’’237

He did not, however, have to decide the point. Clarke J. commented on Rix J.’s judgment, considering that it supported the view he had reached. After Clarke J. had rendered his judgment, Timothy Walker J. reached a similar conclusion in Bouygues Offshore S.A. v. Caspian Shipping Co.238

232. Mr Justice Rix stated a shipowner had a prima facie right to bring limitation proceedings in a forum of its choosing. At the Court of Appeal the defendants’ counsel told the Court that they would not rely on this argument. (At page 459). 233. In which he held that the 1976 Convention was a legitimate juridical advantage which would justify the refusal of a stay in favour of the natural forum. This was on the basis that the 1976 Convention represents a widely accepted development from the regime which existed under the 1957 Convention and that the 1976 Convention should be regarded as part of English public policy which the courts should take into account. 234. The ‘‘Herceg Novi’’ and ‘‘Ming Galaxy’’ [1998] 1 Lloyd’s Rep. 167, at pages 176 to 177. 235. The ‘‘Kapitan Shvetsov’’ [1998] 1 Lloyd’s Rep. 199, at page 211. 236. [1997] 2 Lloyd’s Rep. 507. 237. [1997] 2 Lloyd’s Rep. 507, at page 530. 238. [1997] 2 Lloyd’s Rep. 533.

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The Court of Appeal in The ‘‘Herceg Novi’’, having the benefit of all these judgments, preferred the approach of Wuang J. and that of the dissenting member of the Court of Appeal of Hong Kong to the approach of Rix J., Clarke J., and Timothy Walker J.: ‘‘(1) The 1976 Convention has not received universal acceptance, or anything like it. It is not ‘an internationally sanctioned and objective view of where substantial justice is now viewed as lying’. It is simply the view of some 30 states. (2) The International Maritime Organisation is not a legislature. It may commend the 1976 Convention to the international community. But if by doing so it were found to have enacted an international consensus, that would be to deprive sovereign states to a large extent of their right to stay with some other regime. We say that because jurisdiction could often be obtained by arresting a ship in a 1976 country, and if that action were allowed to proceed despite there being a more appropriate forum where 1957 prevailed, the 1957 country would be left with no effective use for its own law. (3) In our view it is quite impossible to say that substantial justice is not available in Singapore, seeing that there is a significant body of agreement among civilized nations with the law as it is there administered. The preference for the 1976 Convention has no greater justification than for the 1957 regime. Loss in the cases we are considering will often be borne by the insurers of one side or the other. The 1976 Convention provides a greater degree of certainty, which they will perhaps wel­ come. But in terms of abstract justice, neither Convention is objectively more just than the other. Our task is not to decide whether our law is better than the law of Singapore. It is to decide whether substantial justice will be done in Singapore. In our view it will be.’’

The position might be otherwise in the case of Cyprus, which has ratified neither the 1957 nor 1976 Conventions and bases its limitation regime on the Merchant Shipping Act 1894.239 Jurisdiction in the EU Prior to 1 March 2002 courts within the countries of the EU regulated jurisdiction inter se in accordance with the provisions of the Brussels Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters. This Convention operated in tandem with the Lugano Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters which applied as between EU states and the states240 of the European Free Trade Association (EFTA).241 However, as from 1 March 2002 the Brus­ sels Convention has been replaced242 by the European Regulation (EC) 44/2001 of 22 December 2000 on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters243 (the ‘‘EC Regulation’’), the Lugano Convention continuing to apply to the EFTA states. The provisions of all three Conventions are broadly similar in effect. They apply ‘‘in civil and commercial matters no matter whatever the nature of the court or tribunal’’ but they do not apply to ‘‘arbitration’’.244 (For ease of discussion reference will be made below to the relevant provisions of the EC Regulation but it should be remembered that the corresponding provisions of the other Conventions have slightly different terminology and are differently numbered.) 239. See the obiter comments of David Mackie Q.C., sitting as Deputy Judge, in Domansa and Others v. Derin Shipping and Trading Co. Inc. [2001] 1 Lloyd’s Rep. 362 at page 369. 240. Iceland, Norway, Switzerland and Poland. 241. These Conventions were given force in the UK by the Civil Jurisdiction and Judgements Act 1982 as amended by the Civil Jurisdiction and Judgements Act 1991. 242. Except in the case of Denmark which still gives effect to the Brussels Convention 243. Implemented in the UK by the Civil Jurisdiction and Judgments Order 2001 (S.I. 2001/3929) 244. Article 1(2)(d).

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Article 71 of the EC Regulation provides that it ‘‘shall not affect any conventions to which the Member States are parties and which in relation to particular matters govern jurisdiction or the recognition or enforcement of judgement.’’ There are a number of maritime conventions which do expressly regulate jurisdiction.245 However, the 1976 Limitation Convention does not govern jurisdiction for limitation actions.246 Accordingly, regard must be had to the jurisdictional provisions of the EC Regulation itself in relation to limitation issues in the EU. The EC Regulation has many detailed provisions relating to jurisdiction but the most relevant provisions are as follows: Article 23 establishes that if the parties have agreed that the courts of a particular Member State are to have jurisdiction for a particular matter that court is deemed to have exclusive jurisdiction unless the parties have agreed otherwise. If there is no agreement in relation to any particular jurisdiction the defendant must as a general rule be sued in the Member State in which it is domiciled247 and Article 3 emphasises that a defendant which is domiciled in a Member State can be sued in another Member State only in exceptional circumstances. There are detailed provisions relating to jurisdiction for insurance claims in Article 8 but, subject to this, the most important exceptions to Article 2 are found in Article 5 which provides that: ‘‘A person domiciled in a Member State may, in another Member State be sued: 1. (a) in matters relating to a contract in the courts of the place for performance of the obligation in question; ... 3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful act occurred or may occur. ... 5. as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place in which the branch, agency or other establishment is situated; ... 7. as regards a dispute concerning the payment of remuneration claimed in respect of the salvage of a cargo or freight, in the court under the authority of which the cargo or freight in question: (a) has been arrested to secure such payment, or (b) could have been so arrested, but bail or other security has been given; provided that this provision shall apply only if it is claimed that the defendant has an interest in the cargo or freight or had such an interest at the time of salvage.’’

However, specific provision is made for limitation actions by Article 7 which provides that: ‘‘Where by virtue of this Regulation a court of a Member State has jurisdiction in actions relating to liability from the use or operation of a ship, that court, or any other court substituted for this purpose by the internal law of that State, shall also have jurisdiction over claims for limitation of such liability.’’

This provision makes it clear that where the court of a Member State has jurisdiction for a particular claim pursuant to the EC Regulation that court shall also have jurisdiction in relation to limitation in respect of such claims. For example, should a claim be brought by 245. e.g. Arrest Convention 1952 (Article 7), Collision Convention 1952 (Article 1), Athens Convention 1974 (Article 17) and the Hamburg Rules (Article 21) 246. This was recognised by the Court of Appeal in Seismic Shipping Inc. and Westerngeco Limited v. Total E&P UK PLC (The ‘‘Western Regent’’) [2005] EWCA Civ 985 29 July 2005. 247. As determined by Article 59.

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the owners of a German vessel against a Dutch shipowner in England pursuant to Article 5 (3) of the EC Regulation as a result of a collision in English waters, the English court would have jurisdiction to consider a limitation action commenced in England by the Dutch shipowner. However, it is notable that Article 7 of the EC Regulation applies when the court in which limitation is pleaded merely ‘‘has jurisdiction’’. With certain excep­ tions248 the relevant provisions of the EC regulation do not require that proceedings must have been started in the particular jurisdiction before the court can be considered to have jurisdiction. Therefore, provided that it is established, for example in the case of Article 5(3), that the harmful event occurred in a particular Member State the courts of that State would appear to have jurisdiction to hear a limitation action even if no proceedings had yet been commenced in that State against the party seeking limitation. Article 7 deals with the situation where limitation is sought in response to a claim or threatened claim and envisages that the claim and the limitation plea will be heard in the same court. This is clearly sensible in many instances but it ignores the historical fact that the law of many countries has allowed a person claiming limitation to choose where to bring his limitation action and even to do so before a claim has been made against him. For example, Rix J. observed in Caspian v. Bouygues Offshore SA (No. 4) that: ‘‘There can be nothing surprising or inappropriate about a limitation action being commenced in the same forum as a claimant’s action to establish liability: but equally, there is nothing unusual about a limitation action taking place in a different forum from that in which liability is being litigated. Moreover, the choice of forum for a limitation action belongs in principle to the party seeking to limit, not to the claimant.’’249

Accordingly, section 20 of the Supreme Court Act 1981 establishes that the English court has jurisdiction to hear ‘‘any action by shipowners or other persons under the Merchant Shipping Act 1995 for the limitation of the amount of their liability in connection with a ship or other property.’’ In The ‘‘Denise’’250 and The ‘‘Western Regent’’251 the English court has held that Article 10 of the 1976 Limitation Convention is a free-standing provision which leaves it open to a shipowner to commence a limitation action in the jurisdiction of his choice. However, the court did not have to consider the provisions of the EC Regulation in those cases as the relevant parties were not domiciled in the EU.252 Therefore, the question arises whether this traditional right has been curtailed by the provisions of the EC Regulation in cases affecting parties who are domiciled in the EU. The first question is whether a limitation action is affected by Article 2 of the Conven­ tion if one of the Defendants in the limitation action is domiciled in the EU. This in turn begs the question whether a limitation action is brought against any particular defendant or generically against ‘‘all potential defendants’’ wherever they may be domiciled. As a matter of practise a limitation action commenced in the English court must be brought against one named defendant with other possible defendants being referred to generally as 248. E.g. article 9(1) (b) and (c) 249. [1997] 2 Lloyd’s Rep. at page 425 and reiterated by the Court of Appeal in [1998] 2 Lloyd’s Rep. at page 474. See also ‘‘Volvox Hollandia’’ [1988] 2 Lloyd’s Rep. 361. 250. [2004] EWHC 3305 (Admty). 251. Seismic Shipping Inc. and Westerngeco Limited v. Total E&P UK PLC (The ‘‘Western Regent’’) [2005] EWCA Civ 985 29 July 2005; and see further pages 66–68. 252. However, the Dutch court appears to have followed the traditional rule in Maersk Olie and Gas A/S v. Firma M. de Haan and W. de Boer Case C-39/02 [2005] 1 Lloyd’s Rep. 210 albeit that the claimant in the liability action was domiciled in Denmark and that the Danish court had jurisdiction to hear the liability action.

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‘‘all other persons claiming to have suffered damage by reason of a collision between . . . etc’’.253 Accordingly, it is submitted that if the named defendant is domiciled in a Member State he is entitled to demand that the limitation action should be brought in the courts of that State. That same Member State would then appear to have jurisdiction over all other potential EU domiciled defendants by virtue of Article 6 which provides that: ‘‘A person domiciled in a Member State may also be sued: 1. when he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgements resulting from separate proceed­ ings.’’

It is also necessary to consider whether jurisdiction for limitation is affected by Articles 27 or 28 of the EC Regulation. These articles provide as follows Article 27 1. ‘‘Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is estab­ lished. 2. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court’’. Article 28 1. ‘‘Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings. 2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof. 3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.’’

It has been held both by the English court254 and the European Court255 that liability proceedings and a limitation action do not ‘‘involve the same cause of action’’ and that, accordingly, there is no obligation on the court which is not first seised of one of the two actions to relinquish jurisdiction under Article 27 in favour of the court which was first seised. However, the English Court of Appeal held in The ‘‘Happy Fellow’’256 that liability proceedings and a limitation action are, nevertheless,‘‘related actions’’ within the meaning of Article 28 with the result that the court which is not first seised of one of the two actions ‘‘may stay its proceedings’’ whilst the other action is still pending. In that case the Court of Appeal stayed the limitation action which had been commenced in the English court after the commencement of proceedings in the French court to determine liability in the collision action pending the outcome of the French proceedings because it

253. See Meeson: Admiralty Jurisdiction and Practice 3rd edition para 8.91. 254. The ‘‘Happy Fellow’’ [1997] 1 Lloyd’s Rep. 130. 255. Maersk Olie and Gas A/S v. Firma M de Haan and W de Boer Case C-39/02 [2005] 1 Lloyd’s Rep. 210 256. [1997] 1 Lloyd’s Rep 130.

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felt there would be a risk of irreconcilable judgments if both proceedings were allowed to progress contemporaneously. However, Article 28 only places a discretion to give way on the court which is seised of the action which is brought second in time. Accordingly, if the limitation action is commenced first then the court seised of it is not required to consider staying its proceed­ ings pending the outcome of the liability action. Indeed, in such circumstances, it is the court seised of the liability action which must consider whether it should stay its proceed­ ings pending the outcome of the limitation action. Historically, the English court has also been prepared to exercise a discretion to stay its own jurisdiction on the basis of ‘‘forum non conveniens’’ if it considered that another court was a more appropriate forum for the particular case. However, the European Court has held that the English court cannot exercise such discretion where the defendant is domiciled in the EU.257 Therefore, there is scope for considerable uncertainty in relation to jurisdiction for limitation actions under the EC Regulation. This can be a potentially serious issue for a possible claimant against a fund established in limitation proceedings in a Member State which he considers not to have jurisdiction. If he makes an appearance before that court to contest the limitation proceedings then he will be considered to have submitted to the jurisdiction of that court whereas if he chooses not to contest the proceedings the result may be a limitation decree which will be enforceable against him pursuant to Article 33 of the EC Regulation.258 C H A P T E R I V — S C O P E O F A P P L I C AT I O N

Article 15 1. This Convention shall apply whenever any person referred to in Article 1 seeks to limit his liability before the Court of a State Party or seeks to procure the release of a ship or other property or the discharge of any security given within the jurisdiction of any such State. Nevertheless, each State Party may exclude wholly or partially from the application of this Convention any person referred to in Article 1, who at the time when the rules of this Convention are invoked before the Courts of that State does not have his habitual residence in a State Party, or does not have his principal place of business in a State Party, or any ship in relation to which the right of limitation is invoked or whose release is sought and which does not at the time specified above fly the flag of a State Party. 2. A State Party may regulate by specific provisions of national law the system of limitation of liability to be applied to vessels which are: (a) according to the law of that State, ships intended for navigation on inland water­ ways; (b) ships of less than 300 tons. A State Party which makes use of the option provided for in this paragraph shall inform the depositary of the limits of liability adopted in its national legislation or the fact that there are none. 3. A State Party may regulate by specific provisions of national law the system of limitation of liability to be applied to claims arising in cases in which interests of persons who are nationals of other State Parties are in no way involved. 257. Owusu v. Jackson and Others [2005] 1 Lloyd’s Rep. 452. 258. See Maersk Olie and Gas A/S v. Firma M de Haan and W de Boer Case C-39/02 [2005] 1 Lloyd’s Rep. 210.

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4. The Courts of a State Party shall not apply this Convention to ships constructed for or adapted to, and engaged in, drilling: (a) when that State has established under its national legislation a higher limit of liability than that otherwise provided for in Article 6; or (b) when the State has become party to an international convention regulating the system of liability in respect of such ships. In a case to which sub-paragraph (a) applies that State Party shall inform the depositary accordingly. 5. This Convention shall not apply to: (a) aircushion vehicles; (b) floating platforms constructed for the purpose of exploring or exploiting the natural resources of the seabed or the subsoil thereof.

Article 6 of the 1996 Protocol has the following additional text as paragraph 3 bis in Article 15 of the 1976 Convention: ‘‘3. bis Notwithstanding the limit of liability prescribed in paragraph 1 of article 7, a State Party may regulate by specific provisions of national law the system of liability to be applied to claims for loss of life or personal injury to passengers of a ship, provided that the limit of liability is not lower than that prescribed in paragraph 1 of article 7. A State Party which makes use of the option provided for in this paragraph shall inform the Secretary-General of the limits of liability adopted or of the fact that there are none.’’

A RT I C L E 15(1) This subsection substantially restates the position as it was under Article 7 of the 1957 Convention. Thus, the 1976 Convention applies whenever a person who is entitled to limit liability seeks to do so before a court of a State which is Party to the Convention, or seeks the release of a ship or other property from arrest or the discharge of security within the jurisdiction of a State Party. However, a State Party is entitled to exclude either wholly or partially from the application of the Convention any person who would otherwise be entitled to limitation if such person is not habitually resident or does not have his principal place of business in a State Party at the time when the right to limit is invoked. Similarly, any State Party may exclude a ship if it does not fly the flag of a State Party at the time when the right of limitation is invoked or its release from arrest is sought. It follows that in relation to all States which have ratified and adopted the 1976 Convention it is essential to check whether, by domestic law, this right of exclusion has been exercised. The U.K. Govern­ ment has decided not to take advantage of these permitted reservations since the material parts of Article 15(1) do not appear in Schedule 7, Part I, to the 1995 MSA and do not therefore have the force of law in the United Kingdom.

A RT I C L E 15(2) This subsection entitles a State Party to make specific regulations in its national law in relation to the limit of liability of (a) non-sea-going ships and (b) ships of less than 300 tons.

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(a) Non sea-going ships. Article 1(1) of the 1957 Convention (like Article 1(2) of the 1976 Convention) provided that the Convention should apply to sea-going ships. How­ ever, Article 8 of the 1957 Convention allowed a State Party to decide what ‘‘other classes’’ of ship could be treated in the same manner as sea-going ships for the purposes of the Convention. Article 15(2) of the 1976 Convention gives a State Party more limited rights in this respect than it enjoyed under the 1957 Convention since the right to make specific national regulations is restricted to vessels which are, according to the law of that state, intended for navigation on inland waterways. In the case of the United Kingdom, the new regime has introduced no change in this respect.259 Both under section 503 of the 1894 MSA and paragraph 2 of Schedule 7, Part II, and Section 185 of the 1995 MSA, limitation is available in respect of non sea-going ships in the United Kingdom. (b) Ships of less than 300 tons. Article 3(5) of the 1957 Convention provided for a minimum deemed tonnage of 300 tons for purposes of limitation in respect of all types of claim. However the Protocol of Signature to that Convention reserved to States the right to make specific provisions of national law in relation to ships of less than 300 tons. By virtue of Article 6 of the 1976 Convention there is a single minimum limitation fund for all ships not exceeding 500 tons,260 that is, the fund is the same for a ship of 10 tons as it is for one of 500 tons. However, Article 15(2) preserves the right of a State Party to make specific national regulations in relation to ships of less than 300 tons. In the case of the United Kingdom the principle of the deemed minimum tonnage of 300 tons was, by section 1(1) of the 1958 Act, applied only to loss of life or personal injury claims and did not apply to property claims. However, by virtue of paragraph 5 of Schedule 7, Part II, and section 185 of the 1995 MSA, there is a minimum level of limitation for ships of less than 300 tons in respect of all claims within Article 6.261 These provisions do not apply to passenger claims since by virtue of Article 7 of the 1976 Convention limitation of this type of claim is not regulated by the tonnage of the ship but by the number of passengers which the ship is certificated to carry. Again the scope for variation from State to State makes it essential to check domestic legislation both in relation to non sea-going ships and minimum tonnage for limitation purposes.

A RT I C L E 15(3) This subsection allows a State Party to make specific national regulations relating to limitation where no nationals of other states are involved. In the case of the United Kingdom, this provision does not appear in Schedule 7, Part I, to the 1995 MSA. It seems that the U.K. Government decided not to reserve to itself the right to make such specific regulations.

259. See pages 12–13, above. 260. The 1996 Protocol to the Limitation Convention increases the minimum tonnage for limitation purposes from 500 tons to 2,000 tons. The U.K. Government has continued to exercise the right accorded by Article 15(2) to make special arrangements for vessels of less than 300 tons. 261. See page 48, above.

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A RT I C L E 15(3) bis This significant change was introduced at the insistence of the Japanese delegation to the Diplomatic Conference. This new provision will allow a State Party to regulate by national law the system of liability to be applied to claims for loss of life or personal injury to passengers. The proviso to this is that the limit should not be lower than that prescribed in the revised Article 7. It seems likely that the U.K. Government will avail itself of this opportunity. In commenting upon Article 15 of this Convention the authors have pointed out the scope for variation in the limitation regime between different states. This amendment to Article 15 merely gives one further opportunity for regional variations and further under­ mines the aim of international unification of the law relating to limitation of liability.

A RT I C L E 15(4) This subsection provides that the Convention shall not apply to ships which have either been constructed for or adapted to drilling and are engaged in drilling in the following circumstances: (a) when the State Party has by its national legislation established a higher limit of liability than that in Article 6; or (b) when the State has become party to an international convention regulating the system of liability in respect of such ships. In the case of the United Kingdom, this provision does not appear in Schedule 7, Part I, of the 1995 MSA and therefore does not have the force of law in the United Kingdom by virtue of section 185 of that Act. The implication is that such vessels are subject in the United Kingdom to the limitation provisions of the 1976 Convention provided that they satisfy the definition of ‘‘ship’’ contained in paragraph 12 of Schedule 7, Part II, to the MSA 1995.

A RT I C L E 15(5) This subsection provides that the terms of the 1976 Convention shall not apply to: (a) aircushion vehicles; (b) floating platforms constructed for the purpose of exploring or exploiting the natural resources of the seabed or the subsoil thereof. In the case of the United Kingdom this provision does not appear in Schedule 7, Part I, to the 1995 MSA and therefore does not have the force of law in the United Kingdom by virtue of section 185 of that Act. Accordingly the exclusions do not apply in the United Kingdom. The Hovercraft (Civil Liability) Order 1986,262 (issued pursuant to the Hover­ craft Act 1968, section 1(1)(i)) which came into force in the United Kingdom on the same 262. S.I. 1986/1305 (as amended by the Hovercraft (Civil Liability) (Amendment) Order 1987 (S.I. 1987/1835)).

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date as the 1976 Limitation Convention (1 December 1986) provides that the limitation provisions of the 1976 Convention as incorporated in the 1979 MSA apply to: (a) loss of life or personal injury connected with a hovercraft which is caused to persons not carried by the hovercraft; (b) loss or damage connected with a hovercraft which is caused to property; and (c) infringements of rights through acts or omissions connected with a hovercraft. The Order further provides that the Limitation Convention shall not apply to claims in respect of loss of or damage to passengers’ baggage or crew’s property carried by the hovercraft. The rights of hovercraft passengers and their baggage are covered (as specified in section 3 of the Order) by the Carriage by Air Act 1961 as modified by Schedule 1 to the Order itself. Schedule 3 of the Order sets out the modifications which it became necessary to make to the 1976 Limitation Convention to accommodate hovercraft. It should be noted that the limitation fund of a hovercraft under Article 6 is calculated by reference to the ‘‘maximum operational weight’’ of the craft rather than the gross tonnage. Article 7 of the Convention, which deals with limitation of liability for passenger claims, is omitted since such claims and the carrier’s right to limit in respect thereof are specifically dealt with by the Carriage by Air Act 1961 (section 3 of the Order). The Hovercraft (Civil Liability) Order 1986 was amended by the Hovercraft (Convention on Limitation of Liability for Maritime Claims (Amendment)) Order 1998 which came into force at the same time as the 1996 Protocol, May 2004. The amended limits of liability for claims arising on any distinct occasion are: Max operational weight not exceeding 8,000kg

Max operational weight > 8,000kg but not exceeding 13,000kg

Max operational weight >13,000kg

Claims for loss of life or personal injury

£825,085

£1,659,605

An additional £25.55 for each additional kg

Other claims

£357,360

£698,270

An additional £10.75 for each additional kg

Where the available amount calculated in respect of claims for loss of life or personal injury is insufficient to pay such claims in full, then the amount calculated in respect of other claims shall be available for payment of the unpaid balance of claims for loss of life or personal injury and such unpaid balance shall rank rateably with the other claims. There does not seem to be any specific provision in the 1995 MSA referring to floating platforms. Bearing in mind that the exclusion in Article 15(2) does not apply in the United Kingdom, floating platforms are prima facie subject to the 1976 limitation regime in the United Kingdom. However, it is submitted that such platforms may not fall within the definition of ‘‘ship’’ in paragraph 12 of Schedule 7, Part II, of the 1995 MSA (i.e. ‘‘a structure . . . launched and intended for use in navigation as a ship or part of a ship’’). If this interpretation is correct liability in respect of such platforms will be unlimited in the United Kingdom.

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CHAPTER V—FINAL CLAUSES

Article 16: Signature, ratification and accession 1. This Convention shall be open for signature by all States at the headquarters of the InterGovernmental Maritime Consultative Organisation (hereinafter referred to as ‘‘the Organisation’’) from February 1st 1977 until December 31st 1977, and shall thereafter remain open for accession. 2. All States may become parties to this Convention by: (a) signature without reservation as to ratification, acceptance or approval; or (b) signature, subject to ratification, acceptance or approval followed by ratification, acceptance or approval; or (c) accession. 3. Ratification, acceptance, approval or accession shall be effected by the deposit of a formal instrument to that effect with the Secretary-General of the Organisation (hereinafter referred to as ‘‘the Secretary-General’’). Article 17: Entry into force 1. This Convention shall enter into force on the first day of the month following one year after the date on which 12 States have either signed it without reservation as to ratification, acceptance or approval or have deposited the requisite instruments of ratification, accep­ tance, approval or accession. 2. For a State which deposits an instrument of ratification, acceptance, approval or accession, or signs without reservation as to ratification, acceptance or approval, in respect of this Convention after the requirements for entry into force have been met but prior to the date of entry into force, the ratification, acceptance, approval or accession or the signature without reservation as to ratification, acceptance or approval, shall take effect on the date of entry into force of the Convention or on the first day of the month following the 90th day after the date of signature or the deposit of the instrument, whichever is the later date. 3. For any State which subsequently becomes a Party to this Convention, the Convention shall enter into force on the first day of the month following the expiration of 90 days after the date when such State deposited its instrument. 4. In respect of the relations between States which ratify, accept, or approve this Conven­ tion or accede to it, this Convention shall replace and abrogate the International Convention relating to the Limitation of the Liability of Owners of Seagoing Ships, done at Brussels on October 10th 1957, and the International Convention for the Unification of certain Rules relating to the Limitation of Liability of the Owners of Seagoing Vessels, signed at Brussels on August 25th 1924. Article 18: Reservations 1. Any State may, at the time of signature, ratification, acceptance, approval or accession, reserve the right to exclude the application of Article 2, paragraph 1(d) and (e). No other reservations shall be admissible to the substantive provisions of this Convention. 2. Reservations made at the time of signature are subject to confirmation upon ratifica­ tion, acceptance or approval. 3. Any State which has made a reservation to this Convention may withdraw it at any time by means of a notification addressed to the Secretary-General. Such withdrawal shall take effect to the date the notification is received. If the notification states that the withdrawal of a reservation is to take effect on a date specified therein, and such date is later than the date the notification is received by the Secretary-General, the withdrawal shall take effect on such later date.

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Article 7 of the 1996 Protocol replaces paragraph 1 of Article 18 of the 1976 Convention with the following text: ‘‘1. Any State may, at the time of signature, ratification, acceptance, approval or accession or in any time thereafter, reserve the right: (a) to exclude the application of article 2, paragraphs 1(d) and (e); (b) to exclude claims for damage within the meaning of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 or any amendment or Protocol thereto. No other reservations shall be admissible to the substantive provisions of this Conven­ tion.’’

Article 19: Denunciation 1. This Convention may be denounced by a State Party at any time after one year from the date on which the Convention entered into force for that Party. 2. Denunciation shall be effected by the deposit of an instrument with the SecretaryGeneral. 3. Denunciation shall take effect on the first day of the month following the expiration of one year after the date of deposit of the instrument, or after such longer period as may be specified in the instrument.

Article 20: Revision and amendment 1. A Conference for the purpose of revising or amending this Convention may be con­ vened by the Organisation. 2. The Organisation shall convene a Conference of the States Parties to this Convention for revising or amending it at the request of not less than one-third of the Parties. 3. After the date of the entry into force of an amendment to this Convention, any instru­ ment of ratification, acceptance, approval or accession deposited shall be deemed to apply to the Convention as amended, unless a contrary intention is expressed in the instru­ ment.

Article 21: Revision of the limitation amount and of Unit of Account or Monetary Unit 1. Notwithstanding the provisions of Article 20 a Conference only for the purposes of altering the amounts specified in Article 6 and 7 and in Article 8 paragraph 2, or of substitut­ ing either or both of the units defined in Article 8, paragraphs 1 and 2, by other units shall be convened by the Organisation in accordance with paragraphs 2 and 3 of this Article. An alteration of the amounts shall be made only because of a significant change in their real value. 2. The Organisation shall convene such a Conference at the request of not less than one fourth of the States Parties. 3. A decision to alter the amounts or to substitute the units by other Units of Account shall be taken by a two-thirds majority of the States Parties present and voting in such Con­ ference. 4. Any State depositing its instrument of ratification, acceptance, approval or accession to the Convention, after entry into force of an amendment, shall apply to the Convention as amended.

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Article 22: Depositary 1. This Convention shall be deposited with the Secretary-General. 2. The Secretary-General shall: (a) transmit certified true copies of this Convention to all States which were invited to attend the Conference on Limitation of Liability for Maritime Claims and to any other States which accede to this Convention; (b) inform all States which have signed or acceded to this Convention of: (i) each new signature and each deposit of an instrument and any reservation thereto together with the date hereof; (ii) the date of entry into force of this Convention or any amendment thereto; (iii) any denunciation of this Convention and the date on which it takes effect; (iv) any amendment adopted in conformity with Articles 20 or 21; (v) any communication called for by any Article of this Convention. 3. Upon entry into force of this Convention, a certified true copy thereof shall be trans­ mitted by the Secretary-General to the Secretariat of the United Nations for registration and publication in accordance with Article 102 of the Charter of the United Nations. Article 23: Languages This Convention is established in a single original in the English, French, Russian and Spanish languages, each text being equally authentic. DONE AT LONDON this nineteenth day of November one thousand nine hundred and seventy-six. IN WITNESS WHEREOF the undersigned being duly authorised for that purpose have signed this Convention.

Article 17: Entry into force Article 17(1). The Convention has been ratified by 42 states263 and came into force internationally on 1 December 1986. In the case of the United Kingdom, those provisions of the 1976 Convention set out in Schedule 4, Part I, to the 1979 MSA and those provisions in Schedule 4, Part II, which have effect in connection therewith and which were given the force of law in the United Kingdom by virtue of section 17, came into force on 1 December 1986 by virtue of the Merchant Shipping Act 1979 (Commencement No. 10) Order 1986. The 1979 MSA was repealed by the 1995 MSA. The 1976 Convention now appears in Schedule 7, Parts I and II and is given the force of law in the U.K. by section 185 of the 1995 MSA. Article 17(4). This subsection provides that when the 1976 Convention regulates the relations between certain states in relation to limitation, the 1976 Convention shall replace and abrogate the 1924 and 1957 Conventions in respect of such relations. The denuncia­ tion of earlier Conventions is essential to ensure that no residual treaty obligations remain between those States which have ratified the 1976 Convention to replace earlier regimes and those States which have not ratified the 1976 Convention but remain parties to earlier Conventions.

263. These are identified in Appendix IX.

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Article 18: Reservations Article 18(1). This subsection allows any state to reserve the right to exclude the application of Article 2(1)(d) or (e) but does not allow it to make any other reservation in relation to the ‘‘substantive provisions’’ of the 1976 Convention. The United Kingdom has made a reservation in respect of Article 2(1)(d) but not in respect of Article 2(1)(e).264 Article 18(1) as amended by the 1996 Protocol. It is at first sight, surprising to find a reference to the HNS Convention in Article 18: Reservations, rather than in Article 3: Claims excepted from Limitation. However, the effect seems to be the same and it will be essential for States which ratify the HNS Convention to exercise this right of reservation. If this right is not exercised, a State Party to the 1976 Limitation Convention might, because of reciprocal treaty obligations under that Convention, be forced to permit the owners of a vessel flying the flag of another 1976 Convention country to limit in respect of a HNS claim in accordance with the terms of the 1976 Convention rather than in accordance with the higher limits imposed by the HNS Convention. Article 20: Revision and amendment, and Article 21: Revision of the limitation amount and of Unit of Account or Monetary Unit It should be noted that Article 8 of the 1996 Protocol provides a procedure whereby the limits specified in Article 6, paragraph 1, Article 7, paragraph 1 and Article 8, paragraph 2 of the Convention may be amended by a two thirds majority of the Contracting States (provided at least half of them were present at the time of voting) and that such amend­ ments will be deemed accepted 18 months after notification to all Contracting States unless one fourth of them communicate to the Secretary-General that they do not accept them. Amendments will enter into force 18 months after this deemed acceptance and all Contracting States will be bound.265

264. See pages 22–24, above. 265. See Appendix IV.

CHAPTER 4

Limitation: Passenger Claims

THE PASSENGER CONTRACT: GENERAL PRINCIPLES In most jurisdictions ordinary principles of the law of contract apply to a contract for the carriage of passengers by sea. Of particular importance in the United Kingdom are the common law principles dealing with the efficacy of contractual exclusion and limitation clauses. This is because tickets issued for passenger carriage invariably contain terms which attempt to exclude or limit the liability of the carrier. A passenger ticket is an unsigned contract document and the general common law principle is that any term which appears on the ticket will only form part of the contract if reasonable steps were taken to bring it to the attention of the passenger before or at the time the contract was entered into. This involves a consideration of a number of factors including the nature of the term and the steps taken to bring it to the attention of the other party at the time the contract was entered into. In the United Kingdom, quite apart from the common law principles, as from 1 February 1978 any term attempting to exclude or limit liability must satisfy the terms of the Unfair Contract Terms Act 1977. The Act renders certain exclusion clauses absolutely void whereas others are only valid to the extent that they meet the reasonableness test.

THE ATHENS CONVENTION 1974 1 This Convention, to which the United Kingdom is a party2 came into force internationally on 28 April 1987. In 2002 a Diplomatic Conference held at the IMO headquarters in London adopted the text of the Protocol of 2002 to the Athens Convention. However, this Protocol has not yet entered into force internationally.3 The position in the United Kingdom Although the Athens Convention did not come into force internationally until 28 April 1987 the United Kingdom had given the Convention the force of law in the United Kingdom subject to certain special provisions as from 1 January 1981 by section 14 of the MSA 1979 until such time as the Convention came into force internationally.

1. The full title of the Convention is: Convention Relating to the Carriage of Passengers and their Luggage by Sea. 2. Other states which have adopted the Convention are listed in Appendix IX. 3. The Protocol is considered in more detail in Chapter 5.

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When the Athens Convention came into force internationally on 28 April 1987 the Convention was incorporated into the law of the United Kingdom by section 183(1) of the 1995 MSA which repealed the whole of the 1979 MSA. The text of the Convention and the Provisions having Effect in Connection with the Convention appear, respectively, as Parts I and II of Schedule 6 to the Act. (See Appendix III.) Section 183 of the 1995 MSA grants to the Government wide powers, by Order in Council, to amend the section and Schedule 6 if it transpires that they conflict with earlier conventions or if the Athens Convention is subsequently revised. Accordingly, the UK government will not need to enact primary legislation to implement the 2002 Protocol once it comes into force internationally. By section 184 of the 1995 MSA the Government may, by Order in Council, extend the application of the Athens Convention to domestic carriage, that is, to contracts of carriage where the port of departure and destination are within the British Isles. In the United Kingdom, the Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order, 19874 (which came into effect on 30 April 1987) provides that the Athens Conven­ tion shall apply to contracts for the carriage of passengers where the places of departure and destination are within the United Kingdom, Channel Islands and the Isle of Man and where there is no intermediate port of call outside that area. As from 1981 the law of the United Kingdom5 required a carrier to give notice to passengers of the application of the Convention and of some of its salient provisions.6 Failure to comply with this requirement rendered the carrier guilty of an offence and liable on summary conviction to a fine. This penal provision is now embodied in S.I. 1987/7037 which came into force on 30 April 1987. In The ‘‘Lion’’8 it was held that the shipowners were entitled to rely on the provisions of the Athens Convention notwithstanding the fact that they had failed to give notice as required by this provision. Article 1: Definitions In this Convention the following expressions have the meaning hereby assigned to them: 1. (a) ‘‘carrier’’ means a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by him or by a performing carrier; (b) ‘‘performing carrier’’ means a person other than the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or part of the carriage; 2. ‘‘contract of carriage’’ means a contract made by or on behalf of a carrier for the carriage by sea of a passenger or of a passenger and his luggage, as the case may be; 3. ‘‘ship’’ means only a seagoing vessel, excluding an aircushion vehicle; 4. ‘‘passenger’’ means any person carried in a ship: (a) under a contract of carriage, or (b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods not governed by this Convention; 4. S.I. 1987/670. 5. Carriage of Passengers and their Luggage by Sea (Interim Provisions) (Notice) Order 1980 (S.I. 1980/1125) 6. Notice is normally given in the terms and conditions printed on the ticket. 7. Carriage of Passengers and their Luggage by Sea (Notice) Order 1987. 8. [1990] 2 Lloyd’s Rep. 144.

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5. ‘‘luggage’’ means any article or vehicle carried by the carrier under a contract of carriage, excluding: (a) articles and vehicles carried under a charter party, bill of lading or other contract primarily concerned with the carriage of goods, and (b) live animals; 6. ‘‘cabin luggage’’ means luggage which the passenger has in his cabin or is otherwise in his possession, custody or control. Except for the application of paragraph 8 of this Article and Article 8, cabin luggage includes luggage which the passenger has in or on his vehicle; 7. ‘‘loss of or damage to luggage’’ includes pecuniary loss resulting from the luggage not having been re-delivered to the passenger within a reasonable time after the arrival of the ship on which the luggage has been or should have been carried, but does not include delays resulting from labour disputes; 8. ‘‘carriage’’ covers the following periods: (a) with regard to the passenger and his cabin luggage, the period during which the passenger and/or his cabin luggage are on board the ship or in the course of embarkation or disembarkation, and the period during which the passenger and his cabin luggage are transported by water from land to the ship or vice versa, if the cost of such transport is included in the fare or if the vessel used for the purpose of auxiliary transport has been put at the disposal of the passenger by the carrier. However, with regard to the passenger, carriage does not include the period during which he is in a marine terminal or station or on a quay or in or on any other port installation; (b) with regard to cabin luggage, also the period during which the passenger is in a marine terminal or station or on a quay or in or on any other port installation if that luggage has been taken over by the carrier or his servant or agent and has not been re-delivered to the passenger; (c) with regard to other luggage which is not cabin luggage, the period from the time of its taking over by the carrier or his servant or agent onshore or on board until the time of its re-delivery by the carrier or his servant or agent; 9. ‘‘international carriage’’ means any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State;

(a) Carrier/performing carrier The Convention places liability on the carrier and the performing carrier. Carrier is defined as ‘‘a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by him or by a performing carrier’’. This wide definition of carrier will include tour operators, ferry companies and cruise companies. A performing carrier is defined as ‘‘a person other than the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or part of the carriage’’. It follows that if a ship owned by A has been chartered to B who issues his own passenger ticket, B is the carrier and A is the performing carrier. During the performing carrier’s sector of the voyage, the carrier will remain liable for the acts or omissions of the performing carrier and his servants and agents. The perform­ ing carrier himself will be liable jointly and severally with the carrier and may seek to rely upon the terms of the Convention.9 The fact that there is joint and several liability is an advantage to the claimant. 9. See Article 4.

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Where a sub-contractor to the carrier does not come within the definition of ‘‘perform­ ing carrier’’, a claimant’s right of recourse will be restricted to his rights against the carrier who will be liable for the acts of the sub-contractor but may have a right over against the sub-contractor. (b) Contract of carriage Where the carriage does not take place under a contract, or where it is gratuitous, the provisions of the Convention will not apply and the carrier will not have the benefits of the limits of liability provided in the Convention. However, provided that he is a person entitled to limit his liability in accordance with Article 1 of the 1976 Limitation Conven­ tion, his right to rely upon the global limit under that Convention or the 1996 Protocol if applicable would be retained. Paragraph 9 of Part II of Schedule 6 MSA 199510 provides that in any contract for the carriage of passengers to which the law of the United Kingdom applies, ‘‘any reference in the Convention to a Contract of Carriage excludes a contract of carriage which is not for reward’’. It is not clear how these words should be interpreted. Do they signify that the ‘‘reward’’ must substantially reflect the costs incurred by the carrier in carrying the passenger? This might have been relevant to one class of passengers on board the Herald of Free Enterprise who had ‘‘purchased’’ tickets through the Sun newspaper for a nominal fare of £1. But for the special wording of paragraph 9 of Part II of Schedule 6, that would normally present no difficulty since, under English contract law, consideration must be sufficient, though it need not be adequate. The point has never been tested before the courts. (c) Ship The Convention only applies if the carriage is performed on a sea-going vessel.11 In giving effect to the 1976 Convention in the United Kingdom, it was provided in Schedule 7, Part II, paragraph 2,12 that the right to limit shall apply in relation to ‘‘any ship whether seagoing or not’’. No such amendment was made in relation to the Athens Convention which, therefore, only applies to sea-going vessels. It was suggested that this inconsistency between the application of the Athens Convention and the 1976 Convention in the United Kingdom resulted from a legislative error. This error has the unfortunate result that where, as in the case of the 1989 Marchioness Thames disaster, a pleasure-craft is involved, the Athens Convention will not apply because the vessel concerned is not ‘‘sea-going’’. On the other hand, because of the amendment to the 1976 Limitation Convention, as it operates in the United Kingdom, the passenger limitation provisions of the 1976 Convention will apply to such an incident. The fund available under Article 7 of the 1976 Convention is a global fund calculated by reference to the number of passengers which the vessel is licensed to carry. The availability of a global fund may in practice be of advantage to claimants. In bringing into force the 1996 Protocol, the UK Government has removed the overlap between the two conventions in relation to sea-going ships by 10. See Appendix III. 11. See consideration of the meaning of ‘‘sea-going’’ in the context of the 1976 Convention, page 90. 12. See Appendix IV.

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providing that Article 7 of the 1976 Convention, as amended by the 1996 Protocol, shall not apply to sea-going ships.13 Aircushion vehicles are excluded from the Convention,14 as are inflatable rafts and jet skis.15 (d) Passenger A passenger is defined as any person carried on a ship either under a contract of carriage or one who is with the consent of the carrier accompanying a vehicle or live animals which are carried under a contract for the carriage of goods not covered by the Convention. This would, for example, cover drivers accompanying commercial vehicles. Some practical problems may arise from this definition. For example, in the case of the Marchioness disaster of August 1989, the boat had been hired by an individual for the purpose of celebrating his birthday. None of those whom he invited to attend the party had purchased or been issued with tickets and it must be a matter of debate whether they were strictly speaking passengers within the definition of the Convention. It may, however, be sufficient that the individual who hires the boat has entered into a contract for the carriage of his guests. This point was never tested. (e) Luggage/cabin luggage16 Luggage is any article or vehicle carried under a contract of passenger carriage but excludes articles or vehicles carried under a charterparty or bill of lading and also excludes live animals. Cabin luggage on the other hand, means the passenger’s personal effects in his cabin, in his vehicle or in his personal possession. The distinction between luggage and cabin luggage is relevant in the context of limitation of liability under Article 8 of the Athens Convention. The distinction between luggage and cabin luggage is also relevant in the context of the period of time during which the carrier is responsible for loss or damage. (See definition of carriage, below.) (f) Loss of or damage to luggage The introduction of the word ‘‘pecuniary’’ in this definition may have the effect of extending the carrier’s liability to pay damages which would otherwise be regarded as too remote. If, for example, the passenger’s luggage contains vital documents the loss of which prevents the passenger concluding a beneficial deal, it is arguable that the pecuniary loss which he suffers thereby is recoverable. However, it is the authors’ view that questions of remoteness will continue to be governed by the domestic law of the country 13. S.I. 1998/1258, Article 7(e). 14. For special provisions relating to the limitation of liability for claims arising from the operation of air cushion vehicles, see pages 89–90. 15. See McEwan v. Bingham (t/a Studland Watersports) (unreported) and Steedman v. Scofield and Another [1992] 2 Lloyd’s Rep. 163. 16. A similar term, ‘‘personal luggage’’, has been defined (obiter) as meaning ‘‘such things as a passenger requires for his or her personal use or convenience’’. See Dillon and Others v. Baltic Shipping Co. (The ‘‘Mikhail Lermontov’’) (Supreme Court of New South Wales Admiralty Division) [1990] 1 Lloyd’s Rep. 579, at 596; Great Northern Railway v. Shepherd (1852) L.J. Ex. 114.

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in which the claim is pursued and if such a loss is too remote, the wording of the Convention alone would not make the loss recoverable. In the event, the luggage limita­ tion figures are so small that in practice the distinction will be unimportant. (g) Carriage In respect of a passenger and his cabin luggage, the period of the carrier’s liability runs from embarkation to disembarkation including any periods of transport by water from land to the ship or vice versa, if either the cost of such transport is included in the fare or if the vessel used for such transport has been put at the disposal of the passenger by the carrier. However, although luggage is covered from the moment the carrier has taken charge of it (normally at the terminal/quay), the Convention does not apply whilst the passenger himself is in a marine terminal or station or on a quay or other port installation. (h) International carriage International carriage is carriage where, according to the terms of the contract of carriage, the places of departure and of destination are in two different states, or in the same state if there is an intermediate port of call in another state. However, in the United Kingdom, in order to maintain the position which existed under the interim provisions of S.I. 1980/1092, the Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order, 198717 (which came into effect on 30 April 1987), provides that the Athens Convention shall continue to apply to contracts for the carriage of passengers where the places of departure and destination are within the United Kingdom, Channel Islands and the Isle of Man and under which there is no intermediate port of call outside that area.18 Article 2: Application 1. This Convention shall apply to any international carriage if: (a) the ship is flying the flag of or is registered in a State Party to this Convention, or (b) the contract of carriage has been made in a State Party to this Convention, or (c) the place of departure or destination, according to the contract of carriage, is in a State Party to this Convention. 2. Notwithstanding paragraph 1 of this Article, this Convention shall not apply when the carriage is subject, under any other international convention concerning the carriage of passengers or luggage by another mode of transport, to a civil liability regime under the provisions of such convention, in so far as those provisions have mandatory application to carriage by sea.

Having defined ‘‘International Carriage’’ in Article 1(9), Article 2 defines the circum­ stances in which the Convention will apply provided the carriage is international as 17. S.I. 1987/670. 18. It is not clear whether, if a passenger misses his ship and then joins her in another port situated in a country which is not a State Party, the Convention still applies because the port of departure/destination as stated in the ticket is in a State Party.

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defined. Thus, if a carrying vessel is registered in or flies the flag of a Convention country, the Convention will apply, and likewise it will apply if the contract of carriage in question is made within a Convention country or if the place of departure or destination named in that contract of carriage is within a Convention country. Article 2(2) deals with a situation where the contract of carriage may be subject to other Conventions which are mandatorily applicable.

Article 3: Liability of the carrier 1. The carrier shall be liable for the damage suffered as a result of the death of or personal injury to a passenger and the loss of or damage to luggage if the incident which caused the damage so suffered occurred in the course of the carriage and was due to the fault or neglect of the carrier or of his servants or agents acting within the scope of their employ­ ment. 2. The burden of proving that the incident which caused the loss or damage occurred in the course of the carriage, and the extent of the loss or damage, shall lie with the claim­ ant. 3. Fault or neglect of the carrier or of his servants or agents acting within the scope of their employment shall be presumed, unless the contrary is proved, if the death of or personal injury to the passenger or the loss of or damage to cabin luggage arose from or in connec­ tion with the shipwreck, collision, stranding, explosion or fire, or defect in the ship. In respect of loss of or damage to other luggage, such fault or neglect shall be presumed, unless the contrary is proved, irrespective of the nature of the incident which caused the loss or damage. In all other cases the burden of proving fault or neglect shall lie with the claimant.

Article 4: Performing carrier 1. If the performance of the carriage or part thereof has been entrusted to a performing carrier, the carrier shall nevertheless remain liable for the entire carriage according to the provisions of this Convention. In addition, the performing carrier shall be subject and entitled to the provisions of this Convention for the part of the carriage performed by him. 2. The carrier shall, in relation to the carriage performed by the performing carrier, be liable for the acts and omissions of the performing carrier and of his servants and agents acting within the scope of their employment. 3. Any special agreement under which the carrier assumes obligations not imposed by this Convention or any waiver of rights conferred by this Convention shall affect the perform­ ing carrier only if agreed by him expressly and in writing. 4. Where and to the extent that both the carrier and the performing carrier are liable, their liability shall be joint and several. 5. Nothing in this Article shall prejudice any right of recourse as between the carrier and the performing carrier.

Article 5: Valuables The carrier shall not be liable for the loss of or damage to monies, negotiable securities, gold, silverware, jewellery, ornaments, works of art, or other valuables, except where such valuables have been deposited with the carrier for the agreed purpose of safe-keeping in which case the carrier shall be liable up to the limit provided for in paragraph 3 of Article 8 unless a higher limit is agreed upon in accordance with paragraph 1 of Article 10.

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Article 6: Contributory fault If the carrier proves that the death of or personal injury to a passenger or the loss of or damage to his luggage was caused or contributed to by the fault or neglect of the pas­ senger, the court seized of the case may exonerate the carrier wholly or partly from his liability in accordance with the provisions of the law of that court.

Articles 3–6 The basis of liability of the Convention is set out in Articles 3–6. Article 3 defines the basis of the liability of the carrier, but does not restrict the right of recovery to passengers. Claims may be pursued by any person ‘‘for the damage suffered as a result of the death of or personal injury to a passenger and the loss of or damage to luggage’’. This wording appears to open the door to third-party claims for damages including consequential loss and as Article 3 states that the carrier ‘‘shall be liable’’ this liability may not depend on whether the domestic law of the country in which the claim is pursued would recognise the claim. Article 3(1) also provides that in the case of death or personal injury to a passenger and loss or damage to luggage, the carrier shall be liable if the incident was ‘‘due to the fault or neglect’’ of the carrier or his servant or agent acting within the scope of their employ­ ment. The burden is on the claimant to prove: (i) that the incident occurred in the course of the carriage; (ii) that it was due to the fault or neglect of the carrier or of his servants or agents acting within the scope of their employment; and, (iii) the extent of the loss or damage. However, where death or personal injury or loss or damage to cabin luggage arises from or in connection with a shipwreck, collision, stranding, explosion, fire or from a defect in the ship, then fault or neglect on the part of the carrier is presumed ‘‘unless the contrary is proved’’. In other words, if the claim arises out of a maritime accident the burden is placed upon the carrier to prove that there was no fault or neglect on his part or on the part of those for whom he is responsible. ‘‘Shipwreck, collision, stranding, explosion or fire’’ are dramatic and easily recognised events all of which would trigger a presumption of fault on the part of the carrier under Article 3(3). However, a ‘‘defect in the ship’’ is less easily recognised.19 Physical faults which make the ship unseaworthy would presumably qualify but inadequate manning or maintenance would probably not unless they cause physical defects in the ship. As regards loss or damage to ‘‘other luggage’’ (as opposed to ‘‘cabin luggage’’), fault or neglect is presumed in all cases unless the contrary is proved by the carrier. Where the carrier can prove the death or personal injury or loss of or damage to luggage was caused or contributed to by the passenger, then the court may relieve the carrier wholly or partly from his liability in accordance with the provisions of the law of that court.20

19. ‘‘Defect’’ is, however, defined in Article 3(5)(c) of the 2002 Athens Protocol; see page 113. 20. Sched. 6, Part II, para. 3 MSA 1995 provides that in the context of Article 6 in the United Kingdom, the law in relation to contributory negligence is to be found in the Law Reform (Contributory Negligence) Act 1945.

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Whereas the carrier is liable throughout the carriage, the performing carrier is liable for incidents occurring during ‘‘the part of the carriage performed by him’’. Where both the carrier and the performing carrier are liable for the same occurrence, their liability is joint and several. The carrier is liable for the acts and omissions of his own servants and agents and for the acts of the servants and agents of the performing carrier. However, strangely, there is no express provision which states that the performing carrier is responsible for the acts and omissions of his own servants and agents, but this surely must have been intended. Support may possibly be found in the last sentence to Article 4(1), but, arguably, the words used are not sufficiently precise. Article 5 provides that the carrier is not liable for the loss of or damage to monies, negotiable securities, gold, silverware, jewellery and other valuables unless they were deposited with the carrier for the agreed purpose of safekeeping, in which case, unless a higher limit is agreed, the carrier shall not be liable beyond the limits stated in Article 8 of the Convention. Article 7: Limit of liability for personal injury 1. The liability of the carrier for the death of or personal injury to a passenger shall in no case exceed 46,666 units of account per carriage. Where in accordance with the law of the court seized of the case damages are awarded in the form of periodical income payments, the equivalent capital value of those payments shall not exceed the said limit. 2. Notwithstanding paragraph 1 of this Article, the national law of any State Party to this Convention may fix, as far as carriers who are nationals of such State are concerned, a higher per capita limit of liability. Article 8: Limit of liability for loss of or damage to luggage 1. The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 833 units of account per passenger, per carriage. 2. The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 3,333 units of account per vehicle, per carriage. 3. The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 of this Article shall in no case exceed 1,200 units of account per passenger, per carriage. 4. The carrier and the passenger may agree that the liability of the carrier shall be subject to a deductible not exceeding 117 units of account in the case of damage to a vehicle and not exceeding 13 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage. Article 9: Units of account and conversion 1. The unit of account mentioned in this Convention is the special drawing right as defined by the International Monetary Fund. 2. The amounts referred to in Articles 7 and 8 shall be converted into the national currency of the State of the court seized of the case on the basis of the value of that currency on the date of the judgment or the date agreed upon by the parties. Article 10: Supplementary provisions on limits of liability 1. The carrier and the passenger may agree, expressly and in writing, to higher limits of liability than those prescribed in Articles 7 and 8.

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2. Interest on damages and legal costs shall not be included in the limits of liability prescribed in Articles 7 and 8.

Articles 7–10 Articles 7 and 8 set out the maximum amounts per contract of carriage for which the carrier may be liable. In summary these are: Death or personal injury passenger Loss/damage to cabin luggage per passenger (excluding luggage in or on a vehicle) Loss/damage to a vehicle including luggage in or on it (per vehicle) Loss/damage to other luggage per passenger

46,666 SDRs21 833 SDRs 3,333 SDRs 1,200 SDRs

(By Article 8(4), the carrier and the passenger can agree to a deductible not exceeding 117 SDRs for damage to a vehicle and 13 SDRs per passenger for loss of or damage to luggage.) The above are minimum limits and the carrier may not stipulate for any lower limits. However, if they so wish, the carrier and the passenger may agree to higher limits provided such agreement is express and in writing (Article 10). These higher limits may not be binding on the performing carrier unless ‘‘agreed by him expressly and in writing’’—see Article 4(3). Schedule 6, Part II, paragraph 4 MSA 199522 empowers the Secretary of State to substitute different limits for those stated in Article 7(1) (in respect of death or personal injury) for a carrier whose principal place of business is in the United Kingdom. This power was exercised following the Herald of Free Enterprise disaster and the limit for death or personal injury was set in the United Kingdom at FF 1,525,000 (£80,009) with effect from 1 June 1987.23 This has been increased (from 1 January 1999) to 300,000 SDRs. This higher limit only applies to carriers whose ordinary place of business is in the U.K.24 On 1 November 2002, the IMO agreed a Protocol which overhauled and amended the Convention. The Protocol will come into force 12 months after being ratified by 10 States and will substantially increase the limits. The 2002 Protocol is considered in Chapter 5. Article 11: Defences and limits for carriers’ servants If an action is brought against a servant or agent of the carrier or of the performing carrier arising out of damage covered by this Convention, such servant or agent, if he proves that he acted within the scope of his employment, shall be entitled to avail himself of the 21. The 1976 Protocol to the Convention which came into force on 30 April 1989, states limits in SDRs as opposed to the Gold Francs used in the original text. The value of the SDR in the national currency shall be calculated at the date of judgment or at the date agreed by the parties (Article 9). 22. See Appendix III. 23. S.I. 1987/855 Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987. 24. S.I. 1998/2917 Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1998.

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defences and limits of liability which the carrier or the performing carrier is entitled to invoke under this Convention. Article 12: Aggregation of claims 1. Where the limits of liability prescribed in Articles 7 and 8 take effect, they shall apply to the aggregate of the amounts recoverable in all claims arising out of the death of or personal injury to any one passenger or the loss of or damage to his luggage. 2. In relation to the carriage performed by a performing carrier, the aggregate of the amounts recoverable from the carrier and the performing carrier and from their servants and agents acting within the scope of their employment shall not exceed the highest amount which could be awarded against either the carrier or the performing carrier under this Convention, but none of the persons mentioned shall be liable for a sum in excess of the limit applicable to him. 3. In any case where a servant or agent of the carrier or of the performing carrier is entitled under Article 11 of this Convention to avail himself of the limits of liability prescribed in Articles 7 and 8, the aggregate of the amounts recoverable from the carrier, or the performing carrier as the case may be, and from that servant or agent, shall not exceed those limits.

Articles 11 and 12 Article 11 provides that the servant or agent of the carrier or of the performing carrier can limit his liability for death of or personal injury to a passenger, or for loss of or damage to luggage or vehicles incurred whilst acting within the scope of his employment. Articles 7 and 8 make it clear that the carrier can limit his liability under the Convention. Strangely there is no express provision to the effect that the performing carrier can limit his liability. However, the provisions of Article 12(2) and (3) clearly indicate that the performing carrier has that right. For comments generally on the subject of aggregation of claims, see commentary on Article 9 of the 1976 Convention on page 58. Article 13: Loss of right to limit liability 1. The carrier shall not be entitled to the benefit of the limits of liability prescribed in Articles 7 and 8 and paragraph 1 of Article 10, if it is proved that the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. 2. The servant or agent of the carrier or of the performing carrier shall not be entitled to the benefit of those limits if it is proved that the damage resulted from an act or omission of that servant or agent done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. Article 14: Basis for claims No action for damages for the death of or personal injury to a passenger, or for the loss of or damage to luggage, shall be brought against a carrier or performing carrier otherwise than in accordance with this Convention.

Articles 13 and 14 The wording of Article 13 is similar to that of other Conventions and a general discussion of the similarities and differences between the Conventions can be found on pages 32–33 in Chapter 3, commenting on the 1976 Limitation Convention.

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A number of points need to be made, specifically in relation to the Athens Conven­ tion: (a) It is only the conduct of the carrier25 himself which is relevant in determining whether or not he can limit his liability.26 Therefore, if damage has been caused by the intentional or reckless act of a servant or agent of the carrier (unless that servant is the alter ego of the carrier), but without similar conduct on the part of the carrier himself, the carrier is entitled to limit. If a servant or agent27 of the carrier or performing carrier, seeks to limit his liability under the Convention, he will similarly lose such right if personally guilty of intentional or reckless conduct. (b) Article 13 appears to provide that the carrier shall lose the right to limit only if ‘‘damage’’ results from his conduct. It does not expressly provide that the right to limit will also be lost if the claim is for ‘‘loss’’ or injury to the person. However, Article 13 makes it clear that the rights to limit which will be lost are those contained in Articles 7, 8 and 10(1). These articles expressly refer to the liability of the carrier for the death of or personal injury to a passenger28 and for ‘‘loss of or damage to luggage and/or vehicles’’.29 Therefore it is unlikely that this provision will be construed as referring merely to physical damage.30 (c) Like Article 4 of the 1976 Convention and Article 8, Rule 1, of the Hamburg Rules, Article 13 provides the right to limit is lost only if the carrier intends to cause ‘‘such’’ damage or acts recklessly with knowledge that ‘‘such’’ damage will result. Therefore, it seems clear that the right to limit is lost only if the damage complained of was the kind of damage known to be the probable result of the conduct.31 (d) Article 13 refers to the ‘‘carrier’’ and the ‘‘servants or agents’’ of the carrier or of the performing carrier but there is no reference to the performing carrier. Does this mean that the performing carrier has an unbreakable right to limit liability? This cannot have been the intention. Article 14 provides that no claim for damages for death or personal injury to a passenger or for loss or damage to luggage may be brought against the carrier or performing carrier otherwise than in accordance with the Athens Convention. The effect of this Article is to ensure that no passenger can opt to pursue his claim under any other Convention which may apply (such as the 1976 Convention) or otherwise.32 Article 15: Notice of loss or damage to luggage 1. The passenger shall give written notice to the carrier or his agent: (a) in the case of apparent damage to luggage: 25. N.B. there is no express reference to the performing carrier. 26. The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. 144. A similar construction applies to the Hague-Visby Rules. The ‘‘European Enterprise’’ [1989] 2 Lloyd’s Rep. 185. 27. The right is available whether or not he is an independent contractor, contra Article IV bis Rule 2 of the Hague-Visby Rules. 28. Article 7(1). 29. Article 8. 30. The position may be different under the Hague-Visby Rules, see pages 153–154. 31. See pages 35–37 and 153–154. 32. See commentary on pages 52–55, and also see commentary on Article 19, below.

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(i) for cabin luggage, before or at the time of disembarkation of the passenger; (ii) for all other luggage, before or at the time of its re-delivery; (b) in the case of damage to luggage which is not apparent, or loss of luggage, within fifteen days from the date of disembarkation or re-delivery or from the time when such re-delivery should have taken place. 2. If the passenger fails to comply with this Article, he shall be presumed, unless the contrary is proved, to have received the luggage undamaged. 3. The notice in writing need not be given if the condition of the luggage has at the time of its receipt been the subject of joint survey or inspection. Article 16: Time-bar for actions 1. Any action for damages arising out of the death of or personal injury to a passenger or for the loss of or damage to luggage shall be time-barred after a period of two years. 2. The limitation period shall be calculated as follows: (a) in the case of personal injury, from the date of disembarkation of the passenger; (b) in the case of death occurring during carriage, from the date when the passenger should have disembarked, and in the case of personal injury occurring during carriage and resulting in the death of the passenger after disembarkation, from the date of death, provided that this period shall not exceed three years from the date of disembarkation; (c) in the case of loss of or damage to luggage, from the date of disembarkation or from the date when disembarkation should have taken place, whichever is later. 3. The law of the court seized of the case shall govern the grounds of suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of a period of three years from the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later. 4. Notwithstanding paragraphs 1, 2 and 3 of this Article, the period of limitation may be extended by a declaration of the carrier or by agreement of the parties after the cause of action has arisen. The declaration or agreement shall be in writing.

Articles 15 and 16 It should be noted that in respect of damage to luggage, Article 15 provides that unless written notice of damage is given to the carrier or his agent within specified periods of time, then it is presumed, unless the contrary is proved, that the passenger received the luggage undamaged. Article 16 provides that any action for damages33 for personal injury or for loss or damage to luggage must be brought within a period of two years. In the case of personal injury, the period starts to run from the date of disembarkation of the passenger. In the case of death occurring during the carriage, the period runs from the date the passenger should have disembarked. But, where death occurs subsequently as a result of injuries occurring 33. The use of the word ‘‘action’’ is an unfortunate one insofar as English law is concerned since an An ‘‘action’’ has been held to be a generic term for court suit. See Bradlaugh v. Clarke [1882] 8 App. Cas. 354. Whilst ‘‘action’’ makes sense in the context of Article 17(1) which provides for court jurisdiction it could be problematic should the parties agree arbitration pursuant to Article 17(2) as ‘‘action’’ may not include arbitration. Parties who wish to make use of the arbitration option might therefore be well advised to bear this in mind when deciding whether or not to opt for arbitration. Contrast the words ‘‘legal proceedings’’ used in Article 11(1) of the 1976 Convention, which does include arbitration—see page 66.

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during the carriage, then the period shall not exceed three years from the date of dis­ embarkation. In the case of loss or damage to luggage, the period runs from the date of disembarka­ tion or when disembarkation should have taken place. Article 17: Competent jurisdiction 1. An action arising under this Convention shall, at the option of the claimant, be brought before one of the courts listed below, provided that the court is located in a State Party to this Convention: (a) the court of the place of permanent residence or principal place of business of the defendant, or (b) the court of the place of departure or that of the destination according to the contract of carriage, or (c) a court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State, or (d) a court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State. 2. After the occurrence of the incident which has caused the damage, the parties may agree that the claim for damages shall be submitted to any jurisdiction or to arbitration.

Article 17 Article 17 gives the claimant four alternative places in which to bring his claim ‘‘provided that the court is located in a State Party to this Convention’’:34 (a) the court of the place of permanent residence or principal place of business of the defendant; or (b) the court of the place of departure or destination according to the contract of carriage; or (c) a court of the domicile or permanent residence of the claimant provided that the defendant has a place of business and is subject to jurisdiction in that state; or (d) a court of the State where contract of carriage is made, also provided that the defendant has a place of business and is subject to jurisdiction in that State. Article 18: Invalidity of contractual provisions Any contractual provision concluded before the occurrence of the incident which has caused the death of or personal injury to a passenger or the loss of or damage to his luggage, purporting to relieve the carrier of his liability towards the passenger or to prescribe a lower limit of liability than that fixed in this Convention except as provided in paragraph 4 of Article 8, and any such provision purporting to shift the burden of proof which rests on the carrier, or having the effect of restricting the option specified in paragraph 1 of Article 17, shall be null and void, but the nullity of that provision shall not render void the contract of carriage which shall remain subject to the provisions of this Convention.

Article 18 Article 18 renders null and void any provision which attempts either to exclude the liability of the carrier, to prescribe a lower limit than that provided in the Convention, to shift the burden of proof or to limit the options of jurisdiction as set out in Article 17. 34. This condition is omitted under the law of the United Kingdom S.I. 1987/670.

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Article 19: Other conventions on limitation of liability This Convention shall not modify the rights or duties of the carrier, the performing carrier, and their servants or agents provided for in international conventions relating to the limita­ tion of liability of owners of seagoing ships.

Article 19 Article 19 preserves the right of the carrier and the performing carrier and their servants or agents to limit their liability under other ‘‘international conventions relating to the limitation of liability’’ such as the 1976 Convention. However, to avail themselves of this right, the servant or agent must come within the definition of ‘‘owner, charterer, manager or operator of the ship or someone for whose acts such person is responsible within the meaning of Article 1 of the 1976 Convention’’. In the context of the 1976 Convention, claims ‘‘for the death of or personal injury to a passenger’’ are subject to the right of limitation under Article 7 of that Convention. (It should be noted that if the person killed or injured is not a ‘‘passenger’’ as defined in Article 1(4) of the Athens Convention and Article 7(2) of the 1976 Convention, then no claim arises under the Athens Convention and the carrier’s right to limit arises, if at all, under Article 6(1) rather than under Article 7 of the 1976 Convention.)35 Where claims for loss of life or personal injury are presented by ‘‘passengers’’ as defined by Article 1(4) of the Athens Convention and Article 7(2) of the 1976 Convention, it is suggested that because of the terms of Article 14 of the Athens Convention, claims on behalf of such passengers must be presented in accordance with the Athens Conven­ tion. If, however, the total liability of the carrier to all claimants under the provisions of the Athens Convention exceeds the global limitation fund calculated in accordance with the 1976 Convention, then all claims will abate pro rata. Article 20: Nuclear damage No liability shall arise under this Convention for damage caused by a nuclear incident: (a) if the operator of a nuclear installation is liable for such damage under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended by its Additional Protocol of 28 January 1964, or the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or (b) if the operator of a nuclear installation is liable for such damage by virtue of a national law governing the liability for such damage, provided that such law is in all respects as favourable to persons who may suffer damage as either the Paris or the Vienna Conventions.

Article 21: Commercial carriage by public authorities This Convention shall apply to commercial carriage undertaken by States or Public Author­ ities under contracts of carriage within the meaning of Article 1.

35. Article 6 of the 1996 Protocol to the 1976 Limitation enables States Parties to regulate the system of liability for passenger claims by ‘‘national law’’. It seems likely that many State Parties will exercise this right and the U.K. has done so.

CHAPTER 5

Athens Protocol 2002

PROTOCOL OF 2002 TO THE ATHENS CONVENTION RELATING TO THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA 1974 At the 74th Session of the IMO Legal Committee in October 1996 the Delegation of the United Kingdom proposed the establishment of a uniform regime to ensure that ship­ owners would be able to meet the liabilities arising from the operation of their ships. At that stage the project entailed the need for ship owners to carry evidence of liability insurance (or other form of security) to ensure that claims arising out of all manner of shipping incidents would be paid. In order to aid claimants it was further proposed that the claimant should have a right of action not only against the shipowner but also direct against his insurer or other provider of security. The all embracing nature of this concept finally led to its downfall, but from the wreckage emerged a proposal that the Committee should concentrate on protecting the rights of passengers carried by sea. It was quickly established that the preferred method of dealing with this would be by way of a Protocol to the 1974 Athens Convention on the Carriage of Passengers and their Luggage by Sea. The opportunity was also taken to address other aspects of the Athens Convention which were seen as requiring updating. Six years later, on Friday, 1 November a Diplomatic Conference held at the IMO headquarters in London adopted the text of the Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974. (A consolidated text has been produced and that this is known as the Athens Convention—2002. The text is to be found in Appendix X.) The Protocol has not yet entered into force internationally. The UK government will not need primary legislation to implement the Protocol once it comes into force. The purpose of this chapter is to analyse the Protocol and to identify and explain the changes which the Protocol will introduce once it has entered into force. In conducting an article by article analysis of the Protocol we have placed in brackets the corresponding article number in the 1974 Convention—when there is one. DEFINITIONS: Article 1 (Article 1) For the purposes of this Protocol: 1. ‘‘Convention’’ means the text of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. 2. ‘‘Organization’’ means the International Maritime Organization. 3. ‘‘Secretary-General’’ means the Secretary-General of the Organization.

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This Article introduces definitions of the words ‘‘Convention’’, ‘‘Organization’’ and ‘‘Sec­ retary-General’’. Article 2 (Article 1(1)) Article 1, paragraph 1 of the Convention is replaced by the following text: 1. (a) ‘‘carrier’’ means a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by that person or by a performing carrier; (b) ‘‘performing carrier’’ means a person other than the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or a part of the carriage; and (c) ‘‘carrier who actually performs the whole or a part of the carriage’’ means the performing carrier, or, in so far as the carrier actually performs the carriage, the carrier.

This Article replaces Article 1, paragraph 1 of the Athens Convention. The definitions of ‘‘Carrier’’ and ‘‘Performing Carrier’’ remain as in the Athens Con­ vention. In that Convention: ‘‘Performing Carrier means a person other then the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or a part of the carriage.’’

It has been thought necessary, in the Protocol, to define the words ‘‘carrier who actually performs the whole or a part of the carriage’’ which appear in the definition of ‘‘perform­ ing carrier’’ as meaning: ‘‘Performing Carrier, or, in so far as the carrier actually performs the carriage, the carrier.’’

The reason for this new definition may appear somewhat obscure and can only be understood in the context of Article 5 of the Protocol by which Article 4 bis—Compulsory Insurance—is added to the Convention. Article 4 bis imposes on ‘‘any carrier who actually performs the whole or part of a carriage’’ an obligation to maintain insurance or other financial security. The reason for the new definition therefore becomes apparent—it is to ensure that the compulsory insurance/security requirement applies to whomsoever per­ forms the carriage whether he be the contractual carrier or a performing carrier. It is the view of the authors that this new definition is not necessary in order to make sense of Article 4 bis which clearly states that it is the ‘‘carrier who actually performs the whole or part of the carriage’’ who is obliged to maintain insurance. Whether he is the contractual carrier or merely a performing carrier is irrelevant in this context. He knows who he is and he knows what he is expected to do. Article 3 (Article 1(10) and (11)) 1. Article 1, paragraph 10 of the Convention is replaced by the following: 10. ‘‘Organization’’ means the International Maritime Organization. 2. The following text is added as Article 1, paragraph 11, of the Convention: 11. ‘‘Secretary-General’’ means the Secretary-General of the Organization.

This Article merely adds a further definition to Article 1 of the Athens Convention to the effect that references to the ‘‘organization’’ are to be treated as references to IMO and

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references to the ‘‘Secretary-General’’ are to be treated as a reference to the SecretaryGeneral of the IMO. LIABILITY OF THE CARRIER Article 4 (Article 3) Article 3 of the Convention is replaced by the following text:

Article 3: Liability of the carrier 1. For the loss suffered as a result of the death of or personal injury to a passenger caused by a shipping incident, the carrier shall be liable to the extent that such loss in respect of that passenger on each distinct occasion does not exceed 250,000 units of account, unless the carrier proves that the incident: (a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenome­ non of an exceptional, inevitable and irresistible character; or (b) was wholly caused by an act or omission done with the intent to cause the incident by a third party. If and to the extent that the loss exceeds the above limit, the carrier shall be further liable unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier. 2. For the loss suffered as a result of the death of or personal injury to a passenger not caused by a shipping incident, the carrier shall be liable if the incident which caused the loss was due to the fault or neglect of the carrier. The burden of proving fault or neglect shall lie with the claimant. 3. For the loss suffered as a result of the loss of or damage to cabin luggage, the carrier shall be liable if the incident which caused the loss was due to the fault or neglect of the carrier. The fault or neglect of the carrier shall be presumed for loss caused by a shipping incident. 4. For the loss suffered as a result of the loss of or damage to luggage other than cabin luggage, the carrier shall be liable unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier. 5. For the purposes of this Article: (a) ‘‘shipping incident’’ means shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship; (b) ‘‘fault or neglect of the carrier’’ includes the fault or neglect of the servants of the carrier, acting within the scope of their employment; (c) ‘‘defect in the ship’’ means any malfunction, failure or non-compliance with applic­ able safety regulations in respect of any part of the ship or its equipment when used for the escape, evacuation, embarkation and disembarkation of passengers; or when used for the propulsion, steering, safe navigation, mooring, anchoring, arriv­ ing at or leaving berth or anchorage, or damage control after flooding; or when used for the launching of life saving appliances; and (d) ‘‘loss’’ shall not include punitive or exemplary damages. 6. The liability of the carrier under this Article only relates to loss arising from incidents that occurred in the course of the carriage. The burden of proving that the incident which caused the loss occurred in the course of the carriage, and the extent of the loss, shall lie with the claimant. 7. Nothing in this Convention shall prejudice any right of recourse of the carrier against any third party, or the defence of contributory negligence under Article 6 of this Convention. Nothing in this Article shall prejudice any right of limitation under Articles 7 or 8 of this Convention.

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8. Presumptions of fault or neglect of a party or the allocation of the burden of proof to a party shall not prevent evidence in favour of that party from being considered.

This Article of the Protocol makes radical changes to the existing Athens Convention. It contains a wholesale replacement of the terms of Article 3 of the Convention which deals with the Liability of the Carrier. Article 3 of the existing Athens Convention is relatively simple in structure. It provides that the carrier shall be liable for death of or personal injury to a passenger and for the loss of or damage to luggage if the event which causes the death, personal injury or loss of luggage occurred during the carriage and was due to default or neglect of the carrier or his servants or agents. The burden of proving the amount of the loss or damage and that the incident occurred during the period of the carriage lies with the claimant. However Article 3 further provides that the fault or neglect of the carrier is to be presumed (but is open to rebuttal) if the death, personal injury or loss of luggage (cabin luggage only) arose from a ‘‘shipwreck, collision, stranding, explosion or fire, or defect in the ship’’. The existing Article 3 further provides that in respect of loss of luggage, other then cabin luggage, the presumption of fault or neglect applies whether the cause of the loss was a maritime incident or not. Again this presumption may be rebutted by evidence. Finally Article 3 provides that where the death or personal injury or loss of cabin luggage does not arise from a maritime incident the burden of proof is upon the claimant. On the whole Article 3 has caused no problems in practice though it is perhaps a matter of chance that it has never been necessary to explore what is meant by ‘‘defect in the ship’’—a potential area for disagreement. Experience indicates that operators of passenger ships are generally not looking for reasons to reject claims and would certainly not wish to be seen to be rejecting a claim simply on the grounds that the claimant had failed to discharge the burden of proof. The Protocol, as indicated above, introduces wholesale changes. This is an attempt to summarise the effect of the proposed new Article 3. (a) Loss of life and personal injury Where this occurs as a result of a ‘‘shipping incident’’ (see below for definition) the carrier will be strictly liable up to a limit 250,000 SDR. The carrier may escape liability only when the incident resulted from war etc. or from a deliberate act or omission done with intent by a third party. Where the loss exceeds the 250,000 SDR limit the carrier will be further liable (up to the limit of 400,000 SDR stated in a revised Article 7) unless the carrier can prove that the loss occurred without his fault or neglect. (It will be noted that the burden of proof in this respect is on the carrier.) Where the loss is caused by a non-shipping incident the carrier will be liable if the claimant can prove the fault or neglect of the carrier. (b) Luggage The carrier is liable for loss or damage to cabin luggage if caused by the fault or neglect of the carrier. That fault or neglect will be presumed if the loss was caused by a shipping incident.

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As regards non-cabin luggage the carrier will be liable unless he can show that the loss occurred without his fault or neglect. (c) General A ‘‘shipping incident’’ is defined (as in the existing Athens Convention) as meaning ‘‘shipwreck, collision or stranding of a ship, explosion or fire in the ship, or defect in the ship’’ but an effort is made to further define ‘‘defect in the ship’’. The intention behind this further definition of ‘‘defect in the ship’’ is to make it clear that the strict liability up to the 250,000 SDR limit only applies if the defect which gives rise to the claim is in the parts of the ship which are dedicated to navigation, propulsion, steering, handling and in the parts dedicated to passenger safety and evacuation. The new definition does not embrace those parts of the ship which are devoted to hotel func­ tions. The thinking in relation to this re-definition was sound, but the drafting is defective —raising more questions than it answers. Under the Athens Convention, whether a claim arises out of a shipping or a nonshipping incident merely determines whether there is a presumption of fault or not. Under the Protocol wording the determination of the issue will have far more significance for claimants. If it falls within the definition the carrier will be strictly liable up to 250,000 SDR and this will open a line of direct action against the liability insurer or provider of other security. ‘‘Fault or neglect of the carrier’’ includes acts of servants of the carrier acting within the scope of their employment. ‘‘Loss’’ is not to include ‘‘punitive or exemplary damages’’. The burden of proving the amount of the loss and that the loss occurred during the period of carriage is upon the claimant. The right of the carrier to limit liability, to rely on a defence of contributory negligence or to pursue rights of recourse against any third parties is specifically preserved. Finally it is stated that where presumptions of fault or neglect occur within Article 3 that party may produce evidence to discharge that burden. (The meaning or purpose of this provision is obscure.) The most striking feature of this new Article is the introduction of strict liability for loss of life and personal injury claims arising from ‘‘shipping incidents’’ up to 250,000 SDR. This is said to reflect the position of passengers carried by air where the contract is subject to the revised Warsaw Convention though the strict liability limit for aircarriers is only 100,000 SDR. This strict liability provision is to replace the less stringent presumption of fault under the Athens Convention in relation to loses arising from shipping incidents. The inclusion of what is in effect a first tier limitation fund in an Article dealing with liability is untidy. A new first tier limitation fund should, properly, appear in amended Article 7. However, drafting problems ruled out this solution. Under the revised Article 3 the carrier will be further liable up to the limit of 400,000 SDR stated in Article 7. If the loss arises from a shipping incident this further liability will attach unless the carrier proves that the loss occurred without his fault or neglect. If the loss arises from a non-shipping incident the carrier will only be liable if the claimant can prove the carrier’s fault or neglect.

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The regime relating to luggage (cabin or non-cabin) is to be little changed. There remains a presumption of fault in relation to cabin luggage where there has been a ‘‘shipping incident.’’ However there remains no presumption of fault in relation to loss or damage to luggage where this arises from a non-shipping incident though in this latter regard the burden of proof is to be switched. It is for the carrier to prove that the loss occurred without his fault or neglect whereas under the Athens Convention it was for the claimant to prove fault or neglect. There is no doubt that Article 3 in its revised form is markedly more complex then Article 3 in the Athens Convention which it is designed to replace. There has, throughout, been a clear political will amongst delegations to the IMO Legal Committee to impose a degree of strict liability up to a certain limit as a means of offering protection to innocent passengers. Some felt that it would not have been sufficient to maintain the presumption of fault (which has seemed to work well in practice) rather then introduce concepts of strict liability. It is further questionable whether it is sensible to include what is in effect a first tier limitation fund in Article 3 and another, higher, limit in Article 7. The shifting burden of proof in Article 3 of the existing Athens Convention is not without its com­ plexities but these complexities will be greatly increased by the new Protocol. There appear to be are no less then 10 different provisions regarding burden of proof in the new Article 3. C O M P U L S O RY I N S U R A N C E Article 5 (Article 4 bis) The following text is added as Article 4 bis of the Convention: Article 4 bis: Compulsory insurance 1. When passengers are carried on board a ship registered in a State Party that is licensed to carry more than twelve passengers, and this Convention applies, any carrier who actually performs the whole or a part of the carriage shall maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover liability under this Convention in respect of the death of an personal injury to passengers. The limit of this compulsory insurance or other financial security shall not be less than 250,000 units of account per passenger on each distinct occasion. 2. A certificate attesting that insurance or other financial security is in force in accordance with the provisions of this Convention shall be issued to each ship after the appropriate authority of a State Party has determined that the requirements of paragraph 1 have been complied with. With respect to a ship registered in a State Party, such certificate shall be issued or certified by the appropriate authority of the State of the ship’s registry; with respect to a ship not registered in a State Party it may be issued or certified by the appropriate authority of any State Party. This certificate shall be in the form of the model set out in the annex to this Convention and shall contain the following particulars: (a) name of ship, distinctive number or letters and port of registry; (b) name and principal place of business of the carrier who actually performs the whole or a part of the carriage; (c) IMO ship identification number; (d) Type and duration of security; (e) Name and principal place of business of insurer or other person providing financial security and, where appropriate, place of business where the insurance or other financial security is established; and

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(f) Period of validity of the certificate, which shall not be longer than the period of validity of the insurance or other financial security. 3. (a) A State Party may authorize an institution or an Organization recognised by it to issue the Certificate. Such institution or organization shall inform the State of the issue of each certificate. In all cases, the State Party shall fully guarantee the completeness and accuracy of the certificate so issued, and shall undertake to ensure the necessary arrangements to satisfy this obligation. (b) A State Party shall notify the Secretary-General of: (i) The specific responsibilities and conditions of the authority delegated to an institution or organization recognised by it; (ii) The withdrawal of such notice; (iii) The date from which such authority or withdrawal of such authority takes effect. An authority delegated shall not take effect prior to three months from the date from which notification to that effect was given to the Secretary-General. (c) The institution or organization authorized to issue certificates in accordance with this paragraph shall, as a minimum, be authorized to withdraw these certificates if the conditions under which they have been issued are not complied with. In all cases the institution or organization shall report such withdrawal to the State on whose behalf the certificate was issued. 4. The certificate shall be in the official language or languages of the issuing State. If the language used is not English, French or Spanish, the text shall include a translation into one of those languages, and, where the State so decides, the official language of the State my be omitted. 5. The certificate shall be carried on board the ship, and a copy shall be deposited with the authorities who keep the record of the ship’s registry or, if the ship is not registered in a State Party, with the authority of the State issuing or certifying the certificate. 6. An insurance or other financial security shall not satisfy the requirements of this Article if it can cease, for reasons other than the expiry of the period of validity of the insurance or security specified in the certificate, before three months have elapsed from the date on which notice of its termination is given to the authorities referred to in paragraph 5, unless the certificate has been surrendered to these authorities or a new certificate has been issued within the said period. The foregoing provisions shall similarly apply to any modifica­ tion which results in the insurance or other financial security no longer satisfying the requirements of this Article. 7. The State of the ship’s registry shall, subject to the provisions of this Article, determine the conditions of issue and validity of the certificate. 8. Nothing in this Convention shall be construed as preventing a State Party from relying on information obtained from other States or the Organization or other international organi­ zations relating to the financial standing of providers of insurance or other financial security for the purposes of this Convention. In such cases, the State Party relying on such informa­ tion is not relieved of its responsibility as a State issuing the certificate. 9. Certificates issued or certified under the authority of a State Party shall be accepted by other States Parties for the purposes of this Convention and shall be regarded by other States Parties as having the same force as certificates issued or certified by them, even if issued or certified in respect of a ship not registered in a State Party. A State Party may at any time request consultation with the issuing or certifying State should it believe that the insurer or guarantor named in the insurance certificate is not financially capable of meeting the obligations imposed by this Convention. 10. Any claim for compensation covered by insurance or other financial security pursuant to this Article may be brought directly against the insurer or other person providing financial security. In such case, the amount set out in paragraph 1 applies as the limit of liability of

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the insurer or other person providing financial security, even if the carrier or the performing carrier is not entitled to limitation of liability. The defendant may further invoke the defences (other than the bankruptcy or winding up) which the carrier referred to in paragraph 1 would have been entitled to invoke in accordance with this Convention. Furthermore, the defen­ dant may invoke the defence that the damage resulted from the wilful misconduct of the assured, but the defendant shall not invoke any other defence which the defendant might have been entitled to invoke in the proceedings brought by the assured against the defen­ dant. The defendant shall in any event have the right to require the carrier and the perform­ ing carrier to be joined in the proceedings. 11. Any sums provided by insurance or by other financial security maintained in accor­ dance with paragraph 1 shall be available exclusively for the satisfaction of claims under this Convention, and any payments made of such sums shall discharge any liability arising under this Convention to the extent of the amounts paid. 12. A State Party shall not permit a ship under its flag to which this Article applies to operate at any time unless a certificate has been issued under paragraphs 2 or 15. 13. Subject to the provisions of this Article, each State Party shall ensure, under its national law, that insurance or other financial security, to the extent specified in paragraph 1, is in force in respect of any ship that is licensed to carry more than twelve passengers, wherever registered, entering or leaving a port in its territory in so far as this Convention applies. 14. Notwithstanding the provisions of paragraph 5, a State Party may notify the Secre­ tary-General that, for the purposes of paragraph 13, ships are not required to carry on board or to produce the certificate required by paragraph 2 when entering or leaving ports in its territory, provided that the State Party which issues the certificate has notified the SecretaryGeneral that it maintains records in an electronic format, accessible to all States Parties, attesting the existence of the certificate and enabling States Parties to discharge their obligations under paragraph 13. 15. If insurance or other financial security is not maintained in respect of a ship owned by a State Party, the provisions of this Article relating thereto shall not be applicable to such ship, but the ship shall carry a certificate issued by the appropriate authorities of the State of the ship’s registry, stating that the ship is owned by that State and that liability is covered within the amount prescribed in accordance with paragraph 1. Such certificate shall follow as closely as possible the model prescribed by paragraph 2.

This Article of the Protocol adds an Article 4 bis to the Convention which contains the fundamental element which the UK Government sought to introduce by its original submission on Compulsory Insurance in 1996. The effect of this new Article is, briefly, as follows: (a) Where a vessel is licensed to carry more then 12 passengers the carrier who actually performs the carriage is required to maintain insurance or other financial security to cover liability for loss of life and personal injury to passengers. That insurance will be for not less than 250,000 SDR per passenger on each distinct occasion. (b) The ship is required to carry a certificate proving the existence of insurance cover or other financial security. The obligation to issue this certificate rests upon States Parties to the Convention. There follows a list of the details which the certificate shall contain and a model form of certificate is annexed to the Protocol. It is accepted that States Parties may wish to authorise some other institute or organi­ sation to issue these certificates. If this duty is delegated the State Party is expected to guarantee ‘‘the completeness and accuracy of the certificate so

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issued’’. Any State Party which sub contracts the duty to issue certificates as required must notify the Secretary General of IMO of this delegation. The certificate, which is to be in English, French or Spanish, must be carried on board and a copy must be deposited with the ship’s registry. To qualify, the insurance or other financial security must not be terminable at less then three months’ notice. Naturally a certificate may indicate when the insur­ ance or other financial security expires through effluxion of time. Article 4 bis contains extensive provisions regarding sources of information and mutual rec­ ognition of certificates amongst ratifying States. Tucked away in Article 4 bis 10 will be found the striking proposal that claimants may pursue their claims directly against the insurer or other person providing financial security. Following extensive debate it was decided that in such a direct action the insurers or providers of financial security should be entitled to limit their liability even if the carrier, by his conduct, has forfeit the right to limit. The insurer or provider of financial security may also rely upon all the defences which would have been available to the carrier in an action against him. In this context the insurer or provider of financial security may defend the claim on the basis that the damage resulted from the wilful misconduct of the carrier. This proved to be a highly contentious issue. Many national delegations felt that passengers would not be properly protected if this defence was permitted. However, a further substantial number of delegations pointed out that it was contrary to public policy and to statute law for insurance companies to offer cover against the wilful acts of the assured. This argument won the day. Even if the claimant decides to proceed direct against the insurer or provider of financial security he may, if he chooses, join the carrier and performing carrier to the proceedings. Payments made by insurers or providers of financial security will discharge any liability arising under the Convention ‘‘to the extent of the amount paid’’. States Parties are required not to permit vessels flying their flag to operate without proper certificates of insurance. States Parties are also expected to apply control measures to check the existence of insurance on ships entering or leaving a port in their territory. Quite properly, for a twenty-first century convention, there is express recognition of the fact that insurance and other records may be maintained in electronic format rather then in written form. Finally in this Article there is a provision modifying the certification requirement in respect of State owned vessels.

The first key element in this new Article is the requirement to produce evidence of insurance or other financial security up to 250,000 SDR. It is not a coincidence that this figure is the same as the strict liability limit in Article 3 per passenger. The other key provision concerns accessibility or, more precisely, the rights of the claimant to bypass the carrier and pursue his claim directly against the carrier’s liability insurer or provider of security. The intention of this is to improve the prospects of a claimant getting paid his just claim promptly without the need to trace and pursue the carrier. The concept of direct action against insurers spills over from the CLC, HNS and Bunker Conventions, but was even less welcomed by insurers in the context of passenger claims. The burden of handling thousands of direct claims will not be easy.

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L I M I TAT I O N O F L I A B I L I T Y Article 6 (Article 7) Article 7 of the Convention is replaced by the following text: Article 7: Limit of liability for death and personal injury 1. The liability of the carrier for the death of or personal injury to a passenger under Article 3 shall in no case exceed 400,000 units of account per passenger on each distinct occasion. Where, in accordance with the law of the court seized of the case, damages are awarded in the form of periodical income payments, the equivalent capital value of those payments shall not exceed the said sum. 2. A State Party may regulate by specific provisions of national law the limit of liability prescribed in paragraph 1, provided that the national limit of liability, if any, is not lower than that prescribed in paragraph 1. A State Party, which makes use of the option provided for in this paragraph, shall inform the Secretary-General of the limit of liability adopted or of the fact that there is none.

This Article in the Protocol substantially amends Article 7 of the Athens Convention and limits the liability of the carrier for loss of life or personal injury to a passenger to 400,000 SDR per capita on each distinct occasion. It must be understood that this limit is, in effect, a second tier over and above the strict liability tier which is contained in revised Article 3(1). The limit in Article 7 will only apply where claims exceed the first tier limit stated in Article 3. In relation to claims in excess of the Article 3 limit the carrier will be liable unless he can prove that the incident causing the loss occurred without his fault or neglect. Article 7 in its amended form will also enable a State party to provide a higher national limit if it so wishes. It is now clear that this higher national limit will not only apply to national flag carriers but will apply equally to foreign flag vessels visiting the ports of a State Party. The figures inserted in Article 7 and in revised Article 3 represent a compromise between the widely varying views as to the limitation figures amongst national delegations to the Diplomatic Conference. It is hoped that with or without the Article 7(2) opt out the figures will prove acceptable to a large number of States. Article 7 (Article 8) Article 8 of the Convention is replaced by the following text: Article 8: Limit of liability for loss of or damage to luggage and vehicles 1. The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 2,250 units of account per passenger, per carriage. 2. The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 12,700 units of account per vehicle, per carriage. 3. The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 shall in no case exceed 3,375 units of account per passenger, per carriage. 4. The carrier and the passenger may agree that the liability of the carrier shall be subject to a deductible not exceeding 330 units of account in the case of damage to a vehicle and not exceeding 149 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage.

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This Article proposes a new text for Article 8 of the Athens Convention. The limit for cabin luggage is 2,250 SDR per passenger per carriage and the limit for non-cabin luggage is 3,375 SDR. The vehicle limit (including luggage carried in it) is 12,700 SDR per vehicle per carriage. UNITS OF ACCOUNT Article 8 (Article 9) Article 9 of the Convention is replaced by the following text: Article 9: Unit of account and conversion 1. The Unit of Account mentioned in this Convention is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Article 3, paragraph 1, Article 4 bis, paragraph 1, Article 7, paragraph 1, and article 8 shall be converted into the national currency of the State of the court seized of the case on the basis of the value of that currency by reference to the Special Drawing Right on the date of the judgment or the date agreed upon by the parties. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect on the date in question for its operations and transactions. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is not a member of the International Monetary Fund, shall be calculated in a manner determined by that State Party. 2. Nevertheless, a State which is not a member of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 may, at the time of ratification, acceptance, approval of or accession to this Convention or at any time thereafter, declare that the Unit of Account referred to in paragraph 1 shall be equal to 15 gold francs. The gold franc referred to in this paragraph corresponds to sixty-five and a half milligrams of gold of millesimal fineness nine hundred. The conversion of the gold franc into the national currency shall be made according to the law of the State concerned. 3. The calculation mentioned in the last sentence of paragraph 1, and the conversion mentioned in paragraph 2 shall be made in such a manner as to express in the national currency of the States Parties, as far as possible, the same real value for the amounts in Article 3, paragraph 1, Article 4 bis, paragraph 1, Article 7, paragraph 1, and Article 8 as would result from the application of the first three sentences of paragraph 1. States shall communicate to the Secretary-General the manner of calculation pursuant to paragraph 1, or the result of ratification, acceptance, approval of or accession to this Convention and whenever there is a change in either.

This Article contains a new text for Article 9 which identifies the unit of account for limitation purposes as the Special Drawing Right. The new Article 9 contains elaborate provisions for conversion of SDRs into national currencies. TIME BAR FOR ACTIONS Article 9 (Article 16(3)) Article 16, paragraph 3, of the Convention is replaced by the following text: 3. The law of the Court seized of the case shall govern the grounds for suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of any one of the following periods of time:

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(a) A period of five years beginning with the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later; or, if earlier (b) a period of three years beginning with the date when the claimant knew or ought reasonably to have known of the injury, loss or damage caused by the incident.

This Article proposes to replace Article 16(3) of the Athens Convention. As currently worded the Convention provides that claims under the Convention shall be time barred after a period of two years. Article 16 also contains elaborate provisions as to the calculation of a limitation period in respect of different types of claim. These provisions survive. Para 3 of Article 16 currently provides that the law of the court which is dealing with the case shall govern the basis upon which limitation periods may be suspended or interrupted but then goes on to provide that in no case shall an action under the Conven­ tion be brought after the expiration of the period of three years from the date when the passenger should have disembarked or did disembark. The change proposed by Article 9 of the Protocol to Article 16(3) would restrict the rights of national courts to extend the time limit on claims beyond: ‘‘i. A period of five years from the date of disembarkation of the passenger or from the date when disembarkation should have taken place, which ever is later, or if earlier ii. A period of three years from the date when the claimant knew or ought reasonably to have known of the injury, loss or damage caused by the incident.’’

This appears to be an unnecessarily complicated provision. It would mean that Article 16 would contain no fewer then three limitation periods, two years basic, extendable to three years and (possibly) five years. Clearly the five years limit is intended to be an absolute final deadline beyond which the limitation period may not be extended even if the claimant did not know and ought not reasonably to have known of the injury. (Those pressing for the increased right to extend the time limit for claims were concerned to allow for cases in which the extent of an injury is slow to manifest itself.) COMPETENT JURISDICTION Article 10 (Article 17) Article 17 of the Convention is replaced by the following text: Article 17: Competent jurisdiction 1. An action arising under Articles 3 and 4 of this Convention shall, at the option of the claimant, be brought before one of the courts listed below, provided that the court is located in a State Party to this Convention, and subject to the domestic law of each State Party governing proper venue within those States with multiple possible forums: (a) the court of the State of permanent residence or principal place of business of the defendant, or (b) the court of the State of departure or that of the destination according to the contract of carriage, or (c) the court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State, or (d) the court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State.

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2. Actions under Article 4 bis of this Convention shall, at the option of the claimant, be brought before one of the courts where action could be brought against the carrier or performing carrier according to paragraph 1. 3. After the occurrence of the incident which has caused the damage, the parties may agree that the claim for damages shall be submitted to any jurisdiction or to arbitration.

The new Article 17 lists the jurisdictions which are competent to hear cases arising under Articles 3 and 4 of the Convention, that is, claims for loss of life, personal injury and loss or damage to luggage. Competent jurisdictions include (i) the courts of the State in which the defendant carrier has his permanent residence or principal place of business, (ii) the courts of the States where the relevant voyage started or finished, (iii) the courts of the State of the domicile or permanent residence of the claimant provided that the defendant has a place of business and is subject to jurisdiction in that State, (iv) the courts of the State where the contract of carriage was entered into; again provided that the defendant has a place of business and is subject to jurisdiction in that State. Indirectly this increases the number of competent jurisdictions bearing in mind that under Article 4 bis the insurer or other provider of financial security may be a defendant as well as the carrier. Thus the courts of the State where the contract of carriage was made may be competent even if the carrier has no place of business there and is not subject to the jurisdiction of that state if the insurer or other provider of financial security does have a place of business there and is subject to jurisdiction of that State. The only additional jurisdiction proposed in Article 17 appears at (2) which provides that the claimant may, if he wishes, bring an action against the insurer or other provider of financial security before one of the courts where action could have been brought against the carrier or performing carrier. In other words the insurer or other provider of financial security may find himself defending an action in the courts of a country in which he does not have a place of business and is otherwise not subject to the jurisdiction. Article 17 retains the provision whereby claims may, post incident, be submitted, by agreement, to any jurisdiction of choice or to arbitration. RECOGNITION AND ENFORCEMENT Article 11 (Article 17 bis) The following text is added as Article 17 bis of the Convention: Article 17 bis: Recognition and enforcement 1. Any judgment given by a court with jurisdiction in accordance with Article 17 which is enforceable in the State of origin where it is no longer subject to ordinary forms of review, shall be recognised in any State Party, except: (a) Where the judgment was obtained by fraud; or (b) Where the defendant was not given reasonable notice and a fair opportunity to present the case. 2. A judgment recognised under paragraph 1 shall be enforceable in each State Party as soon as the formalities required in that State have been complied with. The formalities shall not permit the merits of the case to be re-opened. 3. A State Party to this Protocol may apply other rules for the recognition and enforcement of judgments, provided that their effect is to ensure that judgments are recognised and enforced at least to the same extent as under paragraphs 1 and 2.

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This Article proposes a new Article 17 bis to deal with the subject of recognition and enforcement of judgments. The Article provides that final judgments of a court of competent jurisdiction, as defined in Article 17, shall be recognised and enforced in the Courts of States Parties unless the judgment was obtained by fraud or the defendant did not have reasonable notice of the action nor a fair opportunity to defend himself. Review of the merits by the enforcing court is forbidden. With increasing demand for international recognition of judgments this was clearly an appropriate amendment to suggest for the Athens Convention. I N VA L I D I T Y O F C O N T R A C T U A L P R O V I S I O N S Article 12 (Article 18) Article 18 of the Convention is replaced by the following text: Article 18: Invalidity of contractual provisions Any contractual provision concluded before the occurrence of the incident which has caused the death of or personal injury to a passenger or the loss of or damage to the passenger’s luggage, purporting to relieve any person liable under this Convention of liability towards the passenger or to prescribe a lower limit of liability than that fixed in this Convention except as provided in Article 8, paragraph 4, and any such provision purporting to shift the burden of proof which rests on the carrier or performing carrier, or having the effect of restricting the options specified in Article 17, paragraphs 1 or 2, shall be null and void, but the nullity of that provision shall not render void the contract of carriage which shall remain subject to the provisions of this Convention.

This Article contains a new text for Article 18 of the Convention which deals with the invalidity of certain contractual provisions. Specifically it invalidates contractual provi­ sions which purport to relieve a person liable under the Convention from liability to a passenger or seeks to prescribe a lower limit of liability then that fixed in the Convention (with the exception of Article 8(4)). Provisions which seek to shift the burden of proof away from the carrier or seek to restrict the range of courts with competent jurisdiction under Article 17 are also void. The changes from Article 18 of the Athens Convention appear to be only those consequential upon the introduction of new provisions by the Protocol. NUCLEAR DAMAGE Article 13 (Article 20) Article 20 of the Convention is replaced by the following text: Article 20: Nuclear Damage No liability shall arise under this Convention for damage caused by a nuclear incident: (a) if the operator of a nuclear installation is liable for such damage under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended by its Additional Protocol of 28 January 1964, or the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or any amend­ ment or Protocol thereto which is in force; or

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(b) if the operator of a nuclear installation is liable for such damage by virtue of a national law governing the liability for such damage, provided that such law is in all respects as favourable to persons who may suffer damage as either the Paris or the Vienna Conventions or any amendment or Protocol thereto which is in force.

This Article contains a new text for Article 20 which deals with nuclear damage. The changes from the text in the Athens Convention are minor and simply introduce references to ‘‘any amendment or Protocol’’ to the Paris and Vienna Nuclear Conventions to which reference is made in the Article. C E R T I F I C AT E O F I N S U R A N C E Article 14 (Article 1 bis): Model certificate 1. The model certificate set out in the annex to this Protocol shall be incorporated as an annex to the Convention. 2. The following text is added as Article 1 bis of the Convention:

‘‘Article 1 bis Annex The annex to this Convention shall constitute an integral part of the Convention.’’

This Article refers to an annex to the Protocol which contains a model Certificate of Insurance or Other Financial Security. This, or a document in similar form, will need to be carried by all ships flying the flag of a State Party. I N T E R P R E TAT I O N A N D A P P L I C AT I O N Article 15: Interpretation and application 1. The Convention and this Protocol shall, as between the Parties to this Protocol, be read and interpreted together as one single instrument. 2. The Convention as revised by this Protocol shall apply only to claims arising out of occurrences which take place after the entry into force for each State of this Protocol. 3. Articles 1 to 22 of the Convention, as revised by this Protocol, together with Articles 17 to 25 of this Protocol and the annex thereto, shall constitute and be called the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 2002.

This Article states that the Athens Convention and the Protocol shall be ‘‘read and interpreted together as one single instrument’’. In this context the Diplomatic Conference resolved to request the Secretary General to prepare a consolidated text of the amended Convention to be known as the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 2002, that is, a single document incorporating all the amend­ ments introduced by the Protocol. This will make implementation much easier for those State Parties who like to schedule the text of an International Convention to the incorpo­ rating legislation. The consolidated text appears in Appendix X. Article 15 also, for the avoidance of doubt, states that the Protocol will apply only to claims arising out of occurrences which take place after the entry into force for each State.

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FINAL CLAUSES Article 16 The following text is added as Article 22 bis of the Convention. Article 22 bis: Final clauses of the Convention The final clauses of this Convention shall be Articles 17 to 25 of the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. References in this Convention to States Parties shall be taken to mean references to States Parties to that Protocol.

This Article introduces Article 17 to 25. S I G N AT U R E , R AT I F I C AT I O N , A C C E P TA N C E , A P P R O VA L A N D ACCESSION Article 17: Signature, ratification, acceptance, approval and accession 1. This Protocol shall be open for signature at the Headquarters of the Organization from 1 May 2003 until 30 April 2004 and shall thereafter remain open for accession. 2. States may express their consent to be bound by this Protocol by: (a) signature without reservation as to ratification, acceptance or approval; or (b) signature subject to ratification, acceptance or approval followed by ratification, acceptance or approval; or (c) accession. 3. Ratification, acceptance, approval or accession shall be effected by the deposit of an instrument to that effect with the Secretary-General. 4. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to this Protocol with respect to all existing States Parties, or after the completion of all measures required for the entry into force of the amendment with respect to those States Parties shall be deemed to apply to this Protocol as modified by the amendment. 5. A State shall not express its consent to be bound by this Protocol unless, if Party thereto, it denounces: (a) the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at Athens on 13 December 1974; (b) the Protocol to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at London on 19 November 1976; and (c) the Protocol of 1990 to amend the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at London on 29 March 1990, with effect from the time that this Protocol will enter into force for that State in accordance with Article 20.

This Article is the first of the so-called Final Clauses and deals with signature, ratification, acceptance, approval and accession. The Article states that the Protocol will be open for signature at IMO from 1 May 2003 until 30 April 2004 and thereafter shall remain open for accession. The Article then lists the various ways in which a State may express its consent to be bound by the Protocol. It also indicates exactly what steps a ratifying State must take in order to complete the ratification process. The Article contains an important provision which requires ratifying States to denounce the Athens Convention of 1974 together with the 1976 and 1990 Protocols. Presumably this means that ratifying States

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should denounce the Athens Convention of 1974 in its unamended form and then replace that Convention with the revised consolidated text. S TAT E S W I T H M O R E T H E N O N E S Y S T E M O F L AW Article 18: States with more than one system of law 1. If a State has two or more territorial units in which different systems of law are applicable in relation to matters dealt with in this Protocol, it may at the time of signature, ratification, acceptance, approval or accession declare that this Protocol shall extend to all its territorial units or only to one or more of them, and may modify this declaration by submitting another declaration at any time. 2. Any such declaration shall be notified to the Secretary-General and shall state expressly the territorial units to which this Protocol applies. 3. In relation to a State Party which has made such a declaration: (a) references to the State of a ship’s registry and, in relation to a compulsory insur­ ance certificate, to the issuing or certifying State, shall be construed as referring to the territorial unit respectively in which the ship is registered and which issues or certifies the certificate; (b) references to the requirements of national law, national limit of liability and national currency shall be construed respectively as references to the requirements of the law, the limit of liability and the currency of the relevant territorial unit; and (c) references to courts, and to judgments which must be recognised in States Parties, shall be construed as references respectively to courts of, and to judgments which must be recognised in, the relevant territorial unit.

Article 18 deals with the problem of States with more then one system of law. An Article of this nature was first seen in the Bunker Convention and seeks to deal with the problems created by the relationship between China and Hong Kong/China. Hong Kong/China retains its own legal system for the time being though remaining part of China for purposes of International Conventions. This Article allows China to declare that the Protocol shall extend to all its territorial units or only to one or more of them. E C O N O M I C I N T E G R AT I O N O R G A N I S AT I O N S Article 19: Regional Economic Integration Organizations 1. A Regional Economic Integration Organization, which is constituted by sovereign States that have transferred competence over certain matters governed by this Protocol to that Organization, may sign, ratify, accept, approve or accede to this Protocol. A Regional Economic Integration Organization which is a Party to this Protocol shall have the rights and obligations of a State Party, to the extent that the Regional Economic Integration Organiza­ tion has competence over matters governed by this Protocol. 2. Where a Regional Economic Integration Organization exercises its right of vote in matters over which it has competence, it shall have a number of votes equal to the number of its Member States which are Parties to this Protocol and which have transferred compe­ tence to it over the matter in question. A Regional Economic Integration Organization shall not exercise its right to vote if its member States exercise theirs, and vice versa. 3. Where the number of States Parties is relevant in this Protocol, including but not limited to Articles 20 and 23 of this Protocol, the Regional Economic Integration Organization shall not count as a State Party in addition to its Member States which are States Parties. 4. At the time of signature, ratification, acceptance, approval or accession the Regional Economic Integration Organization shall make a declaration to the Secretary-General spec­ ifying the matters governed by this Protocol in respect of which competence has been

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transferred to that Organization by its Member States which are signatories or Parties to this Protocol and any other relevant restrictions as to the scope of that competence. The Regional Economic Integration Organization shall promptly notify the Secretary-General of any changes to the distribution of competence, including new transfers of competence, specified in the declaration under this paragraph. Any such declarations shall be made available by the Secretary-General pursuant to Article 24 of this Protocol. 5. States Parties which are Member States of a Regional Economic Integration Organiza­ tion which is a Party to this Protocol shall be presumed to have competence over all matters governed by this Protocol in respect of which transfers of competence to the Organization have not been specifically declared or notified under paragraph 4.

This new Article deals with a European Union problem which results from the fact that States of the European Union in December 2000 adopted Regulation (EC) 44-2001 on Jurisdiction and the Recognition and Enforcement of Judgements in Civil and Commercial Matters. The European Commission took the position before the Diplomatic Conference that by adopting common rules on these matters, Member States of the European Union have effectively transferred their national competence in this area to the Community. Article 19 is designed to deal with this problem. Initially the proposal met with some hostility from non-EU delegates at the Legal Committee Session before the Diplomatic Conference but, in the event, was accepted at the Diplomatic Conference. E N T RY I N TO F O R C E Article 20: Entry into force 1. This Protocol shall enter into force twelve months following the date on which 10 States have either signed it without reservation as to ratification, acceptance or approval or have deposited instruments of ratification, acceptance, approval or accession with the SecretaryGeneral. 2. For any State which ratifies, accepts, approves or accedes to this Protocol after the conditions in paragraph 1 for entry into force have been met, this Protocol shall enter into force three months after the date of deposit by such State of the appropriate instrument, but not before this Protocol has entered into force in agreement with paragraph 1.

This Article contains the important entry into force provisions. In the usual way the Protocol will enter into force 12 months following the date on which 10 States have acceded to the Protocol. The figure for the number of required States is, traditionally, only inserted at the final stages of the Diplomatic Conference. The Athens Convention itself set a requirement of 10 States and it was deemed appropriate to accept the same number of States for the Protocol. As far as each ratifying State is concerned the Protocol will enter into force three months after the date on which that State has deposited the appropriate instruments at IMO. D E N U N C I AT I O N Article 21: Denunciation 1. This Protocol may be denounced by any State Party at any time after the date on which this Protocol comes into force for that State. 2. Denunciation shall be effected by the deposit of an instrument to that effect with the Secretary-General.

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3. A denunciation shall take effect twelve months, or such longer period as may be specified in the instrument of denunciation, after its deposit with the Secretary-General. 4. As between the States Parties to this Protocol, denunciation by any of them of the Convention in accordance with Article 25 thereof shall not be construed in any way as a denunciation of the Convention as revised by this Protocol.

This Article provides a mechanism by which State Parties may denounce the Protocol. Denunciation will become effective not less then 12 months after the notice of denuncia­ tion has been deposited with IMO. REVISION AND AMENDMENT Article 22: Revision and amendment 1. A Conference for the purpose of revising or amending this Protocol may be convened by the Organization. 2. The organization shall convene a Conference of States Parties to this Protocol for revising or amending this Protocol at the request of not less than one-third of the States Parties.

This Article deals with revision and amendment of the Protocol and specifies how and by whom a Conference to consider revision or amendment may be called. AMENDMENT OF LIMITS Article 23: Amendment of limits 1. Without prejudice to the provisions of Article 22, the special procedure in this Article shall apply solely for the purposes of amending the limits set out in Article 3, paragraph 1, Article 4 bis, paragraph 1, Article 7, paragraph 1 and Article 8 of the Convention as revised by this Protocol. 2. Upon the request of at least one half, but in no case less than six, of the States Parties to this Protocol, any proposal to amend the limits, including the deductibles, specified in Article 3, paragraph 1, Article 4 bis, paragraph 1, Article 7, paragraph 1, and Article 8 of the Convention as revised by this Protocol shall be circulated by the Secretary-General to all members of the Organization and to all State Parties. 3. Any amendment proposed and circulated as above shall be submitted to the Legal Committee of the Organization (hereinafter referred to as ‘‘the Legal Committee’’) for con­ sideration at a date at least six months after the date of its circulation. 4. All States Parties to the Convention as revised by this Protocol, whether or not Members of the Organization, shall be entitled to participate in the proceedings of the Legal Committee for the consideration and adoption of amendments. 5. Amendments shall be adopted by a two-thirds majority of the States Parties to the Convention as revised by this Protocol present and voting in the Legal Committee expanded as provided for in paragraph 4, on condition that at least one half of the States Parties to the Convention as revised by this Protocol shall be present at the time of vot­ ing. 6. When acting on a proposal to amend the limits, the Legal Committee shall take into account the experience of incidents and, in particular, the amount of damage resulting therefrom, changes in the monetary values and the effect of the proposed amendment on the cost of insurance. 7. (a) No amendment of the limits under this Article may be considered less than five years from the date on which this Protocol was opened for signature nor less than five years from the date of entry into force of a previous amendment under this Article.

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(b) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as revised by this Protocol increased by 6 per cent per year calculated on a compound basis from the date on which this Protocol was opened for signature. (c) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as revised by this Protocol multiplied by three. 8. Any amendment adopted in accordance with paragraph 5 shall be notified by the Organization to all State Parties. The amendment shall be deemed to have been accepted at the end of a period of eighteen months after the date of notification, unless within that period not less than one fourth of the States that were States Parties at the time of the adoption of the amendment have communicated to the Secretary-General that they do not accept the amendment, in which case the amendment is rejected and shall have no effect. 9. An amendment deemed to have been accepted in accordance with paragraph 8 shall enter into force eighteen months after its acceptance. 10. All States Parties shall be bound by the amendment, unless they denounce this Protocol in accordance with Article 21, paragraphs 1 and 2 at least six months before the amendment enters into force. Such denunciation shall take effect when the amendment enters into force. 11. When an amendment has been adopted but the eighteen-month period for its accep­ tance has not yet expired, a State which becomes a State Party during that period shall be bound by the amendment if it enters into force. A State which becomes a State Party after that period shall be bound by an amendment which has been accepted in accordance with paragraph 8. In the cases referred to in this paragraph, a State becomes bound by an amendment when that amendment enters into force, or when this Protocol enters into force for that State, if later.

Article 23 is a new provision which introduces a quick amendment procedure for the limits specified in Article 3(1), Article 4 bis (1), Article 7(1) and Article 8 of the Convention as amended by the Protocol. The Article provides that at the request of at least half (but not less then six) of the States Parties to the Protocol amendments to limits may be effected by means of a proposal which must be circulated not less then six months before the proposal is to be considered by the Legal Committee. To ratify the proposed amendments requires a two thirds majority of the States Parties to the Convention (present and voting). In considering any amendments to the limits the Legal Committee is required to take into account ‘‘the experience of incidents and in particular the amount of damage resulting therefrom, changes in the monetary values and the effects of the proposed amendment on the cost of insurance’’. To avoid too many changes it is provided that no amendment of limits shall in any event be considered less then five years from the date on which the Protocol was opened for signature nor less then five years from the date of entry into force of a previous amendment made under the quick amendment procedure. There is also a cap on the amount by which the limits may be increased under the quick amendment proce­ dure. This is calculated at the rate of 6% per annum on a compound basis from the date on which the Protocol was opened for signature. A further cap is to be placed on the amount of increase—it may not exceed an amount which corresponds to the limit stated in the Convention (as amended by the proposed Protocol) multiplied by three. The remaining three provision of Article 23 are of a technical nature and contain no matters of substance.

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D E P O S I TA RY Article 24: Depositary 1. This Protocol and any amendments adopted under Article 23 shall be deposited with the Secretary-General. 2. The Secretary-General shall: (a) inform all States which have signed or acceded to this Protocol of: (i) each new signature or deposit of an instrument of ratification, acceptance, approval or accession together with the date thereof; (ii) each declaration and communication under Article 9, paragraphs 2 and 3, Article 18, paragraph 1 and Article 19, paragraph 4 of the Convention as revised by this Protocol; (iii) the date of entry into force of this Protocol; (iv) any proposal to amend the limits which has been made in accordance with Article 23, paragraph 2 of this Protocol; (v) any amendment which has been adopted in accordance with Article 23, para­ graph 5 of this Protocol; (vi) any amendment deemed to have been accepted under Article 23, paragraph 8 of this Protocol, together with the date on which that amendment shall enter into force in accordance with paragraphs 8 and 9 of that Article; (vii) the deposit of any instrument of denunciation of this Protocol together with the date of the deposit and the date on which it takes effect; (viii) any communication called for by any Article of this Protocol; (b) transmit certified true copies of this Protocol to all States which have signed or acceded to this Protocol. 3. As soon as this Protocol comes into force, the text shall be transmitted by the Secre­ tary-General to the Secretariat of the United Nations for registration and publication in accordance with Article 102 of the Charter of the United Nations.

This Article names the Secretary General of IMO as the person with whom the Protocol and amendments must be deposited and specifies what his duties are in that regard. As soon as the Protocol comes in to force the Secretary General is required to transmit the text to the UN Secretariat for registration and publication. LANGUAGES Article 25: Languages This Protocol is established in a single original in the Arabic, Chinese, English, French, Russian and Spanish languages, each text being equally authentic.

This Article deals with languages of publication and states that a single original Protocol shall be established in Arabic, Chinese, English, French, Russian and Spanish languages, each text being equally authentic. RESOLUTIONS

In a Resolution on Framework of Good Practice with respect to Carriers’ Liability passed at the Diplomatic Conference the delegates requested the IMO to develop appropriate guidelines on the provision of insurance or other financial security for compensation for claims for death of or personal injury to passengers. These guidelines should establish an

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appropriate framework of good practice to ensure that all carriers maintain proper insur­ ance or financial security to meet the requirements under the Protocol. I M P L E M E N TAT I O N

This Protocol has taken six years to produce. Throughout the process of refining this instrument there has been an undercurrent of opposition from the shipowning community and from the liability insurance market (the international Group of P. & I. Clubs in particular). Concern has been expressed regarding the capacity of the insurance market to cover the very high potential liabilities of owners of large cruise ships. Between now and the entry into force of this Protocol all eyes will be anxiously focused on the ways in which the insurance market can meet these demands. For comment on implementation in the United Kingdom, please see pages 21 and 55.

CHAPTER 6

Limitation: Carriage of Goods

HISTORY The law relating to the carriage of goods by sea has developed over many centuries predominantly by way of precedent established by individual cases. However, the benefit of international uniformity by codification has been appreciated for some considerable time. Therefore in 1921 the shipping community met at the Hague and a body of rules known as the ‘‘Hague Rules’’ was formulated. The Rules were quickly adopted into the municipal legislation of a large number of countries1 and have been widely used ever since. The Hague Rules are in effect a collection of rules which define the rights and liabilities of the two parties concerned in an agreement to carry goods by sea, namely, the carrier and the cargo interest, including the right of the carrier to limit his liability to cargo claims. By the 1960s it was felt that the Hague Rules were becoming anachronistic and were not totally suited to certain new trends which had developed since their formulation. For example, it was considered that the Hague Rules did not give sufficient assistance where problems arose in the container trade or indeed in the bulk cargo trade. In the circumstances, the shipping community gathered this time at Visby in Sweden and produced the Hague-Visby Rules in 1968. Once again, these Rules have been adopted relatively quickly into the municipal legislation of a number of States.2 However, there existed at the time a strong ground swell of opinion to the effect that a more radical revision was necessary. Some countries considered that the balance of risk between ship and cargo in the Hague Rules and Hague-Visby Rules was weighted far too much in the favour of the carrier and that the balance should be shifted in favour of the cargo interest. This ground swell of opinion resulted in a further meeting of the shipping community being arranged in Hamburg in 1978. This meeting produced the United Nations Conven­ tion on the Carriage of Goods By Sea 1978 (‘‘the Hamburg Rules’’). The Hamburg Rules came into force between those countries who are parties3 to it on 1 November 1992. Under the Hague and Hague-Visby Rules the carrier is subject to defined obligations,4 and has defined rights,5 including the right of limitation of liability.6 However, under the 1. The Hague Rules were incorporated into the domestic legislation of the United Kingdom by the Carriage of Goods by Sea Act 1924, now repealed. 2. The Hague-Visby Rules have been incorporated into the domestic legislation of the United Kingdom by the Carriage of Goods by Sea Act 1971. 3. See Appendix IX. 4. See Article III. 5. See Article IV. 6. See Article IV, Rule 5.

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Hamburg Rules, there are no expressly defined rights and liabilities as such. The carrier is liable for loss of or damage to the goods and for delay unless he proves that he and his servants took all measures that could reasonably be required to avoid the occurrence and its consequences.7 However, if he is liable, the carrier is entitled to limit his liability.8 RELATIONSHIP BETWEEN THE HAGUE, HAGUE-VISBY AND HAMBURG RULES AND THE 1976 LIMITATION CONVENTION There are two separate but interlinked methods of limitation which may be available to the carrier of goods by sea; (i) The ‘‘package’’ limitation in Article IV, Rule 5, of the Hague Rules and the Hague-Visby and Article 6 of the Hamburg Rules. This right of limitation is restricted to claims for loss or damage incurred in connection with the goods which are being carried and the limit is calculated with reference to particulars of the cargo. (ii) The so called ‘‘tonnage’’ limitation available to the carrier under any statute ‘‘relating to the limitation of liability of owners of seagoing ships’’.9 Notwith­ standing the fact that different countries use different bases for calculating the limit, this form of limitation is applied to claims arising not only in connection with the carriage of goods but also to the many other forms of claim which may arise out of a maritime occurrence, for example, hull and property damage and personal injury. There is no separate limitation fund for cargo claimants. Their claims rank pari passu with other claims arising out of the same occurrence (other than claims for loss of life or personal injury which are subject to a separate fund).10 Provided (a) that the carrier of goods is not guilty of conduct which debars his right to limit under the relevant Rules and/or the ‘‘tonnage’’ limitation statute and (b) that the claim in respect of which he wishes to limit is one which is subject to limitation under the relevant ‘‘tonnage’’ limitation statute,11 there is nothing to prevent such carrier from relying on rights given by the Rules to limit his liability to the particular claim and then on the relevant ‘‘tonnage’’ statute to limit his liability to a sum which is lower than the ‘‘package’’ limitation available to him under the Hague or Hague-Visby or Hamburg Rules. Such right is expressly reserved to the carrier by Article VIII of the Hague and Hague-Visby Rules12 and Article 25(1) of the Hamburg Rules. 7. See Article 5(1). 8. See Articles 6–8. 9. The use of the phrase ‘‘tonnage limitation’’ is a useful means of distinguishing this form of limitation from the ‘‘package’’ method of limitation. However, it should be appreciated that whilst in those countries which give effect to the 1957 Brussels Convention or the 1976 London Convention this form of limitation is calculated with reference to the tonnage of the vessel in question, in other countries such as the United States, this form of limitation is calculated by reference to the value of the ship and any freight to be paid on completion of the voyage. Accordingly, this form of limitation is sometimes described as ‘‘global’’ limitation. 10. See pages 55–57 relating to the 1976 Convention. 11. In most cases such claims will fall within Article 2(1)(a) of the 1976 Convention. 12. For these purposes the right of a British shipowner in section 186 of the 1995 MSA to limit his liability totally in certain circumstances is treated as being a right reserved under Article VIII of the Hague-Visby Rules—see section 6(4) of COGSA 1971 and page 26. This right is not available to a British shipowner under the Athens Convention see para. 12, Part II of Schedule 3 to the 1979 MSA.

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Example Cargo is carried on ship A under a contract which is subject to the Hague-Visby Rules. In a collision between ship A and ship B caused by the unseaworthiness of A, the following claims could be made against A: 1. Loss of or damage to cargo on ship A 2. Loss of or damage to cargo on ship B 3. Physical damage to ship B

(after set-off of physical damage to ship A)

£1,000 £1,900 £1,000

Since the collision was caused by the unseaworthiness of A the owners of cargo carried on her would probably have a good cause of action against her owner as carrier for breach of Article III, Rule 1. Provided that the owner of A was not guilty of the conduct which debars his right to limit under the Hague-Visby Rules13 he would be able to rely on the ‘‘package’’ limitation provisions of those Rules to restrict his liability to say, £100.14 However, since the owner of ship A could also expect to face other claims arising out of the same incident he could also (provided again that he is not guilty of conduct debarring his right to limit) rely on the right to limit liability under the relevant ‘‘tonnage’’ limitation rules. Assuming that ship A’s ‘‘tonnage’’ limitation fund is £1,000 then even though her owner has already limited his liability to her own cargo to £100 (as against a claim for £1,000), ship A’s owner will still wish to rely on the relevant ‘‘tonnage’’ limitation, since the total of claims 1, 2 and 3 is still in excess of £1,000. The claims against the fund will therefore be: 1. Claim of cargo carried on ship A 2. Claim of cargo carried on ship B 3. Claim for physical damage to ship B

£1,100 £1,900 £1,000

Total claims against the fund

£2,000

Since each of these claims will rank pari passu against a fund of £1,000 it follows that the owner of the cargo carried on ship A (claim 1) can only recover 1/20 x £1,000, that is, £50. If the totality of the claims against the vessel exceeds the tonnage limit, even after application to some claims of the ‘‘package’’ limit, it will normally make little difference to the shipowner whether he does in fact enforce his package limitation rights since his minimum liability will in any event be determined by the ‘‘tonnage’’ limit. However, the rights of claimants against the ‘‘tonnage’’ fund are clearly affected since the application or otherwise of ‘‘package’’ limitation to those claims which qualify for such form of limita­ tion will affect the proportions of the fund recoverable by all individual claimants. In most

13. See pages 153–154. 14. The actual figures would depend on the number of packages or units or the weight of the cargo see page 142.

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cases, claimants not subject to ‘‘package’’ limitation will recover more of the ‘‘tonnage’’ limit as a result of the application of the ‘‘package’’ limit to those claims which are subject to such limitation. It appears that a claimant against the ‘‘tonnage’’ fund is entitled to insist on the application of the ‘‘package’’ limit where applicable since the proportion which each claimant is entitled to recover from the ‘‘tonnage’’ fund should be calculated with reference to the legal liability which the person who has established the fund has to each claimant.15

Package limitation It should be noted that the wording of the Hague, Hague-Visby and Hamburg Rules differ in many material respects and that the conclusions reached by the courts in relation to one regime are not necessarily binding in relation to the other regimes. Therefore, each regime must be considered separately.

(i) Hague Rules In the United Kingdom and many other countries legislation giving effect to the Hague Rules has been repealed and replaced by legislation giving effect to the Hague-Visby Rules.16 However, there are still some countries which give effect to the Hague Rules and it is common still to see the Hague Rules incorporated into charterparties by express contractual agreement in the form of a ‘‘Paramount Clause’’. Article IV, Rule 5, of the Hague Rules provides that: Neither the carrier nor the ship shall in any event17 be or become liable for any loss or damage to or in connection with goods18 in an amount exceeding £10019 per package or unit20 or the equivalent of that sum in other currency,21 unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lad­ ing.22 This declaration if embodied in the bill of lading shall be prima facie evidence, but shall not be binding or conclusive on the carrier. By agreement between the carrier, Master or agent of the carrier and the shipper another maximum amount than that mentioned in this paragraph may be fixed, provided that such maximum shall not be less than the figure above named. Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of landing.23

15. See Glaholm v. Barker (1866) LR 2 Ex 598. 16. In England the Carriage of Goods by Sea Act 1924, which gave effect to the Hague Rules has been repealed and the Carriage of Goods by Sea Act 1971 now gives effect to the Hague-Visby Rules. 17. See pages 151–153. 18. See pages 158–160. 19. See page 140. 20. See pages 137–140. 21. See page 140. 22. See page 151. 23. See pages 151–153.

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( A ) ‘‘ P E R PA C K A G E O R U N I T ’’

Even if cargo has been lost or damaged the carrier is only entitled to limit his liability if the cargo can truly be classified as a ‘‘package or unit’’ since if it cannot be so classified there is no mechanism for calculating a limit. (B) BULK CARGO

In the case of bulk cargo, it is clearly straining language to say that a bulk cargo is a ‘‘package’’. For example, in the English case of Studebaker Distributors Ltd. v. Charlton Steam Shipping Company Ltd.24 Goddard J. stated that: ‘‘ ‘Package’ must indicate something packed. It is obvious that this clause cannot refer to all cargoes that may be shipped under the bill of lading for instance, on a shipment of grain it could apply to grain shipped in sacks, but could not, in my opinion, possibly apply to a shipment in bulk. If the shipowners desire that it should refer to any individual piece of cargo, it would not be difficult to use, appropriate words, as for instance, ‘package or unit’, to use the language of the Hague Rules.’’

Accordingly, the debate has centred more on whether or not such a cargo or part of it can be described as a ‘‘unit’’. The problem is less acute in the United States where the Carriage of Goods by Sea Act 1936, section 4(5), provides that the carrier can limit his liability to: ‘‘ . . . $500 per package . . . or in case of goods not shipped in packages, per customary freight unit’’. The question which has arisen in other countries which do not have such wording is whether the word ‘‘unit’’ means simply the physical unit received for shipment or the ‘‘freight unit’’ despite the absence of the word ‘‘freight’’. The English court, as indicated by the dictum of Goddard J. in the Studebaker case25 quoted above, is likely to hold26 that a carrier of a bulk cargo cannot rely on any ‘‘package’’ limitation as the cargo is not a physical ‘‘package’’ or ‘‘unit’’27 and there is no alternative ‘‘weight’’ limit as there is under the Hague-Visby Rules.28 ( C ) C O N TA I N E R I S E D C A R G O

In the case of containerised or palletised cargo there would seem to be no reason in principle why the container or the pallet itself should not be considered to be a ‘‘package’’ or ‘‘unit’’. In the old case of Whaite v. Lancs & Yorks Railway29 a railway waggon with wooden sides was held to be a ‘‘package’’ for the purpose of the Carriers Act 1830 and in the case of Standard Electrica S.A. v. Hamburg Sudamerikanische Dampfschiffahrts­ Gesellschaft30 the United States court had no difficulty in finding that a pallet was a ‘‘package’’. Indeed, in The ‘‘River Gurara’’,31 the English court at first instance expressly 24. (1937) 59 Ll.L.Rep. 23 at 27. 25. (1937) 59 Ll.L.Rep. 23. 26. The Canadian court so held in Falconbridge v. Chimo [1969] 2 Lloyd’s Rep. 277. 27. See the unreported judgments of Leggatt J. in Bekol v. Terracina, 13 July 1988, and Hobhouse J. in The ‘‘Troll Maple’’, 26 July 1990. 28. See pages 140–142. 29. (1874) L.R. 9 Ex. 67. 30. [1967] 2 Lloyd’s Rep. 193. 31. [1996] 2 Lloyd’s Rep. 53.

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recognised that a container can be a ‘‘package’’ and this understanding is reflected in Article 5(c) of the Hague-Visby Rules and Article 6 (2) (a) of the Hamburg Rules. However, whilst it can readily be seen that where a container is used to carry bulk cargo then the container itself is probably the ‘‘package’’ or ‘‘unit’’,32 it is less clear where the container (or pallet) is used to carry smaller ‘‘packages’’ or ‘‘units’’. In the Court of Appeal in The ‘‘River Gurara’’ Phillips L.J., after setting out the Oxford English Dictionary definition of ‘‘package’’,33 noted that ‘‘A huge metal container stuffed with goods which will normally themselves be made up in individual packages is not naturally described as a package’’. Indeed, he felt that to so describe it would be to strain the natural meaning of that word.34 A debate has raged for many decades as to whether the relevant ‘‘package’’ in such circumstances is to be determined by an objective assessment of the relevant cargo or by reference to the manner in which the cargo has been described on the bill of lading. Traditionally, the North American courts have approached the question on the basis that the manner in which the cargo is described in the bill of lading is ‘‘entitled to considerable weight’’.35 Therefore, a bill of lading recording the shipment of ‘‘one container said to contain 99 bales of leather’’ was treated as recording the shipment of 99 bales36 whereas a bill of lading evidencing the shipment of ‘‘one container said to contain machinery’’ was treated as a bill of lading recording the shipment of a single ‘‘package’’, although in fact, it contained 350 individual cartons.37 In The ‘‘River Gurara’’38 these principles were adopted by the English court at first instance.39 The ‘‘package’’ was held to be the ‘‘separately packed item’’ described in the bill of lading. If the bill of lading describes ‘‘separately packed items which in turn are said to contain a specified number of separately packed items, the number of packages will be the smallest category of separately packed items so described’’.40 On the other hand ‘‘if the contents of the container are described by words which leave it unclear whether they are separately packed for transportation, the container will be the package and not the individual items’’.41 However, by a majority (Hirst L.J. dissenting), the Court of Appeal, whilst upholding the decision of the court below, disagreed fundamentally with this approach.42 Phillips L.J., giving the leading judgment, concluded that international uni­ formity, whilst desirable, should give way to the legislative intent of the Hague Rules, as 32. The ‘‘River Gurara’’ [1996] 2 Lloyd’s Rep. at 62. 33. ‘‘ . . . a bundle of things packed up, whether in a box or other receptacle, or merely compactly tied up’’: The ‘‘River Gurara’’ [1998] Q.B. 610, at page 617 (Court of Appeal). 34. The ‘‘River Gurara’’ [1998] Q.B. 610, at page 617 (Court of Appeal). 35. Standard Electrica v. Hamburg Sud-Amerikaniske [1967] 2 Lloyd’s Rep. 193. 36. The ‘‘Mormaclynx’’ [1971] 2 Lloyd’s Rep. 276. 37. The ‘‘Kulmerland’’ [1973] 1 Lloyd’s Rep. 319. 38. [1996] 2 Lloyd’s Rep. 53. 39. However, the judge does not seem to have been referred to the earlier unreported judgment of Hobhouse J. in ‘‘Troll Maple’’, 26 July 1990, in which the court considered a bill of lading in which the number of packages was described as ‘‘196 × 20 ft containers said to contain 137,662 cartons dates, say 196 containers only’’. The judge held:— ‘‘If it be material, it is clear that this bill of lading did no more than acknowledge receipt of a certain number of containers and, in the terminology of this bill of lading as issued, the containers were being treated as the packages and the cartons of dates were being treated as the declared but unknown contents of the containers.’’ 40. Per Colman J. at page 63. 41. Ibid. at page 62. 42. The ‘‘River Gurara’’ [1998] Q.B. 610 (Court of Appeal).

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espoused by Anthony Diamond Q.C. in an article in 1978 and District Judge Beeks sitting in the Ninth Circuit in Seattle in The ‘‘Aegis Spirit’’ in 1977.43 That legislative intent was to prevent carriers from imposing on shippers unrealistically low limits of liability by wording a bill of lading such that a container is a ‘‘package’’. He felt unable to accept that the basis of limitation should depend upon the agreement of the parties as to what constitute the relevant ‘‘packages’’ as represented by the description on the face of the bill of lading. Were it otherwise, then shipowners would, by applying that definition to containers, be able to evade the minimum limit of liability that the Hague Rules aimed to secure.44 What then is the effect of the description of the cargo on the face of the bill of lading? Lord Justice Phillips noted that an unqualified description of the goods in the bill of lading does not constitute an agreement between the parties that the goods have been shipped as stated, merely prima facie evidence of that fact (Hague Rules Article III, rule 4).45 Before any question of limitation arises the onus is on the cargo owner to prove his loss. If he does so by reliance upon the bill of lading as prima facie evidence of what is shipped, the description in the bill of lading will be the basis for calculation of the Hague Rules limit. If, however, the carrier displaces the evidential effect of the bill of lading, or if the cargo owner establishes his claim to damages by reference to evidence extrinsic to the bill of lading, then Phillips L.J. held that the Hague Rules limit of liability falls to be calculated by reference to the particulars of the cargo and its packaging as it is proved to have been on loading, not by reference to the description in the bill of lading.46 Thus a cargo owner who proves that he has lost a container containing three packages will be subject to a limit calculated by reference to those packages, even though they were not enumerated in the bill of lading.47 Where the description of the goods in the bill of lading is qualified with the words ‘‘weight, number and quantity unknown’’ the bill of lading is not even prima facie evidence that the goods detailed by the shipper have been shipped.48 However, where the description is qualified by the words ‘‘said to contain’’ or ‘‘STC’’, Phillips L.J. considered 43. The ‘‘River Gurara’’ [1998] Q.B. 610, at page 624, 617 and 621. Anthony Diamond Q.C. wrote in ‘‘The Hague-Visby Rules’’ [1978] Lloyd’s M.C.L.Q. 225, 229: ‘‘one of the main purposes of limitation was to benefit cargo owners . . . The intention of the Hague Rules was to give cargo a liberal limit of liability so as to preclude shipowners from inserting clauses in their bills of lading purporting to limit liability to ridiculously low figures.’’ Judge Beeks held in The ‘‘Aegis Spirit’’ [1977] 1 Lloyd’s Rep. 93 (Seattle Ninth Circuit): ‘‘The better and more traditional approach, which I adopt, is to conscientiously construe the legislation in the factual context seeking to effectuate the legislative, not the parties’ intent and purpose. The undoubted objective of 46 U.S.C. section 1304(5) was to establish a minimum floor below which carriers subject to the Act could not reduce their liability for cargo damage. If carriers alone, or even carriers and shippers together, are allowed to christen something a ‘‘package’’ which distorts or belies the plain meaning of this word as used in the statute, then the liability floor becomes illusory and negotiable. The package limitation provision serves no purpose whatsoever if the courts’ function in applying it is to merely identify and uphold the parties’ private definition of C.O.G.S.A. package.’’ 44. The ‘‘River Gurara’’ [1998] Q.B. 610, at page 624. However, notwithstanding this rationale, subsequent cases have held that carriers are able to treat the container as the relevant package if the Rules do not apply compulsorily but as a matter of contract and the wording of the clause is sufficiently clear. See Dairy Containers Limited v. Tasman Orient Line C.V. (The ‘‘Tasman Discoverer’’) [2004] UKPC 22 and page 150 below. 45. Ibid. at pages 624 to 625. 46. Ibid. at page 625. 47. The wording and effect of Article IV Rule 5(c) of the Hague-Visby Rules is materially different. See pages 142–145 below. 48. Ibid. at page 626.

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it at least arguable that these words do no more than make plain that the carrier is, as required by Article III, rule 3, stating on the bill the ‘‘number of packages . . . as furnished in writing by the shipper’’ without dissenting from the description, so that the description can be relied upon as providing prima facie evidence as to what was within the container. However, this was not argued in the light of a concession by counsel for cargo owners that ‘‘said to contain’’ had the same effect as ‘‘contents unknown’’ or ‘‘weight, number, quantity unknown’’.49 (D) CARGO LOST OR DAMAGED

Unlike the Hague-Visby Rules, Article IV, Rule 5 of the Hague Rules does not state expressly that the ‘‘package’’ limit is to be calculated ‘‘per package or unit . . . lost or damaged’’ but merely ‘‘per package or unit’’. Where the description of the goods on the face of the bill of lading is evidence of the goods shipped, the question has been asked whether the limit is calculated with reference to the total number of packages enumerated on the bill of lading or with reference to the number of packages actually lost or damaged. If the whole cargo described on the bill of lading has become a total loss the question is academic but the question is relevant if, for example, four of the 10 packages enumerated on a bill of lading have been damaged. It appears that both the Hague and the HagueVisby Rules will be construed in similar fashion50 and that the Hague Rules limitation will be calculated with reference to the number of packages which have in fact been lost or damaged.51 ( E ) ‘‘ £ 1 0 0 ’’

The seemingly clear reference to £100 sterling in Article IV, Rule 5, must be read in the light of Article IX which provides that: ‘‘The monetary units mentioned in these Rules are to be taken to be gold value’’. The question has been asked over the years whether limitation is therefore to be £100 sterling or the value of 100 gold sovereigns per ‘‘package or unit’’. However, it has now been held by the English court that the carrier is entitled to limit his liability not to £100 sterling per package or unit but to the current market value of ‘‘the gold content of 100 sovereigns of the weight and fineness specified under the Coinage Act 1870’’.52 This problem is usually avoided when the Hague Rules are incorporated into the domestic legislation of other countries since the relevant statute usually provides for a limit calculated in the currency of that country. (ii) Hague-Visby Rules Because of the difficulties encountered in construing the limitation provisions of the Hague Rules as a result of developments in carrying practises53 attempts were made to 49. Ibid. at page 626. 50. Apart possibly from claims relating to containerised cargo under the Hague-Visby Rules, see pages 142–145. 51. See the unreported judgment of Hobhouse J. in ‘‘Troll Maple’’, 26 July 1990. 52. The ‘‘Rosa S’’ [1988] 2 Lloyd’s Rep. 574. 53. For example, bulk carriers and container vessels were not sailing when the Hague Rules came into force in the 1920s.

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remedy such deficiencies when drafting the Hague-Visby Rules. Article IV, Rule 5, of the Hague-Visby Rules now reads as follows: 5. (a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding 666.67 units54 of account55 per package or unit or 2 units56 of account per kilogramme of gross weight of the goods lost or damaged, whichever is the higher. (b) The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at which the goods are discharged from the ship in accordance with the contract or should have been so discharged. The value of the goods shall be fixed according to the commodity exchange price, or if there be no such price, according to the current market price, or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality. (c) Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages or units for the purpose of this paragraph as far as these packages or units are concerned. Except as aforesaid such article of transport shall be considered the package or unit.57 (d) The unit of account mentioned in this Article is the special drawing right as defined by the International Monetary Fund.58 The amounts mentioned in sub-paragraph (a) of this paragraph shall be converted into national currency on the basis of the value of that currency on a date to be determined by the law of the court seized of the case.59 (e) Neither the carrier nor the ships shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier60 done with intent to cause damage,61 or recklessly and with knowledge that damage would probably result.62 (f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in the bill of lading, shall be prima facie evidence, but shall not be binding or con­ clusive on the carrier. (g) By agreement between the carrier, master or agent of the carrier and the shipper other maximum amounts than those mentioned in sub-paragraph (a) of this para­ graph may be fixed, provided that no maximum amount so fixed shall be less than the appropriate maximum mentioned in that sub-paragraph. (h) Neither the carrier not the ship shall be responsible in any event for loss or damage to, or in connection with goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading.

The Hague-Visby Rules altered the right to limit liability set out in the Hague Rules in the following ways:

54. See page 142. 55. For those countries who have not given effect to the Hague-Visby Protocol of 1979 the relevant figures and units of account are 10,000 Poincare francs and 30 francs respectively. A list of those countries which have adopted the 1979 protocol is set out in Appendix IX. 56. See page 142. 57. See pages 142–144. 58. See page 149. 59. See page 142. 60. See pages 153–154. 61. See page 154. 62. See page 154.

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1. The sterling/gold sovereign limit is replaced by a limit expressed in terms of the Special Drawing Right (SDR)63 the monetary value of which can be calculated each day and is reported in newspapers such as the Financial Times and Lloyd’s List. The relevant date for calculation of value is the date of judgment.64 2. The limit per ‘‘package’’ or ‘‘unit’’ is 666.67 SDRs.65 3. There is an alternative limitation based on weight to cater inter alia for bulk cargoes. This is 2 SDRs per kilo of gross weight and if goods are shipped as ‘‘packages’’ or ‘‘units’’ it is the higher of the ‘‘package’’/‘‘unit’’ or ‘‘weight’’ limits which are to apply.66 In the case of ‘‘light’’ cargoes it is more likely that the limitation based on the number of packages will result in a higher limit whilst the contrary is true of ‘‘heavy cargoes’’. Example 1—light cargo 1,000 packages weighing 1 kilo each: (a) Number of packages limit = 1,000 × 666.67 = SDR 666.670 (b) Weight limit 1,000 × 1 kilo × 2 = SDR 2,000 Example 2—heavy cargo 3 packages weighing 1,000 kilos each: (a) Number of packages limit = 3 × 666.67 = SDR 2,000.01 (b) Weight limit = 3 × 1,000 kilos × 2 = SDR 6,000 4. ‘‘Packages’’ or ‘‘units’’ are defined for purposes of containerised or palletised cargo. They are ‘‘the number of packages or units enumerated in the bill of lading as packed in the [container or pallet]. Except as aforesaid such [container or pallet] shall be considered the package or unit.’’67 Goods lost or damaged Under sub-paragraph (a) the package limit is to be calculated with reference to the goods ‘‘lost or damaged’’. There would seem to be no difference in this regard with the Hague Rules, see page 141. Therefore, it is the weight or quantity actually lost or damaged which is relevant not the quantity or weight described on the bill of lading. In the case of a total loss the distinction will normally be irrelevant, whereas in the case of partial loss or damage, the distinction will be highly relevant. Containerised Cargo Courts and commentators have had some difficulty in construing the provisions of Article IV Rule 5(c) of the Hague-Visby Rules. It appears clear that the container is deemed to 63. Article IV, Rule 5(d). 64. Section 2(5) of the Merchant Shipping Act 1981. 65. Article IV, Rule 5(a). 66. Article IV, Rule 5(a). 67. Article IV, Rule 5(c). See also pages 136–137 for a consideration of this issue in relation to the Hague Rules.

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be the relevant ‘‘package or unit’’ which has been lost or damaged unless the bill of lading enumerates the goods which have been packed inside it. However, in the latter event, it is ‘‘the number of packages or units enumerated in the bill of lading as packed in such article of transport’’ which ‘‘are deemed to be the number of packages or units for the purpose of this paragraph as far as these packages or units are concerned.’’ A number of difficult issues arise in relation to this paragraph: (a) Is cargo ‘‘enumerated’’ for the purposes of the Article if the bill of lading is marked ‘‘weight/quantity unknown’’? or ‘‘STC’’? Where the bill of lading gives the number of ‘‘packages or units’’ in the container or pallet clearly and without qualification the relevant ‘‘package or unit’’ is likely to be the ‘‘smallest category of separately packed items so described’’ in the bill of lading.68 However, bills of lading are often qualified by provisions such as ‘‘weight unknown’’ or ‘‘quantity unknown’’ or ‘‘said to contain (STC)’’ and it is necessary to consider the effect of such qualifications. It has been repeatedly held that by addition of words such as ‘‘weight unknown’’ or ‘‘quantity unknown’’ the number or weight of goods inserted in the bill of lading is not even prima facie evidence of the shipment of such goods and the onus is on the cargo claimant to prove by other evidence how much cargo was shipped.69 A bill of lading qualified in this manner is not ‘‘such a bill of lading’’ as will provide prima facie evidence for the purpose of Article III, Rule 4.70 It is arguable that the provisions of Article IV, Rule 5(c) are intended to complement the obligations placed on the carrier by Article III, Rules 3, 4 and 5 which clearly envisage an unqualified enumeration in the bill of lading of figures provided by the shippers.71 Therefore, it would appear strange if a qualified enumeration which would not be binding on a carrier under Article III, Rule 4, would nevertheless be binding on him for the purposes of Article IV, Rule 5(c).72 This was the conclusion reached in The ‘‘River Gurara’’73 at first instance albeit in the context of the Hague Rules rather than the HagueVisby Rules. This is also the view that has been preferred by English text book writers74 with the result that if the quantity stipulated on the bill of lading has been qualified by the addition of words such as ‘‘quantity unknown’’, there is no ‘‘enumeration’’ for the purposes of Article IV Rule 5(c). However, the view adopted by the Australian Court of Appeal is that such qualified figure is an ‘‘enumeration’’ for the purpose of package limitation under Article IV Rule 5(c) of the Hague-Visby Rules although it is not even prima facie evidence for the purposes of establishing liability under Article III Rule 4.75

68. See The ‘‘River Gurara’’ [1996] 2 Lloyd’s Rep. at page 53. 69. Att-Gen. of Ceylon v. Scindia [1962] A.C. 60. See also unreported judgment of Hobhouse J. in ‘‘Troll Maple’’, 26 July 1990. But see also the obiter comments of Phillips L.J. in the Court of Appeal in The ‘‘River Gurara’’ [1998] Q.B. 610 at page 626—see page 140 above. 70. The ‘‘Atlas’’ [1996] 1 Lloyd’s Rep. 642. 71. See the judgment of Phillips LJ in The ‘‘River Gurara’’ [1998] Q.B. 610. 72. See Voyage Charters, (2nd Edition) page 992. 73. [1996] 2 Lloyd’s Rep. 53. 74. For example, See Paragraph 85.387 of Voyage Charters, 2nd edition. 75. El Greco (Australia) Pty Ltd and another v. Mediterranean Shipping Co. S.A. [2004] 2 Lloyd’s Rep. 537.

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‘‘Said to contain’’ ‘‘STC’’ The matter is further complicated by the uncertainty whether the words ‘‘said to contain’’ or ‘‘STC’’ which are normally found on container bills of lading have the same effect as ‘‘weight unknown’’ or ‘‘quantity unknown’’. The carrier of an FCL container (a container packed and sealed by the shipper before presentation to the carrier) is unlikely to agree to the inclusion of cargo details without such qualification since he has no means of checking the contents of the container. He may wish to utilise the right given to him by the proviso to Article III, Rule 3, to refuse ‘‘to state or show in the bill of lading any . . . number, quantity . . . which . . . he has had no reasonable means of checking’’. He may therefore wish to issue a bill which records shipment merely of ‘‘one container’’ in which case this will probably be the ‘‘package or unit’’ for the purpose of Article IV, Rule 5(c). However, this may be unacceptable to the shipper who will require a bill of lading describing the contents of the container as one of the documents necessary for the sale of his goods. The parties will therefore often agree on a compromise by the issuance of a bill of lading recording the shipment of ‘‘one container said to contain’’ a number of packages or units. In The ‘‘River Gurara’’ counsel for the cargo owners expressly conceded on appeal that ‘‘said to contain’’ is no different to a qualification such as ‘‘contents unknown’’ or ‘‘weight, number, quantity unknown’’, such that the description does not constitute prima facie evidence of the cargo loaded. However, Lord Justice Phillips felt that it was at least arguable that ‘‘said to contain’’ does not prevent the description from being relied upon as providing prima facie evidence, but in the light of the concession, he did not need to decide the point.76 Accordingly it remains uncertain whether the qualification ‘‘said to contain’’ dilutes or undermines the value of the bill of lading as ‘‘enumeration’’ for the purposes of defining the ‘‘package’’ to the same extent as ‘‘weight unknown’’ or ‘‘quantity unknown’’.

(b) What is meant by ‘‘as packed’’? The view preferred by English text book writers is that provided the bill of lading describes the ‘‘packages’’ or ‘‘units’’ which have been stuffed within the container, this is a sufficient ‘‘enumeration’’, whereas the Australian Court of Appeal has held77 that there is not a sufficient ‘‘enumeration’’ unless the bill of lading also describes how the goods in the container have actually been packed. Therefore, a reference in the bill of lading to the shipment of ‘‘1 container’’ containing ‘‘200,945 pieces posters and prints’’ was held not to be a sufficient ‘‘enumeration’’ as it did not explain how the posters and prints had been packed. The distinction between the two methods of construction is important since the Australian Court of Appeal came to the conclusion that, because there was no ‘‘enumera­ tion,’’ the last sentence of Article IV Rule 5(c) would apply with the result that the only ‘‘package’’ for limitation purposes was the container itself.

76. The ‘‘River Gurara’’ [1998] Q.B. 610, at page 626. 77. El Greco (Australia) Pty Ltd and another v. Mediterranean Shipping Co. S.A. [2004] 2 Lloyd’s Rep. 537.

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(c) Is the ‘‘enumeration’’ to be binding even when the actual number of packages or units which have actually been lost or damaged is ascertainable and proved to be different? Article IV Rule 5(a) makes it clear that the package limit is applicable to goods which have been ‘‘lost or damaged’’. When the container and its contents are a total loss then there is no problem in principle in giving effect to the ‘‘deemed’’ provisions of Article IV Rule 5(c) in a manner which does not conflict with Article IV Rule 5(a). However, if the container is not a total loss and it is possible by survey evidence to ascertain whether all of the goods stuffed inside it have been lost or damaged, what is to be the relevant number of ‘‘packages’’ for limitation purposes? Is it to be the quantity ‘‘enumerated’’ on the bill of lading or the actual quantity lost or damaged? There appears to be no clear answer to this question and the crucial question appears to be what is meant by the difficult phrase: ‘‘ . . . shall be deemed to be the number of packages or units for the purpose of this paragraph as far as these packages or units are concerned.’’

Delay It is possible under English law to claim damages if the delivery of the cargo at the port of discharge has been delayed due to the carrier’s breach of contract.78 However, unlike the Hamburg Rules,79 neither the Hague nor the Hague-Visby Rules provide specifically for any limitation to apply in relation to claims for delay. It is likely that a claim for delay is prima facie a claim in respect of which limitation can apply in that it is a claim for ‘‘loss . . . in connection with the goods’’.80 However, difficulty arises expressly in the case of the Hague-Visby Rules and implicitly in the case of the Hague Rules, since the limit is to be calculated with reference to particulars of ‘‘the goods lost or damaged’’. It would appear to strain language81 to say that ‘‘delayed goods’’ are ‘‘lost’’ or ‘‘damaged’’ goods and if it is not possible to calculate the limit then it would not seem to be possible in fact to limit liability for delay.82 5. Certain misconduct on the part of the carrier can deprive him of his right to limit, namely, acts or omissions done with intent to cause damage or recklessly, with knowledge that damage would probably result.83 6. Article IV bis, Rule 1 specifies that: ‘‘The defences and limits of liability provided for in these Rules shall apply in any action against the carrier in respect of loss or damage to goods covered by a contract of carriage whether the action be founded in contract or in tort.’’

78. The ‘‘Heron II’’ [1969] 1 A.C. 350. 79. See page 146. 80. Article IV, Rule 5 of Hague Rules and Article IV, Rule 5(a) of Hague-Visby Rules. 81. See The ‘‘TFL Prosperity’’ [1984] 1 Lloyd’s Rep. at 127. 82. Nevertheless, in The ‘‘Breydon Merchant’’ [1992] 1 Lloyd’s Rep. 373, Sheen J. held in the context of Article 2(1)(a) of the 1976 Limitation Convention that goods which suffered a diminution in value as a result of ‘‘actionable delay’’ were to be treated as damaged. 83. Article IV Rule 5(e). A commentary on this provision can be found on pages 153–154 and a comparison of similar words in other Conventions including Article 4 of the 1976 Convention can be found on pages 31–39.

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Under the Hague Rules it had never been universally established whether the limitation rules applied to claims in tort although, under English law, the carrier could always rely on the Hague Rules defences if the tortious claim were put forward under the contract of carriage. The purpose of Article IV bis (1) was to ensure that a claimant was not placed in a better position by framing his claim in tort rather than in contract. However, the inclusion of this Rule does not mean that the carrier can always limit his liability to a tort claim. Article II of the Rules implies that the Rules apply only where there is a ‘‘contract of carriage of goods by sea by the carrier’’. Therefore, if a claim can and is brought against the carrier in tort other than under such a contract the Hague-Visby Rules may not apply, in which case, the carrier may not be able to rely on any ‘‘package’’ limitation.84 However, as a result of the decision of the House of Lords in The ‘‘Aliakmon’’85 there would not appear to be many cases in which a claimant can now bring an action in tort outside the contract of carriage. In any event, the carrier may still be able to limit his liability under the 1976 Limitation Convention or similar legislation.86 7. Article IV bis, Rules 2, 3 and 4, specifies that if a claim is brought against a servant or agent (but not an independent contractor) of the carrier such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke and the aggregate amount recoverable from the carrier, servant and agent shall not exceed the limits provided by the Rules. However, Article IV bis, Rule 4, makes it clear that if the servant or agent is guilty of intentional and reckless misconduct, whereas the carrier is not, the carrier can limit his liability but the servant or agent cannot (assuming he can be made legally liable to the claimant). It should also be remembered that these rights benefit only a servant or agent who is not an independent contractor. The rights will probably therefore be of limited application in practice since most of the agents who are likely to be held liable, for example, stevedores, will normally be independent contractors and not employees of the carrier. For similar reasons, it may not benefit carriers to whom a sector of through-carriage has been delegated by the through carrier and who may wish as sub-bailees for reward to rely on the terms of the contract concluded between the claimant and the through carrier.87 These independent contractors may nevertheless be able to limit their liability by virtue of a Himalaya Clause in the bill of lading88 or under Article 1(4) of the 1976 Convention if they are a person for whose acts the shipowner is responsible.89

(iii) Hamburg Rules The Hamburg Rules as set out in the United Nations Convention on the Carriage of Goods by Sea 1978 came into force internationally on 1 November 1992.90 The Hamburg Rules provide as follows:

84. See the decision of the Court of Appeal in The ‘‘Captain Gregos’’ [1990] 1 Lloyd’s Rep. 315. 85. [1986] 2 Lloyd’s Rep. 1. 86. See the commentary on Article 2 of the 1976 Convention on pages 18–26. 87. See The ‘‘K.H. Enterprise’’ [1994] 1 Lloyd’s Rep. 593 and The ‘‘Mahkutai’’ [1996] 3 W.L.R. 1. 88. See pages 156–157 below. 89. See pages 13–14. 90. To date the Hamburg Rules have been ratified by the countries named in Appendix IX.

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Article 6: Limits of liability 1. (a) The liability of the carrier for loss resulting from loss of or damage to goods according to the provisions of Article 5 is limited to an amount equivalent to 835 units of account per package or other shipping unit or 2.5 units of account per kilogramme of gross weight of the goods lost or damaged whichever is the higher. (b) The liability of the carrier for delay in delivery according to the provisions of Article 5 is limited to an amount equivalent to two and a half times the freight payable for the goods delayed, but not exceeding the total freight payable under the contract of carriage of goods by sea. (c) In no case shall the aggregate liability of the carrier, under both subparagraphs (a) and (b) of this paragraph, exceed the limitation which would be established under subparagraph (a) of this paragraph for total loss of the goods with respect to which such liability was incurred. 2. For the purpose of calculating which amount is the higher in accordance with para­ graph 1(a) of this Article, the following rules apply: (a) Where a container, pallet or similar article of transport is used to consolidate goods, the package or other shipping units enumerated in the bill of lading, if issued, or otherwise in any other document evidencing the contract of carriage by sea, as packed in such article of transport are deemed packages or shipping units. Except as aforesaid the goods in such article of transport are deemed one shipping unit. (b) In cases where the article of transport itself has been lost or damaged, that article of transport, if not owned or otherwise supplied by the carrier, is considered one separate shipping unit. 3. Units of account means the unit of account mentioned in Article 26. 4. By agreement between the carrier and the shipper, limits of liability exceeding those provided for in paragraph 1 may be fixed.

Article 7: Application to non-contractual claims 1. The defences and limits of liability provided for in this Convention apply in any action against the carrier in respect of loss or damage to the goods covered by the contract of carriage by sea, as well as of delay in delivery whether the action is founded in contract, in tort or otherwise. 2. If such an action is brought against a servant or agent of the carrier, such servant or agent, if he proves that he acted within the scope of his employment, is entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke under this Convention. 3. Except as provided in Article 8, the aggregate of the amounts recoverable from the carrier and from any persons referred to in paragraph 2 of this Article shall not exceed the limits of liability provided for in this Convention.

Article 8: Loss of right to limit liability 1. The carrier is not entitled to the benefit of the limitation of liability provided for in Article 6 if it is proved that the loss, damage or delay in delivery resulted form an act or omission of the carrier done with the intent to cause such loss, damage or delay, or recklessly and with knowledge that such loss, damage or delay would probably result. 2. Notwithstanding the provisions of paragraph 2 of Article 7, a servant or agent of the carrier is not entitled to the benefit of the limitation of liability provided for in Article 6 if it is proved that the loss, damage or delay in delivery resulted from an act or omission of such

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servant or agent, done with the intent to cause such loss, damage or delay, or recklessly and with knowledge that such loss, damage or delay would probably result.

The wording of the Hamburg Rules does differ (sometimes markedly) from that used in the Hague-Visby Rules. It is not within the scope of this book to enter into a detailed examination of those differences and, therefore, regard should be had to the specific provisions of the Hamburg Rules themselves when the problems arise.91 However, the general approach to limitation adopted in the Hamburg Rules follows that adopted in the Hague-Visby Rules and the following comments adopt the numbering on pages 142–146, above, relating to the manner in which the Hague-Visby Rules amended the Hague Rules: 1. Equivalent provisions can be found in Articles 6(3) and 26. 2. The limit is 835 SDRs ‘‘per package or other shipping unit’’. See Article 6(1)(a). The Hamburg Rules therefore apparently provide for the concept of a ‘‘unit’’ which is not merely physical and which could encompass the freight unit. 3. The limit is 2.5 SDRs per kilo of the goods lost or damaged. See Article 6(1)(a). 4. Similar provisions are found in Article 6(2). 5. Similar provisions are found in Article 8.92 6. Similar provisions are found in Article 7(1)(i). However, Article 10 also places liability on the ‘‘actual carrier’’ who may not have a contractual relationship with the claimants. Therefore, ‘‘the actual carrier’’ may be able to rely in such circumstances on the provisions of the Rules to limit his liability to a tortious claim even though the claim against him is not brought under the contract of carriage. 7. Similar provisions are found in Article 7(2) and 7(3) and Article 8. It should be noted, however, that unlike Article IV bis, Rule 2, of the Hague-Visby Rules,93 Article 7(2) gives the right of limitation to a ‘‘servant or agent’’ of the carrier irrespective of whether or not he is an independent contractor so long as liability arises in relation to an act done ‘‘within the scope of his employment’’. In determining whether the act was or was not ‘‘within the scope of his employ­ ment’’ the court may refer to cases on the effect of Article IV, Rule 2(q), of the Hague and Hague-Visby Rules. In The ‘‘Chyebassa’’94 it was held that the theft of cargo by a stevedore was an act within the duties entrusted to him whereas the theft by a stevedore of part of the ship’s equipment was not. Article 10(3) of the Hamburg Rules also gives similar right to the ‘‘actual carrier’’ who is defined in Article 1(2) as: ‘‘ . . . any person to whom the performance of the carriage of the goods, or of part of the carriage, has been entrusted by the Carrier, and includes any other person to whom such performance has been entrusted.’’ 91. For a detailed discussion see the lecture of Mr Diamond Q.C. on the Hamburg Rules given for Lloyd’s of London Press on 28 September 1978. See also Christof F. Luddeke and Andrew Johnson, A Guide to the Hamburg Rules (Lloyd’s of London Press Ltd., 2nd edition, 1995). 92. A commentary on this provision can be found on page 155 and a comparison of similar words in other Conventions including Article 4 of the 1976 Convention can be found on pages 31–39. 93. See page 146. 94. [1966] 2 Lloyd’s Rep. 193.

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Article 10(4) specifies that where both the carrier and actual carrier are liable their liability is to be joint and several. Unlike the Hague or Hague-Visby Rules, the Hamburg Rules provides a further express rule of limitation in the case of delay. Article 6(1)(b) provides that in such circumstances the carrier can limit his liability to an amount equivalent either to two and a half times the freight payable on the goods delayed or to the total freight payable under the contract of carriage which ever is the lower. However, where the claim involves both delay and loss or damage the claimant cannot recover more than the maximum limitation which is applicable for a total loss of the goods under Article 6(1)(a). (iv) Can the carrier of goods rely on lower ‘‘package’’ limits? (1) Where the Hague Rules, Hague-Visby Rules or Hamburg Rules apply as a matter of law95 Where the Rules apply as a matter of law it is not possible for the carrier to impose a package or weight limitation which is more beneficial to him than that imposed by such Rules. Article III, Rule 8, and Article IV, Rule 5, of the Hague and Hague-Visby Rules stipulate that any clause which purports to ‘‘lessen’’ liability otherwise than provided in the Rules is to be ‘‘null and void and of no effect’’.96 There is a provision to similar effect in Article 23(1) of the Hamburg Rules. Such a clause includes an attempt to define a ‘‘package’’ for the purposes of limitation with the intention of reducing the limit which would otherwise apply by virtue of Article IV, Rule 5, for example, a container is deemed to be the relevant package notwithstanding the fact that the relevant bill of lading enumerates other packages.97 This principle can have effect in surprising circumstances. In The ‘‘Hollandia/Morvi­ ken’’98 the House of Lords considered a cargo claim against a vessel which had shipped cargo at a port in the United Kingdom after the Carriage of Goods by Sea Act 1971 had given statutory effect to the Hague-Visby Rules in the United Kingdom. The bill of lading had a Dutch law and jurisdiction clause and the carrier subsequently sought to stay English proceedings and to refer the claim to Holland where package limitation was more favourable to him since Holland was still at that time giving effect to the Hague Rules. The House of Lords held that the effect of the Dutch law and jurisdiction clause, if imple­ mented, would be to lessen the liability of the carrier under the Hague-Visby Rules. They therefore refused to stay the English proceedings on the grounds that the law/jurisdiction clause was void under Article III, Rule 8. (2) Where the Hague Rules, Hague-Visby Rules or Hamburg Rules apply as a matter of contract Parties often incorporate the Rules into the contract of carriage (for example, by virtue of the inclusion of a clause paramount) even though the Rules may not apply compulsorily 95. Section 1(2) and (3) and (6) of the Carriage of Goods by Sea Act 1971 provides that the Hague-Visby Rules as set out in the Schedule to the Act shall ‘‘have the force of law’’ in the United Kingdom in the circumstances described in the Act and the Schedule. 96. See The ‘‘European Enterprise’’ [1989] 2 Lloyd’s Rep. 185. 97. The ‘‘River Gurara’’ [1996] 2 Lloyd’s Rep. 53. 98. [1983] 1 Lloyd’s Rep. 1.

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to such a contract.99 In such circumstances it is a matter of construction of the whole contract whether effect would be given to a clause lessening the carrier’s liability to a sum lower than that in the Rules. There is nothing in principle to prevent parties from agreeing that the Rules shall apply but that a lower figure should be substituted for the figures in the Rules themselves since both provisions would have equal force as contractual terms. However, it is likely that clear words would be required since otherwise a court or tribunal might, in view of Article III, Rule 8, of the Hague or Hague-Visby Rules or Article 23(1) of the Hamburg Rules feel constrained to apply any expressed lower limits to claims relating to incidents other than those covered by the Rules such as, for example, to incidents arising, in the case of the Hague and Hague-Visby Rules, before loading or after discharge. In The ‘‘River Gurara’’100 the parties agreed that the Hague Rules as incorporated into the legislation of the country of shipment should apply, together with a provision to the effect that ‘‘notwithstanding any provision of law to the contrary, the container shall be considered a package or unit . . . ’’. Although the Hague Rules seem to have applied as a matter of contract, Colman J. held that the latter clause was void under Article III, Rule 8 of the Hague Rules.101 This was not challenged on appeal.102 However, the decision should now be viewed with caution in the light of the decision of the Privy Council in The ‘‘Tasman Discoverer’’.103 This was an appeal to the Privy Council in London from the New Zealand Court of Appeal. The carriage was not compulsorily subject to any of the international regimes but clause 7 of the bill of lading provided that for port to port shipments the liability of the carrier in respect of loss or damage to goods should be determined by the Hague Rules as referred to in clause 6(B)(b)(i), which provided: ‘‘By the Hague Rules contained in the International Convention for the Unification of Certain Rules relating to the Bills of Lading dated Aug. 25, 1924 (hereinafter called the Hague Rules), if the loss or damage is proved to have occurred at sea or on inland waterways; for the purpose of this subparagraph the limitation of liability under the Hague Rules shall be determined to be £100 Sterling, lawful money of the United Kingdom per package or unit and references in the Hague Rules, to carriage by sea, shall be deemed to include references to carriage by inland waterways and the Hague Rules shall be construed accordingly.’’

The cargo owners argued that clause 6(B)(b)(i) was rendered void to the extent that it attempted to exclude Article XI of the Hague Rules (which provided that the monetary units mentioned in Article IV, Rule 5 were to be taken to be gold value). However, the Privy Council held that since the Rules applied only as a matter of contract and since the wording of clause 6(B)(b)(i) was clear, the parties had agreed to apply the Hague Rules in a qualified manner (that is, Article IV, Rule 5 not qualified by Article XI) and that the applicable limit was not therefore based on £100 gold value (which would have been the 99. The Hague and Hague-Visby Rules apply compulsorily only to a ‘‘bill of lading or similar document of title’’ (Article 1(b) of the Rules) and the Hamburg Rules only to a contract under which freight is paid. (Article 1(6)) excluding a charterparty. 100. [1996] 2 Lloyd’s Rep. 53. 101. In reaching his decision the judge was clearly influenced by the fact that he was following similar conclusions reached by U.S. and Canadian judges. However, it appears likely that such judges were considering cases in which the Hague Rules applied as a matter of law under the U.S. and Canadian Acts. It does not appear to have been argued that the situation could be different if the Hague Rules applied as a matter of contract. 102. The ‘‘River Gurara’’ [1998] Q.B. 610, at page 627 (Court of Appeal). 103. Dairy Containers Limited v. Tasman Orient Line C.V. (The ‘‘Tasman Discoverer’’) [2004] UKPC 22.

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case if the Rules had applied compulsorily) but on £100 sterling in ordinary or paper currency per package. (v) No ‘‘package’’ limit Article IV Rule 5 of both the Hague and Hague-Visby Rules stipulate that the right of the carrier to limit his liability according to the Rules applies ‘‘unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading’’. If this is done then the carrier’s liability is unlimited under the Rules (subject to his right to rely on ‘‘tonnage’’ limitation under the 1976 Limitation Convention or similar legislation). However, to achieve this end both the requirement of declaration by the shipper and insertion in the bill must be satisfied.104 A bill of lading including these particulars is called an ‘‘ad valorem’’ bill. The issuance of such a bill usually has a prejudicial effect on the carrier’s P. & I. cover and accordingly, commands a higher freight rate. To compensate the carrier to some extent for the loss of his right to limit his liability in such circumstances the last paragraph of Article IV, Rule 5, of the Hague Rules and Article IV, Rule 5(h), of the Hague-Visby Rules provides that if the nature or (N.B. not ‘‘and’’) value of the goods has been knowingly misstated ‘‘by the shipper’’ on the bill, ‘‘neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with the goods’’. This right appears to apply no matter what the cause of the damage and irrespective of whether the claim is brought by the shipper, or the receiver or any other party provided that the shipper knew of the misstatement. There seems to be no similar provisions in the Hamburg Rules. Article 17(1), of the Hamburg Rules appears to envisage that if the nature of the goods is stated inaccurately on the bill of lading (whether this is known to the shipper or not) the carrier will be liable to the claimant subject to his right to limit under Article VI and can subsequently seek an indemnity from the shipper for any ‘‘loss resulting from inaccuracies in such partic­ ulars’’. (vi) Loss of right to rely on package limitation (A) HAGUE RULES

There is no specific provision in the Hague Rules which attempts to restrict the carrier’s right to limit under Article IV, Rule 5. Indeed, Article IV, Rule 5, states that: ‘‘Neither the carrier nor the ship shall in any event become liable for any loss or damage to or in connection with goods in an amount exceeding . . . ’’ The words ‘‘in any event’’ suggest that there is no restriction on the carrier’s right to limit. This is the view which has traditionally been adopted by English text-book writ­ ers.105 However, it has been questioned over the years whether these words are sufficient to entitle the carrier to limit his liability where he has been guilty of a deviation. The law relating to deviation is currently in a state of some uncertainty as different judges have

104. Pyrene Co. Ltd. v. Scindia Steam Navagation Co. Ltd. [1954] 1 Lloyd’s Rep. 321 [1954] 2 Q.B. 402. 105. See Scrutton 20th edition, page 441.

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come to different conclusions as to whether the concept of deviation has survived the decision of the House of Lords in the Photo Productions case.106 Lord Justice Lloyd said in The ‘‘Antares’’107 that the ‘‘deviation rule’’ (if it now exists at all) should be restricted to the original concept of geographic deviation: ‘‘Whatever may be the position with regard to deviation clauses strictly so called . . . .I see no reason for regarding the unauthorised loading of deck cargo as a special case.’’

Nevertheless, in The ‘‘Chanda’’108 which was a case of quasi-deviation in the form of unauthorised carriage on deck, Hirst J. held at first instance that since the provisions of the Rules were intended to apply to under-deck carriage, Article IV, Rule 5 and the words ‘‘in any event’’ were to be construed purely in relation to such carriage and not to loss or damage resulting from uncontemplated deck carriage. The ‘‘Chanda’’ has now been overruled by the English Court of Appeal in The ‘‘Happy Ranger’’109 and ‘‘Kapitan Petko Voivoda’’.110 The ‘‘Kapitan Petko Voivoda’’ was a case of unauthorised carriage on deck under a contract which was made subject to the Hague Rules as a matter of contract. Longmore L.J. adopted the view of Lloyd L.J. in the ‘‘Antares’’ that liability for unauthorised carriage of cargo on deck should not be con­ sidered to be a deviation and observed that: ‘‘The duty of the court is merely to construe the contract which the parties have made.’’

He then went on to hold that, provided the wording of the clause in the contract was sufficiently clear, it could protect a carrier in such circumstances. He considered that a carrier who was guilty of an unauthorised shipment on deck could not rely on the various defences in Article IV Rule 2 of the Hague and Hague-Visby Rules since the cause of the loss or damage in such circumstances was not any of the circumstances itemised in that Rule but the failure of the carrier to carry and look after the goods in a proper manner. Nevertheless, the Court of Appeal were ready to adopt the dictum of Tuckey L.J. in ‘‘Happy Ranger’’ where he said of the words ‘‘in any event’’ in Article IV Rule 5 of the Hague Rules: ‘‘However, I think the words ‘‘in any event’’ mean what they say. They are unlimited in scope and I can see no reason for giving them anything other than their natural meaning.’’

Therefore, the Court of Appeal held in The ‘‘Kapitan Petko Voivoda’’ that, notwithstand­ ing the unauthorised carriage on deck, the carrier could rely on the right to limit liability under Article IV Rule 5 of the Hague Rules even though the Rules were applicable as a matter of contract not law. It further follows that if the Rules apply as a matter of law, the words ‘‘in any event’’ would have even greater force.111 However, until it has been definitively determined whether the concept of deviation still remains as a ‘‘special rule’’ under English law, the decisions of the Court of Appeal in The ‘‘Happy Ranger’’ and The ‘‘Kapitan Petko Voivoda’’ must be viewed with caution in 106. See Lord Wilbeforce in Photo Productions v. Securicor [1980] A.C. at page 845 and Lloyd L.J. in Kenya Railways v. Antares [1987] 1 Lloyd’s Rep. 424. 107. [1987] 1 Lloyd’s Rep. at 430. 108. [1989] 2 Lloyd’s Rep. 494. Subsequently followed by the court of New Zealand in The ‘‘Pembroke’’ [1995] 2 Lloyd’s Rep. 290. 109. [2002] 2 Lloyd’s Rep. 357. 110. [2003] 2 Lloyd’s Rep. 3. 111. See the reasoning of the Court of Appeal in The ‘‘Antares’’ [1987] 1 Lloyd’s Rep. 424.

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relation to the more traditional concept of geographic deviation as the latter cases con­ sidered the specific situation of unauthorised deck carriage. (B) HAGUE-VISBY RULES

The doubt which has been voiced in relation to the meaning of the words ‘‘in any event’’ in Article IV Rule 5 of the Hague Rules is academic in the context of the Hague-Visby Rules due to the more precise and specific wording of the amended Article which appears in the Hague-Visby Rules. Article IV, Rule 5(e), states that: ‘‘Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result.’’

A general commentary in relation to the meaning of these words and of similar words in other Conventions can be found on pages 32–33. However, some points are worth re-emphasis: (1) It is only the conduct of the carrier himself which is relevant in determining whether or not he can limit his liability under this Article. Therefore, if damage has been caused by the intentional or reckless conduct of a servant or agent of the carrier (unless that servant or agent is the alter ego of the carrier) but without similar conduct on the part of the carrier himself, the carrier is entitled to limit his liability.112 The situation differs, therefore, from that under Article III, Rules 1 and 2, where the ‘‘carrier’’ is in breach of his obligations to exercise due diligence to make the ship seaworthy and to ‘‘properly and carefully carry’’ etc., the goods if there is merely negligence on the part of his servants, agent or independent contractors.113 Similarly, if an action is brought against a servant or agent114 of the carrier and such person wishes to limit his liability, such right is lost if that servant or agent is personally guilty of intentional or reckless conduct.115 Accordingly, it is submitted that if the court in The ‘‘Chanda’’116 had been required to consider the effect of unauthorised carriage on deck under a contract subject to the HagueVisby Rules (not the Hague Rules) it would have concluded that the right to limitation was available unless the carrier himself had connived in the unauthorised deck carriage and that such conduct constituted recklessness with knowledge that damage would probably result.117 (2) There is a strange omission in Article IV, Rule 5(e), and Article IV bis, Rule 4, in that there is no mention of ‘‘loss’’. Throughout its other provisions the Hague-Visby Rules speak consistently of ‘‘loss or damage’’. Indeed, even Article IV, Rule 5(a), uses the same phrase when establishing the carrier’s right to limit. Yet, Article IV, Rule 5(e), which is

112. The ‘‘European Enterprise’’ [1989] 2 Lloyd’s Rep. 195. The position is the same under the Athens Convention. See The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. 144 and page 106. 113. See for example The ‘‘Muncaster Castle’’ [1961] 1 Lloyd’s Rep. 57. 114. A servant or agent who is an independent contractor cannot limit. Article IV bis, Rule 2. 115. Article IV bis, Rule 4. 116. [1989] 2 Lloyd’s Rep. 494. 117. However, see the decision of the New Zealand court in The ‘‘Pembroke’’ [1995] 2 Lloyd’s Rep. 290.

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intended to restrict the general application of Article IV, Rule 5(a), apparently applies only to ‘‘damage’’ and not ‘‘loss’’. A similar omission arises in Article 4 of the 1976 Convention which refers to ‘‘loss’’ without mention of ‘‘damage’’.118 However, whereas it is possible in that context to argue that ‘‘loss’’ means the financial loss arising from a physical loss of or damage to the goods with the result, therefore, that Article 4 is applicable to most situations, it is more difficult to do so in relation to Article IV, Rule 5(e), of the Hague-Visby Rules, since, when read in context, the word ‘‘damage’’ appears to contemplate merely physical damage to goods and conduct relating thereto.119 If this is correct then, if cargo is ‘‘lost’’ (‘‘not damaged’’) due to intentional or reckless conduct on the part of the carrier, he may be able to limit his liability under Article IV, Rule 5(a) (particularly in view of the words ‘‘in any event’’) since nothing in Article IV, Rule 5(e), restricts that right.120 (3) Whereas, Article 4 of the 1976 Convention stipulates that the right to limit liability is lost only if the carrier intends to cause ‘‘such’’ loss or acts recklessly with knowledge that ‘‘such’’ loss will result, the word ‘‘such’’ is not present in Article IV, Rule 5(e), of the Hague-Visby Rules. In Goldman v. Thai Airways121 the Court of Appeal considered similar words in the Warsaw Convention and came to the conclusion that the right to limit is lost if ‘‘the damage complained of is the kind of damage known to be the probable result’’.122 However, Eveleigh L.J., who delivered the leading judgment, went on to say: ‘‘It is with less confidence that I have said that the damage anticipated must be of the same kind of damage as that suffered. I have reached my conclusion because Article 25 is designed to cover cases of damage both to the person, in other words, injury, and to property.123

The Hague-Visby Rules do not cover injury to the person and accordingly it may be that a court construing the Hague-Visby Rules would come to the conclusion that the right to limit may be lost even if the damage anticipated is not the same as that suffered.124 (C) HAMBURG RULES

It is likely that, as in the case of the Hague-Visby Rules, only the conduct of the carrier himself or the actual carrier themselves is relevant in determining whether or not he can limit his liability under the Hamburg Rules.125

118. See page 31. 119. Although Article 13 of the Athens Convention also speaks merely in terms of ‘‘damage’’, the reference in the same Article to liability under Article 7 and 8 makes it clear that ‘‘damage’’ is to encompass injury to the person and damage to and loss of luggage. 120. In The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. 144 Hobhouse J. emphasised at page 149 the importance of ‘‘a consistent approach to the construction of similar Maritime Conventions using similar terms and expressing similar ideas’’. Query, however, whether such an approach is warranted where the words of the particular Convention in question appear to draw a distinction. See e.g. Tatton v. Ferrymasters [1974] 1 Lloyd’s Rep. 206, in relation to the C.M.R. Convention. 121. [1983] 3 All E.R. 693 (C.A.). 122. [1983] 3 All E.R. page 698. 123. [1983] 3 All E.R. page 700. 124. However in The ‘‘Lion’’ [1990] 2 Lloyd’s Rep. 144, Hobhouse J. emphasised at page 149 the importance of ‘‘a consistent approach to the construction of similar Maritime Conventions using similar terms and express­ ing similar ideas’’. 125. See pages 153–154.

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The Hamburg Rules do not suffer from the deficiencies referred to above in relation to the Hague-Visby Rules. Article 8(1) of the Hamburg Rules refers to ‘‘such loss, damage or delay’’ and, therefore, the right to limit liability can be lost in relation to all these types of claim if the carrier is personally guilty of intentional or reckless misconduct.126 Article 8(2) provides that the ‘‘servant or agent’’ of the carrier may lose the right to limit liability if (as in the case of Article IV, Rule 2, of the Hague-Visby Rules) they are personally guilty of intentional or reckless misconduct.127 (vii) Persons who can limit liability (1) Owners and charterers (A) HAGUE/HAGUE-VISBY/HAMBURG RULES

Article IV, Rules 5, of the Hague and Hague-Visby Rules provides that a ‘‘carrier’’ can limit his liability. Article I(a) of both Rules provides that: ‘‘ ‘Carrier’ includes the owner or the charterer who enters into a contract of carriage with a shipper.’’ Similarly, Articles 6 and 10 of the Hamburg Rules provide that a ‘‘carrier’’ and ‘‘actual carrier’’ can limit their liability. Article 1(1) defines a ‘‘carrier’’ as: ‘‘ . . . any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper’’ and Article 1(2) defines an ‘‘actual carrier’’ as any person to whom the carrier has entrusted part of the carriage. There is therefore no precise definition of a carrier under any of the Rules but an owner and a charterer clearly come within the definition. This is express in the case of the Hague and Hague-Visby Rules and implicit in the case of the Hamburg Rules. However, such persons can limit their liability under the Rules only to the extent that the claim arises under a ‘‘contract of carriage’’. The definition of a ‘‘contract of carriage’’ differs under the Hague/Hague-Visby Rules on the one hand and the Hamburg Rules on the other hand. Article I(b) of the Hague/Hague-Visby Rules describes a ‘‘contract of carriage’’ as: ‘‘ . . . contract of carriage covered by a bill of lading or similar document of title128 . . . ’’ Article 1(6) of the Hamburg Rules defines a ‘‘contract of carriage’’ as: ‘‘ . . . any contract whereby the carrier undertakes against payment of freight to carry goods by sea from one port to another.’’ A charterparty is not a ‘‘contract of carriage’’ for the purposes of the Hague/HagueVisby Rules as it is not a bill of lading or a similar document of title and is equally not a ‘‘contract of carriage’’ for the purpose of the Hamburg Rules as Article 2(3) of the Hamburg Rules provides that: ‘‘The provisions of this Convention are not applicable to charterparties’’. Therefore an owner or charterer cannot limit his liability under any of the Rules in respect of liabilities incurred by him as a carrier under a charterparty unless the parties to such contract have expressly agreed that the Rules are to apply, for example by the inclusion of a paramount clause in the charter.

126. See page 154. 127. See pages 145 and 148. 128. The term ‘‘bill of lading or similar document of title’’ includes a straight bill of lading. See J.I. MacWilliam Co. Inc v. Mediterranean Shipping Co. S.A. (The ‘‘Rafaela S’’) [2005] 1 Lloyd’s Rep. 347.

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(B) 1976 CONVENTION

Owners and charterers acting as shipowners are clearly ‘‘persons entitled to limit liability’’ under the Convention by virtue of the express provisions of Article 1(2). The issue has arisen, however, as to whether charterers’ entitlement to limit only arises when acting as shipowners. The current position rests with the Court of Appeal decision in The ‘‘CMA Djakarta’’ and is that there is no such restriction.129 Furthermore, an ‘‘actual carrier’’ within the meaning of Article 1(2) of the Hamburg Rules is no doubt a ‘‘person for whose act . . . the shipowner . . . is responsible’’ within the meaning of Article 1(4) of the 1976 Convention since Article 10(1) of the Hamburg Rules states expressly that: ‘‘The carrier is responsible, in relation to the carriage performed by the actual carrier, for the acts and omissions of the actual carrier . . . ’’. (2) Other ‘‘carriers’’ (A) HAGUE/HAGUE-VISBY/HAMBURG RULES

The definition of ‘‘carrier’’ in the Hague and Hague-Visby130 and Hamburg Rules131 is clearly wide enough to include ‘‘carriers’’ who are not owners or charterers. Therefore, for example, a freight forwarder who issues his own bill of lading to a shipper and collects freight from him could be such a ‘‘carrier’’ and entitled to limit his liability under the Rules. (B) 1976 CONVENTION

However, a freight forwarder may not be a ‘‘person entitled to limit liability’’ under the 1976 Convention in that he may not be an ‘‘owner, charterer, manager or operator of a’’ ship and not a person for whose acts etc. such parties are liable.132 (3) Servants and agents of a carrier (A) HAGUE RULES

There is nothing in the Hague Rules to indicate that any party other than the ‘‘carrier’’ himself can limit his liability under the Rules. However, the common use of ‘‘Himalaya clauses’’ in bills of lading may reduce the instances in which such a servant or agent can be held liable to a claimant.133 The purpose of such a clause is to either extend to the servant or agent (including independent contractors) any defences or limitations which are available to the carrier or to oblige a claimant to claim against the carrier himself and not against his independent contractors. Furthermore, if the bill of lading is subject to English law such servants and agents have a statutory right to rely on clauses in the bill which are intended to allow them to exclude 129. See page 10. 130. Article I(a). 131. Article I(i). 132. See pages 13–14. 133. See for example The ‘‘Eurymedon’’ [1975] 2 Lloyd’s Rep. 534, Port Jackson v. Salmond [1980] 3 All E.R. 257 and ‘‘Starsin’’ [2003] 1 Lloyd’s Rep. 571.

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or limit their liability. Section 1 of the Contracts (Rights of Third Parties) Act states that: ‘‘(1) Subject to the provisions of this Act, a person who is not a party to a contract (a ‘‘third party’’) may in his own right enforce a term of the contract if: (a) the contract expressly provides that he may, or (b) subject to sub-section (2), the term purports to confer a benefit on him. (6) Where a term of the contract excludes or limits liability in relation to any matter, references in this Act to the third party enforcing the term shall be construed as references to his availing himself of the exclusion or limitation.’’

In the Explanatory Notes accompanying the proposed Statutory Bill, the Lord Chan­ cellor’s department stated that: ‘‘In particular, this enables clauses which seek to extend an exclusion or limitation of liability of a Carrier of goods by sea to servants, agents and independent contractors engaged in the loading and unloading process, to be enforced by those servants, agents or independent contractors (so called ‘‘Himalaya’’ clauses).’’

The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description134 and section 2 makes it clear that the parties to the bill of lading contract (that is, the carrier and the cargo interest) cannot cancel or vary the bill in a manner which affects the third party’s rights without his consent or the consent of the court. Furthermore, such servant or agent, if personally liable to a claimant, may also be able to limit his liability under Article 1(4) of the 1976 Convention as a ‘‘person for whose act, neglect or default the shipowner or salvor is responsible’’.135 (B) HAGUE-VISBY RULES

Article IV bis, Rule 2, provides that a servant or agent of the carrier can limit his liability in the same way and to the same extent as the carrier provided, however, that servant or agent is not an independent contractor. It therefore follows that only a limited class of persons (predominantly the carrier’s crew and other employees) can take advantage of these rights. Stevedores, ship’s agents and managers are usually incorporated as independ­ ent contractors and would not therefore be able to rely on this right to limit if they were held liable in respect of a cargo claim. However, this problem is circumvented in a number of instances by the insertion into the bill of lading of a ‘‘Himalaya clause’’, which either extends to the servant or agent (including independent contractors) any defences or limitations which are available to the carrier or obliges the claimant to bring a claim only against the carrier.136 Furthermore, if the bill of lading is subject to English law such servants and agents (including independent contractors) have a statutory right to rely on clauses in the bill which are intended to allow them to exclude or limit their liabil­ ity.137

134. Section 1(3) 135. See pages 13–14. 136. See page 8. 137. See (3)(A) ‘‘Hague Rules’’ at page 156 above.

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In determining whether or not the servant or agent can limit his liability under the Rules it is his own conduct which is relevant, not the conduct of his principal.138 The ‘‘servant or agent’’ who is an employee will also in most cases be entitled to limit his liability under Article 1(4) of the 1976 Convention as a ‘‘person for whose act, neglect or default the shipowner or salvor is responsible’’.139 Similarly, independent contractors such as stevedores (who cannot limit under the Hague-Visby Rules) can also probably rely on Article 1(4) of the 1976 Convention provided that the shipowner is liable for their actions as a matter of law. However, it may be more difficult to prove that an independent contractor, as opposed to an employee, is in fact someone, ‘‘for whose act . . . the shipowner is responsible’’. (C) HAMBURG RULES

Articles 7(2) and 10(2) of the Hamburg Rules have similar provisions to those of Article IV bis, Rule 2, of the Hague-Visby Rules except that the right to limit is afforded by the Hamburg Rules to servants or agents irrespective of whether they are independent con­ tractors, so long as the liability which they wish to limit has been incurred whilst acting within the scope of their employment. Servants or agents who are not independent contractors are likely to be entitled to limit their liability under Article 1(4) of the 1976 Convention as ‘‘persons for whose act . . . the shipowner is responsible’’. It may well be that a servant or agent who is an independent contractor has a similar right but, depending on the precise relationship in a particular case, it may be more difficult for the independent contractor to prove that he is a ‘‘person for whose act . . . the shipowner is responsible’’. (viii) Claims which are subject to limitation (A) HAGUE AND HAGUE-VISBY RULES

Article IV, Rule 5, of the Hague Rules, and Article IV, Rule 5(a), of the Hague-Visby Rules provide that: ‘‘ . . . neither the carrier nor the ship in any event be or become liable for any loss or damage to or in connection with the goods . . . ’’. These words clearly give the carrier the right to limit his liability in respect of claims against him for physical loss of or damage to cargo carried on board the ship. However, the words ‘‘in connection with the goods’’ have been held to extend the rights of the carrier to limit his liability to other claims for ‘‘loss or damage’’ provided they arise ‘‘in connec­ tion with the goods’’.140 For example, G. H. Renton & Co. Ltd. v. Palmyra Trading Corporation (The ‘‘Caspiana’’)141 similar words in Article III, Rule 8, were held to apply where loss arose as a result of the discharge of goods at the wrong port. Similarly, in The ‘‘Satya Kailash’’142 the Court of Appeal held that where the Rules are incorporated into a charter the carrier was entitled to invoke the immunities in section 4 of the U.S. Carriage of Goods by Sea Act (which includes a provision similar to Article 138. The ‘‘Captain Gregos’’ [1990] 1 Lloyd’s Rep. at 316. 139. See page 13. 140. Anglo Saxon Petroleum Co. Ltd. v. Adamastos Shipping Co. Ltd. [1958] 1 Lloyd’s Rep. 73. 141. [1956] 2 Lloyd’s Rep. 379. 142. [1984] 1 Lloyd’s Rep. 588.

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IV, Rule 5, of the Hague Rules) in respect of the wide range of activities to be performed by the carrier under the charter. The carrier in that case could rely on the immunities in section 4 of the Act in respect of a claim against him for damage caused by a lightening vessel to the mother ship which was owned by the charterer. In The ‘‘Marinor’’,143 claims for the cost of hiring substitute vessels under a time charter were held to be ‘‘in respect of the goods’’ for the purposes of the Hague Rules time limit. However, the mere fact that claims are made for ‘‘loss or damage to or in connection with the goods’’ does not of itself mean that such claims are subject to limitation.144 In the case of the Hague-Visby Rules145 limitation is calculated with reference to particulars of ‘‘the goods lost or damaged’’. Therefore, unless the goods have been lost or damaged it would not seem to be possible to calculate the package limit.146 It further follows that, in such circumstances, the right to package limitation is not available. (B) HAMBURG RULES

Article 6(1) and (2) of the Hamburg Rules are more limited in scope than Article IV, Rule 5, of the Hague and Article IV, Rule 5(a) of the Hague-Visby Rules in that the right to limit is restricted to: ‘‘ . . . The liability of the carrier for loss resulting from loss of or damage to goods . . . ’’ (Article 6(1)(a)) and ‘‘The liability of the carrier for delay in delivery . . .’’ (Article 6(1)(b)). Article 6(1)(a) therefore clearly envisages claims merely for physical loss of or dam­ age147 to goods and Article 6(1)(b) extends the right to limit to claims for delayed delivery. Liability for other forms of claim (such as that in Renton v. Palmyra148 and The ‘‘Satya Kailash’’149) may not therefore be the subject of limitation under the Hamburg Rules. (C) 1976 CONVENTION

Whether claims which qualify for limitation under the various Rules also qualify for limitation under the 1976 Convention depends on whether the particular claim is a ‘‘claim in respect of . . . loss of or damage to property . . . occurring on board or in direct connection with the operation of the ships . . . and consequential loss resulting therefrom’’ within the meaning of Article 2(1)(a)150 or a claim ‘‘resulting from delay in the carriage by sea of cargo . . . ’’ within the meaning of Article 2(1)(b) of the Convention.151 The words clearly encompass claims for loss of or damage to cargo. However, on a strict construction of the quoted words in Article 2(1)(a), the right to limit for con­ sequential loss can only exist if there is also a claim for physical loss of or damage152 to 143. [1996] 1 Lloyd’s Rep. 301. 144. See pages 142–145. 145. For a consideration of the situation which applies under the Hague Rules see pages 137–140. 146. E.g. where the goods have been merely delayed. See pages 145–146. 147. However, see The ‘‘Breydon Merchant’’ [1992] 1 Lloyd’s Rep. 373 and pages 18–21 above. 148. [1956] 2 Lloyd’s Rep. 379. 149. [1984] 1 Lloyd’s Rep. 588. 150. See pages 18–21. 151. See page 21. 152. See note 147 and the discussion on this issue in ‘‘Aegean Sea’’ [1988] 2 Lloyd’s Rep. at page 55 and ‘‘CMA Djakarta’’ [2004] 1 Lloyd’s Rep. at page 469.

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the cargo. On this view a carrier who might be able to limit his liability for a claim for loss of market or for discharging cargo at the wrong port under the Hague or Hague-Visby Rules might not be able to limit his liability under the 1976 Convention if there was no claim for physical loss of damage153 to the cargo. It is also debatable whether a carrier who has delivered cargo without surrender of the original bills of lading is entitled to limit his liability under the 1976 (or the earlier 1957) Convention.154 However, if the claim is of its nature one which clearly falls within one of the sub­ paragraphs of Article 2, the fact that it is being brought by way of indemnity or recourse does not disentitle the defendant from limiting his liability for such claim as Article 2(2) expressly extends the right to limit to such claims.

153. See note 147. 154. See [1997] IJOSL 121–122.

PART B

Country Analysis for Limitation of Liability for

Maritime Claims

CHAPTER 7

Argentina Alberto C. Cappagli Marval, O’Farrell & Mairal, [email protected]

A. INTRODUCTION 1. Preliminary notes on the Argentine legal system The Argentine Republic is a civil law country. The main sources of the law are the acts enacted by the National Congress and the treaties or international conventions to which the country is a party. Precedents of the courts are an important guide to construe the law, but judges are not obliged to follow the precedents of superior courts and each court is free to depart from its own precedents. Of course, judicial precedents have a persuasive authority. Therefore, first instance judges usually follow the precedents of the courts of appeals and the court of appeals normally stick to their own precedents. The Argentine Republic is a federal country. Each province has its own legislative power. Nevertheless, under the National Constitution it is the National (or Federal) Congress which is the political body in which rests the power to enact certain uniform acts (and codes). Navigation is an area entrusted to the National Congress. The main source of the Argentine maritime law is the Navigation Act (Act 20,094) and the international Conventions approved by the National Congress. In the Argentine Republic there co-exist (i) the judicial powers of each province and of the City of Buenos Aires, and (ii) the Federal Judicial Power. Federal courts have jurisdiction over maritime cases. The most experienced courts in maritime disputes are the federal courts of the City of Buenos Aires (i.e., the 11 Civil and Commercial First Instance Federal Courts, and the three divisions of the Civil and Commercial Federal Court of Appeals). B. LIMITATION OF LIABILITY 2. Different cases Limitation of liability in the Argentine maritime law must be considered from two different points of view: (i) shipowners’ limitation of liability, and (ii) carriers’ limitation of liability. C. SHIPOWNERS’ LIMITATION OF LIABILITY 3. The Navigation Act No international Convention on shipowners’ limitation of liability has been ratified by the Argentine Republic. Thus, the only legal regimen on this issue is the regime of the 163

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Navigation Act, particularly sections 175 to 182 and 561 to 577 (the last ones concerning procedural issues) 4. Persons entitled to limit liability The persons entitled to limit liability are: (a) (b) (c) (d)

the the the the

armador (the disponent owner) (section 175); propietario (the owner of the vessel) (sections 175 and 181); carrier (section 181); and master and crew-members (section 181).

Persons mentioned in (a), (b) and (c) are allowed to limit their liability in cases in which their liability arises from the activity of the master and/or the crew, but not when the liability arises from their own faults or from faults of their employees other than the master or crew-members (sections 175 and 181). Persons mentioned in (d) are allowed to limit their liability when they incur fault whilst acting in their capacities of master or crew member, but not when they are owners of the vessel, disponent owners or carriers and they incurred fault whilst acting in these latter capacities (section 181). 5. Claims subject to limitation The claims subject to limitation are (section 177): (a) death or injuries to any person; (b) loss or damage to goods or rights; and (c) wreck removal, ship refloating and damage to harbours and waterways. 6. Claims excepted from limitation Claims arising from salvage, from general average and from labour relationships are excepted from limitation (section 178). 7. Conduct barring limitation When the liability arises from fault of the owner of the vessel, the disponent owner or the carrier, they cannot limit their liability (sections 175 and 181). The master and the crew members cannot limit their liability when they acted with the intention to damage or knowing that their conduct may cause damage (section 181, second paragraph). 8. Counterclaims Counterclaims between the disponent owner and a creditor shall be set off against each other and the limitation shall be applied to the balance (section 175, last paragraph). 9. Financial limits for all types of claim In principle, the limitation fund must be constituted with the value of the vessel at the end of the voyage in which the credit was originated, plus the gross freights, the value of the

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passengers tickets and the amount of the credits originated during the voyage (section 175, first paragraph). However, insurance indemnifications must not be included in the limita­ tion fund (section 175, fourth paragraph). As an alternative to the value of the vessel, the owner may abandon her in favour of the creditors (section 175, second paragraph). In this case, the vessel would be auctioned by the court (section 575). This option must be exercised within three months of the voyage termination. In cases of death or personal injuries, if the amount of the limitation fund is insufficient to cover all of the indemnifications up to the equivalent of 13 Gold Argentine Pesos per ton of the vessel, the balance should be added to the other items of the fund and, up to the equivalent of 13 Gold Argentine Pesos per ton. The personal victims have preference for the collection of their credits (section 175, third paragraph). 10. Unit of account This issue will be considered in Part F of this contribution. 11. Aggregation of claims The limitation fund is applicable to the total amount of claims originated in the same voyage (section 179). 12. Limitation of liability: need to constitute the fund The fund, which includes the items mentioned in section 9 above, must be deposited in cash in a bank account opened in the bank of judicial deposit (in the City of Buenos Aires, the Banco de la Ciudad de Buenos Aires). The decision to abandon the ship should be adopted by the owner within three months of the end of the voyage (section 175, second paragraph). In this case, the title to the vessel must be filed with the Court (section 562.b). 13. Constitution of the fund In order to start limitation proceedings, the interested party must (a) deposit in cash the amount of the limitation fund or file the title to the vessel if her owner chose to abandon her, (b) submit to the court a list with the description and quantification of each item of the fund, (c) submit to the court a list of the creditors subject to the limitation, the amount of each credit, their titles and their domiciles, and (d) submit to the court a list of the hipotecas (mortgages) on the vessel (section 562). The court must estimate the amount that the interested party must deposit to cover the legal costs of the limitation proceeding and for the other lawsuits that may have been started by the creditors (section 564). 14. Distribution of the fund among claimants The fund must be distributed considering the ranking of the privileges of each creditor (section 572).

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15. Constitution of fund as bar to other actions As from the initiation by the interested party of the limitation proceeding, judicial actions regarding the credits included in section 177 (see paragraph 5 of this chapter) must be suspended (section 561). 16. Governing law in matters of limitation The governing law in matters of limitation is a debatable question still unresolved. No provision on this issue has been included in the Navigation Act and there are no judicial precedents to guide us. Some scholars have argued that the governing law is the law that governs the credit subject to limitation. In our opinion, however, the limitation of liability should be governed by the law of the flag. D. PASSENGERS 17. Applicable law The Argentine Republic is a party to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (1974). When the Athens Convention is not applicable, the Argentine Navigation Act estab­ lishes limits of liability of 1,500 Gold Argentine Pesos per passenger, 150 Gold Argentine Pesos for the luggage which is not cabin luggage, and 100 Gold Argentine Pesos for the cabin luggage. In transport by river, these last figures are 80 and 50 Gold Argentine Pesos, respectively. In the transport of vehicles, the limit is 350 Gold Argentine Pesos, including the luggage in the car (section 337). For the conversion of the franc mentioned in the Athens Convention and the Gold Argentine Pesos of the Argentine Navigation Law, see Part F below. E. CARRIAGE OF GOODS BY SEA 18. Adoption of international Conventions The Argentine Republic is a party to the International Convention for the Unification of certain Rules of Law relating to Bills of Lading (Brussels, 1924), known as The Hague Rules. When this Convention is not applicable, the rule governing the limitation of liability of the carriers of goods is sec. 278 of the Navigation Act which, in general terms, follows Article 4.5 of The Hague Rules. The limitation has been fixed in the Argentine Navigation Act in the amount of 400 Gold Argentine Pesos (section 278) per package or unit lost or damaged, or—in cases of bulk cargo—per freight unit. The conversion of the gold value of the Pounds Sterling and of the Gold Argentine Peso, is considered in Part F below. 19. Package or unit limitation The National Supreme Court of Justice has held that when containers or pallets are employed, if the number of units contained in the container or pallet is mentioned in the

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bill of lading, that number of units must be considered in order to determine the amount of the limitation (14 February 1989, in re Autotecnica SA y otro c/Cap y/o Prop y/o Arm. Bq. Rio Marapa, reported in FALLOS, 312,152). The Civil and Commercial Federal Court of Appeals of the City of Buenos Aires, through its three divisions has adopted a similar rule (e.g. 22 September, 1989, in re La Confianza . . . c/ . . . bq. Salvador y/o Ivaran Lines, reported in Revista Juridica Argentina La Ley, t. 1990- A, p´ag. 498). In the event of damage suffered by a machine that was packaged in parts in several boxes, if the damage occurred in just one box, the limit under The Hague Rules and the Navigation Act must be calculated on a unit basis. This rule has been adopted by the three divisions of the Civil and Commercial Federal Court of Appeals of the City of Buenos Aires (e.g. 13 September, 1988, in re Ant´artida . . . c/ . . . bq. Paola, reported in Revista Juridica Argentina La Ley, t. 1988-E-p´ag.378).

F. CONVERSION OF GOLD COINS INTO LOCAL CURRENCY Argentine judicial precedents repeatedly decided that Pounds Sterling mentioned in the international conventions must be converted into pesos taking into consideration the value of the gold contained in the said coin. For example, if we consider the market value of gold in May 2005, 100 Gold Pound Sterling are roughly the equivalent of USD 9,850. The same system is applicable to the francs of the Athens Convention (passengers). Surprisingly, the problem arises with the wording of the Argentine Navigation Act. Pursuant to an Act enacted in 1881 (Act 1,130), in Argentina there exist two gold coins: the peso de oro and the argentino de oro. The equivalent of one argentino de oro is five pesos de oro The wording of the Navigation Act is not clear: neither the argentino de oro nor the peso de oro are mentioned in this Act. The wording of the Navigation Act is ‘‘pesos argentinos oro’’ (sections 175, 278 and 337). Traditionally, it was understood that the reference was to the peso de oro in which case the per package limitation would be in the region of USD 7,810. However, some years ago a division of the Civil and Commercial Federal Court of Appeals of the City of Buenos Aires held that the coin referred to in the Navigation Acts is the argentino de oro. Thus, the figures were multiplied by five (in the example above, about USD 39,050 instead of USD 7,810) (25 August 1994, Oholeguy de Devicenzi, G.E. y otros c/Hube, R.R. y otro, reported in Diario de Doctrina y Jurisprudencia, el Derecho, t. 160, p´ag. 481).

CHAPTER 8

Australia Stuart Hetherington Withnell Hetherington, Sydney

INTRODUCTION Limitation Until the passing of the Navigation Amendment Act 1979, when Australia gave effect to the 1957 Limitation Convention, the relevant legislative regime in Australia was governed by the United Kingdom Merchant Shipping Act 1894. However, subsequent amendments to that legislation (in particular the 1958 Merchant Shipping (Liability of Shipowners and Others) Act, which gave effect, in the UK, to the 1957 Convention), were held by the Australian High Court in Bistricic v. Rokov,1 not to apply in Australia. That case clearly gave impetus to the Australian legislature to enact its own limitation law and gave rise to the Navigation Amendment Act 1979. Australia acceded to the 1976 Limitation Convention (the ‘‘Convention’’) on 20 Feb­ ruary 1991. The Convention has been given effect to in Australia by the Limitation of Liability for Maritime Claims Act 1989 (the ‘‘Act’’), which entered into force for Australia and was given the force of domestic law on 1 June 1991. Carriage of goods Australia’s Carriage of Goods Liability regime can best be described as a hybrid. Pursuant to the Carriage of Goods by Sea Act 1991, and regulations made thereunder, Australia has a liability regime based on the Hague-Visby Rules but containing some elements of the Hamburg Rules. The Hamburg Rules are also incorporated as a Schedule to the Carriage of Goods by Sea Act 1991, but that legislation provides that if, by the year 2007, the Minister has not tabled a statement, having conducted a review of the legislation, to the effect that the Amended Hague Rules should be replaced by the Hamburg Rules, Part 3 of the Act, which gives effect to the Hamburg Rules and Schedule 2 (which contains the Hamburg Rules) are automatically repealed. Passenger claims Australia has not given effect to the Athens Convention, and claims for passenger injuries are governed by the common law, as modified by domestic legislation, such as the Civil Liability Act 2002. That Act limits the circumstances in which damages can be obtained for personal injuries and the amounts payable, but does not effect a civil liability in respect 1. (1976) 135 CLR 552.

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of an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct. Other relevant legislation includes the Civil Liability Amendment (Personal Responsibility) Act 2002. Trade Practices Act Other Australian legislation that needs to be taken into account is the Trade Practices Act 1974 (as amended) which incorporates warranties in relation to the supply of services which cannot be excluded, restricted or modified by private contract. The incorporation of such warranties does not apply to contracts relating to the transportation or the storage of goods for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored. In Dillon v. Baltic Shipping Co.,2 it was held that section 74 of the Trade Practices Act does not extend to the carriage of a person, but it does extend to the carriage of personal luggage, and section 68 applies to render inoperative any conditions in the passenger’s ticket which would otherwise render the shipping line not liable for breach of section 74 in relation to loss or damage to luggage.

A. THE CONVENTION Pursuant to section 5 of the Act, it is expressed not to apply in relation to a ship to the extent that a law of a State or the Northern Territory makes provision giving effect to the Convention in relation to that ship. (West Australia is the only State which has enacted any limitation law. By the Western Australian Marine Act (1982) it purported, in section 84, to give effect to the 1957 Convention, but due to constitutional law, it can only apply to non-seagoing vessels.) By section 6 of the Act, paragraphs 1(d) and (e) of Article 2, relating to claims in respect of ‘‘raising, removal, destruction, or the rending harmless of a ship which is sunk, wrecked, stranded or abandoned’’ or ‘‘removal, destruction, or the rending harmless of the cargo of a ship’’, are not subject to limitation under the Convention. Australia has therefore availed itself of the option contained in Article 1, paragraph 2, insofar as such claims are concerned, but not in respect of Article 2, paragraph 1(f), which relates to ‘‘claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with the Convention, and further loss caused by such measures’’. Dr Michael White Q.C., in his work Australian Maritime Law, 2nd ed, has pointed out that a, perhaps, unfortunate effect of Australia taking advantage in section 6 of the Act of excluding the claims enumerated in Article 2, paragraphs 1(d) and (e), is that salvors, who are specifically referred to, as well as shipowners, as being entitled to ‘‘limit their liability’’ in accordance with the Convention, would often, in ordinary salvage operations, raise and remove a ship which has sunk, been wrecked or stranded and, as that author points out, under Article 14 of the 1989 Salvage Convention, are encouraged to protect and preserve the marine environment, even if there is no success obtained.

2. (1989) 92 ALR 331.

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In Barameda Enterprises Pty Limited v. Patrick O’Connor and KFV Fisheries (QLD) Pty Limited,3 it was held that had the plaintiff suffered loss by reason of expenses incurred in wreck removal, the defendants would not have been able to limit their liability in respect of the amount so claimed by reason of the exclusion contained in the prior legislation to the Limitation of Liability of Maritime Claims Act 1989 (the Navigation Act 1912) which had excluded claims arising from an obligation or liability relating to the removal of wreck from the operation of the 1957 Convention. Pursuant to section 7 of the Act, the applied provisions do not apply in relation to a ship that belongs to the naval, military or airforces of a foreign country. Australia’s Foreign States Immunity Act 1985 also makes foreign states immune from the jurisdiction of the courts of Australia, subject to certain exceptions, which include circumstances such as actions in rem against ships owned by a foreign state but which are engaged in commercial operations at the time the cause of action arose. Australia has taken advantage of the option contained in Article 6, paragraph 3, to provide in its national law that claims in respect of damage to harbour works, basins, and waterways, and aids to navigation have priority over other claims under paragraph 1(b) of Article 6. This is accomplished in section 8 of the Act. Section 9 establishes the procedures which can be followed in order to apply to have a limitation order made. Section 9 gives a person, against whom a claim is made, or against whom a claim is expected to be made, the option of applying to the Supreme Court of a state or territory, in which a claim has been made or, in any other case, to apply to the Supreme Court of any state or territory to determine the limit of its liability and the relevant court is then empowered to make any order with respect to the ‘‘constitution, administration and distribution, in accordance with the applied provisions, of a Limitation Fund in respect of claims subject to the limitation’’. Section 9(5) expressly provides that section 9 does not exclude or limit the operation of section 25 of the Admiralty Act 1988. That Act also makes express provision for a person who apprehends that a claim for compensation ‘‘under a law that gives effect to provisions of a Liability Convention’’ (defined in section 3 of that Act as meaning ‘‘the Civil Liability Convention, the Limitation Convention or any other international Convention that is in force in relation to Australia’’ and makes provision with respect to the limitation of liability in relation to maritime claims) may be made against the person, that person may apply to the Federal Court to determine the question whether the liability in respect of the claim may be limited under that law. Section 25 then goes on to provide that the Federal Court may, on such an application, determine whether the liability may be so limited and the amount, order the constitution of a fund, and make such orders as are just with respect to the administration and distribution of that fund. Section 25 also makes it clear that where a court has jurisdiction under the Admiralty Act, the jurisdiction extends to entertaining a defence in the proceed­ ing by way of limitation of liability. In James Patrick & Co. Ltd. v. Union Steamship Co. of New Zealand Limited,4 one of Australia’s most celebrated judges (who subsequently became Chief Justice), Dixon J., said at 673:

3. [1987] 2 Lloyd’s Rep. 666. 4. (1938) 60 CLR 650.

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‘‘They might, no doubt, have counter-claimed for a limitation decree. But a failure to counter-claim does not preclude a defendant from afterwards seeking by an independent action the relief which it was open to him to seek by way of counter-claim. The Statute gives no defence; at best it limits damages. But the foundation of the relief, administered first in Chancery and afterwards in Admi­ ralty, is the provision on the part of the shipowner of the fund representing his maximum liability. The court then administers the fund brought into court by the shipowner. The court ascertains the claims upon it, marshals them and distributes the fund rateably among the claimants. In principle, the title to relief of such a nature is a substantive right enforceable by independent proceedings. It is more than one of the conditions affecting the amount of the loss or damage to be awarded in the collision action. A limitation decree operates upon claims that have passed into judgment as well as upon those that rest upon the original cause of action. Failure to assert the right in the collision action ought, therefore, to be no bar to its subsequent enforcement.’’

Davies and Dickey Shipping Law (2nd ed. at page 455) notes that the legislation which enacted the 1957 Limitation Convention in Australia specifically provided that the Crown was entitled to limit its liability under that Convention. There is no such explicit reference in the Act and those authors therefore suggest that it ‘‘will only be held to apply to the Crown if a legislative intent to that effect can be discerned in the Act, when construed in a context which includes permissible extrinsic aids’’. Time of commencement Interesting questions arose when the 1976 Convention came into force in Australia as to whether it applied to a casualty which had taken place prior to the date upon which it came into force. The issue was raised in two cases which were ultimately determined by the High Court of Australia. In the Sanko Steamship Co. Limited and anor v. Sumitomo Australia Limited5 the circumstances were that the Sanko Harvest ran aground and sank on 14 February 1991. The owners of the Sanko Harvest instituted an action pursuant to section 25 of the Admiralty Act 1988 on 4 March 1991, seeking a declaration limiting their liability pursuant to the 1957 Convention which was in force in Australia at that time. Thereafter, Sumitomo, the cargo owner, filed a defence to the limitation action and a crossclaim seeking damages for breach of contract, breach of bailment and negligence. The shipowners then pleaded limitation of liability pursuant to the 1976 Limitation Convention pursuant to an amended defence. The issue for the court was therefore whether the 1976 Convention was applicable to an occurrence which had taken place in February 1991, that is, before the date upon which the 1976 Convention entered into force for Australia, and was given the force of domestic law, namely 1 June 1991. (The same issue was raised in the case of Victrawl Pty Limited v. Telstra Corporation Limited.) In both cases the High Court held that the 1976 Convention was inapplicable to occurrences which took place before 1 June 1991. One argument which the High Court disposed of was that based upon the unfortunate use of the word ‘‘under’’ in section 25 of the Admiralty Act 1988. As the High Court recognised, strictly, the claims brought against the shipowners are not brought ‘‘under’’ the Limitation Convention, and have as their source some other wrong. The High Court held that the words ‘‘claim under a law’’ in section 25, ‘‘can be understood in a broader and less exact sense which comprehends claims which are the subject of, in the sense of being defined and qualified by, the relevant law. This is particularly so in a case where, as under 5. (1995) 131 ALR 490.

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the Brussels and 1976 Conventions, affected claims against a shipowner (and the ship­ owner’s property) are effectively transformed into claims against a limited fund estab­ lished under that law’’. Professor Crawford, who chaired the Australian Law Reform Commission reference on Admiralty law which drafted what became the Admiralty Act 1988, has subsequently conceded6 that an error was made by the Commission in using the word ‘‘under’’. The principal question for the Court, was whether section 6 of the Act (which provided that the Convention had the force of law in Australia) was to have retrospective operation, in circumstances in which occurrences had taken place prior to 1 June 1991, but no proceedings had been determined or fund constituted prior to that date. It was contended that as the provision was merely procedural, the ordinary presumption against retro­ spective operation was inapplicable. The court held that as section 6, if given unconfined operation, effected pre-existing substantive rights or liabilities, it could not be regarded as a purely procedural provision. Having determined that section 6 should not be construed as having a retrospective operation, the court then had to consider whether the language of the Statute, expressly or by necessary implication, required such a construction. In holding that it did not, the High Court relied, in part, on Article 28 of the Vienna Convention on the Law of Treaties as being an authoritative statement of customary international law. The High Court did also point out that there is no transitional clause in the 1976 Convention, although it was noted that Articles 15.1, 17.3, and 17.4 might arguably be seen as favouring or militating against a retrospective operation of the Convention, and all were ‘‘at best’’ equivocal. Australia has not availed itself of any of the options provided in Article 15 of the Convention, such as the exclusion from the application of the Convention of persons who do not have a habitual residence in a State Party or do not have a principal place of business in a State Party or in respect of ships who do not fly the flag of a State Party. Nor has Australia sought to exclude, from the operation of the Convention, ships intended for navigation on inland waters, or ships of less than 300 tonnes. Australia has not established its own national legislation giving higher limits of liability in respect of ships constructed for or adapted for drilling, thus the provisions of Article 15 paragraph 4 do not have the effect of excluding such ships from the limitation regime. 1996 Protocol Australia has acceded to the 1996 Protocol to the Convention and, pursuant to the International Maritime Conventions Amendment Act 2001, amended the Act so as to bring into effect the changes made to the Convention by the Protocol six months after the Protocol comes into effect for Australia (that is 90 days after 10 states have agreed to be bound by it). Who can limit? Article 1 paragraph 2 of the Convention defines ‘‘shipowner’’ as meaning ‘‘the owner, charterer, manager and operator of a seagoing ship’’. In the case of Kirmani v. Captain Cook Cruises Pty Limited,7 Gibbs C.J. said, ‘‘no authority is needed to support the 6. Ebsworth & Ebsworth Maritime Law Lecture 1996. 7. (1985) 159 CLR 351.

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statement that a ship which is used entirely within the limits of internal waters, and never goes to sea, is not a sea-going ship’’. This is of course still relevant under the Convention because of the definition of shipowner. Accordingly, in circumstances in which a vessel only engaged on inland waters (or arguably non-tidal waters), sought to limit liability, it may be that the common law has done what the Australian Government has not done under Article 15, paragraph 2, and effectively excluded from the limitation regime, such vessels. (Ferries on Sydney Harbour, which do not venture beyond the Harbour, might therefore not be able to limit their liability.) Davies and Dickey suggest that ‘‘because the provisions relating to salvors make no reference to ‘seagoing ships’, it seems that salvors and the owners of salvage vessels, are entitled to limit their liability whether or not the salving ship or the ship being salved is seagoing’’. Those authors also note that the inclusion of the words ‘‘whatever the basis of liability may be’’, in Article 2 paragraph 1 of the Convention ‘‘has effected a change from the law under the 1957 Limitation Convention’’ so as to permit limitation ‘‘whether that liability arises in tort, contract, by statute or for some other reasons’’ and, in their view, that position is supported by the provisions of Article 2 paragraph 2, which provide that the claims set out in paragraph 1 ‘‘shall be subject to limitation of liability even if brought by way of recourse or for indemnity under a contract or otherwise’’. Whilst there have not been any comparable decisions, it would seem to be likely that an Australian Court would follow the decisions of Mr Justice Thomas in The ‘‘Aegean Sea’’,8 the Court of Appeal in CMA CGM SA v. Classica Shipping Co. Ltd.9 (namely that the Charterer could not limit liability when a claim is brought by the owner, except insofar as the claim related to an indemnity sought by the owners against the owners’ own liability for cargo claims, to the extent that that liability was discharged by owners in a sum exceeding the appropriate limit) and Mr Justice David Steel in The ‘‘Darfur’’,10 assuming there is no appeal from the Court of Appeal’s or Mr Justice Steel’s recent decisions resulting in different conclusions. Australia has availed itself of the liberty contained in Article 15 paragraph 3 in Section 59B of the Navigation Act 1912 which provides as follows: ‘‘(i) In this section: Convention means the Convention on Limitation of Liability for Maritime Claims 1976, being the Convention, a copy of whose English text is set out in Schedule 1 to the Limitation for Liability for Maritime Claims Act 1989. (ii) The owner of a ship is not entitled to limit his, her or its liability in respect of any claim of a kind specified in paragraph 1(a) of Article 2 of the Convention made by: (a) a servant of the owner whose duties are connected with the ship; or (b) any heir or dependant of the servant or any other person who is, within the meaning of paragraph (e) of Article 3 of the Convention, a person entitled to make such a claim’’.

Conduct barring limitation In Barde A.S. v. ABB Power Systems AB and ors,11 Sheppard J. had to consider whether on the establishment of the limitation fund, with interest, the release of the vessel or any 8. (1998) 2 Lloyd’s Rep. 39. 9. (2004) 1 Lloyd’s Rep. 460. 10. (2004) 2 Lloyd’s Rep. 469. 11. (1995) 132 ALR 358.

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security given in respect of it, must be ordered pursuant to Article 13 paragraph 2 of the Convention, notwithstanding that there was alleged to have been conduct barring the limitation within the meaning of Article 4 of the Convention, prior to any determination of that issue. Pursuant to Article 11, the Fund may be constituted by deposit or by production of the guarantee ‘‘acceptable under the legislation of the State party’’. There is no such legisla­ tion in force in Australia, as noted by Sheppard J. in The Barde A.S. case, when he said, ‘‘it would appear that the Fund must be constituted by deposit’’. In reaching his decision, Sheppard J. had regard to Sheen J.’s decision in the Bow­ belle,12 this work (the first and second editions) as well as Meeson’s work ‘‘Admiralty Jurisdiction and Practice’’, Berlingieri’s work on ‘‘Arrest of Ships’’ and the lecture given by Mr David Steel Q.C. (as he then was) entitled ‘‘Ships are Different: the case for limitation of liability’’, published in Lloyd’s Maritime and Commercial Law Quarterly (1995) LMCLQ 77. Sheppard J. placed reliance on the statements made by the authors of this work and Mr Steel Q.C. as emphasising ‘‘the very great nature of the change which was brought about by the coming into force of the 1976 Convention’’. In the result, Mr Justice Sheppard was clearly also much influenced by another paper presented by Richard Shaw entitled, ‘‘Practice and Procedure’’, at a seminar organised by The Institute of Maritime Law in September 1984, in which it was pointed out that Article 11 does not define the word ‘‘constituted’’ and the author queried: ‘‘if mere deposit of the amount of a limitation fund is to be sufficient to ‘constitute’ the fund, this equally means that the principal point decided in The ‘‘Wladyslaw Lokietek’’ by Brandon J. has been reversed, and that once a limitation fund has been ‘constituted’, a ship or other property which has been arrested or attached within the jurisdiction of a State party, or any security given, may be released, and must be released, in the four instances specified’’. In holding that the applicant shipowner was not entitled to release of the vessel upon the deposit of the limitation sum, together with interest, Sheppard J. based his decision, in part, on the wording of section 25 of the Admiralty Act 1988, which empowers the court to order the constitution of a limitation fund ‘‘for the payment of claims in respect of which the applicant is entitled to limit liability’’. In passing, Sheppard J. also commented in relation to the meaning of ‘‘freely transfer­ able’’ in paragraph 3 of Article 13 that it ‘‘refers to the ability of parties to pay and receive monies in the relevant countries. In other words, the Convention recognises that there may be cases in which currency regulations and the like may prevent the free transfer of monies’’. In the concluding remarks in his judgment, Sheppard J. said, ‘‘it is clear from some of the texts I have looked at that a number of commentators take the view that, for all practicable purposes, every shipowner has at least a de facto right to limit because the barrier is so difficult to overcome. I see the force of this but there will be cases in which it may be overcome and the Convention acknowledges this. The Convention must be given effect in all its respects. All that the first respondent here seeks to do is to have an opportunity to challenge the right of the applicant to limit his liability by constituting a limitation fund. The first respondents want their day in Court. In my opinion, they are entitled to have it’’.

12. [1990] 1 Lloyd’s Rep. 532.

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Guidance might be obtained as to what behaviour does constitute a bar to limitation from SS Pharmaceutical Co. Ltd. v. Qantas Airways Limited.13 In that case, the New South Wales Court of Appeal had to determine whether similar wording in the Warsaw Convention, Article 25, precluded the defendant airline from limiting its liability when it had left a consignment of pharmaceutical products in the open during transhipment, even though there had been a thunderstorm forecast, and there were indications on the goods themselves that these were likely to be damaged if exposed to water. The New South Wales Court awarded full compensation to the plaintiff. Calculating the amount of the limit Insofar as calculation of the limitation sum and the ship’s tonnage are concerned, The International Convention on Tonnage and Measurement of Ships 1969 entered into force for Australia on 21 August 1982 and was brought into Australian law by The Navigation Act 1912. In Ballast Trailing NV v. Decca Survey Australia Ltd.,14 it was held that the owners of a dredger were not entitled to limit their liability because the damage had not occurred on one ‘‘distinct occasion’’. That decision would, no doubt, still apply in respect of the same wording under Article 6 of the Convention. Australia is a member of the International Monetary Fund, and accordingly, the special drawing right is calculated in accordance with the Fund’s practices. Where a tug and its tow are involved in an incident, which might give rise to a claim for limitation, it is thought that the position as it applies in the United Kingdom, as a result of decisions such as The ‘‘Harlow’’,15 The ‘‘Sir John Rawlinson’’;16 The ‘‘Ismjeli’’;17 The ‘‘American’’ and the ‘‘Syria’’;18 and The ‘‘Bramley Moore’’,19 would be followed in this jurisdiction. In a recent unreported decision of Palmer J. in the New South Wales Supreme Court, in the case of Newcastle Port Corporation v. Pevitt and Ors,20 His Honour held that a claim against a limitation fund is exclusive of the legal costs of establishing that claim. His Honour thereby reached the same conclusion as the learned authors of this work in the 3rd edition, which he quoted, albeit for different reasons. Procedures Part VIII of the Admiralty Rules (which operate throughout Australia) contains a number of procedural provisions relating to limitation proceedings. They include, for example, the prohibition on an applicant in a limitation proceedings applying to have the proceedings set down for hearing, or for judgment in default of an appearance, until at least one of the persons named as respondents in the initiating process has been served (Rule 61). Rule 62 13. [1991] 1 Lloyd’s Rep. 288. 14. Unreported NSW Supreme Court 1980. 15. (1922) P. 175. 16. [1973] Q.B. 285. 17. [1982] 2 Lloyd’s Rep. 74. 18. (1874) LR 6 PC 127. 19. (1964) P. 200. 20. (2003) NWSC 888; [2004] 2 Lloyd’s Rep. 47.

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requires the court, after making a determination on limitation, to make orders for the advertisement of its determinations where persons are identified as respondents in the initiating process by reference to their being members of a specified class of persons and fixing the period within which such persons may prosecute their claim or seek to have the determination set aside. Provision is also made in the Rules (Rule 73) for applications to be made for the determination of priorities by persons who have obtained a judgment in a court, including a foreign court, provided the judgment is enforceable in a court of Australia.

B. CARRIAGE OF GOODS BY SEA Adoption of international Convention The Carriage of Goods by Sea Act 1991 (as amended), gives effect to the Hague-Visby Rules with some modification. Australia has also made provision for the Hamburg Rules to come into effect in Australia by incorporating those Rules as a Schedule to the Act, but providing that they will automatically be repealed if, by the year 2007, the Minister has not tabled a statement as required by the legislation, to the effect that the amended Hague Rules should be replaced by the Hamburg Rules.

Package or unit limitation There has been a recent decision of the Full Court of the Federal Court of Australia, in the case of El Greco (Australia) Pty Limited v. Mediterranean Shipping Company SA.21 The bill of lading described the goods as ‘‘1 × 20 ft FCL/FCL General Purpose container said to contain 200,945 pieces, posters and prints’’. The ‘‘total number of packages’’ at the foot of the carrier’s bill of lading was marked ‘‘1’’, and clause 21 of the bill of lading pro­ vided: ‘‘Where the goods have been packed into containers by or on behalf of the merchant, it is expressly agreed that such container shall constitute one package for the purpose of the application of limitation of the Carrier’s liability.’’

Allsop J., who wrote the leading judgment and with whom Black C.J. agreed, held that the parties had not enumerated 200,845 units on the sea carriage document for the purposes of Article 4 rule 5(c) of the Amended Hague Rules. He did however apply the limit of Article 4 rule 5(a) to one package or unit. In an earlier decision, Carruthers J. determined in PS Chellaram & Co. Pty Limited v. China Ocean Shipping Co.,22 that where a bill of lading described the goods as ‘‘1 container (20’) FCL/FCL shippers load, count and seal said to contain, 900 CTNS blank cassette cases’’, each of the cartons was a package and not the container.

21. (2004) FCAFC 202; [2004] 2 Lloyd’s Rep. 537. 22. [1989] 1 Lloyd’s Rep. 43.

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Financial limits of liability Australia is a member of the IMF, and accordingly, the SDR limits are calculated by reference to the IMF applicable rates. Loss of right to limit In Sellers Fabrics Pty Ltd. v. Hapag-Lloyd AG,23 Rolfe J. held that a slot charterer, carrier, was entitled to limit liability under Article 4 paragraph 5(e) as the ‘‘carrier’’ did not mean the carrier’s servants and agents but the ‘‘carrier’’ through its governing mind. Fur­ thermore, the crew (whose negligence in the stowage of the containers was the relevant consideration) were not the servants or agents of the carrier in any event. Also, in New Holland Australia Pty Ltd. v. TTA Australia Pty Ltd.24 Carruthers J. held that the carrier could not limit liability where the finding had been made that the goods had never been loaded into the ship and the Hague Visby-Rules did not apply to events preloading. Scope of Application By section 10 of the Carriage of Goods by Sea Act 1991 the amended Hague Rules apply to a contract of carriage of goods by sea to which Article 10 of the amended Hague Rules apply, that is, where carriage from ports in Australia to ports outside Australia is con­ cerned, and from ports outside Australia to ports inside Australia unless either the Hague, Hague-Visby or Hamburg Rules apply to that carriage. By reason of section 11 of the Carriage of Goods by Sea Act 1991 the parties to a sea carriage document relating to the carriage of goods from any place in Australia to any place outside Australia (or of a non-negotiable document being one that contains express provision to the effect that the amended Hague Rules are to govern the contract as if the document were a bill of lading) are taken to have intended to contract according to the laws in force at the place of shipment. Any attempt to preclude or limit the affect of that provision is ineffective as are any provisions which seek to preclude or limit the jurisdic­ tion of a Court of Australia in respect of such carriage documents whether for shipment out of Australia or shipment to Australia. An agreement, or a provision of an agreement, that provides for the resolution of a dispute by arbitration to be conducted in Australia, is not made ineffective by those provisions. Himalaya Clause In Port Jackson Stevedoring Pty Ltd. v. Salmond and Spraggon (Australia) Pty Ltd. (The ‘‘New York Star’’25), the Privy Council (on appeal from the High Court of Australia) upheld the validity of Himalaya Clauses. The New South Wales Supreme Court has also upheld the validity of undertakings by merchants contained in bills of lading not to sue third parties in cases such as BHP v. Hapag Lloyd.26 23. NSW Supreme Court, unreported, 29 October 1998. 24. NSW Supreme Court unreported 6 December 1994. 25. (1981) 1 W.L.R. 138. 26. (1980) 2 NSWLR 572.

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C. PASSENGER CLAIMS Athens Convention Australia has not ratified or acceded to the Athens Convention or enacted legislation giving effect to it. Actions at common law for damages for death or personal injury and claims for compensation arising from work injuries are available but in the last year or so, there has been significant legislation in most states and territories of Australia curtailing claimants’ rights in that regard. In New South Wales, for example, there has been the Civil Liability Act 2002 (NSW) and the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW). Such legislation has been introduced in response to the perceived public liability crisis, in part occasioned by the collapse of a major insurance company. The reforms seek to place controls on the award of damages in personal injury claims by capping some heads of damage and abolishing others, discouraging unmeritorious claims and restricting legal costs recoverable in relation to small claims. The reforms, as described in the second reading speech by the Premier of New South Wales are intended ‘‘to wind back this culture of blame’’. Claimants are presumed to have been aware of an ‘‘obvious risk’’, there is no liability for harm suffered as a result of the materialisation of an obvious risk of a dangerous recreational activity, or for harm arising from recreational activities where risk warnings have been given or where waivers have been received. The Federal Government has also passed legislation in this area, including the Trade Practices Amendment (Liabil­ ity for Recreational Services) Act 2002, and the Taxation Laws Amendment (Structured Settlements and Structured Orders) Act 2002, to amend the Income Tax Assessment Act 1997.

CHAPTER 9

Belgium Marc A. Huybrechts Professor of Law, University of Louvain and Antwerp, member of the Antwerp and Brussels Bar

Charles P. Brandt L.L.M. University of Stellenbosch, South Africa

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY 1

The Convention on the Limitation of Liability for Maritime Claims, London, 19 Novem­ ber 1976 (‘‘LLMC Convention’’) substantially amended the limitation of liability in Belgium. By statute of 11 April 19892 the Belgium Parliament both approved the Convention and incorporated by reference the text of it into the domestic statutory body. 1. Persons entitled to limit liability The owner, the charterer, the operator, the salvors, the liability insurer, and all persons for whose act, neglect or default the ship owner or salvor is responsible are entitled to limit their liability, such as the pilot on board. The insurer’s right to limit his liability is significant, since under Belgian statutory law the government has a direct action against the insurer for the costs of wreck and cargo removal.3 2. Claims subject to limitation Domestic law does not amend any of the following provisions of the Convention: ‘‘(a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins, and waterways and aid to navigation), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; (b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;

1. This part of the text is based on the contribution of Goemans, B. and Den Haerynck, W., ‘‘Liability and Limitation of Liability in Maritime Law’’, International Encyclopaedia of Laws (Gen. Ed., Prof. Dr. R. Blan­ pain), Contribution of Belgium, as taken up in Transport law (Ed. Prof. Dr. M. Huybrechts), Vol. 1, Kluwer Law and Taxation Publishers, Deventer, 1994, 89–90. 2. Mon. B., 6 October 1989. 3. Article 16, al. 3, Statute 11 April 1989, Mon. B., 6 October 1989.

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(c) claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations; [... ] (f) claims of a person other than the person liable in respect of measures taken in order to avert or minimize loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures.’’

According to Article 18.1. of the LLMC Convention any State may reserve the right to exclude the following claims from the application of the limitation: ‘‘(d) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship; (e) claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship.’’

These claims are governed by statute in Belgium, more particularly the statute of 11 April 1989 on maritime accidents.4 3. Claims excepted from liability Claims for salvage or contribution in general average are excepted from limitation (Article 3(a) LLMC Convention). Claims for oil pollution are excluded from the application of the LLMC Convention (Article 3(b) and (c) LLMC Convention). Nor shall the LLMC Convention apply to ‘‘claims subject to any international conven­ tion or national legislation governing or prohibiting the limitation of liability for nuclear damage’’ (Article 3(c) LLMC Convention) and to ‘‘claims against the shipowner of a nuclear ship for nuclear damage’’ (Article 3(d) LLMC Convention), Belgium ratified a Convention as mentioned under Article 3(c) LLMC Convention.5 A claim of a shipowners’s or salvor’s servant is excepted from the application of the LLMC Convention, if under the law of the contract of employment such a claim is not subject to limitation of liability or if it is subject to other limits (Article 3(e) LLMC Convention). 4. Conduct barring limitation A ‘‘personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result’’ bars the limitation (Article 4 LLMC Convention).6 5. Counterclaims Counterclaims shall be set off against each other and the limitation shall only apply to the balance (Article 5 LLMC Convention). 4. Article 16, al. 3, Statute 11 April 1989, Mon. B., 6 October 1989. For an illustration see Court of Appeals Antwerp, 24 April 1991, R.H.A., 1992, 327, with note Delwaide, L. 5. Convention on third party liability in the field of nuclear energy, Paris, 29 July 1960, Mon. B., 23 August 1966 and 26 April 1968. 6. For an illustration see Court of Commerce Antwerp; Kh. Antwerpen, 12 January 1995, R.H.A. 1996, 26.

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6. Financial limits of liability for all types of claims 1 . A C C O R D I N G TO T H E L L M C C O N V E N T I O N

The limits are stated in ‘‘Units of Account’’ which refers to the Special Drawing rights as determined by the International Monetary Fund. One such Unit of Account was on 1 July 2005 equal to USD 1,456230 or 1,209790 EUR. The limits are determined according to the gross tonnage as calculated by the tonnage measurement rules contained in Annexe 1 of the International Convention on Tonnage Measurement of Ships, 1969. The LLMC Convention makes a distinction whether the claim arises out of loss of life or personal injury, on the one hand, or other claims, on the other hand. For claims arising out of loss of life or personal injury: — for a ship not exceeding 500 tons: 333,000 Units of Account; — for a ship between 501 tons and 3,000 tons: 333,000 Units of Account plus 500 Units of Account per ton in excess of 500 tons; — for a ship between 3,001 tons and 30,000 tons: 1,583,000 Units of Account plus 333 Units of Account per ton in excess of 3,000 tons; for a ship between 30,001 tons and 70,000 tons: 10,574,000 Units of Account plus 250 Units of Account per ton in excess of 30,000 tons; — for a ship exceeding 70,000 tons: 20,574,000 Units of Account plus 167 Units of Account per ton in excess of 70,000 tons. For all other claims: — for a ship not exceeding 500 tons: 167,000 Units of Accounts; — for a ship between 501 tons and 30,000 tons: 167,000 Units of Account plus 167 Units of Account per ton in excess of 500 tons; — for a ship between 30,001 tons and 70,000 tons: 5,093,500 Units of Account plus 125 Units of Account per ton in excess of 30,000 tons; — for a ship exceeding 70,000 tons: 10,093,500 Units of Account plus 83 Units of Account per ton in excess of 70,000 tons. — see Article 7 of the Convention for passenger claims: 46.666 Units of Account multiplied by the number of passengers which the vessel is authorised to carry with a maximum of 25 million Units of Account (PAL Convention). 2 . A C C O R D I N G TO D O M E S T I C L AW

As mentioned under part 2 of this chapter, the LLMC Convention does not apply to the liability for the costs of removing stranded or sunk ships and their cargo. The limitation of liability is governed by domestic statute. The limits are stated in Belgian Francs (now converted to the Euro) and are determined according to the tonnage of the ship. Since the introduction of the Euro the limits are expressed in Euro. One Euro equals 40,3399 Belgian Francs. — for a ship not exceeding 500 tons: 123,946.76 EUR; — for a ship between 501 tons and 6,000 tons: 371,840.29 EUR plus 446.21 EUR per ton in excess of 500 tons;

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— for a ship between 6,001 tons and 70,000 tons: 3,569,666.76 EUR plus 446.21 EUR per ton in excess of 6,000 tons; — for a ship exceeding 70,000 tons: 13,758,090.62 EUR plus 123.95 EUR per ton in excess of 70,000 tons.7 7. Units of Account used for calculating limitation fund The Units of Account refer to the Special Drawing Rights (SDRs) as determined by the International Monetary Fund. One such Unit of Account was equal to 1,456230 or 1,204790 EUR on 1 July 2005. 8. Aggregation of claims As stated in 6 above, possible claims are divided into two categories: claims arising out of loss of life or personal injury, and all other claims. The limitation amounts for the first group are considerably higher. Furthermore, in the case where there is an occurrence of both personal damage and other forms of damage, the unpaid amount from the first group of claims shares proportionally in the limitation amount available for the second group of claims.8 9. Limitation of liability—need to constitute fund According to Article 10 of the 1976 LLMC, limitation of liability may be invoked notwithstanding that a limitation fund has not been constituted. Although the Convention provides the possibility for a State party to the Convention to restrict this possibility, Belgium did not make use of this. Neither does Belgian law provide at what time the limitation fund should be constituted. 10. Constitution of fund The LLMC Convention has no express jurisdiction provisions. However, the EEC Con­ vention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 1968, as amended in 1978, provides in Article 6a that where by virtue of this Convention a Court of a contracting State has jurisdiction in actions relating to liability arising from the use or operation of a ship, that court, or any other court substituted for this purpose by the internal law of that State, shall also have jurisdiction over claims for limitation of such liability. Consequently, Article 6a provides an alternative jurisdiction base to that of the domicile of the owner. The implication of a jurisdiction agreement, has been construed by the Antwerp Court of Appeals in a decision of 10 May 1994.9 The Court was of the opinion that an agreement between parties according to which all claims arising out of a collision were subject to English jurisdiction also encompasses the 7. Article 18, Statute 11 April 1989, Mon. B., 6 October 1989. 8. De Decker, M., ‘‘De aansprakelijkheid van de scheepseigenaar: De Wet van 11 april 1989’’, Revue de Droit Commercial Belge, 1991–2, 96–121, at 114. Also see Huybrechts, M.A., ‘‘Het Verdrag over de beperking van aansprakelijkheid inzake maritieme schuldvorderingen, ondertekend te Londen op 19 november 1976’’, Liber Amicorum Lionel Tricot, Kluwer, Deurne, 1988, 325–337, at 334. 9. Court of Appeals of Antwerp, 10 May 1994, R.H.A., 1994, 357.

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issue with reference to limitation of liability.10 Further the Court decided that the jurisdic­ tion of the English Court is also based on section 6 bis of the EEC Convention on Jurisdiction and Enforcement of Judgement in Civil and Commercial Matters 1968 as amended in 1978. According to section 6 bis the court that is competent to deal with claims in relation to liability arising out of the use of a vessel is also competent to deal with the issues of limitation of liability. The venue is determined by Article 627, 10° Code of Procedure: the owner or salvor will apply for constitution of the limitation fund by submitting a request to the president of the Commercial Court in Li`ege, Brussels or Antwerp, depending on the place where the damages occurred. If the damage occurred in the territorial sea, or the high sea of in the territorial waters of another State, the President of the Commercial Court in Antwerp is competent. The procedure to be followed is mainly laid down in Articles 48–52 of the Belgian Maritime Code. The request for limitation of liability should mention name and nation­ ality of the vessel, the date and the place of the occurrence of the accident, the amount of the limitation of liability as calculated according to the legal provisions and the manner in which it is intended to constitute the limitation fund (cash or by guarantee). Together with the request, a list of known claimants against whom the limitation of liability can be invoked should be submitted, as well as the documents evidencing the correct calculation of the legal amount of limitation of liability. The president of the Commercial Court will first verify the amount of the limitation fund as calculated in the request. He will then appoint a liquidator and a judge-commis­ sioner. If the limitation fund is constituted in cash, the liquidator will indicate where the assets should be deposited. After a report of the liquidator, stating that the assets have been deposited or that the guarantee has been given, the president of the Commercial Court will then issue an order stating that the limitation fund has been constituted. This order will be published, if necessary also in one or several foreign maritime newspapers. Opposition or caveat proceedings to the constitution of the limitation fund should be raised within three months after publication and should be brought before the Commercial Court. After the constitution of the fund, the arrest on the vessel is to be lifted.11 11. Distribution of fund between claimants As soon as the liability of the owner or salvor has been finally established, the liquidator will distribute the fund among the claimants in proportion to their established claims against the fund, after having submitted a draft of distribution to the claimants. Payment to the claimant of this part of the fund extinguishes the action of the claimant against the applicant. Once all claims have been settled, any remaining assets in the fund will be returned to the applicant.

10. In a recent decision by the European Court of Justice it was held that the action for damages and the limitation proceedings are separate procedures and do not constitute a situation of ‘‘lis pendens’’ Maersk Olie and Gas A/S firma M De Haan and W De Boer Case C-39/02 European Court of Justice [2005] I Lloyd’s Rep. 210. 11. Court of Antwerp, 10 January 2003, NJW 2003, Volume 20, 166, with a note by K. Broeckx.

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12. Constitution of fund as bar to other actions From the moment the president of the Commercial Court has issued an order that the limitation fund has been constituted, Article 13 of the LLMC Convention applies to the pending claim.12 Thus, where a limitation fund has been constituted, any person having made a claim against the fund shall be barred from exercising any right in respect of such claim against any other assets of a person by or on behalf of whom the fund has been constituted. The constitution of the fund does not prevent a claimant from seeking a money judgment for the full extent of his claim despite the limitation proceedings.13 13. Governing law in matters of limitation By virtue of Article 15 of the LLMC Convention, the contracting States may: ‘‘exclude wholly or partially from the application of this Convention any person who at the time when the rules of this Convention are invoked before the courts of that State does not have his habitual residence in a State Party, or does not have his principal place of business in a State Party or any ship in relation to which the right of limitation is invoked or whose realise is sought and which does not at the time specified above fly the flag of a State Party.’’

Thus, in the case where a contracting State has made use of Article 15, the forum chooses freely the applicable law to persons alien to the treaty. However, this is not the position in Belgium since use has not been made of the possibility of Article 15. According to Belgian conflict of laws, the courts will apply the lex loci delicti commissi on the issue of the limitation of liability.14 A Belgian Court will adhere to the limitation amounts contained in the applicable LLMC Convention despite the constitution in another jurisdiction (in the event Singapore) of a fund which is considerable less under the 1957 Limitation Convention which is applicable in that jurisdiction.15 14. Scope of application—special types of vessel The Convention does not define, nor does it enumerate, the ship or floating equipment whose owners, charterers, operators, salvors etc. can limit their liability. It expressly excluded from its application the ‘‘air cushion vehicles’’ and ‘‘floating platforms con­ structed for the purpose of exploring or exploiting the natural resources of the sea-bed or the subsoil thereof’’.16 Neither does the Convention apply to ‘‘ships constructed for, or adapted to, and engaged in, drilling’’ provided the State Party’s domestic legislation states a higher limit or if the State Party entered into a convention governing the limitation of liability for such ships.17 Belgium has no statutory law ruling specifically on the limitation of liability for ships constructed, adapted to, or engaged in, drilling. Neither did Belgium enter into a conven­ tion governing the issue. As a consequence, the limitation of liability for ships constructed for, adapted to, or engaged in drilling, is ruled by the LLMC Convention. 12. Article 48, paragraph 5, Belgian Maritime Code. 13. Court of Appeals of Antwerp, 5 March 1996, R.H.A., 1996, 312. 14. Cass., 23 November 1962, JPA, 1963, 306, Rev. Dr. Int. Comp., 1963, 248. 15. Court of Appeals, Antwerp (4th Chamber), 5 February 2002, I.T.L., 2002, Vol. 2, 231. 16. Article 15(5) LLMC Convention. 17. Article 15(3) LLMC Convention.

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Article 1 of the Belgian Maritime Code (not amended by the Statute of 11 April 1989) defined the sea-going vessel as any ship of at least 25 tons usually used or designated for the carriage of persons or goods, for fishing, towing and any other profit-making shipping activity on the sea. By virtue of Article 10, Statute of 11 April 1989, the limitation of liability also applies to sea-going vessels operated by a public authority or a government agency, sea-going pleasure crafts, and sea-going ships used for scientific research.18 According to case law the limitation of liability also applies to floating cranes or any other floating equipment, provided it is able to move on water, which activity should be normal rather than occasional.19 15. Mutual obligation to other States to permit limitation In theory, the problem might arise that a State finds itself obliged to permit another State, which has not ratified the 1976 Convention, to rely on limitation in terms of either the 1924 or the 1957 Convention, depending on which one the first-mentioned State has failed to denounce. This will be the result from Article 30(4) of the Vienna Convention on the Law of Treaties, which obliges a State, not having denounced an earlier convention, to fulfil its treaty obligation by allowing the owners of vessels registered in the State that has not ratified the 1976 Convention, to limit their liability in accordance with a prior convention ratified by both States. However, as will be clear from part 17 below, Belgium has denounced both the 1924 and the 1957 Limitation Conventions. Thus, in any given case where Belgian law will be applicable, the other State that has not ratified the 1976 Convention, will be obliged to permit limitation in terms of the 1976 Convention. 16. Date of entry info force of the present system of limitation The Belgian government ratified the LLMC Convention on 15 June 1989.20 According to Article 17, it entered into force in Belgium on 1 October 1989. The domestic statute entered into force on 1 December 1989 for sea-going vessels and on 1 January 1990 for river crafts.21 17. Denunciation of previously ratified Limitation Conventions The Brussels Convention of 1924, enacted into Belgian law by the Act of 28 November 1928, put an end to the right to abandon the vessel.22 Instead, the owner could limit his liability to the ‘‘value of the vessel, the freight, and the accessories’’.23 However, for a 18. Mon. B., 10 October 1989. 19. Court of Appeal, Brussels, 9 March 1957, JPA, 1957, 224; Commissie van Beroep, Antwerp, 3 December 1954, JPA, 1958, 248; see also: Part II, Chapter I, no. 1. 20. Mon. B., 6 October 1990. 21. Article 26, Statute 11 April 1989, Mon. B., 6 October 1989 juncto Article 6, al. 1 and 2 and Article 7, Royal Decree, 27 November 1989, Mon. B., 1 December 1989. 22. International Convention for unification of certain rules relating to the limitation of the liability of owners of sea-going vessels, Brussels, 25 August 1924 (hereinafter ‘‘1924 Convention’’) ratified by Belgium on 2 June 1930, entered into force on 2 June 1931. 23. Article 1, 1924 Convention.

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number of claims the limit was not to ‘‘exceed an aggregate sum equal to £8 Sterling per ton of vessel’s tonnage’’. As stated above, Belgium incorporated the text of this Conven­ tion into its domestic statute.24 The 1957 Limitation Convention entered into force in Belgium on 31 January 1976, and suppressed the value of the ship as a criterion but kept the tonnage limitation.25 There is uncertainty as to whether the 1957 Convention explicitly repealed the operation of the 1924 Convention.26 However, even if the 1924 Convention has not explicitly been repealed, and the domestic statute is thus left unamended, there is no doubt that the 1957 Convention, after 31 January 1976, regulated the limitation of liability of sea-going ships, since self-executing conventions override the provisions of domestic law.27 However, as the 1957 Convention only applied to sea-going vessels,28 the domestic statute, being the text of the 1924 Convention, still governed the limitation of liability for river crafts after the entry into force of the 1957 Convention. With the incorporation of the LLMC Convention by Statute of 11 April 1989, it can be stated that by way of interpretation, the previous Conventions of 1924 and 1957 are denounced. This follows from the reading of Article 17(4) of the LLMC Convention, which explicitly states that it replaces the Conventions of 1924 and 1957. Various leading authors on Belgian maritime law have interpreted Article 17(4) as having the effect of complete denunciation of the 1924 and the 1957 Conventions.29 Furthermore, concerning these Conventions, it should be stated that the parts in Article 46 of the Maritime Code, that incorporated the 1924 and the 1957 Conventions into Belgian law, have been deleted. This is a further clear indication of denunciation. With reference to the application of the LLMC Convention to events occurring prior to the entry into force of the Belgian statute of 11 April 1989, there is some confusion and the courts are divided on the issue. Some courts are of the opinion that the limitation law which was in force on the moment that the damage or incident occurred, is the relevant and applicable limitation regime even though the limitation proceedings are instituted when the new limitation treaty entered into force.30 Other courts are of the opinion that the limitation regime, which is to be applied is the limitation regime that is in existence on the moment limitation proceedings are opened.31

24. Article 46, MC. 25. International Convention Relating to the Limitation of the Liability of Owners of Sea-going Ships, Brussels, 10 October 1957 (hereinafter ‘‘1957 Convention’’), Mon. B., 29 January 1976. 26. Article 16 of the 1957 Convention is not formulated very clearly. It reads that only the contracting parties repealed the operation of the 1924 Convention. Thus, it is not clear what the position was towards states that were not parties to the 1957 Convention and thus still applied the 1924 Convention. In this regard see Huybrechts, M.A., ‘‘Het Verdrag over de beperking van aansprakelijkheid inzake maritieme schuldvorderingen, ondertekend te London 19 November 1976’’, Liber Amicorum Lionel Tricot, Kluwer, Deurne, 1988, 325–337, at 327. 27. De Decker, M., ‘‘De aansprakelijkheid van de scheepseigenaar. De Wet van 11 april 1989’’, Revue de Droit Commercial Belge, 1991–2, 96–121 at 102. 28. Article 1(1), 1957 Convention. 29. See for instance Delwaide, L. and Blockx, J. ‘‘Kroniek van Zeerecht’’, Revue de Droit Commercial Belge, 1991, 943–1023, at 970–971. De Weerdt, I., ‘‘De nieuwe wet inzake zee- en binnenvaart’’, Rechtskundig Weekblad, 1989–90, no. 20, 665–677, at 666 para. 5. 30. Court of Appeals Li`ege, 21 December 1995, R.H.A., 1996, 20. 31. Court of Appeals Antwerp, 22 February 1994, European Transport Law, 1994, 432, R.H.A., 1995, 15.

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On a comparative note one can refer to a decision of the Dutch Supreme Court which favours the moment of the incident over the moment that the limitation proceedings are opened. The Dutch Court is guided by the fact that the LLMC Convention by itself does not provide in a specific transition order and because the owners of seagoing vessels were/ are entitled to rely on the expectation that existed for them right after the incident occurred. Of course a decision of a Dutch court is not binding in Belgium, but it has certain persuasive power.32

32. Dutch Court of Cassation (Hoge Raad), 28 February 1992, N.I.P.R., 1992, 373.

CHAPTER 10

Brazil Artur R. Carbone Maritime Lawyer, Rio de Janeiro

Lu´ıs Felipe Galante Maritime Lawyer, Rio de Janeiro

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

Brazil is still party to the Brussels Convention of 1924 (‘‘1924 Convention’’),1 which was enacted into Brazilian law by Decree 350, dated 1 October 1935. Furthermore, Brazilian domestic law has its own provision on the matter in Article 494, second and third paragraphs, of the old Brazilian Commercial Code enacted in 1850.2 Finally, Brazil has not ratified the International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships, Brussels, 1957 (‘‘1957 Convention’’), nor the Convention on the Limitation of Liability for Maritime Claims, London, 1976 (‘‘LLMC Convention’’). As a precedent the Brazilian Supreme Court held that Article 494 of the domestic law remains in force3 and it follows that Brazilian law has a dual regime as far as limitation of liability is concerned. The 1924 Convention applies only to foreign sea-going ships which are nationals of a contracting State (Article 12). All other cases are governed by article 494 of the Commercial Code. 1. Persons entitled to limit liability Under the 1924 Convention the owner of sea-going vessels,4 the principal charterer and the person who operates the vessel without owning it5 are entitled to limit liability. 1. International Convention for Unification of Certain Rules relating to the Limitation of the Liability of Owners of Sea-Going Vessels, Brussels, 25 August 1924 (hereinafter ‘‘1924 Convention’’). 2. Free translation: ‘‘The same owners or part owners are joint and severally liable for the losses that the master causes to third parties due to lack of diligence he must exercise concerning the proper custody, stowage and preservation of the goods received on board (article 518). This liability ceases if the owners or part owners abandon the ship and freight already due and to become due in the respective voyage. The abandonment by the owner or part owner who is, at the same time, the master of the ship is not allowed.’’ 3. RE 14.215-DF, unanimous judgment on 30 April 1956, Justice Edgar Costa acting as reporting judge, in Arquivo Judiciario ´ , vol. 120, page 266. But some legal commentators still maintain the opposite opinion that the 1924 Convention revoked Article 494 of the Brazilian Commercial Code (see Theophilo de Azeredo Santos, Direito da Navegac˜ ¸ao, pages 142/144, 2nd edition, Forense, 1968). 4. Article 1. 5. Article 10.

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However, according to Article 2, final paragraph, where the owner or part owner is at the same time master of the ship, he cannot claim limitation of liability for his faults, other than his faults of navigation and the faults of persons in the service of the vessel. This provision has naturally become obsolete in modern shipping, particularly in sea-going navigation, and is of little or practically no use now. In domestic law the owner of a ship is undoubtedly entitled to limit his liability. However, in the absence of court precedents, controversies still remain as to whether or not the charterer has the same right.6 Finally, Article 494, third paragraph, of the Brazilian Commercial Code excludes the possibility of limitation by the owner who is, at the same time, the master of the ship, regardless of any circumstance. This provision, although outdated, still applies to smaller ships such as yachts or river vessels. 2. Claims subject to limitation I. IN ACCORDANCE WITH THE 1924 CONVENTION

According to Article 1 of the Convention the following claims are subject to limita­ tion: ‘‘(1) Compensation due to third parties by reason of damage caused, whether on land or on water, by the acts or faults of the master, crew, pilot, or any other person on the vessel; (2) Compensation due by reason of damage caused either to cargo delivered to the master to be transported, or to any goods and property on board; (3) Obligations arising out of bills of lading; (4) Compensation due by reason of a fault of navigation committed in the execution of a con­ tract; (5) Any obligation to remove the wreck of a sunken vessel, and any obligations connected therewith; (6) Any remuneration for assistance and salvage; (7) Any contribution of the shipowner in general average; (8) Obligations arising out of contracts entered into or transactions carried out by the master, acting within the scope of this authority, away from the vessel’s home port, where such contracts or transactions are necessary for the preservation of the vessel or the continuation of the voyage, provided that the necessity is not caused by any insufficiency or deficiency of equipment or stores at the beginning of the voyage.’’ I I . I N A C C O R D A N C E W I T H D O M E S T I C L AW

Literally speaking, the second paragraph of Article 494 of the Commercial Code only makes reference to claims concerning the goods received on board. However, the jurispru­ dence has expanded the scope of this provision so as to encompass, in general, any illegal acts by the master, either in contract or in tort. 3. Claims excepted from limitation I. IN ACCORDANCE WITH THE 1924 CONVENTION

According to Article 2 of the 1924 Convention the limitation established in Article 1 does not apply to: 6. For instance, against the possibility of limitation by the charterer see Silva Costa, Direito Commercial Mar´ıtimo, Fluvial e Aer ´ eo, vol. I, page 259, 2nd edition, Freitas Bastos, 1935. The opposite opinion can be seen in Hugo Simas, Compendio ˆ de Direito Mar´ıtimo Brasileiro, pages 110/115, Revista dos Tribunais, 1938.

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‘‘(1) Obligations arising out of acts or faults of the owner of the vessel; (2) Any of the obligations referred to in no. (8) of Article 1, when the owner has expressly authorized or ratified such obligation; (3) Obligations on the owner arising out of the engagement of the crew and other persons in the service of the vessel.’’

In addition, it must be noted that pollution cases do not fall within the scope of article 1(1) and 1(4) of the Convention. Full protection to the environment is a matter of public policy, which is regulated by provisions in the Brazilian Constitution and also in federal legisla­ tion promulgated since the 1980s. Likewise, wreck removal is nowadays viewed as a question of public policy as well and the relevant enactment of specific federal statutes on this subject has caused article 1(5) of the 1924 Convention to be revoked. I I . I N A C C O R D A N C E W I T H D O M E S T I C L AW

Both wreck removal and pollution cases are also excluded from limitation for the reasons already set out in item I above. Further, even though there is express provision in the Brazilian legislation similar to Article 2(1) of the 1924 Convention, it is generally accepted that the owner loses his right to limitation when the relevant loss or damage arises out of acts or omissions committed by himself. This is due to the application of the general legal principle that no one is allowed to benefit from his own wrongdoings. 4. Nature of limitation systems The limitation systems contained in the Commercial Code of 1850 and the 1924 Conven­ tion are completely different. The limitation contained in the Commercial Code is the oldest limitation system of all and creates the right to physically abandon the ship to creditors as a means to limit lia­ bility. In turn, the 1924 Convention brought as one criterion for limitation the liability up to the ‘‘value of the vessel, the freight, and accessories’’ and, as a second criterion, for a number of claims, the limitation is not to ‘‘exceed an aggregate sum equal to £8 sterling per ton of the vessel’s tonnage’’.7 5. Financial limits of liability I. IN ACCORDANCE WITH THE 1924 CONVENTION

Where the limit of liability is linked to the ‘‘value of the vessel, the freight, and accesso­ ries’’, the manner by which the value of the ship is to be assessed is established in Article 3, according to different circumstances, whereas freight is fixed at 10% of the value of the vessel at the commencement of the voyage (Article 4) and the concept of ‘‘accessories’’ is defined in Article 5. On the other hand, where limitation is determined in accordance with the tonnage of ship (£8 sterling per ton), this is calculated, ‘‘in the case of steamers and other mechani­ cally propelled vessels’’, on the basis of the ‘‘net tonnage, with the addition of the amount 7. Head of Article 1 and its final paragraph.

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deducted from the gross tonnage on account of engine-room space for the purpose of ascertaining the net tonnage’’. In the case of sailing ships the vessel’s tonnage is the net tonnage.

I I . I N A C C O R D A N C E W I T H D O M E S T I C L AW

The limitation by means of abandonment comprises ‘‘the ship and freight already due and to become due in the respective voyage’’. The vessel is abandoned in an ‘‘as is’’ condition, even if she is sunk, aground or simply a wreck. As for the freight, Brazilian law does not provide whether this is gross or net freight. 6. Aggregation of claims As set out in parts 4 and 5 above, the claims under the 1924 Convention are divided into two categories: claims subject to a limit of £8 sterling per ton of the vessel’s tonnage (Articles 1(1) to 1(5)) and claims where the limit is the value of the vessel, the freight, and accessories (Articles 1(6) to 1(8)). Depending on the particular circumstances, the limita­ tion amount of the second category may be higher. Death and personal injury fall within the scope of the first category (Article 1(1)). However, in that respect, Article 7 of the Convention states that if the victims are not fully compensated by the amount up to £8 sterling per ton of the vessel’s tonnage, then they rank, as regards the balance of their claims, with the other claimants whose limit is the value of the vessel, the freight, and accessories, regard being had to the order of the liens. 7. Limitation of liability—procedure Neither the 1924 Convention, nor Brazilian law contemplates the procedure to be fol­ lowed in order to establish the limitation of liability. Thus, it is generally accepted that the persons entitled to the right of limitation may exercise it at any time until the final judgment of the claims in relation to which limitation is possible. Limitation can be exercised either by means of a judicial protest to the creditor(s) or invoked in the course of the relevant legal action brought against the persons entitled to limitation. Neither system of limitation involves the setting up of a limitation fund. Under domes­ tic law the very vessel physically abandoned to creditors provides the security required. In turn, under the 1924 Convention system, security is only considered as a means to release the owner’s, charterer’s or operator’s ships from arrest. If that is the case, ‘‘where a vessel is arrested and security is given for an amount equal to the full limit of liability, it shall accrue to the benefit of all creditors whose claims are subject to this limit’’ (Article 8, first paragraph). If different creditors take proceedings into courts of different States, the owner may, before each court, require account to be taken of the whole of the claims and debts so as to insure that the limit of liability is not exceeded (Article 8, fourth paragraph). Finally, if ‘‘the security is given for a smaller amount or if security is required on several successive occasions, the effect will be regulated by agreement between the parties, or by the court, so as to insure that the limit of liability be not exceeded’’ (Article 8, third paragraph).

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195

8. Scope of application—types of vessels The 1924 Convention is restricted to ‘‘sea-going vessels’’. It does not define, or enumerate what that means. However, it expressly excludes from its application vessels of war or government vessels appropriated exclusively to the public service (Article 13). Domestic law does not define the concept of ‘‘ship’’ for the purposes of limitation.

B. PASSENGERS As stated above, Brazil has not ratified the 1957 Convention nor the LLMC Convention. Neither has it ratified the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, Athens 1974. Thus, the only Convention in force in Brazil containing any provision in respect of limitation of liability for passengers is the 1924 Convention. Article 7, final paragraph, of the 1924 Convention concerns the aggregation of claims mentioned in part A.6 above, in cases of death or personal injury. It reads as follows: ‘‘The same limitation of liability applies to passengers as respects the carrying vessel but does not apply to the crew or other persons in the service of the vessel whose right of action in the case of death or bodily injury remains governed by the national law of the vessel’’. The limitation amounts and scope of application of this provision as regards passengers are the same as those already explained in Section A above. No Court precedent applying this limitation is known. Brazilian domestic law makes no provision for the limitation of liability for passenger claims.

C. CARRIAGE OF GOODS BY SEA Brazil has four different limitations as far as carriage of goods by sea is concerned. These are: (a) the £8 sterling limitation per ton of the vessel’s tonnage established in Articles 1(2) and 1(3) of the 1924 Convention; (b) a limitation to the value of cargo and freight inserted in the Bill of Lading in accordance with Article 750 of the Civil Code enacted in 2003; (c) the limitation in multimodal transportation in the Mercosur8 area, in accordance with the Partial Agreement for the Facilitation of Multimodal Transport of Goods, dated 27 April 1995, and enacted into Brazilian law by the Decree 1.563 of 19 July 1995; (d) the domestic limitation for any other multimodal transportation in accordance with Law 9.611 of 19 February 1998. As one can see, two of the aforementioned systems are based on International Conven­ tions (‘‘a’’ and ‘‘c’’), whilst the other two are a matter of domestic law (‘‘b’’ and ‘‘d’’). But, from a different perspective, two of them are unspecific and thus apply to any type of

8. The South American Common Market.

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carriage (‘‘a’’ and ‘‘b’’), whereas the others are specifically concerned with multimodal transportation (‘‘c’’ and ‘‘d’’). 1. The 1924 Convention on Limitation As previously examined in section A above, the 1924 Convention applies only to foreign sea-going ships which are nationals of a contracting State (Article 12). Only the owner of sea-going vessels, the principal charterer, and the person who operates the vessel without owning it are entitled to limit liability. Cargo limitation is not to exceed an aggregate sum equal to £8 sterling per ton of the vessel’s tonnage. 2. Limitation under the Brazilian Civil Code Article 750 of the 2003 Brazilian Civil Code, appearing in the section related to carriage of goods, limits the liability of the carrier to the value of the goods and freight inserted in the bill of lading. Authority in respect of this very recent provision is still scarce and there were no known court precedents up to the time of writing . However, it is reasonable to assume that the limitation in Article 750 refers exclusively to material or property damages, as opposed to moral compensation (trouble or inconvenience, damage to image, etc), which, as a per­ sonal right (more valued than property rights), have been held as an independent claim guaranteed by the Brazilian Constitution. This has been the view of the Brazilian Supreme Court when dealing with the limitation issues arising from the Warsaw Convention in air transportation.9 3. The Mercosur Partial Agreement for the Facilitation of Multimodal Transport of Goods The Agreement aims to facilitate multimodal transport between member States. The member States of Mercosur to which the Agreement is to apply are Brazil, Argentina, Paraguay and Uruguay. The Agreement applies to contracts for multimodal transport of goods, provided that the place where the Multimodal Transport Operator takes charge of the goods and the place of their delivery is located in a member State. The provisions of this Agreement, will, however, only apply if specific reference to the Agreement is made in the multimodal contract. Furthermore, only duly registered Multimodal Transport Operators can invoke the application of the Agreement. Unless the nature and value of the goods have been declared by the consignor and inserted in the multimodal document (when liability will be limited to that amount), the Multimodal Transport Operator shall in no event be liable for loss of, or damage to, the goods in an amount exceeding 666.67 SDR10 per package or unit, or 2 SDR per kilogram of gross weight of the goods lost or damaged, whichever is the higher. The liability of the Multimodal Transport Operator in respect of loss following delay in delivery, consequential loss or damage other than loss or damage to the goods is limited 9. RE 172.720, reporting-judge Justice Marco Aur´elio de Mello, in RTJ 162/1.093. 10. Special Drawing Rights as determined by the International Monetary Fund.

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to an amount not exceeding the equivalent of freight under the multimodal contract (Article 16). The Multimodal Operator will lose the right to limit liability (Article 18) if it is proved that the loss, damage or delay resulted from his personal act or omission committed with malice (intent to cause such loss or damage or reckless conduct with knowledge that such loss, damage or delay would probably result) or gross fault (negligence that is marked by conduct that presents an unreasonably high degree of risk to others and by a failure to exercise even the slightest standard of care). 4. The domestic limitation for multimodal transportation Law 9.611, of 19 February 1998, applies to national multimodal transport of goods. It also applies to international multimodal transport whenever the place of taking in charge or delivery of the goods is located in Brazilian territory (Articles 1 and 2). Only duly registered Multimodal Transport Operators can invoke the application of the Agree­ ment. The liability of the Multimodal Operator (Artic1e 17) is limited to the declared value of the goods lost or damaged, including the cost of freight and insurance. If the consignor has not declared the value of the goods, the Multimodal Operator can limit his liability to an amount not exceeding 666.67 SDR per package or unit, or 2 SDR per kilogram of gross weight of the goods lost or damaged, whichever is the higher (Article 32, §1º). The liability of the Multimodal Operator in respect of loss following from delay, consequential loss or damage other than loss or damage to the goods, is limited to an amount not exceeding the value of the freight under the multimodal contract (Article 17, §2º). The Multimodal Operator loses the right to limit liability (Article 20) if it is proved that the loss, damage or delay in delivery resulted from his personal act or omission committed with malice (intent to cause such loss or damage or reckless conduct with knowledge that such loss, damage or delay would probably result) or gross fault (negligence that is marked by conduct that presents an unreasonably high degree of risk to others and by a failure to exercise even the slightest standard of care).

CHAPTER 11

Canada A. Barry Oland Oland & Co. Vancouver Centre, P.O. Box 11547, 2020 - 650 West Georgia Street, Vancouver, BC V6B 4N7

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

The Canadian approach to Limitation of Liability of Maritime Claims, the Athens Con­ vention and Hague-Visby Rules has been to legislate international conventions into domestic law. Previously, Canadian maritime legislation was contained in the Canada Shipping Act, and the Carriage of Goods by Water Act. Effective 10 August 2001, the Marine Liability Act came into force. It brings together in one statute Canadian law on the following matters: Part Part Part Part Part Part

1: 2: 3: 4: 5: 6:

Personal injuries and fatalities; Apportionment of liability; Limitation of liability for maritime claims; Liability for carriage of passengers by water; Liability for carriage of goods by water; Liability and compensation for pollution damage.

By section 26 of the Marine Liability Act, Articles 1 to 15 of the 1976 Convention on Limitation of Liability for Maritime Claims (‘‘1976 Convention’’) as amended by the 1996 protocol have the force of law in Canada. 1. Persons entitled to limit liability These are as described in the 1976 Convention on Limitation of Liability for Maritime Claims, plus: (1) By section 25(1)(b) of the Marine Liability Act, the meaning of shipowner is as follows: ‘‘The definition of ‘shipowner’ in paragraph 2 of Article 1 of the Convention shall be read without reference to the word ‘seagoing’ and as including any person who has an interest in or possession of a ship from and including its launching.’’

(2) By section 30(1) of the Marine Liability Act, limitation of liability is extended to the owner of a dock, canal or port and to any person for whose act the owner of the dock, canal or port is responsible. 2. Claims subject to limitation These are as described in Article 2 of the 1976 Convention. 199

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3. Claims excepted from limitation These are as described in Article 3 of the 1976 Convention. 4. Conduct barring limitation This is as described in Article 4 of the 1976 Convention. 5. Counterclaims These are dealt with according to Article 5 of the 1976 Convention. 6. Financial limits of liability for all types of claims Limits of liability for vessels over 300 gross tons are those described in Articles 6 and 7 of the 1976 Convention as amended by the 1996 Protocol to amend the Convention on Limitation of Liability for Maritime Claims 1976, concluded at London on 3 May 1996. Through domestic legislation, Canada was one of the first nations to put into force the 1996 Protocol. 7. Units of account used for calculating limitation fund The Unit of Account used is the Special Drawing Right of the International Monetary Fund (SDR). 8. Aggregation of claims This is dealt with according to Article 9 of the 1976 Convention. 9. Limitation of Liability—need to constitute a fund It is not necessary to constitute a fund to plead limitation of liability. 10. Constitution of fund Constitution of the fund is governed by Article 11 of the 1976 Convention. 11. Distribution of fund between claimants Distribution of the fund is dealt with according to Article 12 of the 1976 Convention. 12. Constitution of fund as a bar to other actions This is dealt with according to Article 13 of the 1976 Convention. 13. Governing law in matters of limitation On the matter of governing law Canada has adopted Article 14 of the 1976 Convention, namely that rules relating to constitution and distribution of a limitation fund and all rules

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of procedure are governed by the law of the State Party in which the fund is constituted. Rules of Procedure are dealt with in sections 32, 33 and 34 of the Marine Liability Act. 14. Scope of application—special types of vessel (1) Canada, pursuant to Article 15(2) of the 1976 Convention, has enacted domestic legislation for vessels under 300 tons by section 28 of the Marine Liability Act. The maximum liability of a shipowner on any distinct occasion involving a ship with tonnage less than 300 gross tons, other than vessels used for passenger purposes, is: (a) 2,000,000 units of account for claims for loss of life or personal injury; and (b) CAN. $500,000 in respect of all other claims. (2) Section 29(1) of the Marine Liability Act provides for maximum liability for maritime claims or loss of life or personal injury to passengers on a ship where no certificate is required at: (a) CAN $2,000,000 units of account; (b) the number of units of account calculated by multiplying 175,000 units of account by the number of passengers on board. (3) Section 29(2) of the Marine Liability Act provides a maximum liability for loss of life or personal injury of persons carried on a ship, otherwise then under a contract of passenger carriage in similar terms to section 29(1) 15. Mutual obligation to the other States to permit limitation These are dealt with according to Article 11 of the 1976 Convention. 16. Date of entry into force of the present system of limitation The Canada Shipping Act was amended in August 1998 to bring into Canadian law the 1976 Convention and the 1996 Protocol. The relevant portions of the Canada Shipping Act were repealed when the Marine Liability Act came into force on 10 August 1998. Denunciation of previously ratified Limitation Conventions As Canada has not ratified previous limitation conventions, no denunciation was required.

B. PASSENGERS 1. Special provisions of national law in relation to passenger claims By sections 29(1) and (2) of the Marine Liability Act, Canada has made provision for limitation amounts of a shipowner for claims arising from loss of life, or personal injury to passengers of a small ship and also where persons are carried on a ship as guests, but not under a contract of passenger carriage. These sections are designed to impose the same

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liability upon the shipowner of smaller vessels carrying passengers, or involved in the pleasure vessel trade, as applied by Article 7 of the 1976 Convention amended by the 1996 Protocol. 2. Limitation amounts Canada has adopted the limit for passenger claims provided by Article 7 of the 1976 Convention as amended by the 1996 Protocol. 3. Scope of application By a combination of Article 7 of the 1976 Convention amended by the 1996 Protocol and section 29 of the Marine Liability Act, Canada has dealt with passenger liability for all size of vessel.

C. CARRIAGE OF GOODS BY SEA 1. Adoption of International Convention The Marine Liability Act, Part V carried over in total the Carriage of Goods by Water Act which had come into force on 3 May 1993. The legislation put in place a two-stage process. The Hague-Visby Rules immediately came into force as Part I and remain in force today. The Hamburg Rules were enacted as Part II, but not proclaimed. The Minister of Transport conducted a review in 1999 to determine if the Hamburg Rules ought to be proclaimed. The government concluded that Canada should not adopt the Hamburg Rules. Therefore, Canada remains a Hague-Visby Rules country. 2. Package or unit limitation The package/unit limitation is that of the Hague-Visby Rules, namely 666.67 SDR per package, or 2 SDR per kilo. 3. Financial limits of liability These are defined in Article IV(5)(b) of the Hague-Visby Rules. 4. Loss of right to limit This is governed by Article IV(5)(e) of the Hague-Visby Rules. 5. Scope of Application By the Marine Liability Act, Part V, Section 43 of the Hague-Visby Rules apply to all export shipments from Canada, and to all shipments from one place in Canada to another place in Canada unless there is no bill of lading and the contract stipulates that the Rules do not apply.

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Jurisdiction By section 46 of the Marine Liability Act, if a contract of carriage to which the Hamburg Rules do not apply, provides for adjudication or arbitration of claims arising under the contract in a place other than Canada, the claimant still may institute and maintain judicial or arbitral proceedings in a Court or arbitral tribunal in Canada, provided: (a) the actual port of loading or discharge or the intended port of loading or discharge under the contract is in Canada; (b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or (c) the contract was made in Canada. By section 46 of the Marine Liability Act, Canada has effectively incorporated the substance of Articles 21 and 22 of the Hamburg Rules into domestic law.

CHAPTER 12

Chile Jose Tomas Guzman Hendaya 60, Office 503, Santiago, Chile

INTRODUCTION Rules for limitation of liability are included in the Commercial Code of Chile (Book Three) (the ‘‘Code’’), with the exception of certain specific events such as the refloating, removal or destruction of a sunken, stranded or abandoned vessel including cargo on board, and damage to the environment, which are governed by the Navigation Law. Chilean regulations in relation to claims subject to limitation of liability are inspired by the International Convention signed in Brussels in 1957. With respect to the amount of the limitation fund, the Code follows the lines of the 1976 London Convention. Liabilities concerning passenger claims are treated as in the Athens Convention of 1974.

A. PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY 1. Persons entitled to limit liability The persons entitled to limit liability are: (a) the shipowner (person or corporation, whether or not the proprietor of the vessel, who trades or dispatches it under his name);1 (b) the shipowner’s subordinates, in the cases and for the causes set down by law; (c) the proprietor or operator of the vessel and the carrier, when they are a different person from the owner, their subordinates or the Captain and members of the crew, with respect to claims addressed to them; (d) liability insurers, in the same conditions as the assured.2 2. Claims subject to limitation Liability may be limited in respect of: (a) death or injuries to any person on board the vessel, and for losses, leakages or damage to their goods if they are also on board; (b) death or injuries caused by anyone for whose actions the owner is liable, be they on board or not. If the person who causes the death or injuries was not on board,

1. Code, Article 882. 2. Code, Articles 891, 901 and 902.

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his actions must necessarily be related to the operation and trading of the vessel, or else with the loading, carriage and discharge of the goods carried; (c) loss, leakages or damages to other goods, including the cargo, caused by persons, motives, places and in circumstances as described in part 1, above; (d) any obligation or liability arising from damage caused by a vessel to the port works, docks, inner harbours, and navigable waters.3 3. Claims excepted from limitation Claims are excepted: (a) for salvage or contribution in general average; (b) by the master or any subordinate of the proprietor or owner of the vessel who may be on board or whose functions are related with her service and derive from their respective labour rights. 4. Conduct barring limitation When the claim is addressed to the captain or the crew members, they may limit their liability even when the occurrence which originates the action may have been caused by their own fault, unless it is proved that the damage was the result of their act or omission done with the intent to cause damage, or recklessly and in circumstances from which it may be assumed that they had knowledge that the damage would probably result. However, if the captain or member of the crew is, at the same time, proprietor, joint proprietor, carrier, owner or operator, he may only seek to limit his liability when he has incurred in fault in his capacity as master or as member of the crew.4 5. Counterclaims If the owner of the vessel has a claim against a creditor for damages resulting or by reason of the same event, the respective claims shall be set off and the rules of limitation will only be applicable to the resulting balance.5 6. Financial limits of liability for all types of claim In respect of claims for loss of life or personal injury: (a) 333,000 Units of Account for a ship with a tonnage not exceeding 500 tons. (b) for a ship with a tonnage in excess of 500 tons, the following amount in addition to that set out in (a) above: — in excess of 500 tons up to 3,000 tons, 500 Units of Account per ton; — in excess of 3,000 tons up to 30,000 tons, 333 Units of Account per ton; — in excess of 30,000 tons up to 70,000 tons, 250 Units of Account per ton and — for each ton exceeding 70,000 tons, 167 Units of Account. 3. Code, Article 889. 4. Code, Article 903. 5. Code, Article 894.

P R O P E RT Y D A M A G E , L O S S O F L I F E A N D P E R S O N A L I N J U RY

207

In respect of any other claims: (a) for vessels whose tonnage is up to 500 tons, 167,000 Units of Account. (b) for vessels whose tonnage exceeds 500 tons, the amounts indicated hereunder for each section, in addition to that set out in (a) above: — in excess of 500 tons up to 30,000 tons, 167 Units of Accounts per ton; — in excess of 30,000 up to 70,000 tons, 125 Units of Accounts per ton; — for each ton in excess of 70,000, 83 Units of Account.6 Where the amount calculated in respect of claims for loss of life or personal injury as specified above is insufficient to pay the claims related to loss of life or corporal injuries in full, the unpaid balance in respect of this shall join with the claims referred to above, in respect of other claims. In this case, said balance shall rank rateably with the claims mentioned above, in respect of other claims.

7. Unit of Account When the expression Units of Account is used in the Code, it shall be understood as a reference to the unit called Special Drawing Rights, defined by the International Monetary Fund or its substitute. The value of the SDR shall be calculated according to the method established by the International Monetary Fund in its transactions and operations, upon the date of the fulfillment of the obligation concerned. The value of the Unit of Account will be determined at the time when the limitation fund is constituted, payment is made, or the security which the competent court may fix is constituted, whichever may be the case. The determination of the equivalence of the SDR in Chilean currency shall depend upon the Central Bank of Chile.7

8. Aggregation of claims When the same occurrence gives rise to liability for which the owner has the right to limit as per the rules of the Commercial Code and also by the Navigation Law, and he decides to make use of that right, he will have to constitute the corresponding number of independ­ ent funds, in order that neither the funds nor the claims become confused.

9. Limitation of liability—need to constitute the fund The persons who consider themselves to have a right to limit liability, or the underwriter if appropriate, may appear before the competent court and request that proceedings be commenced to constitute the fund, verify and liquidate the claims and to make the distribution according to law.8

6. Code, Article 895. 7. Code, Article 1244. 8. Code, Article 1210.

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10. Constitution of the fund The request to commence proceedings should indicate the event that caused the loss or damage, the maximum amount of the fund or funds that will be constituted, and the manner in which the fund will be constituted, be this in money or by means of security the sufficiency of which will be decided by the court.9 If the court approves the calculations as complying with the law, it will declare the proceedings initiated, will order the constitution of the fund and will appoint a titular and a deputy trustee to conduct and execute all the proceedings. Once this decision is issued by the court, the trustee will inform all the creditors whose names were included in the request for the constitution of the fund, by registered mail. The trustee will also publish an extract of the same information and the list of claimants in the Official Gazette and in a daily newspaper where the court functions, indicating that the claimants have 30 consecutive days as from the date of the last of these publications in order to verify their claims and attach the substantiating documents. Within this same time limit, any of the claimants may oppose the limitation, alleging that the legal requirements to exercise such right have not been complied with. Also within this period, the claimants may challenge the quantum of the fund.10 11. Distribution of the fund amongst claimants The trustee will prepare a list of claimants with a right to participate in the distribution of the fund and shall propose to the judge the payment of the claims. The distribution shall be done in accordance with the rules on preferences and privileges established in Book Three of the Commercial Code. When there exist disputed claims or a claim has not been proved, the trustee shall make the proportional reserves which he deems prudent, and meanwhile will distribute the rest of the fund.11 12. Constitution of the fund as bar to other action The court shall make a declaration once the fund has been constituted or the security or guarantee accepted concerning its constitution. From the date of said resolution, all enforcement procedures or measures to obtain security against the party who constituted the fund will be suspended in respect of the claims which may be subject to limitation of liability. In the writer’s opinion, according to general rules, such effect will take place when the decision of the court is final. 13. Governing law in matters of limitation As there is no special provision in respect of these matters, general rules applicable to claims are also applicable to their system of limitation of liability.

9. Code, Article 1213. 10. Code, Articles 1220 to 1222. 11. Code, Articles 1224 and 1225.

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14. Date of entry into force of present system of limitation The Commercial Code in its present wording has been in force since 12 July 1988 except for Articles 984 and 987 concerning contracts for the carriage of goods by sea, which have been compulsory since 1 November 1992. 15. Removal of wrecks and damage to environment The obligations and liabilities relating to the refloating, removal, destruction or elimina­ tion of the danger represented by a sunken, shipwrecked, stranded or abandoned vessel, including the cargo and other items which may be or have been onboard the same, and damage to the environment, are excepted from the above regulations of limitation of liability, and are instead regulated by Navigation Law (Decreto Ley No 2.222).12 In the case of pollution caused by the spillage of hydrocarbons, or other damaging substances, the Navigation Law permits the owner, proprietor or operator of a vessel or naval appliance, to limit liability for damages in each casualty up to a maximum in local currency equivalent to 2,000 francs per ton registered by the ship or naval appliance with a maximum of 210 million francs. The benefit is lost if the casualty has been caused by fault or neglect of the proprietor, owner or operator of the vessel.13 The procedure for the constitution and distribution of the limitation fund in these cases will be the same one regulated by the Commercial Code and mentioned above in part 10.14

B. PASSENGERS In case of loss of life or personal injury to passengers, the maximum limit of liability of the carrier shall be determined by multiplying the sum of 46,666 Units of Account by the number of passengers that the ship is authorised to carry. The maximum liability shall not exceed 25 million Units of Account. Whenever there is more than one claimant, the maximum limit for each shall be determined by dividing the total amount resulting from the application of the rules in the preceding paragraph, by the number of claimants.15

C. CARRIAGE OF GOODS BY SEA 1. Adoption of International Conventions In 1982 Chile ratified the United Nations Convention on the Carriage of Goods by Sea, signed in Hamburg on 1978 (The Hamburg Rules) and incorporated most of it into the Commercial Code which, together with other modifications in relation to Maritime Trade, has been in force since 12 July 1988. 12. Code, Article 890. 13. Navigation Law, Article 145. 14. Code, Article 1230. 15. Code, Article 1065.

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2. Package or unit limitation (a) The liability of the carrier for damages arising from the loss or from the damage to goods shall be limited to a maximum equivalent to 835 Units of Account per package or other cargo unit carried, or to 2.5 Units of Account per kg gross weight of the damaged or lost goods, whichever is the higher. (b) Liability of the carrier for delay in delivery of the goods shall be limited to a sum equivalent to 2.5 times the freight due on the goods which have suffered delay, but shall not exceed the total freight which is due to be paid by virtue of the respective contract for carriage of goods by sea. (c) In no case shall the aggregate liability of the carrier under paragraphs (a) and (b) exceed the limits determined by virtue of paragraph (a) for the total loss of the goods in respect of which the liability has been incurred.16 The above limits of liability do not include interest accrued on the sum assessed by way of damages or judicial costs.17 3. Loss of right to limit The carrier is not entitled to the benefit of limitation of liability if it is proved that the loss, damage or delay in delivery resulted from an act or omission of the carrier with the intent of causing such loss, damage or delay or recklessly and in circumstances in which it may be presumed that he had knowledge that the loss, damage or delay would probably result. When claims are addressed against an employee or agent of the carrier, they may invoke the same defences and limits of liability as the carrier, provided that they prove that they have acted in the exercise of their duties. Notwithstanding this, the subordinates or agents of the carrier are not entitled to the benefit of the limitation of liability if it is proved that the loss, damage or delay in delivery resulted from their act or omission done with the intent to cause such loss, damage or delay, or recklessly and in circumstances in which it may be presumed that they had knowledge that the loss, damage or delay would probably result.18 4. Scope of application Without prejudice to treaties and international conventions in force in Chile, these rules are applicable to all the contracts of carriage of goods by sea, provided that: (a) the port of loading or discharge foreseen in the contract of carriage by sea is situated within national territory; or (b) the bill of lading or other document which serves as proof of the contract of carriage, stipulates that the contract shall be ruled by the provisions of this paragraph; or (c) one of the optional ports of discharge foreseen in the contract of carriage is the actual port of discharge and that this is located within national territory. 16. Code, Articles 992, 993 and 994. 17. Code, Article 995. 18. Code, Articles 1001 and 1002.

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These provisions shall be applied notwithstanding the nationality of the vessel, the carrier, the actual carrier, the shipper, the consignee or any other interested party.19 5. Effect of stipulations in the contract of carriage All stipulations of the contract of maritime transport contained in the bill of lading or in any other document which serves as proof of it, and which differ directly or indirectly from the rules provided for the same contract in the Commercial Code shall be void and ineffective. Notwithstanding this, the carrier may increase the liability and obligations which correspond to him according to the legal provisions.20 6. Application to non-contractual terms The above-mentioned exemptions and limits of liability are applicable in any action against the carrier in respect of loss or damage to the goods covered by the contract of carriage by sea, as well as of delay in delivery, whether the action is founded in contract liability, in tort or in some other cause.21

19. Code, Articles 979 and 980. 20. Code, Article 1039. 21. Code, Article 998.

CHAPTER 13

People’s Republic of China Gao Sunlai China Maritime Arbitration Commission, 6th Floor, Golden Land Building, 32 Liang Ma Qiao Road, Beijing 100016, China.

A. LIMITATION OF LIABILITY—PROPERTY DAMAGES, LOSS OF

LIFE AND PERSONAL INJURY

1. Persons entitled to limit liability Those who are entitled to limit liability are shipowners (including charterers and opera­ tors), salvors, and persons for whose act, neglect or default the shipowner or salvors is responsible. Where an assured may limit his liability, the insurer shall be entitled to the same limitation as the assured. 2. Claims subject to limitation Claims in respect of the following are subject to limitation: (a) loss of life or personal injury and loss of or damage to property (including damage to harbour works basins and waterways and aids to navigation occurring on board or in direct connection with the operation of the ship or with salvage operations), as well as consequential damages resulting therefrom; (b) loss resulting from delay in delivery in the carriage of goods by sea or from delay in the arrival of passengers or their luggage; (c) other loss resulting from infringement of rights other than contractual rights occurring in direct connection with the operation of the ship or salvage opera­ tions; (d) claims of a person other than the person liable in respect of measures taken to avert or minimise loss for which the person liable may limit his liability. 3. Claims excepted from limitation Claims excepted from limitation are: (1) for salvage payment or contribution in general average; (2) for pollution damage under the International Convention on Civil Liability for Oil Pollution Damage to which the People’s Republic of China is a party; (3) for nuclear damage under international conventions on limitation of liability for nuclear damage to which the People’s Republic of China is a party; (4) against the shipowner of a nuclear ship for nuclear damage; (5) by the servants of the shipowner or salvor, if under the law governing the contract of employment, the shipowner or salvor is not entitled to limit his liability or if he is by such law only entitled to limit his liability to a greater amount. 213

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4. Conduct barring limitation A person liable shall not be entitled to limit his liability, if it is proved that the loss resulted from his act or omission done with the intent to cause such loss or recklessly and with knowledge that such loss would probably result. 5. Counterclaims Where a person entitled to limitation of liability has a counterclaim against the claimant arising out of the same occurrence, their respective claims shall be set off against each other and the limitation shall only apply to the balance, if any. 6. Financial limits of liability for all types of claim Except for claims in respect of carriage of passengers by sea, the limitation of liability shall be calculated as follows: (1) In respect of claims for loss of life or personal injury: (a) 333,000 Units of Account for a ship with a gross tonnage ranging from 300 to 500 tons; (b) for a ship with a gross tonnage in excess of 500 tons, the limitation under (a) above shall be applicable to the first 500 tons, and the following amounts in addition to that set out under (a) shall be applicable to the gross tonnage in excess of 500 tons: — for each ton from 501 to 3,000 tons: 500 Units of Account; — for each ton from 3,001 to 30,000 tons: 333 Units of Account; — for each ton from 30,001 to 70,000 tons: 250 Units of Account; — for each ton in excess of 70,000 tons: 167 Units of Account. (2) In respect of claims other than that for loss of life or personal injury: (a) 167,000 Units of Account for a ship with a gross tonnage ranging from 300 to 500 tons; (b) for a ship with a gross tonnage in excess of 500 tons, the limitation under (a) above shall be applicable to the first 500 tons, and the following amounts in addition to that set out under (a) shall be applicable to the part in excess of 500 tons: — for each ton from 501 to 30,000 tons: 167 Units of Account; — for each ton from 30,001 to 70,000 tons: 125 Units of Account; — for each ton in excess of 70,000 tons: 83 Units of Account. (3) Where the amount calculated in accordance with (1) above is insufficient for payment of claims for loss of life or personal injury set out therein in full, the amount calculated in accordance with (2) above shall be available for payment of the unpaid balance of claims under (1) above, and such unpaid balance shall rank rateably with claims set out under (2) above. (4) However, without prejudice to the right of claims for loss of life or personal injury, claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have priority over other claims under (2) above. (5) The limitation of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which, he is rendering

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salvage services, shall be calculated according to a gross tonnage of 1,500 tons. 7. Unit of account used for calculating limitation fund The Unit of Account is the Special Drawing Right as defined by the International Mone­ tary Fund. 8. Aggregation of claims The limitation of liability shall apply to the aggregate of all claims that may arise on any given occasion against shipowners and salvors themselves, and any person for whose act, neglect or fault the shipowners and the salvors are responsible. 9. Limitation of liability—need to constitute fund Constitution of a limitation fund is not a prerequisite for limitation of liability. 10. Constitution of fund Any liable person claiming the limitation of liability may constitute a limitation fund with a court having jurisdiction. The fund shall be constituted in the sum of such of the amounts calculated in accordance with Part 6 above, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. 11. Distribution of fund amongst claimants There being no express provisions of law, the general view is that, subject to part 6 above, paragraphs (1) to (4), the fund shall be distributed among the claimants in proportion to their established claims which are subject to limitation. 12. Constitution of fund as bar to other actions Where a limitation fund has been constituted by a liable person, any person having made a claim against the liable person may not exercise any right against any assets of the liable person. Where any ship or other property belonging to the person constituting the fund has been arrested or attached, or, where a security has been provided by such person, the court shall order without delay the release of the ship arrested or the property attached or the return of the security provided. 13. Governing law in matters of limitation The law of the place where the court hearing the case is located shall apply to the limitation of liability for maritime claims.

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14. Scope of application—special types of vessel The limitation of liability for ships with a gross tonnage from 20 to 300 tons and those engaging in transport services between the ports of the People’s Republic of China as well as those for other coastal works is subject to special regulations promulgated by the Ministry of Communications with the approval of the State Council. 15. Mutual obligations to other States to permit limitation China has no such obligations. 16. Date of entry into force of present system of limitation The present system entered into force on 1 July 1993. 17. Denunciation of previously ratified Limitation Conventions China has not previously ratified or acceded to any conventions. B. PASSENGERS 1. Special provisions of national law in relation to passenger claims These are discussed in part 3, below. 2. Limitation amounts In respect of claims for loss of life or personal injury to passengers carried by sea, the limitation of liability shall be an amount of 46,666 Units of Account multiplied by the number of passengers which the ship is authorised to carry according to the ship’s relevant certificate, but the maximum amount of compensation shall not exceed 25 million Units of Account. The limitation of liability of the carrier under each carriage of passengers by sea shall be: (1) for death of or personal injury to the passenger: not exceeding 46,666 Units of Account per passenger; (2) for loss of or damage to the passengers’ cabin luggage: not exceeding 833 Units of Account per passenger; (3) for loss of or damage to the passengers’ vehicles including the luggage carried therein: not exceeding 3,333 Units of Account per vehicle; (4) for loss of or damage to luggage other than those described in (2) and (3) above: not exceeding 1,200 Units of Account per passenger. 3. Scope of application The limitation of liability for claims in respect of carriage of passengers by sea between the ports of the People’s Republic of China is subject to special regulations promulgated by the Ministry of Communications with the approval of the State Council.

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C. CARRIAGE OF GOODS BY SEA 1. Adoption of International Conventions China has not acceded to any of the international conventions on carriage of goods by sea. 2. Package or unit limitation In respect of liability for loss of or damage to the goods, the carrier is entitled to per package or unit or per kilogramme (gross weight) limitation, whichever is the higher. 3. Financial limits of liability In respect of liability for loss of or damage to the goods the limit is 666.67 Units of Account per package or other shipping unit, or 2 Units of Account per kilogramme, gross weight of the goods, whichever is the higher. In respect of liability for the economic losses resulting from delay in delivery of the goods the limit is an amount equivalent to the freight payable for the goods of which delivery was delayed. 4. Loss of right to limit The carrier shall not be entitled to the benefit of the limitation of liability if it is proved that the loss or damage or delay resulted from an act or omission of the carrier done with the intent to cause such loss or damage or delay or recklessly and with knowledge that such loss or damage would probably result. 5. Scope of application The limitation set out above is not applicable to liability in respect of carriage of goods by sea between the ports of the People’s Republic of China.

CHAPTER 14

Croatia Prof. Dr. Hrvoje Kacic Law Office Kacic, Petrova 48A, 10000 Zagreb

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

Introduction Croatia has ratified the Convention on Limitation of Liability for Maritime Claims 1976 (1976 Convention) and has been considered a Contracting State. The Croatian Parliament promulgated the Maritime Code on 8 December 2004 and it became effective from 29 December 2004. Part 6 of the Croatian Maritime Code (hereinafter MC) devotes section 1 to substantive issues concerning the limitation of the shipowner’s liability and section 2 to limitation proceedings.

1. Persons entitled to limit liability Responsibility for any activity in connection with a vessel and all relevant maritime adventures is vested in the ship operator and the provision of Article 385 of the MC 2004 establishes the ship operator as liable for obligations arising out of the navigation and the employment of the ship. The ship operator (entrepreneur) includes the shipowner, the charterer and the manager of the sea-going ship. The salvor, as defined in the 1976 Convention, is also identified as a person entitled to limit his liability. The master, crew members and other persons engaged by the ship operator in respect of maritime adventure are also listed as entitled to limit their liability.

2. Claims subject to limitation Claims defined in Article 2 of the 1976 Convention are incorporated in Article 388 of the MC 2004.

3. Claims excepted from limitation All claims listed in Article 3 of the 1976 Convention as being exempt from limitation are identified in Article 389 of the MC 2004. Furthermore, under Croatian Law, the operator or the shipowner is not entitled to limit liability for damages resulting from loss of life or personal injury of persons employed. 219

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4. Conduct barring limitation The operator or shipowner who incurs liability is barred from limiting his liability if the loss resulted from his personal act or omission, committed with intent to cause such loss, or recklessly, with knowledge that such loss would probably result. 5. Counterclaims In a case where a person entitled to limit liability has a counterclaim against a third party claimant, arising out of the same occurrence, there will be a set off of the claim against the counterclaim and only the balance, if any, remaining outstanding may be ranked for compensation against the established limitation fund. 6. Financial limits of liability The general limits expressed in Units of Account by reference to the relevant gross tonnage of the ship concerned as elaborated in Articles 6 and 7 of the 1976 Convention are reproduced exactly in Articles 391 and 394 MC 2004 respectively. 7. Units of account For calculation of a limitation fund, the Units of Account are the Special Drawing Rights as defined by the International Monetary Fund which shall be converted into the Croatian Kuna, at the rate of exchange prevailing at the National Bank of Croatia on the date of constitution of the fund. 8. Aggregation of claims Solutions as provided by Article 9 of the 1976 Convention are fully incorporated in Article 394 of the MC 2004. 9. Constitution of fund The ship operator has the option to constitute a fund, but nevertheless the ship operator may invoke the benefits of limitation of liability, without setting up a limitation fund in advance. 10. Distribution of fund The fund shall be distributed or claims settled among creditors in proportion to their established claims against the limitation fund. Croatian law acknowledges also a right of subrogation to those, including insurers, if and when genuine claims against the fund have been compensated, but only to the extent of permissible subrogation. 11. Bar of other actions Once the limitation fund has been constituted, all persons that have submitted any claim are barred from exercising any right or action in respect of such a claim against any other

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assets belonging to a person by or on behalf of whom the fund has been constituted. Furthermore, once the limitation fund has been constituted, any ship or other property or security given, belonging to the person entitled to enjoy protection of the constituted fund, must have his assets released. In a case where the limitation fund has been constituted abroad the domestic court may decide in its discretion to release the relevant property seized or the security given. Such a release becomes compulsory if and when the limita­ tion fund has been constituted: (a) in the port of occurrence or, if the event has taken place outside port, in the subsequent port; or (b) in the port of discharge for claims resulting out of loss of life or personal injuries; or (c) in the port of discharge in respect of cargo damage; or (d) in the State where the arrest is made. 12. Governing law On matters concerning the limitation of liability the governing law will be the law of the ship’s nationality. However, Croatian law will be applied if the provisions of the MC 2004 are stricter than the law of the State of the ship’s nationality. 13. Application to special types of vessel Limitation of liability is also applicable to owners of small boats, although a boat is considered for limitation purposes as though it were a ship of 500 tons gross. In respect of warships, limitation of liability may be invoked provided that the capacity of the warship is determined in terms of displacement, that is, one ton gross will be considered as equal to two tons of displacement. Limitation of liability does not apply to hydrofoils and rigs/platforms engaged in research and exploitation of natural resources of the sea-bed and its subsoil. 14. Denunciation of previously ratified limitation conventions As Croatia did not ratify any of the previous limitation of liability conventions, the question of denunciation does not arise. B. PASSENGERS 1. Adoption of international conventions Croatia is a contracting State to the Convention relating to the Carriage of Passengers and their Luggage by Sea, and to its 1990 Protocol, representing universally accepted prin­ ciples of Maritime Law. 2. Limitation amounts For claims resulting from loss of life or personal injury of passengers on board, the MC 2004 provides the limit of the ship operator’s liability to be 175.000 units of Special

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Drawing Rights multiplied by the number of passengers the ship is permitted to carry according to the ship’s register. 3. Scope of application For application of limitation of liability a passenger is defined as a person on board the ship either under a contract for carriage of passengers or for persons on board the ship with the consent of the operator for the purpose of accompanying a vehicle or live animals contracted to be transported.

C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions As Croatia is a successor state after the dissolution of the former Yugoslavia, the Bill of Lading Convention 1924 is observed with all compulsory standards incorporated in the MC 2004 as implemented by the Hague Rules in respect of liability for loss or damage to the cargo. Following introduction of provisions as provided by both the Visby Rules (1968 Protocol) and the 1979 Protocol to the Hague Rules in the MC 2004, Croatia has ratified both Protocols to the Hague Rules in 1995. 2. Package or unit limitation The package and unit limitation are as provided by the Hague Rules and Protocols. 3. Financial limits of liability Claims under the Hague-Visby Rules are also made subject to the global (overall) limits of liability as provided for property claims. 4. Loss of right to limit Croatian law follows the above-mentioned provisions of the International Conventions in respect of loss of right to limit liability for cargo received for transport. 5. Scope of application All provisions connected with issues relating to loss, damage or delay in delivery of cargo, including limits of liability, remain applicable when any case or dispute is governed by Croatian law. Furthermore, application of the Hague Rules is not restricted only to situations where a bill of lading is issued. Carriers or operators or owners carrying goods under all types of charterparties remain responsible for loss of and damage to the goods resulting from failure to exercise due diligence.

CHAPTER 15

Denmark Bent Nielsen Kromann Reumert, Sundkrogsgade 5, DK-2100 Copenhagen Ø

LIMITATION OF LIABILITY FOR MARITIME CLAIMS Introduction The Danish rules on limitation of liability for maritime claims are contained in the Danish Merchant Shipping Act 1994 (DMSA). Denmark has ratified the 1996 Protocol to the 1976 Limitation Convention (henceforth the 1996 Protocol). It was given binding effect in Denmark as of 1 January 2004 but since Denmark was still bound by the 1976 LLMC at the time, it was made applicable only to ships not subject purely to the 1976 LLMC, that is, where limitation proceedings are issued in Denmark in relation to Danish ships, ships from states that have ratified the 1996 Protocol (also where these are parties to the 1976 LLMC too) and ships from countries which have not ratified either the 1976 or the 1996 Protocol, and cannot show that the limitation regime applicable in their home state is similar to these conventions. Denmark has now denounced the 1976 LLMC, however, and the denunciation came into force on 1 April 2005. As of that day, the 1996 Protocol has applied to all vessels. Denmark has also ratified the Hague-Visby Rules. The rules in the DMSA on global limitation and limitation of liability for carriage of goods are based on these Conventions. The rules on limitation of liability for carriage of passengers and luggage are based on the Athens Convention of 1974 and the Protocol of 1990. Denmark has, however, applied higher limits of liability and has not ratified the Athens Convention and protocol. It is not felt necessary here to deal with the rules of Danish law where they are mainly the same as in the said Conventions, but rather with particular problems in the application of those rules, and with some supplemental provisions to the rules of the Conventions where these occur. Many of the comments below are based upon a report (Betaenkning) No. 924 of 1981 prepared by the Governmental Maritime Law Committee which drafted the limitation rules of the DMSA. This report is considered an important travaux preparatoires. 1. Persons entitled to limit liability The wording of the 1996 Protocol Article 1(2) ‘‘Charterer, Manager and Operator . . . ’’ is considered to have a very broad application. Thus, ‘‘charterer’’ includes not only a time or a voyage charterer, but also a shipper of goods in liner service to the extent the damage has occurred on board the vessel and in connection with the operation of the ship. Further, such a charterer can limit his liability for claims by other cargo owners, the owners of the ship and also claims (in tort) by third parties. 223

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The DMSA provides that warships and other ships in non-commercial service cannot limit the liability if the loss or damage is due to the vessel’s particular capabilities and use. Therefore, for example, a submarine is not entitled to limitation for collision damage caused while it is submerged. Warships are deemed to have a minimum tonnage for limitation purposes as mentioned below. Mobile platforms and mobile offshore units are considered entitled to limit liability under the 1996 Protocol. As mentioned below, the financial limits are higher when such platforms or units are on location engaged in exploitation or production. Denmark has made use of the right to provide for specific rules of limitation governing vessels below 300 tons. The limit applicable to those vessels is SDR 500,000. 2. Claims subject to limitation Denmark has not excluded the application of the 1996 Protocol, Article 2(1)(d) and (e). Thus, claims in respect of wreck removal including the removal and rendering harmless of cargo are subject to limitation. 3. Claims excepted from limitation The DMSA makes it clear that claims for payment due under a contract with respect to such measures as mentioned in the 1996 Protocol, Article 2(1)(d)(e) and (f) (for example, wreck removal or preventive measures) are not subject to limitation. The DMSA provides expressly that the exception of claims for oil pollution damage under the 1996 Protocol Article 3.b. applies only in situations where the owner is entitled to limitation under the CLC and CLC protocols. Thus, oil pollution damage, for which the foreign court having jurisdiction over the oil pollution aspects of an incident holds that there is no limitation or limitation in accordance with other rules than those of CLC, are subject to 1996 Protocol limitation under Danish law. In other words, if in such a case the owner establishes a limitation fund in Denmark, other claims arising out the incident (e.g. for collision damage) must share the fund proportionally with owners’ subrogated claims for oil pollution. It is understood that this rule differs from the legislation of other countries, including Norway and the United Kingdom. Denmark has not availed itself of the possibility in Article 15 to exclude vessels from states which have not ratified either the LLMC 1976 or 1996 Protocol from limiting liability in accordance with the DMSA. Finally, the DMSA provides that claims for interest and costs are not subject to limitation. This has specific relation to the fact that the DMSA permits limitation of liability without constitution of a limitation fund. 4. Conduct barring limitation There are no reported Danish judgments holding that owners are barred from limitation under the 1996 Protocol Article 4, nor such judgments with respect to the similar provi­ sion in the Hague-Visby Rules or the Athens Convention. This seems to confirm that the owners’ right of limitation must be considered almost ‘‘unbreakable’’.

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5. Financial limits of liability Denmark has not used the possibility under the 1996 Protocol Article 6(3) of providing in its national law that claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have priority. The DMSA provides that ships of war or other vessels of the State employed exclu­ sively in non-commercial service are deemed to have a tonnage of not less than 5,000 tons. Irrespective of the size of the platform or unit, the financial limit for damage caused by platforms or mobile offshore drilling units on location engaged in exploitation and in production is 32 million SDRs in respect of claims for loss of life or personal injury, and 20 million SDRs for other claims. If the platform or other unit is not on site working (e.g. if it causes damage while under tow), the financial limit is as in the 1996 Protocol. 6. Limitation of liability—need to constitute fund As mentioned, the DMSA permits limitation of liability without the constitution of a limitation fund. In this case the DMSA provides that the court shall only take into account the claims which have been lodged in the litigation before the court. However, if the owner so demands, a reservation shall be made in the judgment, according to which other claims subject to the same limitation may be paid out of the limitation sum. A judgment containing such a reservation, can, however, be enforced without regard to the reservation unless the owners at that time have constituted a limitation fund. Under the Danish law relating to legal interest, interest will very often start to accrue from a date later than that of the incident. It is possible however, that Danish courts will hold that an owner who limits without constitution of a limitation fund must add interest of the fund from the date of the incident, although the most recent court practice on this issue came to the result that only legal interest had to be paid. 7. Constitution of fund In Denmark, a limitation fund can only be established at the Maritime and Commercial Court in Copenhagen even if legal proceedings are instituted in other Danish courts in respect of claims subject to limitation. The Maritime and Commercial Court has accepted that the fund is established by a P. & I. Club letter from Scandinavian clubs, and clubs that are members of the Inter­ national Group. However, if a claimant protests, there is no authority as to the extent that letters from recognised clubs are acceptable, in particular if the club is domiciled outside EU and EFTA. The DMSA contains rather detailed rules about the establishment of the limitation fund and its distribution. It provides, for example, that the party who institutes the fund must submit a list of possible claimants as well as a statement indicating the background for the establishment of the fund. The court’s decision about the size of the fund as well as the acceptability of any letter of guarantee can be appealed to the Supreme Court. Further, during the later proceedings the Maritime and Commercial Court can also amend its decision in this regard. The fund is deemed established when the court has granted the application for the establishment of

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the fund by decree and the funds or security required by the court in the decree has been provided. The court shall issue a notice about the establishment of the fund in the official Danish Gazette inviting claimants to lodge their claims within a certain period of time, which must not be less than two months. If required, this notice must also be published in other States where loss or damage may have occurred. Further, the notice must be sent by registered post to all known claimants.

8. Distribution of fund amongst claimants The Maritime and Commercial Court may appoint an average adjuster or another admin­ istrator of the fund when the period of time fixed by the court within which claims must be lodged against the fund has expired. The court, upon the request of any claimant or other party, shall fix a hearing to which all interested parties must be summoned. In this hearing the court shall (provisionally or finally as the case may be) consider questions with respect to the basis for liability, the right to limit and the size of the fund. Any such questions will have to be decided by judgment of the court in accordance with the rules of civil procedure, that is, after usual litigation. When all disputes have been decided, the court must decide, by judgment, the distribu­ tion of the fund between the claimants. This distribution shall be made even if the court has held that there is no right to limitation, in which case the court, upon the request of a party, can issue judgment for that part of the claim which has not been paid out of the fund. The court’s final judgment about distribution of the fund is binding for all possible claimants against the fund, even if they have not lodged their claim. The Maritime and Commercial Court’s judgments or decisions can be appealed to the Supreme Court.

9. Carriage of goods As mentioned, Danish law is based upon the Hague-Visby rules. Accordingly, the limita­ tion for loss or damage to cargo follows these rules. The carrier’s liability for delayed delivery of the goods is limited to an amount equal to 2.5 times the freight that has to be paid for the delayed goods. The liability for delayed goods may, however, not exceed the total freight of the transport agreement. It should however be noted that the damages on account of the goods being lost or damaged shall be calculated on the basis of the normal value of goods of the same kind and the place and time at which the goods were or should have been delivered according to the contract. If a cargo of 10,000 kg bananas is delayed, and damaged as a result of the delay, the limitation rules concerning damage to the goods will apply. The limitation amount will thus be 20,000 SDRs unless a higher unit limitation amount applies. If a cargo of Christmas candy is delayed and thereby does not reach the stores until after Christmas, and an economic loss is suffered as a result, the limitation rules concerning delay will apply. If four containers, each with 4,000 kg of Christmas goods, were trans­ ported under one contract of carriage and the total freight amount was USD 12,000 (4 ×

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USD 3,000) and one of the containers was delayed, resulting in a loss of USD 15,000, then the limitation should be calculated as follows: 2.5 × freight of the delayed goods USD 3,000 = USD 7,500 10. Carriage of passengers and luggage The carrier’s liability for personal injury shall not exceed 175,000 SDRs for each pas­ senger. For delay to the passengers, the liability shall not exceed 4,150 SDRs for each passenger. For damage to, or loss of or delay to luggage, the liability shall not exceed: (1) 1,800 SDRs for each passenger with respect to hand luggage; (2) 6,750 SDRs for each passenger with respect to valuables which the carrier has received for safe storage; (3) 10,000 SDRs for any vehicle; and (4) 2,700 SDRs for each passenger with respect to other luggage. The limitation amount shall apply per voyage. A higher limitation amount may be agreed between the carrier and the passenger. The carrier is entitled to a deductible from the damages in an amount not exceeding the following: (1) 150 SDRs for each damaged vehicle; (2) 20 SDRs for each damaged luggage; and (3) 20 SDRs for loss due to delay to a passenger or his luggage. Denmark is currently considering ratification of the 2002 Protocol to the Athens Con­ vention.

CHAPTER 16

Finland Peter Wetterstein Department of Law, Abo Akademi University, Gezeliusgatan 2, FIN-20500 Turku/Abo

INTRODUCTION Finland denounced the LLMC 1976 (Convention on Limitation of Liability for Maritime Claims, 1976) with effect from 13 May 2004. The present rules on limitation of liability for maritime claims entered into force on the same day and they are based on the Protocol of 1996 to amend the LLMC 1976. The rules have been incorporated into the Finnish Maritime Code (FMC) of 1994 (chapter 9).

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

1. Persons entitled to limit liability According to the FMC chapter 9 §1 the operator of a vessel, that is, the person who equips a vessel, supplies it with the crew and uses it in shipping, shall be entitled to limit his liability. This applies also to an owner of a vessel who does not operate the vessel (e.g., in cases of bare boat chartering, hire of vessel), to a person who manages the vessel in the operator’s place, to a charterer, sender of goods and to any one performing services directly connected with salvage. Furthermore, if liability is asserted against any person for whom the vessel’s operator or any other person referred to above is responsible (vicarious liability, covering also faults by pilots), this person shall also have the right to limit his liability according to the provisions of chapter 9. Finally, anyone responsible on account of an insurance contract for a claim which is subject to limitation shall be entitled to limit his liability to the same extent as the assured. This provision may be relevant in ‘‘direct action’’ situations.

2. Claims subject to limitation The FMC chapter 9 §2 provides that there exists a right to limitation of liability, regardless of the basis of liability, for claims on account of: (a) personal injury or damage to property (including economic losses which are consequential upon damage to the claimant’s person or property), if the injury or damage has arisen on board the vessel or in direct connection with its operation or with salvage operations; 229

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(b) loss resulting from delay in the carriage by sea of goods, passengers or their luggage; (c) other loss resulting from infringement of rights other than contractual rights occurring in direct connection with the operation of the vessel or with salvage operations. A Finnish court would presumably grant a right of limitation in respect of claims for pure economic loss, that is, economic loss unconnected with personal injury or property damage. For instance, such losses may affect fisher­ men, ferry operators, hoteliers, restauranteurs, etc., as a result of environmental impairment. Furthermore, because the present provision does not differentiate between infringement of private/public rights, claims for damage to the environ­ ment per se, for example, damage to species of flora and fauna, to food chains in the environment, etc. (res communis omnium), also seem to be covered; (d) measures for the raising, removal, destruction or rendering harmless of a vessel which is sunk, stranded, abandoned or wrecked, including anything that is or has been on board; (e) measures for the removal, destruction or rendering harmless of the cargo of the vessel, for example, hazardous chemicals; and (f) measures taken in order to avert or minimise losses for which limitation of liability apply and losses caused by such measures. It may be noted that the writing of this provision does not exclude costs incurred by the person liable. However, this rule should be interpreted in conformity with Article 2(1)(f) of the LLMC 1976, that is, such claims of the person liable should be excluded from limitation. 3. Claims excepted from limitation According to the FMC chapter 9 §3 the right of limitation of liability shall not apply to: (a) claims for salvage or contribution to general average or any contractual claim for payment in respect of measures referred to in the preceding section under sub­ paragraphs (d) to (f); (b) claims for oil pollution damage covered by the FMC chapter 10 §2, sub-para­ graph 1. Consequently, claims for oil pollution damage, including bunker spills, which are not covered under the Protocol of 1992 to Amend the International Convention on Civil Liability for Oil Pollution Damage, 1969, are subject to limitation; (c) claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage; (d) claims in respect of nuclear damage caused by a nuclear vessel; (e) claims on account of damage or injury caused to the master, any member of the crew or pilot, or to any other person while performing work in the vessel’s service on the order of the operator or master. Excluded from limitation also are such claims by other persons whose duties are connected with the operation of the vessel or salvage operations and (f) claims for interest or compensation for legal costs.

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4. Conduct barring limitation A person liable is not entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with intent to cause such loss, or recklessly and with knowledge that such loss would probably result (FMC chapter 9 §4). In Case 1993 II 166 the Finnish Supreme Court held that gross negligence without knowledge of the probability of the resulting cargo damage did not deprive the carrier of his right to limit his liability. As regards the question of identification, that is, the question as to what person or persons and what bodies can be attributed to the operator (or other person liable) so that he loses his right to limitation of liability, there are few court cases. However, in Finnish legal literature1 it has been recommended that identification should be with those bodies that constitute a company’s management, such as the board of directors and the managing director, for example. This applies both to ‘‘individual’’ and ‘‘corporate’’ operators. Fur­ thermore, identification should be with persons in executive positions with an independent status and empowered to represent the company and make agreements on its behalf. Special attention in such cases should be attached to questions of risk, for example, supervision of the vessel’s seaworthiness. Identification is not usually with the master and crew of the vessel.2 5. Counterclaims The FMC chapter 9 §2, paragraph 2 provides that if a person entitled to limitation of liability has a counterclaim against the claimant and the claim and counterclaim have arisen out of the same event, the limitation shall apply only to that part of the claim which exceeds the counterclaim (the ‘‘single liability’’ principle). 6. Financial limits of liability for all types of claim The FMC chapter 9 §5 has adopted the liability limits in Articles 3 and 4 of the 1996 LLMC Protocol. The vessel’s gross tonnage is calculated in accordance with the tonnage measurement rules contained in Annex I to the International Convention on Tonnage Measurement of Ships, 1969. 7. Unit of account used for calculating limitation fund According to the FMC chapter 9 §5, sub-paragraph 1, ‘‘Special Drawing Right’’ (SDR) is used as a Unit of Account. FMC chapter 23 §2 specifies that SDR refers to the special drawing rights used by the International Monetary Fund. Conversion of SDR into Finnish currency shall be made according to the rate of the day when payment is made, or, if security is lodged for the payment, when the security was lodged. The value of the euro (EUR) shall be determined according to the calculation method used on the same day by the International Monetary Fund for its business and transactions.

1. P. Wetterstein, 1980. 2. See for example, ND 1983 page 82, Helsinki Court of First Instance.

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8. Aggregation of claims The limits of liability concern the aggregate of all claims arising out of any distinct occasion against the vessel’s operator, non-operating owner, manager, charterer or sender of goods and against anyone for whom these persons are responsible. This rule applies also to salvors not operating from a vessel or operating entirely from the vessel which is subject to the salvage.

9. Limitation of liability—need to constitute fund If, on account of a claim subject to limitation, suit has been brought or arrest or other legal proceedings have been instituted in Finland, a limitation fund may be constituted. The fund shall be constituted with the Maritime Court where the suit has been brought, or else with the Maritime Court competent for the place where arrest or other legal action has been applied for. According to the FMC chapter 9 §9, limitation of liability may be invoked notwith­ standing that a limitation fund has not been constituted. If suit has been brought concern­ ing a claim subject to limitation of liability and if a limitation fund has not been constituted, the court in applying the provisions of chapter 9 shall take account only of the claim concerned in the lawsuit. If the defendant wants any other claim subject to the same liability amount to be considered with regard to limitation of liability, a reservation to that effect shall be made in the judgment. Furthermore, if a limitation fund has not been constituted, the parties may submit the question of the amount of the limitation of liability and the distribution to decision by an average adjuster.

10. Constitution of fund According to the FMC chapter 9 §7, a limitation fund shall be deemed to have been constituted with effect for all persons who can claim limitation of liability. It is intended for payment only of claims of the kind to which limitation of liability applies. After a limitation fund has been constituted in Finland, suit regarding a claim of a kind that is subject to limitation may be brought only in a limitation action. The same shall apply to any suit concerning the right of the person constituting the fund to limit his liability and concerning distribution of the fund. Persons entitled to bring a limitation action are the person who has constituted the fund, his insurer and persons raising claims of a kind that is subject to limitation.

11. Distribution of fund amongst claimants The FMC chapter 9 §6 provides that each liability amount shall be distributed among the claimants in relation to the extent of their proven claims of the type to which the limit of liability applies. If the amount available for personal injuries (other than injury to pas­ sengers) does not suffice for the payment of such claims, the remainder of these claims shall be paid out of the amount available for other claims and have the same right as these other claims.

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When all disputes are settled, the court shall decide on the distribution of the fund. The court may reserve a certain amount for covering claims which have not been submitted before the end of the distribution of the fund at the inferior court. Such amounts shall be distributed when all claims submitted have been considered and it can be assumed that no further claims will be submitted. Distribution of the fund shall take place even if the person constituting the fund has no right to limitation of liability. In such case the court, upon motion, may give judgment concerning the part of a claim that is not paid out of the fund (FMC chapter 12 §14).

12. Constitution of fund as bar to other actions See above under part 10 for discussion of this. Furthermore, according to the FMC chapter 9 §8, a claimant against a limitation fund constituted in Finland or in any other contracting State (1996 LLMC Protocol) may not, on the basis of his claim, obtain arrest, other security measure or distraint against the vessel or other property belonging to any person for whom the fund has effect according to chapter 9 §7 and who is entitled to limitation of liability.

13. Governing law in matters of limitation When limitation of liability is invoked before a Finnish Court, the provisions of the FMC chapter 9 shall be applied (lex fori). However, for claims mentioned in 3, sub-paragraph (e) (see above under part 3) arising under a contract of service which is subject to the law of another contracting State, the determination of the amount of the limitation shall be subject to that law (FMC chapter 9, §11).

14. Scope of application—special types of vessel The rules on limitation of liability are applicable both to pleasure boats and to warships and other vessels used exclusively for public purposes. However, there are special limita­ tion amounts for the latter category of vessels. According to the FMC chapter 9 §10, the limits of liability for warships and other vessels which at the time of the event constituting a claim are used by the State only for public purposes (and not commercially) may in no case be less than the limits applicable to a vessel having a tonnage of 5,000. Nevertheless, if a claim is for compensation for loss or damage caused by the special characteristics or employment of such a vessel, there shall be no right to limitation of liability.3 The provisions Chapter 9 §10 do not, however, apply to vessels used primarily for ice breaking or salvage. There are special limits of liability for a vessel built and adapted to drilling for natural resources of the sea-bed if the claims concern damage caused while the vessel is used in

3. See ND 1978 page 353, Swedish Supreme Court, and ND 1981 page 152, Hlogaland Court of Appeal, concerning damage caused by submarines.

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drilling activities. Equal amounts apply to mobile platforms intended for exploration or exploitation of the natural resources of the sea-bed.

B. PASSENGERS 1. Special provisions of national law in relation to passenger claims limitation amounts Finland has not ratified the 1974 Athens Convention Relating to the Carriage of Pas­ sengers and their Luggage by Sea. According to the FMC chapter 9 §5, the limit of liability for claims on account of death or personal injury caused to the vessel’s own passengers shall be 175,000 SDRs multiplied by the number of passengers which the vessel is entitled to carry according to her certificate. Furthermore, chapter 15 §15 of FMC provides that the carrier’s liability for death or personal injury shall not exceed 175,000 SDRs for each passenger. For delay to pas­ sengers, the liability shall not exceed 4,150 SDRs for each passenger. There are special limitation amounts for damage to, or loss of or delay to, luggage. The limits of liability under chapter 15 concern the aggregate of all claims arising out of each voyage. They do not apply to claims for interest or compensation for legal costs. The carrier may by written agreement assume higher liabilities than prescribed in chapter 15. 2. Scope of application The provisions of chapter 15 shall apply unless it is otherwise agreed or follows from custom. However, contract stipulations restricting a passenger’s rights under, inter alia, chapter 15 §15 shall be void: (a) in domestic carriage within Finland, Denmark, Norway or Sweden or to or from any of those States, regardless of which law is otherwise applicable to the carriage; (b) in other carriage to which Finnish law is applicable according to general Finnish choice-of-law rules. The provisions of the FMC chapter 15 shall not apply to the extent that the carriage is subject to any international agreement in force for the carriage by any other means of transport.

C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions Finland ratified the 1924 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading as amended by the 1968 Protocol (the Hague-Visby Rules), and the 1979 Protocol amending the first-mentioned Protocol on 16 November 1984. The solution adopted in the FMC chapter 13 is that the legislation is in principle in conformity with the Hague-Visby Rules, but to the extent that the Hamburg Rules (United Nations Convention on the Carriage of Goods by Sea, 1978) are not in conflict with the Hague-Visby Rules, Finland has implemented the Hamburg Rules to applicable parts on a national basis. The other Nordic countries (Denmark, Norway and Sweden) have implemented corresponding legislation.

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2. Package or unit limitation financial limits of liability According to the FMC chapter 13 §30, the carrier’s liability is limited to 667 SDRs per package or other unit of the goods, or two SDRs per kg of the gross weight of the goods concerned, whichever is the higher. Where a container, pallet or similar transport device has been used to consolidate the goods, each package or other unit which, according to the transport document has been placed in the transport device, is deemed as one package or unit in applying chapter 13 §30. Otherwise the goods in the transport device shall be considered as one unit. If the transport device itself has been lost or damaged, it shall be considered as one separate unit, unless it is owned or otherwise provided by the carrier (chapter 13 §31). 3. Loss of right to limit Chapter 13 §33 provides that there is no limitation of liability for the benefit of any person if it is proved that the loss resulted from an act or omission of such person done with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. 4. Scope of application The provisions of the FMC chapter 13 are applicable to contracts of carriage by sea in domestic traffic in Finland and in traffic between the Nordic countries (Finland, Denmark, Norway and Sweden). Furthermore, the provisions shall apply to contracts of carriage by sea between two States, where: (a) the agreed port of loading is located in a contracting State (i.e., a State bound by the Hague-Visby Rules); (b) the agreed port of discharge is located in the Nordic countries; (c) one of the optional ports of discharge provided for in the contract of carriage by sea is the actual port of discharge and such port is located in the Nordic countries (d) the transport document has been issued in a contracting State; or (e) the transport docu­ ment provides that the Convention (i.e., the Hague-Visby Rules) or any legislation based on the Convention shall apply. If neither the agreed port of loading nor the agreed or actual port of discharge is located in the Nordic countries, the parties may, however, agree that the contract of carriage by sea shall be subject to the law of any other specified contracting State (chapter 13 §2). The provisions of chapter 13 are not applicable to charterparties for the chartering of a whole vessel or part of a vessel. However, where a bill of lading has been issued pursuant to a charterparty, the provisions of chapter 13 apply to such a bill of lading when it governs the relationship between the carrier and the bill of lading holder (chapter 13 §3). Finally, any stipulation in a contract of carriage or a transport document is null and void (in the absence of particular circumstances/conditions) to the extent that it derogates from, inter alia, the provisions on limitation of liability (above, under parts 2 and 3.). The carrier may increase his responsibilities and obligations under chapter 13 (chapter 13 §4).

CHAPTER 17

France Jean-Serge Rohart President of the Comite´ Maritime International

Villeneau Rohart Simon & Associes—15, ´ Place du Gen ´ eral ´ Catroux, 75017 Paris

INTRODUCTION The LLMC Convention (Convention on Limitation of Liability for Maritime Claims, 1976) was approved by France on 29 December 1979 and entered into force on 1 December 1986. The earlier Limitation Convention of 1957 (International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships), which had been incorporated into French law by the Law of 3 January 1967 was denounced in 1987, with effect from 15 July 1988. This system of limitation of liability for maritime claims was incorporated into French law by the Decree of 23 December 1986. The Law of 3 January 1967 has been amended accordingly. The Protocol of 1996 amending the former Convention of 1976, which entered into force on 13 May 2004 in the 12 States which ratified it, has not yet been approved or ratified by France. This Protocol is currently under debate for incorporation into French law. A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY 1. Persons entitled to limit liability According to Article 69 of the Law of 3 January 1967, any shipowner, defined as being the owner, charterer, operator or manager of the vessel, can benefit from a limitation of liability. Article 69 provides that, additionally, the master and other nautical or land-based terrestrial agents—any person for whose act, neglect or default the owner is responsible —shall be entitled to avail themselves of the limitation of liability, even in case of their personal fault. Salvors are also entitled to limit liability in respect of claims for damages that occurred in direct connection with an act of assistance or salvage (Article 21 bis of the Law of 7 July 1967). 2. Claims subject to limitation The text of article 58 of the Law of 3 January 1967, unlike that of Article 2 of the LLMC Convention, does not contain a list of the specific claims which shall be subject to 237

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limitation of liability. It only provides in general terms that the shipowner may, even against the State, limit his liability towards any contracting or third party for any claim made in respect of damage occurring on board the vessel or in direct relation to the navigation or operation of the vessel. 3. Claims excepted from limitation Under Articles 59 and 60 of the Law of 3 January 1967, there are certain claims in respect of which the shipowner is not entitled to limit his liability: (a) claims made by the State or other legal entities of public law who have, in place of the shipowner, raised, destroyed or rendered harmless a vessel which has sunk, stranded, been abandoned or lost, including everything that is or has been on board; (b) claims for salvage, assistance or contribution to general average; (c) claims by seamen or other servants employed on board by the shipowner; (d) claims for oil pollution damage and claims in respect of nuclear damage: Article 69 bis of the Law of 3 January 1967 (incorporated in that law by the Law of 21 December 1984 enacted at the same time as the entry into force of the LLMC Convention) underlines the fact that its provisions do not derogate from the other particular provisions enabling the shipowner to limit his liability in respect of claims for oil pollution damage, nuclear damage or nuclear damage caused by a nuclear vessel. 4. Conduct barring limitation A person liable shall not be entitled to limit his liability if it is proved that the loss or damage resulted from his personal act or omission, committed with intent to cause such damage, or recklessly and with knowledge that such loss or damage would probably result.1 5. Counterclaims According to Article 67 of the Decree of 27 October 1967, if a person entitled to limit his liability has a counterclaim against the claimant arising out of the same occurrence, the respective claims shall be set off against each other. Consequently, the provisions of the Law and of the Decree only apply to the balance, if there be any. 6. Financial limits of liability for all types of claim Article 61 of the Law of 3 January 1967 (incorporated since 1984) expressly refers to the limits fixed by the LLMC Convention 1976 with regard to the calculation of the limitation, taking into consideration the gross tonnage of the vessel and the kind of claim. However, the Law of 15 December 1986 provides that, for vessels with a tonnage not exceeding 300 tons, the limit of liability applicable will be equal to half of the limits fixed by the LLMC Convention in respect of ships with a tonnage not exceeding 500 tons. 1. Article 58, §3, Law of 3 January 1967 which strictly adopts the same wording as the LLMC Conven­ tion.

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7. Unit of Account used for calculating limitation fund The Unit of Account is the Special Drawing Right (SDR) as defined by the International Monetary Fund. Conversion of SDRs into Euros shall be made according to the exchange rate at the date when the fund is constituted, the payment is actually made, or the security for it is lodged. 8. Aggregation of claims The limitation of liability applies to the aggregate of all claims arising on any distinct occasion. If different events occur on one voyage, separate funds have to be constituted to limit the liability for each event. Those claims which are concerned are all those against the shipowner, operator, manager, charterer and against any person for whose act, neglect or default these persons are responsible. 9. Limitation of liability—need to constitute fund The owner of the vessel that caused the damage can redeem all debts by constituting a limitation fund out of which the respective claims will be paid.2 Whereas the LLMC Convention expressly mentions that the constitution of a fund is not an essential condition to benefit from limitation,3 the provisions of the Law and of the Decree of 1967 do not clearly address the issue. Yet Articles 59–60 of the Decree of 27 October 1967 provide that the shipowner or other liable person who intends to avail himself of the limitation must file an application before the Commercial Court, specifying the circumstances of the event and the maximum amount of the limitation fund. But this provision does not settle the question of whether limitation of liability may be invoked even if a limitation fund has not been constituted. The Cour de Cassation4 has judged that a person may benefit from limitation under French Law even if there has been no fund constituted. In other words one must consider that the right to limit is not dependent on the constitution of the fund; the fund is a mere procedural measure for the shipowner to liquidate his debts, without any influence on the right of limitation. 10. Constitution of fund Chapter VII of the Decree of 1967 deals with the rule governing the constitution of a limitation fund. The fund cannot only be lodged by the shipowner, but also by any person assimilated to him (see Part 1 above). An application must be filed before the President of the competent French Commercial Court. The competent court is: — for a French vessel, the court of the port of registration of the vessel; — for a foreign vessel, the French court where the occasion occurred, or the court for the first French port of call of the vessel after the occasion, or if the above two conditions are not met, the court of the port in which an arrest was first made of the vessel, or a security was posted. 2. Article 62, Law of 3 January 1967. 3. Article 10(1) LLMC. 4. Cass Com Bull. n° 39, Pourvoi 98-18-617.

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The application shall describe the event which caused the damage, indicating the max­ imum amount of the limitation fund, the form under which the fund will be constituted and the amounts of the various claims as known by the owner. The President of the court will check the amount of the fund and acknowledge its constitution by an order. He will, at the same time appoint a liquidator and a judge in charge of controlling the liquidation of the fund. Once it is constituted, the fund is considered to bind all claimants. The fund is available to settle only the claims to which the limit of liability can be opposed.5 All suits concerning a claim of that kind must be brought forward in a limitation action; any measure of execution against the shipowner for the claims to which a limita­ tion may be opposed is prohibited. The constitution of a fund does not imply any acknowledgement of liability on the part of the owner.6

11. Distribution of fund amongst claimants (a) According to Article 64 of the Law of 3 January 1967 (incorporated since 1984), the distribution of the fund shall be made amongst the claimants pari passu, that is, in proportion to the extent of the respective proven claims of the type to which the limit of liability applies except as hereafter mentioned under (b). There are no preferred claimants to the fund, as the principle of the distribution is an equal treatment of all the creditors for each category of claims. There are three categories of claims to be considered in the distribution according to the following order: — claims for loss of life or personal injury to passengers; — claims for loss of life or personal injury to other persons;

— other claims.

(b) If the amount reserved for claims in respect of loss of life or personal injury to persons other than passengers is not sufficient to settle those claims, the balance of the claims is paid out in concourse with the claims of the third category. (c) The procedure of distribution of the fund starts with the invitation made to the claimants by the liquidator to produce their statements of claim within a certain time frame (30 days for French citizens, 40–50 days for foreign claimants), and then to repeat the said invitations by publication in certain newspapers, in France and abroad, as the case may be. At the completion of the time frame, the liquidator will then proceed with the verification of the nature and of the amount of each claim. In case of disputes, they are settled by the judge in charge of controlling the liquidation. When all disputes are settled and the amount of the limitation fund is fixed, the court decides on the distribution of the fund.7 Each claimant is informed about the outcome with indication of the exact sum he will receive.

5. Article 62(2), Law of 3 January 1967. 6. Article 63, Law of 3 January 1967. 7. Article 82, Decree of 3 January 1967.

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The payment of each claimant leads to the definitive settlement of the claim.8 (d) If the person constituting the fund has already settled a claim before the distribu­ tion of the fund, he will be subrogated to the rights of such claimant.9 (e) The court may order that a sufficient amount of the fund be reserved for covering claims that the person constituting the fund might be obliged subsequently to pay.

12. Constitution of fund as bar to other actions Once a limitation fund has been constituted, all suits relating to a claim which is subject to limitation can only be brought in a limitation action.10 As from the moment, no claimant against the limitation fund is entitled to seek arrest or any other conservatory measure against the vessel, nor any other assets of the person constituting the fund.11 Finally, Article 67 of the Law of 3 January 1967 provides that a shipowner who is authorised to limit his liability can obtain the release of his vessel and of all other properties arrested as well as the discharge of the securities already provided as soon as the constitution of a fund is proven.

13. Governing law in matters of limitation French law is applied as lex fori if limitation of liability is invoked before a French court. Disputes relating to the nature of a claim, or its amount, may be determined under certain rules of conflict depending on the particular circumstances.

14. Scope of application—special types of vessel The rules of limitation liability apply to fishing and commercial shipping as well as to pleasure boats which are exposed to the same maritime risks and can cause accidents as other ships. The Law of 3 January 1967 does not distinguish between different types of vessel. The State can also benefit from the limitation of liability for damage caused by its vessels used exclusively for public (non-commercial) purposes. Yet, the question concern­ ing the limits of liability for warships remains unanswered. There are special limits of liability for damage caused by vessels used for the drilling of natural resources on the seabed. As for offshore platforms intended for exploration or operation of those natural resources, there are no international rules in force limiting the liability of the operator; the platforms are explicitly excluded from the scope of applica­ tion of the LLMC 1976. The abovementioned limitations apply to ships only. If such a

8. Article 84, Decree of 27 October 1967. 9. Article 65, Law of 3 January 1967. 10. Article 62, Law of 3 January 1967. 11. Article 65, Decree of 27 October 1967.

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platform cannot be qualified as a ship, there are no applicable rules to the limitation of liability.

B. PASSENGERS The provisions of French domestic law on the carriage of passengers do not seem to be restricted by the application of any international Convention. France denounced the 1961 Brussels Convention in 1975, and has not ratified either the 1974 Athens Convention or the following Protocols (1976, 1990 and 2002 Protocols), although by virtue of Article 2(c) of the latter it may be rendered applicable to a French vessel if the port of departure or the port of destination is in a State Party to that Convention.

1. Special provisions of domestic law in relation to passengers claims All limitations concerning passenger claims require a prerequisite contract of carriage. They do not apply outside the scope of the contract; nor do they apply if there is no contract concluded at all. Not all the claims in respect of loss of life or personal injury to passengers entail a prima facie liability for the carrier. All claims in respect of ‘‘individual’’ accidents must be grounded on the evidence of a wrongful act or omission on the part of the carrier. The prima facie liability of the carrier only applies to a ‘‘major’’ event such as collision, stranding, explosion or fire (same rule as in the 1974 Athens Convention, although France has not ratified that Convention). The carrier cannot depart from the legal rules; any clause reducing his liability is null. In case of an accident causing the death of a passenger, the latter’s dependants can claim compensation under the same conditions as the passenger could have done. If the liability of the carrier is retained, he may limit his liability, save in case of an intentional or a reckless fault or omission on his part.

2. Limitation amounts According to Article 40 of the Law of 18 June 1966 the limitation amount for claims for loss of life or personal injury caused to vessel’s passengers is fixed by the LLMC 1976. Consequently, it shall be 46.666 SDR multiplied by the numbers of passengers which the ship is authorised to transport according to her certificates, without exceeding 25 million SDR. For claims resulting from a delay in the carriage of passengers, the liability is limited in accordance with the provisions of Article 6(1)(b) of the LLMC 1976. There are also special limitation amounts for the loss or damage or delay to luggage. These limits of liability are set forth by a Decree of 23 March 1967, modified by a Decree of 24 September 1986 and are as follows: 1,143 EUR per passenger for the claims relative to the cabin luggage; 4,312 EUR for claims relative to cars; 1,524 EUR for claims relative

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to luggage other than cabin luggage. No limit applies to valuables deposited in the hands of the master or competent officer.

C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading of 1924 was ratified by France on 9 April 1934 and implemented into national law by the Law of 2 April 1936 and the Law of 18 June 1966. The Convention was amended by the 1968 Protocol (the Hague-Visby Rules) which entered into force in 1977 and was again amended by the 1979 Protocol, entering into force in 1984. The rules of these Protocols have been adopted by the Law of 23 December 1986 and the Decree of 12 November 1987 that modified the Law of 1966. Hence, the French legislation is now principally in conformity with the Hague-Visby Rules. The Hamburg Rules (United Nations Convention on the Carriage of Goods by Sea, 1978) has not been ratified by France.

2. Package or unit limitation; financial limits of liability Article 28 of the Law of 18 June 1966 provides that the limitation of the carrier’s liability for loss or damage to goods is fixed by the 1924 Convention and the 1979 Protocol. Consequently, the limitation amount is either 666.67 SDR per package or unit, or 2 SDR per kilogramme of the gross weight of the goods concerned, the higher limitation amount being applied. The carrier can agree to increase the amount, but the parties cannot stipulate a lower amount of limitation. The limit is fixed ‘‘per package or other unit’’. Concerning the notion of units, the French Cour de Cassation has ruled that it should be determined by the transport docu­ ment, for example, if the weight mentioned in the bill of lading is indicated in tons, the unit will be a ton. The package is a specific element of cargo, individualised by distinct characteristics and as such taken in charge by the carrier. If a container or similar transport device containing different goods has been used, each of the individual packages which is listed on the transport document is considered as one package. If a container is delivered without specification of its contents, the container shall be considered as one single package.

3. Loss of right to limit According to Article 28(a) of the Law of 18 June 1966 the carrier cannot benefit from limitation of liability in case of his intentional or inexcusable fault, that is, if it is proved that the damage resulted from his personal act or omission committed with intent to cause such damage, or recklessly and with knowledge that such loss or damage would probably result. Article 28(b) also provides that there will be no limitation of liability if the shipper has made a declaration of value of his goods, such declaration being incorporated into the bill of lading and having been accepted by the carrier.

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4. Scope of application The above provisions apply to any contract of carriage by sea, carried out from or to any French port to such an extent that such carriage is not subject to an international con­ vention.12 The above provisions are applicable to all parties concerned by the contract of carriage. They also apply to the relationship between the carrier and any third party holder of a bill of lading, whenever that bill of lading has been issued to perform a charterparty.

12. Article 16, Law of 18 June 1966.

CHAPTER 18

Germany Dr. Markus Eichhorst Ince & Co., Grosse Elbstrasse 47, 22767 Hamburg

A. THE 1976 LIMITATION CONVENTION AS AMENDED BY THE 1996 PROTOCOL 1. Legal framework Germany is a contracting State to the 1976 Convention on Liability for Maritime Claims as amended by the 1996 Protocol (‘‘London Convention’’). The 1996 Protocol increased the financial limits of liability and is in force as of 13 May 2004. The convention in its original version of 1976 still applies on incidents generating claims that occurred prior to 13 May 2004. Section 486 of the German Handelsgesetzbuch (‘‘Commercial Code’’) declares the London Convention as directly applicable, so that its scope and framework can (with few exemptions) directly be assessed by reference to the terms of the London Convention, although the construction of some of the London Convention’s provisions and their application might differ from one Member State to the other. As the London Convention is directly applicable law in Germany, the following claims are subject to limitation: (a) Claims in respect of loss of life or personal injury or loss of or damage to property ( . . . ) occurring on board or in direct connection with the operation of the ship or with salvage operations including consequential losses, Article 2(1)(a) of the London Convention; (b) Claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage, Article 2(1)(b) of the London Convention; (c) Claims in respect of other losses resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations, Article 2(1)(c) of the London Convention; (d) Claims in respect of raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned ( . . . ), Article 2(1)(d) of the London Convention; (e) Claims in respect of removal, destruction or the rendering harmless of the cargo of a ship, Article 2(1)(e) of the London Convention; (f) Claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability ( . . . ) and further loss caused by such measures, Article 2(1)(f) of the London Convention. 245

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The London Convention excludes certain claims, especially claims for salvage or con­ tribution in general average, claims arising from oil pollution damage within the Inter­ national Convention on Civil Liability for Oil Pollution Damages (see below), Article 3 of the London Convention. According to Article 1 of the London Convention, ship owners and salvors of seagoing ships including charterers, managers and operators of such ships are entitled to limit their liability for claims set out above as well as any other person for whose act or neglect or default the shipowner would be liable as well as the insurer of the vessel to the same extent as his assured. According to Article 4 of the London Convention, the right to limit liability is excluded if the claimant proves that the liable person personally caused the loss intentionally or recklessly and with the knowledge that such loss would probably occur. No cases have yet been published in which German courts found that the ship owner acted recklessly. A reason for this is that the vessel’s master is not qualified as the ship owner’s alter ego. Although the ship owner’s personal liability could follow from his possible misconduct to organise the work process on board safely, it was unclear to what extent a ship owner was under an obligation to do so under German law. Although the ISM Code has extended the ship owner’s duties in this respect, it will remain difficult for a claimant to establish that the ship owner recklessly and with the knowledge that damage might probably occur failed to organise the work process on board properly.

2. Peculiarities under German Law In certain respects, Germany did not fully implement the London Convention, so that German law is different to what could be expected by looking only at the provisions of the London Convention. (a) Germany used its powers under Article 18 of the London Convention and filed reservations concerning claims deriving from wreck removal (Article 2(1)(d) of the London Convention) and from removal of the vessel’s cargo (Article 2(1)(e) of the London Convention). That does not mean that the liability for those claims cannot be limited. This can be done and the limits of liability are to be calculated in accordance with the London Convention. However, differing from the London Convention, section 487 of the Commercial Code stipulates that the limitation amount applicable in cases of wreck and/or cargo removal applies only on those claims without the participation of other claims. Consequently, the full limitation amount is available for wreck/cargo removal claims without the need to share it with other claims as for example claims for damage to property. Accordingly, under German law, a defendant might be liable for claims for wreck/cargo removal within the limit calculated in accordance with the London Convention and he might additionally be liable for other claims within a further limit, also calculated in accordance with the London Convention, so that in total he might be liable for twice the limitation amount. (b) A further peculiarity results from Article 15(2)(a) of the London Convention according to which a contracting State may regulate by specific provisions of national law the system of limitation of liability to be applied to vessels which are

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intended for navigation on inland waterways. Under German law, the ‘‘Bin­ nenschiffahrtsgesetz’’ governs the limitation of liability in respect of those ves­ sels. Different methods of calculating the limitation are to apply, depending on the type of vessel. Thus, the limitation amount might be calculated by reference to the vessel’s tonnage displacement (passenger vessel), or her deadweight capacity (cargo vessel) or her main engine power (tug) or her value (excavator, crane). The calculation might be complicated as it might depend on further details of the individual case. (c) According to Article 15(2)(b) of the London Convention, Germany adopted a specific limitation for vessels of up to 250 tons for losses other than loss of life/ personal injury set out in section 487a Commercial Code. 3. The limits The following limits apply, unless a vessel intended for the use on inland waterways is concerned. The limits are calculated in accordance with the London Convention (as amended by the 1996 Protocol in force as of 13 May 2004 and applicable on incidents generating claims that occurred on or after that date). (a) Loss of life/personal injury (as of 13 May 2004), Article 6(1)(a) of the London Convention: (1) Vessel of up to 2,000 tons:

2,000,000 SDR

(2) Vessel in excess of 2,000 tons:

2,000,000 SDR plus 800 SDR per ton from 2,001 to 30,000 tons plus 600 SDR per ton from 30,001 to 70,000 tons plus 400 SDR per ton in excess of 70,000 tons.

(b) Other Claims than Loss of Life/Personal Injury (as of 13 May 2004), Article 6(1)(b) of the London Convention: (1) Vessel up to 250 tons:

500,000 SDR

(2) Vessel up to 2,000 tons:

1,000,000 SDR

(3) Vessel in excess of 2,000 tons:

1,000,000 SDR plus 400 SDR per ton from 2,001 to 30,000 tons plus 300 SDR per ton from 30,001 to 70,000 tons plus 200 SDR per ton in excess of 70,000 tons

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(c) Passenger Claims, Article 7(1) of the London Convention and Athens Convention/ Athens Protocol: The 1996 Protocol also increased the limits for passenger claims for loss of life and personal injury. They now amount to 175,000 SDR per passenger that the vessel may carry without any absolute limitation. Article 6 of the 1996 Protocol enables contracting States to increase the limit of liability by national legislation. Although not a signatory to the 1974 Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea (‘‘Athens Convention’’), Germany implemented the provisions of this convention into its national law with few modifications, thereby increasing the limits of liability and making it easier for a claimant to break the limitation. Thus, a carrier cannot limit his liability if he or his employees/agents intentionally or grossly negligently caused the loss (Article 10(1) of the Attachment to section 664 Commercial Code (‘‘Attachment’’)). The current limits are compulsory and any agreement on a lower liability is void. Pursuant to Article 6 of the Attachment, the limits are DEM 320,000 (163,613 EUR) for claims for loss of life/personal injury per passenger, DEM 4,000 (2,045.17 EUR) for loss of or damage to cabin luggage per passenger, DEM 16,000 (8,180.67 EUR) per vehicle (including luggage within) and DEM 6,000 (3,067.75 EUR) for other luggage. As Germany did not change the Attachment after the introduction of the Euro, the limits are still stated in German Marks rather than Euro. This is to be explained with Germany’s signing of the Athens Protocol 2002 (which is not yet in force) on 29 April 2004. As Germany intends to ratify the Protocol, it considered it unnecessary to change the limits stated in the Attachment or to convert them into Euro. The national provisions on the carrier’s liability for passenger claims do not prevent the carrier from invoking defences under the London Convention. 4. Procedure According to Article 10 of the London Convention, the limitation of liability may be invoked before German courts without setting up a limitation fund. The court dealing with the claims then needs to assess if the liable person is entitled to limit his liability. However, if the court considers that this would delay the proceedings as further claims following from the incident are either on their merits or on their quantum uncertain, the court might decide the case without assessing the limitation issue. As to the limitation issue, the court then only decides that the defendant, despite being convicted into payment of an unlimited amount, may still limit his liability within limitation proceedings to be initiated (section 305(a) Zivilprozessordnung (‘‘German Code of Civil Procedure’’)). Any person entitled to limit liability as, for example, a ship owner may for himself or jointly with other concerned persons as, for example, the vessel’s master apply to the Magistrate Court (‘‘Amtsgericht’’) of Hamburg—Insolvency Division—for initiation of limitation proceedings. The applicant needs to submit relevant documentation (excerpt of ship registry, tonnage certificate, etc.) and needs to establish that claims for which the applicant is entitled to limit liability are pursued before German courts. Arrest procedures are sufficient in this respect. After having checked that the application is admissible, the court decides on the limitation amount and orders the applicant to pay it to the court in cash or to provide a bank guarantee and to make a payment on account of costs of

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proceedings. Until recently, the Hamburg Magistrate Court accepted P. & I. letters of guarantee as security for the limitation fund. However, after one P. & I. insurer filed for insolvency which impacted on two pending limitation proceedings, it remains to be seen if the court will in future still accept any security not put up by a first class bank. After the limitation fund has been set up, the court will order that the limitation procedure is in effect. As a consequence, all proceedings pending before German courts on claims falling under the limitation procedure are automatically suspended and any enforcement measure for such claims against the persons who initiated the proceedings is prohibited (including arrest measures). The court will then appoint an administrator to administer the limitation fund, to check the claims filed against the fund and to pay out the compensation at the end of the proceedings. Any claimant as well as the applicant (liable person who initiated the limitation proceedings) is entitled to object to claims filed against the fund. If such disputes cannot be solved amicably, the claimant would need to sue the person who objected before the competent German civil court for the court’s declaration that the claim and its quantum are justified. After having reached consensus on the justification of claims and their quantum or after the claimants have obtained unappealable judgments on this issue, the administrator distributes the funds to the claimants in propor­ tion to their total claims and the sum available. Limitation proceedings can be initiated for specific classes of claims. Any class requires the setting up of a separate limitation fund. The following classes exist: (a) Class A: Claims for loss of life/personal injury and other damage, Article 6(1)(a), (b) London Convention; (b) Class B: Passenger claims for loss of life/personal injury, Article 7(1), London Convention; (c) Class C: ‘‘Claims for Wreck Removal’’, Article 15, London Convention and section 487, German Commercial Code; (d) Class D: Claims falling under the scope of the 1992 International Convention on Civil Liability for Oil Pollution Damage. Class D does not relate to the London Convention. Germany is also a contracting State to the 1992 International Convention on Civil Liability for Oil Pollution Damage (‘‘1992 Convention’’). This convention only applies on oil pollution damage resulting from spills of persistent oil from tankers and provides, inter alia, for different limits of liability. However, the German procedural rules stated above cover both, the limitation proceedings under the London as well as under the 1992 Convention.

5. Limitation proceedings in other States Article 13 of the London Convention only bars other legal actions, if the claimant actually participates in the limitation proceedings and pursues his claims against the limitation fund. However, exceeding the scope of this Article, German law stipulates that even if a claimant does not participate in limitation proceedings conducted in another State in accordance with the London Convention, he is barred from pursuing and/or enforcing the claims he could pursue in the foreign limitation proceedings in Germany (section 50 Procedural Code on Limitation Proceedings).

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B. HAGUE AND HAGUE-VISBY RULES Although Germany is a contracting State to the Hague Convention without ratifying the Visby Protocol, it incorporated the Hague-Visby rules into its national law. Thus, under German law the Hague-Visby rules as incorporated into national law are effectively in most cases applied when a bill of lading is issued. However, as the Hague Convention is a multilateral international treaty binding on its Member States, Germany is under public international law bound to apply the Hague rules viv-`a-vis other Member States of the Hague Convention, if those didn’t ratify the Visby Protocol. Therefore, under German law, the Hague rules as incorporated into national law are to be applied on sea transports covered by a bill of lading that was issued in a Member State of the Hague Convention, if the cargo’s destination is also a Member State of the Hague Convention. An exemption applies if the sea transport starts and ends in Germany. It might in some cases be rather complicated to determine which rules are to apply. This would depend on the country where the bill of lading was issued and the membership of this country to either the Hague Convention, the Visby Protocol, to both or to none of these, and it will also depend on the country of the vessel’s departure and the country of her destination. If the Hague/Visby rules as incorporated into German law are to apply, a carrier might be liable for a maximum of 666.67 SDR per package or of 2 SDR per kilogramme, whichever is higher. Under the Hague rules as incorporated into German law, the limitation of 2 SDR per kilogramme does not apply but only the package limitation of 666.67 SDR. The recoverable loss is in both cases limited to the value of the goods at the place of destination. The carrier will in any event lose his right to limit liability if he caused the damage intentionally or recklessly with the knowledge that damage would probably occur.

CHAPTER 19

Greece Deucalion G. Rediadis1 Deucalion Rediadis & Sons, 41 Akti Miaouli, GR-185 35 Piraeus, [email protected]

The general limitation of liability regime currently in force in Greece is the 1976 Conven­ tion on limitation of liability for maritime claims (the Convention).2 Specific liability regimes making provision for limitation are in force for carriage of passengers and their luggage by sea, carriage of goods by sea and crew claims. With regard to marine pollution, the Hellenic Republic has adopted the CLC and Fund Convention system.3

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

Global limitation in respect of claims for property damage, loss of life and personal injury is governed by the 1976 Convention. In line with standard practice, this was brought into Greek law in its entirety, with the full text made part of the ratifying Act. No reservations or alterations were made which would make it necessary to add to the commentary on the individual articles contained in the main body of this book.

1. Scope of application and relevance of earlier law The 1976 Convention came into force on 1 November 1991, displacing, in all but very limited cases, the substantive provisions on shipowners’ limitation of liability contained in the Fifth Title (Articles 84 to 106) of the Code of Private Maritime Law.4 Greece had not been a party to any of the earlier conventions on limitation of liability. None of the Code’s provisions were expressly repealed or altered when the 1976 Convention was ratified, but their scope is now restricted to cases to which the Convention does not apply. The Code provides for a traditional system allowing shipowners and operators to limit their liability, at their option, either by abandoning the ship and the gross freight to their creditors or by setting up a fund equal to three tenths of the ship’s value plus the gross freight, with a further three tenths reserved to claims for accidents to persons only. Under the Code, limitation is available in respect of liabilities arising from wrongful acts committed by the master, the crew or the pilot in the course of their duties,

1. Advocate, Piraeus; deputy-secretary of the Hellenic Maritime Law Association. 2. Ratified by Act 1923/1991, Govt. Gaz. A13/14.2.1991. 3. The latest development being the entry into force on 1 November 2003 of the amended limits adopted at the 82nd session of the IMO Legal Committee. 4. Act 3816/1958, Govt. Gaz. A32/28.2.1958 (hereafter referred to as CPML or the Code).

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as well as from contracts entered into by the master, save for those specifically consented to or subsequently approved by the shipowner or operator.5 No reservations were made at the time of ratification under Article 18 of the Conven­ tion. It therefore applies to wreck and cargo removal claims prescribed in Article 2(1)(d)6 and (e). There are no specific provisions in Greek law dealing with limitation of liability for vessels which, under Greek law, are ships intended for navigation on inland waterways or for ships under 300 tons. The former do not qualify as ‘‘ships’’ for the purposes of Greek private maritime law in any event7 and would not have been eligible for limitation under the Code. Floating rigs of more than 5,000 tons’ displacement, as well as floating refineries and oil storage tanks of more than 15,000 grt used in exploration, drilling of the sea bed, pumping, refining and storage of oil or natural gas from the sea are classified as ships, with the provisions relating to limitation of liability applying thereto.8 If, as it is understood, the definition of ‘‘seagoing ship’’ for the purposes of Article 1(2) of the Convention is left to national laws, it would appear that, save for such of the above constructions as are envisaged by Article 15(5)(b), the Convention would apply to these craft. The Code would thus cover, residually, cases excepted under Article 15(5)(b).9 There are no specific provisions for claims arising from cases where Greek interests solely are involved. Doctrine and case law accept that in those circumstances conflict of laws rules would not come into play because of the absence of a foreign element; but with the Convention being an integral part of Greek law, that could not affect its application to purely domestic situations.

2. Governing law Greek courts will apply the Convention to all cases falling within its scope, irrespective of other connecting factors such as the vessel’s flag and the place of domicile or business establishment of the person seeking to limit liability,10 or that person’s nationality,11 or the law governing the claim which is subject to limitation.12 This was held to be the import of Article 15(1), combined with the Convention’s enhanced constitutional status as against

5. For a fuller description of the system under the Code, see Gerasimos M. Vlachos, ‘‘Greece and the 1976 Convention’’: Chap. XIV of Limitation of Shipowners’ Liability: The New Law (ed. Institute of Maritime Law, University of Southampton), London, 1986, at pages 231–233 and Nicholas A. Deloukas, ‘‘Admiralty and Private Maritime Law’’: Chap. 12 of K.D. Kerameus and Ph.J. Kozyris (eds.), Introduction to Greek Law, 2nd edn., Deventer/Boston/Athens, 1993, at pages 235–236. 6. But ‘‘wreck dues’’ charged by Piraeus Port Authority S.A. were held not to be subject to limitation: Piraeus Court of Appeal judgment 149/2005, unreported. 7. Under Article 1 §1 of the Code, a ship is a vessel of not less than 10 net registered tons of capacity destined to navigate at sea by own means. 8. Article 1 of Legislative Decree 117/1974, Govt. Gaz. A310/23.10.1974. 9. And, indeed, under sub-paragraph (a), but the question whether air-cushion vehicles qualify as ships under Greek law remains unsettled: see A. Antapassis, Maritime Assistance and Salvage [in Greek], Athens, 1992, at pages 334–336. 10. Greek Supreme Court Judgment 869/1999 (First Div.), Epitheoresi Nautiliakou Dikaiou (ENautD) 1999. 391. 11. Piraeus Multi-member Court of First Instance 3248/1999, unreported. 12. Greek Supreme Court Judgment 388/2004 (First Div.), ENautD 2004. 340.

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ordinary national Acts,13 including the one containing the Greek conflict of laws rule dealing with shipowners’ limitation of liability: Article 77 §6a of Act 1892/1990,14 which provides that the law of the vessel’s flag is to govern the substantive requirements and the extent of shipowners’ limitation of liability, could operate only in cases not covered by LLMC 1976.15 Timewise, the established rule in Greek case law is that an incident would be governed by the limitation of liability provisions which were in force at the time of its occurrence, rather than by those which may have come into force by the time limitation is sought. That rule was first developed to cater for the transition to the limitation provisions of the 1958 Code16 and was confirmed for the purposes of the transition from the Code to the 1976 Convention.17 It has also been held to apply where there is a change in the conflict of laws rules dealing with limitation of liability, for example, in selecting as between Article 77 §6a of Act 1892/1990 and earlier conflicts rules18 when deciding the law applicable to limitation of liability for an incident which had occurred prior to the entry into force of that provision.19 3. Procedure involved in limiting liability Limitation can be sought either pre-emptively or as a defence,20 for example, to an action or to a conservative arrest instigated by a claimant. There is no time limit for invoking limitation and this can be put forward as late as in the stage of enforcement against the debtor’s assets. In either case the constitution of the limitation fund is required before any practical effects (essentially, the release of a ship or other property) can be obtained. Court intervention is required in the setting up of the fund, the release of any property and the distribution of the fund. The Greek courts would acquire jurisdiction for the setting up of the limitation fund under Article 11 of the Convention, as a result of legal proceedings having been com­ menced in Greece against a party entitled to limit. ‘‘Legal proceedings’’ has been held to include more than just an ‘‘action’’ (which is the word being used wrongly in the Greek translation of the Convention).21 Domestic law allocates jurisdiction within Greece to either the courts of the vessel’s port of registration or those of Piraeus.22 The latter would presumably have jurisdiction for all cases of non-Greek flag vessels.

13. Under Article 28 §1 of the Constitution of 1975, international conventions are adopted through ratification by Act of Parliament; conventions thus ratified are endowed with enhanced status as against laws of domestic origin, superseding the latter to the extent that they are in conflict. 14. Govt. Gaz. A101/31.7.1990. 15. See text to footnotes 8 and 9, above. 16. Judgment 241/1966 of the Supreme Court of Greece (First Div.), NoB 1966. 1113 et seq. 17. Greek Supreme Court 388/2004 (First Div.), ENautD 2004. 340. 18. Three views were being put forward in literature and case law, favouring the application of the law of the flag, of the lex fori or of the law governing the substance of the individual claim for which limitation was being sought; for a summary and detailed references see A. Antapassis, ‘‘Matters relating to wreck removal and limitation of liability of its owner’’ [in Greek], Dikaio epikheireseon kai etaireion 1996. 220–221. 19. Piraeus Single-member Court of First Instance 2505/1991, ENautD 1992. 83 et seq.; noted Revue hel­ l´enique de droit international 1992. 253–258. 20. Piraeus Multi-member Court of First Instance 3248/1999, unreported. 21. Piraeus Single-member Court of First Instance 1949/1992, ENautD 1992. 437. 22. Article 90 §2 CPML.

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When limitation is invoked independently of the constitution of a fund in a declaratory action seeking the fixing of the plaintiff’s maximum liability in respect of a given incident at the amount of the Convention limits, jurisdiction would be determined under either one of the ordinary bases provided for in the Code of Civil Procedure or the international statutes in force in Greece—essentially, EU Regulation 44/2001, the 1968 Brussels Con­ vention and the 1988 Lugano Convention on jurisdiction and the enforcement of judg­ ments in civil and commercial matters—for the hearing of an action relating to the particular facts against the specified defendant (prospective plaintiff in the liability action), or under the special basis introduced by Article 7 of the Regulation and Article 6A of the Conventions. The constitution of the fund commences with the filing in court of a declaration of limitation of liability, to which must be appended the document(s) evidencing the deposit of the relevant sum or the lodging of a corresponding guarantee.23 In the latter case practice requires the prior determination by the court of the type of security that would be acceptable; this is invariably a letter of guarantee issued by a bank operating in Greece. The amount is to be calculated under Articles 6 and 7 of the Convention and the court does not involve itself in fixing a figure at this stage.24 The declaration must set out the cause giving rise to its filing, the names and addresses of the claimants known at the time and the amounts of their claims; a person domiciled within the court’s jurisdiction must be appointed to accept service of documents on behalf of the party seeking limitation. Release of property seized in pursuance of security or enforcement proceedings may be obtained as soon as the declaration and appended documents are filed in court; the possibility to pursue claims other than through the fund similarly ceases as from that time.25 Within one month after the lapse of ten days from the filing of the declaration, the court appoints a rapporteur judge and an administrator to proceed with the distribution of the fund. The latter takes care of the service of the judgment appointing the officers on the known creditors and on the Hellenic Chamber of Shipping, together with notice that claims against the fund must be filed within three months. Summary of the judgment, together with the notice, is published in two Athens daily newspapers with large circula­ tion. The filing of a claim in the limitation proceedings preserves time. A meeting of the creditors who have filed claims against the fund is convened following the lapse of the three months. Claims that are not disputed by the creditors may be settled from the fund, but provision must be made in respect of all claims under dispute. The latter are determined by the court, on application by the administrator, and the distribution of the fund resumes as soon as the judgment becomes unappealable at the level of the Court of Appeal; this may take considerable time, but an agreement between all the creditors putting an end to the disputes is not precluded. Subject to the allocation of funds in accordance with Articles 6 and 7 of the Convention, distribution is made pari passu and any priority conferred by a particular claim’s status as a maritime lien is disregarded.26

23. Article 90 §1 CPML. 24. Piraeus Single-member Court of First Instance judgments 1949/1992, ENautD 1992. 437 and 2539/1992, ENautD 1993. 25. Article 102 CPML and 13 LLMC. 26. Piraeus Court of Appeal 149/2005, unreported.

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4. Recognition of foreign limitation proceedings By virtue of Articles 13 and 15 of the Convention, the Greek courts are under a duty to recognise foreign limitation proceedings pursued according to the Convention. There is no specific provision dealing with the remaining cases, which would have to be examined under the general provisions in force in Greece with regard to recognition and enforce­ ment of foreign judgments. These provisions would come into play as long as the public act of the foreign state granting limitation of the debtor’s liability (whether a judgment, decree or other) qualifies as an instrument falling within their scope. Limitation proceedings in States where EU Regulation 44/2001 or the Brussels and Lugano Conventions are in force would be looked at in Greece under these statutes.27 The definition of ‘‘judgment’’ given therein for the purposes of recognition and enforcement28 appears to be wide enough to cover the various court orders or decrees involved in a limitation action. For the effects of limitation orders or decrees rendered in other countries to be recog­ nised in Greece, since these would probably be classified as resulting from ‘‘non­ contentious proceedings’’, the foreign court must29 have applied the limitation laws that would have been applied by a Greek court pursuant to Greek conflict of laws rules30 and must have assumed jurisdiction under one of the bases provided by the law of the State whose limitation laws were applicable.31 In marine pollution cases, subject to the provisions of international conventions to which Greece is a party, foreign court judgments awarding damages are being declared enforceable to the extent that the award does not exceed the limits of liability provided by Greek domestic law or by an international convention in force in Greece.32

B. CARRIAGE OF PASSENGERS AND LUGGAGE Greece is a contracting party to the 1974 Athens Convention and to the relevant Protocol of 1976.33 These came into force on 1 October 1991 and apply as prescribed in Article 2(1) of the Convention, that is, to cases of international carriage only.34 Domestic carriage is governed by the provisions of Articles 174 to 189 of the Code of Private Maritime Law and those of ordinary civil law on contract and tort. Neither the Code nor ordinary civil law35 provide for a monetary limit in respect of claims for loss of life and personal injury; as a result, limitation is available only in the global amounts of Article. 7 of the Convention and not on a per passenger basis. Claims 27. See e.g. Piraeus Single-member Court of First Instance 906/1995, unreported. 28. Article 32 of the Regulation and Article 25 of the Conventions. 29. Article 780 of the Code of Civil Procedure. 30. That is to say, either the 1976 Convention or the law of the vessel’s flag, depending on whether the case falls within the scope of LLMC. 31. Whether, in cases falling within the scope of LLMC 1976, this means that the foreign Court must have assumed jurisdiction under one of the bases provided by Greek law, or under those of the law of the vessel’s flag is probably open to argument. 32. Article 77 §6b of Act 1892/1990. 33. Act 1922/1991, Govt. Gaz. A15/15.2.1991. 34. Piraeus Court of Appeal 161/2004, ENautD 2004. 3. 35. Readers are referred to the main body of this book for a description of the Athens Convention and its implications on limitation of liability.

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for loss or damage to luggage are made subject to the regime provided for carriage of goods by sea;36 post-1993 this is the Hague-Visby Rules.37 Liability for cabin luggage lies only in respect of faulty acts by the Master or the crew relating to such luggage.38 No special provision is made in relation to vehicles, and these are dealt with under the HagueVisby Rules as any other cargo on board. The time-bar period provided by the Code for claims under a contract for the carriage of passengers is of one year, counting from the end of the year during which the claim arose; claims in tort are subject to the ordinary civil law time bar of five years, counting from the time when the victim became aware of the damage and of the person liable to pay. Claims in respect of luggage, whether made in contract or tort, fall under the one-year time bar of the Hague-Visby Rules39 and the same applies to vehicles. It is not uncommon for individual carriers to incorporate the Athens Convention into their standard terms and conditions of carriage in domestic situations. All terms contained in contracts entered into or due to be performed in Greece or to which Greek law is applicable for some other reason are, nevertheless, subject to the consumer protection statutes,40 outlawing ‘‘abusive’’ terms, such as those excluding or excessively diminishing the carrier’s liability. C. CARRIAGE OF GOODS Greece has been a party to the Hague-Visby Rules since 23 June 1993 but has had a Hague Rules-based system ever since the current Code of Private Maritime Law was enacted in 1958. The Convention of 1924 and the Visby and SDR Protocols of 1968 and 1979 respec­ tively were ratified by the Hellenic Republic by virtue of Act 2107/1992.41 Article 2 §1 thereof extends the scope of application of the Rules to cases beyond those envisaged in Article 10 of the amended Convention. The extension relates both to domestic and international carriage contracts with the relevant paragraph reading as follows [contribu­ tor’s translation]: ‘‘1. The provisions of the international convention ratified by this act, as amended by the protocols ratified likewise, apply in Greece and are in force for all [cases of] carriage performed under a bill of lading, where the ports of shipment and discharge are located in different States, as well as to sea carriage between Greek ports.’’

None of the provisions of the Code were repealed or altered by that Act. It would appear from the above that the position with regard to domestic and inter­ national carriage cases is as follows: 1. Carriage between Greek ports The Hague-Visby Rules apply irrespective of whether a bill of lading has been issued and would also govern charterparty contracts. That would be in line with the regime in force 36. Article 187 CPML. 37. Piraeus Court of Appeal 162/2004, ENautD 2004. 32. 38. Article 188 CPML. 39. Piraeus Court of Appeal 248/2004, unreported. 40. Act 2251/1994, Govt. Gaz. A191/16.11.1994, as amended, enacting essentially EU legislation. 41. Govt. Gaz. A203/29.12.1992.

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under the 1958 Code of Private Maritime Law, where not only contracts of carriage are treated ‘‘as such’’ (i.e., irrespective of the type and, indeed, of the issuing of a particular document) but also charterparties are subjected to the same liability rules as contracts of carriage by sea. 2. International carriage The picture is now split because the new Act only deals with contracts under a bill of lading. Whenever a dispute arising therefrom is heard before a Greek court, as a matter of substantive law these contracts are now covered by the Hague-Visby Rules even though Greek law may not be the law applicable to the contract. This would be the combined effect of Article 7 §2 of the 1980 Rome Convention on the law applicable to contractual obligations and of Article 2 §1 of Act 2107, which is intended to render the rules a set of r`egles d’application immediate, ´ effectively excluding the application of the Hamburg Rules by the Greek courts. That would be the case even though the statute does not include any ‘‘magic’’ words such as ‘‘ . . . irrespective of the law otherwise applicable to the contract’’. There is also a contrary view which argues that Greek law will have to be held applicable first, but its supporters seem not to be familiar with the concept of r`egles d’application immediate, ´ a concept formally recognised for the first time in many jurisdic­ tions by the Rome Convention. All other contracts are governed, as a matter of private international law, by the selection rules of the Rome Convention and, as a matter of substantive law, they are left within the ambit of Articles 134 to 148 of the Code of Private Maritime Law (reflecting the Hague Rules of 1924). Such other contracts would include: (a) contracts of carriage where no document is issued; (b) contracts where a document other than a bill of lading (e.g. a sea waybill,42 a non­ negotiable vehicle carriage receipt43 or a vehicle ticket44) is issued; (c) contracts where the subject-matter is the transfer of the use of the ship, that is, charterparty contracts. This means that contracts under (a) and (b) would potentially be susceptible to the Hamburg Rules, if the law of a Hamburg State is held to apply and the case falls within their well known extensive scope; and the standard of liability for charterparties will be that of the Hague Rules while the international statute adopted by Greece is now HagueVisby. The Code45 provides for limitation of liability per package or unit (Art. 141) at an amount fixed by Decree. With effect from 24 November 1995, the limit is 733.68 EUR (formerly Greek drachmae 250,000),46 being the approximate equivalent of 666.67 SDRs at the 1995 rate. Although there is no specific provision dealing with the matter, containers are treated by case law in the same manner as under the Visby Rules.

42. Piraeus Court of Appeal 97/2004, ENautD 2004. 41. 43. Piraeus Court of Appeal 1023/1997, ENautD 1998. 13. 44. Piraeus Court of Appeal 33/1996, ENautD 1997.140. 45. Readers are referred to the main body of this book for a description of the Hague-Visby Rules and their implications on limitation of liability. 46. Presidential Decree 425/1995, Govt. Gaz. A245/24.11.1995.

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The Code does not deal with limitation of the carrier’s liability in tort actions and does not provide a right to limit for the benefit of the carrier’s servants or agents. Neither is the loss of the right to limit specifically regulated; general Greek law principles would apply in that respect, barring limitation of liability where the loss is due to an intentional act of either the carrier or its servants. The time-bar period under the Code for claims under a contract of affreightment or a contract for the carriage of goods, other than those for partial shortage or damage, is of one year starting from the end of the year during which the claim arose (Articles 289 and 291). Claims for partial shortage or damage are, similarly, extinguished within one year, count­ ing, however, from delivery.

D. CREW CLAIMS Greek national law47 prevents the shipowner from limiting his liability for obligations arising from the contracts of employment of the Master and the crew. The Workmen’s Compensation Act 551/1915 provides for strict liability in respect of accidents occurring in the course of performance of the seafarer’s duties or on account thereof, which accidents result into loss of life or disability. Compensation is limited to amounts calcu­ lated on the basis of the seafarer’s average earnings over the previous year. Fault on the part of the shipowner or operator or their servants may give rise to an entitlement to compensation for pain and suffering and, in certain circumstances, full damages under ordinary civil law.

47. Article 87 §2 CPML.

CHAPTER 20

Hong Kong Harry Hirst and Billy Wong Ince & Co, Rm 3801-6, 38th Floor, Asia Pacific Finance Tower, Citibank Plaza, 3 Garden Road, Hong Kong

A. INTRODUCTION On 1 July 1997 the People’s Republic of China resumed the exercise of sovereignty over Hong Kong pursuant to the Joint Declaration signed with the Government of the United Kingdom of Great Britain and Northern Ireland in December 1984; and Hong Kong is now formally known as the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China. As a special administrative region Hong Kong enjoys a high degree of autonomy under the principle of ‘‘one country, two systems’’, and this is enshrined in the Basic Law of the HKSAR adopted on 4 April 1990 by the People’s Republic of China, and which operates as a ‘‘mini-Constitution’’ for Hong Kong since its entry into force in Hong Kong on 1 July 1997. 1. The laws of Hong Kong Under Article 8 of the Basic Law, all laws previously in force in Hong Kong (the common law, rules of equity, ordinances, subordinate legislation, customary law, etc) continue to apply save for those laws which contravene the Basic Law. Hong Kong law therefore, now consists of the Basic Law; all laws previously in force in Hong Kong prior to 1 July 1997 which do not contravene the Basic Law and which continue to apply; and all new laws enacted by the Government of the HKSAR. Hong Kong now has its own executive authorities, legislature and judicature which are independent from those of the People’s Republic of China. The Court of Final Appeal was established pursuant to Article 82 of the Basic Law and is vested with the power of final adjudication in Hong Kong, in place of the Privy Council which used to hear appeals from the Hong Kong Court of Appeal prior to 1 July 1997. The Hong Kong courts are now also no longer bound by the decisions of the Courts in England, and can refer and apply the decisions of the courts of any common law jurisdiction pursuant to Article 84 of the Basic Law. However, English Court decisions do and will continue to have a strong persuasive influence on the Hong Kong courts, and the commentary in main text of this book is also highly relevant to the law on the limitation of shipowners liability for maritime claims in Hong Kong. 2. Ratification of treaties Since 1 July 1997 it is now within the sovereign power of the People’s Republic of China to conclude and ratify treaties for Hong Kong. However, under Article 151 of the Basic Law, the Government of the HKSAR is authorised to conclude and ratify treaties of its 259

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own volition in appropriate fields, including shipping and international trade, under the name ‘‘Hong Kong, China’’. Following ratification, a treaty must first be incorporated into the domestic laws of Hong Kong by legislation before it can have any effect. Immediately following the hand-over of sovereignty on 1 July 1997 the government of the HKSAR took steps to ratify all those treaties which then applied in Hong Kong by reason of their earlier ratification by the British Government on behalf of the territory of Hong Kong, including those dealing with limitation of a shipowners liability for maritime claims.

B. THE 1976 LIMITATION CONVENTION Section 12 of the Merchant Shipping (Limitation of Shipowners’ Liability) Ordinance [Cap. 434] (the ‘‘Limitation Ordinance’’) provides for the Convention on Limitation of Liability for Maritime Claims 1976 (the ‘‘1976 Limitation Convention’’) to have the force of law in Hong Kong. The provisions of the 1976 Limitation Convention are set out in Schedule 2 of the Limitation Ordinance, although their application in Hong Kong is qualified by sections 13 to 23 as follows: 1. Article 1—Persons entitled to limit liability The word ‘‘ship’’ includes any air-cushioned vehicle designed to operate in or over water while so operating, and any structure (whether completed or in the course of completion) launched and intended for use in navigation as a ship or part of a ship (section 13); and the right to limit liability applies in relation to any ship whether seagoing or not (section 14). 2. Article 2—Claims subject to limitation The claims referred to in paragraph 1(d) are not presently subject to limitation in Hong Kong (section 15). 3. Article 3—Claims excluded from limitation The claims excluded from limitation by virtue of paragraph (b) of this article are those claims in respect of any liability incurred under section 6 of the Merchant Shipping (Liability and Compensation for Oil Pollution) Ordinance [Cap. 414]. This Ordinance gives the force of law in Hong Kong to the provisions of the 1992 Protocol to the International Convention on Civil Liability for Oil Pollution Damage 1969 (‘‘CLC 92’’) and to the Fund Convention 1992. The right to limit for liabilities under these conventions are dealt with separately under this Ordinance and not under the Limitation Ordinance (section 16). The claims excluded from limitation by paragraph (c) of this Article are those claims made by virtue of sections 3 or 4 of the Nuclear Material (Liability for Carriage) Ordinance [Cap. 479] (section 16). These Sections of this Ordinance impose a duty on persons engaged in carrying nuclear material or causing nuclear material to be carried within Hong Kong waters to ensure there is no occurrence involving that nuclear material

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which will cause injury to any other person or to the property of any other person or to the property of any other person in Hong Kong. In the absence of conduct barring the right to limit liability as set out in Article 4, the owner of a Hong Kong ship is not liable for any loss or damage to property onboard the ship caused by fire; or for any loss or damage to any valuables on the ship caused by reason of theft, robbery or other dishonest conduct unless their nature and value were declared by their owners to the owner or masters of the ship in the bill of lading or otherwise in writing at the time of shipment (section 22). ‘‘Owner’’ includes any part owner, and any charterer, manager or operator of the ship; and ‘‘valuables’’ are defined as gold, silver, watches, jewels or precious stones. Where such loss or damage arises from anything done or omitted to be done by any person in his capacity as master, or as a member of the crew, or in the course of his employment as a servant of the owner of the ship, then again and in the absence of conduct barring the right to limit liability as set out in Article IV, that person too will not be liable (section 22). 4. Article 6—The general limits For a ship with a tonnage of less than 300 tonnes the limit of liability in respect of claims for loss of life or personal injury is 166,667 units of account, and the limit of liability in respect of other claims is 83,333 units of account (section 17). Tonnage for limitation purposes is a ship’s gross tonnage (section 17). The Merchant Shipping (Liability of Shipowners and Others) (Calculation of Tonnage) (Hong Kong) Order [Cap. 434A] dated 30 June 1997 provides for the tonnages of a ship to be calculated in accordance with Regulations 4 to 6 of the Merchant Shipping (Tonnage) Regulations [Cap. 415] which in turn adopt the same formulae for calculating gross and net tonnages as in Annex I of the International Convention on Tonnage Measurement of Ships 1969. 5. Article 11—Constitution of the fund The Monetary Authority in Hong Kong may, from time to time, by order prescribe the rate of interest to be applied for the purposes of paragraph 1 of this article (section 19). The last such order, the Merchant Shipping (Limitation of Shipowners’ Liability) (Rate of Interest Order) [Cap.434D] was made on 31 May 2002 and sets out the rates of interest to be applied where the date of the occurrence giving rise to liability occurred on or after 16 January 1987. Since 31 May 2002 the applicable rate of interest has been fixed by this Order at 5.16%. Where a fund is constituted with the court in Hong Kong in accordance with this article for the payment of claims arising out of any occurrence, the court may stay any proceed­ ings in Hong Kong relating to any claim arising out of that occurrence which are pending against the person by whom the fund has been constituted (section 19). 6. Article 12—Distribution of the fund No lien or other right in respect of any ship or property shall affect the proportions in which the fund is to be distributed among the several claimants as provided for in this article (section 20).

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7. Article 13—Bar to other actions A person who successfully applies in Hong Kong for an order for the release of a ship or other property under paragraph 2 of this article will be deemed to have submitted to the jurisdiction of the Hong Kong court for the purposes of adjudicating the claim for which the ship or property was arrested or attached (section 21). 8. Comment It is expressly stated in section 23 that nothing in this part (Part III) of the Limitation Ordinance (being sections 12 to 23 providing for the application of the 1976 Limitation Convention in Hong Kong) relieves a person of any liability imposed upon him under Part II of the Limitation Ordinance (being sections 3 to 11 providing for the application of the 1974 Athens Convention in Hong Kong, which is discussed below). On 18 March 2005 the Government of the HKSAR, through the Legislative Council, passed into law the Merchant Shipping (Limitation of Shipowners Liability)(Amendment) Ordinance 2005. This Ordinance provides for the implementation in Hong Kong of the new, higher limits of liability prescribed by the 1996 Protocol to the 1976 Limitation Convention on a day to be appointed by the Secretary for Economic Development and Labour by notice published in the Government Gazette. No notice has, as yet, been published but it is expected that the new, higher limits will come into force later this year. This Ordinance also provides for the retrospective application of certain other amend­ ments to the Limitation Ordinance which are deemed to have come into operation on 1 July 1997. These amendments are largely semantic and include, for example, the substitu­ tion of ‘‘Chief Executive’’ for ‘‘Governor’’. This Ordinance also makes it clear that it is the provisions of 1976 Limitation Convention which apply in Hong Kong and not the Convention per se, which does not apply in its entirety but with the qualifications set out in the Limitation Ordinance as described above.

C. LIMITATION: PASSENGER CLAIMS Section 3 of the Merchant Shipping (Limitation of Shipowners’ Liability) Ordinance [Cap. 434] (The ‘‘Limitation Ordinance’’) provides for the Athens Convention relating to the Carriage of Passengers and their Luggage by sea, 1974 and the 1976 London Protocol to that Convention (collectively the ‘‘1974 Athens Convention’’) to have the force of law in Hong Kong. The provisions of the 1974 Athens Convention are set out in Schedule 1 of the Limitation Ordinance, although their application in Hong Kong is qualified by sections 4 to 11 as follows: 1. Article 1—Definitions The word ‘‘ship’’ means any seagoing vessel and includes any air-cushion vessel designed to operate in or over water while so operating: and the words ‘‘contract of carriage’’ do not include a contract of carriage which is not for reward (section 4).

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2. Article 2—Application Where it is stated in the contract of carriage that the provisions of another international convention governing liability for the carriage of passengers or luggage are to apply, then such provisions will be treated as having mandatory application to the contract even though they might not have mandatory application otherwise to contracts for the carriage of passengers or luggage at sea (section 5). 3. Article 7—Limit of liability for personal injury The Government of the HKSAR may by order specify a limit in substitution for, but not lower than, that specified in paragraph 1 of this Article for claims against a carrier whose principal place of business is in Hong Kong (section 6). No such orders have been made as yet. 4. Article 12—Aggregation of claims The limitations on liability mentioned in this article in respect of a passenger or his luggage apply to the aggregate liabilities of the persons in question in all proceedings for enforcing the liabilities of any of them which may be brought whether in Hong Kong or elsewhere (section 7). 5. Article 16—Time-bar for actions This article applied to arbitrations as it applies to court actions (section 8). 6. Article 17—Competent jurisdiction Where proceedings are brought pursuant to this article in Hong Kong to enforce a liability which is limited by virtue of Article 12, the court may at any stage of the proceedings make such order as appears to be just and equitable in view of the provisions of Article 12 and in view of any other proceedings which have been or are likely to be commenced in Hong Kong or elsewhere to enforce such liability in whole or in part (section 9). Where such liability is or may be partly enforceable in other proceedings in Hong Kong or elsewhere, the court has jurisdiction to award an amount less than it would have awarded if the limitation applied solely to the proceedings before it; or to make any part of its award conditional on the results of those other proceedings (section 9). 7. Article 18—Invalidity of contractual provisions The Government of the HKSAR may by order require the carrier to give notice in a prescribed manner of the application of the 1974 Athens Convention to the contract of carriage, and to make the failure to comply with such a requirement an offence, with the carrier liable on conviction to a fine of HK$10,000 (section 10). As yet no such order has been made. 8. Comment It is expressly stated in section 11 that nothing in this part (Part II) of the Limitation Ordinance (being sections 3 to 11 providing for the application of the 1974 Athens

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Convention in Hong Kong) affects the operation of Part III of the Limitation Ordinance (being sections 12 to 23 providing for the application of the 1976 Limitation Convention in Hong Kong). On 18 March 2005 the Government of the HKSAR, through the Legislative Council, passed into law the Merchant Shipping (Limitation of Shipowners Liability)(Amendment) Ordinance 2005 (see above). In the context of passenger claims and with effect from 18 March 2005 this Ordinance provides that where such claims are brought in Hong Kong and relate to ‘‘regional carriage’’ then Hong Kong law will apply and the limits of liability will be converted into Hong Kong currency. ‘‘Regional carriage’’ is defined by this Ordinance as any carriage between Hong Kong and Macau, or between Hong Kong and Mainland Chinese ports, or where the scheduled itinerary provides for an intermediate call at Hong Kong, Macau, or a Mainland Chinese port. This Ordinance also provides for the retrospective application of certain other amend­ ments to the Limitation Ordinance which are deemed to have come into operation on 1 July 1997. These amendments are largely semantic and include, for example, the substitu­ tion of ‘‘Chief Executive’’ for ‘‘Governor’’. This Ordinance also makes it clear that it is the provisions of 1974 Athens Convention which apply in Hong Kong and not the Convention per se, which does not apply in its entirety but with the qualifications set out in the Limitation Ordinance as described above. Presently, the Government of the HKSAR has no plans to implement the 2002 Protocol to the 1974 Athens Convention.

D. LIMITATION: CARRIAGE OF GOODS Section 3 of the Carriage of goods by Sea Ordinance (‘‘COGSO’’) provides for the International Convention for the Unification of Certain rules of Law relating to Bills of Lading 1924 as amended by the Brussels Protocols of 1968 and 1979 (collectively the ‘‘Hague-Visby Rules’’) to have the force of law in Hong Kong and to apply to all contracts for the carriage of goods by sea which provide, either expressly or by implication, for the issue of a bill of lading or similar document of title. The provisions of the Hague-Visby Rules (the ‘‘Rules’’) are set out in the Schedule to COGSO and their application in Hong Kong is slightly qualified by Sections 3 to 7. However, there are no qualifications on a carrier’s right to limit liability under Article IV r.5(a) of the Rules to 666.67 units of account per package or unit or to 2 units of account per kilogram of gross weight of the goods lost or damaged, whichever is the higher.

CHAPTER 21

India Shardul Thacker Mulla & Mulla & Craigie Blunt & Caroe, Mulla House 51 M.G. Road, Fort, Mumbai 400 001

A. INTRODUCTION The Merchant Shipping Act 1958 was amended by the Amendment Act 1970 and thereby inter alia, sought to adopt and give effect to the International Convention on Limitation of Liability of Owners of Sea-going Ships 1957. The legislature, however, reserved its rights and did not adopt the Convention in its entirety. In 2002 there were several changes carried out to the Merchant Shipping Act, 1958, as it was felt that: ‘‘As an active member of the International Maritime Organisation (IMO), India has acceded to a number of International Conventions and Protocols adopted by the IMO. Suitable provisions are required to be made in the Merchant Shipping Act, 1958 to enable the Government of India or its agencies to give effect to those Conventions and Protocols. Besides, amendments of certain provi­ sions of the Act are also required to enable the maritime administration to meet its operational requirements.’’1

Hence several changes have been carried out to Chapter XA of the Merchant Shipping Act (which deals with Limitation of Liability against Maritime Claims) to bring the position of Indian law in line with the International Convention on Limitation of Liability of Maritime Claims (‘‘LLMC’’) 1976.

B. WHO CAN LIMIT LIABILITY? 1. Before the amendments of 2002 The following persons/entities were allowed to limit liability under the Merchant Shipping Act: (a) an owner of a vessel; (b) a charterer/manager/operator of the vessel; (c) master/crew/other servants of the owner, manager, operator of the vessel acting in the course of their employment; (d) builders or other persons having an interest in any vessel built in any port or place in India from and including the launching of such vessel until the registration.

1. The Gazette of Indian Extraordinary 30 July 2002.

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2. After the amendments of 2002 The following persons are now allowed to limit liability: (a) an owner of a vessel; (b) a charterer/manager/operator of the vessel; (c) master/crew/other servants of the owner, manager, operator of the vessel acting in the course of their employment; (d) a salvor, for any act, neglect or default of persons he is responsible for; (e) an insurer of liability to limit his liability to the same extent as his assured.

C. WHAT ARE THE CLAIMS IN RESPECT OF WHICH LIABILITIES CAN BE LIMITED? 1. Before the amendments of 2002 (1) Claims for loss of life or personal injury to any person aboard the vessel; (2) claims for loss or damage to any property on board the vessel; (3) claims for loss or personal injury to any person (whether on land or water), loss of or damage to any other property or infringement of any rights which is caused by an act, neglect or default of any person on board the vessel for whose act, neglect or default the owner is responsible; or (4) which is caused by the act, neglect or default of any person not on board the vessel for whose act, neglect or default the owner is responsible. 352A—Limitation of liability for damages in respect of certain claims (1) The Ship owner, salvor, any person for whose act, neglect or default the shipowner or salvor, as the case may be, is responsible, and an insurer of liability for claims to the same extent as the assured himself, may limit his liability as provided under section 352B in respect of— (a) claims arising from loss of life or personal injury to, or loss of or damage to, property (including damage to harbour works, basins and waterways and aids to navigation), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; (b) claims arising out of loss resulting from delay in the carriage by sea of cargo and passengers or their luggage; (c) claims arising out of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage opera­ tions; (d) claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with the provisions of the Convention or the rules made in this behalf prescribe, as the case may be, and such further loss caused by such measures; (e) claims for the loss of life or personal injury to passenger of a ship brought by or on behalf of any person— (i) under the contract of passenger carriage; or (ii) who, with the consent of the carrier, is accompanying a vehicle for live animals which are covered by a contract for the carriage of goods carried in that ship.’’

The Indian legislature has not adopted the LLMC 1976 Article 2(1) in its entirety in that it does not allow the following claims to be subject to limitation of liability:

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(a) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship; (b) claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship.2 D. CLAIMS EXCEPTED FROM LIMITATION 1. Before the amendments of 2002 (1) A liability imposed law, which relates to the removal of the wreck and has arisen or is connected with the raising, removal or destruction of any vessel which is sunk, stranded or abandoned. (2) Claims arising out of any damage caused to harbour works, navigation and navigable waterways.3 (3) Claims for contribution in general average or salvage. (4) Claims by the master or crew or any servant of the vessel who is either on board or whose duties are connected with the vessel including a claim by their legal representatives unless the contract of service is governed by a foreign law which permits such limitation. 2. After the amendments of 2002 (1) Claims for contribution in general average. (2) Claims for salvage. (3) Claims for oil pollution damage within the meaning of the International Conven­ tion on Civil Liability for Oil Pollution Damage, 1992 as amended from time to time. (4) Claims by servants or the shipowner or salvor whose duties are connected with the ship or the salvage operation including claims of their heirs dependants or other persons entitled to make such claims, if under the law governing their service contracts do not permit the limitation of liability in respect of such claims, or stipulates that a larger fund be constituted. (5) Claims which are subject to Indian law or an international convention which prohibits limiting liability due to nuclear damage. (6) A shipowner of a nuclear ship is also not permitted to limit his liability for any nuclear damage. E. BURDEN OF PROOF 1. Before the amendments of 2002 By virtue of section 352A(2) of the Indian Merchant Shipping Act the burden of proof was categorically and specifically cast on the owner to prove that the occurrence giving rise to 2. Article 2, International Convention on Limitation of Liability of Maritime Claims 1976. 3. By virtue of the new section 352A(a) post 2002 amendments, such claims are now permitted to be limited.

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the claim was not due to his actual fault or privity, and this position of law has been recognised by the SCI v. Hindustan Shipyard Ltd.4 2. After the amendments of 2002 The old section 352A(2) has now been deleted from the Act and the burden of proof has now shifted onto the claimant or a person who is attempting to break the limitation as construed by Article 4 of the LLMC 1976.

F. LIMITS OF LIABILITY 1. Before the amendments of 2002 Under section 352B the limit of liability is fixed on the basis of the tonnage of vessel:5 (a) Where the claim related to property only the owner could limit his liability for an amount which did not exceed 1,000 francs for each ton of the vessel. (b) Where the claim related to the loss of life or personal injury the limit was enlarged to 3,100 francs for each ton of the vessel. (c) Where the claim related to both property and loss of life or personal injury, then the limit was 3,100 francs for each ton of the vessel. This sum of 3,100 francs was then split into two parts. The first part comprising 2,100 francs which would be available for all loss of life and personal claims and the second part compris­ ing 1,000 francs which would be available for property claims. In case the first part was not sufficient for all the loss of life and property claims, then the balance of such claims is to rank rateably with property claims against the second part of the find. (d) If a vessel had a tonnage of less then 300 tons then it was to be considered to have a tonnage of 300 tons.6 2. After the amendments of 2002 Section 352B of the Act has been substituted in light of the 2002 amendments, and the limit has now been increased in accordance with the LLMC 1976, hence the limits of liability are in accordance with Article 6, 7, 8, 9, 10 of the Convention.

G. SETTING UP THE FUND 1. Before the amendments of 2002 To set up a limitation fund, the owner had to make an application to the High Court. The High Court determines the owner’s liability and directs him to deposit such amount or 4. 1990(3) Bom C.R.496. 5. AIR 1998 SC 2330. 6. By virtue of the new section 352E post 2002 amendments unless the Central Government notifies to the contrary, vessels with a tonnage of less than 300 tons are excluded from limiting their liability under Chapter XA of the Indian Merchant Shipping Act 1958.

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security as it thinks is necessary to constitute the fund. In the matter of Shipping Corpora­ tion of India v. Hindustan Shipyard Ltd.7 the Bombay High Court has stated that: ‘‘It is not a matter of mere procedure whom the Court, by an order, constitute a Limitation Fund. It is a matter of substantive law and in the absence of any provision for the purpose of an interim Limitation Fund it is not possible for the Court to grant any such relief. The fundamental assumption when the Court constitutes a Limitation Fund is that the plaintiffs are not at fault. That fact will have to be established and then only the Court can proceed with the constitution of any such fund. Constitution of a limitation fund has various consequences, as provided under sub-sections (3) to (7) of section 352(C) of the said Act. It is not a matter of furnishing any security as such. It is a method of determining the liability and fixing a limit thereon. It curtails the rights of all claimants and circumscribes the scope of their action against the owners, once such a Fund is constituted. Neither under the English law nor under our law, is there any provision for constitution of interim liability Fund.’’

The Supreme Court of India in the leading case of World Tanker Carrier Corporation v. SNP Shipping Services Pvt. Ltd.8 held that an owner of a vessel may also limit his liability by taking defensive measures where a suit is filed against him: ‘‘A limitation action as in the present case, falls under the High Court’s Admiralty jurisdiction. But a limitation action, though filed in Admiralty, is not against a vessel. It is a protective action against claims which may be filed by others against owner of the vessel in admiralty jurisdiction. Therefore, a plea of limitation can be taken as a defence by the owner in an action in admiralty filed against him by the claimant against him and his ship. Hence, the Court having jurisdiction to entertain an admiralty action against the vessel of the owner has jurisdiction to set up a limitation fund for the owner. Similarly, if the owner initiates the ‘defensive’ action in limitation, the Court which has jurisdiction to entertain a liability claim will have jurisdiction to entertain the limitation action. If a liability claim is already filed, that Court will have jurisdiction over limitation action also. But claims may be several, and they may be actually filed or may be apprehended. Any Court where such a claim is filed or is likely to be filed will have jurisdiction to entertain a limitation action. The Court of domicile of the owner and the ship is a Court where such a claim is likely to be filed. Therefore, that Court will also have jurisdiction. Out of these, the owner has the option to choose his Court for filing a limitation action.’’

2. After the amendments of 2002 The procedure of setting up the limitation fund after the 2002 amendment remains the same. H. RELEASE OF AN ARRESTED SHIP The procedure with respect to the release of ships has remained unchanged following the 2002 amendments.9 The court may release a vessel from arrest if: (a) in the opinion of the High Court the security which has previously been given is satisfactory in respect of the said liability and the High Court is satisfied that if such claim is established the security will be available to the claimant; 7. 1990(3) BOM C.R.496. 8. AIR 1998 SC 2330. 9. The only change is that before the 2002 Amendments ‘‘convention country’’ meant country which is a party to the Brussels Convention relating to the Limitation of Liability of owners of Sea-going Ships 1957. Post amendment ‘‘convention country’’ refers to countries that are signatories to the LLMC 1976.

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(b) security is previously given and the High Court must be satisfied that the security is not less then the permitted limit. In case it is of the opinion that further security is required then it has the power to pass appropriate orders. The High Court generally has the discretion whether to release the vessel or not; however if security has been provided in a port of a country which is a party to the convention then it is bound to order the release of the vessel on being satisfied of the above.

I. SCOPE OF THE AMENDED PART XA The amended Merchant Shipping Act has excluded owners, salvors and insurers from limiting their liability if: (a) they do not habitually reside in India; or (b) they do not have a principal place of business in India; or (c) the ship in relation to which the right of limitation is invoked or whose release is sought and which at the time specified does not at the time specified fly the flag of one of the parties to the LLMC 1976. The Act also excludes the following ships (unless notified otherwise by the Central Government from Part XA): (a) ships intended for navigation around the coast of India that have been registered under the Indian Merchants Shipping Act 1958; (b) ships with a tonnage of less then three hundred tons; (c) air cushion vehicles; (d) floating platforms constructed for the purpose of exploring or exploiting the natural recourses of the seabed/subsoil.

CHAPTER 22

Ireland J. Niall Mcgovern Past President, Irish Maritime Law Association, Honorary Vice-President, Comite Maritime International

A. INTRODUCTION Ireland did not ratify, accede to, or adopt either of the Conventions of 1924 or 1957 relating to Limitation of Liability. By virtue of the Irish Constitutions of 1922 and 1937, British Acts which applied to Ireland before 1922 continued in force after that date until they were repealed. Consequently, prior to 6 February 1997, the law on Limitation of Shipowners and Others was that which was contained in the British Merchant Shipping Acts passed before 1922, as modified by the Adaptation of Enactments Act 1922. Indeed because of what were regarded by some as defects in that Adaptation of Enactments Act, the right of a shipowner to limit his liability was open to some doubt. The Merchant Shipping (Liability of Shipowners and Others) Act 1996 (MSA 1996) was enacted by the Irish Parliament on 5 December 1996. It was brought into force on 6 February 1997, the day appointed by the Minister by S.I. 215/1997. This Act gives the force of law in Ireland to: (1) The Convention on Limitation of Liability for Maritime Claims 1996; (2) The Convention on the Carriage of Passengers and their Luggage by Sea 1974 as amended by the Protocol of 1976; (3) The Convention for the Unification of Certain Rules relating to Bills of Lading 1924 (Hague Rules) as amended by the Protocols of 1968 (Visby Rules) and 1979. Ireland deposited an Instrument of Accession to the Limitation Convention 1976 on 24 February 1998 and therefore in accordance with the provisions of Article 17.3, the Convention entered into force internationally as far as Ireland is concerned on 1 June 1998, although it had become part of the domestic law of Ireland from 6 February 1997. Ireland’s Instrument of Accession to the Limitation Convention was accompanied by a declaration that, as permitted by Article 18, it would exclude the application of Article 2.1 (d) and (e). This reflected the provisions of section 11 of the MSA 1996 which in turn reflected sections 39 and 53 of the Merchant Shipping (Salvage and Wreck) Act 1993 (MSA 1993). B. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

1. Persons entitled to limit liability These are shipowners and salvors as set out in the Convention, but whereas the Conven­ tion refers to the owner etc of a seagoing ship, the MSA 1996 defines ‘‘Ship’’ as any 271

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structure (whether completed or in the course of completion) launched and intended for use in navigation as a ship or part of a ship and specifically provides that it need not be seagoing. 2. Claims subject to limitation These are as set out in Article 2 of the Convention except those set out in paragraphs (d) and (e). 3. Claims excepted from limitation These are as set out in Article 3 of the Convention except for: (a) Claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including, anything that is or has been on board such a ship. This includes cargo. (b) The reference to a ‘‘nuclear’’ ship in paragraph (d) will be interpreted as includ­ ing a ship carrying nuclear material (whether or not the ship is powered by such material). 4. Other matters Matters such as conduct barring limitation, counterclaims, financial limits of liability, unit of account, aggregation of claims, the constitution of the fund and the need to do so, the distribution of the fund, the barring to other actions and the governing law are determined by the provisions of the Convention

C. PASSENGERS There are no special provisions of national law in relation to passenger claims. Limitation amounts are as set out in the Athens Convention of 1974 and the Protocol of 1976, but section 25(1) of the MSA 1996 provides as follows: ‘‘If, as respects the application by virtue of Article 2 of the 1974 Convention, of the provisions of that Convention in particular proceedings, any state referred to in that Article is not a party to the 1976 Protocol, the provisions of that Convention, without the amendments thereof effected by the said Protocol, shall apply in relation to any defendant in those proceedings who is a national of the said state.’’

Thus, although the Passenger Convention 1974 with the increased limits for which the Protocol of 1976 provides are part of Irish domestic law, an Irish national, suing in Ireland for injuries sustained on board a ship flying the flag of a state which, although a party to the Convention is not a party to the Protocol, will be restricted to the lower limits of liability for which the Convention provides, simply because the state of which the defen­ dant is a national has not adopted the Protocol. Indeed it is arguable that the lower limits will apply even in a case in which in which the ship may fly the flag of a state which has accepted the Protocol but the Owner is a national of a non-contracting state. Ireland has not adopted the Protocol of November 2002.

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D. CARRIAGE OF GOODS BY SEA The Merchant Shipping Act 1947 made the Hague Rules part of the domestic law of Ireland since 1948, although Ireland did not accede to the Convention until 1962. When the MSA 1996 came into force on 6 February 1997, the Visby Rules and the Protocol of 1979 also became part of the domestic law of Ireland although Ireland has yet to accede to these Protocols. The limit of liability per package or unit of cargo is as provided in the Convention and the Protocols. Section 37 of the MSA 1996 provides that the overall limit of liability in the Limitation Convention 1976 applies to claims under the Hague-Visby Rules. Loss of the overall right to limit liability would be governed by the Limitation Conven­ tion 1976. The package or unit limit would be lost if there was a breach of a fundamental term of the contract of carriage. Section 34 of the MSA 1996 provides that the Rules shall have the force of law in relation to and in connection with the carriage of goods by sea where the port of shipment is a port in the State whether or not the carriage is between ports in two different States within the meaning of Article X of the Rules.

CHAPTER 23

Israel P.G. Naschitz 5 Tuval St., Tel Aviv 67897 Israel

LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY The Israeli law dealing with limitation of liability of ship owners is the Shipping (Limita­ tion of Liability of Owners of Vessels) Law, 5725-1965 (hereinafter: the ‘‘Law’’). The Law incorporates the 1957 Convention relating to the Limitation of Liability of Owners of Sea-Going Ships and Protocol of Signature (hereinafter: ‘‘the 1957 Convention’’). The Law also incorporates the Protocol amending the International Convention relating to the Limitation of Liability of Owners of Sea-going Ships of 10 October 1957, signed in Brussels 21 December 1979 (hereinafter: ‘‘the 1979 Protocol’’). 1. Persons entitled to limit liability These are as described in Article 1 of the 1957 Convention. 2. Claims subject to limitation These are as described in Articles 1(a), 1(b), 1(c) of the 1957 Convention. 3. Claims excepted from limitation These are as described in Article 1(4) of the 1957 Convention. 4. Conduct barring limitation Conduct barring liability is described in Article 1(1) of the 1957 Convention. In addition, Article 5 of the Law provides that the Minister of Transport may prescribe by order published in Reshumot that this Law shall not apply to vessels registered in a particular state, not being a party to the Convention, if he considers that such state does not, in the matter of the limitation of the liability of the owner of an Israeli vessel, act in accordance with the principles laid down by this Law. 5. Financial limits of liability for all types of claims Limits of liability are as described in Article 3 of the 1957 Convention and amended in Article 2 to the 1979 Protocol. 275

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6. Units of account used for calculation limitation fund The Unit of Account used is the Special Drawing Right of the International Monetary Fund (SDR). 7. Aggregation of claims Article 7 of the law provides as follows: ‘‘Where the Court considers that the total sum of the claims arising out of one occurrence which are subject to limitation of liability and which are or may be brought against the applicant exceeds the maximum amount to which the applicant is liable under article 3 of the Convention and that the other conditions of the constitution of a limitation fund laid down by this Law or by regulations thereunder are fulfilled, it shall authorise the constitution of the fund either by the deposit of that amount with the Court, plus such amount of costs as the Court may determine, or by the provision of some other security for the payment of the said amount, as the Court may decide and within such time, not exceeding the tune prescribed by regulations, as it may fix.’’

8. Limitation of liability—need to constitute a fund It is not necessary to constitute a fund to plead limitation of liability. The fund will be constituted if the ship owner submits a request to the Court and if the Court permits that constitution. 9. Constitution of the fund The authorisation to constitute the limitation fund is described in Article 7 of the Law (quoted above). 10. Distribution of fund between claimants Distribution of the fund is dealt with according to Article 3(2) of the 1957 Convention. 11. Constitution of fund as a bar to other actions Article 9(a) of the Law provides as follows: ‘‘Where the applicant has constituted a limitation fund in accordance with an authorization under section 7, the Court shall, on his application, direct a Received stay of all operations for the execution of a judgment against him as to a claim subject to limitation of liability, and the court may direct a stay of all hearings, of a claim as aforesaid on which a judgment has not yet been given if it considers that such should be done in order to ensure the just distribution of the fund constituted as foresaid. Where the Court has directed a stay of execution proceedings or a stay of hearings the claim shall be deemed to have been filed under section 13.’’

Section 13 describes the filing of a claim against the fund. 12. Governing law in matters of limitation The law that governs limitation of liability, as aforementioned, is the Shipping (Limitation of Vessel) Law, 5725–1965. The Minister of Transport is charged with the implementation of this Law and may make regulations as to any matter relating to such implementation, except procedural

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regulations of the Court, in respect of which section 8 of the Maritime Court Law, 5712-1952, shall be followed. 13. Scope of application—special types of vessel The limitation of liability applies both to ships under and above 300 tons as described in Article 3(5) of the 1957 Convention. 14. Mutual obligation to the other States to permit limitation Article 1(4) of the Law provides that: (a) ‘‘Where, in connection with a particular occurrence abroad, a limitation fund has been consti­ tuted, in one of the states parties to the Convention, by the owner of a vessel or by a person treated like the owner of a vessel for the purposes of article 5 of the Convention, and such owner or such person has constituted a limitation fund in respect of that occurrence in Israel also, the Court may postpone the hearing of the claims against the fund until the fund constituted abroad has been distributed if it considers that the postponement will not cause damage to a person claiming from the fund in Israel. (b) For the purposes of this section, a state to the vessels registered in which this Law applies by virtue of section 5 although it is not a state party to the Convention shall be treated like a state party to the Convention.’’

15. Date of entry into force of the present system of limitation The Law came into force in 1965. 16. Denunciation of previously ratified limitation conventions As Israel has not ratified previous limitation conventions, no denunciation was required.

CHAPTER 24

Italy Prof. Francesco Berlingieri Studio Legale Berlingieri, Via Roma 10, 16121 Genoa-Italy

A. GLOBAL LIMITATION Italy is not a party to the LLMC 1976 nor was it a party to the 1957 Limitation Convention. A bill is being presented for the ratification of the LLMC 1976 and its 1996 Protocol.1 1. Calculation of the limit Italian domestic law on limitation of liability has not adopted a per ton limitation, but a limitation based on the ‘‘commercial value’’ at the time of the end of the voyage during which the obligations have arisen. Therefore, if during the voyage the ship has been damaged (e.g., as a consequence of a collision), the relevant value is her value in damaged conditions. Such value, however, is taken as the limit of liability if it is not below one fifth of the value at the beginning of the voyage and not above two fifths thereof. If it is lower, the limit shall be equal to one fifth of the sound value; if it is higher, the limit shall be equal to two fifths of the sound value (Articles 275 and 276 of the Code of Navigation (CN)). The sound value is, pursuant to Article 622 CN, the commercial (or market) value but, if the ship is insured, the insured value is taken as the market value. There must be added to the value of the ship the freight and other remuneration (e.g., salvage award) earned during the voyage in question. 2. Claims subject to limitation All claims that have arisen in the course of a given voyage are subject to limitation. Limitation, therefore, is not related to an accident, but to a voyage. It is, however, unclear what the notion of ‘‘voyage’’ is for the purposes of limitation. 3. Persons entitled to limit Only the operator of the ship, who may be the owner or the bareboat charterer, is entitled to limit liability.

1. At time of writing in June 2005, the Italian Ministry of Foreign Affairs advised that a bill authorising the ratification of the 1976 LLMC as amended by the 1996 Protocol will be presented to Parliament for adoption in the very near future.

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4. Loss of the right to limit Pursuant to Article 275 CN the benefit of limitation cannot be invoked in respect of obligations resulting from the personal fraud or gross negligence of the operator, the burden of proof being on the claimants. 5. Limitation proceeding Limitation proceedings are commenced by the operator in the court of the district in which the operator has its principal place of business. The operator must produce a statement of the value and of the earnings of the ship, a list of the claimants and an extract from the ship’s register. The tribunal with which the application is filed then issues a judgment whereby the proceedings are started and within three days therefrom the operator must pay into court the limitation amount, subject then to a possible increase if the value of the ship is found to be greater than that declared by the operator. 6. Distribution of the fund Once the claims have be assessed by the tribunal, the fund is distributed among the claimants in accordance with the priority of each claim: claims secured by a maritime lien first, then claims secured by a registered charge (hypoth´eque) and finally unsecured claims. 7. Governing law Pursuant to Article 7 CN limitation is governed by the law of the flag of the ship. 8. Jurisdiction Although Article 620 CN provides that the competent tribunal is the tribunal of the place where the operator has its principal place of business, in case of a foreign flag ship Italian jurisdiction would exist if the ship is, at the time limitation proceedings are commenced, in Italian territorial waters and has been arrested or seized.

B. LIMITATION OF LIABILITY IN RESPECT OF POLLUTION

DAMAGE

Italy is a party to the Civil Liability Convention 1992 and, therefore, its provisions apply in respect of limitation of liability for pollution damage.

C. LIMITS OF LIABILITY UNDER THE ATHENS CONVENTION, AS AMENDED Italy is not a party to the Athens Convention.

CHAPTER 25

Japan Makoto Hiratsuka Hiratsuka & Co, 1104 Kioi-TBR Building, 5–7 Kojimachi, Chiyoda-Ku, Tokyo 102–0083

A. INTRODUCTION Japan ratified the Convention on Limitation of Liability for Maritime Claims, 1976 (hereafter called the ‘‘Convention’’) and incorporated it into domestic law by amending the Law concerning Limitation of Liability of Shipowners etc. (hereafter called the ‘‘Law’’). However, as will be seen from below, instead of using a word-for-word translation of the Convention, the draftsmen of the Law chose to use a different drafting style so that in their view the Law would be in accordance with the style of other Japanese laws.

B. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY 1. Persons entitled to limit liability Under the law, the following persons are entitled to limit liability: (a) an owner, lessee, charterer, operator or manager of ships and in the case of a corporation, its members with unlimited liability (hereafter collectively referred to as ‘‘Shipowners’’) and its employees and others for whose conduct Shipowners are responsible (hereafter referred to as ‘‘Employees’’);1 (b) a salvor and, in case of a corporation, its members with unlimited liability (hereafter collectively called ‘‘Salvors’’) and its employees and others for whose conduct Salvors are responsible (hereinafter also referred to as ‘‘Employ­ ees’’);2 (c) a liability insurer of (a) and (b) above.3 It is not clear from the provisions of the Law whether or not NVOCC (non-vessel operating common carriers), who are not operators nor charterers of the ship, are entitled to limit liability. It is this author’s opinion that the Japanese courts are more likely to allow NVOCC to limit their liability.

1. Article 2 para. 1 subpara. 2 and 3, Article 3 para. 1 and Article 98 of the Law. 2. Article 2 para. 1 subpara. 2–2 and Article 3 para. 2 of the Law. Actually, the Law does not include the words ‘‘in case of a corporation, its members with unlimited liability’’. However, the court will probably find that the above words should be deemed to be included. 3. Article 98 para. 2 of the Law.

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According to the draftsmen of the Law, employees should in certain cases include independent contractors of the shipowners and salvors such as stevedores. Pilots are included as employees of shipowners. Any of the above parties is entitled to limit liability regardless of whether or not his habitual residence and/or his principal place of business is in a State Party or the ship in question flies the flag of a State Party,4 in circumstances where the limitation proceedings are subject to Japanese jurisdiction (see part A.10 below). 2. Claims subject to limitation When Japan ratified the Convention, it made reservations with respect to Article 2 paragraph 1(d) and (e), namely claims with respect to wreck removal and claims with respect to removal of cargo. Article 3 of the Law provides for claims subject to limitation which are in principle the same as those set out in Article 2(a)(b)(c) and (f) of the Convention. However, as seen below, the provisions of Article 3 of the Law are not strictly in accordance with the provisions of the Convention. Article 3 of the Law provides: (1) Shipowners and their Employees can limit liability with respect to the belowmentioned claims in accordance with the provisions of the Law: (i) claims based on damages due to loss of life or personal injury or loss or damage to property other than to the ship itself, occurring onboard or directly connected with the operation of the ship; (ii) claims based on loss resulting from delay in the carriage of cargo, pas­ sengers or their luggage; (iii) other than those set out in (i) and (ii) above, claims based on damage from infringement of rights occurring in direct connection with the operation of the ship (except for claims based on damages resulting from non-fulfilment of contractual obligations and claims based on damages due to loss or damage to the ship itself); (iv) claims based on loss as a result of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accor­ dance with the Law; (v) claims with respect to measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with the Law (excluding those held by Shipowners and their Employees or claims with respect to fees and expenses based on a contract with these parties). (2) Salvors and their Employees can limit liability with respect to the below-men­ tioned claims in accordance with the provisions of the Law: (i) claims based on damages due to loss of life or personal injury or loss or damage to property, other than salvage ship(s) of the Salvors, which occurred directly in conjunction with the salvage operation; (ii) other than those set out in (i) above, claims based on damage from infringe­ ment of rights occurring in direct connection with the salvage operation 4. See Article 15(1) of the Convention.

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(except for claims based on damages resulting from non-fulfilment of con­ tractual obligations and the claims based on damages due to loss of or damage to the salving ships of the Salvors); (iii) claims based on damages as a result of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accor­ dance with the Law; (iv) claims with respect to measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with the Law (excluding those held by Salvors or their Employees or claims with respect to fees and expenses based on a contract with those parties). Claims with respect to removal of the ship’s wreck or removal of the cargo of the ship are not subject to limitation. However, where a party has paid these claims to claimants and seeks indemnity from other parties, such indemnity claims are subject to limitation. Claims for loss of profit from one party interested in the ship (such as shipowners) to another party interested in the ship (such as charterers) is, according to the draftsmen of the Law, not subject to limitation. In Tokyo East Credit Bank v. SKB Marine Co. Ltd. (the ‘‘ROKKO’’), the Tokyo Superior Court held in its decision dated 25 February 2000 that the bill of lading holder’s claim against the owners and the Master of the vessel for non delivery of the cargo (the cargo having been delivered to the receivers without presenting the bill of lading) was not a claim subject to limitation because it was not ‘‘loss (of) property’’ nor did it ‘‘occur onboard’’ nor was it ‘‘directly connected with the operation of the ship’’ under Article 3 Paragraph 1(i) of the Law. Further it was not ‘‘damage from infringement of rights occurring in direct connection with the operation of the ship’’ under paragraph 1(iii) of Article 3 of the Law. 3. Claims excepted from limitation Article 4 of the Law provides: ‘‘Shipowners and Salvors are not allowed to limit liability with respect to the below-mentioned claims: (i) claims for salvage or contribution in general average and (ii) claims by servants of the Shipowners whose duties are connected with the ship, or by servants of the Salvors whose duties are connected with the salvage operation, against their employers, and claims by third parties for these servants’ loss of lives or personal injury;’’

Where cargo owners who have paid a salvage claim to Salvors then seek indemnity against the carriers, the indemnity claim will probably be found to be subject to limitation, although there is no precedent on this issue in Japan. In Article 4(ii) of the Law, there is no reference to the law governing the contract of service between the Shipowner or Salvor and servants. Accordingly, regardless of the provisions of the law governing contract of service, claims by servants are not subject to limitation under Japanese law. There is no reference in Article 4 of the Law to ‘‘claims for oil pollution damage within the meaning of the International Convention on Civil Liability for Oil Pollution Damage,

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1969’’.5 Such claims should be subject to limitation under the Oil Pollution Damage Compensation Law which was enacted to incorporate the said International Convention 1969 and its 1992 amendment into domestic law, and thus are not subject to limitation under the Law. There is no reference in Article 4 of the Law to claims for nuclear damage.6 Such claims should be subject to limitation under the Law concerning Compensation for Nuclear Damage, and accordingly are not subject to limitation under the Law. Claims in respect of domestic carriage of passengers are also excepted from limitation (see part C.3, below). 4. Conduct barring limitation According to Article 3, paragraph 3 of the Law, shipowners, salvors or their employees shall not be entitled to limit their liability if the claims are in relation to damages resulting from their acts committed intentionally or recklessly with knowledge that such loss would probably result. Only those persons who personally commit these acts are barred from limitation and other parties are still allowed to limit liability for damages caused by intentional or reckless acts by these persons. The burden of proving intentional or reckless acts lies with the party who seeks to break the limitation. 5. Counterclaims Article 5 of the Law is meant to incorporate Article 5 of the Convention and provides: ‘‘If Shipowners or Salvors or their Employees have a claim against the Claimant arising out of the occurrence, the provisions of the Law shall apply to the balance after deducting their claims from the Claimant’s claim.’’

6. Financial limits of liability for all types of claim Article 7, paragraphs 1–5 of the Law provides: ‘‘1. The limits of liability for claims specified in Paragraphs 1 and 2 of the preceding Article (i.e. (i) limits of liability of the Shipowners and their Employees, other than those concerning damage to passengers and (ii) limits of liability of the owners of the salving vessel or their Employees or of the Salvors with respect to salving vessels) shall be calculated as follows: (1) Where there are claims with respect to physical damage only, the amount calculated is based on the following formula. Provided, however, that with respect to wooden vessels of not more than 100 tons, the amount is 56,000 Units of Account; (a) 167,000 Units of Account for a ship with a tonnage not exceeding 500 tons; (b) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (a) above: — for each ton from 501 to 30,000, 167 Units of Account — for each ton from 30,001 to 70,000, 125 Units of Account — for each ton in excess of 70,000, 83 Units of Account. (2) With respect to other claims, 5. Article 3(b) of the Convention. 6. Article 3(c) and (d) of the Convention.

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(a) 500,000 Units of Account for a ship with a tonnage not exceeding 500 tons, (b) For a ship with a tonnage in excess of 500 tons, the following amounts in addition to that mentioned in (a) above: — for each ton from 501 to 3,000 tons, 667 Units of Account, — for each ton from 3,001 tons to 30,000 tons, 500 Units of Account; — for each ton from 30,001 to 70,000 tons, 375 Units of Account and — for each ton in excess of 70,000 tons, 250 Units of Account. 2. Where Paragraph 1(2) above applies, out of the amount provided therein, the proportion, equiva­ lent to a fraction (the numerator being the amount calculated in accordance with Paragraph 1(1) above and the denominator being the amount calculated by Paragraph 1(2) above), shall be appro­ priated for the payment of claims with respect to physical damage and the balance thereof shall be appropriated to the compensation of claims with respect to loss of life or personal injury. Provided, however, that in the event the said balance is insufficient to pay the claims for loss of life or personal injury in full, the amount calculated for compensation of claims for physical damage shall be available for payment of the unpaid balance of claims for loss of life or personal injury, and such unpaid balance shall rank rateably with claims for physical damage. 3. The limits of liability for claims set out in Paragraph 3 of the preceding Article (Salvors not operating from any ship) shall be calculated as follows: (1) with respect to claims for physical damage only, 334,000 Units of Account; (2) in other cases 1,167,000 Units of Account. 4. The provisions of Paragraph 2 above shall apply mutatis mutandis to the case provided in paragraph 3(2) above. 5. The limits of liability in the case of Paragraph 5 of the preceding Article (in respect of claims for damage to passengers of a ship) shall be the amount specified in (1) or (2) below, whichever is the lesser: (1) an amount of 46,666 Units of Account multiplied by the number of passengers which the ship is authorised to carry according to the ship’s certificate; (2) 25 million Units of Account.’’

Shipowners etc. can apply for limitation of liability with respect to claims for physical damage only or physical damage and personal damage. However, they cannot limit their liability with respect to claims for only personal damage by the limitation amount set out in Article 6(1)(a) of the Convention. In the Law, there is no provision complying with Article 6, paragraph 3 of the Con­ vention. 7. Unit of account used for calculating limitation fund Article 2, paragraph 1(7) of the Law provides: ‘‘One Unit of Account is one Special Drawing Right as defined in Article 3 Paragraph 1 of the International Monetary Fund Agreement.’’

The limitation fund must be constituted by Japanese Yen using the exchange rate prevail­ ing at the time the limitation fund is formed. 8. Aggregation of claims Article 6, paragraphs 1–3 of the Law provides: (1) Limitation of liability of shipowners and their employees, other than claims for damages to passengers, shall apply to the aggregate of all claims which arise on a distinct occasion with respect to each vessel, both with respect to claims for personal damages and claims for physical damage.

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(2) The limits of liability of Salvors operating from salving ships or owners of the salving ships which arise on a distinct occasion shall apply to the aggregate of personal claims and physical damage claims against these parties with respect to each salving vessel. (3) The limits of liability of Salvors other than those set out in the preceding paragraph, or their Employees shall apply to the aggregate of all physical damage claims and personal damage claims from any distinct occasion with respect to each Salvor. 9. Limitation of liability—need to constitute fund Article 26 of the Law provides: ‘‘The proceedings to limit liability become effective when a decision to commence the limitation proceedings is rendered.’’

Article 25, paragraph 3 of the Law provides that the court may not render a decision to commence limitation proceedings if the applicant does not comply with the decision to form a limitation fund. Accordingly, under Japanese law, limitation of liability may not be invoked until a limitation fund has been constituted. 10. Constitution of fund (jurisdiction) With respect to the jurisdiction of the court for the constitution of a fund, Article 9 of the Law provides: ‘‘Cases for limitation of liability shall be subject to the exclusive jurisdiction of the court as set out in (1)–(3) below: (1) If the vessel involved is registered in Japan, with respect to limitation of liability subject to Article 6, paragraph 1 (limitation of liability of Shipowners and their Employees, other than claims for damage to passengers) or Article 6, paragraph 5 (limitation of liability of Shipowners and their Employees in respect of claims for damage to passengers), or limitation of liability in accordance with the provisions of Article 6, paragraph 2 (limitation of liability of Salvors, operating from the salving ship or owners of the salving ship), the district court within whose jurisdiction the port of registry of the vessel involved is located. (2) In cases where the vessel involved is not registered in Japan, with respect to limitation of liability under Article 6, paragraphs 1 or 5, or in cases where the salving vessel involved is not registered in Japan with respect to Article 6, paragraph 2, the district court within whose jurisdiction either of the following is located: — the address of the applicant, — the place the accident occurred, — the first port of call of the vessel after the accident, or — the place where the assets of the applicant were seized or provisionally attached with respect to the claim which is subject to limitation of liability. (3) In cases of limitation of liability under Article 6, paragraph 3 of the Law: The district court within whose jurisdiction either of the following is located: — the address of the applicant, — the place the accident occurred, or — the place where the applicant’s assets were seized or provisionally attached based on the claims which are subject to limitation of liability.’’

Certain professors argue that, in cases where the claim for damage is subject to the jurisdiction of a district court of Japan, the defendant should be able to apply to the district

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court for limitation of his liability, even if the court does not have jurisdiction of limitation of liability under the provisions of Article 9 of the Law. Accordingly, there is a possibility that the Japanese Court may accept the application for limitation of liability, and order the constitution of a limitation fund in Japan, in such cases. Provisions of Article 6, paragraphs 1–3 of the Law (see above part 8, Aggregation of claims), have the same effect as that of Article 11, paragraph 3 of the Convention. Article 19, paragraph 1 of the Law provides that when the court finds that an application for commencement of limitation proceedings is appropriate, it shall order the applicant to make a deposit in cash, within a period of not more than one month (from the date of the order), with the judicial affairs bureau nominated by the court. The deposit shall be the limitation fund plus interest at the rate of 6% per annum from the date of the accident up to the date of deposit. Article 20 of the Law provides that the applicant may, instead of making a cash deposit, submit to the court a contract with a bank, trust company or underwriter who has an office in Japan, whereby the bank etc. promises to provide the deposit when requested by the court to do so. 11. Distribution of fund amongst claimants Article 7, paragraph 6 of the Law corresponds to Article 12, paragraph 1 of the Conven­ tion, and provides, in effect, that ‘‘the claimants shall receive payment in proportion to their claims which are subject to limitation under the Law’’. In the case of Nipponkoa Insurance Company, Limited v. H. Kimura, the Receiver of the Limitation Fund et al (the ‘‘Buen Viento’’), where (a) the vessel sank with cargo onboard, (b) the owners commenced limitation proceedings and paid into the court limitation fund about Yen 277 million, (c) the plaintiff, cargo underwriters who paid to the assured cargo insurance proceeds of approx Japanese Yen 5.75 billion, applied for distribution in propor­ tion to its claim amount, but (d) under the Japanese CoGSA the plaintiff’s claim is limited to about Yen 100 million, (e) the defendants filed an objection to the plaintiff’s claim and based upon the objection, the court decided that the plaintiff’s claim amount should be limited to the CoGSA limitation, and (f) the plaintiff filed an appeal from the decision, the Tokyo District Court held in its judgment dated 16 October 2003, that, the plaintiff is not entitled to receive payment in proportion to their original claim amount of approx Yen 5.75 billion but is only entitled to receive payment in proportion to their claim after applying the CoGSA limitation of about Yen 100 million. Article 47, paragraph 2 of the Law corresponds to Article 12, paragraphs 2 and 3 of the Convention, and provides, in effect: ‘‘Persons who paid claims which are subject to limitation, shall, up to the amount they have paid, be deemed to have claims against the fund and may join the limitation proceedings.’’

Article 47, paragraph 3 of the Law corresponds to Article 12, paragraph 4 of the Conven­ tion, and provides, in effect: ‘‘Persons, who may at a later date, acquire by subrogation the right to claim against the fund or who may have the right to seek indemnity from the parties who are entitled to limit their liability under the Law, may join the limitation proceedings, except in cases where the parties who can limit their liability have already joined the limitation proceedings.’’

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Article 56 of the Law provides that in certain cases, the court may order the administrator of the fund to distribute part of the fund prior to the amount of such party’s claim being established. 12. Constitution of fund as bar to other actions The second sentence of Article 33 of the Law corresponds to Article 13, paragraph 1 of the Convention and provides in effect as follows; ‘‘Where the limitation proceedings have been commenced, any person who has a claim which is subject to limitation shall be barred from exercising any right in respect of such claim against any other assets of a person by or on behalf of whom the limitation proceedings have been com­ menced.’’

Articles 34, 35 and 36 of the Law correspond to Article 13, paragraph 2 of the Convention and provide, in effect, as follows: ‘‘Where limitation proceedings are commenced, any person having a claim which is subject to limitation may not set off his claim against the claim which the persons, for whose benefit the limitation proceedings are commenced, have against the persons whose claims are subject to the limitation (Article 34).’’ ‘‘In order to stop the enforcement of judgments, mortgages or liens against their other assets, the person by or on behalf of whom the fund has been constituted, shall file an objection against the enforcement proceedings (Articles 35 and 36).’’

Under Japanese law, release from the enforcement of judgments, mortgages or liens shall always be ordered, upon objection, if the limitation fund has been constituted in Japan. In addition to the above, the Japanese court has the discretion to order, even prior to rendering a decision to commence limitation proceedings, the suspension of enforcement of the claims which are subject to limitation, against other assets of a person for whose benefit the commencement of limitation proceedings is applied (Article 23 of the Law). Article 96 of the Law provides in effect as follows: ‘‘If the fund is constituted in any State Party other than Japan, persons for whose claims the fund is available, shall be barred from exercising any right in respect of such claims against any other assets of the Shipowners, Salvors, or their Employees’’

13. Governing law in matters of limitation The constitution and distribution of a limitation fund in Japan shall be governed by Japanese law. In cases where a claim, which may be subject to limitation, is governed by a foreign law, there have been arguments among academics as to whether or not the issues of (i) whether the claims are actually subject to limitation or not, (ii) what should be the amount of limit etc. are subject to Japanese law as lex fori, or subject to the law which governs the claim. The Sendai Superior Court held in its decision dated 19 September 1994, with respect to a collision between a Korean ship and a Japanese ship on the high seas, that the limitation proceedings shall be subject to Japanese law as lex fori. The Japanese owners appealed from the Superior Court judgment but the Supreme Court dismissed the appeal.

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14. Scope of application—special types of vessel Japan does not exclude any party from application of the Law, regardless of whether or not the person has his habitual residence or principal place of business in a State Party, or whether or not the vessel involved flies the flag of a State Party. The Law applies to sea-going ships other than those propelled mainly by oars or ships used for public purposes. As the Law applies to sea-going ships, it does not apply to ships intended for navigation on inland waters. Article 7, paragraph (1) of the Law provides that the amount of limit with respect to a wooden ship of not more than 100 tons shall be 56,000 Monetary Units. Accordingly, the Law applies to ships of less than 300 tons. It appears that the system of limitation of liability under the Law applies to drilling ships, air-cushion vehicles and floating platforms. 15. Mutual obligations to other States to permit limitation Article 96 of the Law provides in effect as follows: ‘‘If the fund is constituted in any State Party other than Japan, persons for whose claims the fund is available shall be barred from exercising any right in respect of such claims against any other assets of the Shipowners, Salvors, or their Employees.’’

16. Date of entering into force of present system of limitation The Law came into force on 20 May 1984. 17. Denunciation of previously ratified limitation conventions Upon the enforcement of the amendment the Law to incorporate the 1976 Convention, Japan notified its denunciation of the 1957 Convention to the Belgian government and such Notice became effective upon the lapse of 19 May 1984.

C. PASSENGERS 1. Special provisions of national law in relation to passenger claims Passenger’s claims shall also be the subject of provisions of the Law. Article 4–2 of the Law provides in effect: ‘‘The limitation of liability with respect to claims for loss of life or personal injury to passengers of a ship shall be constituted separately from the limitation of liability with respect to other claims, even if arising on a distinct occasion. Persons who have other kinds of claims may not join the limitation fund for passengers’ claims. However, passengers may claim not only against the fund for passenger’s claims but also against other limitation funds constituted by the Shipowners.’’

2. Limitation amounts Under Article 7, paragraph 5 of the Law, the limit of liability of the Shipowner with respect to claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, shall be an amount of 46,666 Units of Account multiplied by the

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number of passengers which the ship is authorised to carry according to the ship’s certificate, but not exceeding 25 million Units of Account. 3. Scope of application The limitation applies only with respect to passengers’ claims against the Shipowners, or their Employees, of the ship upon which the passengers were being carried. The limitation applies to passengers carried not only by passenger ships but by cargo ships as well. Article 3, paragraph 4 of the Law provides: ‘‘Shipowners or their Employees of a Japanese ship navigating only between Japanese ports may not limit their liability with respect to loss of life or personal injury to passengers of such a ship.’’

D. CARRIAGE OF GOODS BY SEA Hereafter reference shall be made to international carriage of goods by sea. There is not a system of limitation of liability applicable to carriage of goods between Japanese ports. 1. Adoption of international conventions Japan ratified the Hague Rules and enacted the International Carriage of Goods by Sea Act (the ‘‘Japanese CoGSA’’) which came into effect on 1 January 1958. After ratifying the Protocol 1979 (the ‘‘Hague-Visby Rules’’), Japan amended the Japanese CoGSA in 1992, which came into effect from 1 June 1993. Japan denounced the Hague Rules and therefore is not bound to apply the Hague Rules with respect to carriage of goods with countries which have ratified the Hague Rules but not the Hague-Visby Rules. 2. Package or unit limitation Under the Japanese CoGSA, the carriers can rely upon package or unit limitation as per the limitation figure set out in part 3, below. 3. Financial limits of liability Article 13, Article 12–2 and Article 2, paragraph (4) of the Japanese CoGSA provide: ‘‘Article 13 (Limitation of Liability) (1) The carrier’s liability for a package or unit of the goods shall be the higher of the follow­ ing: (i) an amount equivalent to 666.67 units of account; (ii) an amount equivalent to 2 units of account per kilo of gross weight of the goods lost, damaged or delayed. (2) The unit of account used in each item of the preceding paragraph shall be the final publicised one at the date on which the carrier pays damages in respect of the goods. (3) Where a container, pallet or similar article of transport (which are referred to as containers etc. in this paragraph) is used for the transportation of the goods, the number of containers etc. or units shall be deemed to be the number of the packages or units of the goods for the purpose of the preceding paragraph unless the goods’ number or volume or weight is enumerated in the bill of lading.

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(4) Where the liability of the carrier’s servant is lessened under the provisions of paragraph (2) of Article 20–2 to the limit which the carrier’s liability is lessened by the preceding three paragraphs which are applied by the provisions of paragraph (1) of the same Article, if the carrier’s servant has paid the damages, the carrier’s liability for the goods under the preceding three paragraphs shall be further lessened up to the amount paid by the carrier’s servant. (5) The provisions of each of the preceding paragraphs shall not be applied where the kind and value of the goods has been declared by the shipper at the consignment of the goods for transport and inserted into the bill of lading if it is issued. (6) In the case of the preceding paragraph, if the shipper knowingly has declared a value which is remarkably higher than the actual price, the carrier shall not be responsible for the damage in connection with the goods. (7) In the case of paragraph (5), if the shipper knowingly has declared a value which is remarkably lower than the actual price, the declared price shall be deemed to be the value of the goods for the purpose of assessing damages in connection with the goods. (8) The provisions of the preceding two paragraphs shall not be applicable if the carrier acted in bad faith.’’ ‘‘Article 12–2 (Amount of damages) (1) The amount of damages for the goods shall be fixed according to the current market price of the goods at the place and time at which the goods should have been discharged (or according to the commodity exchange price if such price is available). However, if such current market price is not available, the amount of damages for the goods shall be fixed by reference to the normal value of the goods of the same kind and quality at the place and time at which the goods should have been discharged. (2) The provisions of paragraph (3) of Article 580 of the Commercial Code shall be applicable mutatis mutandis to a situation under the preceding paragraph.’’ ‘‘Article 2 (Definitions) (4) As used in this Act the term ‘‘one unit of account’’ means the amount equivalent to one Special Drawing Right as defined in paragraph (1) of Article 3 of the International Monetary Fund Agreement.’’

At first sight, the provisions of Article 13, paragraph (1) seem to be in accordance with those of the Hague-Visby Rules. However, on closer inspection, one realises that there are discrepancies between the Hague-Visby Rules and the Japanese CoGSA. Assuming that 2 SDRs per kilogram of gross weight of the goods is higher than 666.67 SDRs, Article 13(1) reads: ‘‘The carriers’ liability for a package or unit of the goods shall be . . . an amount equivalent to 2 Units of Account per kilogram of gross weight of the goods . . . ’’ (Emphasis added).

However, Article 4, paragraph 5(a) of the Hague-Visby Rules provides: ‘‘ . . . neither the carrier nor the ship shall . . . be . . . liable for any loss or damage to . . . the goods in an amount exceeding 666.67 Units of Account per package or units or 2 Units of Account per kilogram of gross weight of the goods . . . ’’

Accordingly, under the Hague-Visby Rules, the amount of limitation seems to be ‘‘2 Units of Account per kilogram of the gross weight’’ of the entire cargo loss or damage and not ‘‘per package or unit’’. The difference in provisions of the Japanese CoGSA and the Hague-Visby Rules can be highlighted if one considers the following case, namely: If two packages are lost, one package weighing 100 kilograms and the other package weighing 1,000 kilograms, the carrier’s limit of liability under the Hague-Visby Rules should be:

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(100 + 1,000) × 2 = 2,200 SDRs (which is higher than 666.67 SDRs × 2) However, under the provisions of Article 13, paragraph (1) of the Japanese CoGSA, if it is construed literally, the carriers’ limit should be: — as to the package weighing 100 kilograms . . . 666.67 SDRs (higher than 2 SDRs × 100), and — as to the other package weighing 1,000 kilograms . . . 2,000 SDRs Total . . . 666.67 + 2,000 = 2,666.67 SDRs, which is 466.67 SDRs more than the limitation of liability under the Hague-Visby Rules. There has been no court precedent with respect to this issue, and there are arguments among scholars and practising lawyers as to whether or not Article 13, paragraph (1) of the Japanese CoGSA should be construed literally, or construed in the same way as the Hague-Visby Rules The limitation of liability by gross weight of the cargo will most probably apply to cargo in bulk, although Article 13, paragraph (1) of the Japanese CoGSA provides for limitation ‘‘per package or unit’’. Article 13, paragraph (3) of the Japanese CoGSA is meant to incorporate Article 4 paragraph 5(c) of the Hague-Visby Rules. However, the words ‘‘the goods number or volume or weight’’ in the Japanese CoGSA is different from ‘‘the number of packages or units’’ in the Hague-Visby Rules. There are no court precedents as to whether Article 13, paragraph (3) of the Japanese CoGSA should be construed differently from the Hague-Visby Rules. The majority of scholars argue that the interpretation of Article 13(3) of the Japanese CoGSA should be the same as that of the Hague-Visby Rules. Under Article 13, paragraph (2), the limit of liability in SDR shall be converted to Japanese Yen using the exchange rate prevailing on the date of payment. However, when rendering a judgment the Japanese courts apply the exchange rate prevailing on the date of the final court hearing. The position is not clear as to whether the number of containers should be used for the purposes of calculating the limit in cases where the goods’ volume or weight is enumer­ ated in the bill of lading but the number of packages is not. 4. Loss of right to limit Article 13–2 of the Japanese CoGSA provides: ‘‘Article 13–2 (Exception to amount of damages and limitation of liability)

Notwithstanding the provisions of Article 12–2 and of paragraphs (1) to (4) of the preceding Article,

if the damage to goods resulted from an act or omission of the carrier done with intent to cause

damage, or recklessly and with knowledge that the damage would probably result, the carrier shall

be responsible for any loss of or damage to the goods.’’

The above provision is meant to incorporate Article 4, paragraph 5(e) of the Hague-Visby Rules into the Japanese CoGSA. Article 20–2 paragraph (5) of the Japanese CoGSA provides: ‘‘Article 20–2 (Tort liability of carrier and others) (5) The provisions of the preceding three paragraphs shall not apply to the case where the damage to the goods has resulted from an act or omission of the carrier’s servant done with

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intent to cause damage or recklessly and with knowledge that the damage would probably result.’’

The provisions of paragraphs (2)–(4) concern the exemption or limitation of the tortious liability of the carrier’s servant. The provision of Article 20–2 is meant to incorporate Article 4, paragraph 4 of the Hague-Visby Rules into the Japanese CoGSA. The burden of proof with respect to loss of right to limit lies with the claimants (shippers, receivers and bill of lading holders). If the carrier is found not to be entitled to the benefit of package limitation, the carrier is not entitled to rely upon Article 12–2 of the Japanese CoGSA or Article 4, paragraph 5(b) of the Hague-Visby Rules. Further, if the carrier is not entitled to the benefit of the package limitation, the carrier’s servant is not entitled to do so either, even if his own act or omission done with intent to cause damage, or recklessly and with knowledge that damage would probably result, was not involved. 5. Scope of application Article 20–2, paragraph 1, 2 and 4 of the Japanese CoGSA provide in effect that the defences and limits of liability provided for in the Japanese CoGSA shall apply mutatis mutandis to the carrier’s liability for damage to the goods caused by his tortious act against the shipper, receiver or holder of the bill of lading. Where the carrier’s liability for the goods is relieved or lessened, the tort liability of the carrier’s servant to the shipper, receiver or holder of the bill of lading for damage to the goods, shall also be relieved or lessened to the same extent as the carrier’s liability is relieved or lessened. Article 13, paragraph 4 and Article 20–2, paragraph 4 of the Japanese CoGSA provide in effect that the aggregate of the amounts recoverable from the carrier and its servants shall in no case exceed the package limit. The above provisions are meant to incorporate Article 4 bis of the Hague-Visby Rules into the Japanese CoGSA. Note that according to Japanese authorities (Foreign Policy Bureau of the Ministry of Foreign Affairs and Maritime Bureau of the Ministry of Land, Infrastructure and Trans­ port), there is no prospect of Japan ratifying the 2002 Protocol to the Athens Convention 1972 in the near future. According to the Civil Bureau of the Ministry of Judicial Affairs, Japan has not yet ratified the 1996 Protocol to the 1976 Limitation Convention. The Ministry of Judicial Affairs filed the necessary bill to ratify the 1996 Protocol with the Ordinary National Diet in 2005, but they are not sure if the bill will be approved within the terms of the Ordinary National Diet, 2005.

CHAPTER 26

Korea Chang-Joon Kim Choi & Kim, 4th Floor, Dongwon Building, 128-27, Dangju-dong, Chongro-gu, Seoul, Korea

A. INTRODUCTION Korea has not ratified either the 1976 Limitation Convention or Hague-Visby Rules. However, with effect from 1 January 1993, Korea has incorporated the basic principles and main parts of those international conventions into its domestic law, the Korean Commercial Code (‘‘KCC’’) and the Act on Procedure for Limitation of Shipowners’ Liability (‘‘Limitation Procedure Act’’). However, the KCC and Limitation Procedure Act are not exactly the same as the 1976 Limitation Convention and Hague-Visby Rules in some respects. Nevertheless, the Korean courts have shown their willingness to interpret the KCC and Limitation Procedure Act in harmony with the 1976 Limitation Convention and Hague-Visby Rules. Set out below are the main features of the limitation system under Korean law.

B. LIMITATION OF LIABILITY—GLOBAL LIMITATION The substantive parts of the 1976 Limitation Convention were incorporated into the maritime law chapter of the KCC, while the procedural rules for applying the limitation were incorporated into the Limitation Procedure Act, which is a separate body of law than the KCC. The KCC and Limitation Procedure Act follow in general the basic principles contained in the 1976 Limitation Convention. The relevant parts of the KCC consist of eight Articles: Articles 746 through 752-2.

1. Persons entitled to limit liability The KCC is similar to the 1976 Limitation Convention with regard to persons who are entitled to limit liability. The KCC allows a charterer to limit liability, and thus a time charterer or slot charterer may limit their liability to the extent that their liability falls within the scope of claims subject to limitation of liability. The KCC provides that ‘‘servants or agents’’ may limit their liability. However, because the KCC does not define ‘‘servants or agents’’ and does not have a provision similar to Article 1(4) of the 1976 Limitation Convention, it may be questioned whether ‘‘servants or agents’’ may include an independent contractor such as a stevedore or terminal operator. Although there is no court judgment directly on this point, in view of the the Korean courts’ tendency of favouring the original international conventions, it is probable that the Korean courts would rule that an independent contractor such as a stevedore or terminal operator for 295

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whose act, neglect or default the shipowner is responsible would fall within the concept of ‘‘servants or agents’’ and would be entitled to limit their liability under Korean law. The KCC allows a claimant to bring a direct action against a liability insurer. Allowing direct action against a liability insurer is intended to provide the claimant with a quick and secure indemnity. The KCC also provides that the liability insurer is allowed to avail itself of any defence the insured has against the claimant. Hence, although Article 1(6) of the 1976 Limitation Convention was not incorporated into the KCC, the liability insurer may commence limitation proceedings and would be able to limit its liability up to the amount of the insured’s liability. 2. Claims subject to limitation The list of claims subject to limitation is identical to those contained in Article 2 of the Limitation Convention, except for a few differences that are briefly discussed below. The KCC precluded from the list of claims subject to limitation, (i) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and (ii) claims in respect of raising, removal, destruction or the rendering harmless of the cargo of the ship. The foregoing claims fall within the claims that are excluded from the limitation in paragraph 4 of Article 748 of the KCC. If a ship sinks in a harbour or any fairway due to an accident, the Korean government may order the shipowner to remove the wreck. This order is directed to the owner of the wrecked ship even if it or its crew were not at fault in causing the accident. In the event that the shipowner fails to comply with the order, the Korean port authorities may, for the sake of navigational safety, remove the wreck and later raise an indemnity claim against the shipowner. Such a claim against the shipowner would not be subject to limitation in Korea by virtue of paragraph 4 of Article 748 of the KCC, which means that Korea has made the reservation in this respect as allowed in Article 18 of the 1976 Limitation Convention. It has been an issue before the Korean Supreme Court as to whether the owner of a ship which collided with another ship which sank may limit its liability for the indemnity claim raised by the owner of the sunken ship in respect of the costs of the wreck removal of the sunken ship. The Korean Supreme Court held that the owner of the ship which caused the other ship to sink may limit its liability with regard to the wreck removal based on the reasoning that such indemnity claim does not fall within the claims that are excluded from limitation pursuant to paragraph 4 of Article 748 of the KCC.1 Although the 1976 Convention allows Member States to give priority to claims for damage to harbour works, basins, waterways and aids to navigation over other priority claim the KCC does not allow such priority. 3. Claims excepted from limitation The category of claims excepted from limitation under the KCC is identical to that of Article 3 of the 1976 Limitation Convention, except that the wreck removal claim men­ tioned in the previous paragraph was added to the list of the claims excepted from 1. Korean Supreme Court, 22 August 2000, Case No. 99Da9646.

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limitation. Because Korea ratified the International Convention on Civil Liability for Oil Pollution Damage 1969 (‘‘1969 CLC’’) and its 1992 Protocol, the liability of a tanker owner causing oil pollution damages would be determined pursuant to the 1969 CLC and its 1992 Protocol. 4. Conduct barring limitation The 1976 Limitation Convention bars the application of the limitation if the loss resulted from a party’s personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. This standard was incorporated into the KCC. The question in construing the standard in Korea is how to construe the concept of recklessness, since this concept is new to the Korean legal system. It has been submitted that recklessness means more than ‘‘gross negligence’’ because recklessness implies a higher degree of carelessness bordering on a semi-intentional act. Although some commentators still argue that recklessness may be construed to include ‘‘gross negligence’’ because the term recklessness is ambiguous, given the process of drafting the 1976 Limitation Convention, Korean courts would conclude that the proof of gross negligence of the shipowner is not sufficient to bar the application of the limita­ tion. The Korean Supreme court held in a case where the shipowner was the party limiting its liability that the shipowner’s personal intentional or reckless act must be present.2 The fact that there was an intentional or reckless act of the master or other crewmembers would not itself preclude the shipowner from limiting liability. In the event that the shipowner is a corporation, there is an issue of whose action will be considered a ‘‘personal act’’. Although there is no court precedent directly on point, commentators submit that not only the representative director’s acts but also the acts of other officers of the corporation should be included when determining a ‘‘personal act’’. 5. Limits of liability The limits of liability under the KCC are identical to that of Article 6 of the 1976 Limitation Convention with only one exception. As per Article 15(2) of the 1976 Limitation Convention the KCC provides for special lower limits for ships of less than 300 tons; the personal injury fund for non-passengers is set at 167,000 SDR and the property fund is set at 83,000 SDR. As regards the limitation amount when tug and tow are involved, the Korean Supreme Court held that the limitation amount of the tug owner shall be the aggregate of the limitation amount of both the tug and tow, respectively.3 In the foregoing case the tow (a barge) that was leased to the owner of the tug was involved in a collision with the other ship due to the fault of the crewmem­ ber of the tug while being towed to the discharge port. 6. Governing law The Korean Supreme Court once held that in the event that a claimant brings a claim against a shipowner sounding in tort, the law of the place where the tort occurred would 2. Korean Supreme Court, 24 March 1995, Case No. 94Ma2431. 3. Korean Supreme Court, 25 March 1998, Case No. 97Da2758.

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apply in respect of the global limitation.4 Hence, in the past, if there was a collision involving vessels in Korean territorial waters and if the owner of a foreign vessel wanted to limit its liability in a Korean court, regardless of the law of the vessel’s flag, it would be able to limit its liability pursuant to the KCC. However, the principle laid down by the foregoing Korean Supreme Court has changed due to the enactment of the Korean Private International Act which became effective from 1 July 2001. Under the Korean Private International Act the law of the flag would apply in respect of whether an owner can limit its liability and the amount of limitation. 7. Procedures of limitation of shipowner’s liability Along with the amendment of the KCC, Korea enacted the Limitation Procedure Act. The Limitation Procedure is a separate body of rules from the KCC and is mainly procedural. The rules are basically identical to those contained in the 1976 Limitation Convention. Some points to note are as follows: (1) The limitation of liability may not be invoked unless a limitation fund has been constituted. (2) Where the shipowner petitions to limit in a Korean court, the court orders the shipowner to deposit the limitation fund if the court deems the petition appro­ priate. The deposit can be in the form of cash or a letter of guarantee by a bank or an insurance company acceptable to the limitation court. The letter of guaran­ tee must show the limit amount in SDR. A letter of guarantee issued by a P. & I. club belonging to an international group is acceptable in practice, provided that the P. & I. club appoints its agent in Korea who will receive service of process on behalf of the P. & I. club which is needed in enforcing the letter of guarantee. The amount of the deposit required by the Korean court is the aggregate of the amount of the limitation prescribed in the KCC and interest of 6% per annum from the date of the accident to the date of the deposit. (3) The petition to limit liability must be filed within one year after the applicant (shipowner or other person entitled to limit liability) has received a demand from the claimant in writing, the aggregate amount of which exceeds the limits avail­ able to the applicant. (4) While the Limitation Procedure Act prohibits claimants from attaching assets of the applicant after the commencement of the limitation proceedings, the Limita­ tion Procedure Act does not bar claimants from instituting ordinary legal pro­ ceedings against the applicant. (5) The claimants who have claims against the applicant must file their claims within the time limit set by the limitation court. Usually, the court allows the claimants three months to file their claims. (6) The applicant, other persons entitled to limit or other claimants may raise objec­ tions to the filed claims. In that event the limitation court would render its decision (‘‘Assessment Decision’’) regarding the objections. Any of the partici­ pants may object to the Assessment Decision by initiating a legal action against

4. Korean Supreme Court, 6 December 1996, Case No. 99Da31611.

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the opponent. In that event the court will hold hearings to determine the sub­ stance. In these proceedings, ordinary legal proceedings initiated by the claim­ ants mentioned in (4) above would be consolidated.

C. LIMITATION OF LIABILITY OF CARRIERS OF PASSENGERS Korea has neither ratified the Athens Convention 1974 nor introduced it by enacting new legislation. Accordingly, only the 1976 Limitation Convention will apply in the limitation of liability for the carrier of passengers. The KCC provides the following provisions on limitation of liability for the carrier of passengers which should be noted: (1) With regard to passengers’ luggage which has been entrusted to the carrier, the carrier of the passengers shall be liable to the extent the carrier of cargo is liable. Accordingly, the package limitation is applicable and the carrier has the burden of proving that it is not liable; (2) With regard to claims for loss of passengers’ luggage which was not entrusted to the carrier, the carrier and its crew will not be liable unless they were at fault. Accordingly, the passenger has the burden of proving that the carrier or the crew was at fault. Nevertheless, the package limitation still applies in this case; (3) A claim for loss of life shall be time-barred after five years from the date of the accident as a general commercial claim. A carrier’s liability regarding loss of luggage shall be time-barred if a claim is not filed within one year from the date the luggage was delivered or should have been delivered to the passenger.

D. LIMITATION OF LIABILITY IN CARRIAGE OF GOODS BY SEA The Hague-Visby Rules have been incorporated into the KCC with some changes. Set forth below are some points to note: (1) The carrier may limit liability to 500 SDR per package or per shipping unit. The package limitation under the Hague-Visby Rules of 666.67 SDR has been slightly amended to 500 SDR in enacting the KCC. Further the KCC did not introduce the kilogram limitation of the Hague-Visby Rules. These are the most significant features of the Korean package limitation. (2) The term ‘‘shipping unit’’ is not defined in the KCC. (3) The KCC provides that ‘‘servant or agent’’ are entitled to avail themselves of the package limitation. However, the KCC does not define what are ‘‘servants or agent’’. The independent contractor such as a stevedore or terminal operator would not be considered ‘‘servant or agent’’ under the package limitation.5 (4) The KCC provides that a carrier may limit its liability regardless of whether the claim sounds in contract or tort. (5) A carrier may not limit its liability by package limitation where the loss resulted from a personal act or omission, committed with the intent to cause such loss or recklessly and with knowledge that such loss would probably result. 5. Seoul District Court, 11 September 1997, Case No. 96KaHap44704.

CHAPTER 27

Malta Dr. Richard Camilleri & Dr. Ivan Vella Mamo TCV Advocates, Palazzo Pietro Stiges, 90 Strait Street, Valletta, Malta.

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

Introduction The law relating to the limitation of liability for maritime claims in Malta has recently been significantly revised following Malta’s ratification of the Convention on Limitation of Liability for Maritime Claims, 1976 as amended by the Protocol of 1996 thereto (hereinafter ‘‘the Limitation Convention’’). Incidentally, it was Malta’s ratification that secured the entry into force of the Limitation Convention.1 Malta’s ratification of the Limitation Convention is empowered by Article 375 (1) of the Merchant Shipping Act of Malta2 (hereinafter ‘‘the MSA’’). Article 375(2)(a) and (b) of the MSA empower the Minister responsible for shipping3 to make regulations giving effect to the provisions of the Limitation Convention upon ratification thereof. The said regulations—the Merchant Shipping (Limitation of Liability for Maritime Claims) Regulations, 2003—were promulgated under the MSA by Legal Notice 361 of 2003 as amended by Legal Notice 103 of 2004 and by Legal Notice 261 of 2004 (hereinafter ‘‘the Regulations’’). The Regulations came into effect on 13 May 20044 and are intended to ‘‘provide a regime of limitation of liability for maritime claims’’ and to ‘‘give effect to’’ the Limita­ tion Convention5 by effectively giving the force of law to certain provisions thereof.6 More precisely Articles 1 to 7, 8(1), 9 to 15 and 18 of the Limitation Convention are textually reproduced as a Schedule to the Regulations.7 The said provisions of the Limita­ tion Convention therefore ‘‘form part of’’ and are ‘‘enforceable as part of the Law of Malta’’.8 The Regulations also expressly repeal Articles 349 to 358 of the MSA9 and the 1. 13 May 2004. 2. Chapter 234 of the Revised Edition of the Laws of Malta. 3. Whose current full designation is ‘‘Minister for Communication and Competitiveness’’. 4. Regulation 1(2). 5. Regulation 3. 6. Regulation 4(1). 7. Ibid. 8. Ibid. 9. Regulation 4(2). In terms of Article 375(1) of the MSA any regulations made by the Minister responsible for shipping giving effect to the provisions of any of the treaties or conventions mentioned in Article 375(2) upon ratification or accession thereof may provide that any provision of the MSA inconsistent with the provisions of any such treaty or convention shall no longer apply. The aforesaid Articles 349 to 358 are found in Part IX of the MSA that deals with liability of shipowners. Certain provisions of the said Part IX of the MSA have not been repealed by the Regulations. These are Articles 347 and 348 and Articles 359 to 362. The text of these provisions is set out hereunder for the sake of completeness. Article 347: ‘‘Subject to the provisions of this Part of this Act,

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Merchant Shipping (Limitation of Liability) Order, 197510 that established the amounts11 which, for the purposes of Article 350 of the MSA, were to be taken as equivalent to specified numbers of gold francs. More generally any other provision of the MSA that is inconsistent with the provisions of the Limitation Convention no longer applies.12 It is likely that in applying and construing the provisions of the Regulations the Maltese courts13 will be guided by the judgments of the courts in various jurisdictions in the Commonwealth, and in particular by those of the courts of the United Kingdom, on identical or at least kindred rules of law. In the light of the foregoing it is submitted that Maltese courts are likely to view all aspects of limitation as being of a purely procedural nature and therefore an issue of the law of the forum.14 In so far as construction of the and to any other exclusion of limitation provided by law in relation to the carriage of goods or otherwise, the owner of a ship shall be responsible for all obligations contracted by the master in relation to the ship, and shall be liable for any damages caused by acts or omissions in the navigation or management of the ship’’. Article 348: ‘‘The owners of a Maltese ship shall not be liable to make good, to any extent whatever, any loss or damage happening without their actual fault or privity in the following cases, namely: (a) where any goods, merchandise, or other things whatsoever, taken in or put on board their ship are lost or damaged by reason of fire on board the ship; or (b) where any gold, silver, diamonds, watches, jewels, or precious stones, are taken in or put on board their ship, the true nature and value of which have not at the time of the shipment been declared by the owner or shipper thereof to the owner or master of the ship in the bills of lading or otherwise in writing, are lost or damaged by reason of any theft, embezzlement, making away with or secreting thereof’’. Article 359: ‘‘For the purposes of the following provisions of this Part of this Act, ‘freight’ includes passage money and hire, and references to damage or loss caused by the fault of a vessel shall be construed as including references to any salvage or other expenses, consequent upon that fault, recoverable at law by way of damages’’. Article 360: ‘‘(1) Where by the fault of two or more vessels damage or loss is caused to one or more of those vessels, their cargoes or freight, or to any property on board, the liability to make good the damage or loss shall be in proportion to the degree in which each vessel was in fault: provided that if, having regard to all the circumstances of the case, it is not possible to establish different degrees of fault, the liability shall be apportioned equally. (2) Nothing in this article shall operate so as to render any vessel liable for any loss or damage to which her fault has not contributed, or shall affect the liability of any person under a contract of carriage or any contract, or shall be construed as imposing any liability upon any person from which he is exempted by any contract or by any provision of law, or as affecting the right of any person to limit his liability in the manner provided by law’’. Article 361: ‘‘Where loss of life or personal injuries are suffered by any person on board a vessel owing to the fault of that vessel and of any other vessel or vessels, the liability of the owners of the vessels shall be joint and several: provided that nothing in this article shall be construed as depriving any person of any right of defence on which, independently of this article, he might have relied in an action brought against him by the person injured, or any person or persons entitled to sue in respect of such loss of life, or shall affect the right of any person to limit his liability in cases to which this article relates in the manner provided by law’’. Article 362: ‘‘Where loss of life or personal injuries are suffered by any person on board a vessel owing to the fault of that vessel and of any other vessel or vessels, and a proportion of the damage is recovered against the owners of one of the vessels which exceeds the proportion in which she was in fault, they may recover by way of contribution the amount of the excess from the owners of the other vessel or vessels to the extent to which those vessels were respectively in fault: provided that no amount shall be so recovered which could not, by reason of any statutory or contractual limitation of, or exemption from, liability, or which could not for any other reason, have been recovered in the first instance as damages by the person entitled to sue therefor’’. 10. Regulation 15. 11. These amounts were expressed in the Sterling Pound currency. The said amounts were then converted to the equivalent value in Malta liri at the time of the said Order. 12. Regulation 4(1). 13. Competence in matters falling within the scope of application of the Regulations is vested, by virtue of regulation 7, in the Civil Court, First Hall and references in the Regulations and in the Limitation Convention to ‘‘the Court’’ or to ‘‘the Court or other competent authority’’ are to be construed accordingly. 14. See, Caltex Singapore Pte Ltd. v. BP Shipping Ltd. [1996] 1 Lloyd’s Rep. 286 at pages 293–294 and The ‘‘Happy Fellow’’ [1997] 1 Lloyd’s Rep. 130 at page 135, upheld [1998] 1 Lloyd’s Rep. 13 at page 17 (C.A.); also D.C. Jackson, Enforcement of Maritime Claims, 3 edition, (2002), paragraphs 24.106 and 24.109–24.111 at pages 604–605; W. Tetley, International Maritime and Admiralty Law, 4 edition, (2002), International Shipping ´ Publications, Editions Yvon Blais, pages 313–315; W. Tetley, International Conflict of Laws—Common, Civil ´ and Maritime, (1994), International Shipping Publications, Editions Yvon Blais, pages 35–43, 131–132, 509–531.

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provisions of the Regulations are concerned it is expressly provided that words and expressions used therein, unless otherwise defined, have the same meaning assigned to them in the Limitation Convention.15 It may also be of interest to note that the Regulations are published only in the English text. Generally laws and regulations are published in Maltese and in English and, unless otherwise expressly provided, the Maltese text prevails over the English text. In the case of the Regulations however there is no Maltese text and therefore the English text is unique. This is permitted by article 374(4) of the MSA that provides that ‘‘[r]egulations, rules and orders made under any of the provisions of this Act may be made in the English language only’’.16 1. Persons entitled to limit liability It is premised that under the Regulations the right to limit liability in terms of the provisions of the Limitation Convention applies to any ship, whether seagoing or not, and the definition of ‘‘shipowner’’ in Article 1(2) of the Limitation Convention must be construed accordingly.17 For the purposes of the Regulations any reference therein or in the Limitation Convention to a ‘‘ship’’ includes a reference ‘‘to any structure, whether completed or in the course of completion, launched or intended for use in navigation as a ship or part of a ship, and shall apply to any barge or like vessel however propelled, and the expression ‘ship’ shall be construed accordingly’’.18 As previously explained Article 1 of the Limitation Convention forms part of and is enforceable as part of the Law of Malta. Accordingly owners, charterers, managers and operators of ships (whether seagoing or not) and salvors are entitled to limit their liability for maritime claims under Maltese law. Also entitled to limit is any person for whose act, neglect or default the shipowner or salvor is responsible. Moreover insurers of liability for claims subject to limitation in accordance with the rules of the Limitation Convention are entitled to the benefits of the Limitation Convention to the same extent as the assured. 2. Claims subject to limitation Article 2 of the Limitation Convention, as applied by regulation 4(1), provides that the following claims are subject to limitation of liability: (a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to naviga­ tion), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; (b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage; 15. Regulation 2(2). 16. See also, Article 14 of the Interpretation Act (Chapter 249 of the Revised Edition of the Laws of Malta). 17. Regulation 5. 18. Regulation 6. The definition clearly includes ships under construction; however it should not cover ‘‘air­ cushion vehicles’’ and ‘‘floating platforms constructed for the purpose of exploring or exploiting the natural resources of the sea-bed or the sub-soil thereof’’ that are expressly excluded by Article 15(5) of the Limitation Convention.

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(c) claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations; (d) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship; (e) claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship; (f) claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with the Limitation Convention, and further loss caused by such measures. It appears, however, that the claims set out in paragraphs (d) and (e) in Article 2(1) of the Limitation Convention19 are not subject to limitation of liability under the Regulations and therefore under Maltese law.20 3. Claims excepted from limitation In terms of Article 3 of the Limitation Convention the rules thereof do not apply to: (a) claims for salvage, including, if applicable, any claim for special compensation under Article 14 of the International Convention on Salvage, 1989, as amended, or contribution in general average; (b) claims for oil pollution damage within the meaning of the International Conven­ tion on Civil Liability for Oil Pollution Damage, dated 29 November 1969 or of any amendment or Protocol thereto which is in force;21 (c) claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage; (d) claims against the shipowner of a nuclear ship for nuclear damage; (e) claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations, including claims of their heirs, dependants or other persons entitled to make such claims, if under the law governing the contract of service between the shipowner or salvor and such servants the ship­ owner or salvor is not entitled to limit his liability in respect of such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 6. The aforesaid claims are therefore excluded from the scope of the Regulations by virtue of regulation 4(1). In addition Article 18 of the Limitation Convention provides that a State may reserve the right: 19. Paragraphs (d) and (e) above. 20. Regulation 11(3). See Article 18(a) of the Limitation Convention. 21. In this regard regulation 11(2) expressly refers to claims in respect of any liability incurred under Article III of the International Convention on Civil Liability for Oil Pollution Damage, 1992, as set out in the First Schedule to the Oil Pollution (Liability and Compensation) Act (Chapter 412 of the Revised Edition of the Laws of Malta).

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(a) to exclude the application of Article 2(1), paragraphs (d) and (e); and (b) to exclude claims for damage within the meaning of the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 or of any amendment or Protocol thereto. The exclusion referred to in paragraph (a) above is made legislatively in regulation 11(3).22 The exclusion referred to in paragraph (b) above is made in regulation 11(1) that however refers only to claims ‘‘which arise from occurrences which take place after the coming into force of the [International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996] as part of the Law of Malta’’.23 It therefore seems that until such time as the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea 1996 comes into force in Malta any occurrence giving rise to a claim for damage within the meaning of that Convention will be subject to limitation in Malta under the provisions of the Regulations, and therefore in accordance with the provisions of the Limitation Convention. Article 18 further provides that no reservations ‘‘to the substantive provisions’’ of the Limitation Convention, other than those expressly cited in Article 18, are ‘‘admiss­ ible’’. 4. Conduct barring limitation The rule established in Article 4 of the Limitation Convention24 applies under Maltese law on the limitation of liability for maritime claims. 5. Counterclaims The rule established in Article 5 of the Limitation Convention applies under Maltese law on the limitation of liability for maritime claims. 6. Limits of liability The limits of liability applicable under Maltese law are those set out in Article 6 of the Limitation Convention.25 For such purpose regulation 8(2) provides that the tonnage of a ship is her gross tonnage calculated in accordance with the Merchant Shipping (Tonnage) Regulations, 200226 that effectively reproduce the provisions of the International Conven­ tion on Tonnage Measurement of Ships, 1969. In so far as ships of less than 300 tons are concerned,27 regulation 8(1) provides that, in the application of Article 6 of the Limitation Convention, the limit established in Article 22. See fn. 20 above. 23. Author’s emphasis. 24. Breaking the right to limit liability in the event that the loss results from the personal act or omission of the person liable, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. 25. Regulation 4(1). 26. Legal Notice 391 of 2002. 27. Article 15(2)(b) of the Limitation Convention.

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6(1)(a)(i) is 1 million Units of Account and the limit established in Article 6(1)(b)(i) is 500,000 Units of Account. In principle the Regulations do not apply a limit of liability to claims in respect of loss of life or personal injury to passengers of seagoing ships.28 Moreover it is expressly provided29 that Article 7 of the Limitation Convention shall not apply in respect of seagoing ships. Article 7 does however apply only in respect of any non-seagoing ship, in which case sub-article (1) shall read as follows: ‘‘In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof in respect of each passenger shall be an amount of 175,000 Units of Account.’’30

Finally, in terms of regulation 9(4), the provisions of regulation 9 only apply to claims covered by the Athens Convention relating to Carriage of Passengers and their Luggage by Sea, 1974 or any amendment or Protocol thereto, which arise from occurrences which take place after the coming into force of that Convention as part of the Law of Malta. 7. Unit of Account used for calculating limitation fund The Unit of Account used in the Limitation Convention, as contemplated in Article 8 of the Limitation Convention, is the Special Drawing Right (SDR) as defined by the Inter­ national Monetary Fund. In this regard the Regulations provide that ‘‘one Special Drawing Right is to be treated as equal to such a sum in Malta liri as the International Monetary Fund fixes as being the equivalent of one SDR for— (a) the relevant date under Article 8(1) of the Limitation Convention;31 or (b) if no sum has been so fixed for that date, the last preceding date for which a sum has been so fixed.’’32

Regulation 10(2) further provides that:

‘‘A certificate given by or on behalf of the Minister [responsible for shipping] stating—

(a) that a particular sum in Malta liri has been fixed as mentioned in paragraph (1) hereof for a particular date; or (b) that no sum has been so fixed for that date and that a particular sum in Malta liri has been so fixed for a date which is the last preceding date for which a sum has been so fixed, shall be conclusive evidence of those matters for the purposes of the Articles referred to in paragraph (1) hereof [Articles 6 and 7]; and a document purporting to be such a certificate shall, in any proceedings, be received in evidence and, unless the contrary is proved, be deemed to be such a certificate.’’

8. Aggregation of claims The rules established in Article 9 of the Limitation Convention apply under Maltese law on the limitation of liability for maritime claims. 28. Regulation 9(1) that qualifies Article 2(1)(a) of the Limitation Convention so that the reference therein to ‘‘loss of life or personal injury’’ is not to include a reference to loss of life or personal injury to passengers of seagoing ships. This principle may arguably be inconsistent with the provisions of Article 18 of the Limitation Convention that provides that no reservation ‘‘to the substantive provisions’’ of the Limitation Convention other than those specified in that provision (see paragraph 3 above) is ‘‘admissible’’. 29. Regulation 9(2). 30. Regulation 9(3). 31. The date the limitation fund is constituted, payment is made, or security given which under the law of the forum is equivalent to payment of the relevant limit of liability. 32. Regulation 10(1).

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9. Need to constitute limitation fund The rules established in Article 10 of the Limitation Convention apply under Maltese law on the limitation of liability for maritime claims. 10. Constitution of limitation fund The rules established in Article 11 of the Limitation Convention apply under Maltese law on the limitation of liability for maritime claims. For the purposes of Article 11(1) the court where the fund must be constituted is the Civil Court, First Hall,33 and the rate of interest to be applied is 8%.34 The fund is constituted by the person claiming limitation by payment into (the Registry) of the Civil Court, First Hall (hereinafter ‘‘the Court’’) of the Malta liri equivalent of the number of SDRs to which such person claims to be entitled to limit his liability in terms of the Regulations,35 together with interest thereon from the date of the occurrence giving rise to the liability to the date of effective payment into the court.36 Upon making such payment into the court the person claiming the right to limit his liability must give notice thereof in writing to every person making a claim against him, specifying the date of payment, the amount paid, the amount of interest included therein and the period to which such interest relates.37 If the Malta liri equivalent of the relevant number of SDRs is not known on the date of payment of the fund into the court, it may be calculated on the basis of the latest available published Malta liri equivalent of an SDR as fixed by the International Monetary Fund.38 In the event that such calculation results in a shortfall, the person claiming the right to limit his liability must make up any deficiency by making a further payment into the court within 14 days after the original payment.39 In such circumstances the payment will be treated as if it had been made on the date of the original payment into the court.40 Although not expressly provided, it appears to be implied that if the further payment is not made within the 14-day limit the payment will be treated as if it had been made on the date of the further payment into the court. Furthermore, presumably, if the further payment is not made at all the fund will not be properly constituted in terms of the Regulations. If the aforesaid calculation results in an excess payment the person claiming the right to limit his liability may apply to the court for the refund thereof.41 Such application must be supported by evidence proving the Malta liri equivalent of the appropriate number of SDRs on the date of payment into the court.42 Moreover, the person claiming the right to

33. Regulations 7 and 13(1). 34. Regulation 13(2). This is in accordance with the relevant provisions of the Civil Code (Chapter 16 of the Revised Edition of the Laws of Malta). 35. It is unclear from the express language of this provision whether the person entitled to limit his liability in terms of the Regulations may alternatively produce a guarantee acceptable under Maltese law and considered adequate by the competent court, as contemplated by Article 11(2). 36. Regulation 13(3). 37. Regulation 13(6). 38. Regulation 13(4). 39. Regulation 13(4)(a). 40. Ibid. 41. Regulation 13(4)(b). 42. Regulation 13(5).

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limit his liability must also give notice in writing to every person making a claim against him of the excess amount, if any, paid out to such person.43

11. Distribution of fund amongst claimants The rules established in Article 12 of the Limitation Convention apply under Maltese law on the limitation of liability for maritime claims. The person entitled to limit his liability may apply to the court for the determination of the amount of his liability and, where several claims are made or apprehended in respect of that liability, for the distribution of that amount rateably among the claimants.44 In such case the court may stay any proceed­ ings pending in relation to the same matter, and any other court shall, upon an application to that effect (and notwithstanding any other provision of law) transfer any such proceed­ ings for trial by the court.45 The court (and, on appeal, the appellate court) may in such circumstances proceed in such manner, and subject to such procedure as to making persons interested parties to the proceedings, and as to the exclusion of any claimants who do not come in within a certain time, and as to requiring security from the applicant, and as to the payment of costs, as it thinks just.46 It is expressly provided that privileges and other rights in respect of any ship or property do not affect the proportions in which the fund is distributed among several claimants.47 In making any distribution the court may, if it thinks fit, postpone the distribution of such part of the amount to be distributed as it deems appropriate having regard to any claim that may later be established before a court of any country outside Malta.48

12. Constitution of fund as bar to other actions The rules established in Article 13 of the Limitation Convention apply under Maltese law on the limitation of liability for maritime claims. Where the release of a ship or other property is ordered under Article 13(2) of the Limitation Convention, the person applying for the release of such property is deemed to have submitted to the jurisdiction of the court to adjudicate the claim for which the ship or property was arrested.49

13. Governing law In accordance with Article 14 of the Limitation Convention ‘‘the rules relating to the constitution and distribution of a limitation fund, and all rules of procedure in connection therewith’’ will be governed by Maltese law in the event that the said fund is constituted in Malta.

43. Regulation 44. Regulation 45. Ibid. 46. Ibid. 47. Regulation 48. Regulation 49. Regulation

13(7). 12(1). 12(3). 12(2). 14.

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14. Scope of application—special types of vessel Article 15(1) of the Limitation Convention applies under Maltese law on the limitation of liability for maritime claims. In so far as Article 15(2) of the Limitation Convention is concerned: (a) the right to limit liability is extended in respect of ships intended for navigation on inland waterways;50 and (b) the limitation of liability applied to ships of less than 300 tons is addressed in regulation 8.51 15. Date of entry into force The Regulations came into effect on 13 May 2004.52 B. PASSENGERS Malta is not a party to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 nor is this Convention incorporated into Maltese law. Malta’s ratification of the Athens Convention, as well as the 1976 and 1990 Protocols thereto, is empowered by article 375 (1)(c), (d) and (e) of the MSA. Article 375(1) does not however refer to the 2002 Protocol to the Athens Convention. Other than the provisions of the Regulations there are no provisions under Maltese law that deal specifically with limita­ tion of liability in respect of passenger claims. From the point of view of the general principles of the law of contract, in a number of cases the Maltese courts have held exclusion of liability clauses invalid on the grounds that they are contrary to morals or public policy but, generally speaking, contractual limitation of liability clauses have been upheld.53 C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions The Hague Rules are incorporated into Maltese law54 by virtue of the Carriage of Goods by Sea Act (‘‘COGSA’’)—Chapter 140 of the Laws of Malta.55 The Hague Rules are incorporated in the schedule to COGSA (‘‘the Rules’’). 2. Package or unit limitation The limitation of liability provision is contained in Article IV Rule 5 which limits the liability of the carrier to ‘‘one hundred liri per package or unit or the equivalent of that sum 50. Regulation 5, see paragraph 1 above. 51. See paragraph 6 above. 52. Regulation 1(2). 53. Most of the cases deal with damage to goods. See for instance: Zammit v. Petrococchino noe. 25/2/52–XXXVI.i.319 and Cutajar v. Portughes noe et, 24/1/51–XXXV.iii.528. 54. Malta has not given effect to the Hague-Visby Rules or the Hamburg Rules. 55. Enacted by Act XI of 1954.

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in other currency’’. The Maltese courts are likely to hold that with respect to containerised or palletised cargo, the container or pallet is to be considered as a ‘‘package’’ or ‘‘unit’’.56 The problem which arises when the container or pallet contains a number of packages or units has not been deeply considered. 3. Financial limits to liability Article IV Rule 5 establishes the sum of one hundred Maltese liri (Lm100) per package or unit as the limit of liability. Article IX of the Rules then states: ‘‘The monetary units mentioned in these Rules are to be taken to be gold value’’. The problem which arises in this context is that the Maltese lira does not have nor did it ever have a gold value. When COGSA was enacted in 1954, Malta was a British colony and the Maltese unit of currency was the Malta pound which was pegged at par with the pound sterling, however Article IV Rule 5 did not refer to Malta pounds but to pounds sterling. The pegging of the Maltese currency to the pound sterling was subsequently done away with and some time later the unit of currency changed from Malta pound to Maltese lira. When COGSA was reprinted as Chapter 140 of the Revised Edition of the Laws of Malta in terms of the Statute Law Revision Act 1980 the reprint of Article IV Rule 5 referred to lira and not sterling. The Maltese courts, as far as the authors know, have not had the occasion to consider what the gold value of the Maltese liri amounts to or whether Article IX of the Rules which refers to gold value has become superfluous. On some occasions, the Lm100 limit has been applied without any discussion as to the meaning of ‘‘gold value’’ in Article IX of the Rules.57 4. Loss of right to limit The carrier’s right to limit liability under Article IV Rule 5 does not apply where ‘‘the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading’’. Furthermore, ‘‘a carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under the Rules contained in any of these Articles provided such surrender or increase shall be embodied in the bill of lading issued to the shipper’’.58 On the other hand, where COGSA applies qua law, the carrier cannot rely on a contractual provision which gives him a lower limit of liability.59 5. Scope of application The Rules apply to outward carriage of goods by sea and not to inward and inland carriage, that is, they apply to carriage from Malta to any port outside Malta.60 In these 56. Farrugia noe v. Mizzi et noe, Commercial Court 18/4/77. This was recently confirmed by a judgment of the First Hall Civil Court dated 12/02/2004 in the names of Mizzi noe v. Sorotos et noe. 57. Mizzi noe v. Sorotos et noe, First Hall Civil Court 12/02/2004. 58. Article V of the Rules. 59. Article III Rule 8 and Article IV Rule 5. 60. Article 3 COGSA.

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circumstances, the Rules apply ‘‘notwithstanding any provisions to the contrary contained in the Commercial Code’’61 and the right to limit liability is available to the carrier with respect to any ‘‘loss or damage to or in connection with the goods’’.62 A carrier of goods by sea is entitled, in the appropriate circumstances, to avail himself of both the ‘‘tonnage’’ limitation under Part IX of the MSA as well as the ‘‘package’’ limitation under COGSA. Article 7 COGSA states: ‘‘Nothing in this Act shall affect the operation of articles 286 to 291, both included, and of Part IX of the Merchant Shipping Act, or the operation of any other enactment, for the time being in force, limiting the liability of shipowners’’.63

61. Ibid. 62. Article IV Rule 5. 63. This provision is echoed in Article VIII of the Rules which reads: ‘‘The provisions of these Rules shall not affect the rights and obligations of the carrier under any statute for the time being in force relating to the limitation of the liability of owners of sea-going vessels’’.

CHAPTER 28

Mexico Dr. Ignacio L. Melo Ruiz Melo & Melo, Rio Hudson #8, Colonia Cuauhtemoc, C.P. 06500, Mexico

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

The adoption of the Limitation of Liability for Maritime Claims, signed in London on 19 November 1976 (‘‘LLMC Convention’’) substantially amended the limitation of liability in Mexico. Before 1994, Mexico followed the system of Fortune de Mer adopted from France and Spain, which applied in Mexico since before our independence from Spain in the Ordenanzas de Bilbao and after independence in the Commercial Code of 1854, 1884 and 1889 and the Navigation and Maritime Code of 1963. In 1994, Mexico decided to adopt the Limitation of Liability system as established in the LLMC Convention, London, 1976, which is substantially different from the Fortune de Mer system. The Mexican Senate approved the LLMC Convention on 13 December 1993, the deposit of the instrument was on 13 May 1994 and it was published in the Government Official Gazette on 9 August 1994. The Convention has been in force in Mexico since 1 September 1994. Since Mexico did not establish domestic legislation regarding this matter, the LLMC Convention is fully applicable in all its terms. Mexico has not adopted either the Reforms of the Protocol of 1996 nor the Dangerous and Hazardous Goods Transport Convention.

1. Persons entitled to limit liability These are as mentioned in Article 1 of the LLMC Convention.

2. Claims subject to limitation Claims subject to limitation are those mentioned in Article 2 of the LLMC Conven­ tion.

3. Claims excepted from liability These are as per Article 3 of the LLMC Convention. It must be pointed out that Mexico has not adopted the 1996 Convention on Dangerous and Hazardous Goods Transport and therefore the claims arising from the transport of these goods are not excepted. 313

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4. Conduct barring limitation Conduct barring limitation is as per Article 4 of the LLMC Convention. 5. Counterclaims These are as per Article 5 of the LLMC Convention. 6. Financial limits of liability for all types of claims Since Mexico is part of the Protocol of 1979, the financial limits are calculated as special drawing rights (SDR) which as of, September 2003, are USD 1.40 per 1 SDR or MXP 12.54 per 1 SDR and therefore the Limitation of Liability is as per Article 6 of the LLMC Convention 1976 modified by the 1979 Protocol. 7. Units of Account used for calculating fund These are the Special Drawing Rights (SDRs) as determined by the International Mone­ tary Fund. 8. Aggregation of claims Aggregation of claims are as per Article 9 of the LLMC Convention and there is now Internal Legislation that modifies it. 9. Limitation of Liability—need to constitute fund Article 10 of the LLMC applies and there is no internal legislation regarding this point. 10. Constitution of fund This is as per Article 11 of the LLMC. 11. Distribution of the fund between claimants Article 12 of the LLMC is applicable in Mexico. 12. Constitution of fund as bar to other actions Article 13 of the LLMC is applicable. 13. Governing law in matters of limitation This is as per Article 14 of the Convention. 14. Scope of application There is no domestic legislation and Article 15 of the LLMC is applicable.

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B. PASSENGERS Mexico is not part of the Athens Convention, therefore the limitation of liability to passengers is according Article 7 of the LLMC Convention.

C. CARRIAGE OF GOODS BY SEA Mexico has adopted the International Convention for the unification of Certain Rules of Law relating to Bills of Lading dated 25 August 1924, also known as the Hague Rules, the Visby Protocol of 23 February 1968, also known as the Visby Rules, and the Protocol to the Brussels Convention, which introduces SDRs, on 20 August 1994. Article 104 of the Navigation Act mentions the same limitation as the Hague-Visby Rules and the Protocol of SDRs which were published in the Mexican Federal Official Gazette of 25 August 1994.

CHAPTER 29

The Netherlands Taco Van Der Valk1 AKD Prinsen Van Wijmen, PO Box 4302, 3006 AH, Admiraliteitskade 50, 3063 ED Rotterdam

Introduction The Convention on Limitation of Liability for Maritime Claims, London 19 November 1976 (‘‘the Convention’’), and its enactment in Dutch statute law2 have been operative in the Netherlands as from 1 September 1990, with simultaneous denunciation of the 1957 Brussels Convention. In 1992, the Dutch Court of Cassation (the Hoge Raad) ruled that the regime of the 1976 Convention applies to causes of action arising after the date of its entry into force.3 The Netherlands is not a party to the Protocol of 1996 to amend the Convention. Current information suggests that the Dutch government is preparing for accession, but no bill to that effect has been introduced in the Dutch Parliament as yet. The provisions for limitation proceedings are to be found in sections 642a–642z of the Dutch Code of Civil Procedure (DCCP), which equally cover the proceedings for the (differing) limitation of liability regime with respect to non-seagoing vessels. 1. Persons entitled to limit liability Those entitled to limit liability are: owners, charterers, hirers and any users of a ship, including persons charged with her operation (‘‘exploitation’’), as well as salvors (whereby ‘‘salvage operations’’ also covers measures referred to in Article 2, paragraphs 1(d), (e) and (f) of the Convention);4 further: insurers of the liability concerned and those for whose acts, neglect or defaults the shipowner etc. or the salvor is responsible.5 The terminology used in the list is wide enough to encompass: firstly, time-, voyage-, demiseand bareboat charterers; and, secondly, those persons who are usually termed ‘‘operators’’ and ‘‘managers’’ of a ship. 2. Ship A ‘‘ship’’ is defined as being a seagoing ship. A ship under construction is also considered to be a ship from the start of its launch into the water.6 As to the meaning of ‘‘seagoing 1. The author acknowledges that this chapter is little more than an updated version of Chapter 22 of the previous edition, prepared by Prof. Eric Japikse. Where it was deemed practical, references were added to the CMI Yearbook 2000 which inter alia contains a comprehensive response by the Dutch Maritime Law Associa­ tion to a CMI questionnaire on the implementation and interpretation of the 1976 LLMC Convention. 2. As from 1 January 1997: sections 8:750–8:759 Dutch Civil Code (DCC) and, partly, sections 642a–642z Dutch Code of Civil Procedure (DCCP). See in more detail: CMI Yearbook 2000, page 458 et seq. 3. Hoge Raad 28 Feb. 1992, S&S 1992, 61, The ‘‘Sylt’’. 4. Section 8:750 DCC. 5. Section 8:751 DCC. 6. Section 8:750 DCC.

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ship’’ it should be borne in mind that, in the absence of a definition in either the Convention or sections 8:750 et seq. Dutch Civil Code (DCC), one has to resort to the general rule in section 8:2 DCC: ‘‘seagoing’’ ships are ships entered into the official register for sea-going ships and—failing such an entry (as well as failing one in the register for inland navigation ships)—ships which are apparently constructed so as to navigate exclusively or predominantly at sea. The right accorded by Article 15, paragraph 2(a) to regulate by specific provisions the system of limitation of liability relating to ships intended for navigation on inland water­ ways, has been exercised. The Netherlands is a party to the Convention of Strasbourg on the Limitation of Liability in Inland Navigation (CLNI), Strasbourg, 4 November 1998, and it has incorporated in its statute law the system of limitation of liability provided by the Strasbourg Convention in respect of inland navigation ships.7 The Netherlands has also exercised the right accorded by Article 15, paragraph 2(b) of the Convention, to introduce specific provisions for seagoing ships of less than 300 tons. However, it has exercised that right only in respect of ships which, according to their construction, are exclusively or principally destined to carry persons and only with regard to liability for the claims set out in Article 6, paragraph 1(b) of the Convention.8 Excluded from the present limitation regime are air-cushioned vehicles and floating platforms constructed for the purpose of exploring or exploiting the natural resources of the seabed or the subsoil thereof, but in the case of these platforms, only when they are fixed to the seabed (and not when they are floating, for instance during towage). Dutch law thus partly deviates from Article 15, paragraph 5(b) of the Convention).9 3. Claims subject to limitation Section 8:752 DCC lists in paragraph 1 the same claims as Article 2 of the Convention and it adopts in paragraph 2 the same provisos as added by paragraph 2 of Article 2. The text of section 8:752, paragraph 1 DCC, also makes it clear that the limitation is available whatever the basis of liability may be (‘‘whether the claims are brought under a contract or in tort’’). Section 8:752 DCC further stipulates the availability of limitation in cases where liability arises from mere ownership or possession of a ship or from a ‘‘privilege’’ on the ship or from having the ship in one’s custody or under one’s supervision (the term ‘‘privilege’’ refers to preferred claims against a ship whether or not its owner is their actual debtor). Excepted from limitation are the claims enumerated in Article 3 of the Convention. In respect of oil pollution damage the Netherlands has a separate Act (1975, as subsequently amended) reflecting the rules of the Convention on Civil Liability for Oil Pollution Damage 1992 (CLC 1992). Article 10a of the Act grants a right to limit liability for oil pollution damage under the enacted 1976 Convention provisions when such damage has been caused outside the Netherlands (including its territorial sea) or outside the Dutch Exclusive Economic Zone (EEZ), and not within the territory of a State being a Party to the Convention (i.e., the CLC 1992). The implied effect of Article 10a is that, where oil 7. See in more detail: CMI Yearbook 2000, page 487 et seq. 8. Section 8:755 para. (2) DCC. See in more detail: CMI Yearbook 2000, page 490. 9. Section 8:750 para. (4) DCC.

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pollution damage has been caused both within the territory or the EEZ of the Netherlands and in open sea or in a non-CLC 1992 State, the owner should constitute separate funds under the CLC 1992 and Limitation Convention regimes.

4. Conduct barring limitation Section 8:754 incorporates the rule contained in Article 4 of the Convention. There is fairly recent case law of the Hoge Raad10 with respect to the phrase ‘‘act or omission committed . . . recklessly and with knowledge that such loss would probably result’’. The Hoge Raad ruled that: ‘‘There is conduct which is to be regarded as reckless and with knowledge that the loss would probably result therefrom, if the person conduct­ ing himself in this way knew the risk connected to that conduct and was conscious of the fact that the probability that the risk would materialise was considerably greater than that it would not, but all this did not restrain him from behaving in this way’’. Although this very strict test was applied to the phrase as it appears in Dutch statute law regarding carriage of goods by road, the Court of Appeal of The Hague (Gerechtshof’s-Gravenhage) and the District Court of Amsterdam (Rechtbank Amsterdam) have now held the same test to be applicable in cases regarding the limitation of liability of shipowners.11 The misconduct must be personal; others jointly liable without themselves being to blame for misconduct retain the right to limit. Where the party liable is a corporation, some case law tends to show that the blame should lie with someone whose misconduct is, in a commercial and social sense, the very action of the company itself (an ‘‘organ’’—that is, alter ego—so representative as to be considered identifiable with the company). Once, more specifically, the ‘‘chief manage­ ment of the affairs of the company’’—test12 was applied in relation to ‘‘actual fault or privity’’ under the previous 1957 regime.13 There would seem to be no valid reason why this test should not similarly provide a clue to defining ‘‘personal act (etc.)’’. The onus of establishing a misconduct is on the creditor challenging the right of limitation.14

5. Amounts and funds The Netherlands have made the reservation permitted by Article 18 of the Convention; the claims from Article 2, paragraphs 1(d) and (e)—namely, removal of a ship and its cargo—are excluded and for these claims a separate fund (‘‘wreck fund’’) has been introduced, with separate amounts of limitation applicable to those claims. Thus there are three funds (a fourth one for passenger claims being dealt with in part 6, below):

10. Hoge Raad 5 January 2001, S&S 2001, 61 and 62; Hoge Raad 22 February 2002, S&S 2002, 94; Hoge Raad 11 October 2002, S&S 2003, 61. 11. Gerechtshof’s-Gravenhage 22 February 2002, S&S 2002, 60, The ‘‘Pioner Onegi’’ and (in a matter concerning Article 4 of the CLNI Convention) Rechtbank Amsterdam 12 May 2004, S&S 2004, 88, The ‘‘Arcturus’’. 12. Carver, Carriage of Goods by Sea, 1971, para. 214. 13. Rechtbank Rotterdam 15 June 1981, S&S 1981, 93, The ‘‘Nedlloyd Bahrain’’, affirmed by Gerechtshof’sGravenhage, 23 March 1984, S&S 1984, 105. 14. Section 8:754 DCC; see Article 4 of the Convention.

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(1) for loss of life and injury claims not being passenger claims nor claims from Article 2, paragraphs 1(d) and (e); as to this ‘‘persons fund’’ the SDR and tonnage figures of the Convention have been incorporated; (2) for any other claims not being passenger claims nor claims under Article 2, paragraphs 1(d) and (e); again as to this ‘‘property fund’’ the SDR and tonnage figures of the Convention have been adopted; (3) for claims from Article 2, paragraphs 1(d) and (e), the limits of liability in this ‘‘wreck fund’’ being: (a) 262,000 SDRs in respect of a ship with a tonnage not exceeding 500 tons; (b) in respect of a ship with a tonnage in excess thereof the same amount (262,000 SDRs) but increased by 333 SDRs for each ton from 501–6,000 tons, then by 125 SDRs for each ton from 6,000–70,000 tons, and then by 83 SDRs for each ton in excess of 70,000 tons. As in the Convention, a salvor’s limitation shall be calculated according to a fixed 1,500 tons when he is not operating from any ship or operating solely on the ship to which, or in respect of which, he is rendering salvage services. The above figures appear in section 8:755 DCC which also defines ‘‘tonnage’’ in terms similar to those of the Convention. The balance of unsatisfied claims for loss of life and injury ranks against the ‘‘property fund’’ rateably with the other claims covered by that fund.15 The effect of this provision has yet to be authoritatively decided when there is no ‘‘property fund’’, for example, because the relevant property claims do not reach the limitation level (or perhaps there may even be no such claims). 6. Passenger claims In respect of passenger claims the provisions of (Article 7 of) the Convention have been enacted in section 8:756 DCC. Thus the ‘‘passenger fund’’ is restricted to claims for loss of life or personal injury brought by or on behalf of a ‘‘passenger’’ as outlined by the Convention. The passenger fund should be strictly distinguished from the ‘‘persons fund’’, as clearly follows from the remark made on the ‘‘persons fund’’ in the summary above. Nor could an overlap arise with the ‘‘wreck fund’’, passenger claims being specifically excluded from this fund by section 8:755 (if harm is done to passengers in the course of ship/cargo removing operations). 7. Units of Account The amount of limitation is increased by statutory interest as from the date after the day of the occurrence which gives rise to the claim until the date after the day on which the fund has been constituted,16 the statutory rate being from time to time adapted to market fluctuations (see ‘‘Constitution of the fund’’, below in part 8). While the material sections express the limitation figures in ‘‘Units of Account’’, these are defined in section 8:759 DCC, as the SDR, following Article 8, paragraph 1 of the Convention. 15. Section 642t sub c DCCP; see Article 6 of the Convention. 16. Section 8:757 DCC; see Article 11 of the Convention.

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8. Constitution of the fund As a condition precedent to limitation, a fund has to be constituted either by depositing the sum of the amount applicable under the relevant sections or by producing a guarantee for such sum plus an (estimated) amount of statutory interest over the period from the constitution of the fund until the time the claimants are called upon by the Court Registrar to receive their share of the fund.17 Failing a fund, the liability in question remains unlimited. The fund should be established in the names of a judge commissioner and a fund liquidator appointed by the court to handle the further limitation proceedings. They must have exclusive authority jointly to dispose of the fund. Case law tends to confirm that a bank account may be opened for depositing purposes (with a view to the addition of accruing interest) and that a guarantee by a reputable bank or by (P. & I.) Underwriters may be found acceptable. The legislative history of the present law reveals that the judge commissioner and the liquidator are meant to secure the accrual of at the least the statutory interest on the sum deposited. The respective funds are each only available for a payment in respect of the aggregate of all claims arisen from any one occasion for which a liability is sought to be limited through the fund applicable to those claims; in the event of more persons being liable for the relevant occurrence, a fund is deemed to have been constituted by them jointly.18 Once deposited, the amount concerned no longer forms part of the assets of the party liable (which also secures the exclusive availability of a fund to its relevant claimants). It should be observed that also the claims themselves continue to accrue (statutory) interest (which follows from remarks made by the Minister of Justice in one of the usual exchanges during the parliamentary discussion of the matter)19 and that only proven claims qualify (pro rata) for the final distribution of a fund. 9. Bar to other actions The principles of Article 13 having been enacted, the constitution of a fund basically prevents the initiation or continuation of separate actions against the person(s) liable20 as outlined by the Convention. Thus, a ship or other property under arrest or any security given may be released, and pending litigation will be stayed. A release from arrest and a release of security ‘‘shall’’ be ordered in the cases indicated by paragraph 2 of Article 13. The conditions to be satisfied for an order under sections 642e and 642f DCCP: a valid fund has been established and is actually available to the creditor(s) concerned; the latter may effectively bring an action against the fund; and the right to limit has not within a specified period been challenged or such a challenge has been rejected (see ‘‘Conduct barring limitation’’, above in part 4, and ‘‘Procedure’’, below in part 13). It is submitted that, whenever necessary, Article 13 itself can be relied upon by the person(s) liable, since 17. Section 642c DCCP. 18. Section 8:758 DCC read together with section 642d DCCP. 19. While the parliamentary discussion is limited to statutory interest, it is submitted that the Minister’s remarks are equally valid for contractual interest, if applicable. It should be noted that the Netherlands currently has two rates of statutory interest: the general rate and the higher rate introduced following the implementation of the EC Directive 2000/35 on Combating the Late Payment in Commercial Transactions. 20. Sections 642e and 642f DCCP.

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all material provisions of the Convention capable of direct application are considered to have self-executing force within the Netherlands.21

10. Counterclaims In paragraph 2, section 8:753 DCC adopts the single liability rule of Article 5 of the Convention. As expressed by the wording used, the counterclaim must result from the same occurrence (e.g., a collision). It should further be understood that the rule does not apply where the counterclaim is excepted from limitation (e.g., a salvage claim) and exceeds a claim subject to limitation. Also either side’s claims must clearly be capable of a set-off, that is, a counterclaimant can set off his claim only against the person liable for the counter claim (e.g., against the owner of the ship and not against its charterer). Like Article 5, section 8:753 DCC fails to distinguish the various funds and their corresponding claims. It is believed, however, that with due regard to the above require­ ments, the set-off rule applies to each of the respective funds.

11. Jurisdiction Limitation (and, accordingly, constitution of a fund) can be applied for only if legal proceedings are instituted in respect of claims subject to limitation; see Article 11, paragraph 11 of the Convention read together with the final observation in part 9, above. There is authority for the views that a pre-judgment arrest (for security purposes) satisfies the requirement of prior ‘‘legal proceedings’’ and that such proceedings should have been instituted by the claimant (and not by the person liable who would otherwise be in a position to establish jurisdiction of his choice). The former view seems indeed to serve the very purport of the Convention: a party entitled to limitation should be given an opportu­ nity to put up security for (or deposit a sum in) the amount of limitation rather than being forced to maintain a guarantee up to the full amount of the unlimited claim. These two views expressed above have been endorsed in the Hoge Raad, while at the same time holding that an application for the appointment of a judicial expert (to examine cause and size of damage to cargo) and, equally, an application for the pre-litigation hearing of witnesses (to have evidence formally recorded in court) are ‘‘legal proceedings instituted’’ within the meaning of Article 11 of the Convention. By such steps (as by an application for leave to arrest) a creditor indicates to pretend a claim.22 Recent judgments of the injunction judge (Voorzieningenrechter) of the Rechtbank Rotterdam and the Gerechtshof’s-Gravenhage (in appeal) however, show the reluctance of the courts to attach full value to legal proceedings initiated between persons who are both entitled to limit their liability under the Convention. In both instances, an action by a shipowner for the release of security under Article 13 of the Convention was dismissed in a situation where legal proceedings were first issued against the shipowner in the Nether­ lands, the shipowner then initiated (arbitration) proceedings against the bareboat

21. See in more detail: CMI Yearbook 2000, pages 458–459. 22. Hoge Raad 20 December 1996, S&S 1997, 38 The ‘‘Sherbro’’; referred to by Colman J. in The ‘‘ICL Vikraman’’ [2004] 1 Lloyd’s Rep. at page 28.

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charterer in Sweden, following which the bareboat charterer constituted a limitation fund in Sweden and the shipowner subsequently intended to rely on the existence of that fund.23 In an earlier judgment the Rechtbank Rotterdam ruled that each person named in section 8:750 DCC (i.e., shipowners and salvors) wishing to limit his liability needs to do so by submitting an application to the court regardless of whether a fund has already been constituted by another person wishing to limit his liability. The court further ruled that Article 11 of the Convention did not bar the court from hearing an application submitted by a person against whom no legal proceedings were instituted in the Netherlands, in circumstances where another person had already constituted a fund in the Netherlands pursuant to Article 11.24 In a case where legal proceedings were initiated in two different State Parties to the Convention against the same person allegedly liable, the Rechtbank Rotterdam also held that it did not follow from Article 11 of the Convention that only the court where legal proceedings were initiated first would have jurisdiction to hear an application for limita­ tion of liability.25 The person allegedly liable would therefore have a right to choose the forum. The reciprocity rule of Article 15, paragraph 1 of the Convention has not been intro­ duced: in The Netherlands any person liable can apply for limitation whatever his nation­ ality may be and whatever flag the vessel may fly. The court having jurisdiction is the Rechtbank of the place of the ship’s Dutch registry (only Dutch ships being capable of registration in The Netherlands) or the Rechtbank Rotterdam in the case of a non-registered Dutch ship or of a foreign ship. Ineffective are any contractual (foreign) jurisdiction stipulations between the claimant and defendant for the settlement of disputes on (e.g.) merits or quantum of the claim; by the nature of limitation proceedings, all disputes between the parties have to be kept concentrated in the limitation court.26 In several recent cases involving the issue of lis pendens under Article 27 of the EC Regulation 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters the Rechtbank Amsterdam has had the opportunity to apply the judgment of the Court of Justice of the European Communities27 with regard to the similar Article 25 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. The Rechtbank Amsterdam ruled that actions for damages initiated in France do not have the same cause of action as limitation proceedings in the Netherlands.28

23. Voorzieningenrechter Rechtbank Rotterdam 24 April 2003, S&S 2003, 126, and Gerechtshof ‘s-Graven­ hage 15 March 2005, S&S 2005, 88 The ‘‘Seawheel Rhine’’ and The ‘‘Assi Eurolink’’. 24. Rechtbank Rotterdam 30 October 2002, S&S 2003, 26, The ‘‘Might Servant II’’. 25. Rechtbank Rotterdam 6 November 1997, S&S 2002, 37, The ‘‘MSC Samia’’ and The ‘‘Carina’’. Similar, but less outspoken: Rechtbank Amsterdam 12 March 2002, S&S 2002, 119, The ‘‘Egelantiersgracht’’. 26. Hoge Raad 1 July 1992, S&S 1992, 102, The ‘‘Volvox Hollandia’’. 27. ECJ 14 October 2004, C-39/02 Maersk Olie & Gas A/S v. Firma M de Haan en W. de Boer, The ‘‘Cornelis Simon’’; a matter dealing with the question whether a Dutch court decision on limitation of liability should be recognised in Danish proceedings. 28. Rechtbank Amsterdam 2 March 2005, unpublished; Rechtbank Amsterdam 16 March 2005, unpublished, The ‘‘Egelantiersgracht’’.

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12. Applicable law As to substantive issues of limitation (notably, e.g., the right to limit or the amount of limitation), Dutch courts are to apply the provisions of the Convention. Where, in respect of those issues, the Convention is silent or permits departures adopted by The Netherlands, the matter will be governed by Dutch law (as lex fori). To that extent, choice of other law clauses is held inoperative.29 The lex fori approach makes more sense because Article 15 links the application of the Convention to the jurisdiction of ‘‘the Court of a State Party’’. As to procedural issues, the Dutch Code of Civil Procedure provides the necessary guidance in compliance with Articles 10(3) and 14 of the Convention. 13. Procedure Briefly, the main features of procedure are: — a person wishing to invoke limitation has to do so by submitting an application to the Rechtbank, which application states the particulars of himself, the ship, the material occurrence and the potential claim(ant)s—all to the extent known—as well as the amount of liability alleged to apply (usually to that end the ship’s tonnage certificate is exhibited);30 — the application should also contain a proposal for the manner in which a (the) fund(s) will be constituted;31 — the application cannot be taken for an admission of liability;32 — at a subsequent hearing no argument as to intent or recklessness of the applicant can be raised;33 — the court then issues (what should be looked upon as) a provisional order, thereby inter alia determining the SDR amount of limited liability and the fund(s) to be constituted; additionally a judge commissioner and a liquidator are appointed to conduct the further limitation proceedings;34 — after constitution of the fund(s) the person seeking to limit liability has again to submit an application to the Rechtbank showing that the above order has been complied with, which the court (if satisfied) endorses in a second order;35 — this order triggers the handling of the matter by the judge commissioner and the liquidator, who (through notices by registered mail and in newspapers) arrange for all claims to be filed and for a hearing to be held with all parties involved;36 — before and at this hearing, issues can be taken by any claimant, by the defen­ dant(s) and by the liquidator with respect to the right to limit, the amount of

29. Hoge Raad 1 July 1992, S&S 1992, 102, The ‘‘Volvox Hollandia’’; see also the final remark in part 9, above. 30. Section 642a DCCP; Rechtbank Rotterdam 30 October 2002, S&S 2003, 26, The ‘‘Mighty Servant II’’. 31. Section 642a DCCP. 32. Section 642a DCCP; see Article 1, paragraph 7 of the Convention. 33. Section 642c DCCP. 34. Section 642c DCCP. 35. Section 642c DCCP. 36. Section 642g DCCP.

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limitation, any claim filed (merits, quantum) or any other point capable of challenge; thus claimants can also oppose each other’s claims;37 — unresolved disputes are referred to the Rechtbank;38 — if there are no disputes or once these have been decided after their reference, a list of claims is prepared with their respective shares in the fund(s), such list being deposited for inspection;39 — failing opposition, or any opposition having been finally decided by the court (after reference), the judge commissioner, respectively the court, issues a final order stating the plan of distribution, on the basis of which payments are effected from the fund(s).40 Claimants failing, though duly notified, to file a claim in the above proceedings lose their rights: these expire once the plan of distribution becomes final.41 14. Carriage of passengers by sea The Netherlands is not a party to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, Athens 13 December 1974, or any of its subsequent protocols. Dutch statute law relating to the carriage of passengers by sea is, however, largely based on the principles of the Athens Convention. The statutory provisions regarding the carriage of passengers by sea provide for the respective limits of 137,000 EUR for claims for death and personal injury, 1,000 EUR for claims for delay and for loss or damage to luggage, and 9,100 EUR for claims for loss of or damage to a vehicle or ship accepted for carriage as luggage. The carrier is not entitled to limit his liability in as far as the loss or damage resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly with knowledge that such loss would probably result. The observations made in part 4, above are equally relevant regarding the construction of this phrase. 15. Carriage of Goods by Sea: Hague-Visby Rules The Netherlands is a party to the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, Brussels 25 August 1924, as amended by the Protocols of 23 February 1968 and 21 December 1979 (Hague-Visby Rules). Articles I up to and including IX of the Hague-Visby Rules have been given ‘‘self-executing’’ force by the Dutch legislator in the cases which Article X spells out for the Convention’s scope of application (section 8:371 DCC). Additionally, there is an incorporation of those Rules in the Civil Code (Book 8), covering all other instances where Dutch law should (and the Convention does not) apply. Thus the ‘‘package’’ and ‘‘unit’’ limitations of Article IV Rule 5 up to the SDR figures indicated in its paragraph 5(d) are applicable to liability for loss of or damage to cargo carried by sea. 37. Section 38. Section 39. Section 40. Section 41. Section

642g et seq. DCCP. 642q DCCP. 642l et seq. DCCP. 642s DCCP. 642w DCCP.

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In respect of the principle laid down in Article IV Rule 5(e) and equally reflected in the Civil Code (section 8:388, paragraph 5 DCC), the prevailing view is that only the carrier’s personal intent or recklessness bars limitation (the main authority being the official Memorandum of Explanation presented to Parliament as annex to the Bill for approval of ratification of the Convention, with simultaneous enactment of its Hague-Visby Rules into Dutch legislation). As for the provision’s further construction by the Dutch courts, the observations made at part 4, above may provide guidance. The Gerechtshof’s-Gravenhage has given an indication that the Hoge Raad test cited in part 4 will also be applied in respect of Article IV Rule 5(e).42 There is, however, no clear authority on the precise interpretation of the general word ‘‘damage’’ in Article IV Rule 5(e) or section 8:388, paragraph 5 DCC.

42. Gerechtshof’s-Gravenhage 13 March 2001, S&S 2002, 82, The ‘‘Quo Vadis’’.

CHAPTER 30

New Zealand Tom Broadmore Barrister

Level 5, 101 Lambton Quay, Wellington

PRELIMINARY 1. Introduction New Zealand enacted legislation in 1987 which is broadly in line with the 1976 Limitation Convention. It did not accede to the Convention until 1994. Also in 1994 it enacted legislation giving effect to the Hague Visby Rules, and acceded to the Brussels Protocols of 1968 and 1979. New Zealand has not acceded to or enacted legislation giving effect to the Athens Convention of 1974. 2. New Zealand law New Zealand law is English in origin; and its maritime law closely follows English models.1 English, Australian, and (to a lesser extent) Canadian authorities are cited frequently in the New Zealand courts. The summary which follows deals only with matters where New Zealand law appears to differ from English law or where for some other reason comment is required from a New Zealand perspective. 3. 1976 Limitation Convention In updating New Zealand’s law as to limitation in line with the Limitation Convention in 1987, Parliament adopted the peculiar and unsatisfactory technique of paraphrasing ele­ ments of the Convention in the text of the statute (now re-enacted as Part VII of the Maritime Transport Act 1994 (‘‘MTA’’)). The only reason for this appears to be the choice of a drafting technique which was quite inappropriate for the subject matter. (By way of contrast, the MTA gives the force of law to both the Salvage Convention and the Hague Visby Rules, and reproduces the texts in schedules to the Act.) The effect is that ‘‘Parlia­ ment must be taken to have deliberately decided not to make the London Convention part of the law of New Zealand except to the limited extent the provisions of the Convention are part of the Act’’.2 As a consequence, there are apparent inconsistencies between the Convention text and the legislation. Moreover some matters dealt with in the Convention

1. Until recently there was a right of appeal to the Privy Council in London from judgments of the New Zealand Court of Appeal. That right has been abolished in respect of cases heard after 31 December 2003, and replaced by a right of appeal to the newly-established Supreme Court of New Zealand. 2. Tasman Orient Line CV v. Alliance Group Limited and others (The ‘‘Tasman Pioneer’’)(No. 2) Unreported, 12.5.2005, Auckland AD31-SD02, Williams J, at paragraph 20.

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are omitted entirely from the legislation. Some of these inconsistencies and omissions have considerable significance. 4. Passenger claims New Zealand has not ratified or acceded to the Athens Convention, or enacted legislation giving effect to it. The limitation provisions of the MTA include the Convention limits for passenger liabilities and personal injury generally. However the general position in New Zealand is that all common law claims for damages for personal injury or death occurring within New Zealand have been abolished. Injured persons (including visitors) receive compensa­ tion under a State organised compensation scheme. The maintenance of the personal injury and passenger limits preserves the rights of those entitled to limitation in the event of litigation in New Zealand in respect of claims arising elsewhere. Claims for passengers’ baggage lost or damaged outside New Zealand are left to be dealt with under common law or by contract. Within New Zealand, such claims are covered by the Carriage of Goods Act 1979. 5. Carriage of goods by sea The Hague Visby Rules are given the force of law in New Zealand by section 209 MTA, and reproduced as the Fifth Schedule to that Act. The Carriage of Goods Act covers the domestic carriage of goods, including by sea. A. 1976 LIMITATION CONVENTION 1. Persons entitled to limit liability The MTA follows the principles of the Convention in extending the benefits of limitation to owners and salvors and their respective employees, and to insurers. By section 85(1), the term ‘‘owner’ (a) Means every person who owns the ship or has any interest in the ownership of the ship; (b) In any case where the ship has been chartered, means the charterer; (c) In any case where the owner or charterer is not responsible for the navigation and management of the ship, includes every person who is responsible for the naviga­ tion and management of the ship. Despite the ambiguities of this definition, a time charterer is within it and is entitled to seek a decree of limitation—except, possibly, in respect of a claim by the owner.3 2. Claims subject to limitation The benefits of limitation are not confined to the owners of seagoing ships. There is significant commercial and tourist activity on a number of New Zealand’s larger lakes and rivers. 3. Tasman Orient Line CV v. Alliance Group Limited and others (The ‘‘Tasman Pioneer’’) [2003] 2 Lloyd’s Rep. 713; [2004] 1 NZLR 650.

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The text of section 86(1) and (2) MTA largely reflects the text of Article 2 of the Convention. Changes in wording do not appear to have altered the meaning. However: (a) the phrase ‘‘whatever the basis of liability may be’’ does not appear. However, the word ‘‘claims’’ is not qualified by reference to damages; and there does not therefore appear to be any need to include the phrase; (b) the first sentence of Article 2(2), relating to claims under recourse or indemnity, does not appear. The reason for the omission is unknown. It is possible that the drafter thought the position was sufficiently covered by the phrase ‘‘in respect of’’, which qualifies the word ‘‘claims’’ as it does in the Convention text. 3. Claims excepted from limitation The exceptions in Article 3 of the Convention for salvage, general average contributions, oil pollution and nuclear damage etc. are repeated in section 86(2). Unaccountably, the exception in Article 3(3) for claims by employees under contracts of service is not repeated. It is possible that the drafter thought such claims were preserved by the second sentence of Article 2(2), which appears as section 86(2)(b). Section 86(4) excludes from limitation claims for wreck removal brought by harbour authorities or (in respect of wrecks outside harbour limits) the Minister of Transport. 4. Conduct barring limitation Article 4 of the Convention is enacted as section 85(2). In The ‘‘Tasman Pioneer’’4 the Court reviewed case law from England and Australia and academic writing in considering the application of Article 4 in New Zealand conditions. It concluded that, whether or not the master had intended to cause loss, or had acted recklessly and with knowledge that loss would probably result, the master’s conduct could not be imputed to Tasman Orient Line CV as time charterer. 5. Counterclaims Article 5 is not repeated in the MTA either in word or substance. The consequence is unfortunate: it is unclear whether limitation applies to the balance after set off, or to the amount found due by the party entitled to limitation before set off. New Zealand law is therefore in the unsatisfactory position apparent from The ‘‘Tojo Maru’’.5 6. Financial limits for all types of claim The limits specified by the Convention are repeated in section 87. For small vessels there is a division at 300 tons. In cases where the tonnage of a vessel is unable to be ascertained, the Court is to rely on an estimate by the Director of Maritime Safety as to the tonnage if measured in accordance with the relevant rules. The New Zealand government is considering whether to adopt the 1996 Protocol. It is likely to do so, but the issue is not being treated with any urgency. 4. Supra, footnote 3. 5. [1971] 1 Lloyd’s Rep. 341.

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7. Units of account used for calculating the limitation fund The units of account for the purposes of section 87 are defined in section 88. They are the special drawing rights of the International Monetary Fund. 8. Aggregation of claims The provisions of Article 9 of the Convention are repeated in section 86(3). The effect of Article 9(2) is expressed in more elaborate language, without, it seems, any change in substance. 9. Pleading in limitation cases A claim for limitation is generally raised by way of defence to a cargo or collision claim. In The ‘‘Tasman Pioneer’’6 the vessel had stranded, leading to a large number of separate proceedings brought by cargo owners; and the time charterers (as carriers under the bills of lading) took the alternative step of commencing a separate limitation action. To the best of this correspondent’s knowledge, this is the only such New Zealand case to have gone to an opposed hearing. 10. The limitation fund (a) No requirement to constitute fund After detailed consideration of the MTA and its legislative history, the court in The ‘‘Tasman Pioneer’’7 concluded that there was no power to order the plaintiff in a limitation action to constitute a limitation fund. In the course of the analysis, the court discussed a possible drafting error in the legislation. Any amending legislation might therefore affect the position. Thus, for the present at least, there is no statutory requirement to constitute a fund. Furthermore rule 792 of the High Court Rules, which prescribes the procedure to be followed in limitation actions, does not deal with the payment of the fund into Court. (b) Option of constituting fund Although not required to do so, it appears that a plaintiff may choose to constitute a fund. That emerges from section 88(1)(a) MTA, which repeats Article 8(1)(a) of the Conven­ tion, and which provides machinery for determining the value in New Zealand currency of a limitation fund calculated in units of account. One of the dates on which the value may be calculated is the date of constitution of the fund. There may be some circum­ stances in which a plaintiff considers it desirable to constitute a fund in order to lock in a conversion rate or guard against legislative change. However, the means by which a fund might be constituted remains obscure.

6. Supra, footnote 3. 7. Supra, footnote 3.

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11. Security Section 91 MTA provides for the release of vessels arrested in respect of claims which appear to be ones for which liability is limited. The Court may order the release of an arrested vessel if: (a) security has been given in New Zealand or elsewhere in respect of the claim; and the Court is satisfied that: (b) the amount of the guarantee will in fact be available to the claimant if the claim is established; (c) the amount of the guarantee is at least equal to the maximum amount that may be allowed to a claimant under the limitation provisions. The Court may require further security. Section 91 was considered by the High Court in Sea Tow Limited v. The Ship ‘‘Katsuei Maru No 8’’.8 The plaintiff had arrested the vessel, and sought security for its release for the full amount of its claim, which exceeded the limitation fund. The plaintiff argued that it would show that the crew of the defendant vessel acted recklessly and with knowledge that damage would probably result. The court considered that no sufficient basis for that proposition existed at that time, but recognised that a basis might subsequently be shown. Release was ordered against a guarantee provided by a Japanese mutual—Gyosen Hoken Chuokai—for an amount limited to the limitation fund; however leave was reserved to the plaintiff to apply for increased security to be provided; and the guarantee included an undertaking by the guarantor to provide a guarantee for a further amount if so ordered. In The ‘‘Tasman Pioneer’’,9 the vessel was not under arrest. The question of security for the limitation fund did not arise, as the court had already held that a fund did not have to be constituted. Had the court reached that question, however, it is clear that it would have regarded a P. & I. Club letter of guarantee as acceptable. 12. Distribution of fund amongst claimants Section 89 MTA appears at first sight to provide for the consolidation of relevant claims and distribution of the fund rateably amongst all claimants. This reflects the sense of Article 12(1) of the Convention. However, it suffers from the same apparent drafting error referred to above in discussing Article 10, so that the class of claims intended to be covered by the section is uncertain. The section carries on to give the Court a wide discretion to make procedural orders as to the joinder of parties and the like, but there are no procedural provisions for the establishment of claims. The general rules of procedure contained in the High Court Rules, and in particular Rule 792, appear to provide sufficiently for claims to be estab­ lished in separate proceedings and then brought into account for purposes of distribution of the fund. The balance of Article 12 facilitates settlement of claims by a person liable, by providing that the amount of the settlements may be brought into account when the fund

8. Unreported, 8.5.96, Auckland AD736, Salmon J. 9. Supra, footnote 3.

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is finally distributed. Regrettably, those provisions are not repeated in the MTA, either in section 89 or elsewhere, either in word or in substance. The consequences of this omission were discussed in a recent judgment10 in the Tasman Pioneer litigation already referred to. The party potentially liable sought an order for the argument before trial of a question as to whether the amounts of any settlements could be brought into account, so as to give the same result as provided for in Article 12(2)–(4). The application was declined for technical reasons, but the judge nevertheless went on to consider in detail the position at common law. In particular, he discussed the position prevailing in England before the adoption of the Convention. It was clear that to the judge that Article 12 reflected the prior English law.11 The judge indicated his view that the New Zealand courts ‘‘may well choose to follow the equitable principle discussed in the English cases’’. Although the judge’s views are strictly obiter, it is not easy to see why they would not be followed. 13. Constitution of fund as bar to other actions The MTA contains no provision along the lines of Article 13, although the narrow issue of release from arrest against the provision of security is dealt with in section 91, referred to in part 11 above. The drafter of the MTA has, however, dealt with the issue by the introductory words of section 86, the principal purpose of which is to identify the classes of claim subject to limitation. The introductory words state: ‘‘No person who is entitled to limitation of liability shall be liable for an amount greater than the relevant limit calculated in accordance with section 87 of this Act in respect of claims for loss or injury or damage arising on any distinct occasion, . . . ’’

14. Governing law in matters of limitation Neither the MTA nor the High Court Rules contain a provision along the lines of Article 14. Section 83 MTA provides as follows: ‘‘This Part of this Act applies to every ship (whether registered or not and whether a New Zealand ship or not) in any circumstances in which the High Court has jurisdiction under section 4 of the Admiralty Act 1973.’’

(Section 4 of the Admiralty Act defines the extent of admiralty jurisdiction in New Zealand, and is to the same effect as section 1(1) of the Administration of Justice Act 1956 (UK) (now repealed).) Section 83 does not address the question of jurisdiction in respect of the owners of ships or other persons entitled to the benefit of limitation, or of jurisdiction over the constitution and distribution of the fund; and it does not address at all the question of governing law. Inferentially, these questions are to be answered by New Zealand’s rules of private international law.

10. Supra, footnote 2. 11. See The ‘‘Giacinto Motta’’ [1977] 2 Lloyd’s Rep. 221 (Brandon J.).

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15. Scope of application—special types of vessel The MTA contains no provision along the lines of Article 15(5). Section 84 contains a definition of the word ‘‘ship’’ for the purposes of limitation, as follows: ‘‘ ‘Ship’ means every description of vessel (including barges, lighters, and like vessels) used or intended to be used in navigation, however propelled; and includes any structure (whether com­ pleted or not) launched and intended for use as a ship or part of a ship; and also includes any ship used by or set aside for the New Zealand Defence Force.’’

This definition differs significantly from the definition in the Admiralty Act, which is as follows: ‘‘ ‘Ship’ includes any description of vessel used in navigation; and includes a hovercraft.’’

In the absence of New Zealand authority on the scope of the definition in section 84,12 it is not possible to say whether persons interested in hovercraft, drilling platforms and the like would be entitled to the benefit of limitation. Obviously, it is possible to construe the provisions of sections 83 and 84, and the Admiralty Act, so that the MTA definition of ‘‘ship’’ applies to limitation cases rather than the Admiralty Act definition.

16. Mutual obligations to other states The MTA does not address this issue. New Zealand practitioners accept that limitation is an aspect of procedural rather than substantive law, with the effect that a party vulnerable to a claim in New Zealand may not be able to rely on the fact that he has paid out the convention limit in another jurisdiction.13

17. Date of entry into force of present system of limitation The present system came into force on 1 August 1987 following amendment to the thencurrent Shipping and Seamen Act 1952. The provisions were carried forward unaltered into the MTA.

18. Denunciation of previously ratified limitation conventions New Zealand has never ratified or acceded to previous limitation conventions. Until 1987, the limit of liability was NZ$16 per ton (£8 until the decimalisation of the currency in 1967). The statutory provisions reflected the original provisions of the Merchant Shipping Act 1894 (UK). The Shipping and Seamen Amendment Bill introduced into Parliament in 1986 proposed the limits contained in the Brussels Convention 1957; but following Select Committee consideration the measure was amended to give effect to the London Conven­ tion. New Zealand did not formally ratify the London Convention until 1 June 1994.

12. There are a number of New Zealand cases on the Admiralty Act definition, summarised in Lovegrove v. The Un-named Ship (unreported, 31.5.96, Whangarei M55/96, Kerr J.). 13. The ‘‘Steelton’’ (No. 2) [1972] 1 Lloyd’s Rep. 431; The ‘‘Falstria’’ [1988] 1 Lloyd’s Rep. 495.

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B. PASSENGER CLAIMS 1. Athens Convention 1974 New Zealand has not ratified or acceded to the Athens Convention, or enacted legislation giving effect to it. New Zealand is similarly unlikely to ratify the 2002 Protocol.

2. Accident Compensation Scheme Actions at common law for damages for death or personal injury occurring in New Zealand (including in the 12 mile territorial sea) are barred in New Zealand. Instead, accident victims receive compensation under a State-organised scheme which has been in force since 1974. The scheme is now governed by the Injury Prevention, Rehabilitation and Compensation Act 2001. Visitors to New Zealand who are injured or who die as a result of an accident in New Zealand are entitled to all benefits under the scheme except earnings-related compensa­ tion.

3. Claims outside the Accident Compensation Scheme Claims for personal injury or death occurring accidentally outside New Zealand may still be brought in the New Zealand courts, as the claimants would not have cover under the scheme. (There is an exception for New Zealanders working abroad for New Zealand companies.) Such claims might arise where a consumer abroad claims to have suffered personal injury attributable to a product or foodstuff manufactured in New Zealand. More particularly, there is no limitation on actions for damages for personal injury or death in respect of seafarers’ or passengers’ claims arising anywhere in the world outside New Zealand—provided that the claimant can obtain jurisdiction in New Zealand over the defendant. Examples exist of the commencement of admiralty actions in rem and the arrest of vessels in New Zealand to obtain jurisdiction and security in respect of such claims.14 Such claims when brought are dealt with as common law tort claims on the principles followed in New Zealand until 1974 and as modified by English and Commonwealth developments since then.

4. Passengers’ baggage Claims for passengers’ baggage lost or damaged outside New Zealand are dealt with under common law or by contract, or by the Warsaw Convention where applicable. Within New Zealand, such claims are covered by the Carriage of Goods Act 1979, which governs all aspects of the carriage of goods within New Zealand, including between New Zealand ports and by scheduled air services. Unless otherwise agreed, a per package limitation of NZ$1,500 applies to passengers’ baggage as well as to goods in general.

14. Mitrofanova v. The Ship ‘‘Kursa’’ [1996] 3 NZLR 215.

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C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions Part XVI (sections 208–213) of the MTA, which gives effect to the Hague-Visby Rules (‘‘the Rules’’), came into force on 1 February 1995. The text of the Rules appears as the Fifth Schedule to the MTA. Until 1995, the unamended Hague Rules were in force by virtue of the Sea Carriage of Goods Act 1940. 2. Package or unit limitation There have been no modern reported cases in New Zealand on the application of the package limitation in either the Hague Rules or the Hague-Visby Rules. 3. Financial limits of liability The limits in Article IV Rule 5 of the Hague-Visby Rules apply. As New Zealand is a member of the IMF, the Special Drawing Right of the IMF, valued as specified by the IMF, is the unit of account for the purposes of Article IV Rule 5(a) of the Rules. The Hague Rules as previously in force contained a significant alteration to the Brussels Convention text of Article IX. It provided: ‘‘The monetary units mentioned in these Rules are to be taken to be New Zealand currency.’’

As a result, the ‘‘gold value’’ issue never arose in cases under the Sea Carriage of Goods Act; and the package limitation figure was unarguably NZ$200 (the decimal currency equivalent of £100) as specified in Article IV Rule 5 of the Hague Rules. However, the gold value issue has arisen in a case15 in which there was no binding national law or international convention governing the claim, so that a default clause in the bill of lading became applicable. This clause referred to the Hague Rules, but purported to amend the package limitation amount to £100 sterling lawful money of the United Kingdom. The New Zealand Court of Appeal, and the Privy Council in London on further appeal, held that the clause permitted the carrier to limit its liability for each package damaged to the New Zealand currency equivalent of £100 ordinary or paper sterling rather than gold value as argued by the claimant. 4. Loss of right to limit The High Court of New Zealand considered the application of Article IV Rule 5(e) of the Rules in Nelson Pine Forests Limited v. Seatrans New Zealand Limited (The ‘‘Pem­ broke’’).16 The issue was whether the carrier had been reckless within the meaning of Article IV Rule 5(e), so as to deprive it of the benefit of package limitation. The vessel had loaded expensive machinery in open-top containers for carriage from Bremen in Germany to Nelson in New Zealand. The court held that there was a contractual obligation to carry the containers below deck. That obligation was met on loading. However, the vessel called 15. Dairy Containers Limited v. The Ship ‘‘Tasman Discoverer’’ [2002] 2 Lloyd’s Rep. 528; [2002] 3 NZLR 353 (CA); [2004] 2 Lloyd’s Rep. 647, [2005] 1 NZLR 433 (PC). 16. [1995] 2 Lloyd’s Rep. 290.

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at an intermediate port south of Rio de Janeiro to load more cargo. During that call, one of the plaintiff’s containers was discharged and reloaded on deck. The vessel then pro­ ceeded to New Zealand via the Straits of Magellan, and encountered severe gales as it traversed the Roaring Forties. The machinery parts in the container suffered corrosion damage which the court held to be caused by contact with salt water. The court held that the Master would have known with considerable certainty that the vessel would encounter very rough weather on passage through the Straits of Magellan and thence into the westerly gales to be expected in traversing the South Pacific Ocean towards New Zealand. There was an obvious risk that cargo on deck would be waterdamaged. The court held that the Master was reckless within the meaning of Article IV Rule 5(e) to disregard this risk. The carrier argued that it had not personally acted recklessly in any way. But the court held, without elaboration, that it was the recklessness of the Master of the vessel that was in issue; recklessness for the purposes of the rules was not limited to the management of the carrier. Moreover the Master had been in contact with the carrier by fax at the time of the intermediate call in South America; and it seems that the court would have inferred if necessary that the carrier was in fact party to and aware of the risks inherent in the reloading of the container on deck. As a result, the carrier was found liable for the damage to the plaintiff’s machinery in full. Elsewhere in the judgment, the court confirmed that the doctrine of fundamental breach was not part of the law of New Zealand; so that a defendant would be deprived of the right to limit its liability only if it could be shown that its actions were, as a matter of construction, outside the protective clauses of the governing contract. The court appears to have adopted the factual and legal arguments of the plaintiff on most issues in the case, and did not analyse the key issue of the implications of the Master’s recklessness in any detail. The judgment has been widely criticised, in New Zealand and elsewhere.17 However it remains of some assistance in determining whether conduct is reckless in fact within the meaning of Article IV Rule 5(e). 5. Scope of application The Rules apply in terms of Article X. The effect of section 210 MTA should be noted. It provides as follows: (1) An agreement, whether made in New Zealand or elsewhere, has no effect to the extent that it purports to— (a) Preclude or limit the jurisdiction of the Courts of New Zealand in respect of­ (i) A bill of lading or a similar document of title, relating to the carriage of goods from any place in New Zealand to any place outside New Zealand; or (ii) A non-negotiable document of a kind mentioned in section 209(2) of this Act relating to such a carriage of goods; or (b) Preclude or limit the jurisdiction of the Courts of New Zealand in respect of— 17. See the authorities collected in The ‘‘Tasman Pioneer’’ (supra, footnote 3) at paragraph 45.

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(i) A bill of lading, or a similar document of title, relating to the carriage of goods from any place outside New Zealand to any place in New Zealand; or (ii) A non-negotiable document of a kind mentioned in section 209(2) of this Act relating to such a carriage of goods. (2) Nothing in this section shall be construed as limiting or affecting any stipulation or agreement to submit any dispute to arbitration in New Zealand or any other country. The effect is that choice of forum clauses are ineffective to deprive the New Zealand courts of jurisdiction, except in the case of arbitrations, where the provisions of the New York Convention are regarded as inviolate. It remains open to the parties to reach a binding agreement on applicable law. 6. Carriage of goods by sea within New Zealand Claims for loss of or damage to goods carried by sea within New Zealand are covered by the Carriage of Goods Act 1979, already referred to in relation to passengers’ baggage. In most cases, containers will be subject to the package limitation of NZ$1,500. The Act provides a mechanism for parties to vary the standard arrangements if specified precondi­ tions are met.

CHAPTER 31

Nigeria Louis N. Mbanefo, S.A.N. 230 Awolowo Road, P.O. Box 54409, Ikoyi, Lagos

A. INTRODUCTION Despite considerable developments in the international arena and persistent calls locally for an updating of the Nigerian legislation on this subject, the Nigerian law relating to the limitation of a shipowner’s liability is still somewhat out of date. Nigeria became an independent State in 1960. Until that time British legislation on maritime matters was either deemed applicable in Nigeria or was incorporated into the Nigerian statute books by specific legislation. Nigeria enacted her own Merchant Shipping Act two years after independence in 1962. This Act was modelled on the British Merchant Shipping Act of 1894 (as it was at that time) and has remained in force to this day with a few amendments. Whilst section 503 of the English Act dealt with limitation of liability, section 383 of the Nigerian Act covered the same subject. The version of section 503 of the English Act which Nigeria thus inherited had already been amended in Britain by the Merchant Shipping (Liability of Shipowners and Others) Act 1958 which gave effect to the changes introduced by the 1957 International Conven­ tion on Limitation of Liability. Thus the Nigerian legislation at the present time contains the provisions of the 1957 Convention. Section 381 of the 1962 Act defines ‘‘Convention’’ as referring to the 1957 Convention. Despite constant agitation by the writer and other Nigerian practitioners, Nigeria is yet to become a party to or to adopt the 1976 Convention on Limitation of Liability. In 1990 the Laws of Nigeria were re-codified and in codification the existing laws were streamlined and tidied up. Obsolete provisions were omitted. As a result of the exercise, section 383 became section 363 of the Merchant Shipping Act, now designated as Chapter 224 of the 1990 Laws of the Federation of Nigeria. Following the setting-up by the Federal Minister of Transport in 1999 of a Law Reform Committee headed by the author to update the entire corpus of Nigerian maritime legisla­ tion, drafts of legislation (including a new Merchant Shipping Act) incorporating the International Conventions to which Nigeria is a party (including the Limitation Conven­ tion of 1976 and the Hamburg Rules) have been submitted to the Federal government and will be placed before the National Assembly.

B. THE EXISTING POSITION A shipowner wishing to limit his liability in Nigeria must prove that the loss or damage was caused ‘‘without his actual fault or privity’’. The right extends to the owner of a ship whether registered in Nigeria or not, and ‘‘ship’’ is defined to include: 339

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‘‘every description of lighter, barge or like vessel used in navigation in Nigeria and however propelled, and any structure, whether completed or in the course of construction, launched and intended for use in navigation as a ship or part of a ship.’’

The tonnage of a ship is her registered or licensed tonnage. But where she is not registered or licensed but has been or can be measured, her tonnage as ascertained by that measure­ ment shall be deemed to be her tonnage. 1. The limitation amount Section 363 of the 1990 Laws aforesaid provides that the amount (if any), to which a shipowner is entitled to limit his liability depends on whether there has been loss of life or personal injury, or whether there has only been loss of or damage to property. In the case of injury or loss of life only or in addition to claims for damage to property, the shipowner’s liability would be limited to 3,100 gold francs for each ton of the ship’s tonnage. In the case of loss or damage to property, the limitation figure would be 1,000 gold francs for each ton of the ship’s tonnage. The gold franc is defined in subsection (2) of section 363 as consisting of 65.5 milligrams of gold of millesimal fineness 900. The Minister of Transport is authorised to specify, by Order, the amounts which are taken as equivalent to 3,100 and 1,000 gold francs respectively. Pursuant to subsection (2) aforesaid, the Minister of Transport did by Legal Notice 94 of 1964 fix the amounts equivalent to the aforesaid gold franc. The Order equated 73 pounds, 10 shillings with 3,100 gold francs and 23 pounds, 13 shillings and nine-pence with 1,000 gold francs. The above equations have remained unchanged until the present day, except that the pound was replaced by the naira and kobo by the Decimal Currency Act 1971. That Act provided that one pound sterling was to be equivalent to two naira and 100 kobo were equivalent to one naira. Accordingly, since 1971 the limitation figures are approximately N146.90 per ton for personal injury or loss of life, and N47.40 per ton for other loss or damage. The above figures have remained fixed despite attempts made to correlate them to the deflated value of the naira as against the British pound sterling.1 However, it is submitted that whilst common sense dictates that the market rate of exchange should apply, existing legislation (i.e., the Decimal Currency Act 1971) would seem to dictate otherwise. It is expected that in the not-too-distant future, the entire legislative framework for Nigerian shipping as well as the provisions relating to limitation of liability will undergo radical surgery. 2. The Carriage of Goods by Sea Act The Hague Rules were introduced into Nigerian legislation by the British administration in 1926. They promulgated the Carriage of Goods Act which has remained unchanged 1. See the judgment of the Court of Appeal in Nigerian National Shipping Line Ltd v. Gilbert Emenike (1987) 3 NSC 163. In that case, the Court of Appeal applied the then current rate of exchange from the British pound to the Nigerian naira of seven naira to one pound.

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since that time. Currently, it features as Chapter 44 of the 1990 Laws of the Federation of Nigeria. However, in November 1988, Nigeria ratified the Hamburg Rules. Although the Ham­ burg Convention has now come into force, there has been no enabling legislation to bring it into force in Nigeria. Whilst it is expected that such enabling legislation would even­ tually be enacted, Nigeria currently applies the Hague Rules in their original form. Section 2 of the Carriage of Goods by Sea Act provides that the Hague Rules shall have effect in relation to and in connection with the carriage of goods by sea in ships carrying goods from any port in Nigeria to any other port whether in or outside Nigeria. The Hague Rules are reproduced in full in the Schedule to the Act. 3. Package limitation Article IV(5), of the Rules provides: ‘‘Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding £100 (N200) per package or unit or the equivalent of that sum in other currency. Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.’’

As has already been mentioned in connection with section 363 of the Merchant Shipping Act, the naira equivalent of £100 was fixed as N200 by the 1971 Decimal Currency Order. In Nigerian National Shipping Line v. Gilbert Emenike2 the Court of Appeal held, first, that the definition of package extended to include a whole container and not the individual packages stored within the container. It further held that seven naira was equivalent to £1, and therefore £100 specified in Article 4(5) was equivalent to 700 naira. The writer respectfully begs to disagree with the latter conclusion for reasons already stated. 4. Other conventions Other conventions which provide for the limitation of a shipowner’s liability such as the 1974 Athens Convention on the Carriage of Passengers and their Luggage by Sea (together with its 1976 Protocol) and the 1969 International Convention on Civil Liability for Oil Pollution Damage have not been ratified by Nigeria and are therefore not appli­ cable. 5. Procedure for limitation of liability The Admiralty Jurisdiction Act 1991 and the Admiralty Jurisdiction Procedure Rules 1993 govern the procedural and jurisdictional aspects of shipping practice in Nigeria. The Admiralty Jurisdiction Act provides the machinery for the limitation of a shipowner’s liability. Section 9(2) thereof grants the court the power to: (a) determine whether the applicant’s liability may be limited and, if so, determine the limit of the liability; 2. See Note 1, above.

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(b) order the constitution of a limitation fund for the payment of claims in respect of which the applicant is entitled to limit his liability; and (c) make such orders as are just with respect to the administration and distribution of that fund. As an alternative to commencing a limitation action a shipowner is entitled to plead limitation as a defence to the main action. Order 13 of the Admiralty Jurisdiction Procedure Rules 1993 deals with some practical aspects of the legal proceedings to limit liability. It provides that: (1) there shall be at least one defendant named in a writ and served with an applica­ tion to limit; (2) the court may order advertisement as a means of notifying members of a speci­ fied class that limitation proceedings have been held and the nature of the determination; (3) where there has been no advertisement, the determination would only bind those who have been served with the writ; (4) the court has power to vary or set aside determination.

CHAPTER 32

Norway Haakon Stang Lund and Gaute Kr. Gjelsten Wikborg, Rein & Co., Kronprinsesse Marthas ¨ pl. 1, P. B. 1523 Vika, N-0117 Oslo, Norway (www.wr.no)

Introduction Norway, like many other nations, has different regimes on limitation of maritime claims. The global limitation of liability is based on the 1976 Convention on Limitation of Liability for Maritime Claims (‘‘LLMC 1976’’). The 1996 Protocol to Amend the Conven­ tion on Limitation of Liability for Maritime Claims of 1976 (the ‘‘1996 Protocol’’) was implemented into Norwegian law with effect from 20 February 2001. Subsequently, in May 2005 the Norwegian council of state approved a resolution proposing that the Parliament withdraw from the LLMC 1976. Until the withdrawal from the LLMC 1976 is formally effective, Norway will apply a dual system under which the LLMC 1976 will apply to legal entities domiciled in a foreign country signatory to the LLMC 1976 but not the 1996 Protocol. For all other entities the 1996 Protocol will apply. Since it is uncertain when Norway will denounce the LLMC 1976, we shall below describe both sets of limitation rules. For claims related to oil pollution a separate set of rules apply. Norway has ratified and adopted the Civil Liability Convention of 1969 with the 1992 amendments. The 2000 Fund Protocol has also been ratified and entered into force with increased limits of liability from 1 November 2003. Norway has also ratified and adopted the Hague-Visby Rules giving the carrier the benefit of unit and kilogramme limitation. Similar rules are applicable for passengers, their cars and luggage. The latter rules are not based on the Athens Convention of 1974 since Norway decided not to ratify this Convention because the limitation amounts were considered too low. Following the increase in limitation amounts under the 2002 Protocol to the Athens Convention 1974, the Norwegian Ministry of Justice is presently preparing a white paper, and it is assumed that the amended convention will be adopted within a two-year period. In 2002, Norway signed the International Convention on Civil Liability for Bunker Oil Pollution Damage of 2001, and the Ministry of Justice is preparing a white paper with respect to the ratification of this convention, and it is assumed that also this convention will be adopted within a two-year period. Norway is also considering the International Convention on Liability and Compensa­ tion for Damages in Connection with the Carriage of Hazardous and Noxious Substances by Sea of 1996 (the ‘‘HNS Convention’’), and the Maritime Law Committee is preparing a white paper that will be published at year-end 2003. It is presently uncertain whether Norway will adopt the HNS Convention and the answer will inter alia depend on the development internationally. 343

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References to sections herein are to the Maritime Code of 1994. The following deals with Chapter 9 of this Code unless otherwise stated. This chapter incorporates, as men­ tioned above, a dual system of the LLMC 1976 and the 1996 Protocol, hence references are made to two sections as the two systems are dealt with in two sub-chapters of Chapter 9. The special rules regarding oil pollution are not dealt with. 1. Persons entitled to limit liability, §171 and §183 The operator, the bareboat charterer, the shipowner, the charterer (time or voyage), the disponent owner and the manager will be entitled to limit their liability. Anyone performing services directly connected with salvage or wreck removal of a ship or her cargo will also be entitled to limit their liability. Anyone for whom any of the forgoing may be vicariously liable, such as crew, pilot, longshoremen and independent contractors, will likewise be entitled to limit their lia­ bility. Claims against insurers are also limited so that the claimant cannot circumvent the limitation rules by claiming directly from the insurer. 2. Claims subject to and excepted from limitation Claims for which liability may be limited under §172 and §183 are: (a) claims in respect of loss of life or personal injury or loss of or damage to property, occurring onboard or in direct connection with the operation of the vessel or with salvage operations; (b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage; (c) claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the vessel or with salvage operations; (d) claims in respect of raising, removal, destruction or the rendering harmless of a vessel, which is sunk, wrecked, stranded or abandoned, including anything that is or has been onboard such ship; (e) claims in respect of removal, destruction or rendering harmless of the cargo of the vessel; (f) claims in respect of measures taken in order to avert or minimise loss for which limitation of liability applies, and further loss caused by such measures. Article 7 of the 1996 Protocol, replaces Article 18 no. 1 of the LLMC 1976 reserving the right to exclude the application of Article 2, Paragraph 1(d) and (e). Because of recent ˚ cases, such as inter alia the ‘‘Green Alesund’ ’, in which the Norwegian government had to cover the majority of costs in relation to clean-up etc., the Maritime Law Committee was instructed by the Norwegian legislators to consider whether such exclusion should be made. The Committee proposed in 2002 to exclude the application of Article 2, Paragraph 1(d) and (e), and instead incorporate higher limitation amounts for these categories of claims (cf. NOU 2002:15). The Norwegian Ministry of Justice has also proposed to increase the limitation amounts for clean-up operations after groundings/collisions at sea and for passenger injuries. The proposed increases apply to the Maritime Code section 172

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paragraphs 4 and 5, and will result in an amendment of the Maritime Code sections 172 and 175 in form of new sections 172a and 175a. The Maritime Code section 422 will also need to be amended. These changes have been included below. Whether the legislators will follow the recommendations is uncertain. §§172, 172a and 183 do not establish any basis for a claim, but it is immaterial for the right of limitation whether a claim is based on statue, fault or negligence, absolute or strict liability or any other grounds. If the person or entity entitled to limit liability has a counterclaim arising from the same occurrence against anybody claiming in the fund (typically in collision cases) they can only apply the limitation amount on the balance of the claim. This is known as the single liability principle. Claims for which limitation of liability is not available under §173 and §183 are: (a) claims for salvage, general average contribution, or any contractual claim for payment in respect of measures referred to in §172 no. 4 or §172a paragraph 1; (b) claims for oil pollution damage which may be limited according to the special rules regarding oil pollution liability (§191 and §207); (c) claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage; (d) claims for nuclear damage caused by a nuclear powered vessel; (e) claims for damage or injury caused to any employee of the persons entitled to limit their liability (e.g., the crew and pilot) and whose duties are connected with the vessel or the salvage operation; (f) claims for interest and litigation costs. 3. Conduct barring limitation, §174 and §183 Limitation of liability will be barred only if it can be proved by the claimant that the person otherwise entitled to limit their liability committed the wrongful act or omission with an intent to cause the loss or recklessly with knowledge that the loss would probably result. Such knowledge must have been subjective to the person entitled to limit their liability and must have existed with respect to the particular loss which resulted. The knowledge or intent of the ‘‘shipowner’’ will be equated with that of his decisionmaking bodies and higher management personnel. The borderline is not clearly defined by the Norwegian courts, but it is certain that the master and crew will not be identified with the ‘‘shipowner’’, unless the master had been delegated authority from the ‘‘shipowner’’ within the ‘‘commercial field’’ as opposed to his normal nautical authority. Superinten­ dents will not normally be identified with the owner, while their immediate superior, the technical director, will most probably be considered an alter ego of the company. 4. Current limits of liability, §175 and §184 In calculating the limit of liability, claims arising out of one distinct occasion, whether directed towards one or more of the persons entitled to limit their liability, will be aggregated and be subject to a single limitation sum.

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( I ) PA S S E N G E R S

(a) LLMC 1976 According to §184 personal injury claims by the vessel’s own passengers are limited to 46,666 SDRs multiplied by the number of passengers which the vessel is entitled to carry according to its certificate, but in no event more than 25 million SDRs. Thus the maximum limit of 25 million SDRs will apply to all passenger vessels with a carrying capacity of more than 535 passengers. (b) 1996 Protocol Pursuant to §175, personal injury claims by the vessel’s own passengers are limited to 175,000 SDRs multiplied by the number of passengers, which the vessel is entitled to carry according to its certificate. Contrary to the rules under the LLMC 1976 there is no maximum limit of liability. As mentioned in the introduction hereto, Norway has not ratified the Athens Conven­ tion of 1974 because the limitation amounts were considered too low. Instead, Norway has set its own per-passenger limits of liability at §422: individual claims for personal injury are limited to 175,000 SDRs.1 If the individual claim exceeds this amount, the excess amount will be disregarded when distributing the global limitation fund. The Norwegian Ministry of Justice has proposed increasing the limitation amount in connection with passenger injuries in §422 from SDR 175,000 to SDR 400,000.

( I I ) P E R S O N A L I N J U RY ( I N C L U D I N G L O S S O F L I F E )

(a) LLMC 1976 Recovery for personal injury claims from persons other than the vessel’s own passengers is limited to 333,000 SDRs for a ship up to 500 tons.2 If the tonnage is higher, the limit will be increased by: If the tonnage is higher, the limit will be increased by: 500 333 250 167

SDRs SDRs SDRs SDRs

for for for for

each each each each

ton ton ton ton

from from from over

501 to 3,000 3,001 to 30,000 30,001 to 70,000 70,000

(b) 1996 Protocol For claims regulated by the 1996 Protocol, recovery for personal injury claims from persons other than the vessel’s own passengers is limited to 2,000,000 SDRs for a ship up to 2,000 tons.3 If the tonnage is higher, the limit will be increased by:

1. When paid as a life annuity, the limitation amount represents the capitalised value. 2. ‘‘Ton’’ means gross tonnage, as calculated in Annex I of the Tonnage Convention of 1969. 3. ‘‘Ton’’ means gross tonnage, as calculated in Annex I of the Tonnage Convention of 1969.

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If the tonnage is higher, the limit will be increased by: 800 SDRs for each ton from 600 SDRs for each ton from 400 SDRs for each ton from

2001 to 30,000 30,001 to 70,000 70,000

If, however, the limitation amount is insufficient to satisfy all claims, the uncovered portions of the personal injury claims will share pro rata in the limitation amount applic­ able to property damage. This does not apply to uncovered portions of passenger claims under the LLCM 1976. Such claims will only receive a dividend from the special fund established for such claims if this special fund is insufficient to satisfy all passengers’ claims. The special fund is the fund referred to under ‘‘Passengers’’ above, that is, ‘‘46,666 SDRs multiplied by the number of passengers’’, etc. ( I I I ) P R O P E RT Y D A M A G E

(a) LLMC 1976 Claims for property damage, as well as claims for any personal injury, which cannot be covered by the personal injury limitation amount, will together be limited to 167,000 SDRs for vessels up to 500 tons. If the tonnage is higher, the limit will be increased by: 167 SDRs for each ton from 125 SDRs for each ton from 83 SDRs for each ton over

501 to 30,000 30,001 to 70,000 70,000

(b) 1996 Protocol Claims for property damage, as well as claims for any personal injury which cannot be covered by the personal injury limitation amount, will together be limited to 1,000,000 SDRs for vessels up to 2000 tons. If the tonnage is higher, the limit will be increased by: 400 SDRs for each ton from 300 SDRs for each ton from 200 SDRs for each ton over

2001 to 30,000 30,001 to 70,000 70,000

Cargo claims brought under a contract for the carriage of goods by sea are subject to the same limitation as other property damage. If the unit limitation of 667 SDRs or kilo limitation of 2 SDRs per kilo pursuant to §280 is applicable, individual cargo claims in excess of these limits will be disregarded when distributing the aforementioned fund. The same applies to passenger claims for delay or loss of or damage to luggage. The carrier’s liability for such claims for passenger per voyage is limited pursuant to §422 with a deductible pursuant to §423 as follows:

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Type of claim: Delay Deposited valuables Hand luggage Other luggage Car

Limitation amount: 4,150 SDRs 6,750 SDRs 1,800 SDRs 2,700 SDRs 10,000 SDRs

Deductible: 20 SDRs nil 20 SDRs 20 SDRs 150 SDRs

( I V ) C L A I M S A G A I N S T S A LV O R S

If the salvors are operating from a salvage tug or vessel, the tonnage of this tug or vessel shall be used for calculating the limitation amount applicable to claims against the salvors. If the salvors are not operating from any tug or vessel or if they operate from the salved vessel, the limit of liability for claims against salvors is calculated on the basis of a tonnage figure of 1,500 tons. Claims against salvors are aggregated only inter se, not with claims directed towards other persons entitled to limit their liability.

( V ) P R O P O S E D I N C R E A S E S I N T H E L I M I TAT I O N A M O U N T S F O R C L E A N - U P O P E R AT I O N S A F T E R G R O U N D I N G S / C O L L I S I O N S AT S E A ; N E W S E C T I O N 1 7 5 a

Claims regarding §172a (former §172 nos 4 and 5), i.e.: (a) claims in respect of raising, removal, destruction or rendering harmless of a vessel which is sunk, wrecked, stranded or abandoned, including anything that is or has been onboard such ship; (b) claims in respect of removal, destruction or rendering harmless of the cargo of the vessel; and (c) claims in respect of measures taken in order to avert or minimising loss for which limitation of liability applies, and further loss caused by such measures, will be limited to SDR 2,000,000 for vessels up to 1,000 tons. If the tonnage is higher, the limit will be increased by: 2,000 SDRs for each ton from 1001 to 10,000 500 SDRs for each ton over 10,001 Vessels less than 300 tons will not be affected. 5. Constitution of limitation fund ( I ) N O O B L I G AT I O N TO C O N S T I T U T E A L I M I TAT I O N F U N D , § 1 8 0 O R § 1 8 6

Pursuant to Norwegian law, unlike, for example, English law, the right of limitation is a substantive right, not only a procedural right. This means that the right of limitation can be invoked as a defence in, for example, a cargo claim. If the number of claimants is few and known, it may simplify matters to refrain from establishing a fund. If there is a dispute, this must be solved by the courts or an adjuster if the parties so agree. Either party may, on the ground that his distribution is incorrect in law or in fact, appeal the adjuster’s distribution of the fund to the courts.

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However, if claims are overlooked for one reason or another before distributing the fund and without having constituted a limitation fund, the claimants are not barred from pursuing their claims in any appropriate jurisdiction, subject of course to the claims not being time-barred or otherwise precluded from prosecution. Thus, the liable party may risk having to pay such claims in addition to the limitation amount already distributed. He may still invoke his right of limitation towards the claimants, but will in this case have to pay the limitation amount once more. The liable party may of course also establish a fund at a later stage with effect for all claimants that have not been paid. The liable party may then prove against his own fund for the amount which he has paid out, subject of course to rateable reduction if the global fund is insufficient to meet all claims. ( I I ) T H E R I G H T TO C O N S T I T U T E , § 1 7 7 O R § 1 8 6

A limitation fund may be constituted if a suit has been brought or arrest or other proceedings have been instituted in Norway on account of a claim, which is subject to limitation. The shipowner may not establish a fund in Norway in order to prevent claimants from arresting his ship in a foreign country. ( I I I ) P R O C E D U R A L QU E S T I O N S I N B R I E F

The detailed procedural rules are found in Chapter 12 of the Maritime Code and are applicable also for oil pollution limitation funds. A person applying for constitution of the fund is obliged to pay into the court the amount of the fund or to post adequate security for it. Norwegian courts have accepted Club letters from P. & I. clubs on a case-by-case basis. The fund will generally comprise: (a) the aggregate limitation amounts applicable in relation to the types of claims for which limitation is being invoked; (b) interest on such amounts, as accrued from the day of the casualty until the day of the constitution of the fund; and (c) costs for the limitation proceedings, including expenses for the administration and distribution of the fund. After the fund is constituted, the court will issue a public notice and ask all creditors to submit their claims to the court within a stipulated submission period, which is at least two months. All known creditors are informed by special message. The court will appoint an administrator for the fund if it deems it appropriate in light of the circumstances. The administrator must be experienced and legally versed. (IV) EFFECT OF CONSTITUTION ON CLAIMANTS, §178 OR §186

A claimant is barred from obtaining any security measure or distraint against the vessel or other property of any person who can limit their liability in respect of a constituted limitation fund, and who is entitled to limitation. Any security measure or distraint that has previously been obtained will be annulled and any security lodged will be released. The same applies if the fund is constituted in Denmark, Finland or Sweden. The court may at its discretion apply the same rules if the fund is constituted in another Convention

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State, and shall always do so if the fund is constituted in a port of such State and this is: (a) the port of the accident or first port of call; (b) the port of disembarkation if the claims relates to personal injury claims for an injury sustained onboard; or (c) the port of discharge if the claim relates to damage to cargo. However, regarding the proposed increase in limitation amount for claims regulated by §172a, it will be necessary to constitute an additional fund in Norway to secure such claims. The court may even apply the same rules if the fund is constituted in a State that is not a party to the 1976 Convention, provided the court is satisfied that the fund is equivalent to a fund constituted in Norway pursuant to §177 or §186. The provisions of §178 or §186 presuppose that the claimant de facto may file a claim before the court abroad which administers the fund, and that the fund is available so that money from the fund is freely transferable to the claimant. (V) DISTRIBUTION METHOD, §176 OR §185

Each limitation amount is distributed among the claimants according to their proven claims of the type to which the limitation of liability applies. The court seized of the limitation proceedings will generally decide on the distribution of the fund after all disputes are settled. By exception, the court may order that a certain part of the proven claims be paid immediately after the submission period for the claim. The fund may be distributed even if the court finds that the person, who constituted the fund, although liable, was not entitled to limit their liability. An additional judgment could be rendered regarding any balance, which cannot be satisfied from the fund. 6. Applicable law, §170 The rules of Chapter 9 of the Maritime Code will be applied in all cases where the right of limitation is invoked before a Norwegian court. The only stated exception to this rule relates to claims by a pilot or a person employed by the owner or operator in the service of the vessel. If such claims arise from an employment contract, which is subject to the law of another Convention State, the amount of the limitation will be determined according to the law of that State. 7. Jurisdiction There are no special rules that establish jurisdiction in Norway for claims subject to limitation. Generally, jurisdiction will be denied if the claim does not have a sufficient connection to Norway, such as domicile of the defendant, assets within the jurisdiction, the occurrence of the damage in Norway, etc.

CHAPTER 33

Pakistan Mohammad Naeem Surridge & Beecheno, Finlay House, I. I. Chundrigar Road, Karachi-74000 Pakistan

A. LIMITATION OF LIABILITY AND PROPERTY DAMAGE, LOSS

OF LIFE AND PERSONAL INJURY

Introduction The limitation regime in Pakistan has as from 3 October 2001 gone through a significant change by the promulgation of the Merchant Shipping Ordinance LII of 2001, the ‘‘Ordi­ nance’’. Accordingly the limits of liability of the shipowners which are substantially taken from Article 6 of the 1996 Protocol to the Limitation Convention of 1976 are contained in Chapter XLI comprising sections 534 to 548. Prior to 3 October 2001 the limits of liability of ship owners were based on the English Merchant Shipping Act of 1894 which was in force as part of all the laws existing on 14 August 1947 which were adopted by Pakistan on the partition of British India. By the said Ordinance the English Merchant Shipping Act of 1894 and all other Merchant Shipping Acts right up to 1947 were repealed in so far as they applied to Pakistan and thus the archaic limit of liability which remained frozen from 14 August 1947 to 2 October 2001 was done away with. Pakistan is a sizeable country but unfortunately it is not a signatory to any of the International Limitation Conventions. The limits of liability for maritime claims under the 1996 (London) Protocol to the 1976 Limitation Convention have been given effect through the Ordinance, but ‘‘The Government of Pakistan, at the moment, is not con­ templating to ratify the Protocol of 1996’’. Pakistan has also adopted the limit of liability in respect of the carriage of passengers in a ship as prescribed under the 1974 Athens Convention, but ‘‘The Government of Pakistan at the moment, is not contemplating to ratify the 2002 Protocol’’. Pakistan has not adopted The Hague Visby Rules, as amended by the Brussels Protocol 1968 or the Hamburg Rules 1978, but the Hague Rules were adopted and incorporated in the Carriage of Goods by Sea Act 1925 by the erstwhile British India and, upon partition of the country on 14 August 1947, the said Act was entirely adopted by Pakistan as part of all then existing laws.

1. Persons entitled to limit liability According to section 535 of the Ordinance the ship owners and salvors are entitled to limit their liability for causing loss or damage resulting from negligence or by reason of a maritime accident but the explanation attached to subsection (1) of the said section 535 considerably enlarges the scope and enables the charterer, manager, operator and an insurer for liability of claims, which are subject to limitation which in other words would 351

352

PA K I S TA N

include the Protection and Indemnity clubs of which the owners and/or charterers or salvors may be member. Similarly the ship herself could limit her liability in any action against her in the rem jurisdiction of an admiralty court. The charterer mentioned above would of course include a demise charterer, a time charterer, a voyage charterer as well as a slot charterer as held by the Court of Appeal in The ‘‘Tychy’’ (1992) 2 Lloyd’s Rep. 11 and it would be beneficial to quote from page 21: ‘‘It can this be seen that there is no distinction in principle between a slot charter and a voyage charter of a part of a ship. They are both in a sense charters of space in a ship, a slot charter is simply an example of a voyage charter of part of a ship.’’

Besides, all or any person for whose act, neglect or default the ship owner or salvor may be responsible, shall be similarly entitled to avail himself of the limits of liability available to the ship owners or salvors. This provision under sub-section (2) of section 535 corre­ sponds entirely with Article 1(4) of the 1976 Limitation Convention which has since been designed to overcome the problem arising from The Himalaya1 wherein an action was brought against the master only for personal injury and he was found liable in damages without any right to limit his liability, as the owners could do, had the plaintiff claimed against them. The plea to limit liability by invoking the limitation regime under the Ordinance shall however, not constitute an admission and accordingly limitation may be raised as a defence in addition to other defences available to the claim. 2. Claims subject to limitation The following claims are made specifically subject to limitation under section 536 of the ordinance: (a) claims in respect of loss of life or personal injury; (b) loss or damage to property including damage to harbour works, basins, waterway and aids to navigation occurring in connection with or resulting from the opera­ tion of the ship or salvage operation; (c) claims for losses arising from delay in the carriage of cargo, passengers or their luggage; (d) claims for losses resulting from infringement of rights other than contractual rights occurring during the operation of the ship or salvage operation. Thus all claims relating to damage to other ships caused by collision or loss of or damage to goods, either carried in the ship or on board the other vessel or damage to a jetty, quay or pier are subject to limitation. 3. Claims excepted from limitation Under section 537 of the Ordinance the following claims are specifically excluded from the scope of limitation of liability mentioned above: (a) claims for salvage or contribution for general average; (b) claims for oil pollution damage; 1. (1954) 2 Lloyd’s Rep. 267.

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(c) claims for nuclear damage against the ship owner; (d) claims for nuclear damage, which may be subject to any international convention or any Pakistani law prohibiting such limit of liability; (e) claims in respect of raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned; (f) claims for removal, destruction and rendering harmless of the cargo of a ship; (g) claims by a servant of the ship owner or salvor or of their heirs, dependants or other persons. 4. Conduct barring limitation The persons entitled to limit liability as aforesaid may however be disentitled to do so if the loss or damage results from their personal act, neglect or default committed intention­ ally or recklessly or with the knowledge that such loss or damage would probably result therefrom. Thus following the alter ego rule, if the director in charge of the management of a shipowning company is at fault and/or privy to mismanagement flowing from his conduct, they would not be entitled to the benefit of the limitation rule, if such fault or privity contributed to the accident, which means the negligence of the owners. Thus, owners may lose their right to limit liability if they employ an unqualified master or crew, resulting in the accident. 5. Counterclaims Whenever the owner, charterer or other persons in control or possession of the ship are entitled to make a claim for compensation for the loss caused by factors for which the claimants themselves may be responsible they may prefer a counterclaim along with their defence. Under the Code of Civil Procedure such counterclaims will be given the status and treatment of an independent action and tried separately. On such counterclaims, therefore, a court fee is also charged as on any suit, at the rate of 2.5% of the claim. However if the said counterclaims arise out of the same occurrence the claims and counterclaims may be set off against each other and the balance may be tried by the court. 6. Financial limits of liability for all types of claim Under section 541 the following limits of liability are prescribed; (a) For a ship with a tonnage not exceeding 500 tons (b) In addition for a ship with a tonnage in excess of 500 tons for each ton from 501 to 30,000 tons (c) In addition for a ship with a tonnage in excess of 30,000 tons for each ton from 30,001 to 70,000 tons (d) In addition for a ship with a tonnage in excess of 70,000 tons for each ton in excess of 70,000 tons

167,000 units of account

167 units of account 125 units of account

83 units of account.

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PA K I S TA N

Thus: for a ship of 500 tons

167,000 units of account

for a ship of 10,000 tons for a ship of 20,000 tons

1,753,500 units of account 3,423,500 units of account

for a ship of 30,000 tons for a ship of 40,000 tons

5,093,500 units of account 6,343,500 units of account

for a ship of 50,000 tons for a ship of 60,000 tons for a ship of 70,000 tons

7,593,500 units of account 8,843,500 units of account 10,093,500 units of account

7. Unit of account used for calculating limitation fund The unit of account for calculating the limitation fund is the Special Drawing Right ‘‘SDR’’ as defined by the International Monetary Fund which varies slightly in accordance with the intrinsic value of the several currencies of the world which are taken as the basis. The value of the SDR is thus expressed in terms of the US Dollar and is also converted into Pakistani currency according to the equivalent rates prescribed by the State Bank of Pakistan and notified from time to time and the present value of 1 SDR is approximately US$1.454 or Rs.87.861 as on 6 June 2005. 8. Aggregation of claim The limits of liability mentioned above would apply on any distinct occasion to the aggregate of all claims howsoever arising against all or any persons entitled to the benefit of the limitation regime. 9. Limitation of liability—need to constitute fund Where the number of claims arising out of an occurrence aggregate in excess of the limits of liability mentioned above the persons entitled to limit their liability may under section 545 of the Ordinance file a suit in the High Court for setting up of a limitation fund for the total sum representing their liability and the High Court may in the exercise of its admiralty jurisdiction direct that the total sum representing such liability may be deposited in court or security furnished to the satisfaction of the court and the deposit thus made or as the case may be the sum secured shall constitute the limitation fund and the said fund shall be utilised only for the satisfaction of such claims. The claimants for whose benefit the limitation fund may be available shall thereafter be precluded from proceeding against any other assets of the persons at whose instance the fund was constituted. The court may also grant stay of proceedings pending in any other court in relation to the same subject matter. If the sum equivalent to the total liability is deposited in court it may be invested by order of the court in any profit bearing account. It is however not quite clear as to whether any profit accruing on the deposit would also be available for disbursement among the various claimants because in that case it would exceed the limits laid down by law mentioned above. It follows therefore that the accumulated profit may revert back and

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enure to the benefit of the person who deposited the amount in court and not the claimants. Once the fund is constituted the plaintiffs in the suit may inter-plead and require the claimants to establish their right to claim from the funds but subject to the following order of priority approved by The High Court of Sindh in The Asian Queen:2 (a) marshall’s charges including cost of sale; (b) possessory liens; (c) maritime liens arising out of claims for salvage, collision, wages and master’s disbursements; (d) mortgages; (e) necessaries supplied to the vessel; (f) contractual claims, for example, claims regarding loss or damage to cargo etc. 10. Constitution of fund The limitation fund may thus be constituted by filing a suit in the High Court and the High Court may in its discretion permit such fund to be established for satisfying various claims arising out of the same occurrence. 11. Distribution of fund among claimants When the court is satisfied about the maintainability and extent of the compensation to which various claimants may be entitled, the limitation fund shall be distributed among all the claimants in order of their priority followed in the admiralty court and claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have priority over all other claims. However, the seamen’s lien shall have precedence under Section 549 of the Ordinance over all other liens or charges on the ship and the master’s lien shall have precedence likewise except over that of a seaman. 12. Constitution of fund as bar to other actions The constitution of limitation fund by itself may not bar any other action by any claimant, but the High Court may grant stay of proceedings in other courts and may deal with such claims as it deems fit and subject to the claim being proved, consider them for distribution in accordance with the priorities established by the claimants. 13. Governing law in matters of limitation The limitation regime in Pakistan is now entirely governed by the Merchant Shipping Ordinance LII of 2001 which is in turn an adaptation from Article 6 of the 1996 Protocol to the Limitation Convention of 1976 and thus the English Merchant Shipping Act of 1894 in its application to Pakistan has been done away with, with effect from 3 October 2001. 2. PLD 1982 Karachi 749.

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PA K I S TA N

The right to limit liability being purely procedural or remedial, the court in Pakistan will be guided by the principles of lex fori and will give effect to the provisions of the limitation regime in force in Pakistan in preference to the laws of the country in which the incident occurred and irrespective of the owners domicile or the law of the flag of the vessel. 14. Jurisdiction of the court The civil courts in Pakistan are vested with the jurisdiction to entertain any pecuniary claims relating to maritime subjects and the High Court can entertain and try suits of the value of Rs.3,000,000 or more whereas the jurisdiction to entertain claims below Rs.3,000,000 is vested in the subordinate courts. The High Courts of Sindh and Balochistan however have concurrent jurisdiction to entertain such maritime claims as are specified in the Admiralty Jurisdiction of the High Courts Ordinance 1980 without any pecuniary limits either higher or lower. The High Courts of Sindh and Balochistan are specially vested with the jurisdiction to establish limitation fund under section 545 of the Ordinance and may further entertain the owner’s counterclaim arising out of the same occurrence which may be set off against the claims preferred by various claimants and the court may then deal only with the balance, if any. The admiralty court in Pakistan will have jurisdiction to entertain any proceedings in rem whenever the vessel may be found within its jurisdiction. However proceedings in personam against the owners or other persons involved will be entertained only in collision or similar cases where (a) the defendant has his ordinary residence or place of business in Pakistan; (b) the cause of action arose within the internal or territorial waters; or (c) an action out of the same incident is proceeding or has been heard and deter­ mined in such court. The courts in Pakistan are competent to pass judgement and decree in any foreign currency in accordance with the agreed terms of the contract or the law applicable to the case and a case on the point is reported as Terni SPA v. Peco.3 15. Scope of application—special types of vessels The limitation regime in Pakistan shall apply to all kinds of seagoing vessels whether registered in Pakistan or any other countries, which are used for navigation. Pakistan Carriage of Goods by Sea Act 1925 which is an adaptation of the Hague Rules defines a ‘‘ship’’ as any vessel used for the carriage of goods by sea. The definition of ship under the Merchant Shipping Ordinance 2001 as well as under the Admiralty Jurisdiction of the High Courts Ordinance XLII of 1980 includes any description of vessel used in navigation. The following vessels are however excluded from the limitation regime; (a) ships constructed for or adapted to or engaged in drilling at sea; 3. 1992 Supreme Court Monthly Review 2238.

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357

(b) floating platforms constructed for the purpose of exploring or exploiting the natural resources of the sea bed or its subsoil; and (c) air cushioned vehicles. Thus, dumb barges or other vessels used as floating platforms for off-shore drilling or power generation will not qualify for the purpose of limitation of liability unless the provisions of the limitation regime are made specifically applicable by means of a government notification in the official Gazette which may also fix limits of liability for such ships or floating platforms which may be different from the limits of liability applicable to other ships.

16. Mutual obligations to other states to permit limitation Although Pakistan is not a signatory to the Limitation Convention of 1976 or the 1996 Protocol it would have, by reason of the adaptation of the limitation regime, the mutual obligation to permit limitation.

17. Date of entry into force of present system of limitation The Merchant Shipping Ordinance LII of 2001 was promulgated and came into force in Pakistan with effect from 3 October 2001.

18. Denunciation of previously ratified limitation conventions Pakistan has neither signed nor ratified any of the previous limitation conventions but the provisions of the original section 503 of the English Merchant Shipping Act 1894 in their application to Pakistan have since been repealed by the Ordinance.

B. PASSENGERS 1. Special provisions and national law in relation to passenger claims There is no special national law relating to any passenger claim but the liability for such claims is now governed by the limits laid under section 542 of the Ordinance and the ordinary law of contract between the parties and the terms thereof.

2. Limitation amount In respect of claims arising on any distinct occasion for loss of life or personal injury to passenger of a ship liability is calculated at 46,666 units of account multiplied by number of passengers which the ship is authorised to carry but not exceeding 25 million units of account. However the limit of liability for claims for loss of life or personal injury is as fol­ lows:

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(a) For a ship with a gross tonnage not exceeding 500 tons (b) In addition for each ton from 501 tons to 3,000 tons (c) In addition for each ton from 3,001 tons to 30,000 tons (d) In addition for each ton from 30,001 tons to 70,000 tons (e) In addition thereafter for each ton in excess of 70,000 tons Thus: for a ship of 500 tons for for for for for for for for

a a a a a a a a

ship ship ship ship ship ship ship ship

of of of of of of of of

3,000 tons 10,000 tons 20,000 tons 30,000 tons 40,000 tons 50,000 tons 60,000 tons 70,000 tons

333,000 units of account 500 units of account

333 units of account 250 units of account 167 units of account 333,000 units of account 1,583,000 units of account 3,914,000 units of account 7,244,000 units of account 10,574,000 units of account 13,074,000 units of account 15,574,000 units of account 18,074,000 units of account 20,574,000 units of account

The unit of account for calculating the limitation fund is the SDR as stated in paragraph 7 of Section A above as defined by the International Monetary Fund. 3. Scope of application The limit of total liability at the maximum of 25 million units of account mentioned above shall apply to all passengers carried on board under a contract of carriage by sea including those carried with the consent of the carrier accompanying any vehicles, animals or goods. C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions The Brussels Convention of 1924 or the Hague Rules were given effect in India by incorporating the said Rules into the Carriage of Goods by Sea Act 1925 which was adopted in Pakistan as one of the then existing laws at the time of partition of British India on 14 August 1947. Pakistan has not adopted the Hague-Visby Rules. The provisions of the Carriage of Goods by Sea Act 1925 which is in all material respects identical to the English Carriage of Goods by Sea Act 1924 governs all export cargo only. However, presently the United Nations Conference on Trade and Development (UNCTAD) is using its good offices and is endeavouring to persuade the government of

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Pakistan to adopt the Hague-Visby rules in combination with Hamburg Rules taking the best points of both. 2. Package or unit limitation The package limitation is £100 per package. The controversy as to gold value continues to exist due to the presence of Article IX in the Schedule to the Carriage of Goods by Sea Act 1925 which provides for: ‘‘The monetary units mentioned in these rules are to be taken to be gold value.’’

3. Financial limits of liability The shipowner’s liability is therefore calculated by reference to the market value of the gold contents of 100 British Sovereigns per package on any given date and it is by no means clear as to whether ‘‘the equivalent of that sum in other currency’’ (paragraph 5, Article IV, of the Schedule to the Act) would be conclusive. However, for the purpose of calculating the gold value, market value of 7.98805 grams of gold per Pound will be taken into account. The High Court of Sindh in the recent case of Qua Jaing4 has upheld the gold value interpretation following the leading English case of ‘‘Rosa S’’.5 There is confusion with regard to the recovery of interest in Pakistan, as under the Islamic Jurisprudence interest is not recoverable at all. Taking into consideration the max­ imum limits of liability set down by the Hague Rules mentioned above, if the recovery of interest were allowed, but would in fact exceed the maximum limits it would accordingly not be permitted. Reliance may be placed on a case reported from the Australian jurisdic­ tion on the interpretation of Article 22 of the Carriage by Air Act 1934 (Warsaw Conven­ tion) reported as SS Pharmaceutical Company Ltd. v. Qantas Airways Ltd.6 4. Loss of right to limit Unlike the Hague-Visby Rules where any wilful misconduct or gross negligence on the part of shipowners would result in the loss of right to limit liability, the Hague Rules presently in force in Pakistan provide vide clause 5 of Article IV of the Schedule to the Carriage of Goods by Sea Act 1925 that; ‘‘Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding £100 per package or unit or the equivalent of that sum in other currency, unless the nature and value of the goods have been declared by the shippers before shipment and inserted in the bill of lading.’’

It therefore follows that the liability of the shipowners may not exceed the said maximum limit even when there is an allegation of misconduct or negligence wilful or otherwise.

4. Premier Insurance Company Limited v. China National Shipping 1999 Yearly Law Report 781. 5. (1988) 2 Lloyd’s Rep. 574. 6. (1989) 1 Lloyd’s Rep. 319, 329.

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Following the case of Falcon Bridge7 the words ‘‘in any event’’ occurring in the above rule were thus interpreted by the High Court of Sindh in the case of Flying Foam8 as suggesting a wider protection to the carriers and the ship ‘‘in all events and circum­ stances’’ including ‘‘negligence of the carrier’’. 5. Scope of application The limitation of £100 per package would apply to the number of packages as incorpo­ rated in the bill of lading, which includes unpacked machinery or motor vehicles. Thus, the number of packages contained in a pallet or a container will be taken into account when determining the liability of the carrier.

7. (1969) 2 Lloyd’s Rep. 227. 8. PLD 1983 Karachi 29, 39.

CHAPTER 34

Philippines Ruben T. Del Rosario Managing Partner, Del Rosario & Del Rosario

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

Introduction The Philippines is not a signatory to the 1957 or 1976 Limitation Conventions or the 1974 Athens PAL Convention. Neither has the Philippines ratified or given effect to the HagueVisby Rules as amended by the Brussels Protocol (1968) and the Hamburg Rules (1974). Although the Philippines has neither ratified nor acceded to the Hague Rules, the said rules are incorporated in Philippine Law in view of the enactment of the Commonwealth Act No. 65 in 1936 which made the US Carriage of Goods by Sea Act (COGSA) of 1936 applicable to the Philippines. The Philippines has its own limited liability rules which are principally embodied in Articles 587, 590 and 837 of the Philippine Code of Commerce. These provisions were intended to embody the universal principle of limited liability in all cases. Thus: (a) Article 587—The ship agent shall also be civilly liable for the indemnities in favour of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freight it may have earned during the voyage. (b) Article 590—The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common fund, for the results of the acts of the captain, referred to in Article 587. Each co-owner may exempt himself from this liability by the abandonment, before a notary, of the part of the vessel belonging to him. (c) Article 837—The civil liability incurred by the shipowners in the case prescribed in this section, shall be understood as limited to the value of the vessel with all its appurtenances and freightage earned during the voyage. These provisions accord a shipowner or agent the right to limit their liability to that which they own in the vessel, her appurtenances and/or freight. The limited liability rule of the Philippines is tied up with the so-called real and ‘‘hypothecary’’ nature of maritime law, which essentially means that the vessel or res is the one that answers for the shipowner’s obligations and so the shipowner’s liability is limited to the vessel. The ship is hypothe­ cated for its obligations connected with its operation. The limited liability rule and the real and hypothecated nature of maritime law can be expressed in the phrase ‘‘No vessel, no liability’’. 361

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1. Persons entitled to limit liability The shipowner, co-owners of the vessel and the ship agent are entitled to limit their liability. Whether or not an entity is deemed an ‘‘owner’’ depends largely upon the possibility that he may be subjected to a liability which ordinarily is assertable against one having, or claiming to have, proprietorship or dominion over the vessel. Article 586 of the Philippine Code of Commerce has defined a ‘‘ship agent’’ to be the person entrusted with provisioning or representing the vessel in the port in which it may be found. In order to be entitled to limit liability, the entity should bring himself within the ambit of the words ‘‘owner’’ and ‘‘ship agent’’. It should be noted that under Philippine law the ship agent is considered jointly and severally liable together with the shipowner for the latter’s liabilities. This entity is the one who represents the interests of the owner of the vessel.

2. Claims subject to limitations Based on statute, limited liability can be invoked on claims arising from (a) collision (Article 837), (b) injuries to third party (Article 587), and (c) on acts of the captain (Article 590). However, the Philippine Supreme Court has held that, notwithstanding the language of the aforesaid provisions, the benefit of limited liability applies to all cases wherein the shipowner or agent may properly be held liable for the negligent or illicit acts of the captain.

3. Claims excepted from limitation Philippine jurisprudence has admitted two exceptions to the limited liability rule. There is no limited liability in claims involving (a) workmen’s compensation law and (b) for repairs and provisioning already completed before the loss of the vessel. Also, if the vessel is insured, the claimants may recover against the insurance pro­ ceeds.

4. Conduct barring limitation The limited liability doctrine does not apply when the loss is due to the shipowner’s own fault or negligence, as when a vessel is allowed to sail in an unseaworthy condition or when it is manned by unlicensed officers/crew.

5. Counterclaims The various claims will be prosecuted independently and separately from the limitation proceedings. Any counterclaims should be pursued against the appropriate party in the pertinent proceedings. It is the final and executory decision of the court with respect to each claim that will be submitted to the limitation proceedings for appropriate con­ sideration.

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363

6. Financial limits of liability The financial limit of liability applied in the Philippines is the value of the vessel with all its equipment, or the insurance proceeds received by the shipowner, if any, and the freight it may have earned during the voyage.

7. Units of account For calculation of the limitation fund, the Units of Account are usually in Philippine pesos or in U.S. currency. However, other legal currencies may also be used.

8. Aggregation of claims All the claims are ranked proportionately or in pari passu to the insurance proceeds. No priority or preference is given to claims filed or proved sooner.

9. Constitution of fund In order to limit liability, the shipowner or agent must abandon the vessel and institute a limitation proceeding before the proper admiralty court. Insurance proceeds already received including the freight should be held in trust on behalf of all the claimants, pending the final determination of the claimants’ respective demands.

10. Distribution of fund In case the fund cannot satisfy all the claims, it would be distributed by the court among creditors pro rata. The pro rata share of each claim can only be determined and satisfied after all the court cases have been finally decided.

11. Bar of other action The effect of abandonment, or the institution of the limitation proceeding and the deposit­ ing of the insurance proceeds and the freight in trust is to extinguish the liability of the shipowner and ship agent.

12. Governing law According to Philippine conflicts of laws, the courts will apply the lex loci delicti commissi on the issue of the limitation of liability. However, absent proof of foreign law, the courts will presume that Philippine law is the same as foreign law.

13. Application to special types of vessel The limited liability rules do not make any distinction as to its application to the type of vessel.

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PHILIPPINES

14. Denunciation of previously ratified limitation conventions As the Philippines has not ratified any of the limitation of liability conventions, the issue of denunciation does not apply.

B. PASSENGERS 1. Adoption of international conventions The Philippines is not a party to the 1974 Athens PAL convention or any other inter­ national convention on limitation of liability for the carriage of passengers and their luggage. The general rules on limitation of liability of shipowners as provided under Articles 587, 590 and 837 of the Philippine Code of Commerce is applicable to liability arising for the carriage of passengers and their luggage. 2. Limitation amounts There are no specific limitations specifically applicable to liability for injury or death of passengers. A reduction of fare does not justify any limitation of liability (Article 1758 of the Philippine Civil Code). However, when a passenger is carried gratuitously, a stipulation limiting a carrier’s liability for negligence is valid, but not for wilful acts or gross negligence. Liability for luggage can be limited by stipulation. In cases where the shipowner is allowed to limit its liability under the general limited liability rules, the applicable financial limits of liability for all claims including passenger liability is the value of the vessel with all its equipment or the insurance proceeds received by the shipowner, if any, and the freight it may have earned during the voyage. 3. Scope of application There is no statutory definition of a passenger for purposes of application of limitation of liability. It can be inferred from Philippine jurisprudence that a passenger is one who pays ‘‘freight’’ for the carriage of his person and baggage. However, Article 1758 of the Philippine Civil Code considers a person carried gratuitously by a carrier to be also a passenger. The relation of carrier and passenger commences when one puts himself in the care of the carrier, or directly under its control, with the bona fide intention of becoming a passenger, and is accepted as such by the carrier. One does not become a passenger until he has put himself in the charge of the carrier and has been expressly or impliedly received as such by the carrier. As a rule, the relation of carrier and passenger does not cease at the moment the passenger alights from the vessel at a place selected by the carrier at the point of destination, but continues until the passenger has had reasonable time and/or opportu­ nity to leave the carrier’s premises. Article 1755 of the Philippine Civil Code provides that a carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all circumstances. In case of death of or injury to passengers, carriers are presumed to have been at fault or to have

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acted negligently, unless they prove that they observed extraordinary diligence (Article 1756 of the Philippine Civil Code). The shipowner is liable for the negligence or wilful acts of its employees, although they may have acted beyond the scope of their authority or in violation of the order of the shipowner (Article 1759 of the Philippine Civil Code). In addition, the carrier is respons­ ible for the wilful acts or negligence of other passengers or of strangers, if the carrier’s employees, through the exercise of the diligence of a good father of a family, could have prevented or stopped the act or omission (Article 1763 of the Philippine Civil Code). The carrier’s responsibility for the safety of the passengers cannot be dispensed with, lessened, eliminated or limited by stipulations, by the posting of notices, by statements on tickets, or otherwise. A passenger’s luggage which is not in his personal custody is treated as cargo. As for other luggage, this is considered as ‘‘necessary deposit’’ and the carrier is responsible as a depositary, provided that notice was given to them, or to their employees, of the effects brought by the passenger. Further, employees must take the precautions which a hotel­ keeper or its equivalent advise in relation to the care and vigilance of passenger’s effects. The carrier’s responsibility as depositary shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the carrier as well as by strangers, but not that which may proceed from any force majeure. Note that the act of a thief or robber in entering the ship is not deemed force majeure unless it is done with the use of arms or though an irresistible force. The carrier is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the thing brought. C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions The Philippines is not a party to any of the international conventions concerning the carriage of goods by sea. However, the Philippines has adopted the US Carriage of Goods by Sea Act (COGSA) of 1936. The Philippine Civil Code primarily governs the carriage of goods by sea. The Philippine Code of Commerce and COGSA are applied in a suppletory manner if they are not in contravention of the Philippine Civil Code. COGSA is only applicable to all contracts of goods by sea to the Philippine ports in foreign trade unless contractually stipulated to apply also to coastwise carriage. Article 1753 of the Philippine Civil Code provides that the law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. 2. Package or unit limitation The basis of the limitation for the carrier’s cargo liability depends on whether the cargo is contained in ‘‘packages’’ or is shipped ‘‘per customary freight unit’’. When the cargo is shipped in packages laden in a container and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the ‘‘package’’ for purposes of limitation of liability.

366

PHILIPPINES

It is the individual crates or cartons prepared by the shipper and containing his goods which can rightly be considered ‘‘packages’’. The customary freight unit refers to a unit of quantity, weight or measurement. How­ ever, the freight unit should be one that is well-known in the shipping industry or at least known to the immediate parties. 3. Financial limits of liability A stipulation in the bill of lading limiting to a certain sum the carrier’s liability for loss or destruction of a cargo, unless the shipper or owner declares a greater value, is sanc­ tioned by law. There are, however, two conditions to be satisfied: (1) the contract is reasonable and just under the circumstances and (2) has been fairly and freely agreed upon by the parties. In instances where COGSA is applicable including cases involving international car­ riage wherein there is no stipulated package limitation, the pertinent limitation is US$500 per package or customary freight unit. However, the bill of lading can stipulate a different limit of liability. 4. Loss of right to limit Limited liability cannot be claimed if there is negligence or bad faith on the part of the carrier. There are, however, exceptional cases wherein the Philippine Supreme Court did allow the shipowner the right to limit liability due to equity reasons. If the carrier, delays the transportation of the goods or changes the stipulated or usual route, without just cause, the contract limiting the carrier’s liability cannot be availed of in case of the loss, destruction, or deterioration of the goods (Article 1747 of the Phil­ ippine Civil Code). 5. Scope of application The carrier is under statutory obligation to observe extraordinary diligence in the vigilance over goods transported by them according to all the circumstances of each case (Article 1733 of the Philippine Civil Code). This responsibility lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them (Article 1736 of the Philippine Civil Code). However, the extraordinary liability of the carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them (Article 1738 of the Philippine Civil Code). It is important to note that Article 1752 of the Philippine Civil Code provides that even when there is an agreement limiting the liability of the carrier in the vigilance over the goods, the carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration.

CHAPTER 35

Poland

Wojciech Adamczak University of Gdansk ´

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF

LIFE AND PERSONAL INJURY

Poland ratified the Limitation Convention 1976 in 1984. The Polish Maritime Code of 1961 was amended in 1986, 1991 and again in 1995. This Code has been replaced by the new Maritime Code of 2001 (‘‘MC’’) which came into force on 4 June 2002. Under Article 97 §1 of this Code, the debtor’s liability for maritime claims is limited according to the provisions of the Limitation Convention 1976 (‘‘LLMC’’) with the amendments ratified by Poland. This means that the Convention is treated as part of Polish domestic law, so it is pointless, for the purposes of this chapter, to repeat article by article the provisions of LLMC. It is, however, necessary to present some additional provisions provided in the Maritime Code in connection with the Liability Convention. In accordance with Article 6(3) of LLMC it has been provided in Article 100 of MC that claims in respect of damage to harbour works, basins, waterways and aids to navigation shall have priority over other claims but without prejudice to the right of claims for loss of life or personal injury. With regard to Article 8 of LLMC (Unit of Account) it should be borne in mind that Poland is a party to the International Monetary Fund. According to Article 101 §2 of MC of the Unit of Account is the Special Drawing Right as defined in LLMC. A person liable may invoke the right to limit liability notwithstanding that a limitation fund has not been constituted. However, according to Article 98 §2 of MC, the court may order the applicant to constitute a limitation fund, if there are other claimants who are likely to be filing claims against him. In connection with Article 15 of LLMC, Article 101 §2 MC provides that the limit of liability to be applied to vessels of less than 300 tons amounts to 100,000 Units of Account in respect of claims for loss of life or personal injury, or 50,000 Units of Account in respect of other claims. With regard to mutual obligations to other States to permit limitation, the Maritime Code contains these provisions: (a) Under Article 97 §2 of MC, a foreign claimant whose State has established a limit of liability lower than that determined by LLMC shall only be entitled to claim to the lower limit. (‘‘Foreign claimant’’ means a non-resident claimant, or a claimant having a seat abroad.) (b) A foreign applicant resident or having a seat in a State where the law does not provide for any limitation of liability shall have no right to limit liability in 367

368

POLAND

Poland. If the law of such State provides for a higher limit of liability than that determined by LLMC then that higher limit shall be applied. The District Court at Gda´nsk is the only competent court in Poland in respect of proceed­ ings for the constitution and distribution of limitation funds. The present system of limitation as described above came into force on 28 March 1991. The previously ratified Limitation Conventions of 1924 and 1957 have not so far been denounced. The 1996 protocol to the Limitation Convention has not so far been ratified by Poland.

B. PASSENGERS Poland ratified the Athens Convention 1974 in 1987 and the Protocol of 1976 to this Convention (‘‘PAL PROT’’) in 1987. Under Article 181 §1 of MC, the carrier shall be liable for damage done to passengers and their luggage, according to the provisions of the Athens Convention 1974 as amended by PAL PROT 1976. The provisions of this Convention are applied to all contracts of passage and carriage of passengers’ luggage governed by the Maritime Code. These provisions are applied mutatis mutandis to the carriage of persons who are carried with the carrier’s consent, but without necessarily paying a passage fee and also to the carriage of persons based on contracts other than a contract of passage. Under Article 182 of MC, the carrier who undertakes to carry a passenger by a vessel of Polish nationality, is bound to have the insurance covering indemnity for death of, or personal injuries to passengers and indemnity for loss of, or damage to, passengers’ luggage up to the limits determined by the Articles 7 and 8 of the Athens’ Convention. The same rule is applied to the foreign carriers carrying the passengers in the area of Poland or between the Polish ports. The proper insurance certificate or the policy should be carried on board and produced at the request of the marine inspection authorities. The carriage of passengers without above mentioned insurance is forbidden. The 2002 Protocol to the Athens Convention 1974 has not so far been ratified by Poland.

C. CARRIAGE OF GOODS BY SEA Poland ratified the Hague Rules of 1924 in 1937, the Visby Rules in 1980 and the SDR Protocol of 1979 in 1984. The Hague-Visby Rules were incorporated in the Polish Maritime Code in 1986 and also in the new Maritime Code of 2001. According to the provisions of Article 167 §1 of MC, concerning carriage of cargo under a bill of lading on which the value of that cargo has not been shown, indemnity for loss of, or damage to, one package (or other unit of cargo as by custom used in trade) may not exceed the amount calculated according to principles established on the subject by international convention, in this case the Brussels Convention on bills of lading, as amended by the Brussels Protocols of 1968 and 1979. Where the container, pallet or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed therein shall

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369

be deemed the number of packages or units. Otherwise, the container, pallet or similar article of transport shall be considered as a package or unit. The carrier shall not be entitled to the benefit of limitation of liability if it is proved that the damage resulted from an act or omission caused by intentional fault or gross negli­ gence of the carrier. The provisions of the Convention 1924, as amended in 1968 and 1979, shall apply to bills of lading relating to the carriage of goods between ports of two different States, where: — the bill of lading is issued in a Contracting State; — the carriage is from a port in a Contracting State; — the contract contained in or evidenced by the bill of lading provides that the Rules of the Convention or the legislation of the State giving effect to those Rules are to govern the contract, regardless of the nationality of the ship, carrier, shipper or any other person.

CHAPTER 36

Singapore Haridass Ajaib and Augustine Liew Haridass Ho & Partners, 24 Raffles Place, #18–00 Clifford Centre, Singapore 048621

Introduction In this edition, this chapter undergoes fundamental changes, brought about by the Mer­ chant Shipping (Amendment) Act 2004. This Act imports most of the provisions of the Convention on Limitation of Liability for Maritime Claims 1976 (hereinafter ‘‘the 1976 Convention’’). Subject to certain savings, by sections 3 and 4 of the Merchant Shipping (Amendment) Act 2004, the pre-existing Part VIII of the Merchant Shipping Act (Cap. 179) (which contained the provisions for limitation of liability based on the Convention on Limitation of the Liability of Owners of Sea-going Ships, 1957—hereinafter ‘‘1957 Convention’’) was repealed and a new Part VIII of sections 134 to 144 and a new Schedule were enacted in its place. The introduction of the provisions of the Convention on Limitation of Liability for Maritime Claims 1976 was foreshadowed by the observations made in the dissenting judgment of Judith Prakash J. in The Sunrise Crane1 as follows: ‘‘It is clear from the cases . . . that, over the years, the courts have whittled down the protection available to a shipowner from the 1957 Convention and s 136 of the Merchant Shipping Act. There is hardly a reported case after The Norman where an owner has managed to show that his systems of management of the vessel were such that they in no way contributed to any negligence on the part of the crew of the vessel. Thus, the purpose of s 136 has to a great extent been negatived and the protection it offers to shipowners is, largely, illusory. That development was a major reason why many countries, including the United Kingdom, moved away from the 1957 Convention and adopted the 1976 Convention instead.’’

In the second reading of the Bill for the Act, the Minister of State for Transport stated, ‘‘ . . . Although the liability limits under the Brussels 57 have served us well, the industry has given us feedback that these limits are now too low to meet their needs. Owing to the nature of the Convention, claimants are now more inclined to take their cases to Court under Brussels 57, to challenge the shipowner’s right to limit his liability. This creates great uncertainty for all parties concerned and almost always delays the payment of compensation . . . ’’

Further, section 2 of the Merchant Shipping (Amendment) Act 2004 which contains amendments to the definition of ship and certain other provisions of section 2(1) of the Merchant Shipping Act (Cap. 179) came into operation on 25 January 2005.2 The remain­ ing provisions of the Merchant Shipping (Amendment) Act 2004 came into operation on 1 May 2005 The definition of ‘‘ship’’ has been expanded to include ‘‘an off-shore industry 1. [2004] 4 SLR 715. 2. With regard to this amendment to the definition of ship, the Minister of State for Transport, in the second reading of the Bill stated, ‘‘Sir, let me conclude by saying that the proposals to accede to LLMC 76, and to allow the registration of mobile rigs under the Singapore Registry of Ships, will further strengthen our position as a global hub port and international maritime centre’’.

371

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SINGAPORE

mobile unit’’ and the amendments to give effect to this came into operation on 25 January 2005.3 The Merchant Shipping (Amendment) Act 2004, however, contains a saving provision that for liability arising out of an occurrence which took place before 1 May 2005, the pre­ existing Part VIII in the Merchant Shipping Act (Cap. 179) (based on the 1957 Conven­ tion) shall continue to apply.4

A. APPLICABLE LAW In considering the applicable law governing limitation of liability, it is trite to say that a distinction will be drawn between substantive and procedural law. Substantive law refers to the law that will be applied to the merits, or lack thereof, of any claim and the law that will be applied to ascertain whether there has been conduct barring limitation. Procedural law refers to the corpus of rules and law that govern, for example, commencement of proceedings and constitution of the limitation fund. For the latter, the law of the forum will always be applied. As for the former, the law of the forum need not always be the applicable law; the determination of which is dependent upon conflicts of law principles. Foreign law is admissible in the courts of Singapore in a suit or matter as a question of fact. With regard to limitation of liability under the Carriage of Goods by Sea Act (Cap. 33), the recent amendment to the Act has brought about a change. Prior to the amendment of the Carriage of Goods by Sea Act (Cap. 33), there was some uncertainty as to whether parties could contract out of the Hague-Visby Rules (including the rules relating to limitation of liability) by agreeing that a law which does not give effect to the HagueVisby Rules shall govern the contract of carriage of goods by sea. However, since the amendment to the Carriage of Goods by Sea Act (Cap. 33), it is clear that the Hague-Visby Rules constitute compulsory law out of which the parties may not contract. The result is that with regard to contracts of carriage of goods by sea which fall within the ambit of the Carriage of Goods by Sea Act (Cap. 33), the limitation of liability provisions as provided in the Hague-Visby Rules shall govern. 1. 1957 Convention in Singapore generally Singapore is a signatory to the International Convention relating to the Limitation of the Liability of Owners of Sea-going Ships, 1957 (‘‘1957 Convention’’). Singapore acceded to the 1957 Convention in 1958 and passed national legislation giving effect thereto in 1968. The Merchant Shipping Act (Cap. 179) being Act 19 of 1995 was enacted with the commencement date of 2 February 1996. This Act was revised by Act 7 of 1996 which had a commencement date of 2 February 1996. The next amendments were brought about by the Merchant Shipping (Amendment) Act 2004. The law on limitation of liability based on the 1957 Convention is largely contained in the pre-existing Part VIII of the Merchant Shipping Act (Cap. 179). These provisions are 3. See section 2 of the Merchant Shipping Act (Cap. 179). 4. Section 3 of the Merchant Shipping (Amendment) Act 2004; section 144 of the Merchant Shipping Act (Cap. 179)

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373

in pari materia with sections 502 and 503(1) of the UK Merchant Shipping Act 1894 respectively. 2. 1976 Convention in Singapore generally IMO Circular LLMC/Circ.50 dated 30 March 2005 stated that Singapore acceded to the 1976 Convention by way of deposit of an instrument on 24 January 2005. Where local legislation has inducted parts of the 1976 Convention, those parts, as enacted, have the force of law. By comparison to the limitation of liability law based on the 1957 Convention (herein­ after referred to as ‘‘the old law’’), under the limitation of liability law based on the 1976 Convention (hereinafter referred to as ‘‘the new law’’): (i) The right to limit is not confined to claims for damages but includes other claims; (ii) There are explicit provisions relating to salvors and salvage operations to expand the otherwise more restricted rights afforded by the old sections 135 and 136 of the Merchant Shipping Act (Cap. 179).5 (iii) The ‘‘actual fault or privity’’ concept as conduct barring limitation is replaced by the test of whether the loss resulted from some personal act or omission, committed with the intent to cause such loss or recklessly and with knowledge that such loss would probably result; (iv) The limits of liability are increased and the manner of computation of the limitation fund is different (The ship’s gross tonnage is used for calculation and the limitation fund is derived in Special Drawing Rights). 3. Persons who can limit liability U N D E R T H E O L D L AW

The persons entitled to limit their liability are the owner, any charterer and any person interested in or in possession of the ship and, in particular, any manager or operator of the ship.6 In relation to claims arising from the act or omission of any person, the masters, members of the crew and employees acting in the course of employment are also entitled to limit their liability as the classes of persons mentioned above. U N D E R T H E N E W L AW

Under the new law, the shipowner, charterer, manager and operator of a ship continue to be entitled to limit their liability.7 However, in addition, a salvor, any person for whose act/ default the shipowner or salvor is responsible and the insurer may also limit their lia­ bility. In Article 1, paragraph 3 of the 1976 Convention, ‘‘salvor’’ refers to any person rendering services in direct connection with salvage operations and ‘‘salvage operations’’ include operations referred to, inter alia, in Article 2, paragraph 1(d) and (e) of the 1976 5. See the decision in The ‘‘Tojo Maru’’ [1971] 1 Lloyd’s Rep. 341. 6. The old section 141(1) of the Merchant Shipping Act (Cap. 179). 7. Although Article 2(1) refers to ‘‘sea-going ship’’, section 136 of the Merchant Shipping Act (Cap. 179) broadens the application to a ship, whether sea-going’’ or not. Section 136 states, ‘‘Notwithstanding paragraph 2 of Article 1 of the Convention, the right to limit liability under the Convention applies in relation to any ship whether seagoing or not, and ‘shipowner’ in that paragraph has a corresponding meaning’’.

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Convention. The operations referred to in Article 2, paragraph 1(d) of the 1976 Conven­ tion are claims in respect of wreck removal and the related operations in relation to the ship. The operations referred to in Article 2, paragraph 1(e) of the 1976 Convention are claims in respect of the removal, destruction or rendering harmless of the cargo of the ship. Section 136(1) of the Merchant Shipping Act (Cap. 179) under the new law enacts that ‘‘Subject to this Part, the provisions of the Convention, other than paragraph 1(d) and (e) of Article 2 of the Convention, shall have the force of law in Singapore’’.8 Hence, the salvor’s claim for the cost of the wreck removal is not subject to limitation. However, claims in respect of loss of life or personal injury or loss of or damage to property in direct connection with salvage operations are claims subject to limitation under the new law.9 4. Exclusion of liability U N D E R T H E O L D L AW

There are two situations in the old section 135 of the Merchant Shipping Act (Cap. 179) where liability may be totally excluded if there is no actual fault or privity on the part of the party seeking to rely on limitation. First, under the old section 135 of the Merchant Shipping Act (Cap. 179), where any goods, merchandise or other things whatsoever, taken in or put on board a Singapore ship, are lost or damaged by reason of fire on board that ship, the owner, charterer and any person interested in or in possession of the ship (including any manager or operator of the ship) is not liable for the loss of or damage to the goods, merchandise or other thing whatsoever. The exception in the old section 135 of the Merchant Shipping Act (Cap. 179) in relation to ‘‘goods, merchandise or other thing . . . put on board’’ the Singapore ship is subject to the qualification that the act of putting on board the goods, merchandise or other thing must be a lawful act. This qualification was made clear by the Singapore Court of Appeal in The ‘‘Kota Sejarah’’10 where it was held that the right to exclude liability was lost when the cargo was wrongfully transhipped after the voyage had been abandoned. Secondly, under the old section 135 of the Merchant Shipping Act (Cap. 179), where any gold, silver, diamonds, watches, jewels or precious stones taken in or put on board a Singapore ship, the true nature and value of which have not at the time of shipment been declared by the owner or shipper thereof to the owner or the master of that ship in the bills of lading or otherwise in writing, the owner, charterer and any person interested in or in possession of the ship (including any manager or operator of the ship) are not liable for the loss of or damage to the gold, silver, diamonds, watches, jewels or precious stones caused by any robbery, embezzlement, making away with or secreting them. U N D E R T H E N E W L AW

The provisions contained in the new section 135 of the Merchant Shipping Act (Cap. 179) substantially re-states section 135 under the old law except that conduct barring exclusion 8. The exclusion of paragraph 1(d) and (e) of Article 2 of the 1976 Convention from enactment may be contrasted with the position under the old law expounded by the Court of Appeal in The ‘‘Seaway’’ [2005] 1 SLR 435. 9. Article 2, paragraph 1(c) of the 1976 Convention. 10. [1991] 1 MLJ 136.

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of liability is that stated in Article 4 of the 1976 Convention in place of ‘‘actual fault or privity’’. The provisions contained in the new section 135 of the Merchant Shipping Act (Cap. 179) are substantially similar to section 186 of the English Merchant Shipping Act 1995. 5. Claims subject to limitation U N D E R T H E O L D L AW

In instances distinctly specified by the old section 136 of the Merchant Shipping Act (Cap. 179), liability may be limited where there is no actual fault or privity on the part of the shipowner or other persons entitled to limit liability. They are: (a) where any loss of life or personal injury is caused to any person being carried in the ship; (b) where any damage or loss is caused to any goods, merchandise or other things whatsoever on board the ship; (c) where any loss of life or personal injury is caused to any person not carried in the ship through the act or omission of any person (whether on board the ship or not) in the navigation or management of the ship or in the loading, carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers, or through any act or omission of any person on board the ship; and (d) where any loss or damage is caused to any property (other than any property mentioned in paragraph (b) or any right is infringed through the act or omission of any person (whether on board the ship or not) in the navigation or management of the ship, or in the loading, carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers, or through any other act or omission of any person on board the ship. In the Singapore decision of Shell Eastern Petroleum (Pte) Ltd. v. The Owners of the ship or vessel The ‘‘Seaway’’,11 Justice Belinda Ang, held that the word ‘‘property’’ in the old section 136(1)(d) of the Merchant Shipping Act (Cap. 179) did not include private wharves. However, Justice Ang ruled that tonnage limitation could nonetheless be invoked on the ground that proprietary rights in the wharf had been infringed through the act or omission of a person in the navigation or management of the ship. On appeal to the Court of Appeal, it was held as follows: ‘‘It will be noted that s 136(1)(d) is applicable to two situations, namely, (a) where any loss or damage is caused to any property, other than any goods, merchandise or other things on board the ship (‘first limb’); or (b) where any right is infringed (‘the second limb’), Through the act or omission of any person in the navigation or management of the ship.’’12

Further, the Court of Appeal agreed with the judge below that ‘‘when the wharf of a person is damaged by the operation of a vessel, the right of the owner of the wharf is infringed’’.13 11. [2004] 2 SLR 577. 12. The ‘‘Seaway’’ [2005] 1 SLR 435 at page 439. 13. The ‘‘Seaway’’ [2005] 1 SLR 435 at page 456.

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Since the legal position in Singapore is the same as the English position under the UK Merchant Shipping Act 1894, it is likely that those not acting in the ‘‘navigation or management of the ship’’ may not avail themselves of the right to limit their liability under the old section 136(1)(c) and (d) of the Merchant Shipping Act (Cap. 179). It follows that a salvor not acting in the ‘‘navigation or management of the ship’’ would not be able to limit liability under the relevant paragraph of the old section 136(1) of the Merchant Shipping Act (Cap. 179), as was held to be the case in The ‘‘Tojo Maru’’. The decision of The ‘‘Maritime Prudence’’; Felda Oil Products Sdn Bhd v. Owners of the Ship mv ‘‘Maritime Prudence’’14 elucidates the import of the old section 136(1) paragraph (d) of the Merchant Shipping Act (Cap. 179). In that case, it was held that the expression ‘‘where . . . any right is infringed . . . in the . . . management of the ship’’ did not encompass the act of shipping agents who had issued fraudulent bills of lading inasmuch as the act of the shipping agents was not referable to the management of the ship as a physical entity. Thus, the owners of the vessel could not limit their liability for non­ delivery of cargo arising from the issuance of fraudulent bills of lading. As a result of The ‘‘Maritime Prudence’’, under the old law in Singapore, the right to limit for any loss, damage or infringement of rights only arises where that loss, damage or infringement of rights is causally linked to the navigation and/or management of the ship as a physical entity. In other words, before there is a right to limit liability under the old section 136(1) paragraph (d) of the Merchant Shipping Act (Cap. 179), it must be shown that the human act or fault which formed a link in the chain of causation (irrespec­ tive of whether the human act or fault occurred on board or outside the ship) must be directed to or connected with the ship or some part of the ship as a physical entity. Absent the causal connection between the ship as a physical entity and the injury, loss or damage or infringement of rights in respect of which liability is sought to be limited, there is no right to limit liability under the old section 136(1)(d) of the Merchant Shipping Act (Cap. 179). Thus, the right to limit under the old section 136(1)(d) of the Merchant Shipping Act (Cap. 179) does not apply to an act in connection with the business for which the ship was employed where the ship (as a physical entity) is not the effective cause of the injury, loss or damage or infringement of rights in respect of which liability is sought to be limited. The decision of The ‘‘Maritime Prudence’’ was foreshadowed by the decision of Chao Hick Tin J. in Soctek Sendirian Berhad and Tekoil Trading Pte Ltd. v. Temuka Navigation Co. Pte Ltd.15 where he accepted the reasoning of Pilcher J. in The ‘‘Athelvictor’’16 that the expression ‘‘navigation or management of the ship’’ should not be construed in quite the same narrow manner as in the bill of lading cases. U N D E R T H E N E W L AW

The categories of claims which are subject to limitation of liability are: (a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to naviga­ tion), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;17 14. [1996] 1 SLR 168. 15. [1995] SGHC 136. 16. [1945] 78 Ll.L.Rep. 529. 17. Article 2, paragraph 1(a) of the 1976 Convention.

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(b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;18 (c) claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations;19 (d) claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with the 1976 Convention , and further loss caused by such measures.20 Provided that they are not excepted under Article 3 of the 1976 Convention and in the absence of conduct barring limitation stated in Article 4 of the 1976 Convention. The excepted claims under Article 3 of the 1976 Convention are: (a) claims for salvage or contribution in general average;21 (b) claims for oil pollution damage within the meaning of the International Conven­ tion on Civil Liability for Oil Pollution Damage dated 29 November 1969 or of any amendment or Protocol thereto which is in force;22 (c) claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage;23 (d) claims against the shipowner of a nuclear ship for nuclear damage;24 (e) claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations, including claims of their heirs, dependants or other persons entitled to make such claims, if under the law governing the contract of service between the shipowner or salvor and such servants the ship­ owner or salvor is not entitled to limit his liability in respect of such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 6 of the 1976 Convention.25 Article 2, paragraph 1 of the 1976 Convention begins by stating that subject to Articles 3 and 4, the claims whatever the basis of liability may be, shall be subject to limitation of liability. By comparison to limitation of liability under the 1957 Convention, the right to limit under the new law is not confined to claims for damages and is for claims whatever the basis of liability.26 Under the provisions of Article 2, paragraph 1(a) of the 1976 Convention, claims for loss of life or personal injury or for loss of or damage to property are subject to limitation, where occurring on board the ship or in direct connection with the operation of the ship or with salvage operations. Under the old law, claims for loss of life or personal injury are subject to limitation where loss of life or personal injury (as the case may be) is caused to a person being carried on the ship and, where that person is not carried on the ship, the 18. Article 2, paragraph 1(b) of the 1976 Convention. 19. Article 2, paragraph 1(c) of the 1976 Convention. 20. Article 2, paragraph 1(f) of the 1976 Convention. 21. Article 3, paragraph (a) of the 1976 Convention. 22. Article 3, paragraph (b) of the 1976 Convention. 23. Article 3, paragraph (c) of the 1976 Convention. 24. Article 3, paragraph (d) of the 1976 Convention. 25. Article 3, paragraph (e) of the 1976 Convention. 26. In the context of Article 2, paragraph 1(c), this is apparently restricted again by the words ‘‘other than contractual rights’’.

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loss of life or personal injury is caused through the act or omission of any person in the navigation or management of the ship in the loading, carriage or discharge of its cargo or in the embarkation, carriage, or disembarkation of its passengers, or through any other act or omission of any person on board the ship. Under the old law, claims for loss of life or personal injury or for loss of or damage to property are subject to limitation where the person is on board the ship. It remains to be seen to what extent the loss of life and personal injury claims which are subject to limitation have been expanded under the new law in the light that the words ‘‘navigation’’ and ‘‘management’’ have been dropped and in their place the connecting factor is ‘‘direct connection with the operation of the ship or with salvage operations’’. The Tojo Maru-type of liability will now be covered by the definition of ‘‘salvor’’ in the 1976 Convention and by the words ‘‘in direct connection with salvage operations’’. The claims subject to limitation under Article 2, paragraph 1(f) of the 1976 Convention are a new category. This category would cover claims for loss from the person who took measures to avert or minimise loss and who is not the person liable and includes claims of further loss caused by such measures. However, the liable person (e.g., the shipowner) must be entitled to limit the loss for which the measures were taken. To qualify for limitation, this category of claims is subject to a further restriction in Article 2 (2) of the 1976 Convention, in these terms, namely ‘‘ . . . claims set out under paragraph 1 . . . (f) shall not be subject to limitation of liability to the extent that they relate to remuneration under a contract with the person liable’’. 6. Conduct barring limitation U N D E R T H E O L D L AW

The right to limit or exclude liability would be lost where actual fault or privity is proven to exist on the part of the person seeking to limit his liability. In Singapore, under the old law, the burden of proof falls on the party who seeks to limit his liability.27 There is no reported local decision on the definition of ‘‘actual fault or privity’’ in the context of the old section 136 of the Merchant Shipping Act (Cap. 179) and therefore, cases such as Lennard’s Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd.,28 The ‘‘Lady Gwendolen’’,29 Grand Champion Tankers Ltd. v. Norpipe AS and Others (The ‘‘Marion’’)30 and The ‘‘Annie Hay’’31 are of persuasive value. Where, as is often the case, the party seeking to limit liability is a corporation, the ‘‘alter ego’’ of the company is sought to be identified and the question of actual fault or privity is examined, having regard to the ‘‘alter ego’’. That alter ego person is the person for whom the company is liable because his action is the very action of the company itself: Lennard’s Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. He is the directing mind and will of the company. In The ‘‘Star Sea’’,32 a question arose in relation to the issue of privity to the ship being sent to sea in an unseaworthy state, in a claim under a marine insurance cover. The ‘‘alter ego’’ of the assured company was sought to be identified. Tuckey J. thought that the question boiled down to who had full 27. Paterson Steamships Ltd. v. Robin Hood Mills Ltd. [1937] 58 Ll.L.Rep. 33. 28. [1914] 1 K.B. 419. 29. [1965] 1 Lloyd’s Rep. 335, CA. 30. [1984] 2 Lloyd’s Rep. 1. 31. [1968] 1 Lloyd’s Rep. 141. 32. [1995] 1 Ll.L.Rep. 651.

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discretion or autonomy instead of merely a delegated responsibility to do certain things in his own initiative, in relation to the acts or omissions in question. In a similar context, G. P. Selvam J. in Kin Yuen Co. Ltd. v. Lombard Insurance Co. Ltd. & Ors33 held that the managing director, whom he found was the effective decision maker, was the ‘‘alter ego’’. U N D E R T H E N E W L AW

Under Article 4 of the 1976 Convention, conduct barring limitation is as follows. A person shall not be entitled to limit his liability if it is proved that: (1) the loss resulted from his personal act or omission; (2) committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably occur. Unlike the position under the 1957 Convention, the burden of proof under the 1976 Convention is likely to be on the claimant to establish the facts which bars the shipowner from relying on limitation. As can be seen from the terms of Article 4, an element of the conduct barring limitation is the personal act or omission. The concept of ‘‘alter ego’’ used to examine the issue of actual fault and privity under the old remains relevant for consideration of the personal act or omission. The provisions of Article 25 of the Warsaw Convention 1929 as amended by Article 13 of the Hague Protocol 1955 are in comparable language. The provisions state: ‘‘ . . . if it is proved . . . done with intent to cause damage or recklessly and with knowledge that such damage would result.’’

In the English case of Goldman v. Thai Airways International Ltd.,34 the Court of Appeal held, inter alia: ‘‘ . . . the Article requires the plaintiff to prove . . . (3) that it was done when the doer was aware that the damage would probably result but he did so regardless of that probability; (4) that the damage complained of is the kind of damage known to be the probable result.’’

This passage of the judgment was cited in the judgment of the Singapore Court of Appeal in Clarke Beryl Claire (as personal representative of the estate of Eugene Francis Clarke & Ors v. SilkAir (Singapore) Pte Ltd.35 The judgment in Goldman v. Thai Airways International Ltd. suggests that the element of recklessness entails awareness that damage would probably result. The judgment in Clarke Beryl Claire (as personal representative of the estate of Eugene Francis Clark & Ors v. SilkAir (Singapore) Pte Ltd. suggests that the element of recklessness entails consciousness of the risk, in the following terms:36 ‘‘ . . . In SS Pharmaceutical Co., the clause was said to involve ‘one composite concept’. It is hence wrong to attempt to construe ‘reckless’ in isolation and to ask whether it should be given an objective or subjective meaning: Goldman (supra). . . . It is, however, possible to attribute an objective or subjective meaning to ‘knowledge’. Courts in common law and most other jurisdictions agree that the knowledge must be subjective: Air Law 33. [1994] 34. [1983] 35. [2002] 36. [2002]

2 1 3 3

SLR 887. W.L.R. 1186. SLR 1 at page 16, paragraph 52. SLR 1 at pages 16 and 17, paragraphs 53, 54, 55.

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(4th Ed) by Shawcross & Beaumont Vol. 1 at para. VII (447); Carriage by Air (2001) by Fountain Court Chambers at para. 10.72. In Nugent v. Michael Goss Aviation [2000] 2 Lloyd’s Rep. 222, Dyson J. classified the relevant ‘knowledge’ as follows: (1) Actual conscious knowledge: ‘actual knowledge in the mind of the pilot at the moment at which the omission occurs’. (2) Background knowledge: ‘knowledge which would be present to the mind of a person if he thought about it’. (3) Imputed knowledge: ‘knowledge which a person ought to have but does not in fact have’. Dyson J. held that only conscious knowledge would suffice for art. 25 because it is difficult to draw the line between such knowledge and the knowledge in categories (2) and (3) above. With regards to background knowledge, he said: If a person fails to apply his mind to a fact because he has temporarily forgotten it, he has no more and no less actual knowledge of that fact at the time of his act or omission than a person who fails to apply his mind to it because he has been temporarily distracted. With regards to imputed knowledge, he said: It is not sufficient to show that, by reason of his training and experience, the pilot ought to have known that damage would probably result from his act or omission. Auld L.J. agreed that background knowledge did not fall within art 25, but Phil L.J. dissented on that point. . . . .As for ‘probable’, the Court in Goldman (supra at p 700) said that it means ‘something is likely to happen . . . In other words, one anticipates damage from the act or omission’. . . . (b) Application to the Facts The court in Goldman said: One cannot . . . decide whether or not an act or omission is done recklessly without considering the nature of the risk involved. In that case, the court knew what the risk was: the risk of injury should the passengers not be told to fasten their seatbelts during turbulence. This was not so here. . . . It is also impossible for a court to ascertain whether the pilots had actual conscious knowledge of the risks, as these risks are unknown.’’

With regard to the standard of proof, the Singapore Court of Appeal held: ‘‘The standard of proof is on a balance of probabilities, but a higher degree of probability is required in respect of particularly serious allegations: Carriage by Air (2001) by Fountain Court Chambers at para. 10.82 . . . ’’

The right to limit has been described as ‘‘almost indisputable’’ and the combined effect of Articles 2 and 4 of the 1976 Convention ‘‘imposes on the claimant a very heavy bur­ den’’.37 In the absence of any allegation of intent, the claimant challenging the rights to limit has to establish both reckless conduct and actual knowledge that the relevant loss would probably result; ‘‘constructive’’ knowledge is insufficient.38 7. Limits of liability U N D E R T H E O L D L AW

The limits of liability are dependent on the lettered paragraphs in the old section 136 of the Merchant Shipping Act (Cap. 179) and the limits of liability generally fall into two categories:39 37. The ‘‘Bowbelle’’ [1900] 1 Lloyd’s Rep. 532 at page 535. 38. The ‘‘MSC Rosa M’’ [2000] 2 Lloyd’s Rep. 399. 39. The old section 136(1) of the Merchant Shipping Act (Cap. 179).

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(a) where the damages are in respect of loss of life or personal injury, either alone or together with such loss, damage or infringement as is mentioned in paragraphs (b) and (d) of the old section 136, an aggregate amount not exceeding, in the currency of Singapore, the equivalent of 3,100 gold francs for each ton of the ship’s tonnage; (b) where the damages are in respect of such loss, damage or infringement as is mentioned in paragraphs (b) and (d) of the old section 136 of the Merchant Shipping Act (Cap. 179), whether there is loss of life or personal injury or not, an aggregate amount not exceeding, in the currency of Singapore, the equivalent of 1,000 gold francs for each ton of the ship’s tonnage. At present, 3,100 gold francs is equivalent to S$484.73 and 1,000 gold francs is equivalent to S$156.36.40 U N D E R T H E N E W L AW

Under Article 6, the limits of liability are: 1(a) For ‘‘injury’’ claims except those mentioned in Article 7: (i) up to 500 tons, the limit is 333,000 Special Drawing Rights; (ii) 501–3,000 tons, the limit is 500 Special Drawing Rights per ton plus 333,000 Special Drawing Rights; 3,001–30,000 tons, the limit is 333 Special Drawing Rights per ton plus 333,000 Special Drawing Rights; 30,001–70,000 tons, the limit is 250 Special Drawing Rights per ton plus 333,000 Special Drawing Rights; 70,001 tons and above, the limit is 167 Special Drawing Rights per ton plus 333,000 Special Drawing Rights; 1(b) For any ‘‘other’’ claims except those mentioned in Article 7: (i) Up to 500 tons, the limit is 167,000 Special Drawing Rights; (ii) 501–30,000 tons, the limit is 167 Special Drawing Rights per ton plus 167,000 Special Drawing Rights; (iii) 30,001–70,000 tons, the limit is 125 Special Drawing Rights per ton plus 167,000 Special Drawing Rights; (iv) 70,001 and above, the limit is 83 Special Drawing Rights per ton plus 167,000 Special Drawing Rights; 2. Where the total fund under Article 6(1)(a) is insufficient to satisfy ‘‘injury’’ claims, the shortfall shall rank rateably with ‘‘other’’ claims against the Article 6(1)(b) fund, ‘‘if any’’. Article 6(3) of the 1976 Convention states that, without prejudice to the rights of the ‘‘injury’’ claims under Article 6(2), a State Party (such as Singapore) is at liberty to enact that claims for damage to harbour works, basins, waterways and navigational aids shall have priority over other claims. Such enactment has been made in section 136(2) of the Merchant Shipping Act (Cap. 179), thereby giving such claims priority. 40. The Merchant Shipping (Limitation of Liability) (Singapore Currency Equivalents) Order, 1983 (No. S22/83).

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Whereas in the 1957 Convention, there was a fixed rate in gold francs for each ton of a ship, Article 6 of the 1976 Convention sets out a sliding scale with the amount working in inverse order to the ship’s tonnage. The Singapore Dollar equivalent for the sum in Special Drawing Rights (‘‘SDR’’) may be certified by the Maritime and Port Authority of Singapore for a particular day.41 Singapore modifies the aggregate amounts in Article 6(1)(a)(i) and 6(1)(b)(i) as fol­ lows: — for harbour craft, such aggregate amounts are replaced by the sum insured under compulsory insurance against third party risks; — for any other ship below 300 tons, the ‘‘Article 6(1)(a)(i) aggregate’’ is replaced by 166,667 Special Drawing Rights and the ‘‘Article 6(1)(b)(i) aggregate’’ is replaced by 83,333 Special Drawing Rights.42 Article 7 of the 1976 Convention, to which Article 6(1)(a)–(b) are subject deals especially with ‘‘injury’’ claims relating to ‘‘passengers’’. The limit on each distinct occasion is 46,666 Special Drawing Rights multiplied by the authorised passenger-carrying capacity of the ship, subject to a maximum of 25 million Special Drawing Rights.43 For the salvor operating solely on the salved ship or not operating from any ship, the limit of liability shall be calculated on a fixed tonnage of 1,500 tons.44 For each distinct occasion, the limitation figures under Articles 6 and 7 are to be applied respectively to the aggregate of all relevant claims against the relevant parties set out in Article 1 of the 1976 Convention. 8. Tonnage and limitation amount U N D E R T H E O L D L AW

For the purposes of the limitation fund, the tonnage of a mechanically propelled ship shall be its net tonnage with the addition, if any, of engine-room space deducted for the purpose of ascertaining that tonnage, and the tonnage of any other ship shall be its net tonnage. In the event that the tonnage of a ship cannot be ascertained in the manner just described, the Marine Director shall, if so directed by the court, certify what, on the evidence specified in the direction, would in his opinion be the tonnage of the ship if ascertained in accordance with the above method. The determination of the applicable tonnage is by no means a simple matter as the net tonnage for mechanically powered ships may only be found by looking at the ship’s tonnage certificate. The International Convention on Tonnage Measurement of Ships, London 1969 (the 1969 Tonnage Convention) retained the concept of gross and net tonnage but the calculation is based on a logarithmic formula which does not record any propelling power allowance. It is not finally settled in any reported local decision, whether the calculation will be based on the net tonnage solely or a re-measurement under the previous tonnage measurement system will be required.45 41. Section 142(1) of the Merchant Shipping Act (Cap. 179). 42. Section 137(1) of the Merchant Shipping Act (Cap. 179). 43. Section 138 of the Merchant Shipping Act (Cap. 179). 44. Article 6(4) of the 1976 Convention. 45. Chorley and Giles, Shipping Law (8th Edn.), 1987, at page 403.

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The gross or net tonnage of a ship is to be determined in accordance with the provisions in the Merchant Shipping (Tonnage) Regulations46 which implemented the International Convention on Tonnage Measurement of Ships, London 1969. U N D E R T H E N E W L AW

Whereas under the 1957 Convention the net tonnage of the vessel was used to compute the limitation fund, under the 1976 Convention gross tonnage is used.47 In that regard, the gross tonnage would be calculated in the manner which, as far as possible, would give effect to the regulations in Annex 1 of the International Convention on Tonnage Measure­ ment of Ships, 1969.48 9. Constitution of the limitation fund U N D E R T H E O L D L AW

Article 4 of the 1957 Convention provides: ‘‘Without prejudice to the provisions of Article 3 Sub-rule 2 of this Convention, the rules relating to the constitution and distribution of the limitation fund, if any, and all rules of procedure shall be governed by the national law of the State in which the fund is constituted.’’

In Singapore, the applicable national law is found in Order 70 (Admiralty Proceedings) of the Rules of Court and the old section 137 of the Merchant Shipping Act (Cap. 179). In a limitation action commenced in Singapore under the old law, the party seeking to limit liability must prove his case in the action before the court will grant a decree of limitation. There is no reported local decision as to whether or not there is a restriction to a party’s right to invoke such limitation without constitution of a fund. It is arguable that the right to invoke limitation is not restricted by absence of a limitation fund as it is not one of the requirements for the grant of a decree listed in Order 70, Rule 36 of the Rules of Court. The amount of the fund to be constituted will be determined in accordance with the old section 136 of the Merchant Shipping Act (Cap. 179). Current legislation is silent on the method of constituting a fund. In practice, the fund will be paid into court. Further, where there is only one claim, a fund is often not constituted. In such instances, payment will be made directly to the claimant upon settlement of the claim. Under the old law, the courts of Singapore will not accept a guarantee given by a bank or otherwise to constitute the limitation fund and only a cash deposit will suffice to constitute the limitation fund.49 In the Singapore decision of Evergreen International SA v. Volkswagen Group Singapore Pte Ltd. and 73 Others,50 Belinda Ang Saw Ean J. provided guidance on several points. She took the view that the whole purpose of the 1957 Convention is to enable the shipowner 46. Regulation 12, 1990 Edn amended by Nos S333/94, S44/96 and S63/96. 47. Article 6(5) of the 1976 Convention and section 137(2) of the Merchant Shipping Act (Cap. 179). 48. Section 137(3) of the Merchant Shipping Act (Cap. 179). 49. However, under the old section 143 Merchant Shipping Act (Cap. 179), there are provisions relating to a guarantee furnished by the parties seeking to prevent or obtain the release of the ship from arrest. These provisions enable the Singapore court to order the release of the ship if certain conditions stated in the old section 143(2) are fulfilled. 50. [2004] 2 SLR 457.

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to set up one fund against which all claimants would be required to make their claims. Further, she expressed the view that the right to claim limitation in any particular forum is a right that belongs to the shipowner alone and that choice is not to be pre-empted by a claimant. The claimant cannot dictate where the limitation fund is to be constituted. In that case, the limitation decree was granted and the limitation fund was constituted in Singapore by payment into court. U N D E R T H E N E W L AW

The act of invoking limitation of liability shall not constitute an admission of liability.51 Furthermore, limitation of liability may be invoked notwithstanding that a limitation fund has not been constituted.52 Any eligible party potentially liable may constitute a limitation fund either by depositing the sum or by furnishing an acceptable guarantee.53 Upon constitution of the limitation fund, the court may stay any proceedings relating to any claim arising out of that occurrence which are pending.54 Once the limitation fund has been constituted, the claimants’ rights must be exercised solely against the fund and no other assets of the liable party will be exposed to legal action.55 Article 13(2) of the 1976 Convention states that any property (including a ship) of the liable party which has been attached (or arrested) in the State Party shall be released if the fund has been consti­ tuted: (a) at the port where the incident took place, or at the first port of call if the incident took place outside port; or (b) at the port of disembarkation, for ‘‘injury’’ claims; (c) at the port of discharge, for cargo claims; or (d) in the State where the attachment/arrest is made. Upon such release, the liable party (the applicant) is deemed to have submitted to the Singapore Court’s jurisdiction to adjudicate on the particular claim.56 Under Article 14 of the 1976 Convention, the rules relating to the constitution and distribution of a limitation fund and all procedural rules relating thereto shall be governed by the law of the State in which the fund is constituted. 10. Distribution of the limitation fund U N D E R T H E O L D L AW

The old section 137(1)(b) of the Merchant Shipping Act (Cap. 179), expressly empowers the High Court of Singapore to distribute the fund rateably among several claimants. This is in accordance with Article 3, sub-rule 2 of the 1957 Convention which provides that in each portion of the limitation fund the distribution among the claimants shall be made in

51. Article 1(7) of the 1976 Convention. Under the old law, liability must have been admitted or otherwise established before the decree of limitation is granted. 52. Article 10(1) of the 1976 Convention. 53. Article 11 of the 1976 Convention. 54. Sections 139(2) and (3) of the Merchant Shipping Act (Cap. 179). 55. Article 13(1) and (2) of the 1976 Convention. 56. Section 140 of the Merchant Shipping Act (Cap. 179).

A P P L I C A B L E L AW

385

proportion to the amounts of their established claims. This is the legal position in Singa­ pore as the old section 137(3) of the Merchant Shipping Act (Cap. 179) further provides that ‘‘no lien or other right in respect of any ship or property shall affect the proportions in which any amount is distributed among several claimants under this section’’. It naturally follows that the distribution of the fund to claimants will not be determined on an ‘‘early bird’’ basis. Indeed, Article 3, sub-rule 3 provides that where the owner has paid in whole or part to any claimant before the fund is constituted, he shall pro tanto be placed in the same position in relation to the fund as that claimant but only to the extent of the amount recoverable by the claimant under limitation. However, it must be noted that payment out of the fund is only in respect of claims that are subject to limitation.57 Further, the fund is set up for the purpose of satisfying the aggregate claims incurred on any one distinct occasion that resulted in the fund being set up, and not for claims incurred on another distinct occasion.58 The Singapore court has the power to award interest on the claim to be calculated before distribution.59 Interest is awarded on a claim made against the limitation fund. The limitation fund when constituted of a cash deposit would also earn interest and the question whether such interest is to be added to the fund so as to increase the amount available for distribution (the longer distribution is delayed) has not been authoritatively settled in Singapore. It remains to be seen whether the position adopted by the English Court of Appeal in The ‘‘Garden City’’ (No. 2)60 on a limitation fund constituted in the United Kingdom would be followed in Singapore. In the Singapore decision of Evergreen International SA v. Volkswagen Group Singapore Pte Ltd. and 73 Others, the plaintiffs obtained a limitation decree plus interest from the date of collision to the date of payment into court. (Payment into court was made to constitute the limitation fund.) U N D E R T H E N E W L AW

Under Article 12(1) of the 1976 Convention, the limitation fund shall be distributed among the claimants in proportion to their ‘‘established’’ claims. The manner of such distribution and apportionment is in turn subject to the provisions of Article 6(1) and (2) and Article 7: — if the party or his insurer settles a recognised claim directly with the claimant, he may be subrogated to the rights against the fund; — the liable party may ‘‘hedge his future liabilities’’ in respect of potential claims by setting aside a portion of the fund for future distribution and his subrogation rights are preserved; — in The Botany Triad and Lu Shan61 both parties in the collision agreed to the damages computation and that each was 50% to blame. It was held by the court that interest should be added to each claim before a net balance was arrived at on the date of the agreement, not the date of collision.

57. Article 2, 1957 Convention. 58. The old section 136(4), Merchant Shipping Act (Cap. 179). 59. Sched. 1, para. 6, Supreme Court of Judicature Act, (Cap. 322), Singapore Statutes. 60. [1984] Lloyd’s Rep. 37. 61. [1993] 2 Lloyd’s Rep. 259.

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The Maritime and Port Authority of Singapore may, from time to time, by order prescribe the rate of interest to be applied for the purposes of paragraph 1 of Article 11 of the 1976 Convention.62 Section 139(3) of the Merchant Shipping Act (Cap. 179) states, ‘‘No lien or other right in respect of any ship or property shall affect the proportions in which under Article 12 . . . the fund is distributed’’.

B. CARRIAGE OF GOODS BY SEA 1. The Hague-Visby Rules The Singapore Carriage of Goods by Sea Act (Cap. 33) implements the Hague Rules as amended by the Brussels Protocol 1968 (Hague-Visby Rules). In 1995, there was an amendment made to the Carriage of Goods by Sea Act (Cap. 33).63 With effect from 31 March 1995, the Hague-Visby Rules have been given force of law in Singapore and the ambit of the Hague-Visby Rules is spelt out in Article X of the Hague-Visby Rules and section 3 of the Carriage of Goods by Sea Act (Cap. 33). The extensions to the provisions of the Hague-Visby Rules, in particular, are contained in section 3(2), (3), (4) and (6) of the Carriage of Goods by Sea Act (Cap. 33). (a)

PERSONS WHO CAN LIMIT LIABILITY

Under Article IV, Rule 5, both a carrier and the owner may limit liability. It is also likely that the definition of ‘‘carrier’’ is wide enough to include a ‘‘carrier’’ who is not the owner of the carrying ship and thus the definition of a carrier would include charterers. Article IV bis, Rule 2 provides that a servant or agent of the carrier, not being an independent contractor, may limit his liability to the same extent as the carrier. However, the problem faced by independent contractors may be circumvented by the inclusion of a Himalaya clause in the bill of lading. (b)

EXCLUSION OF LIABILITY

The carrier’s immunities are set out in Article IV of the Rules, which has two distinct parts. First, under Article IV, neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence by the carrier, inter alia, to make the ship seaworthy. The duty placed on the carrier to exercise due diligence to make the ship seaworthy before and at the commencement of the voyage is strictly enforced.64 Secondly, Article IV, Rule 2 contains a long list of exclusions which may be relied upon where loss of or damage to cargo has resulted from causes other than unseaworthiness of the vessel. It would be beyond the scope of this work to examine all the exceptions listed in Article IV, Rule 2.65 62. Section 139(1) of the Merchant Shipping Act (Cap. 179). 63. Vide Act Supplement No. 6 of 1995. 64. The ‘‘Patraikos 2’’ [2002] 4 SLR 232. 65. However, see The Law of Singapore on Carriage of Goods by Sea, 1994 Butterworths Asia (2nd edn), by Prof. Tan Lee Meng at pages 358–378.

CARRIAGE OF GOODS BY SEA

(c)

387

C L A I M S S U B J E C T TO L I M I TAT I O N

Limitation of liability under the Hague-Visby Rules is governed by Article IV, Rule 5(a), which provides as follows: ‘‘Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall, in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding the equivalent of 10,000 francs per package or unit or 30 francs per kilo of gross weight of the goods lost or damaged, whichever is the higher.’’

It follows that the carrier may limit his liability in respect of physical loss or damage to the goods and any other losses that may arise in connection with the goods. (d)

C O N D U C T B A R R I N G L I M I TAT I O N

There are various circumstances where the carrier’s right to limit may be lost. First, the right to limit will be lost where Article IV, Rule 5(e) operates. Article IV, Rule 5(e) provides: ‘‘Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result.’’

There appears to be no reported local decision on the right of limitation being lost pursuant to this rule. However, a carrier who has failed to exercise due diligence to have his ship made seaworthy before and at the beginning of the voyage66 is not precluded from relying on the limits of liability provided for by Article IV, Rule 5 unless his fault falls within the ambit of Article IV, Rule 5(e). For example, in National Jaya (Pte) Ltd. v. Hong Tat Marine Shipping Pte Ltd.,67 it was held that in considering the import of Article IV, Rule 5, weight ought to be given to the words ‘‘in any event’’ in that provision and those words clearly suggest that liability may be limited even when there has been a failure to exercise due diligence before and at the beginning of a voyage to ensure that the vessel is sea­ worthy. Secondly, Article IV, Rule 5 cannot be relied upon where the nature and value of the goods have been properly declared and inserted in the bill of lading. In such a case, the carrier may be liable for the declared value. Therefore, the shipper of expensive goods should declare the value of the goods and have the same inserted in the bill of lading. This should preclude the situation in Parker Distributors (Singapore) Pte Ltd. v. AS DS Svenborg68 from occurring. In that case, the shippers could only recover up to the limitation limit and not their full loss as they had failed to declare the nature and value of the goods for insertion in the bill of lading evidencing the shipment of the goods. Thirdly, where there has been an unjustified deviation from the contractual route, it is unclear whether the limits of liability contained in Article IV, Rule 5 may be relied upon. It is arguable that the Article IV, Rule 5 limits of liability apply ‘‘in any event’’. However,

66. Article III, Rule 1. 67. [1979] 2 MLJ 6. 68. [1983] 2 MLJ 26.

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it is likely that the carrier will be barred from limitation if the unjustified deviation was due to conduct barring limitation under Article IV Rule 5(e).69 (e)

L I M I T S O F L I M I TAT I O N

It should be noted that, where higher limits of liability have been agreed upon between the contracting parties, Article IV, Rule 5(g) stipulates that such higher limits will prevail over those of Article IV, Rule 5(a). The limits of liability under the Hague-Visby Rules are found in Article IV, Rule 5(a) reproduced above. Liability is limited to an amount not exceeding 10,000 francs per package or unit, or 30 francs per kilo of gross weight of the goods lost or damaged if higher. Needless to say, where only part of a cargo which weighs more than 333.3 kilos has been damaged or lost, the limit of 10,000 francs will apply if that part which has been damaged or lost weighs less than 333.3 kilos. In the decision of Pirelli General Plc and Others v. PSA Corporation Limited and Others, an issue for determination by the Court was, where a single article was partly damaged, did the term ‘‘gross weight of the goods lost or damaged’’ refer to the total weight of that entire article or did it refer to the actual weight of the damaged portions of the article. The Assistant Registrar hearing the matter held that the applicable limitation quantum was based on the actual weight of the damaged portions of the article damaged.70 At present, 10,000 francs is equivalent to S$1563.65 while 30 francs is equivalent to S$4.69.71 Where the amount recoverable by the claimant after limitation under the Hague-Visby Rules exceeds the limitation amount under the 1957 Convention, the person liable may rely on the limits laid down in the 1957 Convention as Article VII provides: ‘‘The provisions of these Rules shall not affect the rights and obligations of the carrier under any statute for the time being in force relating to the limitation of the liability of owners of sea­ going vessels’’. 2. The Hague Rules Although Singapore has adopted the Hague-Visby Rules, limitation of liability under the Hague Rules will be briefly discussed because there is still a considerable amount of litigation involving the Hague Rules. (a)

PERSONS WHO CAN LIMIT LIABILITY

Persons able to limit liability under the Hague Rules are similar to those under the HagueVisby Rules save for one notable exception. Only the ‘‘carrier’’ himself may limit liability under the Hague Rules whereas servants and agents of the carrier enjoy the same rights under the Hague-Visby Rules. However, the insertion of a Himalaya clause into the

69. Neither the Carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in Article IV Rule 5(e) if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage or recklessly and with knowledge that damage would probably occur. 70. [2003] SGHC 31. 71. Carriage of Goods by Sea (Singapore Currency Equivalents) Order, 1982 (No. S172/82).

PA S S E N G E R S A N D L U G G A G E

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contract of carriage should afford that servant or agent the right to limit liability as per the carrier. (b)

C L A I M S S U B J E C T TO L I M I TAT I O N A N D L I M I T S O F L I M I TAT I O N

In Singapore, claims under the Hague Rules which are subject to limitation are similar to those under the Hague-Visby Rules. The material difference is the limit of limitation. Article IV, Rule 5 of the Hague Rules provides as follows: ‘‘Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding £100 per package or unit, or the equivalent of that sum in other currency unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.’’

The limitation amount of £100 has created some difficulty in interpretation. The moot point was whether £100 was the nominal or paper value or the gold value. In Singapore, it was held in The ‘‘Vishva Pratibha’’ that £100, in its natural and ordinary meaning, was taken to be the nominal value in sterling and not gold.72 This arguably is a rather low amount. More recently, that imbalance has been redressed in The ‘‘Thomaseverett’’73 where the Singapore High Court took the view that £100 in the Hague Rules is a reference to the gold value of that amount. 3. The Hamburg Rules The United Nations Convention on the Carriage of Goods by Sea 1978 (Hamburg Rules) has finally received the required number of signatories and came into force on 1 Novem­ ber 1992. Although Singapore is a signatory of the Hamburg Rules, it has yet to enact any municipal legislation to implement the same.

C. PASSENGERS AND LUGGAGE Singapore is not a signatory to the Convention relating to the Carriage of Passengers and their Luggage by Sea (Athens Convention) nor any of its Protocols. As such, limitation of liability in this area of law is governed by the provisions of the Merchant Shipping Act 1995 and the Merchant Shipping Act (Cap. 179) as earlier discussed and the common law principles dealing with contractual exclusion and limitation clauses.

72. The ‘‘Vishva Pratibha’’ [1980] 2 MLJ 265.2. 73. [1992] 2 SLR 1068.

CHAPTER 37

Slovenia Prof. Dr. Marko Pavliha Mitja Grbec, LL.M.

A. INTRODUCTION The Republic of Slovenia is a civil law country with the result that the doctrine of ‘‘stare decis’’ is not observed. Maritime legislation is within the authority of the Slovenian Parliament (Drˇzavni zbor) while maritime cases are taken before the District Court of Koper (Okroˇzno sodiˇscˇ e v Kopru) and the Court of Appeal (Viˇsje sodiˇscˇ e v Kopru). The right to appeal to the Supreme Court of the Republic of Slovenia (Vrhovno sodiˇscˇ e Republike Slovenije) is also granted on certain conditions. The Maritime Code (Pomorski zakonik) of the Republic of Slovenia, which entered into force on 12 May 2001 regulates exhaustively more or less all areas of admiralty law, including general limitation of liability of ‘‘the maritime operator’’ for maritime claims, as well as the specific limitations in case of oil pollution, carriage of goods and carriage of passengers and their luggage. According to Article 8 of the Constitution of the Republic of Slovenia (Ustava Repub­ like Slovenije), national law and other regulations must be in accordance with generally valid principles of international law, as well as with international agreements (e.g., con­ ventions) by which Slovenia is bound. Ratified and published international conventions are directly applied by Slovenian courts and in case of discrepancy prevail over national law. So far Slovenia has not ratified any of the international conventions (1924, 1957, 1976, 1996) regulating the general limitation of liability for maritime claims. Nonetheless, the limitation provisions of the Maritime Code are based on the 1976 Convention. The carriage of goods provisions in the Maritime Code are based on the Hague-Visby Rules (although Slovenia is a state party only to the 1924 Hague Rules) and the carriage of passengers on the 1974 Athens Convention. It is worth noting that Slovenia is also bound by the 1992 Civil Liability Convention (CLC) and FUND Conventions.

B. GENERAL LIMITATION OF LIABILITY 1. Introduction The Maritime Code of the Republic of Slovenia governs the general limitation of liability and limitation proceedings in Part V, Articles 382–422. The responsibility for any obligation arising out of the navigation and employment of the ship is vested in the carrier, whose definition for the purpose of this part of the Code 391

392

SLOVENIA

includes the shipowner, the charterer and the manager of the ship (Article 383). Fur­ thermore, the right to limit liability extends to the salvor, the master, the crew members and other persons engaged by the carrier in respect of maritime adventure. Finally, the insurer can limit his liability to the same extent as the insured. This obviously means that if the insured cannot limit his liability and must pay in full to the third party claimant, his liability insurer will not be entitled to limit his liability to such third party. That would happen in the case when it has been proved that the loss resulted from the insured’s personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. 2. Claims subject to limitation Article 2 of the 1976 Convention is almost entirely incorporated in Article 385 of the Maritime Code. The only exceptions are paragraph (e) of Article 2 of the Convention which deals with claims with respect to the removal, destruction of or the rendering harmless of the cargo of the ship, as well as paragraph (d) which includes claims in respect of the raising, removal and rendering harmless of a ship which is stranded, abandoned, etc. The carrier and the salvor are entitled to limit their liability independently of the legal action undertaken. Nonetheless, claims cannot be subject to limitation of liability to the extent they relate to remuneration under the contract with the person liable (Paragraph 2 of Article 385). According to Article 386 of the Maritime Code, there are the following claims excepted from limitation: (a) claims for salvage or contribution to general average; (b) claims arising from non-contractual liability of the carrier (liability in tort) for damage caused to third parties outside the ship or to the environment; (c) claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage; (d) claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations, including claims of their heirs, legal successor or other person entitled to make such claim. The carrier is not entitled to limit his liability if the loss resulted from his personal act or omission, committed with intent to cause such loss or with gross negligence (recklessly, with knowledge that such loss would probably result). In addition, the carrier is not entitled to limit liability for damages resulting from loss of life personal injury of persons employed. 3. Limits of liability The limits of financial liability as elaborated in Articles 6 and 7 of the 1976 Convention are fully contained in Articles 388 and 389 of the Maritime Code. The units of account are the Special Drawing Rights (‘‘SDR’’) . The general limits of liability which are calculated with relevance to the relevant gross tonnage of the ship concerned are the following: (a) In respect of claims for loss of life or personal injury;

L I M I TAT I O N O F L I A B I L I T Y F O R M A R I N E C A R G O C L A I M S

393

(i) 333,000 Units of Account (SDR) for a ship with a tonnage not exceeding 500 tons; (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (a): — for each ton from 501 to 3,000 tons—500 SDR; — for each ton from 3,001 to 30,000 tons—333 SDR; — for each ton from 30,001 to 70,000 tons—250 SDR; — for each ton in excess of 70,000 tons—167 SDR. (b) in respect of any other claims; (i) 167,000 SDR for a ship with a tonnage not exceeding 500 tons; (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): — for each ton from 501 to 30,000 tons—167 SDR; — for each ton from 30,001 to 70,000 tons—125 SDR; — for each ton in excess of 70,000 tons—83 SDR. The limits of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which he is rendering salvage services, shall be calculated according to a tonnage of 1,500 tons. The provisions regarding the aggregation of claims (Article 390) are entirely in accordance with 1976 Convention.

4. Limitation fund The Maritime Code provides that any person alleged to be liable must establish a limita­ tion fund for such amounts as set out in Articles 388 and 389 of the Code and as applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. The proceedings in this regard must be filled before the District Court of Koper. The fund shall be available only for payment of claims in respect of which limitation of liability can be invoked. It must be constituted either by depositing the money or by producing an acceptable bank guarantee. According to Article 392 of the Maritime Code the fund shall be distributed among creditors in proportion to their established claims. The Slovenian law also acknowledges the right of subrogation to insurers and other persons, if the established claims against the fund have been compensated. Where a limitation fund has been constituted, any person having made a claim against the fund shall be barred from exercising any right in respect of such claim against any other assets of a person by or on behalf of whom the fund has been constituted.

C. LIMITATION OF LIABILITY FOR MARINE CARGO CLAIMS 1. Introduction Slovenia is a member state of the 1924 Hague Rules (the Visby and the 1979 Protocols have not been ratified so far), although the relevant provision of the 1968 and 1979 Protocols are fully incorporated in the Maritime Code.

394

SLOVENIA

2. Package or unit limitation and financial limits of liability The package and unit limitation are those provided in the 1924 Hague Rules. If the provision of the Maritime Code applies the limits of liability are identical to those provided in the 1968 and 1979 Protocols to the Hague Rules. Claims are made subject to the global limits of liability as provided for property claims. The carrier is not entitled to limit its liability if the damage resulted from his personal act or omission, committed with intent to cause such loss or with gross negligence (recklessly, with knowledge that such loss would probably result).

D. CARRIAGE OF PASSENGERS AND THEIR LUGGAGE 1. Introduction The provisions of the Slovenian Maritime Code regulating the carriage of passengers and their luggage by sea are based on the 1974 Athens Conventions and the 1976 Protocol, although Slovenia has not ratified them. Slovenia is also not a party to the 1990 and 2002 Protocols. 2. Limits of liability For claims resulting from loss of life or personal injury of passenger on board, the Maritime Code provides the limit of the shipowner to be 46.666 SDR for each single passenger. The passenger is defined as a person on board the ship either under a contract for carriage of passengers or for persons on board the ship with the consent of the carrier for the purpose of accompanying a vehicle or live animals contracted to be transported. The overall limits of liability of the carrier for claims resulting from loss of life or personal injury of passenger on board, cannot exceed 25 million SDR for a single incident, while he is not entitled to limit its liability if the damage arise from his personal act or omission, committed with intent to cause such loss or with gross negligence (recklessly, with knowledge that such loss would probably result). 3. Limitation of liability for oil pollution damage As already stated Slovenia is a State Party to the 1992 CLC and Fund Conventions. Therefore, the provisions of this conventions, including the provisions dealing with the limitation of liability of the shipowner and the constitution of the limitation fund, are directly applicable in Slovenia.

CHAPTER 38

South Africa Professor Hilton Staniland Interim Deputy Vice-Chancellor (Administration and Finance) University of KwaZulu-Natal; Member of the

Board of Directors of the South African Maritime Safety Authority; and Advocate of the High Court of South

Africa and the High Court of Lesotho.

A. ADMIRALTY JURISDICTION OVER CLAIMS FOR LIMITATION

OF LIABILITY

The admiralty jurisdiction of the High Court of South Africa (hereinafter referred to as the ‘‘Admiralty Court’’) is enshrined in section 2 of the Admiralty Jurisdiction Regulation Act 105 of the 1983, which provides that: ‘‘(1) Subject to the provisions of this Act each provincial and local division, including a circuit local division, of the Supreme Court of South Africa [now styled the High Court of South Africa] shall have jurisdiction (hereinafter referred to as admiralty jurisdiction) to hear and determine any maritime claim (including, in the case of salvage, claims in respect of ships, cargo or goods found on land), irrespective of the place where it arose, of the place of registration of the ship concerned or of the residence, domicile or nationality of its owner. (2) For the purposes of this Act the area of jurisdiction of a court referred to in subsection (1) shall be deemed to include that portion of the territorial waters of the Republic adjacent to the coastline of its area of jurisdiction.’’

Maritime claims as defined in the 1983 Act include claims for limitation of liability. Paragraph (w) of section 1(1) of the 1983 Act defines a maritime claim as any claim for, arising out of, or relating to ‘‘the limitation of liability of the owner of a ship or of any other person entitled to any similar limitation of liability; . . . ’’. Section 5 of the 1983 Act also impliedly includes matters related to claims for limitation of liability because it provides that: ‘‘(2) A court may in the exercise of its admiralty jurisdiction—(a) consider and decide any matter arising in connection with any maritime claim, notwithstanding that any such matter may not be one which would give rise to a maritime claim; . . . ’’. In the Nagos1 a foreign registered ship sank with some loss of life and cargo off the South African coast. The owner of the ship sought to limit its liability in respect of the loss of cargo by virtue of section 261(1)(b) of the Merchant Shipping Act 57 of 1951.2 Alexander J. held that the Admiralty Court had jurisdiction over the claim for limitation:

1. Nagos Shipping Ltd. v. Owners, Cargo Laden on Board MV Nagos, and Another 1996 (2) SA 261 (D) at 264D, 271D. 2. Section 261(1)(b) provided: ‘‘The owner of a ship, whether registered in the Republic or not, shall not, if any loss of life or personal injury to any person, or any loss of or damage to any property or rights of any kind, whether movable or immovable, is caused without his actual fault or privity—(a) . . . (b) if no claim for damages in respect of loss of life or personal injury arises, be liable for damages in respect of loss of or damage to property or rights to an aggregate amount exceeding an amount equivalent to 850 gold francs for each ton of a ship’s tonnage . . . .’’

395

396

SOUTH AFRICA

‘‘ . . . as I view these proceedings, they are brought within the direct purview of s 1(1)(w) read with s 5(2)(a) of the Admiralty Act. A ‘maritime claim’ as defined and presently relevant includes the ‘limitation of liability of the owner of a ship . . . ’ (s1(1)(w)) and the Court under s 5(2)(a) may in the exercise of its admiralty jurisdiction ‘consider and decide any matter arising in connection with any maritime claim’ . . . ’’.

B. ADMIRALTY JURISDICTION OVER CLAIMS FOR LIMITATION

OF LIABILITY IS NOT EXCLUSIVE TO THE ADMIRALTY COURT

IN SOUTH AFRICA

Although it was once the accepted view that the Admiralty Court had exclusive jurisdic­ tion over maritime claims by virtue of the 1983 Act,3 it is now authoritatively established that it is not peremptory that maritime claims must fall only within the jurisdiction of the Admiralty Court because: ‘‘such a court is empowered by section 7(1)(a) to decline to exercise its admiralty jurisdiction if it is of the opinion that any other court in the Republic or any other court or arbitrator or body elsewhere can more appropriately hear the matter. If the question of jurisdiction is raised in proceedings before a Provincial or Local Division of the Supreme Court, such Court should determine the issue and if it decides that the matter relates to a maritime claim, it shall order that the matter be proceeded with in a maritime court . . . If the question of jurisdiction is raised in proceedings before a Provincial Court or local Division of the Supreme Court, such court should determine the issue and if it decides that the matter relates to a maritime claim, it shall order that the matter be proceeded with in a maritime court. Conversely it follows that if the question of jurisdiction is not raised before such court, and it therefore fails to make a decision, it is not precluded from exercising its ordinary jurisdiction. Hence the proceedings in such court may not then be attacked in this court.’’4

If this dictum is applied to a claim for limitation of liability, then, as a general rule, such a claim is to be heard and determined in the Admiralty Court; but if, for example, the claim is brought in the High Court in the exercise of its ordinary non-admiralty jurisdic­ tion5 and the question of jurisdiction is not raised before or by the High Court, it is not precluded from continuing to exercise its ordinary jurisdiction; and, the exercise of such jurisdiction may not be attacked on appeal to the Supreme Court of Appeal of South Africa.6

C. ADMIRALTY JURISDICTION OVER CLAIMS FOR LIMITATION

OF LIABILITY MAY NOT BE EXCLUSIVE TO SOUTH AFRICA

Where a claim for limitation of liability (which is defined as a maritime claim by virtue of the 1983 Act), is brought in the Admiralty Court, the court may nonetheless decline to exercise its jurisdiction if it is of the opinion that a foreign court can more appropriately 3. Peros v. Rose 1990 (1) SA 420 (N) at 424D. 4. Per Olivier J.A. in The Wave Dancer Nel v. Toron Screen Corp (Pty) Ltd. 1996 (4) SA 1167 (SCA) at 1188J–1189B. See also Weissglass NO v. Savonnerie Establishment 1992 (3) SA 928 (A) at 940G. 5. Such inherent jurisdiction may also be styled as the ‘‘parochial’’ jurisdiction of the High Court. 6. For a discussion as to the likely approach of a High Court where the judge himself raises the question but the parties are agreed that the claim should proceed in the ordinary jurisdiction of the High Court see: Hilton Staniland ‘‘Admiralty Law’’ Annual Survey of South African Law (1996) at 792–794.

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hear the matter in terms of section 7(1)(a) of the 1983 Act.7 The proper forum to hear and determine a claim for limitation of liability may therefore be contested. If so, an applica­ tion to establish a limitation fund may be brought to have proceedings heard in a more appropriate forum by virtue of section 7(1)(a) of the 1983 Act. The convenience of calling witnesses who can testify to the unseaworthiness of the ship is a factor indicating an appropriate forum.8 Another factor, it is submitted, would be the actual limit of liability in the different fora. In The ‘‘Visha Abha’’,9 for instance, Sheen J. took the view that it would be ‘‘a grave injustice to deprive them [the plaintiffs] of their rights to litigate in this country and send them to South Africa where their chances of recovering damages would be limited to so much less than the sum they may recover in this country’’. It is not without some irony that a South African court would, it is submitted, follow such a view; although, it has to be said, the limits of liability in South Africa have, as discussed below, been somewhat raised after 1 September 1997. Whether a South African court would follow the reasoning of the English decision in Caltex Singapore Pte Ltd. v. BP Shipping Ltd.10 and, in effect, characterise section 261 of the 1951 Act as procedural law and not as substantive law is uncertain, given that Alexander J. referred, albeit obiter, in The ‘‘Nagos’’ to the ‘‘substantive rights accorded a shipowner by section 261(1)(b)’’ of the 1951 Act.11 It also has to be said, section 261 has not yet been directly characterised as substantive according to English principles of conflicts of law which, it is submitted, would be applicable in South Africa by virtue of section 6(1) of the 1983 Act. A South African Admiralty Court would (for the reasons mentioned below) apply English law principles to the character­ isation of section 261 to the extent that the wording of the provision allows for various constructions.12 The jurisdiction of the Admiralty Court may be established by submission of the parties13 at the time of the action and can continue to the end of the action.14 In the 7. Section 7(1)(a) states that: ‘‘A court may decline to exercise its admiralty jurisdiction in any proceedings instituted or to be instituted, if it is of the opinion that any other court in the Republic or any other court or any arbitrator, tribunal or body elsewhere will exercise jurisdiction in respect of the said proceedings and that it is more appropriate that the proceedings be adjudicated upon by any such other court or by such arbitrator, tribunal or body.’’ For an English case involving a jurisdiction clause where proceedings were brought in South Africa see: Ultisol Transport Contractors Ltd. v. Bouygues Offshore S.A. and Comite D’Etudes et de Services des Assureurs Maritimes et Transports de Frances [1996] 2 Lloyd’s Rep. 140; and for another case with a South African connection see: Caspian Basin Specialised Emergency Salvage Administration and Another v. Bouygues Offshore S.A. and Others (No. 4) [1997] 2 Lloyd’s Rep. 507. 8. Nagos Shipping Ltd. v. Owners, Cargo Laden on Board MV Nagos 1996 (2) SA 261 (D&CLD) at 270E. 9. [1990] 2 Lloyd’s Rep. 312 at 314. 10. [1996] 1 Lloyd’s Rep. 286. 11. In Nagos Shipping Ltd. v. Owners, Cargo Laden on board MV Nagos 1996(2) SA 261 (D&CLD) at 264D. 12. See, for example, The Herceg Novi and Ming Galaxy [1998] 1 Lloyd’s Rep. 167 and on appeal [1998] 2 Lloyd’s Rep. 454. 13. In Mediterranean Shipping Co. v. Speedwell Shipping Co. Ltd. and Another 1986 (4) SA 329 (D) Van Heerden J. said: ‘‘Submission to the jurisdiction of a court is a wide concept and may be expressed in words or come about by agreement between the parties. Voet 2.11.8. It may arise through unilateral conduct following upon citation before a court which would ordinarily not be competent to give judgment against that particular defendant. Voet 2.1.20. Thus where a person not otherwise subject to the jurisdiction of a court submits himself by positive act or negatively by not objecting to the judgment of that court, he may, in cases such as actions sounding in money, confer jurisdiction on that court.’’ 14. In Pollak on Jurisdiction 2nd ed. at 12–13 it is said: ‘‘Jurisdiction having been established at that time [i.e. when action was instituted], it continues to exist to the end of the action or proceedings even though the ground upon which the jurisdiction was established ceases to exist . . . This principle of continuance has been held to

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‘‘Nagos’’,15 for instance, Alexander J. applied these principles as follows: ‘‘The first respondent brought its claim before a South African Court exercising admiralty jurisdic­ tion without legal need to do so. It consented to the Court’s jurisdiction in securing an attachment in rem. It persisted in its right to do so, notwithstanding vigorous opposition drawn to the very basis of the attachment. It then agreed that this Division was the more logical forum to pursue the argument. It has filed extensive answers and submissions on both the merits and the proper ramifications of the Shipping Act. Yet, having committed itself to all these steps, it now seeks to non-suit the applicant by contending that the action which was the raison d’etre for its advent into South Africa no longer exists. In my opinion the first respondent, by invoking the assistance of the Admiralty Act, has submitted to the jurisdiction of this Court and cannot now seek to deny it.’’

Special statutory provisions apply however where goods are carried under a bill of lading to which the Carriage of Goods by Sea Act 1 of 1986 applies. Here, a claim for limitation of liability in respect of the loss of, or damage to, the goods may arise by virtue of article IV(5) to the Schedule to the Act. Such a claim which is based on any claim for, arising out of, or relating to, goods carried under a bill of lading is a maritime claim as defined by either section 1(1)(g) or 1(1)(h) of the 1983 Act;16 and, therefore, falls within the jurisdiction of the Admiralty Court. However, the general principles governing the stay of proceedings in the Admiralty Court over maritime claims generally do not apply in respect of bills of lading because of the special statutory provisions providing for the jurisdiction of the High Court—and of the Admiralty Court—in section 3 of the 1986 Act. These provisions state that: ‘‘(1) Notwithstanding any purported ouster of jurisdiction, exclusive jurisdiction clause or agree­ ment to refer any dispute to arbitration, and notwithstanding the provisions of the Arbitration Act, 1965 (Act No. 42 of 1965), and of section 7(1)(b) of the Admiralty Jurisdiction Regulation Act, 1983 (Act No. 105 of 1983),17 any person carrying on business in the Republic and the consignee under, or holder of, any bill of lading, waybill or like document for the carriage of goods to a destination in the Republic or to any port in the Republic, whether for final discharge or for discharge or for discharge for further carriage, may bring any action relating to the carriage of the said goods or any such bill of lading, waybill or document in a competent court in the Republic. (2) The provisions of subsection (1) of this section shall not apply to arbitration proceedings to be held in the Republic which are subject to the provisions of the Arbitration Act, 1965.’’

Section 3 has been given a wide interpretation;18 and, it is submitted, there is no apparent follow from practical considerations because the administration of justice would be seriously hampered if the rule were otherwise.’’ 15. Nagos Shipping Ltd. v. Owners, Cargo Laden on Board MV Nagos, and Another 1996 (2) SA 261 (D) at 268B-D. 16. Section 1(1)(g) refers to: ‘‘loss of or damage to goods (including the baggage and the personal belongings of the master, officers or seamen of a ship) carried or which ought to have been carried in a ship, whether such claim arises out of any agreement or otherwise;’’ and section 1(1)(h) covers ‘‘the carriage of goods in a ship, or any agreement for or relating to such carriage . . . ’’. 17. Section 7(1)(b) states that: ‘‘A court may stay any proceedings in terms of this Act if it is agreed by the parties concerned that the matter in dispute be referred to arbitration in the Republic or elsewhere, or if for any other sufficient reason the court is of the opinion that the proceedings should be stayed’’. 18. In Owners of the Cargo Lately Laden on Board the MV Kairos Tran-shipped into the MV Jelsa v. MV Alka 1994(4) SA 622 (D) Hugo J. relied on the Afrikaans text of section 3. He held, in conformity with a literal construction of the provision, that it applied not only to a person carrying on business in the Republic who is also the holder or consignee of a bill of lading, but also to a holder or consignee who does not carry on business in the Republic. The effect of this decision is thus to widen both the application of section 3 and thereby to extend the jurisdiction of the Admiralty Court. But the Admiralty Court is not, of course, compelled to exercise its jurisdiction where it is clear that the Court should decline to exercise its jurisdiction under section 7(1)(a).

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reason why a claim for limitation of liability under article IV(5) of the Schedule to the 1986 Act could not be subject to the section. D. LAW TO BE APPLIED IN RESPECT OF LIMITATION OF

LIABILITY IN SOUTH AFRICA

Section 6 of the 1983 Act19 provides, in effect, for the application of English law as at 1 November 1983 where a pre-1983 South African Court of Admiralty, established under the Colonial Courts of Admiralty Act 1890, had jurisdiction immediately prior to 1 November 1983; but with regard to any other matter, modern Roman-Dutch law is applicable.20 Since the English High Court of Admiralty had jurisdiction in limitation proceedings under section 13 of the Admiralty Court Act 1861, it follows that English law (which comprehends both domestic rules of law and the relevant principles of private international law), is applicable to a claim for limitation of liability in the Admiralty Court.21 However, the effect of section 6(2) of the 1983 Act is that English law is not applicable where there is any South African statute applicable to a claim for limitation of liability. But where there is no such statute, or the statute is silent on the particular issue, English law as of 1 November 1983 is applicable in the absence of any agreement between the parties as to the law to be applied in terms of section 6(5) of the 1983 Act. What, then, is the combined effect of these provisions with regard to the application of English law? The scope for the direct application of the English law of limitation of liability by virtue of section 6 of the 1983 Act is very considerably reduced by section 261 of the Merchant Shipping Act 57 of 1951 and the Schedule to the 1986 Act. But with regard to the interpretation of both these South African statutes, relevant English prece­ dent would be of persuasive authority although it would not be binding by virtue of section 6(2). E. PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY Until 1960, the law in South Africa with regard to property damage, loss of life and personal injury was contained in section 503 of the English Merchant Shipping Act of 1894,22 as amended by the UK Merchant Shipping (Liability of Shipowners and Others) 19. Section 6 states: ‘‘(1) Notwithstanding anything to the contrary in any law or the common law contained a court in the exercise of its admiralty jurisdiction shall—(a) with regard to any matter in respect of which a court of admiralty of the Republic referred to in the Colonial Courts of Admiralty Act, 1890, of the United Kingdom, had jurisdiction immediately before the commencement of this Act, apply the law which the High Court of Justice of the United Kingdom in the exercise of its admiralty jurisdiction would have applied with regard to such a matter at such commencement, in so far as that law can be applied; (b) with regard to any other matter, apply the Roman-Dutch law applicable in the Republic.(2) The provisions of subsection (1) shall not derogate from the provisions of any law of the Republic applicable to any of the matters contemplated in paragraph (a) or (b) of that subsection. . . . (4) The weight to be attached to evidence contemplated in subsection (3) shall be in the discretion of the court. (5) The provisions of subsection (1) shall not supersede any agreement relating to the system of law to be applied in the event of a dispute. 20. Transol Bunker BV v. MV Andrico Unity & Others Grecian-Mar SRL v. MV Andrico Unity & Others 1989 (4) SA 325 (A) at 334H. 21. English conflict of laws were, for example, applied by virtue of section 6(1) in determining whether or not foreign maritime liens were to be recognised in Transol Bunker BV v. MV Andrico Unity & Others Grecian-Mar SRL v. MV Andrico Unity & Others 1989 (4) SA 325 (A) at 336B. 22. 57 and 58 Vict. c 60.

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Act of 1958. The 1894 Act and all Acts adding to or amending it in so far as they were in force in what was then the Union of South Africa were, however, repealed and replaced by the South African Merchant Shipping Act 57 of 1951 Act.23 Section 261 of the 1951 Act, which currently governs limitation of liability in respect of claims for loss of life, personal injury, or any loss of or damage to any property or rights of any kind, came into force on 1 January 1960. While section 261 was, as mentioned, based on section 503 of the 1894 English Act, not all of the many amendments which were effected to section 503 have been incorporated into section 261. Furthermore, only two decisions have been reported24 in respect of section 261, which was amended by section 4(b) of Act 16 of 1995; but this amendment created difficulties and was recently amended, in turn, by section 11 of Act 23 of 1997. South Africa is not a party to the International Convention for the Unification of certain Rules relating to the Limitation of the Liability of Owners of Sea-going Ships 1924 or the International Convention relating to the Limitation of the Liability of Owners of Sea­ going Ships 1957 (the 1957 Convention) but section 261 of the 1951 Act clearly includes provisions modelled on the 1957 Convention. Whether or not South Africa will become a State Party to the Convention on Limitation for Maritime Claims 1976 (the 1976 Convention) is, at the time of writing, an open question. There is the view of the Maritime Law Association of South Africa which holds, in very brief and general terms, that although section 261 of the 1951 Act requires amendment, South Africa should not become a state party to the 1976 Convention since this approach, it is argued, would introduce a fresh set of difficulties that arise out of the Convention. On the other hand, there is growing support in the South Africa Maritime Safety Authority (hereinafter referred to as the ‘‘Authority’’) for the views of Mr Justice Clarke: ‘‘It is true that many countries have not ratified the 1976 Convention. It is however the policy of IMO that they should. It has been recognized by countries which have 43 per cent of the world’s tonnage. It is desirable that as many countries as possible should apply the same standards, partly because that is desirable in itself and partly because it avoids problems such as have arisen in this case. It seems to me to be proper to regard the 1976 Convention as representing a widely accepted development from the regime which existed under the 1957 Convention.’’25

Because the 1976 Convention has been applied without apparent difficulty in other jurisdictions, is linked to other conventions, and would ensure that South African shipping could compete fairly in the international maritime industry, the Authority is giving con­ sideration to the accession of South Africa to the 1976 Convention. 1. What is a ship for the purposes of limitation of liability? In section 2 of the 1951 Act it is provided that: ‘‘ship means any kind of vessel used in navigation by water, however propelled or moved, and includes (a) a barge, lighter or other floating vessel; (b) a structure that is able to float or be floated 23. Nagos Shipping Ltd. v. Owners, Cargo Laden on Board MV Nagos 1996 (2) SA 261 (D&CLD) 261 at 269G. 24. It appears that the only other decision on limitation of liability reported in South Africa was concerned with whether section 503 of the 1894 Act could be pleaded against the Crown: SAR & H v. Smith’s Coasters (Prop.) Ltd. 1931 AD 113. 25. Caltex Singapore Pte Ltd. and Others v. BP Shipping Ltd. [1996] 1 Lloyd’s Rep. 286 at 298.

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and is able to move or be moved as an entity from one place to another; and (c) a dynamically supported craft.’’

Section 261 should, it is submitted, be read as applying to this definition of a ship. But can the definition of a ‘‘ship’’ in the Admiralty Jurisdiction Regulation Act 105 of 1983 extend the definition of a ship entitled to enjoy limitation of liability? In section 1(1) of the 1983 Act (which, as stated above, provides for admiralty jurisdiction over claims for limitation or liability), ‘‘ship’’ is defined to mean: ‘‘any vessel used or capable of being used on the sea or internal waters, and includes any hovercraft, power boat, yacht, fishing boat, submarine vessel, barge, crane barge, floating crane, floating dock, oil or other floating rig, floating mooring installation or similar floating installation, whether selfpropelled or not.’’

Given that the definitions of ship in the 1951 Act and the 1983 Act do not correspond (a dynamically supported craft, for instance, is excluded from claiming limitation of liability under the 1951 Act but a hovercraft is subject to admiralty jurisdiction by virtue of the 1983 Act), it is submitted that not all ships within the jurisdiction of the Admiralty Court enjoy the right to limit liability, which right is derived solely from the 1951 Act. That this is most probably the position is based on the recognition that the 1983 Act does not—in express terms—create any new right of limitation that does not already exist in other legislation. It should be noted that the right to limit liability is available to ‘‘the owner of a ship, whether registered in the Republic or not’’ in terms of section 261(1); and, the general provisions of section 261 ‘‘shall extend and apply to the owners, builders or other persons interested in any ship built at any port or place in the Republic, from and including the launching of such ship until the registration thereof under the provisions of this Act’’ in terms of section 261(2).

2. To which persons does limitation of liability apply? Section 261 only makes reference to ‘‘the owner of a ship’’ in so far as the right to limit liability is concerned; and, in section 2 of the 1951 Act, ‘‘owned’’ is defined to mean ‘‘any person to whom a ship or a share in a ship belongs’’. However, the right to limit liability is expressly not limited to owners. Section 261(2) adds that section 261 ‘‘shall extend and apply to the owners, builders or other persons interested in any ship built at any port or place in the Republic, from and including the launching of such ship until the registration thereof under the provisions of this Act’’. Furthermore, section 263(2) goes on to provide that ‘‘for the purpose of section 261 the word ‘owner’ in relation to a ship shall include any charterer, any person interested in or in possession of such ship, and a manager or operator of such ship’’. The reference to ‘‘any charterer’’ apparently included voyage, time and demise charterers. But it is uncertain whether the failure to refer expressly to master and crew excludes these persons. In the 1957 Convention, for instance, the master and crew may limit their liability. It is submitted that the phrase ‘‘in possession of such ship’’ is probably wide enough to include master or crew where they are sued in their individual capacities. Several questions remain however unanswered. Does the total limit of liability specified under section 261(1) apply to one person or to the sum of all claims against all persons where more than one person is liable? How, if at all, are settlements, voluntary payments

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and default judgments (which may not represent the true quantum of the claim) to be factored into the calculation of the limitation fund? 3. Which claims are subject to limitation? In accordance with section 261(1) of the 1951 Act, limitation of liability may arise only in respect of ‘‘any loss of life or personal injury to any person, or any loss of or damage to any property or rights of any kind, whether movable or immovable’’. As in the 1957 Convention, it seems that the section includes loss of life, personal property injury and damage to property ashore, but it is uncertain whether claims for costs and interest on awards or damages are included. 4. Once the right to limit liability has arisen can it be lost? Since section 261 of the 1951 Act refers to claims arising it has been argued that, unlike its English predecessor, the South African Act has added new prerequisites to the ship­ owner’s right to limit his liability, namely that a claim must have already arisen and must persist. But it has been held that the right to limit liability is not dependent on some other event that may supervene after the time when the claim has already arisen. Thus, where a claim has been instituted by way of an action in rem, the shipowner is immediately entitled to seek the protection of section 261(1)(b), even though the in rem proceedings are withdrawn before an application is brought for a declarator that the applicant has a right to limit its liability.26 Claims for declarations may however be viewed with caution since they obviously can lend themselves to improper attempts at forum shopping. 5. What conduct bars limitation? The references under Article 1(1)(a) and (b) of the 1957 Convention to the phrases ‘‘on board the ship’’ and ‘‘in the navigation or the management of the ship’’ respectively are not prerequisites to the right to limit liability under section 261 of the 1951 Act. Although a change effected by the 1976 Convention is that ‘‘actual fault or privity’’ is no longer the criterion by which the shipowner is barred from limitation, the law has not been changed in South Africa. According to section 261(1) of the 1951 Merchant Shipping Act of South Africa, the right to limit liability arises where the loss or damage ‘‘is caused without’’ the ‘‘actual fault or privity’’ of the owner or other persons entitled to limitation of liability. The reference to actual fault or privity is, of course, derived from section 503 of the 1894 Act. The English courts have dealt extensively with the meaning of actual fault or privity; and, it has been held, there is no valid reason why similar South African provisions should not be construed in accordance with the English authorities on the subject.27 For the purposes of construing section 261 of the 1951 Act, van Heerden J. in Atalantic Harvesters of Namibia v. Unterweser Reederei28 adopted and applied the following conspectus of English law:

26. Nagos Shipping Ltd. v. Owners, Cargo Laden on Board MV Nagos 1996 (2) SA 261 (D&CLD) at 271D. 27. Atlantic Harvesters of Namibia v. Unterweser Reederei 1986 (4) SA 865 (C) at 875I–J. 28. 1986 (4) SA 865 (C) at 875J–876E.

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‘‘In the leading case of Asiatic Petroleum Co. Ltd. v. Lennard’s Carrying Co. Ltd. [1914] 419 it was said at 432 by Lord Justice Buckley: ‘The words ‘‘actual fault or privity’’ in my judgment infer something personal to the owner, something blameworthy in him, as distinguished from constructive fault or privity such as the fault or privity of his servants or agents . . . ’. And at 137 by Lord Justice Hamilton: ‘In the case of a company, the ‘‘owners’’ within the meaning of the section must be the person or persons with whom the chief management of the company’s business resides . . . ’. This does not mean that the person whose actual fault would be the company’s actual fault must necessarily be a director. In The ‘‘Lady Gwendolen’’ [1965] 1 Lloyd’s Rep. 335, it was held for example that where a company has as special department which assumes responsibility for running the company’s ships, then the head of that department, even though not himself a director, should be regarded as someone whose action is the very action of the company itself, so far as concerns anything to do with the company’s ships. It has further been repeatedly held by the English Courts that the onus of proving that there was no actual fault or privity rests on the party seeking to limit the amount of his liability. Thus in The ‘‘England’’ [1971] 1 Lloyd’s Rep. 373 (CA) Megaw L.J. said at 377: ‘It is not in dispute that the onus is on the plaintiffs seeking limitation to establish that there was no relevant fault on the part of the person in the position of the managing owner; and if they failed so to establish, so that there was a fault, it is then for them further, if they can, to establish that the fault was not a cause of the casualty’ ’’.

6. What are the units of account? The first unit of account used in South Africa for calculating the limit of liability was the British pound;29 but the 1959 amendments to the 1951 Act changed the unit of account to gold francs30 following the 1957 Convention. On 1 September 1997, by virtue of section 11 of Act 23 of 1997, the unit of account was changed again to special drawing rights. The application of special drawing rights is not, however, retrospective in operation since section 11(2) of the 1997 Act states that ‘‘section 261 of the Merchant Shipping Act, 1951, as amended by [section 11(1) of the 1997 Act] shall not apply in respect of a cause of action that arose before the date of commencement of this section’’. 7. Position prior to 1 September 1997 It may be helpful to touch lightly on limitation claims that could have arisen before 1 September 1997; although the likely incidence of such claims today must be very small. Immediately prior to that date, section 261(4) of the 1951 Act provided for the purposes of section 261 that: ‘‘(a) a gold franc means a unit consisting of 65.5 milligrams of gold of millesimal fineness 900 and (b) the value of such gold franc in South African currency shall be determined by the court seized of the case.’’

How then was the gold franc to be converted into the equivalent rand value? At first, the amounts of the South African currency, which were equivalent to the amounts of the gold francs, were published from time to time.31 By virtue of section 261(5) of the 1951 Act, the Director-general32 of the Department of Transport was authorised to publish the rand 29. See section 261 prior to its amendment by section 33 of the Merchant Shipping Amendment Act 30 of 1959. 30. By virtue of section 33 of the Merchant Shipping Amendment Act 30 of 1959. 31. See, for example, Government Notice 754 of 14 November 1975 and Government Notice 796 of 12 October 1979. 32. Subsection 261(5) of the 1951 Act was added by section 33(e) of Act 30 of 1959.

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equivalents of the gold francs in the Government Gazette. It is understood that the Director-general simply published the results of a calculation periodically performed by the South African Reserve Bank whereby gold francs were converted into special drawing rights and special drawing rights were then converted into rands. But was a claimant under section 261 to be bound to a rand equivalent of the gold franc which no longer represented its true value? Or was this to legislate retrospectively? In Nagos Shipping Ltd. v. Owners, Cargo Laden on Board MV Nagos33 Alexander J. (followed English precedent34) and held that the rand equivalents to gold francs were to be applied as follows: ‘‘a claimant under s 261 should not be bound to a Rand equivalent of the gold franc which no longer represents its true value. The Act envisages that changes can be called for. That is what has been done. It would be artificial in the extreme, as I see it, that the shipowner should be entitled to rely on an obsolete Rand-gold franc conversion rate that no longer reflects its true value. The reasoning of Brandon J. is, with respect, entirely persuasive. The Director-General of Transport is not legislat­ ing retrospectively. He is determining a conversion rate in order to give proper substance to any limitation fund that may be set up.’’

The problem in practice however was that the conversion rates were not published sufficiently frequently to keep abreast of what was then the rapidly shrinking value of the rand.35 Accordingly, section 261(5) was deleted by section 4(b) of Act 16 of 1995. However, the deletion of section 261(5) rendered the calculation of the limits of liability uncertain. At what date was the conversion from gold francs into rands to have been made? Was it to have been the date of the occurrence, or the date of judgment, or the date of payment, or some other date? Assuming a foreign claimant, when was the conversion from rands into foreign currency to have been made? And, how was the conversion of gold francs into any currency to have been calculated? Was it to have been done by direct reference to an ‘‘official’’ value of gold established by a government organ,36 or by reference to the free market value of the gold,37 or by some other means? To have advised on the limits of liability was thus fraught with difficulty: nothing short of a declarator by the Admiralty Court could have provided certainty as to the limits. The Admiralty Court may, however, have been persuaded to adopt the reasoning applied by Adarn J. in Zimbabwe where the local currency had suffered much greater shrinkage; and, with regard to limitation of liability in respect of the carriage of goods by air, his Lordship held: ‘‘Section 8(4) of the Carriage by Air Act Chap 256 states that the Minister of Transport and Energy, by notice in the Gazette, may specify the respective amounts which for purposes of art. 22 of the Warsaw Convention are to be taken as equivalent to the sums there expressed in francs. To date the Minister has not issued any notice in the Gazette. This means . . . that this Court must accept that the reference to the gold franc in the Warsaw Convention was intended to represent a gold standard of value. The signatories of the Warsaw Convention selected this gold standard of value and provided for payment in gold value. It follows that this Court therefore has to fix the value with 33. 1996 (2) SA 261 (D&CLD) 261 at 273A-C. 34. The Abadesa: Furness-Houlder Argentine Lines Ltd. v. Owners of Steam Tanker Miraflores and Others [1968] 1 Lloyd’s Rep. 493; The Mecca: United Arab Maritime Co. v. Blue Star Line Ltd. and Others [1968] 2 Lloyd’s Rep. 17. 35. In Government Notice 796 of 12 October 1979, the amount of R224,936 was equivalent to 3,100 gold francs. The amount of R72,56 was equivalent to 1,000 gold francs. In the final Government Notice 1747 of 24 September 1993, it was stated that R552,00 was equivalent to 2,635 gold francs and that R178,00 was equivalent to 850 gold francs. 36. See, for example SS Heartland v. SS President Angst (1972) 7 Euro Transport Law 933. 37. See, for example, Olympic Airways v. Zacopulos (1972) LATA ACLR No. 461.

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reference to the price of gold bullion set by the Reserve Bank of Zimbabwe. Once the gold value is obtained, the equivalent in (Zimbabwe) dollars which constitutes that amount will then be payable . . . in dollars on the date of judgment.38’’

8. Position since 1 September 1997 In an attempt to overcome the difficulties touched on above, section 11 of the Shipping General Amendment Act 23 of 1997 amended section 261 of the Merchant Shipping Act 1951. The amendment, which was influenced to some extent by English law and the Convention on Limitation for Maritime Claims 1976, represents a small step towards international norms. Thus, according to section 11 of the 1997 Act, the unit of account is a particular number of special drawing rights (hereinafter referred to as ‘‘SDRs’’) for each ton of a ship’s tonnage. And, in terms of section 11(1)(b) of the 1997 Act, section 261(4) of the 1951 Act is amended to read as follows: ‘‘(a) The amounts mentioned in subsection (1) shall be converted into South African currency on the basis of the value of such currency on the date of the judgment or the date agreed upon by the parties. (b) For the purpose of converting from special drawing rights into South African currency the amounts mentioned in subsection (1) in respect of which a judgment is given, one special drawing right shall be treated as equal to such a sum in South African currency as the International Monetary Fund have fixed as being the equivalent of one special drawing right for—(i) the day on which the judgment is given or (ii) if no sum has been fixed for that day, the last day before that day for which a sum has been so fixed. (c) A certificate given by or on behalf of the Treasury stating—(i) that a particular sum in South African currency has been so fixed for a particular day or (ii) that no sum has been so fixed for that day and that a particular sum in South African currency has been so fixed for a day which is the last day for which a sum has been so fixed before the particular day, shall be prima facie proof of those matters for the purposes of subsection (1) and a document purporting to be such a certificate shall, in any proceedings, be admissible in evidence and, in the absence of evidence to the contrary, be deemed to be such a certificate.’’

9. Calculation of tonnage For the purpose of section 261 of the Merchant Shipping Act 1951 the tonnage of a ship is its gross registered tonnage. The measurement of such tonnage in the case of a South African ship is done according to the law of the Republic where the International Conven­ tion on Tonnage Measurement of Ships 1969 has been given the force of law.39 The tonnage of a foreign ship is to be measured, according to South African law, if capable of being so measured. But in the case of any foreign ship, which is incapable of being measured under the law of the Republic, the Authority shall, after consideration of the available evidence concerning the dimensions of the ship, give a certificate stating what would, in its opinion, have been the tonnage of the ship if the ship had been duly measured according to South African law. Section 262(2) of the 1951 Act excludes any space occupied by seamen or apprenticeofficers and appropriated to their use that has been certified by a surveyor to comply with the requirements of the Act. 38. Barclays Bank of Zimbabwe Ltd. v. Air Zimbabwe Corp. 1994 (1) SA 639 (ZHC) at 653E–F and 654E. 39. South Africa deposited her instrument of accession on 24 November 1982 and the Convention entered into force at the international level for South Africa on 24 December 1983.

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10. Aggregation of claims It is convenient to outline the position before and after 1 September 1997. Immediately prior to 1 September 1997, section 261(1)(a) of the 1951 Act provided that, if no claim for damages in respect of loss of or damage to property or rights arose, the owner of the ship would not have been liable for damages in respect of loss of life or personal injury to an aggregate amount that exceeded an amount equivalent to 2,635 gold francs for each ton of the ship’s tonnage. Since 1 September 1997, the aggregate amount is 206,67 SDRs for each ton of the ship’s tonnage. If no claim for damages in respect of loss of or personal injury arose, then under section 261(1)(b) and immediately prior to 1 September 1997, the owner would not have been liable for damages in respect of loss of or damage to property or rights to an aggregate amount that exceeded an amount equivalent to 850 gold francs for each ton of a ship’s tonnage. Since 1 September 1997, the aggregate amount is 66,67 SDRs for each ton of the ship’s tonnage. If there were claims for damages in respect of loss of life or personal injury, and claims for damages in respect of loss of or damage to property or rights also arose, the owner would not under section 261(1)(c) immediately prior to 1 September 1997 have been liable for damages to an aggregate amount exceeding an amount equivalent to 2,635 gold francs for each ton of a ship’s tonnage. Since 1 September 1997, the aggregate amount is 206,67 SDRs for each ton of the ship’s tonnage. Prior to 1 September 1997, the proviso to section 261(1)(c) was that: ‘‘in such a case claims for damages in respect of loss of life or personal injury shall, to the extent of an aggregate amount equivalent to 1,785 gold francs for each ton of the ship’s tonnage, have priority over claims for damages in respect of loss of or damage to property or rights, and, as regards the balance of the aggregate amount equivalent to 2,635 gold francs for each ton of the ship’s tonnage, the unsatisfied portion of the first-mentioned claims shall rank pari passu with the lastmentioned claims.’’

Since 1 September 1997 the aggregate amounts referred to in the proviso are 140 SDRs for each ton of the ship’s tonnage, and 206,67 SDRs for each ton of the ship’s tonnage respectively. Finally section 261(3) provides that section 261 shall apply to claims for damages in respect of loss of life, personal injury and loss of or damage to property or rights arising on any single occasion, and that, in applying the provisions, claims for damages in respect of loss, injury or damage arising out of two or more distinct occasions should not be combined.

F. LIMITATION OF LIABILITY IN RESPECT OF CARRIAGE OF GOODS BY SEA South Africa is not a state party to either the Hague Rules relating to the Carriage of Goods by Sea contained in the International Convention for the Unification of Certain Rules of Law Relating to Bill of Lading 1924 or the Protocol of 1968 (the Hague-Visby Rules, hereafter referred to as the ‘‘Rules’’). The Hague Rules, which had previously formed part of the provisions of Chapter VIII of the 1951 Act, were repealed and replaced by the 1986 Act. The 1986 Act has given the Rules the force of law in South Africa by

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virtue of section 1(1) of the 1986 Act. And the Rules, which are incorporated into South African law by means of a schedule to the 1986 Act, are expressly made subject to the provisions of the 1986 Act.40 The Rules have been amended in terms of the Shipping General Amendment Act 23 of 1997 so that the Protocol of 1979 to the Rules has been given the force of law in South Africa with effect from 1 September 1997. The gold franc has thereby been substituted by the special drawing right. 1. Scope of application of the Rules The scope of the application of the Rules is to be gathered from reading the Rules subject to the Act. In the result, the Rules apply to the following voyages: all outward and coastal voyages within the Republic;41 any voyage from a port in a contracting state to a port in another state;42 any voyage from a port in one state to a port in another state where the bill of lading is issued in a contracting state;43 any voyage from a port in one state to a port in another state where the contract contained in or evidenced by the bill of lading provides that the Rules or legislation of any state giving effect to them are to govern the contract;44 any voyage whether or not between the ports in different states where the contract contained in or evidenced by the bill of lading expressly provides that the Rules shall govern the contract;45 and any voyage whether or not between ports in different States where the contract contained in or evidenced by any receipt which is a non-negotiable document marked as such provides that the rules are to govern the contract as if the receipt were a bill of lading.46 With regard to the documents to which the Rules apply, the position is as follows: the Rules apply to all bills of lading for shipment from South African ports or for shipments falling within Article X(a) and (b) of the Rules. They also apply if the bill of lading includes a clause that applies either the Rules47 or the legislation of any state giving effect to them.48 Where there is a non-negotiable document marked as such, which is a contract for the carriage of goods by sea that contains a clause paramount providing for the application of the Rules, then the Rules will apply.49 2. Package or unit limitation, financial limits of liability, and loss of right to limit liability The unit of account is a special drawing right. With effect from 1 September 1997, the Shipping General Amendment Act 23 of 1997 amended the 1986 Act. Article IV(5) now reads as follows: 40. For a general commentary on the Act see Hilton Staniland ‘‘The New Carriage of Goods by Sea Act in South Africa’’ [1987] 2 LMCLQ 305. 41. Section 1(1)(a) of the 1986 Act. 42. Article X(b) of the Rules. 43. Article X(a) of the Rules. 44. Article X(c) of the Rules. 45. Section 1(1)(b) of the Act. 46. Section 1(1)(c) of the 1986 Act. 47. Section 1(1)(b) of the 1986 Act. 48. Article X(c) of the Rules. 49. Section 1(1)(c) of the 1986 Act.

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‘‘(a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding 666,67 units of account per package or unit or two units of account per kilogramme of gross weight of the goods lost or damaged, whichever is the higher. (b) The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at which the goods are discharged from the ship in accordance with the contract or should have been so discharged. The value of the goods shall be fixed according to the commodity exchange price, or, if there is no such price, according to the current market price, or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality. (c) Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages or units for the purpose of this paragraph as far as these packages or units are concerned. Except as aforesaid such article of transport shall be considered the package or unit. (d) The unit of account mentioned in this Article is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in sub-paragraph (a) of this paragraph shall be converted into national currency on the basis of the value of that currency on a date to be determined by the law of the Court seized of the case. (e) Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result. (f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in the bill of lading, shall be prima facie evidence, but shall not be binding or conclusive on the carrier. (g) By agreement between the carrier, master or agent of the carrier and the shipper other maximum amounts than those mentioned in sub-paragraph (a) of this paragraph may be fixed, provided that no maximum amount so fixed shall be less than the appropriate maximum mentioned in that sub-paragraph. (h) Neither the carrier nor the ship shall be responsible in any event for loss or damage to, or in connection with, goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading.’’

3. Interpretation of the rules There appear to be no reported decisions in South Africa on limitation of liability under Article IV(5) of the Rules. If conflicting constructions of Article IV(5) are argued before the Admiralty Court it is submitted that the Rules should—and would—be construed in the interests of the harmonisation of international jurisprudence given that the Rules are the product of an international convention. It is most likely that a South African Admiralty Court would follow English law in the interpretation of the Rules;50 although reference may also be had to the views expressed in American, Canadian, Australian, French and Netherlands courts since such an approach would not be inconsistent with any provision in section 6 of the 1983 Act.

50. It is submitted that a South African Admiralty Court would, for instance, have regard to such cases as: The ‘‘Morviken’’ [1983] 1 Lloyd’s Rep. 1; The ‘‘River Gurara’’ [1996] 2 Lloyd’s Rep. 53 at 62 and on appeal [1998] 1 Lloyd’s Rep. 225.

CHAPTER 39

Spain Veronica Meana and Julia Garcia Fernando Meana Green & Co. Abogados, Calle Velazquez 92, 2° Dcha, Madrid, Spain

A. GENERAL ISSUES RELATED TO THE APPLICATION OF

LIMITATION IN SPAIN

As a general rule, Spanish law establishes the principle of unlimited liability which can be found in article 1911 of the Civil Code. This article states that a person’s liability1 extends to all his assets, present or future. As a result of this principle, limitation of liability has always been construed and applied in a restrictive way, especially when the act or omission giving rise to liability is of a criminal nature. Examples of such restrictive interpretation are the Spanish Supreme Court2 judgments (Criminal Docket) of 17 January 1992 and no. 1095/1994 (Criminal Docket) of 27 May in which the Court held that when the act or omission giving rise to liability is considered a criminal offence3 the defendant cannot plead limitation of liability based on the argu­ ment that liability no longer derives from the Code of Commerce but from the Criminal Code, which established the principle of unlimited liability. Taken to its extreme, these precedents suggested that the civil consequences of a minor offence, such as criminal negligence,4 could be sanctioned with unlimited liability once it falls within the scope of application of the Spanish Criminal Code. However, it must be noted that in the cases cited above, the limitation of liability defence was based exclusively on the Code of Commerce.5 In those cases where the right to limit liability arises from an International Convention, the Spanish Courts have sug­ gested that limitation applies, irrespective of the civil or criminal nature of liability. The basis for this distinction would be that International Conventions prevail over domestic law.6 Unfortunately, although there are two judgments ruling as stated above, there is no case law as only one of them is from the Supreme Court,7 that is Supreme Court judgment no. 1095/1994 (Criminal Docket) of 27 May, in which having refused to apply the 1957 Limitation of Liability Convention (the Convention) on the grounds that the defendant insurer could not benefit from the right to limit if the shipowner had not previously 1. Whether the obligation arises in tort or in contract. 2. The highest court. 3. Felony or misdemeanour. 4. Which does not even reach the status of recklessness. 5. Article 837 of the Code of Commerce. 6. Article 96 of the 1978 Constitution. 7. For case law to exist, there need to be two Supreme Court judgements deciding the same issue in an identical way.

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exercised that right,8 the Court ruled that the Code of Commerce could not apply either because the Criminal Code prevailed over this. Thus, although the Court did not expressly find that the provisions of the Convention would apply in cases of criminal liability, it did not reject its application on the same grounds as the Code of Commerce. Consequently, it can be inferred that the Supreme Court accepts the constitutional rule that provides for the supremacy of international treaties and conventions when confronted with domestic law and would withhold the right to limit liability, the other ruling is the one rendered in The ‘‘Aegean Sea’’ case,9 where the issue of limitation was extremely relevant given the extent and nature of the damages to be compensated and the interests at stake.10 However, those judgments were rendered before the entry into force of the current Criminal Code.11 The relevant provisions of the new Criminal Code suggest that civil liability arising from a criminal offence will give way to compensation as established in the Law, which might be interpreted as including both international conventions and domestic law. On the other hand, as a result of the exceptional nature of limitation of liability in Spain, no specific procedure has been established by the Legislature to constitute the limitation fund. This absence of specific rules to constitute the fund causes serious difficulties and problems in cases of a plurality of claimants,12 particularly when those claimants have the option of suing in different jurisdictions. This gets even more complicated when we consider that many of these cases may be tried before criminal courts and that the Spanish legal system gives the victims the option to request civil redress in the criminal proceed­ ings or to wait for the criminal proceedings to end13 and request redress before a civil court. The above raises the following issue: when can the courts be satisfied that all the claims have been submitted and that it is therefore time to distribute the fund? Taking into account that in many cases the incident will be subject to a time bar period14 that may be interrupted indefinitely by mere out-of-court claims15 and that, even if there is a clear time bar,16 civil proceedings will be stayed by the commencement of criminal proceedings until the latter come to an end, it is difficult to ascertain in Spain at what moment the fund must be distributed among the claimants.

B. THE SPANISH COMMERCIAL CODE OF 1885 In shipping matters, the Spanish Commercial Code contains only two provisions con­ templating limitation of liability, namely Article 587 and Article 837. The first one is 8. Unfortunately, the shipowner had died some time before the proceedings commenced. 9. St. A.P. La Coru˜na (Secci´on 3ª) of 18 June 1997. 10. In 1992, The Aegean Sea tanker grounded and burst into flames just outside the mouth of the Galician port of Coru˜na, spilling part of its cargo and causing an environmental disaster. 11. Dated 23 November 1995. 12. For example, with the 1976 LLC or the 1969 CLC or 1971 Fund Convention. 13. When the victim has decided not to be a party to that criminal proceeding or when, being a party, they have exercised their right to seek damages in a further civil proceeding. 14. Called in Spanish prescripci´on. 15. As opposed to the time bar called caducidad which cannot be interrupted. 16. For example, the CLC and IOPC Fund provide for a time bar of three that cannot be extended beyond six years from the moment the incident occurs.

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based on the idea of limitation by abandonment and the second one on the idea of limitation by value. Article 587 states that the ‘‘operator’’17 of the vessel will be liable towards third parties for the damages caused by the master in the custody of the cargo but he can exempt himself from such liability by abandoning the ship, her appurtenances and the freight accrued during the voyage. The term ‘‘operator’’ has been defined by the Spanish Courts as the person—individual or company—that commercially exploits the vessel, whether he is the owner or not.18 The manager, however, is not necessarily included since, in Spanish law, he is considered to be a mere agent of the operator when acting on behalf and in the name of his prin­ cipal. This article allows the operator of a vessel, bearing the obligation to protect the cargo in its custody, to limit his liability in the case of fault or negligence of the master in the safekeeping of the cargo by abandoning the ship. Although the article does not expressly refer to the crew members’ negligence, they are considered included on the grounds that (i) the Code of Commerce establishes the principle of vicarious liability of the operator not only for the acts of the master but also for the acts of the crew members; (ii) a systematic interpretation of these two Articles—587 and 837—leads to the same conclusion since Article 837 remits to Article 826, which expressly refers to the operator’s liability for the consequences of a collision caused by the negligence of the master, pilot and any member of the crew. Obviously, this Article was drafted at a time (in 1885) when the operator and the shipowner was one and the same person. It would appear, therefore, that when the operator is not the shipowner, he cannot possibly limit his liability by abandoning property that does not belong to him. The solution offered by some maritime treatises to include operators other than the owner, is that the abandonment can be substituted by offering the value of the vessel at the end of the voyage.19 This solution is not only acceptable but even more advantageous to the debtor in cases where the vessel is encumbered with liens. Article 587 does not identify the voyage to which it refers but it can be presumed that it refers to the voyage in which the incident occurred. Furthermore, it does not distinguish whether this freight should be considered to be gross or net but it can be understood that since the Code of Commerce defines the freight as the benefit obtained in the commercial exploitation of the vessel, the limitation should refer to the net freight. Finally, whereas it is clear that the operator will be liable for loss or damages occurring as a result of his own negligence, it is not clear whether he would have the option to limit liability through the abandonment of the ship, since this is not expressly contemplated in Article 587. Article 837 states that, in cases of collision, the operator’s liability20 will be limited to the value of the vessel, her appurtenances and the freight accrued during the voyage. In this case, the problem is in determining the value of the vessel. In particular, whether it refers to the value of the vessel at the beginning of the voyage, before or after a salvage.

17. The term used in the Code is ‘‘naviero’’. 18. For example, A.P. Barcelona (secci´on 15) of 20 July 1999 and A.P. Orense (secci´on u´ nica) of 20 October 1999. 19. Which is the time foreseen for the abandonment by the Code of Commerce. 20. Caused by the negligence of the master, pilot and/or crew members.

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However, there is one Spanish Supreme Court decision21 which has ruled that Article 837 refers to the value of the vessel at the time of the collision. Since in cases of collision limitation does not imply the abandonment of the ship, any operator is in principle fully entitled to limit his liability, irrespective of the ownership of the vessel. In practice, these two articles have rarely been applied, which explains the absence of any relevant case law and the difficulties involving their interpretation.

C. THE 1976 LIMITATION CONVENTION AND THE 1996

PROTOCOL

1. Introduction The 1976 Limitation of Liability Convention entered into force in Spain on 1 December 1986 after the official publication of its text in the BOE.22 The automatic incorporation in domestic law explains the inactivity of the legislature and, hence, some of the legal and procedural gaps. Since the signature of the Convention was not followed by the immediate denouncement of the 192423 and 195724 Conventions, the three limitation systems have co-existed for a long time though, in practice, this has had very little relevance. The denouncement of the 1924 and 1957 Conventions took place on 22 December 2004 to be effective on 4 January 2006. On 10 April 2005, the 1976 Convention was amended by the Protocol of 199625 after its publication in the Spanish official journal of 28 February 2005. 2. Constitution of the fund Article 11 establishes that the fund may be constituted with the Court or any other competent authority in a State Party in which legal proceedings are instituted. Although the English version of the article reads differently, the official Spanish version —equally authentic according to Article 23—suggests that a claimant must have com­ menced legal proceedings and that the fund can only be constituted after such legal proceedings have been instituted and in the State in which these have been instituted. It must be borne in mind that, according to Spanish law, the claim does not accrue interest until the date in which the complaint has been filed. Therefore, there would seem to be no practical need to constitute the fund prior to that date. Consequently, it is unlikely that a Spanish court would accept a fund as validly constituted when it has been placed in a State other than that where legal proceedings have already been instituted by a claimant. With respect to the moment of constitution of the fund, the Spanish legislature has not made any specific provision forbidding a person to invoke limitation of liability when the 21. Supreme Court judgment (Criminal Docket) of 19 January 1992. 22. Bolet´ın Oficial del Estado, the Spanish Official Journal. 23. International Convention for the unification of certain rules relating to the limitation of liability of owners of sea-going vessels (Brussels, 1924). 24. International Convention relating to the Limitation of Liability of Owners of Sea Going Ships (Brussels, 1957). 25. London, 2 May 1996.

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fund has not been previously constituted. Thus, following article 10, the constitution may take place at any time prior to the enforcement of a claim against the assets of the defendant. This is confirmed by the Spanish Supreme Court (Civil Docket) in the judg­ ment no. 905/1995 of 24 of October which ruled that limitation can be invoked and the fund may be constituted at any moment prior to the date of enforcement of any con­ demnatory judgements against the assets of the defendants. 3. Scope of application Article 15.1 states that the Convention shall apply to any person included in Article 1 without any reference to their domicile or to the flag of the vessel. Nevertheless, each State Party may exclude wholly or partially from the application of the Convention any person who does not have his habitual residence in a State Party or does not have his principal place of business in a State Party or any ship in relation to which the right of limitation is invoked or whose release is sought and which does not at the time specified above fly the flag of a State Party. On the other hand, Article 15.3 provides that a State Party may regulate by specific provisions of national law the system of limitation of liability to be applied to claims arising in cases in which interests of persons who are nationals of other State Parties are in no way involved. These two provisions have raised the question of whether the Convention can be invoked by someone with domicile in a non-Member State or with respect to ships registered in a non-member State. A part of the Spanish treatises understands that the Convention establishes that the facility to exclude or to regulate by specific provisions of national law is a mere possibility and it is therefore necessary for the State concerned to enact a regulation which specifi­ cally limits the application to persons and ships belonging to State Parties, always provided that foreign interests are involved. With respect to the application to persons/ ships belonging to non-Member States, the Spanish Supreme Court initially followed this line of interpretation in judgment no. 905/1995 cited above. However, a later judgment of 199826 included that the Convention would not apply in such cases. The issue is therefore unsolved and it will take another Supreme Court judgment to define the scope of appli­ cation. Finally, with respect to cases involving domestic interests only, no judgments have been rendered so far. However, it is hard to believe that Article 15.3 establishes that the regulation by specific national law of the system of limitation would involve the applica­ tion of no system at all, that is, the application of the vague and antique rules of the Commercial Code of 1885, to which the legislature has not even expressly referred. It is also hard to believe that the courts, in the absence of a specific regulation compelling them to do so, would give a more favourable treatment to persons belonging to other States seeking to limit liability in Spain than to their own nationals in the same situation, thus leaving the national shipping industry, inter alia, basically unprotected. 4. Types of vessels to which the limitation applies In Spain the Convention applies to all sea-going vessels, that is, those which have the structure or capacity for sea navigation, including those employed in leisure activities or 26. Supreme Court judgment no. 32/1998 (Civil Docket) of 28 January.

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fishing, even if their final destination is limited to inland waterways. The reason for this is that Spain has not made use of the possibility provided in Article 15.2 to exclude the application of the Convention to vessels intended to navigate in inland waterways or to vessels of less than 300 tons though it has provided27 that the limitation for vessels of less than 300 tons will be one half of the limitation established for vessels of 2,000 tons. As a result of the above, only the vessels listed in article 15.5 are excluded, namely: (a) air-cushion vehicles; and (b) floating platforms constructed for the purpose of exploring or exploiting the natural resources of the sea-bed or the subsoil thereof. 5. Claims subject to limitation Articles 2 and 3 of the Convention define the scope of application in relation to the type of claim. Spain has expressly excluded28 the application of the Convention to the claims described in paragraphs (d) and (e) of Article 2, namely those in respect of the raising, removal, destruction, or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship. These claims are to be regulated by Article 107 of the 1992 State Ports Act29 which does not contemplate the possibility of limiting liability. The main issue that has arisen with respect to Articles 2 and 3 of the Convention is whether claims arising from breach of contract are included in the Convention. It is the opinion of most treatises that the only criterion that determines the application of limitation is that the claim belongs to those referred to in Article 2.30 Consequently, it is irrelevant whether the claim is brought in contract or in tort. This is reinforced by Article 2.2 which expressly mentions that ‘‘claims set out in paragraph 1 shall be subject to limitation of liability even if brought by way of recourse or for indemnity under a contract or otherwise’’. Despite the fact that the wording of the Convention is crystal clear, the Spanish Supreme Court has held that the Convention does not apply to cases of breach of contract in the judgments no. 387/1995 (Civil Docket) of 24 April, no. 729/1995 (Civil Docket) of 17 July and no. 32/1998 (Civil Docket) of 28 January. The judgments rendered in 1995 simply state that contractual claims do not fall within the scope of Article 2, whereas the one rendered in 1998 considered that Article 2.1.c covers damages to the cargo and expressly excludes contractual claims. 6. Limits of liability The limits of liability are established in Articles 6 and 7 of the Convention as amended by the protocol of 1996. Spain has not made any reservation in respect of claims arising for loss of life or personal injury to passengers of a ship. It is applicable to those claims in which the limit established in Article 7, paragraph 1, that is, of 175,000 units of account 27. By virtue of an express reservation contained in the 1996 Protocol. 28. By reservation in the 1996 Protocol. 29. Ley 27/1992 de Puertos del Estado y de la Marina Mercante, dated 24 November 1992. 30. With the express exceptions of paragraphs (d), (e), (f) of Article. 2.1, as provided in Article 2.2., which are limited to cases of liability in tort.

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multiplied by the number of passengers which the ship is authorised to carry according to the ship’s certificate. 7. Conduct barring limitation As stated in section 1, in the past, the existence of criminal liability on behalf of the master (or crew member), has barred the application of the limitation of liability to any person responsible for his acts or omissions on the grounds that the civil consequences of a criminal offence had to be regulated by the Criminal Code which, prior to its new version of 1995, was interpreted as establishing unlimited liability. Although no relevant judgments have been issued since the entry into force of the 1995 Criminal Code, in The ‘‘Aegean Sea’’ case, the Court of Appeals held that international conventions prevail over domestic law and that limitation of liability applied for the shipowner despite the criminal nature of the acts of the master. However, it would seem appropriate for any subsequent judgment to follow the ruling in The ‘‘Aegean Sea’’, as indeed international conventions prevail over domestic law, including the provisions contained in the Criminal Code, and Article 4 of the 1976 Convention clearly states that, in the absence of personal recklessness or mens rea of the person seeking limitation, the Convention applies. In practice, most shipowners are companies and not individuals and the question is what constitutes a ‘‘personal’’ reckless act or omission when referring to companies. The most restrictive opinions hold that only the directors’ acts or omissions can qualify as acts or omissions of the company. There are also those who think that the acts or omissions of a person authorised to act on behalf of a company by virtue of a proxy could also be considered as those of the company. Taking into account the tendency of Spanish courts to interpret the right to limit liability in a restrictive way, it is possible that both directors and proxies would give way to the loss of this right if their conduct falls within Article 4.

D. OTHER LIMITATION CONVENTIONS Spain has ratified other limitation of liability conventions, namely: (a) the International Convention on Civil Liability for Oil Pollution Damage (CLC) of 1992; (b) the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (IOPC Fund Convention) of 1992; (c) Convention relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material (NUCLEAR 1971).

E. THE 1974 ATHENS CONVENTION ON CARRIAGE OF

PASSENGERS AND THEIR LUGGAGE BY SEA (AS AMENDED BY

THE 1976 PROTOCOL)

Spain is a party to the 1974 Athens Convention since 1987 and is also a party to its 1976 protocol since 1990.

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Articles 7 and 8, as amended by the 1976 protocol, provide for the following limitation amounts: — In case of death and personal injury of a passenger: SDR 46,666. Spain has not fixed a higher limit for national carriers. — Loss or damages to cabin luggage: SDR 833 per passenger per trip. — Loss or damages to vehicles and luggage carried in or on the vehicle: SDR 3,333 per vehicle per trip. — Loss or damages to other luggage: SDR 1,200 per passenger per trip. The carrier loses the right to limit liability (Article 13) if he acts with intent or recklessness or knowledge that the damage would probably occur. It should be pointed out that this convention has never been applied (or invoked) in Spain, at least before a Court of Appeals or a higher instance. However, in so far as they are compatible, all the comments made on the 1976 London Convention would apply here.

F. THE HAGUE-VISBY RULES The 1924 Hague Rules were enacted in Spain31 by a law of 22 December 1949.32 Later on, in 1984, the Visby Rules came into force33 and have been widely applied by Spanish Courts. The co-existence of the law of 1949 and the Hague-Visby Rules have caused various construction issues which have not affected, however, the provisions on limitation. In view of the fact that, according to the actual case law, the 1976 London Convention has been restricted to non-contractual claims, the limitation in cases of loss or damage to the cargo will have to be exclusively sought under the Hague-Visby Rules.

31. Before the actual Constitucion. 32. Ley de transporte mar´ıtimo de mercanc´ıas en r´egimen de conocimiento de embarque. 33. Since they were ratified after the Constitution of 1978, they were immediately applicable after their publication in the Official Journal (BOE).

CHAPTER 40

Sweden Arthur Csatho Lindhs DLA Nordic KB, PO Box 7315 Kungsgatan 9 103 90, Stockholm

Jan Melander Morssing & Nycander A.B., Sveavagen 31, Box 3299, S-103 66 Stockholm

GENERAL FRAMEWORK The Swedish law on limitation of liability for maritime claims is contained in the Swedish Maritime Code (TSMC). The main provisions on limitation of liability are contained in Chapter 9 on Limitation of Liability and in Chapter 12 on Limitation Funds and Limitation Proceedings. Further provisions are found in Chapter 13 on Carriage of General Cargo (sections 30 to 33), in Chapter 14 on Chartering of Vessels (sections 27 and 63) and in Chapter 15 on Carriage of Passengers and Luggage (sections 21 to 26). The Swedish Maritime Code is prepared in close co-operation with all other Nordic countries. The Maritime Codes in the Nordic countries are thus virtually identical. The Swedish law on limitation of liability for maritime claims is based on the Conven­ tion on Limitation of Liability for Maritime Claims, London 1976. A peculiarity in Sweden is that if the right to limitation for a maritime claim arises in general average, then any dispute arising from the general average must, unless the parties have agreed otherwise, be referred to the Average Adjuster in Gothenburg. The general average adjustment issued by the Average Adjuster may, however, be appealed to the Maritime Court in Gothenburg, which is a division of the District Court in Gothen­ burg.

A. LIMITATION OF LIABILITY—PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY 1. Persons entitled to limit liability1 Operators, owners who do not operate their vessels, persons who manage vessels in place of the owner, charterers, shippers and persons performing services connected with salvage of vessels may limit their liability. If liability is asserted against any person or company, that is, employees and independent subcontractors, for whom somebody mentioned above is responsible, then this person or company is also entitled to limit his or its liability. 1. Chapter 9, section 1, TSMC.

417

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SWEDEN

Finally, liability insurers of any of those mentioned above have a right to limit their liability to the same extent as the insured. 2. Claims subject to limitation2 Regardless of the basis for liability, there is a right to limit liability on account of the following claims: (a) personal injury or damage to property, if the injury or damage has arisen on board the vessel or in direct connection with the operation or salvage of a vessel; (b) loss resulting from delay in the carriage by sea of goods, passengers or their luggage; (c) other loss resulting from the infringement of other rights than contractual rights which has occurred in direct connection with the operation or salvage of a vessel; (d) measures in respect of the raising, removal, destruction or rendering harmless of a sunken, stranded, abandoned or wrecked vessel, including any property which is or has been on board the vessel; (e) measures in respect of the removal, destruction or rendering harmless of the cargo of the vessel; (f) measures taken in order to avert or minimise losses for which limitation of liability applies, including losses caused by such measures. 3. Claims excepted from limitation3 The right to limitation does not apply to the following claims: (a) claims for salvage or contribution to general average or any contractual claim for payment in respect of those measures mentioned under A.2, (d), (e) or (f) above; (b) claims for oil pollution damage at sea; (c) claims subject to international conventions or national legislation governing or prohibiting limitation for nuclear damage; (d) claims in respect of nuclear damage caused by a nuclear vessel; (e) claims on account of damage or injury caused to pilots or any person employed by somebody who has a right to limitation (compare A.1 above) and whose duties are connected with the vessel or a salvage operation and (f) claims for interest and for costs in actions. 4. Conduct barring limitation4 The right to limitation of liability is lost if the injury or damage is caused either intention­ ally or by gross negligence committed with knowledge that injury or damage will prob­ ably result. 2. Chapter 9, section 2, TSMC. 3. Chapter 9, section 3, TSMC. 4. Chapter 9, section 4, TSMC.

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419

5. Counterclaims5 If the person or company entitled to limit liability has a counterclaim against the claimant and the claim and counterclaim have arisen out of the same event, the right to limitation shall apply only to the part of the claim which exceeds the counterclaim. 6. Financial limits of liability for all types of claim6 A . P E R S O N A L I N J U RY

For claims on account of personal injury caused to the vessel’s own passengers, liability is limited to 175,000 SDRs multiplied by the number of passengers which the vessel is entitled to carry according to her certificate. For other claims on account of personal injury, the limit of liability is 2 million SDRs for a vessel with a tonnage not exceeding 2,000 tons. If the vessel’s tonnage is higher, the limit shall be increased by: 800 SDRs for each tonnage unit from 2,001–30,000; 600 SDRs for each tonnage unit from 30,001–70,000; 400 SDRs for each tonnage unit higher than 70,000. B. ALL OTHER TYPES OF CLAIMS

For all other types of claims, as well as claims mentioned above (personal injury), but not satisfied by the amounts mentioned there, the liability is limited to 1 million SDRs, if the vessel’s tonnage does not exceed 2,000 tons. If the vessel’s tonnage is higher, the limit shall be increased by: 400 SDRs for each tonnage unit from 2,001–30,000; 300 SDRs for each tonnage unit from 30,001–70,000; 200 SDRs for each tonnage unit higher than 70,000. The tonnage of a vessel refers to the gross tonnage calculated according to the provisions concerning tonnage measurement in Annex 1 of the the International Tonnage Measure­ ment Convention. The limits of liability of salvors not operating from a vessel or operating solely from a vessel subject to salvage are limited and correspond to the limits of liability applicable to a vessel with a tonnage of 1,500 tons. The limit of liability applies to the aggregate of all claims against such a salvor and those for whom he is responsible, pertaining to a specific incident. 7. Unit of Account used for calculating limitation funds The Units used for calculating limitation funds are Special Drawing Rights (SDRs), referring to the SDRs used by the International Monetary Fund. Conversion of SDRs into Swedish kronas (SEK) is made according to the rate of the day when payment is made or

5. Chapter 9, section 2, para. 2, TSMC. 6. Chapter 9. section 5, TSMC.

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SWEDEN

when the security for payment is lodged. The value of SEK shall be determined according to the calculation method used on the same day by the International Monetary Fund. 8. Aggregation of claims The limits mentioned above apply to the aggregate of all claims arising out of a specific occasion against those who may limit their liability. 9. No need to constitute a fund Liability may be limited even if no limitation fund has been constituted. If a suit is brought concerning a claim which is subject to limitation and no fund has been constituted, the court shall take into account only the claim concerned in the lawsuit when applying the provisions on limitation. If the defendant wishes other claims which are subject to limitation to be considered, a reservation to that effect shall be made in the judgment. If no such reservation is made, the judgment may still be enforced unless a limitation fund has been constituted and the bailiff trying the application finds a cause to refuse enforce­ ment. Further, if no limitation fund has been constituted, the parties may submit the issue of the amount of limitation and the distribution, to the Average Adjuster. 10. Constitution of fund The first step necessary to constitute a fund is to submit a written application for constitu­ tion of a limitation fund with a district court. The application shall account for the circumstances and state the names and addresses of likely claimants against the fund. The applicant must further pay the amount of the fund into court or provide satisfactory security. The court will fix the amount of the fund and decide whether a proposed security is acceptable. As a general rule, the court will also require the applicant to pay into court or lodge adequate security for an additional amount intended to cover remuneration of the administrator of the fund, costs of the procedure and other expenses for the constitution and distribution of the fund, as well as interest for the period after the constitution of the fund. The fund is deemed to be constituted on the day of the issue of the court’s decision if, at that time, payment has been made or security lodged. Otherwise, the fund is deemed to be constituted on the day when payment into court has in fact been made or when acceptable security has been lodged with the court. When the fund is constituted, the court will make an announcement of this fact in, for example, a local newspaper. Under certain circumstances the announcement will also be published abroad. In the announcement all creditors are advised to submit their claims to the court within a certain period, which shall not be less than two months. Normally, the court will also appoint an administrator of the fund. The administrator has to be learned in law and have the special knowledge and experience which the mandate requires. 11. Limitation proceedings and distribution of fund among claimants After the submission period has elapsed the court may order that submitted and proven claims shall be paid immediately. The issues of liability, limitation of submitted claims and the distribution of the fund are otherwise decided and settled in limitation proceed­ ings.

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421

The court will summon the administrator, the constitutor, the person having brought the limitation proceedings into court, the claimants and any other party whose rights may be affected to a Fund Meeting as soon as the submission period has elapsed. At the Fund Meeting, liability, limitation, the amount of the limitation and submitted claims will be discussed. Prior to the Fund Meeting, the administrator will examine submitted claims and, as far as possible, draft a proposal for the distribution of the fund. If no objection is raised against the proposal, duly amended at the end of the Fund Meeting, the proposal will form the basis for distribution of the fund. If there are remaining objections against the proposal at the end of the Fund Meeting and those are maintained, the court will try those disputes as soon as possible. When all the disputes have been settled and/or tried, the court will finalise the distribution of the fund. 12. Constitution of fund as bar to other actions The limitation fund is deemed to be constituted with effect for all persons who can claim the same limit of liability. It is intended for payment of claims of the kind to which that limit of liability applies. After a limitation fund has been constituted, any claim in Sweden which is subject to limitation must be brought in limitation proceedings. The same applies to the right of the person constituting the fund to limit his liability, and to issues concern­ ing distribution of the fund. A claimant against a limitation fund constituted in Sweden or in any other Convention State, may not, on the basis of his claim, obtain any security measure or distraint against the vessel or other property belonging to any person for whom the fund has effect and who is entitled to limit his liability. After a limitation fund has been constituted in either Sweden, Denmark, Finland or Norway, no security measure or distraint against the vessel or other property belonging to any person for whom the fund has effect and who is entitled to limit his liability may be maintained in respect of a claim capable of being brought against the fund. If the security measure of distraint has already been effected, the measure will be annulled, and any security lodged for the avoidance of such a security measure will be released. If a limitation fund has been constituted in a Convention State other than Sweden, Denmark, Finland or Norway, the court or the bailiff may annul such measures already undertaken or release any security which has been lodged in avoidance of security measures. Applications for security measures or distraints will always be refused, and if the fund has been constituted before such action was taken or security lodged, the security will be annulled and all securities released, if the fund in question has been consti­ tuted: (a) at the port of the occurrence on which the claim is based, or if it took part out of port, at the first port of call thereafter; or (b) at the port of disembarkation in respect of claims for personal injury which has been suffered aboard the ship; or (c) at the port of discharge in respect of damage to the vessel’s cargo. What has been mentioned regarding constituted in Sweden or in another limitation fund which is comparable constituted in a State which is not a

claimants bringing claims against a limitation fund Convention State also applies if it is shown that a to a limitation fund under the Convention has been Party to the Convention.

422

SWEDEN

The above-mentioned only applies provided that the claimant brings a claim against the limitation fund and that he has (i) means of obtaining satisfaction for his claim and (ii) it is possible for the claimant to transfer any satisfaction for his claim to another country. 13. Special types of vessel The limits of liability of warships and other vessels which at the time of the event are owned or used by a State and are exclusively used for state purposes and not used commercially in any respect, may never be less than the limits applicable to a vessel having a tonnage of 5,000 tons. Nevertheless, if a claim for compensation for loss or damage is caused by the special characteristics or employment of such a vessel, there is no right to limitation. The aforementioned does not apply to vessels used primarily for ice breaking or salvage. The limits of liability for a vessel built and adapted for drilling for natural resources of the seabed or for mobile platforms intended for exploration of the natural resources of the seabed is 36 million SDRs for personal injuries and 60 million SDRs for other types of damage, if the claim concerns damage caused while the vessel has been used in drilling and exploration activities. For claims in respect of oil pollution, the limitations of the 1969 Convention on Liability for Oil Pollution Damage, as amended by the 1992 Protocol, applies. 14. Mutual obligations to other States to permit limitation See part 12, above. 15. Date of entry into force of present system of limitation The present system of limitation has been in force in Sweden since 1 April 1985. 16. Denunciation of previously ratified limitation conventions A Regulation based on the Convention on Limitation of Liability for Maritime Claims 1924 entered into force in Sweden on 1 January 1939. This Regulation was denounced and replaced in 1964 with a Regulation which was based on the Convention on Limitation of Liability for Maritime Claims 1957. The latter regulation was denounced on 1 April 1985, when the present Regulation came into force.

B. PASSENGERS 1. Special provisions of national law in relation to passenger claims The Swedish provisions in relation to passenger claims are found in Chapter 15, sections 17 to 28 of TSMC. The Regulation is partly based on the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974 and the International Draft Convention for the Unification of Certain Rules relating to the Carriage by Sea of Passengers and their Luggage (Tokyo 1969), but the limitation amounts are higher than in these Conventions.

PA S S E N G E R S

423

The carrier is liable for personal injuries to passengers and for any loss of or damage to luggage resulting from any occurrence during the carriage, if the loss or damage has been caused by fault or neglect of the carrier or anyone for whom the carrier is responsi­ ble. The same applies to losses resulting from passengers being delayed, even if the delay has not resulted from any event during the voyage. The carrier is however not liable for loss of money, bonds or other valuables unless the carrier has received such property for safe custody. The burden of proof is on the carrier to establish that loss or damage has not been caused by his own fault or neglect, or by that of anyone for whom he is responsible. For personal injury and loss of or damage to hand luggage, this only applies if the loss or damage has occurred at or in connection with any shipwreck, collision, stranding, explo­ sion or fire, or if such loss or damage has occurred as a result of any defect in the vessel. 2. Limitation amounts The carrier’s liability for personal injury is limited to 175,000 SDRs for each passenger. When the compensation is to be paid as a life annuity, its capitalised value must not exceed this limit. For delay, liability is limited to 4,150 SDRs for each passenger. For luggage, liability is limited to: — 1,800 SDRs for each passenger with respect to hand luggage; — 6,750 SDRs for each passengers with respect to valuables which the carrier has received for safe storage; — 10,000 SDRs for any vehicle; and — 2,700 SDRs for each passenger in respect of luggage. The carrier is however entitled to a deduction (excess) in the amount of: — 150 SDRs for each damaged vehicle; — 20 SDRs for damaged luggage and for loss due to delay to a passenger or his luggage. The deduction of excesses shall be made before the question of limitation is tried. 3. Scope of application The carrier loses his right to limitation and deductible excess if it is shown that he has caused the damage or loss intentionally or by gross negligence, knowing that in all probability such loss or damage would occur. The regulation on limitation and deductible excess applies even if the action against the carrier is not based on the contract of carriage. The carrier remains liable even if the carriage is performed wholly or partly by someone other than himself. If the other person performs the carriage by vessel, he shall be liable in respect of his part of the carriage, according to the same rules as the carrier. If the carrier has undertaken liability above those limits which have been mentioned, any other person performing the carriage is not bound by those higher limits, unless he has agreed to them in writing. The liability of the carrier and any other person who wholly or partly has performed the carriage is joint and several. If an action is brought against anyone for

424

SWEDEN

whom the carrier is responsible, this person in turn is entitled to the same exceptions from and limitations to liability as the carrier. The aggregate liability of the carrier and such other person is further limited to the amount mentioned above. Claims for personal injuries or delays may only be brought by the passenger or the holders of his rights or, in the case of death, by the dependants to the deceased. C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions Sweden has adopted the Hague-Visby Rules and the Protocol Amending the Hague-Visby Rules done at Brussels 1979. Chapter 13 of TSMC on General Cargo incorporates as far as possible the Hamburg Rules, notwithstanding the fact that Sweden has not ratified the Hamburg Rules. 2. Package or unit limitation and financial limits of liability The main rule is that damage to and loss of cargo shall be calculated on the basis of the value of goods of the same kind at the place and time at which the goods were delivered or should have been delivered according to the contract. The carrier’s liability is limited to 667 SDRs for each package or other unit of the goods or, if the carrier’s liability thereby becomes higher, to 2 SDRs for each kilogram of the gross weight of the goods concerned. If a container, pallet or similar transport device has been used to consolidate the goods, then each package or unit which, according to the transport document, has been placed in the transport device is considered to be one package or unit. Otherwise, the goods placed in the transport device are considered as one unit. If the transport unit itself has been lost or damaged, it is considered as a unit of its own, unless it is owned or provided by the carrier. 3. Loss of right to limitation The carrier loses his right to limitation if it is shown that he has caused the damage or loss intentionally or by gross negligence, knowing that in all probability such loss or damage would occur. Further, the carrier loses his right to limit his liability if a third party suffers loss through the negotiation of a bill of lading on the faith of the statements therein being accurate, provided that the carrier realised or ought to have realised that the bill of lading was misleading to a third party. 4. Scope of application The regulation on limitation applies even if the action against the carrier is not based on the contract of carriage. If the carriage is performed wholly or partly by a subcarrier, the carrier remains liable as if he himself has performed the whole carriage. If it is agreed that a certain part of the carriage shall be performed by a named subcarrier, then the carrier may reserve exemption of liability of loss or damage caused by an event which occurred while the goods were in the custody of the subcarrier. The subcarrier is liable according to the same rules as the

CARRIAGE OF GOODS BY SEA

425

carrier for the part of the carriage which has been performed by himself. If the carrier has undertaken liability above the limits which have been mentioned, then subcarriers are not bound by those higher limits, unless they have agreed to them in writing. The liability for the carrier and the subcarrier is joint and several. Finally, if an action is brought against anyone for whom the carrier is responsible, this person is entitled to the same exemptions from and limitations of liability as the carrier. The aggregate liability of the carrier and subcarrier is limited to the amounts mentioned above.

CHAPTER 41

Turkey Ayhan Oran Barrister; Vice-Chair, IBA Maritime and Transport Law Committee (Committee A)

Bulent ¨ Sozer ¨ (Dr. Jur) Barrister; Instructor in Law, Universities of Bogazi ˇ e, ˛ Koc¸ and Akdeniz

The aim of this chapter is to provide a brief overview of the relevant rules of the Turkish Legal System regulating the liability regime in maritime law. We shall first provide a short explanation of the basic rules in Turkish Law governing liability in general before going into details of the provisions of the maritime law on liability and limitation. Although Turkey is ostensibly1 a party to the International Con­ vention on Limitation of Liability for Maritime Claims, 1976 (‘‘the Convention’’), it would exceed the purpose and scope of this study to attempt detailed analyses on the individual Articles of the Convention. We shall try to provide comparative explanations on certain concepts that are likely to be a source of some misunderstanding, however slight that may be, vis-`a-vis basic notions of Turkish Law.

A. FUNDAMENTAL RULES OF THE TURKISH LEGAL

SYSTEM ON LIABILITY

1. National laws A . O B L I G AT I O N S A C T2

The basic rules defining the fundamental principles of liability in the legal system of Turkey are found, primarily, in the Obligations Act3 (hereinafter, ObA). ObA prescribes for three sources of obligations: (i) contract, (ii) tort and (iii) unjustified enrichment.4

1. See Part IV below. 2. Actually, ObA is part of the Civil Act, both adapted initially from Swiss Civil Code, in 1926 (Schweizer­ isches Zivilgesetzbuch). The Civil Act was substantially amended and modified recently (Act 22 November 2001 and No. 4721 came into force on 1 January 2002, see OfG 8 December 2001) which, following a short introduction, consists of four ‘‘Books’’: (i) Law of Persons, (ii) Law of Family, (iii) Law of Successions and (iv) Law of Property (Real Rights). 3. Act dated 22 April 1926 and No. 818, came into force on 4 October 1926 (see OfG., 8 May 1926). 4. Respectively articles 1ff., 41ff. and 61ff.

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TURKEY

ObA is composed of two ‘‘Parts’’: (i) General Provisions: This part contains the fundamental rules applicable to all categories of obligations, that is, the obligations arising from contractual relations, as well as from torts and unjustified enrichments. More impor­ tantly from the point of view of the present study, it contains the rules applicable to all contractual relations, such as formation and discharge of obligations, rights and duties of the parties, etc. This part also contains the general provisions defining the basic principles of the liability regime and (ii) Particular Contracts. This part consists of the provisions applicable to certain types of contracts that are quite regularly entered into by the individ­ uals in their daily relations, such as contracts of sale, rent, agency, guarantee, etc.

B. COMMERCE ACT

The Commerce Act5 (hereinafter ComA) is the basic code containing the fundamental principles and norms of commercial law in Turkey. This Act is, like the ObA, also an integral part of the Civil Act.6 The Fourth Book of the ComA contains the legal infrastructure of maritime/shipping law in the Turkish legal system, including of course, particular provisions that govern the liability regime in maritime/shipping law. On this point, the ComA deals especially with the liability of the shipowners and carriers.

C. FORCEFUL EXECUTION AND BANKRUPTCY ACT

The Forceful Execution and Bankruptcy Act7 (hereinafter FExA) contains particular provisions on temporary (interim) injunctions, attachment, forceful sale and similar sub­ jects, which also are applicable to ships. Pursuant to Article 23 of the FExA, registered vessels are treated as immovable property and are subject to the provisions in the FExA, governing the forceful sale of immovables. Therefore, mortgaged vessels as well those with maritime liens on them are, where the debtor does not pay the sum involved out of its free will, sold pursuant to the provisions of FExA. 2. International Conventions8 A. THE HAGUE RULES

Turkey is a party to the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, signed in Brussels on 25 August 19249 (the Hague Rules).

5. Act dated 29 June 1956 and No. 6762, came into force on 1 January 1957 (see OfG. 9 July 1956–9353). 6. Turkish Civil Law, therefore, represents a system consisting of civil law itself together with the law of obligations and commercial law. 7. This Act, dated 24 April 1929 and No. 1424, was amended substantially in 1932 and was given No. 2004 (OfG. 19 June 1932–2128). The Act was later amended several times. 8. Only the Conventions relevant to the subject of the present study are cited. 9. Effective as of 16 September 1955. Turkey has not ratified Hague-Visby rules and Hamburg Rules.

L I A B I L I T Y I N M A R I T I M E L AW

429

B . 1 9 7 6 L I M I TAT I O N O F L I A B I L I T Y C O N V E N T I O N

Turkey is a party to the Convention on the Limitation of Liability for Maritime Claims, signed in London on 19 November 1976.10 However, there is a dispute on Turkey’s participation (see Part F.I on this point).

B. LIABILITY IN MARITIME LAW 1. Basic rules on liability A . L I A B I L I T Y B A S E D O N FA U LT

The basic system for liability under Turkish Law is liability based on fault.11 One may, as a rule, be held liable for the damage one has caused only if there was fault on one’s part. This fundamental principle is valid for cases both of contractual liability and liability arising from tort. The claimant must prove the fault of the other party when seeking damages in case of tort and conversely the onus of proof is on the defendant in case of an action arising from a contractual relation; that is, the defendant has to prove that no fault can be attributed to him for the damage the other party has suffered. B . L I A B I L I T Y W I T H O U T FA U LT

Liability without fault, sometimes referred to also as absolute liability or strict liability, is an exception to the basic principle and can only be applicable where a rule of law specifically prescribes for it. To cite one example, liability of the employer, that is, vicarious liability, is liability without fault. C . C O N T R A C T UA L L I A B I L I T Y

When a shipowner enters into a contract with another person, this may give rise to contractual liability in case the shipowner defaults on its obligations arising from the contract. Such a contract may be a contract of affreightment12 or towage or for laying cable on the sea-bed or any other type of contract conceivable in maritime trade. The validity and effect of a contract entered into by a shipowner or equally by a carrier, together with its effects and consequences are subject to the provisions of ObA. 10. Effective as of 1 July 1998. 11. Fault is defined as the failure to fulfil a duty imposed by the law. Fault is divided into two categories: (a). Wilful misconduct: This is an act done intentionally to inflict damage on another person. The objective of the tortfeasor was to give harm to another person; his intention was directed to inflicting a damage. In this regard, wilful misconduct under Turkish law, in its general sense, corresponds conceptually to dolus. (b) Negligence: in negligence, there is no element of intention; the tortfeasor did not want to cause harm. But, he has not acted diligently and prudently, and without taking necessary measures to prevent the occurrence of the damage. Negligence in this sense is comparable to culpa. We speak of gross negligence, where the tortfeasor did not take any of the measures an ordinarily prudent and diligent person should have taken; and of minor negligence, where the tortfeasor failed to take such measures, which only an extremely careful and prudent person would care to take. These categories correspond, respectively to culpa lata and culpa levis. 12. Liability of a shipowner towards the other party in contracts of carriage of goods by sea is identical to that of the carrier arising from a contract of affreightment. This point will be discussed in more detail under II/2 below.

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TURKEY

D. TO RT I O U S L I A B I L I T Y

In the event that a shipowner or carrier inflicts harm on anybody through an act that is definable as a tort,13 he would be held liable pursuant to the provisions governing tortious liability. Liability based on tort is again subject to the provisions of ObA.14 By definition, tortious liability attaches where no prior legal relation15 exists between the parties.16 However, even within a contractual relation, where non-performance, or bad performance, by a party also meets the conditions required for tortious liability, the aggrieved party, may sue the other party based either in contract or in tort.17 E. UNLIMITED LIABILITY

The liability regime in the Turkish legal system is based on unlimited liability. Limitation of liability is an exception and can only be allowed where a specific rule of law prescribes clearly the application thereof. This rule is applicable in cases of both contractual and tortious liability as well as in cases of claims based on unjustified enrichment. Moreover, in cases of vicarious liability, the person who is held vicariously liable is also subject to unlimited liability. F. L I M I T E D L I A B I L I T Y

As we have already indicated, limited liability is an exception to the basic principles governing the liability regime in Turkish law and therefore can only be applied where specific provisions in a relevant act explicitly provide therefore.18 19 Being an exception, limited liability can only be applied based on clear and unambigu­ ous rules; otherwise, especially in cases of doubt, liability must be unlimited. The limita­ tion of liability by shipowners and carriers is one of the exceptions to the general rule. G. VICARIOUS LIABILITY

In most cases, shipowners as well as carriers will be subject to vicarious liability; both contractually and tortiously. Vicarious liability, as a concept, is regulated by the particular 13. Under Turkish law, tort is defined as an unlawful act, by which a person causes harm to another. An act is unlawful (i.e. against the law) when it violates a rule of conduct that is imposed by the legal provisions to protect the rights and interests of the individuals. As a consequence of a tortious act, the tortfeasor shall be under obligation to pay damages (compensation) to the injured person. 14. Articles 41 et seq. 15. Speaking more precisely, where no contract exists between the parties. 16. In this context, tortious liability is also called extra-contractual liability. 17. This situation is called concurrence of claims or concurrent action. 18. It is also possible for the parties to a contract to limit their liabilities by inserting appropriate clauses in their contract.This is only possible where specific rules allow the contractual parties so to do, in other words, to the extent possible pursuant to the rules determining the limits to the freedom of contract; otherwise, such contractual limitations of liability are null and void. 19. See Articles 99 and 100 of the ObA, a free translation of which is set out below: ‘‘Article 99: Contractual clauses exempting the debtor from liability in cases of fraud or gross negligence shall be null and void. Clauses exempting the debtor from liability in cases of minor negligence may be disregarded by the court based upon its discretionary powers, where the creditor is under the employ of the debtor or the undertaking by the debtor was based on a concession granted by the government.’’ ‘‘Article 100: The debtor shall be liable for damages caused by his servants and agents during the discharge of their duties. Parties may mutually agree to evade this liability. The debtor may only evade liability arising out of minor negligence, where the creditor is under the employ of the debtor or the undertaking by the debtor was based on a concession granted by the government.’’

SUBJECTS OF LIABILITY

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provisions in the ObA.20 However, the ComA, under articles 947 and 948 provides special rules for the vicarious liability of the shipowners, covering also both contractual and tortious liability.21

C. SUBJECTS OF LIABILITY 1. Shipowner The ComA, in Article 946/1, defines the shipowner as ‘‘The owner of a ship, which he uses in maritime trade’’. It is apparent that the definition given in the said article, when translated into English, sounds rather awkward. But, the ComA employs a special word to define the person who is a shipowner involved in maritime trade—‘‘Donatan’’. Actually, this matter of terminol­ ogy is similar to the situation that exists in French also, resembling in a way the difference between Proprietaire de Navire and Armateur. The former can be used for anybody who owns a ship; the latter represents a particular legal status as well as a vocation.22 The ComA requires the owner to be involved in the commercial venture personally, as an entrepreneur. In this regard, the term shipowner, as used in Turkish Law, does not merely refer to having a title on a vessel, but more importantly, comprises an economic and commercial enterprise. Based on this definition, for a person to be recognised as a shipowner under the provisions of the ComA, he must satisfy the following conditions, which must exist cumulatively: (a) The determining factor is the title on the vessel. To be recognised as a shipowner, the person23 or persons involved must either be the sole owner or one of the part or joint owners of a ship. On the other hand, pursuant to Article 946/II of the ComA, a person who does not own a ship but operates one exclusively for and on his behalf in maritime trade, shall nevertheless be treated as a shipowner vis-`a-vis his relations with third parties.24 From the point of liability, this entails contractual liability as well as liability arising out of tort. The operation by a non-owner may inevitably give rise to the creation of liens on the ship. Potentially this would be a source of substantial risk for the owner of the vessel. Under the applicable rules,25 the real owner of the vessel may not raise any defence against the holders of a maritime lien arising from the operation of the ship by such non-owner. Practically speaking, the charterer, in contracts of demise and bareboat charters and even in certain categories of time charters, acquires the status of a non-owner 20. Respectively, article 55 for torts and article 100 for contractual relations. 21. As a matter of fact, this way of regulating the shipowners’ vicarious liability gave rise to one of the lively disputes involving both the scholars and the practitioners. We shall dwell on this subject in more detail under ‘‘III. Limitation of Liability’’ below. 22. In this sense, the definition given by the ComA corresponds to a great extent to Exercitor Navis of the Roman Law. 23. ‘‘Person’’ includes both real persons and legal persons. 24. Article 946/II. 25. Article 946/II.

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armateur, within the meaning of article 946/II of the ComA. Equally, and rather more properly, the lessee shall also be treated as the shipowner in financial lease contracts, unless he, in turn, has sub-leased the vessel. Ultimate responsibility remains with the owner/lessor. Pursuant to Article 946/II of the ComA, the only defence available to the owner against a lien holder is to prove that the operation of the ship by the nonowner armateur was unlawful26 and the lien holder was not acting in good faith.27 (b) The status of a shipowner attaches to a person individually on account of each ship he owns. Therefore, a person is treated as a shipowner separately for each ship he owns. (c) The vessel must be engaged in maritime trade In this connection two conditions must exist cumulatively: (i) The owner should effectively have assigned his ship to proper commercial use28 and (ii) the commercial activities should involve trade in open seas and not trade conducted in inland waters.29 (d) The owner must actually operate the ship for and on his own behalf in a commercial venture. Renting out or leasing the ship to third parties or letting her under bareboat charter or charter with demise contracts would alter the status of the owner from ship owner in the sense of the ComA, to a mere owner collecting rentals.30 2. Carrier The carrier is the person who, by entering into a contract of carriage (affreightment) for reward, undertakes to carry passengers and cargo (ComA Article 762). The carrier need not be the owner of the vessel by which he undertakes to perform the contract of affreightment he has concluded with the shipper, nor must the carrier have any vessel under his disposal based on any legal means. Any person may enter into a contract with others whereby he promises to carry their goods (or themselves) by sea. That person may discharge this contract by entering into a contract of affreightment by another person, who is usually the shipowner or a non-owner operator, as the case may be.31 The defining element is the existence of a contract that involves an undertaking to carry goods (or passengers) by sea. Similar to the definition applicable to a shipowner, such contracts of carriage must involve carriage by sea and not by lakes or rivers. 3. Other parties Turkish Law recognises and regulates the status only of the shipowner and the carrier as parties whose liability is governed by special provisions. 26. That is, without any legal ground, whether contractual or lawful. For example, the ship was taken away from the owner forcefully or she was still retained by the operator although a rent or charter contract has already expired. 27. That is, the lien holder knew or should have known the actual situation. 28. That is, the vessel must not be used for personal purposes and/or for pleasure. 29. Moreover, the vessel must not be assigned to stationary functions, such as a restaurant or a casino. 30. This proposition supports the principle that the status defined as shipowner, is one that is conditional upon entrepreneurial undertaking. 31. Consequently there will be a contracting carrier and the actual carrier.

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D. LIMITATION OF LIABILITY 1. Rule—unlimited liability As we have already emphasised above, the basic rule governing the liability regime in the Turkish legal system is liability without any limits. The responsible party would be under an obligation to compensate the full loss (damage) suffered by the aggrieved party. This concept is sometimes also defined as personal liability, to express the rule that the debtor would be liable with all the assets he owns, including of course the receivables. Speaking practically, this corresponds to the power of the creditors to seize all the assets the debtor owns including the seizure of the receivables, by way of garnishment, still held by the debtor third parties.32 2. Parties subject to limited liability With respect to the provisions contained in the ComA, the following parties may take advantage of the limited liability rule: A. SHIPOWNER

Any party who comes within the scope of the definition in ComA shall be treated as a ship owner and shall be subject to limited liability as foreseen by the relevant provisions of the ComA. Since the conditions at Article 946/1 of the ComA must exist cumulatively in each individual case, mere ownership shall not by itself provide sufficient ground for the application of limited liability. The shipowner who chartered his ship to a third party and merely collects the hire cannot take advantage of limited liability where holders of a lien arising out of the operations by the lessee starts proceedings against him. B. CARRIER

A carrier is the person who enters into a contract of carriage with a shipper, in the case of carriage of cargo, and with a passenger, in the case of a contract for the carriage of persons. The status of a carrier is conditional upon being a party to a contract of carriage. As long as a valid contract of carriage exists between two parties, the one which undertook to carry shall be the carrier. It is not necessary for the carrier to be the ship owner at the same time nor is it mandatory that such a carrier should have a vessel at his disposal to carry the goods or the passenger. 3. Methods used in limiting the liability A . L I M I TAT I O N B Y A S S E T

One method is to limit the liability of the debtor to specifically defined assets/items, like the ship herself and/or the freight. Under this method, the creditor is only allowed to attach 32. One should in this connection mention that, unlimited personal liability does not mean condemning the person involved to mort civile.

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the ship and/or the freight,33 but all other property owned by the ship owner is kept immune from any claim by the creditor. This was the method previously applied under German Law34 and is still applied with respect to the liability of the ship owners under Turkish law, as more fully examined hereunder. B . L I M I TAT I O N B Y VA L U E

The other method is to set a ceiling on the amount a creditor may claim from the debtor. In this method, the party responsible will be liable with all of his assets but only up to a certain amount determined by the relevant rules and correspondingly the creditor will have the right to attach all the assets of the debtor but may only collect the limited amount as foreseen by the provisions applicable.35 This is the method prescribed by the Convention, as well as almost all the other contemporary international conventions involving limitation of liability.

E. PROVISIONS OF COMMERCE ACT GOVERNING THE LIABILITY OF SHIPOWNERS 1. Nature of the liability The liability of the shipowner may be both contractual and tortious,36 depending upon whether a contractual relationship is in existence between the shipowner and the other party. This is the liability of the shipowner, who uses his ship in maritime trade and therefore has the status of an armateur and not a shipowner who simply collects rents after renting or leasing his ship to another person. The liability of shipowners is first defined in Article 947 of the ComA and Article 948 sets out the instances where this liability shall be limited. These provisions regulate the liability of shipowners as employers and therefore govern in the meantime their vicarious liability. Articles 55 and 100 of the ObA also provide rules for the vicarious liability of the employers and admittedly these are recog­ nised as containing the basic principles37 with respect to vicarious liability; the former covering the tortious liability and the latter contractual one. Articles 947 and 948 are based on fault and the only means of defence available to the shipowner are lack of fault on the part of the servants and agents and the non-existence of causality. However the shipowner can enjoy the benefit of a limitation on liability, as will be discussed hereunder. Articles 55 and 100 are more generous with regard to the

33. The International Convention for the Unification of Certain Rules Relating to the Limitation of the Liability of Owners of Sea-going Ships, 1924 should not, inadvertently, be taken as an example for this method. Article 1 of this Convention limits the liability of the shipowner to an amount equal to the value of the vessel, but not the vessel itself, as it the case under Turkish law, where the creditor attaches the ship herself. 34. HGB §486. 35. The basis of the limitation may be the weight/tonnage of the ship, as it is the case in the Convention, or the value of the ship and the freight, as it was prescribed in Limitation Act, 1734. 36. For apparent practical purposes we shall not include unjustifiable enrichment in our discussions. 37. In a sense these provisions are recognised as legi generali.

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defences available to the defendant and it is submitted that any—at least moderately —law-abiding shipowner could be able to discharge the onus of proof defined in these provisions. However, these provisions foresee no-fault liability as well as unlimited liability, in accordance with the general principles. These two different sets of rules have occasioned perennial, as well as highly spirited, discussions amongst both the academics and members of the bench; one group alleging that the provisions in the ComA, are special rules and therefore, based on the maxim lex specialis derogate legi generali, ComA must be applied to the exclusion of ObA; while the other group claims that the ComA had no intention of restricting the alternatives available to the injured party and the litigant should be free to choose the legal ground for his case in a manner he thinks more advantageous. In this regard it is respectfully submitted that, after comparing the content and tenor of the above rules, there should be no reason why the provisions in the ComA be taken as lex specialis and compel the litigants to file their suits only based on Articles 947 and 948 of the ComA. Moreover, even though a contract exists between the shipowner and the injured party, the latter would have the option of relying on tortious liability where he finds them more supportive of his action. 2. Grounds for liability A . D E AT H O R P E R S O N A L I N J U RY O F A PA S S E N G E R

The shipowner will be under liability in case a passenger dies or suffers bodily injury whilst being carried onboard his ship. However, the grounds for liability would change depending on whether the passenger was carried based on a contract of carriage between the shipowner or not. Where the shipowner was the contractual carrier his liability shall be governed by the rules regulating the contracts for the carriage of passengers by sea.38 Where the shipowner was not the contractual carrier but merely the actual carrier, liability will be based on tort, subject to the existence of the conditions required by the relevant rules for tortious liability. B. MORAL DAMAGES

Liability in respect of the damages suffered by passengers covers also moral damages, to the extent that relevant rules allow. Under Turkish Law, this issue is regulated by the provisions of ObA.39 Pursuant to the provisions contained in these articles, in cases of personal injury the sufferer himself will be entitled to moral damages and the family members in cases of death of the passenger. C . M AT E R I A L D A M A G E S

The shipowner will be liable for material damages inflicted upon third parties that have not embarked upon a common maritime adventure with the ship, but were either contractual 38. One should in the meantime bear also in mind that; the plaintiff may equally base his claim on tort, if the rules regulating the tortious liability suit him better, since under Turkish law, the theory of concurrence allows for the choice between different grounds. 39. Articles 47 et seq.

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parties performing their obligations on the shore, like dock owners or bunkering com­ panies; or such parties to whom the shipowner may be liable in tort, for damage caused by the ship, whether caused by himself or by his servants and agents. In the latter case, liability will be vicarious. D. L O S S O F O R D A M A G E TO C A R G O

The liability of the shipowner for damages arising from loss of or damage to cargo carried on board his ship separately, should be distinguished. In cases where it was the shipowner who made the contract for the carriage of the cargo that was lost or damaged, he would in the meantime be the contracting carrier and therefore shall also be subject to the rules regulating the liability of the carrier. Even where the shipowner was not the contracting carrier, the liability of the shipowner as the actual carrier is, pursuant to the ComA Article 947, identical to that of the contracting carrier. Article 947 of the ComA contains a particular provision whereby the position of the shipowner vis-`a-vis cargo interests is identical to that of the carrier, regardless of whether or not he was also the contracting carrier. There should be no difference between the content and scope of their liabilities in cases of loss of or damage to goods and claimants should not be given the chance of discriminating between the two. E . D E L AY

The shipowner will be liable for the damage caused to both the passenger and the cargo interests due to delay which occurred during the transportation. Against the claims lodged by the cargo owners, the liability of the shipowner will again be similar to that of the contracting carrier. 3. Limitation of liability A . L I M I TAT I O N B Y A S S E T

(a) Assets involved The method foreseen in limiting the liability of the shipowner by the ComA (see Article 948) is limitation by assets. This means the liability of the shipowner is limited to the ship and the freight.40 The creditor may, therefore, attach only the ship and the freight and where either or both of these two assets are no longer available or their values have depreciated, the replacement values, that is, the surrogates,41 which are specifically defined by the ComA. The ship will be the one that was used in the performance of the

40. The unique combination of these two assets is called in German as Schiffsvermogen and fortune de mer in French; as opposed to Landvermogen and fortune de terre, respectively. This way, the capital risked by the shipowner for his maritime adventures is separated from his other assets, to provide a kind of incentive for shipping exploitations. 41. The following are the surrogates specified by the ComA: (i) Sale proceeds where the master sells the ship under dire conditions, (ii) Sale proceeds where the ship was sold forcefully in Turkey, (iii) General average contribution received against the sacrifice of the ship or the freight, (iv) Damage to be paid to the shipowner as compensation for the harm inflicted to the ship or for the loss of the freight. Insurance payment is not a surrogate and it is allocated to the mortgagee.

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contract or involved in the incident that caused the damage. The freight is also the gross freight of the voyage during which the damage was occasioned.

(b) Cases where the liability was limited by asset Legal transactions entered into by the master Under the relevant rules of the ComA, the master is the statutory representative, that is, the agent of the shipowner. Contracts42 concluded by the master in his capacity as the agent are binding on the shipowner. However, the liability of the shipowner for the obligations arising out of these contracts are subject to limited liability (see the ComA Article 948/1, 1).

Contracts concluded by the shipowner and to be performed by the master Liability arising out of contracts,43 regardless of their subject and content, entered into by the shipowner and to be performed by the master are also subject to limited liability (see the ComA Article 948/1, 2).

Damages caused through fault of the crew While the provisions contained in Article 948/1, 1 and 2 regulates the contractual liability of the shipowner, Article 948/1, 3 regulates his tortious liability. The shipowner will be liable for the damages caused by the members of the crew while they were performing their duties. This liability is also limited to the ship and the freight.

Salvage and assistance The liability of the shipowner involving obligations arising out of rescue and salvage operations are also subject to limited liability (see the ComA Article 1234/1).

B . L I M I TAT I O N B Y VA L U E

(a) In general If the shipowner’s assets become worthless or no longer available, the liability of the shipowner shall be converted into liability limited by value to provide a protection to the creditor. Therefore, the creditor shall be able to attach any property within the patrimony of the shipowner, but only up to the limits specified by the relevant rules.

42. Such as those made for repair and maintenance of the ship or to buy bunker and stores or contract of affreightment. 43. They can be contracts of affreightment or repair and maintenance or rescue and salvage.

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(b) Cases where the liability was limited by value Collecting of the freight or surrogates by the shipowner If the shipowner collects and therefore includes in his overall patrimony44 the freight or the surrogates, he would be liable towards the creditors with all his assets but up to a limit that is equal to the amount of the freight or the surrogates so collected. Carrying of cargo by the shipowner on his own behalf If the shipowner has carried cargo on his own behalf, he would be liable towards the claimants with all his assets, but up to a limit that is equal to the freight current at the time and place of loading. Dispatching the ship to a new voyage If the shipowner, while aware of the existence of a lien, dispatches his ship to a new voyage that is detrimental to the interests of the claimant, he would be liable towards the claimant with a sum equal to the value of the ship at the beginning of the voyage. This liability arises with the dispatch of the ship; it is not necessary that any risk materialises during the voyage. If the voyage was advantageous to the interests of the creditors, such as removing the ship from a hostile area upon the outbreak of war, no such conversion of liability shall occur.

F. PROVISIONS OF COMMERCE ACT GOVERNING THE LIABILITY OF CARRIERS BY SEA 1. In general A . C O N T R A C T UA L L I A B I L I T Y

Liability of the carrier arising from a contract of affreightment is contractual by nature. Being of a contractual nature, the liability of the carrier is regulated by the ObA, which sets out the basic rules governing the liability regime in the Turkish legal system.45 Except in certain cases (discussed below), the ComA does not contain special rules on the liability of the carrier. The carrier is entitled to limit or totally evade his liability arising from the loss of or damage to cargo or delay, within the limits allowed by the relevant rules of the ObA.46 This is usually done by inserting exemption clauses in the contracts of carriage or bills of lading or sometimes in general conditions of contract, provided the latter is made known to third parties. 44. Called technically the Landsvermogen as opposed to Schifsvermogen in German legal terminology. 45. Based on these provisions, the carrier, just like any party to a contract, must perform his obligations properly and completely in accordance; with the terms and conditions of the contract. The performance must strictly and completely comply with the obligations arising from the contract and must be conducted to the full satisfaction of the other party. 46. See Articles 99 and 100 of the ObA, a free translation of which was given in footnote 19.

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Whilst the formation and consequences of the contracts of affreightment are, in general, subject to the rules of the ObA, the ComA, provides individual provisions covering certain specific issues concerning the liability of the carrier. These provisions, to a great extent, correspond to and reflect the system in the Hague Rules. The ComA primarily creates particular obligations for the carrier on two distinct subjects: (a) to make the ship seaworthy before and at the beginning of the voyage (ComA Article 101 9); and (b) to look after and take good care of the cargo (ComA Article 1061). The ComA also provides rules for the liability of the carrier in the following areas: (i) loading or transhipment of cargo, without the approval of the shipper, onto a ship other than the one nominated in the contract of affreightment (ComA Article 1028), (ii) Carry­ ing goods on deck, without the consent of the shipper (ComA, Article 1029) and (iii) unjustified deviation during the voyage (ComA Article 1091). B . TO RT I O U S L I A B I L I T Y

The carrier can also be sued in tort in cases of cargo damage, alongside his contractual liability. The person who has suffered damage has the option of directing his claim against the carrier either based on contractual or tortious liability. Any claim against the carrier that does not arise from a contract of affreightment will be based on tort—or unjustifiable enrichment—but the defendant will not be called a carrier, or to be more precise, shall not have the status of a carrier, in the context of such a case, although he may be carrying goods for reward as a regular business. Where the carrier is sued in tort, the relevant clauses of the ObA regulating tortious liability will apply. However, the question of whether the exemption clauses contained either in the contract of affreightment or in the bill of lading would still be applicable remains. Such clauses will not apply where the claimant himself was not a party to a contract of affreightment. Where the claimant was a party to the contract of affreightment, exemption clauses may be applicable if it was proven that the mutual intention of the parties was to apply them regardless of the cause of action. Otherwise, the applicability of such exemption clauses shall be determined pursuant to the mandatory rules of the ObA. C. UNLIMITED LIABILITY

Pursuant to the basic rule governing the liability regime, the carrier will be unlimitedly liable for the damages he has caused. This fundamental principle is applicable both for contractual liability and liability in tort. This rule is also valid for cases of vicarious liability. D. L I M I T E D L I A B I L I T Y

The ComA does foresee a means of limitation for the liability of the carrier. As we shall analyse below,47 the liability of the carrier is subject to limitations. The ComA in some 47. See under III below.

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cases limits the liability of the carrier to the market value of the goods that were lost or damaged and in some cases puts a strict monetary limit on the amount the carrier could be compelled to pay. E. VICARIOUS LIABILITY

The carrier is liable also for the damages caused by his servants or agent during the course of their employment. However, the ComA makes a distinction between such servants and agents, by using two different terms: Servants and agents of the carrier and members of the crew.48 The servants and agents, or personnel, of the carrier are the people who are employed by the carrier in his business enterprise. Vicarious liability shall attach even though the damage was caused while they were merely attending to their jobs, and not necessarily related to the performance of the contract of affreightment in question. The carrier would be liable although the act or neglect of a servant or agent was not the proximate cause of the damage.49 Members of the crew are the persons who are employed by the shipowner. They are the master, officers and all the other hands employed in the ship. Unless the carrier was also the shipowner or non-owner operator, the crew may not necessarily be in the employ of the carrier. However, the carrier is still liable for their acts and omissions and for any damage caused. 2. Grounds for liability A . D E AT H O R P E R S O N A L I N J U RY O F A PA S S E N G E R

Pursuant to Article 1130 of ComA, the carrier in contracts for the carriage of passengers, is under an obligation to ensure safe passage of the passengers. Therefore, the carrier shall be liable for damage suffered as a result of the death or personal injury to a passenger as well as the loss of or damage to passenger’s luggage. This rule includes liability for moral damages also. The liability of the carrier is towards the passenger himself in cases of personal injury and towards those who were deprived of the support of the deceased in the case of death of the passenger. The liability of the carrier for the death or personal injury of passengers is unlimited. Furthermore, the carrier cannot limit or evade this liability through exemp­ tion clauses. Such exemption clauses would be disregarded if they were somehow inserted by the carrier into the general conditions of contract or any other similar document of the carrier (ComA, Article 766). However, the rules limiting the liability of the shipowner will still be applicable. B . U N S E AW O RT H I N E S S O F T H E S H I P

One of the particular grounds for liability as envisaged and individually regulated by the ComA is the loss of or damage to cargo caused by the unseaworthiness of the ship. The 48. To give a more precise idea, one can translate the terms used by the ComA as the following: The personnel (or employees) of the carrier and members of the crew (ComA Article 1062/1). 49. In other words, an indirect causality between the act of the servant and the damage will be sufficient to hold the carrier liable.

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obligation of the carrier under ComA Article 1019 is threefold. The carrier must ensure that the ship is seaworthy at the beginning of the voyage and the carrier must also make sure that the ship is both cargoworthy and voyageworthy. ComA Article 817/I defines a seaworthy ship as a vessel that is fit to withstand all the hazards of the voyage, excepting extraordinary perils with regard to main equipment and components, such as overall rigging, hull, machinery and boilers. ComA Article 817/II furthermore gives a definition for the ‘‘voyageworthy ship’’ as a vessel that, besides being seaworthy, is also fit to perform the voyage with regard to loading conditions, her bunkers and stores as well as the number and ratings of the crew. ComA Article 1019/I defines ‘‘cargo worthiness’’ as a ship with her holds being ready and fit, including the refrigerating systems, to receive, carry and safeguard the cargo.50 The carrier can only be exonerated from liability if he proves that despite the exercise of due diligence as a prudent carrier, it was impossible to discover the cause of the unseaworthiness until the commencement of the voyage. It is submitted that in spite of the complicated way of defining seaworthiness the meaning ascribed to these provisions of the ComA should be similar to the concept of seaworthiness as defined by Articles 3/1 and 4/1 of the Hague and Hague-Visby Rules. Thus, liability of the carrier is based on fault, although one made more severe by the inclusion of showing due diligence, a qualification which is actually taken as utmost care and attention, instead of the regular diligence expected from a bonus pater familias. Consequently, the carrier can only evade liability by proving that despite the exercise of the utmost care and attention expected of a prudent carrier, it was impossible for him and his servants and agents to discover the defect that was the cause of the unseaworthiness in each individual case.51 The provision in Article 1019 of the ComA, governing the liability of the carrier for damages caused by the unseaworthiness of the ship covers the damages occasioned by delay also. Otherwise, the consequences of delay are subject to the relevant rules of the ObA. The liability of the carrier is limited to TL 100,000 per package or unit. The limitation based on the market value of the goods, as stipulated by Articles 1112 and 1113 of the ComA do not apply in this case because, Articles 1112 and 1113 of the ComA are related to Articles 1061 and 1062 of the ComA pursuant to the reference contained in Articles 1112 and 1113. Moreover Article 1064/1 also applies and the carrier will be relieved of all liability in case the shipper knowingly gives to the carrier false and/or inaccurate information to be inserted in the bill of lading concerning the nature or value of the goods. C . L O S S O F O R D A M A G E TO C A R G O

Pursuant to Article 1061 of the ComA, the carrier is under an obligation to: ‘‘show the diligence expected of a prudent carrier to load, handle, stow, carry and discharge the goods. The carrier shall be liable for the damage occasioned through loss of or damage to the goods 50. We will use the term ‘‘seaworthiness’’ to include also the ‘‘cargoworthiness’’ and ‘‘voyage worthiness’’, unless otherwise indicated. 51. It should be emphasised that, the carrier must actually have carried out proper inspections as required; the carrier cannot escape liability by merely trying to prove that even if proper inspections were made, it would still be impossible to find out the defect.

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from the time they were taken delivery of until they are delivered; unless loss or damage was caused by an event that cannot be avoided even by the diligence of a prudent carrier.’’

This provision, which reflects the concept embodied in Article 3/2 of the Hague Rules, constitutes the basis of the obligation of the carrier to look after and take care of the cargo. In more popular terms, this obligation is defined as a duty of care. This is also a liability based on fault. The carrier can escape liability if he can discharge the onus of proof as defined in the last paragraph of Article 1061. In doing this the carrier must first prove the event that caused the damage and then prove that such event could not be evaded even by the care and attention of a prudent carrier, as well as that of its servants and agents. However, pursuant to Article 1062/11, the carrier shall not be liable for loss or damage arising or resulting from the navigation or technical management of the ship or from fire, unless caused by his fault.52 Moreover, the carrier shall be free from liability if he proves that the loss of or damage to cargo was caused by one of the following events (Article 1063):53 (a) perils, dangers and accidents of the sea or other navigable waters; (b) acts of war or public enemies, commotions and riots, orders by the competent authorities or quarantine restrictions; (c) seizure orders by the courts; (d) strike, lock-out or other restraint of labour; (e) acts or omissions of the shipper or owner of the cargo or his agent or repre­ sentative; (f) saving or attempting to save life or property at sea; (g) wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods. D. D E L AY

Damage54 occasioned by delay caused due to unseaworthiness of a ship shall be subject to the provisions governing the liability of the carrier for the unseaworthiness. Similarly, where damage caused by delay can be related to the obligation of the carrier to take care of and look after the goods, the dispute shall be settled in accordance with the provisions regulating the duty of care of the carrier. In all other cases where the loss of or damage to the goods was alleged to be caused by delay, then the relevant rules of the ObA shall apply to such a dispute. 3. Limitation of liability A. METHOD APPLICABLE

The limitation on the liability of the carrier is limitation by value. The carrier is liable with all his assets, but only up to limits as prescribed by the relevant provisions of the ComA.

52. Understandably enough, this provision reflects the concept in Article 4/2, a–b of the Hague Rules. 53. This Article is also parallel to Article 4/2 of the Hague Rules. 54. Such as damage caused due to loss of market or non-performance of an obligation by the shipper.

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As set out below, while the ComA in some cases prescribes a definite monetary limit, in other cases it indicates a point of reference for the determination of the monetary limit. B . L I M I TAT I O N P U R S UA N T TO M A R K E T VA L U E

Where the carrier is held liable based on Articles 1061 and 1062 of the ComA,55 the liability of the carrier, in case of loss of goods, is, first of all, limited to their fair market value. If the goods have no determinable market value, then the carrier shall pay the ordinary market value of the goods prevailing at the time when their discharge at the port of arrival began.56 Where the ship cannot make the port of arrival, the place the voyage was terminated shall replace the port of arrival. In case of a total loss of the ship, the place where the goods were brought under safety shall be treated as the port of arrival. Any savings made owing to loss of goods, such as unpaid freight or customs charges and duties, shall be deducted57 from the value of the goods (Article 1112). In case of damage to the goods, the carrier shall pay the difference between the market value of the goods or their value at the port of arrival and the price the damaged goods fetch at the port of arrival (Article 1113). C . L I M I TAT I O N P E R PA C K A G E O R U N I T

In all cases, save for certain specific issues, the liability of the carrier shall be limited to TL. 100,00058 per package or unit, where the consignor did not declare the value of the goods prior to loading or such declaration was not indicated in the bill of lading. It goes without saying that the meanings to be ascribed to package and unit occupied a focal point in a number of discussions. However, the following definitions are generally accepted in Turkish law: Package is generally defined as the external element covering or containing the cargo, to protect it against the perils of transportation.59 Unit is defined as the factor taken as the reference for freight or in other words, customary freight unit. The amount involved as the basis for limitation provoked too much discussion with a view to find an equitable solution to this highly unfair method. Without going into too much detail on these discussions and the various alternatives proposed; it should suffice to say that the courts quite often applied the following formulae: in cases where there were certain objective elements or indications in the bill of lading to determine the value of the goods, such limitation rules shall not apply.60 Of course, where it was available to take the freight unit as a measure for limitation, it was all the more welcome.

55. That is, provisions regulating the duty of care. 56. Although Article 1112/I refers to place of arrival, a better view is to take the port of arrival/discharge, and not the actual destination of the cargo, which may be some place situated within the country. 57. No deduction shall be made in cases of freight earned, goods lost or not lost. 58. At the time of finalising this article (January 2003), monthly average rate was TL 1,630,000 to â1. 59. For example, sacks, trunks, crates. 60. It was also argued, that the value of the goods became apparent, where the commercial invoice was attached to the bill of lading and consequently limited liability shall not apply.

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G. SOME COMMENTS ON THE APPLICATION OF THE

CONVENTION IN TURKEY

1. Whether Turkey became a party to the Convention An objection was raised in academic circles, claiming that Turkey did not became a party to the Convention, despite the deposit of the formal instrument as envisaged in Article 16(3) of the Convention by the Turkish Government. The Constitution of Turkey, in Article 90, stipulates that international treaties that give rise to a modification in existing acts have to be ratified by the national parliament, but the instrument of accession to the Convention was deposited to the Organisation only based upon a decree by the Council of Ministers.61 It is therefore submitted that Turkey cannot and should not be recognised as a State Party to the Convention. However, we should also add that it is—rather impliedly—assumed that Turkey is a State Party to the Convention and no clear and straightforward statement is made and no court decision exists for the time being. 2. Some major issues of conflict between the Convention and Turkish law A . PA RT I E S S U B J E C T TO L I M I T E D L I A B I L I T Y

Under Turkish law, limited liability is an exception and therefore a privilege granted only to such debtors as are strictly identified by the relevant acts. The Convention allows this privilege to a range of parties that greatly exceed the category of persons who are envisaged by Turkish Law and even regardless of their nationality or their relation with Turkey.62 Under Turkish law only the shipowner and the carrier can take advantage of limited liability. The Convention provides the same opportunity to too many other entre­ preneurs (e.g., salvors and even insurers). Since limited liability is the exception to the basic rule, this point may create a problem in the application of the Convention in Tur­ key. As the Convention is applicable regardless of the nationality of the parties, any ship­ owner of Turkish nationality is entitled to raise this issue before a court in Turkey, although the dispute may involve a cabotage carriage. In this connection, it should be pointed out that Turkey has not yet made any legislation as referred to in Article 15(3) of the Convention.63 B. GROUNDS FOR LIMITED LIABILITY

The Convention provides for a number of cases where the defendant can claim limited liability as opposed to a much narrower scope recognised by the Turkish Law. This feature of the Convention significantly alters the basic principles of the domestic law and is

61. Council of Ministers may approve regular international commercial treaties or treaties defining the application of the treaties ratified by the Parliament. 62. However, cf. Article 15/1 of the Convention. 63. We should also remark that under the Turkish Conflict of Law Rules, extra-contractual claims between two Turkish nationals heard by the local courts are subject to domestic law.

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moreover substantially detrimental to the interests of the prospective litigants and there­ fore the Convention may only have a binding effect in Turkey following a proper ratifica­ tion by the National Parliament and deposit of the relevant instruments thereafter. C . D I S C R E PA N C Y O N T H E L I M I TAT I O N M E T H O D S B E T W E E N T U R K I S H L AW A N D T H E CONVENTION

Whereas the Convention uses the limitation of liability by value, the basic method on the limitation of liability of the shipowner is limitation by asset. D. S O M E B A S I C T E R M S A N D C O N C E P T S

Last but not least, the definition in Article 4 of the Convention, although becoming ever more popular in international conventions, is still somewhat ambiguous as to the legal concepts to which continental lawyers—the fraternity to which the members of the profession in Turkey belong—are accustomed.

CHAPTER 42

U.S.A. John D. Kimball Healy & Baillie, LLP, 61 Broadway, New York, N.Y. 10006-2834

The shipowner’s right to limitation of liability is a basic feature of the general maritime law of the United States. Although the concept has been criticised by some commentators, limitation of liability continues to be considered by shipowners and their insurers as a significant right. The formation of a limitation fund and a concursus for claims also benefits claimants. Because the United States has not adopted the International Conven­ tion on Limitation of Liability for Maritime Claims, the rules are different in an American limitation action than in Convention countries.

A. THE BASIS FOR LIMITING LIABILITY The right to limit is provided by the Limitation of Vessel Owner’s Liability Act (the ‘‘Act’’).1 All shipowners, American or foreign, may benefit from the Act, which applies to all marine casualties occasioned on navigable waters, whether American or foreign. The Act permits a shipowner who faces claims from third parties as a result of a maritime casualty to commence a court action in which it can seek exoneration from or limitation of liability as to all such claims. The prosecution of any other actions against the owner and the vessel is enjoined. This concursus of claims is a central feature of the Act, ‘‘ensur[ing] the prompt and economical disposition of controversies in which there are often a multitude of claimants’’.2 The first step of the case usually involves a determina­ tion of whether the shipowner or bareboat charterer is liable to the claimants. In cases where the shipowner is denied exoneration and therefore held liable to claimants, the Act limits the shipowner’s liability to the value of the vessel and pending freight at the end of the voyage during which the casualty occurred, provided it occurred because of causes outside the owner’s privity and knowledge.3 Although it remains an open question whether the Act provides an independent basis for admiralty jurisdiction, lower courts have decided this is not the case.4 Thus, it has been held that a shipowner is entitled to limit liability only for casualties which occur on the

1. 46 U.S.C. §§181–189. 2. Maryland Cas. Co. v. Cushing, 347 U.S. 409, 415 (1954). 3. See, e.g., Norwich & N.Y. Trans. Co. v. Wright, 80 U.S. 104 (1872); Univ. of Tex. Med. Branch v. United States (The ‘‘Ida Green’’), 557 F.2d 438 (5th Cir. 1977), cert. denied, 439 U.S. 820 (1978). 4. See Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990); Great Lakes Dredge & Dock Co. v. City of Chicago, 3 F.3d 225 (7th Cir. 1993); In re Bernstein, 81 F. Supp. 2d 176, 2000 AMC 760 (D. Mass. 1999).

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high seas or other ‘‘navigable waters’’, thereby providing the basis for admiralty juris­ diction.5

B. PROCEDURAL REQUIREMENTS The procedural framework for a limitation action is provided by section 185 of the Act together with Supplemental Rule F of the Federal Rules of Civil Procedure. The ship­ owner is required to file a complaint (formerly ‘‘petition’’) seeking exoneration from or limitation of liability in a federal district court sitting in admiralty, within six months of receiving the first written notice of a claim arising from the casualty.6 ‘‘Written notice of a claim’’ can either be in the form of a summons and complaint or any writing clearly informing the owner of an actual or potential claim which may exceed the value of the vessel.7 As a condition to filing a complaint, the shipowner must establish a limitation fund, either by transferring its interest in the vessel and pending freight to a court-appointed trustee, or by depositing with the court a sum equal to the value of such interest or other security.8 Shipowners usually either post a bond or a letter of undertaking given by the vessel’s protection and indemnity club to establish the limitation fund. The amount of security may be challenged by a claimant as insufficient, at which time the court is required to order an appraisal of the vessel.9 Although the ordering of an appraisal is mandatory, it is within the court’s discretion to determine whether the amount of security is sufficient.10

5. See, e.g., Three Buoys Houseboat Vacations, U.S.A. v. Morts, 921 F.2d 775, 1991 AMC 1356 (8th Cir. 1990), cert. denied, 502 U.S. 898 (1991) (holding that ‘‘navigable waters’’ is co-extensive with admiralty jurisdiction); In re Dickenson, 780 F. Supp. 974, 1992 AMC 1660 (E.D.N.Y. 1992) (dismissing limitation action for lack of admiralty jurisdiction where vessel destroyed by fire was in drydock and ‘‘withdrawn from naviga­ tion’’). See also The Daniel Ball, 77 U.S. 557, 563 (1870) (‘‘A Waterway is navigable provided that it is used or susceptible of being used in commerce.’’). 6. Fed. R. Civ. P. Supp. Rule F(1) (‘‘Supp. Rule F’’). See, e.g., Doxsee Sea Claim Co. v. Brown, 13 F.3d 550, 1994 AMC 305 (2d Cir. 1994) (dismissing limitation action as time-barred). 7. Doxsee Sea Clam Co. v. Brown, 13 F.3d 550, 1994 AMC 305 (2d Cir. 1994) (‘‘Notice will be sufficient if it informs the vessel owner of an actual or potential claim . . . which may exceed the value of the vessel . . . and is subject to limitation.’’); In re Lewis, 190 F. Supp. 2d 885, 888 (M.D. La. 2002) (‘‘[T]he written notice of the claim may be in the form of a letter. The letter must inform potential defendants of; the facts of the incident; the claimant’s belief that the vessel owner is to blame for the damage; and the claimant’s intention to seek damages from the vessel owner. The letter must also reveal a ‘reasonable possibility’ that the claim made is one subject to limitation . . . .’’); In re Texaco, Inc., 1991 AMC 2624 (E.D. La. 1991); In re Okeanos Ocean Research Found., Inc. 704 F. Supp. 412, 1989 AMC 1677 (S.D.N.Y. 1989); In re Bisso Marine Co., 2003 U.S. Dist. LEXIS 5279 (E.D. La. 2003) (while there may have been oral communications between the two parties which could have contained other information regarding the claim, and completing the details provided in letters, communications other than written communications do not meet the written notice requirement). See also In re Morania Barge No. 190, Inc., 690 F.2d 32, 34, 1982 AMC 2679, 2679 (2d Cir. 1982) (‘‘When the Owner . . . ‘force the claimant to make his position clear,’ with the result that the claimant affirmatively states on the record that his total claims amount to a figure that is substantially less than the value of the ship and no other claims are in the offing, the statutory time bar does not apply. The period would then begin to run only upon its appearing that there is a reasonable possibility that the claims would exceed the value of the ship.’’); Billiot v. Dolphin Servs., 225 F.3d 515, 2001 AMC 259 (5th Cir. 2000) (holding that a state court lawsuit which identified the wrong vessel was not proper notice). 8. Supp. Rule F(1). 9. Supp. Rule F(7). 10. Ibid.

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The shipowner may file its complaint for limitation in any district where the vessel has been attached or arrested or, if it has not been attached or arrested, in any district where the owner has been sued.11 If the owner has not yet been sued, then the proper venue is in a district where the vessel is present. If the vessel cannot be found within any district, however, then the complaint may be filed in any district in the United States. Further, once the complaint is filed, Supplemental Rule F(9) provides that venue may be transferred in the interest of justice for the convenience of the parties and witnesses.12 Courts have held that the plaintiff’s choice of forum should be preserved, however unless private and public interest considerations clearly weigh in favour of trial in an alternative forum.13 Once the complaint has been filed and the fund established, the court will issue an injunction staying all actions against the owner arising out of the casualty or during the voyage.14 The court will order the plaintiff to send notices to all claimants informing them of the district in which the claims should be filed and the date by which all claimants must file their claims at the risk of default.15 If a claimant files outside of the monition period, the court has the discretion to determine whether the claim should be allowed by prolong­ ing the monition period.16 Permission to file a late claim is not a matter of right, but requires an equitable showing of cause. Upon a proper showing of cause, the court will freely grant permission to file late claims, provided that the proceeding is still pending and the other parties will not be adversely affected.17 This concursus of claims is a central feature of the Act, enabling the shipowner to adjudicate the issues of liability, the extent of liability, the right to limitation, and the distribution of the limitation fund in a single forum. The court’s injunction, of course, has no direct extraterritorial effect on foreign claimants, which may pursue their actions in courts outside the United States.18 All United States claimants, however, are bound by the injunction and must file their claims in the limitation action.19 There are two exceptions to the concursus rule that may enable claimants to pursue claims outside the limitation proceeding. First, the court must dissolve the injunction staying all proceedings where the value of the limitation fund exceeds the value of all the claims filed in the proceeding.20 In that situation, there is no need for a limitation action. The second exception to the concursus principle is the ‘‘single claimant’’ rule that the

11. Supp. Rule F(9): See generally, In re Complaint of Mike’s Inc., 317 F.3d 894, 2003 AMC 192 (8th Cir. 2003). 12. See In re Complaint of Mike’s Inc., 337 F.3d 909 (8th Cir. 2003) and In re Norfolk Dredging Co., 240 F.Supp.2d 532, 2002 AMC 1608 (E.D. Va. 2002). 13. See, e.g., In re Complaint of Connecticut National Bank, 687 F. Supp. 111, 1989 AMC 791 (S.D.N.Y. 1988). 14. Supp. Rule F(3). 15. Supp. Rule F(4). 16. In re Seuse Bros. Ocean Towing, 1992 AMC 1858 (D. Or. 1992). 17. Am. Comm’l Lines, Inc. v. United States, 746 F.2d 1351, 1985 AMC 1892 (8th Cir. 1984); Tex. Gulf Sulphur Co. v. Blue Stack Towing Co., 313 F.2d 359 (5th Cir. 1963). See generally In re Mike’s Inc., 317 F.3d 894, 2003 AMC 192 (8th Cir. 2003); Alter Barge Line, Inc v. Consol. Grain & Barge Co., 272 F.3d 396, 2002 AMC 472 (7th Cir. 2001). 18. Rationis Enterprises, Inc. v. Hyundai Merchant Marine Co., 201 F.3d 432 (2d Cir. 1999); Kreta Shipping, S.A. v. Pressag Int’l Steel Corp., 192 F.3d 41, 1999 AMC 2858 (2d Cir. 1999); In re Bowoon Sangsa Co., 720 F.2d 595, 1984 AMC 97 (9th Cir. 1983); In re Bloomfield S.S. Co., 422 F.2d 728 (2d Cir. 1970). 19. In re Kreta Shipping, S.A. Limitation Proceedings, 1997 AMC 1676, 1679 (S.D.N.Y. 1997). 20. Lake Tankers Corp. v. Henn, 354 U.S. 147 (1957), reh’g denied, 354 U.S. 945 (1957); see also Kreta Shipping, S.A. v. Pressag Int’l Steel Corp., 192 F.3d 41, 1999 AMC 2858 (2d Cir. 1999).

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court must dissolve the injunction where only one claim is asserted against the owner.21 Before dissolving the injunction, however, the parties are required to file protective stipulations to the effect that: (a) the value of the fund is limited to the value of the vessel and its pending freight; (b) the district court retains exclusive jurisdiction over all issues affecting the ship­ owner’s right to limit; and (c) if the action is in state court, then the resulting judgment will not have r es judicata effect in a subsequent limitation proceeding in federal court.22 Limitation of liability may also be invoked by the shipowner as a defence to an action seeking damages in federal court regardless of the six-month time limit.23 The dis­ advantage of this approach, however, is that if a shipowner is sued in separate actions by multiple claimants, it is not permitted to create a concursus for all claims and is exposed to the risk of having to pay multiple limitation funds. The issue of whether a state court has jurisdiction to allow limitation where the right to limit is invoked as a defence and a section 185 action has not been timely filed in federal court is unresolved.24 The better view is that state courts have such jurisdiction when the right to limit is raised as a defence.

C. PERSONS AND VESSELS ENTITLED TO LIMIT Section 183 entitles ‘‘the owner of any vessel, whether American or foreign’’, to limit its liability for a marine casualty in appropriate circumstances. Courts have liberally con­ strued the term ‘‘owner’’ to include any person or entity which may be held liable because of an ownership interest in the vessel.25 This rule is likewise extended to part owners, allowing them the right to limit their own liability separately to the value of their respective interests in a vessel.26 Section 186 broadens the applicability of the Act to include demise charterers, that is, a charterer who ‘‘shall man, victual, and navigate such vessel at his own expense and procurement’’. Time and voyage charterers are not entitled to limit under the Act.27 21. Langnes v. Green, 282 U.S. 531, 1931 AMC 511 (1931). See generally Grindle v. Fun Charters, 962 F. Supp. 1284, 1997 AMC 2791 (D. Haw. 1996). 22. Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 121 S. Ct. 993 (2001); see also Odeco Oil & Gas Co. Drilling Div. v. Bonnette, 4 F.3d 401, 1994 AMC 506 (5th Cir. 1993), cert. denied, 114 S. Ct. 1370 (1994); In re Dammers & Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 1988 AMC 1674 (2d Cir. 1988); Jefferson Barracks Marine Serv., Inc. v. Casey, 763 F.2d 1007, 1986 AMC 374 (8th Cir. 1985). 23. Langnes v. Green, 282 U.S. 531, 1931 AMC 511 (1931). 24. Compare Complaint of Bay View Charter Boats, Inc., 692 F. Supp. 1480, 1989 AMC 1289 (E.D.N.Y. 1988) (holding that federal court has exclusive jurisdiction in adjudicating issues relating to limitation) with Mapco Petroleum, Inc. v. Memphis Barge Line, Inc., 849 S.W.2d 312, 1993 AMC 2113 (Tenn. 1993) (holding that state courts may adjudicate the shipowner’s substantive right to limit), cert. denied, 510 U.S. 815 (1993). 25. See, e.g. Flink v. Paladini, 279 U.S. 59 (1928); Stand. Oil Co. v. S. Pac. Co., 269 U.S. 146 (1925); In re Barracuda Tanker Co., 281 F. Supp. 228, 1969 AMC 1781 (S.D.N.Y 1968), rev’d on other grounds, 409 F.2d 1013, 1969 AMC 1442 (2d Cir. 1969). 26. 46 U.S.C. §183. 27. See, e.g., In re Peacock Limitation Process, 1983 AMC 1200 (N.D. Cal. 1983); In re Amoco Cadiz Limitation Process, 1979 AMC 1017 (N.D. Ill. 1979), aff’d, 1992 AMC 913 (7th Cir. 1992).

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The term ‘‘vessel’’ is also defined broadly in the Act as ‘‘seagoing vessels and . . . all vessels used on lakes and rivers or in inland navigation, including canal boats, barges, and lighters’’.28 In the event there is common ownership of a tug and barge, and both vessels are contractually engaged in a common enterprise under a single command, a court may require that both vessels or their combined value be surrendered under the ‘‘flotilla doctrine.’’29 The flotilla doctrine is limited in application, however, to cases where the liability of the shipowner is based on pure tort (e.g., collision or allision) and both vessels were at fault.30

D. GROUNDS FOR DENYING LIMITATION: PRIVITY OR

KNOWLEDGE

Section 183(a) of the Act provides that the shipowner may limit its liability only upon the showing of proof that the fault causing the loss occurred without its ‘‘privity or knowl­ edge’’. The determination of whether a shipowner is entitled to limitation involves a two-step process. First, the court must determine whether the shipowner has any liability for the losses claimed. If so, the court must then determine whether the shipowner had knowledge or privity of the acts of negligence or conditions which caused the losses. Although the owner bears the burden of proving lack of privity or knowledge, the initial burden of proving fault, negligence or unseaworthiness rests with the claimants.31 ‘‘Privity and knowledge’’ generally have been held to exist where the owner has actual or constructive knowledge of the fault or condition causing the losses. Thus, there is ‘‘privity and knowledge’’ where the owner could and should have obtained the necessary information by reasonable inquiry or inspection.32 A high burden of diligence to detect and correct the fault is placed on an owner: ‘‘The measure in such cases is not what the owner knows, but what he is charged with finding out’’.33 Courts generally apply a wide standard for deciding whether there was privity and knowledge: ‘‘The recent judicial trend has been to enlarge the scope of activities within the ‘privity or knowl­ edge’ of the shipowner, including to corporations’ knowledge or privity of lower-level employees requiring shipowners to exercise an ever-increasing degree of supervision and inspection imposing 28. 46 U.S.C. §188. 29. Billiot v. Dolphin Servs., 225 F.3d 515, 2001 AMC 259 (5th Cir. 2000); Brown & Root Marine v. Zapata Offshore Co., 377 F.2d 724, 1967 AMC 2684 (5th Cir. 1967); Stand. Dredging Co. v. Kristensen, 67 F.2d 548, 1933 AMC 1621 (2d Cir.), cert. denied, 290 U.S. 704 (1933). 30. Liverpool, Brazil & River Plate Steam Nav. Co. v. Brooklyn E. Dist. Terminal, 251 U.S. 48 (1919); In re Magnolia Marine Transp. Co., 1987 AMC 1167 (D. Kan. 1986). 31. Farrell Lines, Inc. v. Jones, 530 F.2d 7 (5th Cir. 1976), reh’ng denied, 532 F.2d 1375 (5th Cir. 1976); see also In re M/V Bowfin, 339 F.3d 1137, 2003 AMC 2274 (9th Cir. 2003) (the claimant has the burden of proving what act caused the loss); Carr v. PMS Fishing Corp., 191 F.3d 1, 1999 AMC 2958 (1st Cir. 1999). 32. Spencer Kellogg & Sons, Inc. v. Hicks (The ‘‘Linseed King’’), 285 U.S. 502 (1932); In re Patton-Tully Transp. Co., 797 F.2d 206 (5th Cir.), reh’g denied, 800 F.2d 262 (5th Cir. 1986). 33. States S.S. Co., v. United States, 259 F.2d 458, 466, 1957 AMC 1181 (9th Cir. 1957) (quoting Great Atl. & Pac. Tea Co. v. Brasileiro, 159 F.2d 661 (2d Cir.), cert. denied, 331 U.S. 836 (1947)), cert. denied, 358 U.S. 933 (1959); see also Suzuki of Orange Park, Inc v. Shubert, 86 F.3d 1060, 1997 AMC 457 (11th Cir. 1996); Birmingham Southeast, LLC v. M/V Merchant Patriot, 124 F. Supp. 2d 1327, 2000 AMC 1015 (S.D Ga. 2000).

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a heavy burden on shipowners to prove their lack of privity or knowledge rendering the shipowner’s duty to ensure the seaworthiness of the ship non-delegable and narrowing the group of potential defendants eligible for exoneration under the Act.’’34

‘‘Privity, like knowledge, turns on the facts of the case.’’35 For example, courts have denied limitation because management failed to provide proper procedures for the main­ tenance of equipment,36 the training of the crew,37 or adequate checks to ensure the implementation of established maintenance and safety procedures.38 Privity or knowledge has also been found where the owner failed to provide the vessel with accurate charts and appropriate navigational equipment.39 However, limitation will be granted where the owner or (in the case of a corporate owner) supervisory personnel are found to have acted in a reasonable manner.40 Individual co-owners of a vessel have the statutory right to limit their own liabilities separately, to the value of their respective interests.41 Where the loss occurs due to fault within the ‘‘privity or knowledge’’ of one of the owners, courts are in disagreement as to whether such fault is imputed to the other co-owners.42 Corporate shipowners are governed by the same standards as individual owners, except that only certain officials are chargeable with corporate knowledge. The privity or knowl­ edge of the corporate owner has been held to be the privity or knowledge of those to whom management is delegated, provided the negligence occurred within the scope of these managing agents’ authority.43 As such, ‘‘privity or knowledge’’ has been defined variously to include the privity or knowledge of managing agents, officers, and supervising employ­ ees, including managerial shoreside personnel.44 34. In re Amoco Cadiz, 1992 AMC 913, 940 (7th Cir. 1992) (citations omitted). See also Statistical Analysis of Limitation of Liability Cases, Maritime Law Association of the United States, Document No. 640, 15 June 1982. 35. Coryell v. Phipps (The ‘‘Seminole’’), 317 U.S. 406, 411, 1943 AMC 18, 22 (1943). 36. In re Amoco Cadiz, 1984 AMC 2123 (N.D. Ill. 1984), aff’d, 1992 AMC 913 (7th Cir. 1992). 37. Hercules Carriers, Inc. v. Claimant State of Florida, 768 F.2d 1558 (11th Cir. 1985). 38. In re Marine Sulphur Queen, 460 F.2d 89 (2d Cir.), cert. denied, 409 U.S. 982 (1972). 39. In re Texaco, Inc., 570 F. Supp. 1272, 1985 AMC 1650 (E.D. La. 1983). 40. 46 U.S.C. §183. 41. Carr v. PMS Fishing Corp., 191 F.3d 1, 1999 AMC 2958 (1st Cir. 1999). 42. Compare Thomassen v. Whitwill, 12 F. 891 (permitting co-owners to limit their liability separately, despite fault within the ‘‘privity or knowledge’’ of one owner) , aff’d, 118 U.S. 520 (1892), with Fetch v. Makowski, 406 F.2d 721, 1969 AMC 144 (5th Cir. 1969) (denying co-owners the right to limit their respective liabilities because of fault within ‘‘privity or knowledge’’ of one of the owners), and In re Falkiner, 716 F. Supp. 895 (E.D. Va. 1988) (same). 43. Coryell v. Phipps (The ‘‘Seminole’’), 317 U.S. 406, 1943 AMC 18 (1943); Spencer Kellogg & Sons Inc., v. Iticks, 285 U.S. 502 (1932); Hellenic Inc. v. Bridgeline Gas Distrib. LLC, 252 F.3d 391, 396, 2001 AMC 1835, 1840 (5th Cir. 2001) (‘‘Where a corporation grants its agents significant discretion and autonomy, it is reasonable to deny limitation and thereby hold the company liable for the full range of consequences resulting from its decision. Where greater supervision is not possible—e.g. where the master is at sea, far from the owner’s control—limited liability is more desirable. The ‘managing agent’ standard reflects these concerns.’’); Pennzoil Producing Co. v. Offshore Express, Inc., 943 F.2d 1465, 1473-74, 1994 AMC 1034, 1045 (5th Cir. 1991) (‘‘[A] party is entitled to limitation only if it is ‘without privity or knowledge’ of the cause of the loss . . . . [K]knowledge, when the shipowner is a corporation, is judged not only by what the corporation’s managing officers actually knew, but also by what they should have known with respect to conditions or actions likely to cause the loss . . . . The burden is on the party seeking limitation to establish that it did not have knowledge or privity of the negligent activity or unseaworthy condition that caused the accident.’’). 44. Great Lakes Dredge & Dock Co. v. City of Chicago, 3 F.3d 225 (7th Cir. 1993), aff’d sub nom., Grubart v. Great Lakes Dredge & Dock Co., 115 S. Ct. 1043, 1995 AMC 913 (1995); Hercules Carriers, Inc. v. Claimant State of Florida, 768 F.2d 1558 (11th Cir. 1985); Cont’l Oil Co. v. Bonanza Corp., 706 F.2d 1365, 1983 AMC 1059 (5th Cir. 1983).

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Section 183(e) makes an owner liable for matters within the privity or knowledge of the master of a seagoing vessel ‘‘at or prior to the commencement of each voyage’’, but only with respect to personal injury and death claims.45 Otherwise, the negligent acts of the master and crew are not imputed to the owner for purposes of determining privity or knowledge.46

E. LIABILITIES SUBJECT TO LIMITATION The Act sets forth generally that an owner may limit for ‘‘any act . . . occasioned, or incurred, without the privity or knowledge of such owner’’.47 Accordingly, the Act has been given broad effect, allowing the shipowner to limit for any loss or damage to cargo, claims for personal injury and death, and any other loss arising from or caused by a maritime casualty. Further, by virtue of section 189, the right to limit extends generally to ‘‘all debts and liabilities’’ of the shipowner. Nevertheless, various exceptions have been carved out for certain of the shipowner’s liabilities which, whether on the basis of equity or by statute, have been exempted from the purview of the shipowner’s limitation rights. For example, under section 189 of the Act, wages due to ‘‘persons employed by said shipowner’’ are not subject to limitation. Additionally, although both section 196 of the Harter Act48 and section 1308 of the Carriage of Goods by Sea Act49 specifically preserve the right to limitation under the Act, the shipowner is divested of its right to limit cargo claims if the loss or damage was caused by an unreasonable deviation.50 Any unearned freight paid in advance may also be excluded from the shipowner’s limitation on equitable grounds.51 Another exception to the shipowner’s right to limit its liability concerns its personal contracts. The ‘‘personal contracts’’ doctrine provides that a shipowner should not be able to limit liability to its contract partners for losses caused by its own personal neglect, fault, or breach of contract.52 The rationale behind this doctrine is in harmony ‘‘with the policy of limiting the owner’s risk to his interest in the ship in respect of all claims arising out of the conduct of the master and crew . . . but leav[ing] him liable for his own fault, neglect and contracts’’.53 45. See Moore-McCormack Lines, Inc. v. Armco Steel Corp. (The ‘‘Mormackite’’), 272 F.2d 873 (2d Cir. 1959), cert. denied, 362 U.S. 990 (1960). 46. Hellenic Lines, Ltd. v. Prudential Lines, Inc., 730 F.2d 159, 1984 AMC 57 (3d Cir. 1984). But see Continental Oil Co. v. Bonanza Corp., 706 F.2d 1365, 1983 AMC 1059 (5th Cir. 1983) (court found master’s privity or knowledge to be that of the corporate owner where master acted as ‘‘managing agent’’ by exerting ‘‘almost exclusive control’’ over vessel’s business activities). 47. 46 U.S.C. §183(a). 48. 46 U.S.C. §196. 49. 46 U.S.C. §1308. 50. Companhia de Navegacao Lloyd Brasileiro v. David G. Evans Coffee Co. (The ‘‘Pelotas’’), 66 F.2d 75 (5th Cir. 1939); The ‘‘Frederick Luckenback’’, 15 F.2d 241 (S.D.N.Y. 1926). 51. See Linea Sud-Americana v. 7,295.40 Tons of Linseed, 29 F. Supp. 210 (S.D.N.Y. 1939), aff’d, 108 F.2d 755 (2d Cir.), cert. denied, 309 U.S. 672 (1940); In re Liverpool & Great W. Steam Co., 3 Fed. 168 (S.D.N.Y. 1880). 52. See Richardson v. Harmon, 222 U.S. 96 (1911); Mediterranean Shipping Co. S.A. Geneva v. POL-Atl., 229 F.3d 397, 403, 2001 AMC 1, 7 (2d Cir. 2000) (‘‘Personal contracts entered into by a vessel Owner or bareboat charterer are not subject to limitation under the Act.’’); Great Lakes Dredge & Dock Co. v. City of Chicago, 2 F.3d 225 (7th Cir. 1993), aff’d sub nom. Grubart v. Great Lakes Dredge & Dock Co., 115 S. Ct. 1043, 1995 AMC 913 (1995). 53. Richardson v. Harmon, 222 U.S. 96, 106 (1911).

454

U.S.A.

Thus, in determining whether an obligation of the shipowner falls within the personal contracts doctrine, courts look to see whether the obligation was one the shipowner was personally bound to perform, rather than one delegated to its agents or servants. As such, courts have variously held that contracts for services, repairs and salvage, charterparties, contracts of affreightment, as well as ship mortgage contracts may be excluded from the owner’s limitation as personal contracts of the owner.54 Some courts have also held that maintenance and cure payments are a personal obligation of the owner and, therefore, exempt from limitation.55 Finally, liability for oil pollution damages under state and federal law is expressly excluded from the shipowner’s right of limitation by the Oil Pollution Act of 1990 (‘‘OPA’’), although a separate right of limitation of liability is provided for in OPA.56 Claims by the United States under the Rivers and Harbors Act (The Wreck Act)57 and the Park System Resources Protection Act58 have also been held to be exempt from the owner’s limitation.59

F. THE FIRE STATUTE Section 182 of the Act, usually referred to as the ‘‘Fire Statute,’’ allows complete exonera­ tion from liability, as opposed to mere limitation of liability, for damage to or loss of cargo due to fire occurring on board the vessel without the ‘‘design or neglect’’ of the ship­ owner.60 ‘‘Design or neglect’’ and ‘‘privity or knowledge’’ have been viewed synony­ mously by courts, where negligence that is sufficient to bar exoneration under the Fire Statute will also suffice to deny the shipowner the right to limit its liability.61 Moreover, as with ‘‘privity or knowledge,’’ the ‘‘design or neglect’’of the master and crew are not imputed to the owner.62

54. See, e.g., Cullen Fuel Co. v. W.E. Hedger, Inc., 290 U.S. 82 (1933) (holding that shipowner who expressly or impliedly warrants seaworthiness of vessel in charterparty cannot limit as to charterer’s claim that vessel was unseaworthy at commencement of voyage); Pendleton v. Benner Line, 246 U.S. 353 (1918) (same); Medi­ terranean Shipping Co. S.A. Geneva v. POL-Atl., 229 F.3d 397, 403, 2001 AMC 1, 7 (2d Cir. 2000) (slot charterer held to be a personal contract). 55. Murray v. N.Y. Central R.R., 171 F. Supp. 80 (S.D.N.Y. 1959), aff’d 287 F.2d 152 (2d Cir.), cert. denied, 366 U.S. 945 (1961); cf. Brister v. A.W.I., Inc., 946 F.2d 350, 1993 AMC 1990 (5th Cir.), reh’g denied, 949 F.2d 1160 (5th Cir. 1991) (en banc) (holding that maintenance and cure are exempt from limitation by virtue of the owner’s obligation to pay employee wages pursuant to §189 of the Act). 56. 33 U.S.C. §2718(c); see also In re Jahre Spray II, 1997 AMC 845 (D.N.J. 1996); In re Glacier Bay, 741 F. Supp. 800, 1990 AMC 1614 (D. Alaska 1990), aff’d, 944 F.2d 577, 1992 AMC 448 (9th Cir. 1991). 57. 33 U.S.C. §409. 58. 16 U.S.C. §19jj. 59. Wyandotte Transp. Co. v. United States, 389 U.S. 191, 1967 AMC 2553 (1967); Tug Allie-B, Inc. v. United States, 273 F.3d 936, 2002 AMC 49 (11th Cir.2001); Univ. of Tex. Med. Branch v. United States, 557 F.2d 438 (5th Cir. 1977), cert. denied, 439 U.S. 820 (1978); In Re Chinese Maritime Tr., Ltd., 478 F.2d 1357 (2d Cir. 1973), cert. denied, 414 U.S. 1143 (1974); In Re Pac. Far E. Line, Inc., 472 F.2d 1382, 1970 AMC 1592 (9th Cir. 1970). 60. See The ‘‘Scotland’’, 105 U.S. 24 (1881); Consumers Import Co. v. Kawasaki Kisen Kabushiki Kaisha, 133 F.2d 781 (2d Cir. 1943), aff’d 320 U.S. 249 (1943). 61. Great Atl. & Pac. Tea Co. v. Brasileiro, 159 F.2d 661 (2d Cir. 1947), cert. denied, 331 U.S. 836 (1947); The ‘‘Edmund Fanning’’, 105 F. Supp. 353 (S.D.N.Y. 1952), aff’d in part, 201 F.2d 281 (2d Cir. 1953). 62. Earle & Stoddart, Inc. v. Ellerman’s Wilson Line, Ltd., 287 U.S. 420 (1932).

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Although this section provides for complete exoneration for all types of loss related to fire, including heat, smoke, and water damage,63 it does not afford relief if the damage or loss was not the direct result of a fire, generally defined as combustion involving the presence of a flame.64 Most importantly, however, the Fire Statute entitles the owner to exoneration from liability only with respect to loss or damage to cargo and not for personal injury or death.65

G. THE LIMITATION FUND Section 183 of the Act requires that a limitation fund be established for the benefit of all claimants equal to the value of the vessel at the end of the voyage, plus any pending freight.66 What constitutes a ‘‘voyage’’ for determining the value of the fund is a question of fact which depends upon the circumstances of each case.67 Since the Act requires the owner to establish a fund equal to the post-casualty value of the vessel, cases where the amount of the fund was zero are not out of the ordinary.68 The Supreme Court has defined freight as ‘‘denot[ing] not the thing carried, but the compensation for the carriage of it’’.69 The Court further explained that ‘‘freight’’ includes not only the shipowner’s compensa­ tion for the carriage of cargo, but also for the transportation of passengers.70 ‘‘Pending freight’’, as used in the Act, has been defined as the total earnings for the voyage, both pre­ paid and uncollected.71 Whether freight has been earned, of course, depends on the terms of the relevant contract of affreightment or charter. In addition to the post-casualty value of the vessel and her pending freight, any sums received as damages by the limiting vessel from that voyage are also included in the fund,72 while claims against third-party tortfeasors for indemnity or contribution for 63. Am. Tobacco Co. v. Goulandris, 173 F. Supp. 140 (S.D.N.Y. 1959), aff’d, 281 F.2d 179 (2d Cir. 1960). 64. Federazione Italiana dei Corsorzi Agrari v. Mandask Compania de Vapores, S.A., 388 F.2d 434 (2d Cir.), cert. denied, 393 U.S. 828 (1968) (denying exoneration where, although fire occurred onboard, loss resulted from foundering caused by cracks in hull); Cargo Carriers, Inc. v. Brown S.S. Co., 95 F. Supp. 288 (S.D.N.Y 1950) (denying shipowner exoneration for damage to cargo of corn where fire damage resulted from contact between cargo and light fixtures in hold and was thus the result of combustion without ‘‘ire’’). 65. See Republic of France v. United States, 290 F.2d 395 (5th Cir. 1961), cert. denied, 369 U.S. 804 (1962); Skibs AS Jolund v. Black Diamond S.S. Corp., 250 F.2d 777 (2d Cir. 1957), cert. denied, 356 U.S. 933 (1958). 66. See City of Norwich v. Norwich & N.Y. Transp. Co., 118 U.S. 468 (1886). 67. Complaint of Caribbean Sea Transp. Ltd., 748 F.2d 622, 626, 1985 AMC 1995, 2000 (11th Cir. 1984) (citing The ‘‘William J. Riddle’’, 111 F. Supp. 657, 658, 1953 AMC 531, 531-32 (S.D.N.Y. 1953)), amended in part, 753 F.2d 948 (11th Cir. 1985); see also Thomassen v. Whitwill (The ‘‘Great Western’’), 118 U.S. 520 (1892) (holding that the value of the offending vessel is to be taken at the end of the voyage, in this case, after the vessel was sunk and stranded not by the casualty itself but by the subsequent negligent navigation of its crew). 68. See Norwich Co. v. Wright, 80 U.S. 104 (1872); In re Caribbean Sea Transp. Ltd., 748 F.2d 622, 1985 AMC 1995 (11th Cir. 1984), amended in part, 753 F.2d 948 (11th Cir. 1985). 69. The Main v. Williams, 152 U.S. 122, 129 (1894). 70. Ibid. at 129-32; In re Offshore Specialty Fabricators Inc., 2002 AMC 2055 (E.D. La. 2002); In re N. Am. Trailing Co., 763 F. Supp. 152 (E.D. Va. 1991); In re Falcon Inland, 1998 U.S. Dist. LEXIS 5640 (E.D. La. 1998). 71. The Main v. Williams, 152 U.S. 122, 132 (1894); see also City of Norwich v. Norwich & N.Y. Transp. Co., 118 U.S. 468, 491 (1886) (holding that ‘‘pending freight is of no value to the shipowner until it is earned, and it is not earned, if at all, until the conclusion of the voyage’’); Pac. Coast Co. v. Reynolds, 114 F. 877 (9th Cir.) (holding that undelivered cargo is not earned and does not constitute ‘‘pending freight’’), cert. denied, 187 U.S. 640 (1902). 72. O’Brien v. Miller, 168 U.S. 287 (1897).

456

U.S.A.

personal injury are not.73 Excluded from the fund, however, are all hull insurance pro­ ceeds.74 Although it has been held that protection and indemnity insurance proceeds are also to be excluded from the fund,75 such proceeds have been ordered deposited in a limitation fund in at least one case of questionable authority.76 If the amount of the fund is insufficient to pay all losses in full, then the Act requires that the fund be increased to the lesser of the amount of claims for death or personal injury or $420 (US) per gross ton of the vessel.77 This supplemental fund is available only to death and personal injury claimants and, by virtue of section 183(b), is applicable only to ‘‘seagoing vessels’’. ‘‘Seagoing vessels’’ are statutorily defined as not including ‘‘pleasure yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels or their tenders, selfpropelled lighters, nondescript self-propelled vessels, canal boats, scows, car floats, barges, lighters, or nondescript non-self-propelled vessels’’. In addition to the supplemental fund requirement, a shipowner is required to establish a separate limitation fund for each occurrence, or ‘‘distinct occasion’’, against which a shipowner seeks to limit its liability for personal injury or death.78 Once the limitation fund is established and a concursus of all claims has been achieved, the court then sets out the distribution of all just claims. If the amount of all the claims exceeds the limitation fund, then the court must provide for the distribution of the fund among the several claimants ‘‘in proportion to the amounts of their respective claims, duly proved, saving, however, to all parties any priorities to which they may be legally entitled’’.79 This pro rata distribution applies equally to both personal injury and property damage claims. It should be kept in mind, however, that a limitation proceeding is ‘‘the administration of equity in an admiralty court’’ and, as such, the court has a great deal of discretion in tailoring the distribution of the fund to accommodate the particular circumstances of a case.80 Using the principles of maritime lien priorities and the concept of equitable subordination as guidelines, courts have distributed limitation funds in a variety of ways.81

73. Guillot v. Cenac Towing Co., 366 F.2d 898 (5th Cir. 1960); D & L Marine Transp. Inc. v. Smand Barge Serv., 2002 U.S. Dist. LEXIS 2448 (E.D. La. 2002) (‘‘The Fifth Circuit has found that claims against a third party tortfeasor amount to a recoupment of damages, essentially the same as receiving insurance proceeds. Therefore, these claims do not add value to the owner’s interest in the vessel. Likewise, payments related to salvage, pollution abatement, survey and other similar expenses do not increase [the owner’s] interest in [the ves­ sel].’’). 74. City of Norwich v. Norwich & N.Y. Transp. Co., 118 U.S. 468 (1886); In re Red Star Barge Line, Inc., 683 F.2d 42, 1983 AMC 2141 (2d Cir. 1982) (criticising this doctrine). 75. In re Hanjin Container Lines Ltd., 1988 AMC 1230 (W.D. Wash. 1987). 76. N.Y. Marine Managers Inc. v. Helena Marine Serv., 758 F.2d 313, 1986 AMC 662 (8th Cir.) (ordering protection and indemnity insurer to deposit proceeds with court on equitable grounds), cert. denied, 474 U.S. 850 (1985). 77. 46 U.S.C. §183(b); In re Caribbean Sea Transp. Ltd., 748 F. 2d 622, 1985 AMC 1995 (11th Cir. 1984); In re Clearsky Limitation Proceedings, 1998 AMC 102 (E.D. La. 1997). 78. See In re Alva S.S. Co., 262 F. Supp. 328 (S.D.N.Y. 1966); Exxon Shipping Co. v. Cailleteau, 869 F.2d 843, 1989 AMC 1422 (5th Cir. 1989) (rejecting a ‘‘but for’’ test and applying instead the British rule that separate and distinct occurrences exist if the petitioner had the time and opportunity to avoid the second casualty after the occurrence of the first). 79. Supp. Rule F(8). 80. See Hartford Accident & Indem. Co. v. S. Pac. Co., 273 U.S. 207 (1927). 81. See, e.g., Am. Cyanamid Co. v. China Union Lines, Ltd., 306 F.2d 135 (5th Cir. 1962) (ranking claims according to maritime lien priorities and distributing remainder of fund pro rata); In re Texas Co. (The ‘‘Washington’’), 213 F.2d 479 (2d Cir.) (simply decreeing a pro-rata equitable distribution of the fund whether or not claims were supported by a maritime lien), cert. denied, 348 U.S. 829 (1954).

C H O I C E O F L AW

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The court’s equitable powers also extend to any pre-existing liens on the limiting vessel.82

H. CHOICE OF LAW Section 183 of the Act clearly permits foreign flag vessels or shipowners to invoke limitation of liability in American courts by providing for limitation by ‘‘the owner of any vessel, whether foreign or domestic’’.83 Somewhat less clear, however, are the choice of law rules applicable to an American limitation proceeding involving a foreign vessel or shipowner. This confusion has princi­ pally centered around the issue of whether the amount of limitation fund to be established by the shipowner involves a substantive or procedural issue. This distinction can have great impact upon a case because, depending upon whether foreign or American law applies, the amount of the limitation fund may be more or less favourable to one party or the other. The first, and arguably clearest, rule concerning the procedural-substantive distinction was enunciated in The ‘‘Titanic,’’ where the Supreme Court held that foreign shipowners seeking to limit their liability in American courts are bound by the limitation amount under United States law, regardless of the law creating the underlying liability.84 This proposition conformed to the traditional conflicts view of the time that matters of proce­ dure are governed by the law of the forum, and the court of that forum determines whether a particular issue is of a substantive or procedural nature. This rule, however, was somewhat obscured by a subsequent decision of the Court in Black Diamond Steamship Corp. v. Robert Stewart & Sons, Ltd. (The ‘‘Norwalk Vic­ tory’’).85 In further elaboration upon The ‘‘Titanic’’, The ‘‘Norwalk Victory’’ Court held that district courts should look to whether the foreign law at issue considers its limitation law as procedural or substantive. If the limitation law is viewed to be substantive, then the foreign limitation amount applies, and if procedural, then the American limit applies.86 Not surprisingly, lower courts have since struggled with the twist given to ‘‘The Titanic’’ by The ‘‘Norwalk Victory,’’ resulting in a confused and inconsistent body of case law on this very important issue.87 The better rule, however, appears to be that ‘‘The Norwalk Victory’’ creates an exception to The ‘‘Titanic’’ rule requiring American law of limitation

82. Rodco Marine Servs., Inc. v. Migliaccio, 651 F.2d 1101, 1985 AMC 605 (5th Cir. 1981) (holding that, while pre-existing liens are not a bar to invoking a limitation proceeding and owner is not required to pay or secure such liens as a condition to filing a complaint, a court may determine whether such liens are to be included in the limitation proceeding). 83. See also The ‘‘Scotland’’, 105 U.S. (15 Otto) 24, 26 L.Ed. 1001 (1882) (holding that American limitation of liability is available to foreign shipowners). 84. Oceanic Steam Nav. Co. v. Mellor (The ‘‘Titanic’’), 233 U.S. 718 (1914). 85. 336 U.S. 386, 1949 AMC 393 (1949). 86. 336 U.S. at 395-96, 1949 AMC at 400. 87. See, e.g., Kloeckner v. A.S. Hakedal (The ‘‘Western Farmer’’), 210 F.2d 754, 1954 AMC 643 (2d Cir.) (following The ‘‘Titanic’’ and ignoring The ‘‘Norwalk Victory’’), cert. dismissed, 348 U.S. 801 (1954); In re Korea Shipping Corp., 596 F. Supp. 1268, 1985 AMC 722 (D. Alaska 1984); In re Ta Chi Nav. Corp. Limitation Process (The ‘‘Euryplus’’), 416 F. Supp. 371, 1976 AMC 1895 (S.D.N.Y. 1976) (following the approach of The ‘‘Titanic’’ but rejecting The ‘‘Yarmouth Castle’’); In re Chadade S.S. Co. (The ‘‘Yarmouth Castle’’), 266 F. Supp. 517, 1967 AMC 1843 (S.D. Fla. 1967) (accepting both The ‘‘Titanic’’ and The ‘‘Norwalk Victory’’).

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U.S.A.

to apply to limitation actions filed in the United States.88 The effect of this is that the limitation fund is to be calculated under foreign law only if that law governs the claims at issue and limitation of liability is considered a substantive right under that law. Another recurring issue pertaining to foreign shipowners’ applications for limitation of liability in United States courts is the doctrine of forum non conveniens. It is clear that, in appropriate circumstances, a limitation action can be dismissed on the grounds of forum non conveniens. In order to determine whether a case should be dismissed for forum non conveniens, the court must first ascertain whether American or foreign law is applicable. If American law applies to the case, then the court lacks discretion to dismiss the case. On the other hand, if the court finds that foreign law is applicable to the case, then dismissal for forum non conveniens would fall appropriately within the court’s discretion. This choice of law is properly determined using the eight factors set forth in Lauritzen v. Larsen89 and Hellenic Lines Ltd. v. Rhoditis:90 (1) (2) (3) (4) (5) (6) (7) (8)

place of wrong; law of the flag; domicile of any injured party; allegiance of the shipowner; place of contract; accessibility of foreign forum; law of the forum; and base of shipowner’s operations.

If it is determined, using the Lauritzen and Rhoditis factors, that the applicable substantive law is foreign, then the court must determine whether to grant a motion to dismiss the action on the grounds of forum non conveniens using the balancing analysis formulated by the Supreme Court in Gulf Oil Corp. v. Gilbert.91 Although the Court declined to ‘‘cata­ logue the circumstances’’ where dismissal on forum non conveniens grounds would be proper, it did identify two sets of factors which would bear on the doctrine’s application. According to the Court, ‘‘the private interest of the litigants’’ and ‘‘factors of public interest’’ are both relevant to the forum non conveniens analysis.92 Although the court refrained from adopting precise rules, it did indicate that ‘‘unless the balance is strongly in favour of the defendant, the plaintiff’s choice of forum should rarely be disturbed’’.93 But, if the balance of public and private factors weighs strongly in favour of the party seeking dismissal, an appropriate alternative forum is available, and trial in the United States would be unjust, oppressive, or vexatious, the doctrine of forum non conveniens authorises dismissal of the action.94 88. In re Korea Shipping Corp., 1990 AMC 190 (C.D. Cal. 1989), aff’d, 919 F.2d 601, 1991 AMC 499 (9th Cir. 1990), cert. denied, sub nom., Hanjin Container Lines v. Tokio Marine & Fire Ins. Co., 499 U.S. 961 (1991); In re Compania Gijonesa de Navegacion (The ‘‘Cimadevilla’’), 590 F. Supp. 241, 1985 AMC 1469 (S.D.N.Y. 1984). 89. 345 U.S. 571 (1953). 90. 398 U.S. 306 (1970). 91. 330 U.S. 501 (1947). 92. Ibid. at 508. 93. Ibid. 94. See generally Alcoa S.S. Co., Inc. v. MV Nordic Regent, 654 F.2d 147 (2d Cir.) (en banc), cert. denied, 449 U.S. 890 (1980); In re Am. President Lines & Hanjin Shipping Corp., 890 F. Supp. 308, 1995 AMC 2296 (S.D.N.Y. 1995); In re Geophysical Serv., Inc., 590 F. Supp. 1346, 1984 AMC 2413 (S.D. Tex. 1984). See also Karim v. Finch Shipping Co., 265 F.3d 258, 269, 2001 AMC 2618, 2632 (5th Cir. 2001) (‘‘When limitation of

DIFFERENCES WITH 1976 CONVENTION

459

I. DIFFERENCES WITH 1976 CONVENTION The United States has not ratified either the International Convention Relating to the Limitation of Liability of Owners of Sea-going Ships (the ‘‘Brussels’’ or ‘‘1957 Conven­ tion’’) or its updated version, the International Convention on Limitation of Liability for Maritime Claims (the ‘‘1976 Convention’’). There are clear differences between these conventions and the Act. The 1976 Convention allows both a broader class of parties to seek limitation of liability and a wider range of claims which may be subject to such limitation. For example, while only shipowners and demise charterers are entitled to limit in the United States, Article 1 of the 1976 Convention permits limitation by not only the shipowner, but also by the charterer, manager, operator, and salvor of a seagoing vessel, as well as the insurer of liability for the subject claims ‘‘to the same extent as the assured himself’’. Article 2 of the Convention includes the same claims which would be subject to limitation in the United States, plus claims for salvage, wreck removal, and delay in the delivery of cargo and passengers. It also is more difficult to break limitation under the 1976 Convention than it is under the Act. Article 4 requires that the claimant prove that the act causing the loss was the personal act or omission of the limiting party and was committed either with the intention of causing such loss or recklessly and with the knowledge that such loss would probably result. This is a considerably higher burden of proof than the ‘‘privity or knowledge’’ standard under the Act. The trade-off under the 1976 Convention for a more difficult test for defeating limita­ tion is a higher limitation fund than that provided under United States law. Since the American limitation fund is based not upon tonnage but upon the post-casualty value of the vessel, limitation funds amounting to ‘‘zero’’ are possible.95

liability proceedings and forum non conveniens intersect, the limitation issue is simply taken as yet another factor to consider in the well-established Gulf Oil/Piper Aircraft framework.’’). 95. See, e.g., Norwich Co. v. Wright, 80 U.S. 104 (1872); In re Caribbean Sea Transp., Ltd., 748 F.2d 622, 1985 AMC 1995 (11th Cir. 1984), amended in part, 753 F.2d 948 (11th Cir. 1985).

CHAPTER 43

Venezuela Luis Cova Arria Luis Cova Arria & Asociados

Caracas-Venezuela

INTRODUCTION Venezuela has not ratified the Conventions relating to Limitation of the Liability of Owners of Sea-going Ships of 1957 and Limitation of Liability for Maritime Claims of 1976. However, Venezuela has incorporated the International Conventions on its new Maritime Commerce Law (VMCL), in force since November 2001. Consequently, the Venezuelan system of limitation of liability follows the principles of the 1976 International Convention on Limitation of Liability for Maritime Claims. For oil pollution liability, Venezuela did ratify the International Conventions on Civil Liability for Oil Pollution Damage (CLC 1969) and its protocols of 1976, 1984 and 1992, and the International Convention on the Establishment of an International Fund Com­ pensation for Oil Pollution Damage (Fund 1971) and its Protocols of 1976, 1984 and 1992.

A. PROPERTY DAMAGE, LOSS OF LIFE AND PERSONAL INJURY 1. Persons entitled to limit liability Under Venezuelan Maritime Commerce Law (VMCL), the persons entitled to limit liabil­ ity are: (a) the shipowner, who is defined by the VMCL1 as the person who manages or operates a ship under his name, whether or not the owner of the vessel; (b) the shipowner’s subordinates, in the cases and for the causes set down by the VMCL;2 (c) liability insurers, in the same conditions as the assured;3 (d) the owner or operator of the vessel and the carrier, when they are a different person from the owner, their subordinates or the Captain and members of the crew, with respect to claims addressed to them;4

1. Article 2. Article 3. Article 4. Article

37 42 49 50

VMCL. VMCL. VMCL. VMCL.

461

462

VENEZUELA

2. Claims subject to limitation According to the VMCL, liability may be limited for claims in respect of:5 (a) loss of life or personal injury or loss of or damage to property (including damage to port works, basins and waterways and aids to navigation), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; (b) loss resulting from delay in the carriage by sea of cargo, passengers or their luggage; (c) other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage opera­ tions; (d) the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship; (e) the removal, destruction or the rendering harmless of the cargo of the ship; (f) claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures. 3. Claims excepted from limitation The rules of civil liability limitation of VMCL are not applicable to:6 (a) claims for salvage or contribution in general average; (b) claims for oil pollution damage, according to law; (c) claims subject to law governing or prohibiting limitation of liability for nuclear damage; (d) claims against the shipowner of a nuclear ship for nuclear damage; (e) claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations; (f) claims by their dependants or other persons entitled to make such claims, if under the law governing the contract of service between the shipowner or salvor and such servants the shipowner or salvor is not entitled to limit his liability in respect of such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 44 (such article regulates the limits to liability). 4. Conduct barring limitation According to Article 51 of VMCL, when a claim is addressed to the captain or the crew members, they may limit their liability even when the occurrence which originates the action may have been caused by their own fault, except if it is proved that the damage was the result of their act or omission done with neglect or gross negligence.

5. Article 41 VMCL. 6. Article 43 VMCL.

P R O P E RT Y D A M A G E , L O S S O F L I F E A N D P E R S O N A L I N J U RY

463

However, when the Master or any member of the crew is, at the same time, owner, joint owner, carrier, or operator, he may only seek shelter in the limitation when he has incurred fault in his capacity as Master or as member of the crew. 5. Counterclaims The shipowner has the right to oppose compensation against a creditor for damages resulting or by reason of the same event.7 6. Financial limits of liability for all types of claims Article 44 of VMCL expressly refers to the limits fixed by the LLMC Convention 1976 with regard to the calculation of the limitation, taking into consideration the vessel’s gross tonnage and the kind of claim. In respect of claims for loss of life or personal injury: (a) 333,000 Units of Account for a ship with a tonnage not exceeding 500 tons, (b) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (a): (i) for each ton from 501 to 3,000 tons, 500 Units of Account; (ii) for each ton from 3,001 to 30,000 tons, 333 Units of Account; (iii) for each ton from 30,001 to 70,000 tons, 250 Units of Account; and (iv) for each ton in excess of 70,000 tons, 167 Units of Account, In respect of any other claims: (a) 167,000 Units of Account for a ship with a tonnage not exceeding 500 tons; (b) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (a): (i) for each ton from 501 to 30,000 tons, 167 Units of Account; (ii) for each ton from 30,001 to 70,000 tons, 125 Units of Account; and (iii) for each ton in excess of 70,000 tons, 83 Units of Account. Where the amount calculated in accordance with paragraph 1 is insufficient to pay the claims mentioned therein in full, the amount calculated in accordance with paragraph 2 shall be available for payment of the unpaid balance of claims under paragraph 1 and such unpaid balance shall rank rateably with claims mentioned under paragraph 2 of the same article. 7. Unit of account Under Article 8 of VMCL, when the expression Units of Account is used in the law, it shall be understood as a reference to the unit called Special Drawing Rights, defined by the International Monetary Fund, calculated according to the method established by such Fund in its transactions and operations, upon the date of the fulfillment of the obligation concerned.

7. Article 60 VMCL.

464

VENEZUELA

The value of the Unit of Account will be determined at the time when the limitation fund is constituted, payment is made, or the security which the competent court may fix it constituted, whichever may be the case.8 8. Aggregation of claims When the same or several occurrences give rise to liability for which the shipowner has the right to limit as per the rules of VMCL, and also by the other Venezuelan laws, and he decides to make use of that right, he must have to constitute a corresponding number of independent funds in order that neither the funds nor the claims become confused.9 9. Limitation of liability—need to constitute fund According to Article 14 of LLCM Convention, rules of procedure shall be governed by the law of the State Party in which the fund is constituted. For that reason, VMCL in its section IV (Articles 52 to 74) deals with the rule governing the constitution of a fund. This proceeding is applicable in all cases of limita­ tion of liability allowed by national law, including international conventions ratified by Venezuela (i.e. CLC and Fund Convention). Such proceeding follows the principles of LLCM Convention, and French Decree No. 67-967 of 27 October 1967. Article 52 of VMCL provide that the proprietor, shipowner, charter, insurer, salvors, or any other liable person who may consider themselves to have a right to limit liability, may appear before the competent court (Special Aquatic Jurisdiction) and request that proceed­ ings be commenced to constitute the fund, verify and liquidate the claims and to make the distribution according to law.10 The competent court is established in Article 54 of VMCL: (a) for a Venezuelan vessel, the court of the port of registration of the vessel; (b) for a foreign vessel, the court of the first port of call of the vessel after the occasion, or the court of the port in which a first arrest was made of the vessel or a security was posted; (c) when the proceedings have not been initiated and previously limitation of liabil­ ity is claimed, the same Court before which is claimed the limitation shall have jurisdiction to start the limitation proceeding. 10. Constitution of the fund The request to open proceedings shall describe the event which caused the damage, indicating the maximum amount of the limitation fund calculated according to law, the amount of the various claims known by the owner and all documents supporting the amount of the fund calculated.

8. Article 44 VMCL (last paragraph) 9. Article 46 VMCL. 10. Article 52 VMCL.

PA S S E N G E R S

465

The court will check the amount of the fund and acknowledge its constitution by an order. It will, at the same time appoint a liquidator in charge of controlling the liquidation of the fund.11 The constitution of a fund does not imply any acknowledgement of liability by the owner.12 11. Distribution of fund amongst claimants The liquidator will prepare a list of claimants with a right to participate in the distribution of the fund and shall propose it to the judge. The distribution shall be done in accordance with the rules on preferences and privileges established in the same VMCL.13 The fund’s balance shall be distributed at pro rata to the credits subject to limitation providing they do benefit from preference or privilege. When there are disputed claims or a claim has not been resolved, the liquidator shall make the reserves which he deems prudent, and meanwhile will distribute the rest of the fund.14 12. Constitution of fund as bar to other actions Once a limitation fund has been constituted, all suits or proceedings against the shipowner, relating to a claim which is subject to limitation will be joined to the limitation pro­ ceeding.15 Also, once a limitation fund has been constituted, any preventive or execution measure against the vessel or other goods of the shipowner, for the claims to which a limitation may be opposed.16 13. Governing law in matters of limitation There is no special provision in respect of these matters in VMCL. The Bustamante Code, a conflict of private international law Code ratified for several Latin American countries, among then Venezuela, in matters of limitation of shipowner liability establishes the law of the flag of the ship as the governing law (Articles 279). 14. Date of entry into force of present system of limitation The VMCL was enacted on 9 November 2001 published in Official Gazette number 5551 extraordinaire and entered into force 90 days after its publication—February 2002. B. PASSENGERS In case of loss of life or personal injury to passengers, the maximum limit of liability of the shipowner shall be determined by multiplying the sum of 46,666 Units of Account by 11. Article 12. Article 13. Article 14. Artcile 15. Article 16. Article

56 42 66 68 61 59

VMCL. VMCL. (sole paragraph) VMCL. VMCL. VMCL. VMCL.

466

VENEZUELA

the number of passengers that the ship is authorised to carry. The maximum liability shall in no event exceed 25 million Units of Account.17 In case of passenger claims under a contract of carriage, VMCL incorporated in its Chapter V of Title V, the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974. VMCL as well as the Athens Convention, establishes a regime of liability for loss of life or personal injury suffered by passengers carried on a seagoing vessel and for damage suffered by his luggage if the incident causing the damage occurred in the course of the carriage and was due to the fault or neglect of the carrier.18 However, unless the carrier acted with intent to cause such damage, or recklessly and with knowledge that such damage would probably result, he can limit his liability. For the death of, or personal injury to, a passenger, this limit of liability is set at 46,666 Special Drawing Rights (SDR) per carriage.19 As far as loss of or damage to luggage is concerned, the carrier’s limit of liability varies, depending on whether the loss or damage occurred in respect of cabin luggage, of a vehicle and/or luggage carried in or on it, or in respect of other luggage.20

C. CARRIAGE OF GOODS BY SEA 1. Adoption of international conventions Venezuela has not ratified the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, 1924 (Hague Rules) or the United Nations Convention on the Carriage of Goods by Sea, 1978 (The Hamburg Rules). However, Venezuela has incorporated the principles of Hague-Visby-SDR rules with some aspects of Hamburg Rules in a hybrid regime contained on the VMCL, Chapter III of Title V. 2. Package or unit limitation; financial limits of liability Article 211 of VMCL establishes the limitation of the carrier´s liability for damage or loss of goods in the same manner as 1924 Convention and the 1979 Protocol. Consequently, the limitation amount is either 666.67 units of account per package or unit or 2.5 units of account per kilogram of the gross weight of the goods concerned, whichever is the higher, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading and has not been imposed by administrative requirements of the port. This shall be prima facie evidence in respect of the value of goods, but evidence on contrary shall be produce for the carrier.21 The limit is fixed ‘‘per package or other unit’’. Concerning the notion of unit, Article 211 establishes that all packages or units enumerated in the bill of lading in a container,

17. Article 18. Article 19. Article 20. Article 21. Article

44 VMCL (paragraph 3) 291 VMCL. 298 VMCL. 299 VMCL. 211 VMCL.

CARRIAGE OF GOODS BY SEA

467

pallet or similar article of transport used to consolidate goods, shall be deemed as packages or units for the purpose of Article 211. 3. Loss of right to limit Neither the carrier, its dependants, agents, nor its port operators can benefit from limitation of liability in cases where personal acts or omissions committed with neglect or gross negligence were the cause of loss or damage. With respect to live animals, VMCL follows the Hamburg Rules establishes that the carrier is not liable for loss, damage or delay in delivery resulting from any special risks inherent in that kind of carriage. If the carrier proves that he has complied with any special instructions given to him by the shipper respecting the animals and that, in the circum­ stances of the case, the loss, damage or delay in delivery could be attributed to such risks, it is presumed that the loss, damage or delay in delivery was so caused, unless there is proof that all or a part of the loss, damage or delay in delivery resulted from fault or neglect on the part of the carrier, his servants or agents, excluding the nautical fault not related to duties specified in Article 204.22 Duties under Article 204 of VMCL are not exactly the same of Article III of the Hague–Visby Rules since is excluded the expression ‘‘to exercise due diligence’’ so it seems a stronger duty for the carrier to be bound before of the voyage to: (a) make the ship seaworthy; (b) properly man, equip and supply the ship; and (c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and pres­ ervation. 4. Scope of application The above provisions apply to any contract of carriage by sea, carried out from or to any Venezuelan port and are applicable to all parties concerned by the contract of carriage. They do also apply to the relations between the carrier and any third party holder of a bill of lading, whenever that bill of lading has been issued to perform a charterparty.

22. Article 210 VMCL which follows Article 5(5) of Hamburg Rules.

Appendices

I. Section 503 of the Merchant Shipping Act 1894 as amended by (a) Merchant Shipping (Liability of Shipowners and Others) Act 1958; (b) section 12 of the Merchant Shipping Act 1984 II. Sections 153, 154, 183, 184, 185, 186 and 191 of the Merchant Shipping Act 1995 III. Merchant Shipping Act 1995, Schedule 6, Parts I and II; 1976 Protocol and 1990 Protocol to amend the Athens Convention 1974 IV. Merchant Shipping Act 1995, Schedule 7, Part I and II and 1996 Protocol to amend the Limitation Convention 1976 V. Tonnage-based International Limitation Conventions—Ratifications and Accessions VI. Statutory Instruments 1. Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) (Amend­ ment) Order 1989 2. Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987 3. Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980 4. The Merchant Shipping (Liability of Shipowners and Others) (Rate of Interest) Order 2004/931 5. The Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998—SI 1258 6. Carriage of Passengers and their Luggage by Sea (Interim Provisions) (Notice) Order 1980 7. The Carriage of Passengers and their Luggage by Sea (Domestic Carriage) order 1987 8. Hovercraft (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998 VII. Carriage of Goods by Sea Act 1971 (The Hague-Visby Rules) VIII. United Nations Convention on the Carriage of Goods by Sea 1978 (The Hamburg Rules) IX. Limitation of Liability for Maritime Claims: Contracting States X. 1. Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 2. Consolidated text of the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 and the Protocol of 2002 to the Convention XI. Extracts from Civil Procedure Rules Part 61 and Practice Direction 61 XII. S. 20 of the Supreme Court Act 1981

469

APPENDIX I

Section 503 of the Merchant Shipping Act 1894

(as amended)

KEY This compilation records the changes made to section 503 of the MSA 1894 by subsequent legislation designed to incorporate into U.K. law the changes introduced by international conven­ tions. (1) Matter in ordinary type is what remains of the original 1894 wording (2) Matter in italics are amendments introduced by Merchant Shipping (Liability of Shipowners and Others) Act 1958 (3) Matter in bold type is a paraphrase of amendments introduced by Merchant Shipping (Liability of Shipowners and Others) Act 1958 (4) Underlined matter denotes wording introduced by section 12 of the Merchant Shipping Act 1984 to replace the original section 503(2).

Limitation of owner’s liability in certain cases of loss of life, injury or damage 503.—(1) The owners of a ship, British or foreign, shall not, where all or any of the following occurrences take place without their actual fault or privity (that is to say), (a) Where any loss of life or personal injury is caused to any person being carried in the ship; (b) Where any damage or loss is caused to any goods, merchandise, or other things whatsoever on board the ship; (c) where any loss of life or personal injury is caused to any person not carried in the ship through the act or omission of any person (whether on board the ship or not) in the navigation or management of the ship or in the loading, carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers, or through any other act or omission of any person on board the ship; (d) where any loss or damage is caused to any property (other than any property mentioned in paragraph (b) of this subsection) or any rights are infringed through the act or omission of any person (whether on board the ship or not) in the navigation or management of the ship, or in the loading, carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers, or through any other act or omission of any person on board the ship; be liable to damages beyond the following amounts (that is to say), (i) In respect of loss of life or personal injury, either alone or together with such loss, damage or infringement as is mentioned in paragraphs (b) and (d) of this subsection, an aggregate amount not exceeding an amount equivalent to three thousand one hundred gold francs, for each ton of their ship’s tonnage and (ii) In respect of such loss, damage or infringement as is mentioned in paragraphs (b) and (d) of this subsection, whether there be in addition loss of life or personal injury or not, an aggregate amount not exceeding an amount equivalent to one thousand gold francs, for each ton of their ship’s tonnage; and the number by which the amount equivalent to three thousand one hundred gold francs mentioned in this section is to be multiplied shall be three hundred in any case where the tonnage concerned is less than three hundred tons. For the purposes of this section a gold franc shall be taken to be a unit consisting of sixty-five and a half milligrams of gold of millesimal fineness nine hundred.

471

472

APPENDIX 1

And the Minister may from time to time by order specify the amounts which for the purposes of this section are to be taken as equivalent to 3,100 and 1,000 gold francs respec­ tively. For the purposes of subsection (1) of this section where any obligation or liability arises— (a) in connection with the raising, removal or destruction of any ship which is sunk, stranded or abandoned or of anything on board such a ship, or (b) in respect of any damage (however caused) to harbour works, basins or navigable waterways, the occurrence giving rise to the obligation or liability shall be treated as one of the occurrences mentioned in paragraphs (b) and (d) of subsection (1) of this section and the obligation or liability as a liability to damages. The provisions of sub-paragraph (a) above, relating to an obligation or liability arising in connection with the raising, removal or destruction of any ship which is sunk, stranded or abandoned or of anything on board such ship shall not come into force until such day as the Minister may by order made by statutory instrument appoint. The application of this section to any liability shall not be excluded by reason only that the occurrence giving rise to the liability was not due to the negligence of any person. (2) For the purposes of this section the tonnage of a ship shall be ascertained as follows: (a) where the register tonnage of the ship has been or can be ascertained in accordance with the tonnage regulations of this Act, the ship’s tonnage shall be the register tonnage of the ship as so ascertained but without making any deduction required by those regulations of any tonnage allowance for propelling machinery space; (b) where the tonnage of the ship cannot be ascertained in accordance with paragraph (a) above, a surveyor of ships shall, if so directed by the court, certify what, on the evidence specified in the direction, would in his opinion be the tonnage of the ship as ascertained in accordance with that paragraph if the ship could be duly measured for the purpose and the tonnage stated in his certificate shall be taken to be the tonnage of the ship. (3) The limits set by this section to the liabilities mentioned therein shall apply to the aggregate of such liabilities which are incurred on any distinct occasion, and shall so apply in respect of each distinct occasion without regard to any liability incurred on another occasion. The persons whose liability in connection with a ship is excluded or limited by Part VIII of the Merchant Shipping Act, 1894, shall include any charterer and any person interested in or in possession of the ship, and, in particular, any manager or operator of the ship. In relation to a claim arising from the act or omission of any person in his capacity as master or member of the crew or (otherwise than in that capacity) in the course of his employment as a servant of the owners or of any such person as is mentioned in subsection (1) of this section,— (a) the persons whose liability is excluded or limited as aforesaid shall also include the master, member of the crew or servant, and, in a case where the master or member of the crew is the servant of a person whose liability would not be excluded or limited apart from this paragraph, the person whose servant he is and (b) the liability of the master, member of the crew or servant himself shall be excluded or limited as aforesaid notwithstanding his actual fault or privity in that capacity, except in the cases mentioned in paragraph (ii) of section five hundred and two of the said Act of 1894.

APPENDIX II

Sections 153, 154, 183, 184, 185, 186 & 191 of

the Merchant Shipping Act 1995

Liability for Oil Pollution 153.—(1) Where, as a result of any occurrence, any oil is discharged or escapes from a ship to which this section applies, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable— (a) for any damage caused outside the ship in the territory of the United Kingdom by contamination resulting from the discharge or escape; and (b) for the cost of any measures reasonably taken after the discharge or escape for the purpose of preventing or minimising any damage so caused in the territory of the United Kingdom by contamination resulting from the discharge or escape; and (c) for any damage caused in the territory of the United Kingdom by any measures so taken. (2) Where, as a result of any occurrence, there arises a grave and imminent threat of damage being caused outside a ship to which this section applies by the contamination that might result if there were a discharge or escape of oil from the ship, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable— (a) for the cost of any measures reasonably taken for the purpose of preventing or minimising any such damage in the territory of the United Kingdom; and (b) for any damage caused outside the ship in the territory of the United Kingdom by any measures so taken; and in this Chapter any such threat is referred to as a relevant threat of contamination. (3) Subject to subsection (4) below, this section applies to any ship constructed or adapted for carrying oil in bulk as cargo. (4) Where any ship so constructed or adapted is capable of carrying other cargoes besides oil, this section shall apply to any such ship— (a) while it is carrying oil in bulk as cargo; and (b) unless it is proved that no residues from the carriage of any such oil remain in the ship, while it is on any voyage following the carriage of any such oil, but not otherwise. (5) Where a person incurs a liability under subsection (1) or (2) above he shall also be liable for any damage or cost for which he would be liable under that subsection if the references in it to the territory of the United Kingdom included the territory of any other Liability Convention country. (6) Where— (a) as a result of any occurrence, a liability is incurred under this section by the owner of each of two or more ships, but (b) the damage or cost for which each of the owners would be liable cannot reasonably be separated from that for which the other or others would be liable, each of the owners shall be liable, jointly with the other or others, for the whole of the damage or cost for which the owners together would be liable under this section. (7) For the purposes of this Chapter— (a) references to a discharge or escape of oil from a ship are references to such a discharge or escape wherever it may occur, and whether it is of oil carried in a cargo tank or of oil carried in a bunker fuel tank; (b) where more than one discharge or escape results from the same occurrence or from a series of occurrences having the same origin, they shall be treated as one, but any measures taken

473

474

APPENDIX II

after the first of them shall be deemed to have been taken after the discharge or escape; and (c) where a relevant threat of contamination results from a series of occurrences having the same origin, they shall be treated as a single occurrence. (8) The Law Reform (Contributory Negligence) Act 1945 and, in Northern Ireland, the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1948 shall apply in relation to any damage or cost for which a person is liable under this section, but which is not due to his fault, as if it were due to his fault. 154.—(1) Where, as a result of any occurrence, any oil is discharged or escapes from a ship other than a ship to which section 153 applies, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable— (a) for any damage caused outside the ship in the territory of the United Kingdom by contamination resulting from the discharge or escape; and (b) for the cost of any measures reasonably taken after the discharge or escape for the purpose of preventing or minimising any damage so caused in the territory of the United Kingdom by contamination resulting from the discharge or escape; and (c) for any damage so caused in the territory of the United Kingdom by any measures so taken. (2) Where, as a result of any occurrence, there arises a grave and imminent threat of damage being caused outside a ship other than a ship to which section 153 applies by the contamination which might result if there were a discharge or escape of oil from the ship, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable— (a) for the cost of any measures reasonably taken for the purpose of preventing or minimising any such damage in the territory of the United Kingdom; and (b) for any damage caused outside the ship in the territory of the United Kingdom by any measures so taken; and in the subsequent provisions of this Chapter any such threat is referred to as a relevant threat of contamination. (3) Where— (a) as a result of any occurrence, a liability is incurred under this section by the owner of each of two or more ships, but (b) the damage or cost for which each of the owners would be liable cannot reasonably be separated from that for which the other or others would be liable, each of the owners shall be liable, jointly with the other or others, for the whole of the damage or cost for which the owners together would be liable under this section. (4) The Law Reform (Contributory Negligence) Act 1945 and, in Northern Ireland, the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1948 shall apply in relation to any damage or cost for which a person is liable under this section, but which is not due to his fault, as if it were due to his fault. (5) In this section ‘‘ship’’ includes a vessel which is not seagoing. Carriage of Passengers and Luggage by Sea Scheduled convention to have force of law 183.—(1) The provisions of the Convention relating to the Carriage of Passengers and their Luggage by Sea as set out in Part I of Schedule 6 (hereinafter in this section and in Part II of that Schedule referred to as ‘‘the Convention’’) shall have the force of law in the United Kingdom. (2) The provisions of Part II of that Schedule shall have effect in connection with the Convention and subsection (1) above shall have effect subject to the provisions of that Part. (3) If it appears to Her Majesty in Council that there is a conflict between the provisions of this section or of Part I or II of Schedule 6 and any provisions relating to the carriage of passengers or luggage for reward by land, sea or air in— (a) any convention which has been signed or ratified by or on behalf of the government of the United Kingdom before 4th April 19791 (excluding the Convention) or 1. 4th April 1979, i.e. the date of the passing of the Merchant Shipping Act 1979.

SS. 153, 154, 183, 184, 185, 186 & 191 OF THE M.S.A. 1995

475

(b) any enactment of the Parliament of the United Kingdom giving effect to such a conven­ tion, She may by Order in Council2 make such modifications of this section or that Schedule or any such enactment as She considers appropriate for resolving the conflict. (4) If it appears to Her Majesty in Council that the government of the United Kingdom has agreed to any revision of the Convention She may by Order in Council make such modification of Parts I and II of Schedule 6 as She considers appropriate in consequence of the revision. (5) Nothing in subsection (1) or (2) above or in any modification made by virtue of subsection (3) or (4) above shall affect any rights or liabilities arising out of an occurrence which took place before the day on which the said subsection (1) or (2) above, or as the case may be, the modification, comes into force. (6) This section shall bind the Crown, and any Order in Council made by virtue of this section may provide that the Order or specified provisions of it shall bind the Crown. (7) A draft of an Order in Council proposed to be made under subsection (3) or (4) above shall not be submitted to Her Majesty in Council unless the draft has been approved by a resolution of each House of Parliament.

Application of Schedule 6 to carriage within British Islands 184.—(1) Her Majesty may by Order in Council provide that Part I of Schedule 6— (a) shall have the force of law in the United Kingdom, with such modifications as are specified in the Order, in relation to, and to matters connected with, a contract of carriage where the places of departure and destination under the contract are within the British Islands and under the contract there is no intermediate port of call outside those Islands and (b) shall, as modified in pursuance of paragraph (a) above, have effect in relation to, and to matters connected with, any such contract subject to the provisions of Part II of that Schedule or to those provisions with such modifications as are specified in the Order. (2) An Order in Council3 made by virtue of subsection (1) above may contain such provisions, including provisions modifying section 28 of the Unfair Contract Terms Act 1977 (which relates to certain contracts as respects which the Convention mentioned in section 183(1) does not have the force of law in the United Kingdom), as the Secretary of State considers appropriate for the purpose of dealing with matters arising in connection with any contract to which the said section 28 applies before the Order is made. (3) An Order in Council made by virtue of subsection (1) above may provide that the Order or specified provisions of it shall bind the Crown. (4) A draft of an Order in Council proposed to be made by virtue of subsection (1) above shall not be submitted to Her Majesty in Council unless the draft of the Order in Council has been approved by a resolution of each House of Parliament. (5) In subsection (1) above expressions to which meanings are assigned by article 1 of the Convention set out in Part I of Schedule 6 have those meanings but any reference to a contract of carriage excludes such a contract which is not for reward.

2. Orders in Council under this section. Up to 1 September 1995 no Orders in Council had been made under this section, but by virtue of the Interpretation Act 1978, s 17(2)(b), the Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987, SI 1987/855, as amended by SI 1989/1880, have effect as if so made. 3. Orders in Council under this section. Up to 1 September 1995 no Orders in Council had been made under this section, but by virtue of the Interpretation Act 1978, s 17(2)(b), Vol 41, title Statutes, the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980, SI 1980/1092, as amended by SI 1987/670 the Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987, SI 1987/670 the Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987, SI 1987/855, as amended by SI 1989/1880, have effect as if so made. The power to make Orders in Council is exercisable by statutory instrument see the Statutory Instruments Act 1946, s 1(1).

476

APPENDIX II

Limitation of liability of shipowners, etc and salvors for maritime claims Limitation of liability for maritime claims 185.—(1) The Provisions of the Convention on Limitation of Liability for Maritime Claims 1976 as set out in Part I of Schedule 7 (in this section and Part II of that Schedule referred to as ‘‘the Convention’’) shall have the force of law in the United Kingdom. (2) The provisions of Part II of that Schedule shall have effect in connection with the Convention, and subsection (1) above shall have effect subject to the provisions of that Part. (3) The provisions having the force of law under this section shall apply in relation to Her Majesty’s ships as they apply in relation to other ships. (4) The provisions having the force of law under this section shall not apply to any liability in respect of loss of life or personal injury caused to, or loss of or damage to any property of, a person who is on board the ship in question or employed in connection with that ship or with the salvage operations in question if— (a) he is so on board or employed under a contract of service governed by the law of any part of the United Kingdom and (b) the liability arises from an occurrence which took place after the commencement of this Act. In this subsection, ‘‘ship’’ and ‘‘salvage operations’’ have the same meaning as in the Conven­ tion. Exclusion of liability 186.—(1) Subject to subsection (3) below, the owner of a United Kingdom ship shall not be liable for any loss or damage in the following cases, namely— (a) where any property on board the ship is lost or damaged by reason of fire on board the ship or (b) where any gold, silver, watches, jewels or precious stones on board the ship are lost or damaged by reason of theft, robbery or other dishonest conduct and their nature and value were not at the time of shipment declared by their owner or shipper to the owner or master of the ship in the bill of lading or otherwise in writing. (2) Subject to subsection (3) below, where the loss or damage arises from anything done or omitted by any person in his capacity of master or member of the crew or (otherwise than in that capacity) in the course of his employment as a servant of the owner of the ship, subsection (1) above shall also exclude the liability of— (a) the master, member of the crew or servant and (b) in a case where the master or member of the crew is the servant of a person whose liability would not be excluded by that subsection apart from this paragraph, the person whose servant he is. (3) This section does not exclude the liability of any person for any loss or damage resulting from any such personal act or omission of his as is mentioned in Article 4 of the Convention set out in Part I of Schedule 7. (4) This section shall apply in relation to Her Majesty’s ships as it applies in relation to other ships. (5) In this section ‘‘owner’’, in relation to a ship, includes any part owner and any charterer, manager or operator of the ship. Limitation of liability for harbour, conservancy, dock and canal authorities Limitation of liability 191.—(1) This section applies in relation to the following authorities and persons, that is to say, a harbour authority, a conservancy authority and the owners of any dock or canal. (2) The liability of any authority or person to which this section applies for any loss or damage caused to any ship, or to any goods, merchandise or other things whatsoever on board any ship shall be limited in accordance with subsection (5) below by reference to the tonnage of the largest United

SS. 153, 154, 183, 184, 185, 186 & 191 OF THE M.S.A. 1995

477

Kingdom ship which, at the time of the loss or damage is, or within the preceding five years has been, within the area over which the authority or person discharges any functions. (3) The limitation of liability under this section relates to the whole of any losses and damages which may arise on any one distinct occasion, although such losses and damages may be sustained by more than one person, and shall apply whether the liability arises at common law or under any general or local or private Act, and notwithstanding anything contained in such an Act. (4) This section does not exclude the liability of an authority or person to which it applies for any loss or damage resulting from any such personal act or omission of the authority or person as is mentioned in Article 4 of the Convention set out in Part I of Schedule 7. (5) The limit of liability shall be ascertained by applying to the ship by reference to which the liability is to be determined the method of calculation specified in paragraph 1(b) of Article 6 of the Convention set out in Part I of Schedule 7 read with paragraph 5(1) and (2) of Part II of that Schedule. (6) Articles 11 and 12 of that Convention and paragraphs 8 and 9 of Part II of that Schedule shall apply for the purposes of this section. (7) For the purposes of subsection (2) above a ship shall not be treated as having been within the area over which a harbour authority or conservancy authority discharges any functions by reason only that it has been built or fitted out within the area, or that it has taken shelter within or passed through the area on a voyage between two places both situated outside that area, or that it has loaded or unloaded mails or passengers within the area. (8) Nothing in this section imposes any liability for any loss or damage where no liability exists apart from this section. (9) In this section— ‘‘dock’’ includes wet docks and basins, tidal docks and basins, locks, cuts, entrances, dry docks, graving docks, gridirons, slips, quays, wharves, piers, stages, landing places and jetties and ‘‘owners of any dock or canal’’ includes any authority or person having the control and management of any dock or canal, as the case may be.

APPENDIX III

Merchant Shipping Act 1995, Schedule 6,

Parts I and II

1 9 7 6 P R O TO C O L A N D 1 9 9 0 P R O TO C O L TO A M E N D T H E AT H E N S C O N V E N T I O N 1 9 7 4

SCHEDULE 6: CONVENTION RELATING TO THE CARRIAGE OF

PASSENGERS AND THEIR LUGGAGE BY SEA

PA RT I : T E X T O F C O N V E N T I O N Article 1: Definitions In this Convention the following expressions have the meaning hereby assigned to them: 1. (a) ‘‘carrier’’ means a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by him or by a performing carrier; (b) ‘‘performing carrier’’ means a person other than the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or a part of the carriage; 2. ‘‘contract of carriage’’ means a contract made by or on behalf of a carrier for the carriage by sea of a passenger or of a passenger and his luggage, as the case may be; 3. ‘‘ship’’ means only a seagoing vessel, excluding an air-cushion vehicle; 4. ‘‘passenger’’ means any person carried in a ship, (a) under a contract of carriage, or (b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods not governed by this Convention; 5. ‘‘luggage’’ means any article or vehicle carried by the carrier under a contract of carriage, excluding: (a) articles and vehicles carried under a charterparty, bill of lading or other contract primarily concerned with the carriage of goods, and (b) live animals; 6. ‘‘cabin luggage’’ means luggage which the passenger has in his cabin or is otherwise in his possession, custody or control. Except for the application of paragraph 8 of this Article and Article 8, cabin luggage includes luggage which the passenger has in or on his vehicle. 7. ‘‘loss of or damage to luggage’’ includes pecuniary loss resulting from the luggage not having been re-delivered to the passenger within a reasonable time after the arrival of the ship on which the luggage has been or should have been carried, but does not include delays resulting from labour disputes; 8. ‘‘carriage’’ covers the following periods: (a) with regard to the passenger and his cabin luggage, the period during which the passenger and/or his cabin luggage are on board the ship or in the course of embarkation or disembarkation, and the period during which the passenger and his cabin luggage are transported by water from land to the ship or vice versa, if the cost of such transport is included in the fare or if the vessel used for the purpose of auxiliary transport has been put at the disposal of the passenger by the carrier. However, with regard to the passenger, carriage does not include the period during which he is in a marine terminal or station or on a quay or in or on any other port installation; (b) with regard to cabin luggage, also the period during which the passenger is in a marine terminal or station or on a quay or in or on any other port installation if that luggage has been taken over by the carrier or his servant or agent and has not been re-delivered to the passenger;

479

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(c) with regard to other luggage which is not cabin luggage, the period from the time of its taking over by the carrier or his servant or agent onshore or on board until the time of its re-delivery by the carrier or his servant or agent; 9. ‘‘international carriage’’ means any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State.

Article 2: Application 1. This Convention shall apply to any international carriage if: (a) the ship is flying the flag of or is registered in a State Party to this Convention, or (b) the contract of carriage has been made in a State Party to this Convention, or (c) the place of departure or destination, according to the contract of carriage, is in a State Party to this Convention. 2. Notwithstanding paragraph 1 of this Article, this Convention shall not apply when the carriage is subject, under any other international convention concerning the carriage of passengers or luggage by another mode of transport, to a civil liability regime under the provisions of such convention, in so far as those provisions have mandatory application to carriage by sea.

Article 3: Liability of the carrier 1. The carrier shall be liable for the damage suffered as a result of the death of or personal injury to a passenger and the loss of or damage to luggage if the incident which caused the damage so suffered occurred in the course of the carriage and was due to the fault or neglect of the carrier or of his servants or agents acting within the scope of their employment. 2. The burden of proving that the incident which caused the loss or damage occurred in the course of the carriage, and the extent of the loss or damage, shall lie with the claimant. 3. Fault or neglect of the carrier or of his servants or agents acting within the scope of their employment shall be presumed, unless the contrary is proved, if the death of or personal injury to the passenger or the loss of or damage to cabin luggage arose from or in connection with the shipwreck, collision, stranding, explosion or fire, or defect in the ship. In respect of loss of or damage to other luggage, such fault or neglect shall be presumed, unless the contrary is proved, irrespective of the nature of the incident which caused the loss or damage. In all other cases the burden of proving fault or neglect shall lie with the claimant.

Article 4: Performing carrier 1. If the performance of the carriage or part thereof has been entrusted to a performing carrier, the carrier shall nevertheless remain liable for the entire carriage according to the provisions of this Convention. In addition, the performing carrier shall be subject and entitled to the provisions of this Convention for the part of the carriage performed by him. 2. The carrier shall, in relation to the carriage performed by the performing carrier, be liable for the acts and omissions of the performing carrier and of his servants and agents acting within the scope of their employment. 3. Any special agreement under which the carrier assumes obligations not imposed by this Convention or any waiver of rights conferred by this Convention shall affect the performing carrier only if agreed by him expressly and in writing. 4. Where and to the extent that both the carrier and the performing carrier are liable, their liability shall be joint and several. 5. Nothing in this Article shall prejudice any right of recourse as between the carrier and the performing carrier.

SCHEDULE 6

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Article 5: Valuables The carrier shall not be liable for the loss of or damage to monies, negotiable securities, gold, silverware, jewellery, ornaments, works of art, or other valuables, except where such valuables have been deposited with the carrier for the agreed purpose of safe-keeping in which case the carrier shall be liable up to the limit provided for in paragraph 3 of Article 8 unless a higher limit is agreed upon in accordance with paragraph 1 of Article 10.

Article 6: Contributory fault If the carrier proves that the death of or personal injury to a passenger or the loss of or damage to his luggage was caused or contributed to by the fault or neglect of the passenger, the court seized of the case may exonerate the carrier wholly or partly from his liability in accordance with the provisions of the law of that court.

Article 7: Limit of liability for personal injury 1. The liability of the carrier for the death of or personal injury to a passenger shall in no case exceed 46,666 units of account per carriage. Where in accordance with the law of the court seized of the case damages are awarded in the form of periodical income payments, the equivalent capital value of those payments shall not exceed the said limit. 2. Notwithstanding paragraph 1 of this Article, the national law of any State Party to this Convention may fix, as far as carriers who are nationals of such State are concerned, a higher per capita limit of liability.

Article 8: Limit of liability for loss of or damage to luggage 1. The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 833 units of account per passenger, per carriage. 2. The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 3,333 units of account per vehicle, per carriage. 3. The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 of this Article shall in no case exceed 1,200 units of account per passenger, per carriage. 4. The carrier and the passenger may agree that the liability of the carrier shall be subject to a deduction not exceeding 117 units of account in the case of damage to a vehicle and not exceeding 13 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage.

Article 9: Unit of Account and conversion The Unit of Account mentioned in this Convention is the special drawing right as defined by the International Monetary Fund. The amounts mentioned in Article 7 and 8 shall be converted into the national currency of the State of the court seized of the case on the basis of the value of that currency on the date of the judgment or the date agreed upon by the Parties.

Article 10: Supplementary provisions on limits of liability 1. The carrier and the passenger may agree, expressly and in writing, to higher limits of liability than those prescribed in Articles 7 and 8. 2. Interest on damages and legal costs shall not be included in the limits of liability prescribed in Articles 7 and 8.

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Article 11: Defences and limits for carriers’ servants If an action is brought against a servant or agent of the carrier or of the performing carrier arising out of damage covered by this Convention, such servant or agent, if he proves that he acted within the scope of his employment, shall be entitled to avail himself of the defences and limits of liability which the carrier or the performing carrier is entitled to invoke under this Convention. Article 12: Aggregation of claims 1. Where the limits of liability prescribed in Articles 7 and 8 take effect, they shall apply to the aggregate of the amounts recoverable in all claims arising out of the death of or personal injury to any one passenger or the loss of or damage to his luggage. 2. In relation to the carriage performed by a performing carrier, the aggregate of the amounts recoverable from the carrier and the performing carrier and from their servants and agents acting within the scope of their employment shall not exceed the highest amount which could be awarded against either the carrier or the performing carrier under this Convention, but none of the persons mentioned shall be liable for a sum in excess of the limit applicable to him. 3. In any case where a servant or agent of the carrier or of the performing carrier is entitled under Article 11 of this Convention to avail himself of the limits of liability prescribed in Articles 7 and 8, the aggregate of the amounts recoverable from the carrier, or the performing carrier as the case may be, and from that servant or agent, shall not exceed those limits. Article 13: Loss of right to limit liability 1. The carrier shall not be entitled to the benefit of the limits of liability prescribed in Articles 7 and 8 and paragraph 1 of Article 10, if it is proved that the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. 2. The servant or agent of the carrier or of the performing carrier shall not be entitled to the benefit of those limits if it is proved that the damage resulted from an act or omission of that servant or agent done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. Article 14: Basis for claims No action for damages for the death of or personal injury to a passenger, or for the loss of or damage to luggage, shall be brought against a carrier or performing carrier otherwise than in accordance with this Convention. Article 15: Notice of loss or damage to luggage 1. The passenger shall give written notice to the carrier or his agent: (a) in the case of apparent damage to luggage: (i) for cabin luggage, before or at the time of disembarkation of the passenger; (ii) for all other luggage, before or at the time of its re-delivery; (b) in the case of damage to luggage which is not apparent, or loss of luggage, within 15 days from the date of disembarkation or re-delivery or from the time when such re-delivery should have taken place. 2. If the passenger fails to comply with this Article, he shall be presumed, unless the contrary is proved, to have received the luggage undamaged. 3. The notice in writing need not be given if the condition of the luggage has at the time of its receipt been the subject of joint survey or inspection. Article 16: Time-bar for actions 1. Any action for damages arising out of the death of or personal injury to a passenger or for the loss of or damage to luggage shall be time-barred after a period of two years.

SCHEDULE 6

483

2. The limitation period shall be calculated as follows: (a) in the case of personal injury, from the date of disembarkation of the passenger; (b) in the case of death occurring during carriage, from the date when the passenger should have disembarked, and in the case of personal injury occurring during carriage and resulting in the death of the passenger after disembarkation, from the date of death, provided that this period shall not exceed three years from the date of disembarkation; (c) in the case of loss of or damage to luggage, from the date of disembarkation or from the date when disembarkation should have taken place, whichever is later. 3. The law of the court seized of the case shall govern the grounds of suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of a period of three years from the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later. 4. Notwithstanding paragraphs 1, 2 and 3 of this Article, the period of limitation may be extended by a declaration of the carrier or by agreement of the parties after the cause of action has arisen. The declaration or agreement shall be in writing. Article 17: Competent jurisdiction 1. An action arising under this Convention shall, at the option of the claimant, be brought before one of the courts listed below, provided that the court is located in a State Party to this Conven­ tion: (a) the court of the place of permanent residence or principal place of business of the defendant, or (b) the court of the place of departure or that of the destination according to the contract of carriage, or (c) a court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State, or (d) a court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State. 2. After the occurrence of the incident which has caused the damage, the parties may agree that the claim for damages shall be submitted to any jurisdiction or to arbitration. Article 18: Invalidity of contractual provisions Any contractual provision concluded before the occurrence of the incident which has caused the death of or personal injury to a passenger or the loss of or damage to his luggage, purporting to relieve the carrier of his liability towards the passenger or to prescribe a lower limit of liability than that fixed in this Convention except as provided in paragraph 4 of Article 8, and any such provision purporting to shift the burden of proof which rests on the carrier, or having the effect of restricting the option specified in paragraph 1 of Article 17, shall be null and void, but the nullity of that provision shall not render void the contract of carriage which shall remain subject to the provisions of this Convention. Article 19: Other conventions on limitation of liability This Convention shall not modify the rights or duties of the carrier, the performing carrier, and their servants or agents provided for in international conventions relating to the limitation of liability of owners of seagoing ships. Article 20: Nuclear damage No liability shall arise under this Convention for damage caused by a nuclear incident: (a) if the operator of a nuclear installation is liable to such damage under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended by its Additional Protocol of 28 January 1964, or the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or

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(b) if the operator of a nuclear installation is liable for such damage by virtue of a national law governing the liability for such damage, provided that such law is in all respects as favourable to persons who may suffer damage as either the Paris or the Vienna Conven­ tions. Article 21: Commercial carriage by public authorities This Convention shall apply to commercial carriage undertaken by States or Public Authorities under contracts of carriage within the meaning of Article 1.

PA RT I I : P R O V I S I O N S H AV I N G E F F E C T I N C O N N E C T I O N W I T H

CONVENTION

Interpretation 1. In this Part of this Schedule any reference to a numbered article is a reference to the article of the Convention which is so numbered and any expression to which a meaning is assigned by article 1 of the Convention has that meaning. Provisions adapting or supplementing specified articles of the Convention 2. For the purposes of paragraph 2 of article 2, provisions of such an international convention as is mentioned in that paragraph which apart from this paragraph do not have mandatory application to carriage by sea shall be treated as having mandatory application to carriage by sea if it is stated in the contract of carriage for the carriage in question that those provisions are to apply in connection with the carriage. 3. The reference to the law of the court in article 6 shall be construed as a reference to the Law Reform (Contributory Negligence) Act 1945 except that in relation to Northern Ireland it shall be construed as a reference to section 2 of the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1948. 4. The Secretary of State may by order provide that, in relation to a carrier whose principal place of business is in the United Kingdom, paragraph 1 of article 7 shall have effect with the substitution for the limit for the time being specified in that paragraph of a different limit specified in the order (which shall not be lower than 46,666 units of account). 5.—(1) For the purpose of converting from special drawing rights into sterling the amounts mentioned in articles 7 and 8 of the Convention in respect of which a judgment is given, one special drawing right shall be treated as equal to such a sum in sterling as the International Monetary Fund have fixed as being the equivalent of one special drawing right for— (a) the day on which the judgment is given or (b) if no sum has been so fixed for that day, the last day before that day for which a sum has been so fixed. (2) A certificate given by or on behalf of the Treasury stating— (a) that a particular sum in sterling has been fixed as mentioned in sub-paragraph (1) above for a particular day or (b) that no sum has been so fixed for that day and a particular sum in sterling has been so fixed for a day which is the last day for which a sum has been so fixed before the particular day, shall be conclusive evidence of those matters for the purposes of articles 7 to 9 of the Convention and a document purporting to be such a certificate shall, in any proceedings, be received in evidence and, unless the contrary is proved, be deemed to be such a certificate. 6. It is hereby declared that by virtue of article 12 the limitations on liability there mentioned in respect of a passenger or his luggage apply to the aggregate liabilities of the persons in question in

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all proceedings for enforcing the liabilities or any of them which may be brought whether in the United Kingdom or elsewhere. 7. Article 16 shall apply to an arbitration as it applies to an action and section 34(3) and (4) of the Limitation Act 1980 and Article 73(2) and (4) of the Limitation (Northern Ireland) Order 1989 (which determine when an arbitration is deemed to commence) shall apply for the purposes of article 16 as they apply for the purposes of that Act and Order. 8. The court before which proceedings are brought in pursuance of article 17 to enforce a liability which is limited by virtue of article 12 may at any stage of the proceedings make such orders as appear to the court to be just and equitable in view of the provisions of article 12 and of any other proceedings which have been or are likely to be begun in the United Kingdom or elsewhere to enforce the liability in whole or in part and without prejudice to the generality of the preceding provisions of this paragraph such a court shall, where the liability is or may be partly enforceable in other proceedings in the United Kingdom or elsewhere, have jurisdiction to award an amount less than the court would have awarded if the limitation applied solely to the proceedings before the court or to make any part of its award conditional on the results of any other proceedings.

Other provisions adapting or supplementing the Convention 9. Any reference in the Convention to a contract of carriage excludes a contract of carriage which is not for reward. 10. If Her Majesty by Order in Council declares that any State specified in the Order is a party to the Convention in respect of a particular country the Order shall, subject to the provisions of any subsequent Order made by virtue of this paragraph, be conclusive evidence that the State is a party to the Convention in respect of that country. 11. The Secretary of State may by order make provision— (a) for requiring a person who is the carrier in relation to a passenger to give to the passenger, in a manner specified in the order, notice of such of the provisions of Part I of this Schedule as are so specified; (b) for a person who fails to comply with a requirement imposed on him by the order to be guilty of an offence and liable on summary conviction to a fine of an amount not exceeding level 4 on the standard scale or not exceeding a lesser amount.

Application of ss. 185 and 186 of this Act 12. It is hereby declared that nothing in the Convention affects the operation of section 185 of this Act (which limits a shipowner’s liability in certain cases of loss of life, injury or damage). 13. Nothing in section 186 of this Act (which among other things limits a shipowner’s liability for the loss or damage of goods in certain cases) shall relieve a person of any liability imposed on him by the Convention.

(PAL PROT. 1976) PROTOCOL OF 1976 TO THE ATHENS CONVENTION RELATING TO THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA, 1974 THE PARTIES TO THE PRESENT PROTOCOL BEING PARTIES to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, done at Athens on 13 December 1974;

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Have agreed AS FOLLOWS: Article I For the purpose of the present Protocol: 1. ‘‘Convention’’ means the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974. 2. ‘‘Organization’’ has the same meaning as in the Convention. 3. ‘‘Secretary-General’’ means the Secretary-General of the Organization. Article II (1) Article 7, paragraph 1 of the Convention is replaced by the following text: ‘‘1. The liability of the carrier for the death of or personal injury to a passenger shall in no case exceed 46,666 units of account per carriage. Where in accordance with the law of the court seized of the case damages are awarded in form of periodical income payments, the equivalent capital value of those payments shall not exceed the said limit.’’ (2) Article 8 of the Convention is replaced by the following text: ‘‘1. The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 833 units of account per passenger, per carriage. 2. The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 3,333 units of account per vehicle, per carriage. 3. The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 of this Article shall in no case exceed 1,200 units of account per passenger, per carriage. 4. The carrier and the passenger may agree that the liability of the carrier shall be subject to a deductible not exceeding 117 units of account in the case of damage to a vehicle and not exceeding 13 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage.’’ (3) Article 9 of the Convention and its title are replaced by the following: ‘‘Units of account or monetary unit and conversion 1. The Unit of Account mentioned in this Convention is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Articles 7 and 8 shall be converted into the national currency of the State of the Court seized of the case on the basis of the value of that currency on the date of the judgment or the date agreed upon by the parties. The value of the national currency, in terms of the Special Drawing Right, of a State which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect at the date in question for its operations and transactions. The value of the national currency, in terms of the Special Drawing Right, of a State which is not a member of the International Monetary Fund, shall be calculated in a manner determined by the State. 2. Nevertheless, a State which is not a member of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 of this Article may, at the time of ratification or accession or at any time thereafter, declare that the limits of liability provided for in this Convention to be applied in its territory shall be fixed as follows: (a) in respect of Article 7, paragraph 1, 700,000 monetary units; (b) in respect of Article 8, paragraph 1, 12,500 monetary units; (c) in respect of Article 8, paragraph 2, 50,000 monetary units; (d) in respect of Article 8, paragraph 3, 18,000 monetary units; (e) in respect of Article 8, paragraph 4, the deductible shall not exceed 1,750 monetary units in the case of damage to a vehicle and shall not exceed 200 monetary units per passenger in the case of loss of or damage to other luggage.

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The monetary unit referred to in this paragraph corresponds to sixty-five and a half milli­ grammes of gold of millesimal fineness nine hundred. The conversion of the amounts specified in this paragraph into the national currency shall be made according to the law of the State concerned. 3. The calculation mentioned in the last sentence of paragraph 1 and the conversion men­ tioned in paragraph 2 shall be made in such a manner as to express in the national currency of the State as far as possible the same real value for the amounts in Articles 7 and 8 as is expressed there in units of account. States shall communicate to the depositary the manner of calculation pursuant to paragraph 1 or the result of the conversion in paragraph 2 as the case may be, when depositing an instrument referred to in Article III and whenever there is a change in either.’’

Article III: Signature, ratification and accession 1. The present Protocol shall be open for signature by any State which has signed the Convention or acceded thereto and by any State invited to attend the Conference to Revise the Unit of Account Provisions in the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974, held in London from 17 to 19 November 1976. This Protocol shall be open for signature from 1 February 1977 to 31 December 1977 at the Headquarters of the Organization. 2. Subject to paragraph 4 of this Article, the present Protocol shall be subject to ratification, acceptance or approval by the States which have signed it. 3. Subject to paragraph 4 of this Article, this Protocol shall be open for accession by States which did not sign it. 4. The present Protocol may be ratified, accepted, approved or acceded to by States Parties to the Convention. 5. Ratification, acceptance, approval or accession shall be effected by the deposit of a formal instrument to that effect with the Secretary-General. 6. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to the present Protocol with respect to all existing Parties or after the completion of all measures required for the entry into force of the amendment with respect to all existing Parties shall be deemed to apply to the Protocol as modified by the amendment.

Article IV: Entry into force 1. The present Protocol shall enter into force for the States which have ratified, accepted, approved or acceded to it on the ninetieth day following the date on which ten States have either signed it without reservation as to ratification, acceptance or approval or have deposited the requisite instruments of ratification, acceptance, approval or accession. 2. However, the present Protocol shall not enter into force before the Convention has entered into force. 3. For any State which subsequently signs this Protocol without reservation as to ratification, acceptance or approval, or deposits its instrument of ratification, acceptance, approval or accession, the present Protocol shall come into force in the ninetieth day after the date of such signature or deposit.

Article V: Denunciation 1. The present Protocol may be denounced by a Party at any time after the date on which the Protocol enters into force for that Party. 2. Denunciation shall be effected by the deposit of an instrument with the Secretary-General who shall inform all other Parties of the receipt of the instrument of denunciation and of the date of its deposit. 3. A denunciation shall take effect one year after the deposit of an instrument of denunciation, or after such longer period as may be specified in the instrument.

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Article VI: Revision and amendment 1. A Conference for the purpose of revising or amending the present Protocol may be convened by the Organization. 2. The Organization shall convene a Conference of the Parties to the present Protocol for revising or amending it at the request of not less than one-third of the Parties. Article VII: Depositary 1. The present Protocol shall be deposited with the Secretary-General. 2. The Secretary-General shall: (a) inform all States which have signed or acceded to the present Protocol of: (i) each new signature and each deposit of an instrument together with the date thereof; (ii) the date of entry into force of the present Protocol; (iii) the deposit of any instrument of denunciation of the present Protocol together with the date on which the denunciation takes effect; (iv) any amendments to the present Protocol; (b) transmit certified true copies of the present Protocol to all States which have signed the present Protocol or acceded thereto. 3. Upon entry into force of the present Protocol, a certified true copy thereof shall be transmitted by the Secretary-General to the Secretariat of the United Nations for registration and publication in accordance with Article 102 of the Charter of the United Nations. Article VIII: Languages The present Protocol is established in a single original in the English and French Languages, both texts being equally authentic. Official translations in the Russian and Spanish languages shall be prepared by the Secretary-General and deposited with the signed original. DONE AT LONDON this nineteenth day of November one thousand nine hundred and seventysix. IN WITNESS WHEREOF the undersigned being duly authorized for that purpose have signed the present Protocol.

PROTOCOL OF 1990 TO AMEND THE ATHENS CONVENTION

RELATING TO THE CARRIAGE OF PASSENGERS AND THEIR

LUGGAGE BY SEA, 1974

THE PARTIES TO THE PRESENT PROTOCOL CONSIDERING that it is desirable to amend the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at Athens on 13 December 1974, to provide for enhanced compensation and to establish a simplified procedure for updating the limitation amounts, Have agreed AS FOLLOWS: Article I For the purpose of this Protocol: 1. ‘‘Convention’’ means the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. For States Parties to the Protocol of 1976 to the Convention, such reference shall be deemed to include the Convention as amended by that Protocol. 2. ‘‘Organization’’ means the International Maritime Organization. 3. ‘‘Secretary-General’’ means the Secretary-General of the Organization.

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Article II (1) Article 1, paragraph 10 of the Convention is replaced by the following text: ‘‘10. ‘Organization’ means the International Maritime Organization.’’ (2) Article 7, paragraph 1 of the Convention is replaced by the following text: ‘‘1. The liability of the carrier for the death of or personal injury to a passenger shall in no case exceed 175,000 units of account per carriage.’’ Where, in accordance with the law of the court seized of the case, damages are awarded in the form of periodical income payments, the equivalent capital value of those payments shall not exceed the said limit. (3) Article 8 of the Convention is replaced by the following text: ‘‘1. The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 1,800 units of account per passenger, per carriage. 2. The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 10,000 units of account per vehicle, per carriage. 3. The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 of this article shall in no case exceed 2,700 units of account per passenger, per carriage. 4. The carrier and the passenger may agree that the liability of the carrier shall be subject to a deductible not exceeding 300 units of account in the case of damage to a vehicle and not exceeding 135 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage.’’ (4) Article 9 of the Convention and its title are replaced by the following: ‘‘Unit of Account and conversion 1. The Unit of Account mentioned in this Convention is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in article 7, paragraph 1, and article 8 shall be converted into the national currency of the State of the court seized of the case on the basis of the value of that currency by reference to the Special Drawing Right on the date of the judgment or the date agreed upon by the parties. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect on the date in question for its operations and transactions. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is not a member of the International Monetary Fund, shall be calculated in a manner determined by that State Party. 2. Nevertheless, a State which is not a member of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 of this article may, at the time of ratification, acceptance, approval of or accession to this Convention or at any time thereafter, declare that the unit of account referred to in paragraph 1 shall be equal to 15 gold francs. The gold franc referred to in this paragraph corresponds to sixty-five-and-a-half milli­ grammes of gold of millesimal fineness nine hundred. The conversion of the gold franc into the national currency shall be made according to the law of the state concerned. 3. The calculation mentioned in the last sentence of paragraph 1, and the conversion mentioned in paragraph 2 shall be made in such a manner as to express in the national currency of the States Parties, as far as possible, the same real value for the amounts in article 7, paragraph 1, and article 8 as would result from the application of the first three sentences of paragraph 1. States shall communicate to the Secretary-General the manner of calculation pursuant to paragraph 1, or the result of the conversion in paragraph 2, as the case may be, when depositing an instrument of ratification, acceptance, approval of or accession to this Convention and whenever there is a change in either.’’

490

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Article III 1. The Convention and this Protocol shall, as between the Parties to this Protocol, be read and interpreted together as one single instrument. 2. A State which is a Party to this Protocol but not a Party to the Convention shall be bound by the provisions of the Convention as amended by this Protocol in relation to other States Parties hereto, but shall not be bound by the provisions of the Convention in relation to States Parties only to the Convention. 3. Nothing in this Protocol shall affect the obligations of a State which is a Party both to the Convention and to this Protocol with respect to a State which is a Party to the Convention but not a Party to this Protocol.

FINAL CLAUSES Article IV: Signature, ratification, etc. 1. This Protocol shall be open for signature at the Headquarters of the Organization from 1 June 1990 to 31 May 1991 by all States. 2. Any State may express its consent to be bound by this Protocol by: (a) signature without reservation as to ratification, acceptance or approval; (b) signature subject to ratification, acceptance or approval followed by ratification, acceptance or approval or (c) accession. 3. Ratification, acceptance, approval or accession shall be effected by the deposit of an instru­ ment to that effect with the Secretary-General. 4. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to the Convention as amended by this Protocol shall be deemed to apply to the Convention so amended, as modified by such amendment. Article V: Entry into Force 1. This Protocol shall enter into force 90 days following the date on which 10 States have expressed their consent to be bound by it. 2. For any State which expresses its consent to be bound by this Protocol after the conditions in paragraph 1 for entry into force have been met, this Protocol shall enter into force 90 days following the date of expression of such consent. Article VI: Denunciation 1. This Protocol may be denounced by any State Party at any time after the date on which it enters into force for that State Party. 2. Denunciation shall be effected by the deposit of an instrument of denunciation with the Secretary-General. 3. A denunciation shall take effect 12 months, or such longer period as may be specified in the instrument of denunciation, after its deposit with the Secretary-General. 4. As between the States Parties to this Protocol, denunciation by any of them of the Convention in accordance with article 25 thereof shall not be construed in any way as a denunciation of the Convention as amended by this protocol. Article VII: Revision and amendment 1. A Conference for the purpose of revising or amending this Protocol may be convened by the Organization. 2. The Organization shall convene a Conference of Contracting States to this Protocol for revising or amending it at the request of not less than one third of the Contracting States.

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Article VIII: Amendment of limits 1. Upon the request of at least one half, but in no case less than six, of the States Parties to this Protocol, any proposal to amend the limits, including the deductibles, specified in article 7, para­ graph 1, and article 8 of the Convention as amended by this Protocol shall be circulated by the Secretary-General to all Members of the Organization and to all Contracting States. 2. Any amendment proposed and circulated as above shall be submitted to the Legal Committee of the Organization (hereinafter referred to as ‘‘the Legal Committee’’) for consideration at a date at least six months after the date of its circulation. 3. All Contracting States to the Convention as amended by this Protocol, whether or not Mem­ bers of the Organization, shall be entitled to participate in the proceedings of the Legal Committee for the consideration and adoption of amendments. 4. Amendments shall be adopted by a two-thirds majority of the Contracting States to the Convention as amended by this Protocol present and voting in the Legal Committee expanded as provided for in paragraph 3, on condition that at least one half of the Contracting States to the Convention as amended by this Protocol shall be present at the time of voting. 5. When acting on a proposal to amend the limits, the Legal Committee shall take into account the experience of incidents and, in particular, the amount of damage resulting therefrom, changes in the monetary values and the effect of the proposed amendment on the cost of insurance. 6. (a) No amendment of the limits under this article may be considered less than five years from the date on which this Protocol was opened for signature nor less than five years from the date of entry into force of a previous amendment under this article. (b) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as amended by this Protocol increased by six per cent per year calculated on a compound basis from the date on which this Protocol was opened for signature. (c) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as amended by this Protocol multiplied by three. 7. Any amendment adopted in accordance with paragraph 4 shall be notified by the Organization to all Contracting States. The amendment shall be deemed to have been accepted at the end of a period of eighteen months after the date of notification, unless within that period not less than one fourth of the States that were Contracting States at the time of the adoption of the amendment have communicated to the Secretary-General that they do not accept the amendment, in which case the amendment is rejected and shall have no effect. 8. An amendment deemed to have been accepted in accordance with paragraph 7 shall enter into force eighteen months after its acceptance. 9. All Contracting States shall be bound by the amendment, unless they denounce this Protocol in accordance with paragraphs 1 and 2 of article VI at least six months before the amendment enters into force. Such denunciation shall take effect when the amendment enters into force. 10. When an amendment has been adopted but the eighteen-month period for its acceptance has not yet expired, a State which becomes a Contracting State during that period shall be bound by the amendment if it enters into force. A State which becomes a Contracting State after that period shall be bound by an amendment which has been accepted in accordance with paragraph 7. In the cases referred to in this paragraph, a State becomes bound by an amendment when that amendment enters into force, or when this Protocol enters into force for that State, if later.

Article IX: Depositary 1. This Protocol and any amendments accepted under article VIII shall be deposited with the Secretary-General. 2. The Secretary-General shall: (a) inform all States which have signed or acceded to this Protocol of: (i) each new signature or deposit of an instrument together with the date thereof; (ii) each declaration and communication under article 9, paragraphs 2 and 3, of the Convention as amended by this Protocol; (iii) the date of entry into force of this Protocol;

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(iv) any proposal to amend limits which has been made in accordance with article VIII, paragraph 1; (v) any amendment which has been adopted in accordance with article VIII, paragraph 4; (vi) any amendment deemed to have been accepted under article VIII, paragraph 7, together with the date on which that amendment shall enter into force in accordance with paragraphs 8 and 9 of that article; (vii) the deposit of any instrument of denunciation of this Protocol together with the date of the deposit and the date on which it takes effect; (b) transmit certified true copies of this Protocol to all Signatory States and to all States which accede to this Protocol. 3. As soon as this Protocol enters into force, the text shall be transmitted by the SecretaryGeneral to the Secretary-General of the United Nations for registration and publication in accor­ dance with Article 102 of the Charter of the United Nations. Article X: Languages This Protocol is established in a single original in the Arabic, Chinese, English, French, Russian and Spanish languages, each text being equally authentic. DONE AT LONDON this twenty-ninth day of March, one thousand nine hundred and ninety. IN WITNESS WHEREOF the undersigned, being duly authorized by their respective Govern­ ments for that purpose, have signed this Protocol.

APPENDIX IV

Merchant Shipping Act 1995,

Schedule 7, Parts I and II

S C H E D U L E 7 . C O N V E N T I O N O N L I M I TAT I O N O F L I A B I L I T Y F O R MARITIME CLAIMS 1976

PA RT I : T E X T O F C O N V E N T I O N Chapter I. The Right of Limitation Article 1: Persons entitled to limit liability 1. Shipowners and salvors, as hereinafter defined, may limit their liability in accordance with the rules of this Convention for claims set out in Article 2. 2. The term ‘‘shipowner’’ shall mean the owner, charterer, manager or operator of a seagoing ship. 3. Salvor shall mean any person rendering services in direct connection with salvage operations. Salvage operations shall also include operations referred to in Article 2, paragraph 1(d), (e) and (f). 4. If any claims set out in Article 2 are made against any person for whose act, neglect or default the shipowner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this Convention. 5. In this Convention the liability of a shipowner shall include liability in an action brought against the vessel herself. 6. An insurer of liability for claims subject to limitation in accordance with the rules of this Convention shall be entitled to the benefits of this Convention to the same extent as the assured himself. 7. The act of invoking limitation of liability shall not constitute an admission of liability. Article 2: Claims subject to limitation 1. Subject to Articles 3 and 4 the following claims, whatever the basis of liability may be, shall be subject to limitation of liability: (a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to navigation), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; (b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage; (c) claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage opera­ tions; (d) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship; (e) claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship; (f) claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures.

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2. Claims set out in paragraph 1 shall be subject to limitation of liability even if brought by way of recourse or for indemnity under a contract or otherwise. However, claims set out under paragraph 1(d), (e) and (f) shall not be subject to limitation of liability to the extent that they relate to remuneration under a contract with the person liable. Article 3: Claims excepted from limitation The rules of this Convention shall not apply to: (a) claims for salvage or contribution in general average; (b) claims for oil pollution damage within the meaning of the International Convention on Civil Liability for Oil Pollution Damage dated 29th November 1969 or of any amendment or Protocol thereto which is in force; (c) claims subject to any international convention or national legislation governing or prohibit­ ing limitation of liability for nuclear damage; (d) claims against the shipowner of a nuclear ship for nuclear damage; (e) claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations, including claims of their heirs, dependants or other persons entitled to make such claims, if under the law governing the contract of service between the shipowner or salvor and such servants the shipowner or salvor is not entitled to limit his liability in respect of such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 6. Article 4: Conduct barring limitation A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. Article 5: Counterclaims Where a person entitled to limitation of liability under the rules of this Convention has a claim against the claimant arising out of the same occurrence, their respective claims shall be set off against each other and the provisions of this Convention shall only apply to the balance, if any. Chapter II: Limits of Liability Article 6: The general limits 1. The limits of liability for claims other than those mentioned in Article 7, arising on any distinct occasion, shall be calculated as follows: (a) in respect of claims for loss of life or personal injury, (i) 333,000 Units of Account for a ship with a tonnage not exceeding 500 tons, (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): — for each ton from 501 to 3,000 tons, 500 Units of Account; — for each ton from 3,001 to 30,000 tons, 333 Units of Account; — for each ton from 30,001 to 70,000 tons, 250 Units of Account, and — for each ton in excess of 70,000 tons, 167 Units of Account, (b) in respect of any other claims, (i) 167,000 Units of Account for a ship with a tonnage not exceeding 500 tons, (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): — for each ton from 501 to 30,000 tons, 167 Units of Account; — for each ton from 30,001 to 70,000 tons, 125 Units of Account and — for each ton in excess of 70,000 tons, 83 Units of Account.

SCHEDULE 7

495

2. Where the amount calculated in accordance with paragraph 1(a) is insufficient to pay the claims mentioned therein in full, the amount calculated in accordance with paragraph 1(b) shall be available for payment of the unpaid balance of claims under paragraph 1(a) and such unpaid balance shall rank rateably with claims mentioned under paragraph 1(b). [Paragraph 3 of Article 6 is not incorporated into U.K. law.] 4. The limits of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which he is rendering salvage services, shall be calculated according to a tonnage of 1,500 tons. Article 7: The limit for passenger claims 1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 46,666 Units of Account multiplied by the number of passengers which the ship is authorised to carry according to the ship’s certificate, but not exceeding 25 million Units of Account. 2. For the purpose of this Article ‘‘claims for loss of life or personal injury to passengers of a ship’’ shall mean any such claims brought by or on behalf of any person carried in that ship: (a) under a contract of passenger carriage, or (b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods. Article 8: Unit of Account The Unit of Account referred to in Articles 6 and 7 is the special drawing right as defined by the International Monetary Fund. The amounts mentioned in Articles 6 and 7 shall be converted into the national currency of the State in which limitation is sought, according to the value of that currency at the date the limitation fund shall have been constituted, payment is made, or security is given which under the law of that State is equivalent to such payment. Article 9: Aggregation of claims 1. The limits of liability determined in accordance with Article 6 shall apply to the aggregate of all claims which arise on any distinct occasion: (a) against the person or persons mentioned in paragraph 2 of Article 1 and any person for whose act, neglect or default he or they are responsible or (b) against the shipowner of a ship rendering salvage services from that ship and the salvor or salvors operating from such ship and any person for whose act, neglect or default he or they are responsible or (c) against the salvor or salvors who are not operating from a ship or who are operating solely on the ship to, or in respect of which, the salvage services are rendered and any person for whose act, neglect or default he or they are responsible. 2. The limits of liability determined in accordance with Article 7 shall apply to the aggregate of all claims subject thereto which may arise on any distinct occasion against the person or persons mentioned in paragraph 2 of Article 1 in respect of the ship referred to in Article 7 and any person for whose act, neglect or default he or they are responsible. Article 10: Limitation of liability without constitution of a limitation fund 1. Limitation of liability may be invoked notwithstanding that a limitation fund as mentioned in Article 11 has not been constituted. 2. If limitation of liability is invoked without the constitution of a limitation fund, the provisions of Article 12 shall apply correspondingly. 3. Questions of procedure arising under the rules of this Article shall be decided in accordance with the national law of the State Party in which action is brought.

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Chapter III: The Limitation Fund Article 11: Constitution of the Fund 1. Any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation. The fund shall be constituted in the sum of such of the amounts set out in Articles 6 and 7 as are applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. Any fund thus constituted shall be available only for the payment of claims in respect of which limitation of liability can be invoked. 2. A fund may be constituted, either by depositing the sum, or by producing a guarantee acceptable under the legislation of the State Party where the fund is constituted and considered to be adequate by the Court or other competent authority. 3. A fund constituted by one of the persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2 of Article 9 or his insurer shall be deemed constituted by all persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2, respectively.

Article 12: Distribution of the fund 1. Subject to the provisions of paragraphs 1 and 2 of Article 6 and of Article 7, the fund shall be distributed among the claimants in proportion to their established claims against the fund. 2. If, before the fund is distributed, the person liable, or his insurer, has settled a claim against the fund such person shall, up to the amount he has paid, acquire by subrogation the rights which the person so compensated would have enjoyed under this Convention. 3. The right of subrogation provided for in paragraph 2 may also be exercised by persons other than those therein mentioned in respect of any amount of compensation which they may have paid, but only to the extent that such subrogation is permitted under the applicable national law. 4. Where the person liable or any other person establishes that he may be compelled to pay, at a later date, in whole or in part any such amount of compensation with regard to which such person would have enjoyed a right of subrogation pursuant to paragraphs 2 and 3 had the compensation been paid before the fund was distributed, the Court or other competent authority of the State where the fund has been constituted may order that a sufficient sum shall be provisionally set aside to enable such person at such later date to enforce his claim against the fund.

Article 13: Bar to other actions 1. Where a limitation fund has been constituted in accordance with Article 11, any person having made a claim against the fund shall be barred from exercising any right in respect of such a claim against any other assets of a person by or on behalf of whom the fund has been constituted. 2. After a limitation fund has been constituted in accordance with Article 11, any ship or other property, belonging to a person on behalf of whom the fund has been constituted, which has been arrested or attached within the jurisdiction of a State Party for a claim which may be raised against the fund, or any security given, may be released by order of the Court or other competent authority of such State. However, such release shall always be ordered if the limitation fund has been con­ stituted: (a) at the port where the occurrence took place, or, if it took place out of port, at the first port of call thereafter or (b) at the port of disembarkation in respect of claims for loss of life or personal injury or (c) at the port of discharge in respect of damage to cargo or (d) in the State where the arrest is made. 3. The rules of paragraphs 1 and 2 shall apply only if the claimant may bring a claim against the limitation fund before the Court administering that fund and the fund is actually available and freely transferable in respect of that claim.

SCHEDULE 7

497

Article 14: Governing law Subject to the provisions of this Chapter the rules relating to the constitution and distribution of a limitation fund, and all rules of procedure in connection therewith, shall be governed by the law of the State Party in which the fund is constituted. Chapter IV: Scope of Application Article 15 This Convention shall apply whenever any person referred to in Article 1 seeks to limit his liability before the Court of a State Party or seeks to procure the release of a ship or other property or the discharge of any security given within the jurisdiction of any such State.

PA RT I I : P R O V I S I O N S H AV I N G E F F E C T I N C O N N E C T I O N W I T H

CONVENTION

Interpretation 1. In this Part of this Schedule any reference to a numbered article is a reference to the article of the Convention which is so numbered. Right to limit liability 2. The right to limit liability under the Convention shall apply in relation to any ship whether seagoing or not, and the definition of ‘‘shipowner’’ in paragraph 2 of article 1 shall be construed accordingly. Claims subject to limitation 3.—(1) Paragraph 1(d) of article 2 shall not apply unless provision has been made by an order of the Secretary of State for the setting up and management of a fund to be used for the making to harbour or conservancy authorities of payments needed to compensate them for the reduction, in consequence of the said paragraph 1(d), of amounts recoverable by them in claims of the kind there mentioned, and to be maintained by contributions from such authorities raised and collected by them in respect of vessels in like manner as other sums so raised by them. (2) Any order under sub-paragraph (1) above may contain such incidental and supplemental provisions as appear to the Secretary of State to be necessary or expedient. Claims excluded from limitation 4.—(1) The claims excluded from the Convention by paragraph (a) of article 3 include claims under article 14 of the International Convention on Salvage, 1989, as set out in Part I of Schedule 11 and corresponding claims under a contract. (2) The claims excluded from the Convention by paragraph (b) of article 3 are claims in respect of any liability incurred under section 153 of this Act. (3) The claims excluded from the Convention by paragraph (c) of article 3 are claims made by virtue of any of sections 7 to 11 of the Nuclear Installations Act 1965. The general limits 5.—(1) In the application of article 6 to a ship with a tonnage less than 300 tons that article shall have effect as if— (a) paragraph 1(a)(i) referred to 166,667 Units of Account and

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(b) paragraph 1(b)(i) referred to 83,333 Units of Account. (2) For the purposes of article 6 and this paragraph a ship’s tonnage shall be its gross tonnage calculated in such manner as may be prescribed by an order made by the Secretary of State. (3) Any order under this paragraph shall, so far as appears to the Secretary of State to be practicable, give effect to the regulations in Annex I of the International Convention on Tonnage Measurement of Ships 1969. Limit for passenger claims 6.—(1) In the case of a ship for which there is in force a Passenger Ship Safety Certificate or Passenger Certificate, as the case may be, issued under or recognised by safety regulations, the ship’s certificate mentioned in paragraph 1 of article 7 shall be that certificate. (2) In paragraph 2 of article 7 the reference to claims brought on behalf of a person includes a reference to any claim in respect of the death of a person under the Fatal Accidents Act 1976, the Fatal Accidents (Northern Ireland) Order 1977 or the Damages (Scotland) Act 1976. Units of Account 7.—(1) For the purpose of converting the amounts mentioned in articles 6 and 7 from special drawing rights into sterling one special drawing right shall be treated as equal to such a sum in sterling as the International Monetary Fund have fixed as being the equivalent of one special drawing right for— (a) the relevant date under paragraph 1 of article 8 or (b) if no sum has been so fixed for that date, the last preceding date for which a sum has been so fixed. (2) A certificate given by or on behalf of the Treasury stating— (a) that a particular sum in sterling has been fixed as mentioned in sub-paragraph (1) above for a particular date or (b) that no sum has been so fixed for that date and that a particular sum in sterling has been so fixed for a date which is the last preceding date for which a sum has been so fixed, shall be conclusive evidence of those matters for the purposes of those articles and a document purporting to be such a certificate shall, in any proceedings, be received in evidence and, unless the contrary is proved, be deemed to be such a certificate. Constitution of fund 8.—(1) The Secretary of State may, with the concurrence of the Treasury, by order prescribe the rate of interest to be applied for the purposes of paragraph 1 of article 11. (2) Any statutory instrument containing an order under sub-paragraph (1) above shall be laid before Parliament after being made. (3) Where a fund is constituted with the court in accordance with article 11 for the payment of claims arising out of any occurrence, the court may stay any proceedings relating to any claim arising out of that occurrence which are pending against the person by whom the fund has been constituted. Distribution of fund 9. No lien or other right in respect of any ship or property shall affect the proportions in which under article 12 the fund is distributed among several claimants. Bar to other actions 10. Where the release of a ship or other property is ordered under paragraph 2 of article 13 the person on whose application it is ordered to be released shall be deemed to have submitted to (or, in Scotland, prorogated) the jurisdiction of the court to adjudicate on the claim for which the ship or property was arrested or attached.

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Meaning of ‘‘court’’ 11. References in the Convention and the preceding provisions of this Part of this Schedule to the court are references to the High Court or, in relation to Scotland, the Court of Session. Meaning of ‘‘ship’’ 12. References in the Convention and in the preceding provisions of this Part of this Schedule to a ship include references to any structure (whether completed or in course of completion) launched and intended for use in navigation as a ship or part of a ship. Meaning of ‘‘State Party’’ 13. Order in Council made for the purposes of this paragraph and declaring that any State specified in the Order is a party to the Convention shall, subject to the provisions of any subsequent Order made for those purposes, be conclusive evidence that the State is a party to the Convention.

PROTOCOL OF 1996 TO AMEND THE CONVENTION ON

LIMITATION OF LIABILITY FOR MARITIME CLAIMS, 1976

(Texts examined and approved by the Drafting Committee) THE PARTIES TO THE PRESENT PROTOCOL, CONSIDERING that it is desirable to amend the Convention on Limitation of Liability for Maritime Claims, done at London on 19 November 1976, to provide for enhanced compensation and to establish a simplified procedure for updating the limitation amounts, HAVE AGREED as follows: Article 1 For the purposes of this Protocol: 1. ‘‘Convention’’ means the Convention on Limitation of Liability for Maritime Claims, 1976. 2. ‘‘Organization’’ means the International Maritime Organization. 3. ‘‘Secretary-General’’ means the Secretary-General of the Organization. Article 2 Article 3, subparagraph (a) of the Convention, is replaced by the following text: ‘‘(a) Claims for salvage, including if applicable, any claim for special compensation under article 14 of the International Convention on Salvage 1989, as amended, or contribution in general average;’’ Article 3 Article 6, paragraph 1 of the Convention is replaced by the following text: ‘‘1. The limits of liability for claims other than those mentioned in article 7, arising on any distinct occasion, shall be calculated as follows: (a) in respect of claims for loss of life or personal injury, (i) 2 million Units of Account for a ship with a tonnage not exceeding 2,000 tons, (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): — for each ton from 2,001 to 30,000 tons, 800 Units of Account;

500

APPENDIX IV

— for each ton from 30,001 to 70,000 tons, 600 Units of Account and — for each ton in excess of 70,000 tons, 400 Units of Account, (b) in respect of any other claims, (i) 1 million Units of Account for a ship with a tonnage not exceeding 2,000 tons, (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): — for each ton from 2,001 to 30,000 tons, 400 Units of Account; — for each ton from 30,001 to 70,000 tons, 300 Units of Account and — for each ton in excess of 70,000 tons, 200 Units of Account.’’ Article 4 Article 7, paragraph 1 of the Convention is replaced by the following text: ‘‘1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 175,000 Units of Account multiplied by the number of passengers which the ship is authorized to carry according to the ship’s certificate.’’ Article 5 Article 8, paragraph 2 of the Convention is replaced by the following text: ‘‘2. Nevertheless, those States which are not members of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 may, at the time of signature without reservation as to ratification, acceptance or approval or at the time of ratification, acceptance, approval or accession or at any time thereafter, declare that the limits of liability provided for in this Convention to be applied in their territories shall be fixed as follows: (a) in respect of article 6, paragraph 1(a) at an amount of: (i) 30 million monetary units for a ship with a tonnage not exceeding 2,000 tons; (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): — for each ton from 2,001 to 30,000 tons, 12,000 monetary units; — for each ton from 30,001 to 70,000 tons, 9,000 monetary units and — for each ton in excess of 70,000 tons, 6,000 monetary units and (b) in respect of article 6, paragraph 1(b), at an amount of: (i) 15 million monetary units for a ship with a tonnage not exceeding 2,000 tons; (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): — for each ton from 2,001 to 30,000 tons, 6,000 monetary units; — for each ton from 30,001 to 70,000 tons, 4,500 monetary units and — for each ton in excess of 70,000 tons, 3,000 monetary units and (c) in respect of article 7, paragraph 1, at an amount of 2,625,000 monetary units multiplied by the number of passengers which the ship is authorized to carry accord­ ing to its certificate. Paragraphs 2 and 3 of article 6 apply correspondingly to subparagraphs (a) and (b) of this paragraph.’’ Article 6 The following text is added as paragraph 3bis in article 15 of the Convention: ‘‘3bis Notwithstanding the limit of liability prescribed in paragraph 1 of article 7, a State Party may regulate by specific provisions of national law the system of liability to be applied to claims for loss of life or personal injury to passengers of a ship, provided that the limit of

P R O TO C O L O F 1 9 9 6 TO A M E N D T H E C O N V E N T I O N

501

liability is not lower than that prescribed in paragraph 1 of article 7. A State Party which makes use of the option provided for in this paragraph shall inform the Secretary-General of the limits of liability adopted or of the fact that there are none.’’

Article 7 Article 18, paragraph 1 of the Convention is replaced by the following text: ‘‘1. Any State may, at the time of signature, ratification, acceptance, approval or accession, or at any time thereafter, reserve the right: (a) to exclude the application of article 2, paragraphs 1(d) and (e); (b) to exclude claims for damage within the meaning of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazard­ ous and Noxious Substances by Sea, 1996 or of any amendment or Protocol thereto. No other reservations shall be admissible to the substantive provisions of this Convention.’’

Article 8: Amendment of limits 1. Upon the request of at least one half, but in no case less than six, of the States Parties to this Protocol, any proposal to amend the limits specified in article 6, paragraph 1, article 7, paragraph 1 and article 8, paragraph 2 of the Convention as amended by this Protocol shall be circulated by the Secretary-General to all Members of the Organization and to all Contracting States. 2. Any amendment proposed and circulated as above shall be submitted to the Legal Committee of the Organization (the Legal Committee) for consideration at a date at least six months after the date of its circulation. 3. All Contracting States to the Convention as amended by this Protocol, whether or not Mem­ bers of the Organization, shall be entitled to participate in the proceedings of the Legal Committee for the consideration and adoption of amendments. 4. Amendments shall be adopted by a two-thirds majority of the Contracting States to the Convention as amended by this Protocol present and voting in the Legal Committee expanded as provided for in paragraph 3, on condition that at least one half of the Contracting States to the Convention as amended by this Protocol shall be present at the time of voting. 5. When acting on a proposal to amend the limits, the Legal Committee shall take into account the experience of incidents and, in particular, the amount of damage resulting therefrom, changes in the monetary values and the effect of the proposed amendment on the cost of insurance. 6. (a) No amendment of the limits under this article may be considered less than five years from the date on which this Protocol was opened for signature nor less than five years from the date of entry into force of a previous amendment under this article. (b) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as amended by this Protocol increased by six per cent per year calculated on a compound basis from the date on which this Protocol was opened for signature. (c) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as amended by this Protocol multiplied by three. 7. Any amendment adopted in accordance with paragraph 4 shall be notified by the Organization to all Contracting States. The amendment shall be deemed to have been accepted at the end of a period of eighteen months after the date of notification, unless within that period not less than onefourth of the States that were Contracting States at the time of the adoption of the amendment have communicated to the Secretary-General that they do not accept the amendment, in which case the amendment is rejected and shall have no effect. 8. An amendment deemed to have been accepted in accordance with paragraph 7 shall enter into force eighteen months after its acceptance. 9. All Contracting States shall be bound by the amendment, unless they denounce this Protocol in accordance with paragraphs 1 and 2 of article 12 at least six months before the amendment enters into force. Such denunciation shall take effect when the amendment enters into force.

502

APPENDIX IV

10. When an amendment has been adopted but the eighteen-month period for its acceptance has not yet expired, a State which becomes a Contracting State during that period shall be bound by the amendment if it enters into force. A State which becomes a Contracting State after that period shall be bound by an amendment which has been accepted in accordance with paragraph 7. In the cases referred to in this paragraph, a State becomes bound by an amendment when that amendment enters into force, or when this Protocol enters into force for that State, if later. Article 9 1. The Convention and this Protocol shall, as between the Parties to this Protocol, be read and interpreted together as one single instrument. 2. A State which is Party to this Protocol but not a Party to the Convention shall be bound by the provisions of the Convention as amended by this Protocol in relation to other States Parties hereto, but shall not be bound by the provisions of the Convention in relation to States Parties only to the Convention. 3. The Convention as amended by this Protocol shall apply only to claims arising out of occurrences which take place after the entry into force for each State of this Protocol. 4. Nothing in this Protocol shall affect the obligations of a State which is a Party both to the Convention and to this Protocol with respect to a State which is a Party to the Convention but not a Party to this Protocol.

FINAL CLAUSES Article 10: Signature, ratification, acceptance, approval and accession 1. This Protocol shall be open for signature at the Headquarters of the Organization from 1 October 1996 to 30 September 1997 by all States. 2. Any State may express its consent to be bound by this Protocol by: (a) signature without reservation as to ratification, acceptance or approval; (b) signature subject to ratification, acceptance or approval followed by ratification, acceptance or approval or (c) accession. 3. Ratification, acceptance, approval or accession shall be effected by the deposit of an instru­ ment to that effect with the Secretary-General. 4. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to the Convention as amended by this Protocol shall be deemed to apply to the Convention so amended, as modified by such amendment. Article 11: Entry into force 1. This Protocol shall enter into force 90 days following the date on which [10] States have expressed their consent to be bound by it. 2. For any State which expresses its consent to be bound by this Protocol after the conditions in paragraph 1 for entry into force have been met, this Protocol shall enter into force 90 days following the date of expression of such consent. Article 12: Denunciation 1. This Protocol may be denounced by any State Party at any time after the date on which it enters into force for that State Party. 2. Denunciation shall be effected by the deposit of an instrument of denunciation with the Secretary-General. 3. A denunciation shall take effect 12 months, or such longer period as may be specified in the instrument of denunciation, after its deposit with the Secretary-General.

P R O TO C O L O F 1 9 9 6 TO A M E N D T H E C O N V E N T I O N

503

4. As between the States Parties to this Protocol, denunciation by any of them of the Convention in accordance with article 19 thereof shall not be construed in any way as a denunciation of the Convention as amended by this Protocol. Article 13: Revision and amendment 1. A conference for the purpose of revising or amending this Protocol may be convened by the Organization. 2. The Organization shall convene a conference of Contracting States to this Protocol for revising or amending it at the request of not less than one-third of the Contracting Parties. Article 14: Depositary 1. This Protocol and any amendments accepted under article 8 shall be deposited with the Secretary-General. 2. The Secretary-General shall: (a) inform all States which have signed or acceded to this Protocol of: (i) each new signature or deposit of an instrument together with the date thereof; (ii) each declaration and communication under article 8, paragraph 2 of the Convention as amended by this Protocol, and article 8, paragraph 4 of the Convention; (iii) the date of entry into force of this Protocol; (iv) any proposal to amend limits which has been made in accordance with article 8, paragraph 1; (v) any amendment which has been adopted in accordance with article 8, paragraph 4; (vi) any amendment deemed to have been accepted under article 8, paragraph 7, together with the date on which that amendment shall enter into force in accordance with paragraphs 8 and 9 of that article; (vii) the deposit of any instrument of denunciation of this Protocol together with the date of the deposit and the date on which it takes effect; (b) transmit certified true copies of this Protocol to all Signatory States and to all States which accede to this Protocol. 3. As soon as this Protocol enters into force, the text shall be transmitted by the SecretaryGeneral to the Secretariat of the United Nations for registration and publication in accordance with Article 102 of the Charter of the United Nations. Article 15: Languages This Protocol is established in a single original in the Arabic, Chinese, English, French, Russian and Spanish languages, each text being equally authentic. DONE AT .......................

APPENDIX V

Tonnage-based International Limitation

Conventions—Ratifications and Accessions

S TAT E

L I M I TAT I O N CONVENTION 1976

Albania

•

Algeria

•

1957

1924

• •

Argentina Australia

•

•

Azerbaijan

•

Bahamas*

•

•

Barbados*

•

•

Belgium

•

•

•

•

Belize •

Benin

•

Brazil

•

•

Bulgaria

•

Canada

•

Chile China

•

Congo

•

Croatia

•

Denmark* **

•

•

Dominica

•

•

505

•

•

506

APPENDIX V

S TAT E

L I M I TAT I O N CONVENTION 1976

Dominican Republic* Egypt

•

Equatorial Guinea

•

Estonia

•

1957

1924

•

•

• • •

Fiji* Finland**

•

•

•

France

•

•

•

Georgia

•

Germany**

•

•

Ghana* Greece

•

•

Grenada

•

Guinea

•

Guyana*

•

Hong Kong •

Hungary •

Iceland* India*

•

•

Iran* Ireland

•

•

Israel

•

Italy

•

•

•

•

Jamaica

•

Japan**

•

•

Kiribati* Latvia Lebanon

•

• •

507

I N T E R N AT I O N A L L I M I TAT I O N C O N V E N T I O N S

S TAT E

L I M I TAT I O N CONVENTION 1976

Liberia

•

Lithuania

•

1957

Luxembourg

•

Macau

•

Malgache Republic

•

Marshall Islands

•

Mauritius*

•

Mexico

•

Netherlands

•

New Zealand

•

Nigeria

•

Norway

•

• •

Peru

• •

Portugal* (Including Aruba)

•

•

• •

•

• •

St. Vincent & The Grenadines Samoa

•

•

Romania St. Lucia*

•

•

Papua New Guinea*

Poland

•

•

•

Monaco*

1924

• •

Seychelles* Sierra Leone

•

Singapore*

•

• •

Solomon Islands* Spain*

•

•

•

Sweden**

•

•

•

508

APPENDIX V

S TAT E

Switzerland

L I M I TAT I O N CONVENTION 1976

1957

•

• •

Syria Syrian Arab Republic

•

Tonga*

•

Trinidad and Tobago

•

Turkey

•

• • •

Tuvalu* United Arab Emirates*

•

•

United Kingdom** ***

•

•

Vanuatu

•

•

•

•

Vatican City Yemen

1924

•

Yugoslavia

•

Zaire

•

As at 19 October 2005.

Source: Foreign Office Treaties Desk

* 1957 Convention applies but with restriction(s) ** Denunciation of 1976 Limitation Convention *** One of the U.K. Dependent Territories, the British Antarctic Territory, is still party to the 1957 Convention.

APPENDIX VI

Statutory Instruments

THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (UNITED KINGDOM CARRIERS) (AMENDMENT) ORDER 1989 (SI 1989 No. 1880) Made Coming into force

-

9 October 1989 10 November 1989

The Secretary of State for Transport, in exercise of the powers conferred upon him by sections 14 and 16 of, and by paragraph 4 of Part II of Schedule 3 to, the Merchant Shipping Act 1979(a) and of all other powers enabling him in that behalf hereby makes the following Order: 1. This Order may be cited as the Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) (Amendment) Order 1989 and shall come into force on 10th November 1989. 2. The Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987(b) shall be amended as follows: (a) in article 2, for ‘‘700,000 francs’’ there shall be substituted ‘‘46,666 units of account’’ and for ‘‘1,525,000 francs’’ there shall be substituted ‘‘100,000 units of account’’; (b) article 3 shall be omitted. Patrick McLoughlin Parliamentary Under Secretary of State, Department of Transport

Signed by authority of the Secretary of State 9th October 1989

Explanatory Note

(This note is not part of the Order) This Order amends the Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987 as a consequence of the coming into force of the 1976 Protocol to the Athens Convention relating to the Carriage of Passengers and their Luggage 1974 (which replaces the reference to gold francs in the Athens Convention by references to Special Drawing Rights). That Order provides a higher limit for United Kingdom carriers. This Order substitutes references to gold francs by appropriate references to ‘‘units of account’’, (the definition and conversion into sterling of which are provided in paragraphs 3 and 4 of Part III of Schedule 3 to the Merchant Shipping Act 1979, which comes into force on the same day as this Order).

(a) 1979 c. 39. (b) S.I. 1987/855.

509

510

APPENDIX VI

THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (UNITED KINGDOM CARRIERS) ORDER 1987 (SI 1987 No. 855)

Made Coming into force

-

28 April 1987 1 June 1987

The Secretary of State for Transport, in exercise of the powers conferred upon him by sections 14 and 16 of, and by paragraphs 4 and 5 of Part II of Schedule 3 to, the Merchant Shipping Act 1979(a) and of all other powers enabling him in that behalf hereby makes the following Order: 1. This Order may be cited as the Carriage of Passengers and their Luggage by Sea (United Kingdom Carriers) Order 1987 and shall come into force on 1st June 1987. 2. In relation to any carrier whose principal place of business is in the United Kingdom, paragraph 1 of Article 7 to the Convention Relating to the Carriage of Passengers and their Luggage by Sea, set out in Part I of Schedule 3 to the Merchant Shipping Act 1979, (including that paragraph as applied to domestic carriage by the Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987(b)) shall have effect as if for the limit of 700,000 francs there specified there were substituted a limit of 1,525,000 francs. 3. The Merchant Shipping (Sterling Equivalents) (Various Enactments) Order 1986(c) is hereby amended by substituting, in the table in article 3, the following entry for the entry for Article 7, paragraph 1:— ‘‘Article 7, paragraph 1 (for carriers other than U.K. carriers) Article 7, paragraph 1 (for U.K. carriers)

700,000 1,525,000

£38,173.40 £80,009.00.’’

Signed by the authority of the Secretary of State 28th April 1987

Michael Spicer Parliamentary Under Secretary of State, Department of Transport

Explanatory Note

(This note is not part of the Order) This Order increases the limit of liability of carriers whose principal place of business is in the United Kingdom for death or injury of passengers carried by them by sea to the amount of 1,525,000 gold francs per passenger per carriage, and fixes the sterling equivalent of that amount at £80,009.00. The limit for other carriers remains that specified in the Convention Relating to the Carriage of Passengers and their Luggage by Sea (set out in Schedule 3 to the Merchant Shipping Act 1979), namely 700,000 gold francs (sterling equivalent currently £38,173.40).

(a) 1979 c. 39. (b) S.I. 1987/670. (c) S.I. 1986/1777.

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THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (INTERIM PROVISIONS) ORDER 1980 (SI 1980 No. 1092) Laid before Parliament in draft Made 28 July 1980 Coming into Operation 1 January 1981 At the Court at Buckingham Palace, the 28th day of July 1980

Present,

The Queen’s Most Excellent Majesty in Council

Whereas a draft of this Order has been laid before Parliament in accordance with section 16(5) of the Merchant Shipping Act 1979(a) and has been approved by a resolution of each House of Parliament: Now, therefore, Her Majesty, in exercise of the powers conferred upon Her by section 16(1), (2) and (5) of the Merchant Shipping Act 1979 (hereinafter referred to as ‘‘the 1979 Act’’) and of all other powers enabling Her in that behalf, is pleased, by and with the advice of Her Privy Council, to order, and it is hereby ordered, as follows:— Citation, commencement and interpretation 1.—(1) This Order may be cited as the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980 and shall come into operation on 1st January 1981. (2) In this Order ‘‘international carriage’’ has the same meaning as in Article 1.9 of the Conven­ tion relating to the Carriage of Passengers and their Luggage by Sea 1974 (hereinafter referred to as ‘‘the Athens Convention’’), as set out in Part I of Schedule 3 to the 1979 Act. Application 2. This Order applies to the following contracts for the carriage of passengers or of passengers and their luggage by sea (being contracts for reward) made on or after 1st January 1981, that is to say:— (a) any contract for international carriage which is made in the United Kingdom; (b) any contract for international carriage under which a place in the United Kingdom is the place of departure or destination; (c) any contract under which the places of departure and destination are in the area consisting of the United Kingdom, the Channel Islands and the Isle of Man and under which there is no intermediate port of call outside that area. Application and modification of the Athens Convention 3.—(1) Paragraph (2) of this Article shall have effect only until such time as subsections (1) and (2) of section 14 of the 1979 Act (which provide for the Athens Convention to have the force of law in the United Kingdom and for certain related provisions to have effect) come into force. (2) Part I of Schedule 3 to the 1979 Act (which sets out the text of the Athens Convention) shall have the force of law in the United Kingdom in relation to, and to matters connected with, contracts to which this Order applies, subject to the modifications specified in the Schedule hereto and (as so modified) shall so have effect subject to the provisions of Part II of the said Schedule 3 as modified by the Schedule hereto. (3) This Order shall bind the Crown. N.E. Leigh, Clerk of the Privy Council. (a) 1979 c. 39.

512

APPENDIX VI

SCHEDULE (Article 3) Modifications to Part I of Schedule 3 of the 1979 Act 1. In Article 2, for paragraph 1 there shall be substituted— ‘‘1. This Convention shall apply to any carriage if: (a) it is international carriage and the contract of carriage is made in the United Kingdom or (b) it is international carriage and, under the contract of carriage, a place in the United Kingdom is the place of departure or destination or (c) under the contract of carriage, the places of departure and destination are in the area consisting of the United Kingdom, the Channel Islands and the Isle of Man and there is no intermediate port of call outside that area.’’ 2. In Article 7, paragraph 2 shall be omitted. 3. In Article 17.1, the words, ‘‘provided that the Court is located in a State Party to this Convention’’ shall be omitted. Modification to Part II of Schedule 3 to the 1979 Act 4. Paragraph 10 of Part II of Schedule 3 to the 1979 Act shall be omitted. Explanatory Note

(This note is not part of the Order) This Order (which binds the Crown) provides that, pending the coming into force internationally of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974, the Convention (as set out in Schedule 3 to the Merchant Shipping Act 1979) shall, subject to modifica­ tions, have the force of law in the United Kingdom, but only: (a) where a contract of international carriage is made in the United Kingdom or where, under a contract of international carriage, the United Kingdom is the place of departure or destination or (b) where, under a contract of carriage, the places of departure and destination are in the area consisting of the United Kingdom, the Channel Islands and the Isle of Man and there is no intermediate port of call outside that area, and the contract is made on or after 1st January 1981. The Convention will have effect subject to (a) the modifications specified in the Schedule to this Order and (b) the provisions of Part II of Schedule 3 to the 1979 Act, as modified. Section 28 of the Unfair Contract Terms Act 1977 (which made temporary provision for contracts for the carriage of passengers and their luggage by sea, pending the provisions of the Athens Convention having the force of law in the United Kingdom) ceases, upon the date of the coming into operation of this Order, to apply to any contract to which this Order applies, but it continues to apply to any contract made before that date.

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513

THE MERCHANT SHIPPING (LIABILITY OF SHIPOWNERS AND

OTHERS) (NEW RATE OF INTEREST) ORDER 2004

(SI 2004 No. 931) Made Laid before Parliament Coming into force

25th March 2004 2nd April 2004 28th April 2004

The Secretary of State, in exercise of the powers conferred upon him by paragraph 8(1) of Part II of Schedule 7 to the Merchant Shipping Act 1995[1], with the concurrence of the Treasury, hereby makes the following Order:

Citation, commencement and interpretation 1. This Order may be cited as the Merchant Shipping (Liability of Shipowners and Others) (New Rate of Interest) Order 2004 and shall come into force on 28th April 2004. 2. In this Order ‘‘the prescribed rate’’ means one per cent more than the base rate quoted from time to time by the Bank of England or the rate of interest set by any body which may supersede it and where there is more than one such rate, the lowest of them.

Revocation and amendment 3. (1) The Merchant Shipping (Liability of Shipowners and Others) (New Rate of Interest) Order 2003 [2] is hereby revoked. (2) The Merchant Shipping (Liability of Shipowners and Others) (Rate of Interest) Order 1999 [3] is amended at article 3(b) by inserting ‘‘until 30th December 2003’’ after ‘‘the prescribed rate’’.

Rate of interest 4. The rate of interest for the purposes of article 11(1) of the Convention on Limitation of Liability for Maritime Claims 1976 [4] shall be the prescribed rate from 31st December 2003 where— (a) the occurrence takes place before 1 September 1999, but the fund is constituted on or after 1st September 1999; or (b) the occurrence takes place on or after 1st September 1999. Signed by the authority of the Secretary of State David Jamieson Parliamentary Under Secretary of State Department for Transport 25th March 2004 We concur with the making of this Order. Nick Ainger Jim Murphy Two of the Lords Commissioners of Her Majesty’s Treasury 15th March 2004

514

APPENDIX VI

THE MERCHANT SHIPPING (CONVENTION ON LIMITATION OF

LIABILITY FOR MARITIME CLAIMS) (AMENDMENT) ORDER 1998

Made 19th May 1998

Coming into force in accordance with Article 1

At the Court of Buckingham Palace, the 19th day of May 1998

Present,

The Queen’s Most Excellent Majesty in Council

Whereas a draft of this Order has, in pursuance of section 185(5) of the Merchant Shipping Act 1995(1), been laid before Parliament and approved by a resolution of each House of Parliament: Now, therefore, Her Majesty, by virtue and in exercise of the powers conferred on her by section 185(2A) of the Merchant Shipping Act 1995, is pleased, by and with the advice of Her Privy Council, to order, and it is hereby ordered, as follows: Citation and commencement 1. This Order may be cited as the Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998 and shall come into force on the date, to be notified in the London, Edinburgh and Belfast Gazettes, on which the Protocol of 1996 to amend the Conven­ tion on Limitation of Liability for Maritime Claims 1976(2) enters into force in respect of the United Kingdom. Interpretation 2. In this Order, unless the context otherwise requires— ‘‘the Act’’ means the Merchant Shipping Act 1995; ‘‘the Convention’’ means the Convention on Limitation of Liability for Maritime Claims, 1976(3). Claims excepted from limitation 3. In the text of the Convention as set out in Part I of Schedule 7 to the Act, in Chapter I, for paragraph (a) of Article 3 there shall be substituted— ‘‘(a) claims for salvage, including, if applicable, any claim for special compensation under Article 14 of the International Convention on Salvage 1989(4), as amended, or contribution in general average;’’. Limits of Liability 4. In the text of the Convention as set out in Part I of Schedule 7 to the Act, in Chapter II— (a) for paragraph 1 of Article 6 there shall be substituted— ‘‘1. The limits of liability for claims other than those mentioned in Article 7, arising on any distinct occasion, shall be calculated as follows: (a) in respect of claims for loss of life or personal injury, (i) 2 million Units of Account for a ship with a tonnage not exceeding 2,000 tons, (1) 1995 c. 21; section 182B has been inserted by, and section 185 amended by, the Merchant Shipping and Maritime Security Act 1997 c. 28, sections 14 and 15. (2) Cm 3581. (3) The text of the Convention is set out in Schedule 7 to the Act. (4) The text of the Convention is set out in Schedule 11 to the Act.

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515

(ii) for a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i): — for each ton from 2,001 to 30,000 tons, 800 Units of Account; — for each ton from 30,001 to 70,000 tons, 600 Units of Account; and — for each ton in excess of 70,000 tons, 400 Units of Account, (b) in respect of any other claims, (i) 1 million Units of Account for a ship with a tonnage not exceeding 2,000 tons, (ii) for a ship with a tonnage in excess thereof the following amount in addition to that mentioned in (i): — for each ton from 2,001 to 30,000 tons, 400 Units of Account; — for each ton from 30,001 to 70,000 tons, 300 Units of Account; and — for each ton in excess of 70,000 tons, 200 Units of Account.’’; (b) for paragraph 1 of Article 7 there shall be substituted— ‘‘1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of ship, the limit of liability of the shipowner thereof shall be an amount of 175,000 Units of Account multiplied by the number of passengers which the ship is authorised to carry according to the ship’s certificate.’’. Scope of application of Convention 5. In the text of the Convention as set out in Part I of Schedule 7 to the Act, in Article 15— (a) the existing text shall be numbered 1; and (b) at the end there shall be added the following paragraphs— ‘‘2. A State Party may regulate by specific provisions of national law the system of limitation of liability to be applied to vessels which are: (a) according to the law of that State, ships intended for navigation on inland waterways; (b) ships of less than 300 tons. A State Party which makes use of the option provided for in this paragraph shall inform the depositary of the limits of liability adopted in its national legislation or of the fact that there are none. 3bis. Notwithstanding the limit of liability prescribed in paragraph 1 of article 7, a State Party may regulate by specific provisions of national law the system of liability to be applied to claims for loss of life or personal injury to passengers of a ship, provided that the limit of liability is not lower than that prescribed in paragraph 1 of article 7. A State Party which makes use of the option provided for in this paragraph shall inform the Secretary-General of the limits of liability adopted or of the fact that there are none.’’. Reservations permitted under the Convention 6. In Part I of Schedule 7 there shall be added at the end the following— ‘‘ARTICLE 18 1998/1258 STATUTORY INSTRUMENTS 3 Reservations 1. Any State may, at the time of signature, ratification, acceptance, approval or accession, or at any time thereafter, reserve the right: (a) to exclude the application of article 2, paragraphs 1(d) and (e); (b) to exclude claims for damage within the meaning of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (1) or of any amendment or Protocol thereto.

516

APPENDIX VI

No other reservations shall be admissible to the substantive provisions of this Conven­ tion.’’. Amendments to provisions which have effect in connection with the Convention 7. In Part II of Schedule 7 to the Act (provisions having effect in connection with the Con­ vention)— (a) at the beginning of paragraph 2 there shall be inserted ‘‘Subject to paragraph 6 below,’’; (b) before paragraph 3 there shall be inserted— ‘‘2A. Paragraph 1(a) of article 2 shall have effect as if the reference to ‘‘loss of life or personal injury’’ did not include a reference to loss of life or personal injury to passengers of seagoing ships.’’; (c) in paragraph 4, for sub-paragraph (1) there shall be substituted— ‘‘4.—(1) Claims for damage within the meaning of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea 1996 (2), or any amendment of or Protocol to that Convention, which arise from occurrences which take place after the coming into force of the first Order in Council made by Her Majesty under section 182B of this Act shall be excluded from the Convention.’’; (d) in paragraph 5, in sub-paragraph (1)(a) for ‘‘166,667’’ there shall be substituted ‘‘1,000,000’’ and in sub-paragraph (1)(b) for ‘‘83,333’’ there shall be substituted ‘‘500,000’’; (e) in paragraph 6, for sub-paragraph (1) there shall be substituted— ‘‘6.—(1) Article 7 shall not apply in respect of any seagoing ship; and shall have effect in respect of any ship which is not seagoing as if, in paragraph 1 of that article— (a) after ‘‘thereof’’ there were inserted ‘‘in respect of each passenger,’’; (b) the words from ‘‘multiplied’’ onwards were omitted.’’. (f) for paragraph 13 there shall be substituted— ‘‘13. An Order in Council made for the purposes of this paragraph and declaring that any State specified in the Order is a party to the Convention as amended by the 1996 Protocol shall, subject to the provisions of any subsequent Order made for those purposes, be conclusive evidence that the State is a party to the Convention as amended by the 1996 Protocol.’’. 8. The Schedule to this Order contains the text of Schedule 7 to the Act as amended by Articles 3 to 7 of this Order. N. H. Nicholls Clerk of the Privy Council

SCHEDULE (1) The text of the Convention is set out in Schedule 5A to the Act. (2) The text of the Convention is set out in Schedule 5A to the Act.

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517

THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (INTERIM PROVISIONS) (NOTICE) ORDER 1980 (SI 1980 No. 1125) Made Laid before Parliament Coming into Operation

30 July 1980 7 August 1980 1 January 1981

The Secretary of State, in exercise of the powers conferred by paragraph 11 of Part II of Schedule 3 to the Merchant Shipping Act 1979(a) (hereinafter called ‘‘the 1979 Act’’), as applied by Article 3(2) of the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980(b), and of all other powers enabling him in that behalf, hereby makes the following Order:— 1.—(1) This Order may be cited as the Carriage of Passengers and their Luggage by Sea (Interim Provisions) (Notice) Order 1980 and shall come into operation on 1st January 1981. (2) In this Order: ‘‘carrier’’ ‘‘luggage’’ and ‘‘passenger’’ have the same meaning as in Article 1 of the Conven­ tion relating to the Carriage of Passengers and their Luggage by Sea 1974 (hereinafter referred to as ‘‘the Athens Convention’’), as set out in Part I of Schedule 3 to the 1979 Act; ‘‘the principal Order’’ means the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980. 2.—(1) In relation to any contract of carriage to which the principal Order applies, the carrier shall give to the passenger notice of those provisions of the Athens Convention specified in the Schedule hereto. (2) Such notice shall be given before departure and it shall be sufficient compliance with paragraph (1) if the notice contains a statement that: (a) the provisions of the Athens Convention may be applicable and (b) the Athens Convention in most cases limits the carrier’s liability for death or personal injury or loss of or damage to luggage (including a vehicle) and makes special provision for valuables and (c) the Athens Convention presumes that luggage has been delivered undamaged unless written notice is given to the carrier; (i) in the case of apparent damage, before or at the time of disembarkation or re-delivery, or (ii) in the case of damage which is not apparent or of loss, within 15 days from the date of disembarkation or re-delivery or from the time when such re-delivery should have taken place: Provided that where a ticket is issued, and it is practicable to do so, the ticket itself shall contain a statement specifying the matters set out in subparagraphs (a) to (c). 3. Any carrier who fails to comply with Article 2 above shall be guilty of an offence and liable on summary conviction to a fine of an amount not exceeding £500. 30 July 1980.

(a) 1979 c. 39. (b) S.I. 1980/1092.

Norman Tebbit, Parliamentary Under-Secretary of State, Department of Trade.

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SCHEDULE Article 2(1) Provisions of the Athens Convention of which notice must be given to passengers: Article Article Article Article

5—Valuables; 7—Limit of liability for personal injury; 8—Limit of liability for loss of, or damage to, luggage; 15—Notice of loss or damage to luggage.

Explanatory Note

(This note is not part of the Order) This Order requires a carrier, in relation to any contract of carriage to which the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980 applies, to give to passengers notice of specified provisions of the Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 (the Athens Convention). Those provisions relate to valuables, the limit of the carrier’s liability for death or personal injury and for loss of or damage to luggage (including a vehicle), and the notice to be given by the passenger in respect of loss or damage to luggage. Notice must be given by the carrier before departure and, where practicable, on the ticket itself.

THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (DOMESTIC CARRIAGE) ORDER 1987 (SI 1987 No. 670) Made Coming into force

-

7 April 1987 30 April 1987

At the Court at Windsor Castle, the 7th day of April 1987

Present,

The Queen’s Most Excellent Majesty in Council

Whereas section 14(1) and (2) of the Merchant Shipping Act 1979(a) (which provides for the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, as set out in Schedule 3 to that Act, to have the force of law in the United Kingdom) is brought into force on 30th April 1987 by the Merchant Shipping Act 1979 (Commencement No. 11) Order 1987(b): And whereas by virtue of section 16(1) and (2) of that Act the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980(c) provides for the Athens Convention to apply to certain international and domestic contracts of such carriage (being contracts made on or after 1st January 1981) but, by virtue of Article 3 of that Order, only until such time as the said section 14(1) and (2) comes into force: And whereas a draft of this Order has been laid before Parliament in accordance with section 16(5) of the Merchant Shipping Act 1979 and has been approved by a resolution of each House of Parliament: Now, therefore, Her Majesty, in exercise of the powers conferred upon Her by section 16(2) and (5) of the Merchant Shipping Act 1979 (hereinafter referred to as ‘‘the 1979 Act’’) and of all other powers enabling Her in that behalf, is pleased, by and with the advice of her Privy Council, to order, and it is hereby ordered, as follows:— (a) 1979 c. 39. (b) S.I. 1987/635. (c) S.I. 1980/1092.

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1. This Order may be cited as the Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987 and shall come into force on 30th April 1987. 2. This Order applies to the following contracts for the carriage of passengers or of passengers and their luggage by sea (being contracts for reward) made on or after 30th April 1987, that is to say any contract under which the places of departure and destination are in the area consisting of the United Kingdom, the Channel Islands and the Isle of Man and under which there is no intermediate port of call outside that area. 3.—(1) Part I of Schedule 3 to the 1979 Act (which sets out the text of the Athens Convention) shall have the force of law in the United Kingdom in relation to, and to matters connected with, contracts to which this Order applies, subject to the modifications specified in the Schedule hereto and (as so modified) shall so have effect subject to the provisions of Part II of the said Schedule 3 as modified by the Schedule hereto. (2) This Order shall bind the Crown. 4. Article 3(1) of the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980 shall have effect as if at the beginning there were inserted the words ‘‘Except in relation to contracts mentioned in paragraph (c) of Article 2 above made before 30th April 1987’’. G. I. de Deney Clerk of the Privy Council SCHEDULE (Article 3) Modifications to Part I of Schedule 3 to the 1979 Act 1. In Article 2, for paragraph 1 there shall be substituted:— ‘‘1. This Convention shall apply to any carriage if under the contract of carriage the places of departure and destination are in the area consisting of the United Kingdom, the Channel Islands and the Isle of Man and there is no intermediate port of call outside that area’’. 2. In Article 7, paragraph 2 shall be omitted. 3. In Article 17.1, the words ‘‘provided that the Court is located in a State Party to this Convention’’ shall be omitted. Modification to Part II of Schedule 3 to the 1979 Act 4. Paragraph 10 of Part II of Schedule 3 to the 1979 Act shall be omitted. Explanatory Note

(This note is not part of the Order) This Order, which comes into force on 30th April 1987 (the day on which the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, as set out in Schedule 3 of the Merchant Shipping Act 1979, is given the force of law in the United Kingdom), provides for the Convention to apply to the contracts of domestic carriage mentioned in Article 2, subject to the modifications referred to in Article 3. The Order also makes a consequential amendment to the Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980 (which made temporary provision for the Conven­ tion to apply to certain contracts of international and domestic carriage pending its full implementa­ tion) to secure that the Convention continues to apply in relation to contracts of domestic carriage made before 30th April 1987. Corresponding provision is made by the Merchant Shipping Act 1979 (Commencement No. 11) Order 1987 in relation to contracts for international carriage made before that date.

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THE HOVERCRAFT (CONVENTION ON LIMITATION OF LIABILITY FOR MARITIME CLAIMS (AMENDMENT)) ORDER 1998 Made 19th May 1998

Coming into force in accordance with Article 1

At the Court of Buckingham Palace, the 19th day of May 1998

Present,

The Queen’s Most Excellent Majesty in Council

Whereas a draft of this Order has, in pursuance of section 1(4) of the Hovercraft Act 1968(1), been laid before Parliament and approved by a resolution of each House of Parliament: Now, therefore, Her Majesty, by virtue and in exercise of the powers conferred on Her by section 1(1)(i) and 1(3)(f) of the Hovercraft Act 1968, is pleased, by and with the advice of Her Privy Council, to order, and it is hereby ordered, as follows:— 1. This Order may be cited as the Hovercraft (Convention on Limitation of Liability for Maritime Claims (Amendment)) Order 1998 and shall come into force on the date, to be notified in the London, Edinburgh and Belfast Gazettes, on which the Protocol of 1996 to amend the Convention on Limitation of Liability for Maritime Claims 1976(2) enters into force in respect of the United Kingdom. 2. The Hovercraft (Civil Liability) Order 1986(3) shall be amended so that in paragraph (8) of Part B of Schedule 3, and in Part (3)B of Schedule 4, in respect of Article 6 there shall be sub­ stituted: ‘‘Article 6 THE LIMITS 1. The limits of liability for claims arising on any distinct occasion shall be calculated as follows: (a) in respect of claims for loss of life or personal injury: (i) £852,085 for a hovercraft with a maximum operational weight not exceed­ ing 8,000 kg.; (ii) £1,659,605 for a hovercraft with a maximum operational weight in excess of 8,000 kg., but not exceeding 13,000 kg., and (iii) for a hovercraft with a maximum operational weight in excess thereof, an amount in addition to that mentioned in (ii) which equals £25.55 for each additional kg., (b) in respect of any other claims: (i) £357,360 for a hovercraft with a maximum operational weight not exceed­ ing 8,000 kg.; (ii) £698,270 for a hovercraft with a maximum operational weight in excess of 8,001 kg. but not exceeding 13,000 kg.; and (iii) for a hovercraft with a maximum operational weight in excess thereof, an amount in addition to that mentioned in (ii) which equals £10.75 for each additional kg. 1998/1257 STATUTORY INSTRUMENTS 2 2. Where the amount calculated in accordance with paragraph 1(a) is insufficient to pay the claims mentioned therein in full, the amount calculated in accordance with paragraph 1(b) shall be available for payment of the unpaid balance of claims under paragraph 1(a) and such unpaid balance shall rank rateably with claims mentioned under paragraph 1(b).’’. N. H. Nicholls Clerk of the Privy Council (1) 1968 c.59, section 1(1)(i) was amended by the Merchant Shipping Act 1995 (c.21), Schedule 13 paragraph 42. (2) Cm 3581. (3) S.I. 1986/1305 as amended by S.I. 1987/1835.

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Explanatory Note

(This note is not part of the Order) This Order increases the limits of liability of owners hovercraft consequent upon the implementation of the 1996 Protocol to the International Convention on Limitation of Liability for Maritime Claims 1976 following its ratification by, and entry into force for, the UK. The Order does this by amending the Hovercraft (Civil Liability) Order 1986 (SI 1986/1305). Corresponding changes to the limits which apply to ships are made by the Merchant Shipping (Convention on the Liability for Maritime Claims) (Amendment) Order 1998 (S.I. 1998/1258). A cost compliance assessment has been prepared, and copies can be obtained from Shipping Policy Directorate, the Department of the Environment, Transport and the Regions, Zone 4/12, Great Minster House, 76 Marsham Street, London SW1P 4DR, (Tel. 0171 271 3893). A copy has been placed in the Library of each House of Parliament. ISBN 0 11 079063 4 DEPARTMENT [DOT 8183] Enabling power: HOVERCRAFT ACT 1968, S. 1 (1) (I) (3) (F). Effect: S.I. 1996/1305 AMENDED. SUPERSEDES DRAFT SI ISBN 0110656075 ISSUED 10.03.1998. Issued: 27.05.1998.

APPENDIX VII

The Carriage of Goods by Sea Act 1971

(The Hague-Visby Rules)

An Act to Amend the Law with Respect to the Carriage of Goods by Sea Application of Hague Rules as amended 1.—(1) In this Act, ‘‘the Rules’’ means the International Convention for the unification of certain rules of law relating to bills of lading signed at Brussels on 25th August 1924, as amended by the Protocol signed at Brussels on 23rd February, 1968, and by Protocol signed at Brussels on December 21, 1972. (2) The provisions of the Rules, as set out in the Schedule to this Act, shall have the force of law. (3) Without prejudice to subsection (2) above, the said provisions shall have effect (and have the force law) in relation to and in connection with the carriage of goods by sea in ships where the port of shipment is a port in the United kingdom, whether or not the carriage is between ports in two different States within the meaning of Article X of the Rules. (4) Subject to subsection (6) below, nothing in this section shall be taken as applying anything in the Rules to any contract for the carriage of goods by sea, unless the contract expressly or by implication provides for the issue of a bill of lading or any similar document of title. (5) [Repealed by section 5(3) of and Schedule to the Merchant Shipping Act, 1981.] (6) Without prejudice to Article X(c) of the Rules, the Rules shall have the force of law in relation to— (a) any bill of lading if the contract contained in or evidenced by it expressly provides that the Rules shall govern the contract, and (b) any receipt which is a non-negotiable document marked as such if the contract contained in or evidenced by it is a contract for the carriage of goods by sea which expressly provides that the Rules are to govern the contract as if the receipt were a bill of lading, but subject, where paragraph (b) applies, to any necessary modification and in particular with the omission in Article III of the Rules of the second sentence of paragraph 4 and of paragraph 7. (7) If and so far as the contract contained in or evidenced by a bill of lading or receipt within paragraph (a) or (b) of subsection (6) above applies to deck cargo or live animals, the Rules as given the force of law by that subsection shall have effect as if Article I(c) did not exclude deck cargo and live animals. In this subsection ‘‘deck cargo’’ means cargo which by the contract of carriage is stated as being carried on deck and is so carried.

Contracting States, etc. 2.—(1) If Her Majesty by Order in Council certifies to the following effect, that is to say, that for the purpose of the Rules— (a) a State in the Order is a contracting State, or is a contracting State in respect of any place or territory so specified; or (b) any place or territory specified in the Order forms part of a State so specified (whether a contracting State or not), the Order shall, except so far as it has been superseded by a subsequent Order, be conclusive evidence of the matters so certified.

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(2) An Order in Council under this section may be varied or revoked by a subsequent Order in Council. Absolute warranty of seaworthiness not to be implied in contracts to which Rules apply 3. There shall not be implied in any contract for the carriage of goods by sea to which the Rules apply by virtue of this Act any absolute undertaking by the carrier of the goods to provide a seaworthy ship. Application of Act to British possessions, etc. 4.—(1) Her Majesty may by Order in Council direct that this Act shall extend, subject to such exceptions, adaptations and modifications as may be specified in the Order, to all or any of the following territories that is— (a) any colony (not being a colony for whose external relations a country other than the United Kingdom is responsible), (b) any country outside Her Majesty’s dominions in which Her Majesty has jurisdiction in right of Her Majesty’s Government of the United Kingdom. (2) An Order in Council under this section may contain such transitional and other consequential and incidental provisions as appear to Her Majesty to be expedient, including provisions amending or repealing any legislation about the carriage of goods by sea forming part of the law of any of the territories mentioned in paragraphs (a) and (b) above. (3) An Order in Council under this section may be varied or revoked by a subsequent Order in Council. Extension of application of Rules to carriage from ports in British possessions, etc. 5.—(1) Her Majesty may by Order in Council provide that section 1(3) of this Act shall have effect as if the reference therein to the United Kingdom included a reference to all or any of the following territories, that is— (a) the Isle of Man; (b) any of the Channel Islands specified in the Order; (c) any colony in the Order (not being a colony for whose external relations a country other than the United Kingdom is responsible); (d) any associated state (as defined by section 1(3) of the West Indies Act 1967, specified in the Order; (e) any country specified in the Order, being a country outside Her Majesty’s dominions in which her Majesty has jurisdiction in right of Her Majesty’s Government of the United Kingdom. (2) An Order in Council under this section may be varied or revoked by a subsequent Order in Council. Supplemental 6.—(1) This Act may be cited as the Carriage of Goods by Sea Act 1971. (2) It is hereby declared that this Act extends to Northern Ireland. (3) The following enactments shall be repealed, that is— (a) the Carriage of Goods by Sea Act 1924, (b) section 12(4) of the Nuclear Installations Act 1965, and without prejudice to section 38(1) of the Interpretation Act 1889, the reference to the said Act of 1924 in section 1(1)(i)(ii) of the Hovercraft Act 1968 shall include a reference to this Act. [(4) It is hereby declared that for the purpose of Article VIII of the Rules section 186 of the Merchant Shipping Act 1995 (which entirely exempts shipowners and others in certain circum­ stances from liability for loss of, or damage to, goods) is a provision relating to limitation of lia­ bility.] (5) [Provisions for coming into force].

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SCHEDULE. THE HAGUE RULES AS AMENDED BY THE BRUSSELS

P R O TO C O L 1 9 6 8 1

Article I In these Rules the following words are employed, with the meanings set out below:— (a) ‘‘Carrier’’ includes the owner or the charterer who enters into a contract of carriage with a shipper. (b) ‘‘Contract of carriage’’ applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter-party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same. (c) ‘‘Goods’’ includes goods, wares, merchandise, and articles of every kind whatsoever except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried. (d) ‘‘Ship’’ means any vessel used for the carriage of goods by sea. (e) ‘‘Carriage of goods’’ covers the period from the time when the goods are loaded on to the time they are discharged from the ship. Article II Subject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth. Article III 1. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to— (a) Make the ship seaworthy. (b) Properly man, equip and supply the ship. (c) Make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation. 2. Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. 3. After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things— (a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage. (b) Either the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by the shipper. (c) The apparent order and condition of the goods. Provided that no carrier, master or agent of the carrier shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had not reasonable means of checking. 4. Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3(a), (b) and (c). However, proof to the contrary 1. Those provisions of the Hague-Visby Rules which differ from the Hague Rules are underlined.

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shall not be admissible when the bill of lading has been transferred to a third party acting in good faith.2 5. The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight, as furnished by him, and the shipper shall indemnify the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper. 6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of goods as described in the bill of lading. The notice in writing need not be given if the state of the goods has, at the time of their receipt, been the subject of joint survey or inspection. Subject to paragraph 6bis3 the carrier and the ship shall in any event be discharged from all liability whatsoever3 in respect of the goods, unless suit is brought within one year of their delivery or of the date whey they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.3 In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods. 6bis. An action for indemnity against a third person may be brought even after the expiration of the year provided for in the preceding paragraph if brought within the time allowed by the law of the Court seized of the case. However, the time allowed shall be not less than three months, commencing from the day when the person bringing such action for indemnity has settled the claim or has been served with process in the action against himself.4 7. After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier, to the shipper shall, if the shipper so demands, be a ‘‘shipped’’ bill of lading, provided that if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the ‘‘shipped’’ bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted if it shows the particulars mentioned in paragraph 3 of Article III, shall for the purpose of this article be deemed to constitute a ‘‘shipped’’ bill of lading. 8. Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with, goods arising from negligence, fault, or failure in the duties and obligations provided in this article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect. A benefit of insurance in favour of the carrier5 or similar clause shall be deemed to be a clause relieving the carrier from liabil­ ity. Article IV 1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit

2. This sentence does not appear in Article III, Rule 4, of the Hague Rules and its effect is to do away (in those cases where the Hague-Visby Rules apply) with the old principle of English law laid down in Grant v. Norway (1851) 10 C.B. 665 that no estoppel arose in relation to quantum (as opposed to apparent good order and condition) when the bill of lading was negotiated. 3. These words do not appear in the Hague Rules. 4. These words do not appear in the Hague Rules and were introduced to do away with the uncertainty which had arisen under those Rules as to whether the one year time limit applied to indemnity claims. 5. These words do not appear in the Hague Rules.

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and safe for their reception, carriage and preservation in accordance with the provisions of para­ graph 1 of Article III. Whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this article. 2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from— (a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship. (b) Fire, unless caused by the actual fault or privity of the carrier. (c) Perils, dangers and accidents of the sea or other navigable waters. (d) Act of God. (e) Act of war. (f) Act of public enemies. (g) Arrest or restraint of princes, rulers or people, or seizure under legal process. (h) Quarantine restrictions. (i) Act or omission of the shipper or owner of the goods, his agent or representative. (j) Strikes or lockouts or stoppage or restraint of labour from whatever cause, whether partial or general. (k) Riots and civil commotions. (l) Saving or attempting to save life or property at sea. (m) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods. (n) Insufficiency of packing. (o) Insufficiency of inadequacy of marks. (p) Latent defects not discoverable by due diligence. (q) Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of his exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage. 3. The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault or neglect of the shipper, his agents or his servants. 4. Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom. 5.6 (a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in any amount exceeding the equivalent of 666.67 units of account7 per package or unit or 2 units of account7 per kilo of gross weight of the goods lost or damaged, whichever is the higher. (b) The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at which the goods are discharged from the ship in accordance with the contract or should have been so discharged. The value of the goods shall be fixed according to the commodity exchange price, or, if there be no such price, according to the current market price, or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality. (c) Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages or units for the purpose of this paragraph as far as these 6. The wording of Article IV, Rule 5, of the Hague Rules is substantially different. The Hague Rules wording is quoted in full on page 94. 7. These figures and units were introduced by s. 2(3) of the Merchant Shipping Act 1981 to give effect to the Hague-Visby Protocol. The unit of account is the SDR and the figures and units replaced by the 1981 Act were 10,000 Poincare´ francs per package or unit or 30 Poincare´ francs per kilo.

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packages or units are concerned. Except as aforesaid such article of transport shall be considered the package or unit. (d) The unit of account mentioned in this Article is the special drawing right as defined by the International Monetary Fund. The amounts mentioned in sub-paragraph (a) of this paragraph shall be converted into national currency on the basis of the value of the court seized of the case.8 (e) Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result. (f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in the bill of lading shall be prima facie evidence, but shall not be binding or conclusive on the carrier. (g) By agreement between the carrier, master or agent of the carrier and the shipper other maximum amounts than those mentioned in sub-paragraph (a) of this paragraph may be fixed, provided that no maximum amount so fixed shall be less than the appropriate maximum mentioned in that sub-paragraph. (h) Neither the carrier nor the ship shall be responsible in any event for loss or damage to, or in connection with goods if the nature or value thereof has been knowingly mis-stated by the shipper in the bill of lading. 6. Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrier has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place, or destroyed or rendered innocuous by the carrier without compensation and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any. Article IV bis9 1. The defences and limits of liability provided for in these Rules shall apply in any action against the carrier in respect of loss or damage to goods covered by a contract of carriage whether the action be founded in contract or in tort. 2. If such an action is brought against a servant or agent of the carrier (such servant or agent not being an independent contractor), such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke under these Rules. 3. The aggregate of the amounts recoverable from the carrier, and such servants and agents, shall in no case exceed the limit provided for in these Rules. 4. Nevertheless, a servant or agent of the carrier shall not be entitled to avail himself of the provisions of this article, if it is provided that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result. Article V A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and obligations10 under these Rules, provided such sur­ render or increase shall be embodied in the bill of lading issued to the shipper. The provisions of 8. This provision was introduced by s. 2(3) of the Merchant Shipping Act 1981 to give effect to the HagueVisby Protocol which replaced the Poincare´ franc with the SDR as the relevant unit. The wording of (d) prior to this amendment was: ‘‘A franc means a unit consisting of 65.5 milligrams of gold of millesimal fineness 900. The date of conversion of the sum awarded into national currencies shall be governed by the law of the Court seized of the case’’. 9. This provision does not appear in the Hague Rules. 10. The Hague Rules has the words: ‘‘ . . . and liabilities’’.

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these Rules shall not be applicable to charterparties, but if bills of lading are issued in the case of a ship under a charterparty they shall comply with the terms of these Rules. Nothing in these Rules shall be held to prevent the insertion in a bill of lading of any lawful provision regarding general average. Article VI Notwithstanding the provisions of the preceding articles, a carrier, master or agent of the carrier and a shipper shall in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in respect of such goods, or his obligation as to seaworthiness, so far as this stipulation is not contrary to public policy, or the care or diligence of his servants or agents in regard to the loading, handling, stowage, carriage, custody, care and discharge of the goods carried by sea, provided that in this case no bill of lading has been or shall be issued and that the terms agreed shall be embodied in a receipt which shall be a non-negotiable document and shall be marked as such. Any agreement so entered into shall have full legal effect. Provided that this article shall not apply to ordinary commercial shipments made in the ordinary course of trade, but only to other shipments where the character or condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement. Article VIII The provisions of these Rules shall not affect the rights and obligations of the carrier under any statute for the time being in force relating to the limitation of the liability of owners of sea-going vessels. Article IX These Rules shall not affect the provisions of any international Convention or national law governing liability for nuclear damage.11 Article X12 The provisions of these Rules shall apply to every bill of lading relating to the carriage of goods between ports in two different States if:— (a) the bill of lading is issued in a contracting State,

or

(b) the carriage is from a port in a contracting State,

or

(c) the contract contained in or evidenced by the bill of lading provides that these Rules or legislation of any State giving effect to them are to govern the contract, whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other interested person.

11. These words do not appear in the Hague Rules. Article IX of the Hague Rules deals with a completely different point, namely, gold value, and reads as follows: ‘‘The monetary units mentioned in these Rules are to be taken to be gold value’’. In view of the amended provisions of Article IV, Rule 5, in the Hague-Visby Rules, gold value is not relevant. 12. This provision does not appear in the Hague Rules and was introduced to extend the circumstances in which the Hague-Visby Rules would apply. Countries giving effect to the Hague Rules had usually provided that those Rules would apply only to exports from that country.

APPENDIX VIII

United Nations Convention on the Carriage of

Goods by Sea 1978

(The Hamburg Rules)

Preamble THE STATES PARTIES TO THIS CONVENTION, HAVING RECOGNIZED the desirability of determining by agreement certain rules relating to the carriage of goods by sea, HAVE DECIDED to conclude a Convention for this purpose and have thereto agreed as follows: PA RT I . G E N E R A L P R O V I S I O N S Article 1: Definitions In this Convention: 1. ‘‘Carrier’’ means any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper. 2. ‘‘Actual carrier’’ means any person to whom the performance of the carriage of the goods, or of part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted. 3. ‘‘Shipper’’ means any person by whom or in whose name or on whose behalf a contract of carriage of goods by sea has been concluded with a carrier, or any person by whom or in whose name or on whose behalf the goods are actually delivered to the carrier in relation to the contract of carriage by sea. 4. ‘‘Consignee’’ means the person entitled to take delivery of the goods. 5. ‘‘Goods’’ includes live animals; where the goods are consolidated in a container, pallet or similar article of transport or where they are packed, ‘‘goods’’ includes such article of transport or packaging if supplied by the shipper. 6. ‘‘Contract of carriage by sea’’ means any contract whereby the carrier undertakes against payment of freight to carry goods by sea from one port to another; however, a contract which involves carriage by sea and also carriage by some other means is deemed to be a contract of carriage by sea for the purposes of this Convention only in so far as it relates to the carriage by sea. 7. ‘‘Bill of lading’’ means a document which evidences a contract of carriage by sea and the taking over or loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document. A provision in the document that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking. 8. ‘‘Writing’’ includes, inter alia, telegram and telex. Article 2: Scope of application 1. The provisions of this Convention are applicable to all contracts of carriage by sea between two different States, if: (a) the port of loading as provided for in the contract of carriage by sea is located in a Contracting State, or (b) the port of discharge as provided for in the contract of carriage by sea is located in a Contracting State, or

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(c) one of the optional ports of discharge provided for in the contract of carriage by sea is the actual port of discharge and such port is located in a Contracting State, or (d) the bill of lading or other document evidencing the contract of carriage by sea is issued in a Contracting State, or (e) the bill of lading or other document evidencing the contract of carriage by sea provides that the provisions of this Convention or the legislation of any State giving effect to them are to govern the contract. 2. The provisions of this Convention are applicable without regard to the nationality of the ship, the carrier, the actual carrier, the shipper, the consignee or any other interested person. 3. The provisions of this Convention are not applicable to charter-parties. However, where a bill of lading is issued pursuant to a charter-party, the provisions of the Convention apply to such a bill of lading if it governs the relation between the carrier and the holder of the bill of lading, not being the charterer. 4. If a contract provides for future carriage goods in a series of shipments during an agreed period, the provisions of this Convention apply to each shipment. However, where a shipment is made under a charter-party, the provisions of paragraph 3 of this Article apply. Article 3. Interpretation of the Convention In the interpretation and application of the provisions of this Convention regard shall be had to its international character and to the need to promote uniformity.

PA RT I I . L I A B I L I T Y O F T H E C A R R I E R Article 4: Period of responsibility 1. The responsibility of the carrier for the goods under this Convention covers the period during which the carrier is in charge of the goods at the port of loading, during the carriage and at the port of discharge. 2. For the purpose of paragraph 1 of this article, the carrier is deemed to be in charge of the goods (a) from the time he has taken over the goods from: (i) the shipper, or a person acting on his behalf; or (ii) an authority or other third party to whom, pursuant to law or regulations applicable at the port of loading, the goods must be handed over for shipment; (b) until the time he has delivered the goods: (i) by handing over the goods to the consignee; or (ii) in cases, where the consignee does not receive the goods from the carrier, by placing them at the disposal of the consignee in accordance with the contract or with the law or with the usage of the particular trade, applicable at the port of discharge; or (iii) by handing over the goods to an authority or other third party to whom, pursuant to law or regulations applicable at the port of discharge, the goods must be handed over. 3. In paragraphs 1 and 2 of this article, reference to the carrier or to the consignee means, in addition to the carrier or the consignee, the servants or agents, respectively of the carrier or the consignee. Article 5. Basis of liability 1. The carrier is liable for loss resulting from loss of or damage to the goods, as well as from delay in delivery, if the occurrence which caused the loss, damage or delay took place while the goods were in his charge as defined in article 4, unless the carrier proves that he, his servants or agents took all measures that could reasonably be required to avoid the occurrence and its consequences. 2. Delay in delivery occurs when the goods have not been delivered at the port of discharge provided for in the contract of carriage by sea within the time expressly agreed upon or, in the

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absence of such agreement, within the time which it would be reasonable to require of a diligent carrier, having regard to the circumstances of the case. 3. The person entitled to make a claim for the loss of goods may treat the goods as lost if they have not been delivered as required by article 4 within 60 consecutive days following the expiry of the time for delivery according to paragraph 2 of this article. 4. (a) The carrier is liable (i) for loss of or damage to the goods or delay in delivery caused by fire, if the claimant proves that the fire arose from fault or neglect on the part of the carrier, his servants or agents; (ii) for such loss, damage or delay in delivery which is proved by the claimant to have resulted from the fault or neglect of the carrier, his servants or agents, in taking all measures that could reasonably be required to put out the fire and avoid or mitigate its consequences. (b) In case of fire on board the ship affecting the goods, if the claimant or the carrier so desires, a survey in accordance with shipping practices must be held into the cause and circum­ stances of the fire, and a copy of the surveyor’s report shall be made available on demand to the carrier and the claimant. 5. With respect to live animals, the carrier is not liable for loss, damage or delay in delivery resulting from any special risks inherent in that kind of carriage. If the carrier proves that he has complied with any special instructions given to him by the shipper respecting the animals and that, in the circumstances of the case, the loss, damage or delay in delivery could be attributed to such risks, it is presumed that the loss, damage or delay in delivery was so caused, unless there is proof that all or a part of the loss, damage or delay in delivery resulted from fault or neglect on the part of the carrier, his servants or agents. 6. The carrier is not liable, except in general average, where loss, damage or delay in delivery resulted from measures to save life or from reasonable measures to save property at sea. 7. Where fault or neglect on the part of the carrier, his servants or agents combines with another cause to produce loss, damage or delay in delivery the carrier is liable only to the extent that the loss, damage or delay in delivery is attributable to such fault or neglect, provided that the carrier proves the amount of the loss, damage or delay in delivery not attributable thereto. Article 6. Limits of liability 1. (a) The liability of the carrier for loss resulting from loss of or damage to goods according to the provisions of article 5 is limited to an amount equivalent to 835 units of account per package or other shipping unit or 2.5 units of account per kilogramme of gross weight of the goods lost or damaged, whichever is the higher. (b) The liability of the carrier for delay in delivery according to the provisions of article 5 is limited to an amount equivalent to two and a half times the freight payable for the goods delayed, but not exceeding the total freight payable under the contract of carriage of goods by sea. (c) In no case shall the aggregate liability of the carrier, under both subparagraphs (a) and (b) of this paragraph, exceed the limitation which would be established under subparagraph (a) of this paragraph for total loss of the goods with respect to which such liability was incurred. 2. For the purpose of calculating which amount is the higher in accordance with paragraph 1(a) of this article, the following rules apply: (a) Where a container, pallet or similar article of transport is used to consolidate goods, the package or other shipping units enumerated in the bill of lading, if issued, or otherwise in any other document evidencing the contract of carriage by sea, as packed in such article of transport are deemed packages or shipping units. Except as aforesaid the goods in such article of transport are deemed one shipping unit. (b) In cases where the article of transport itself has been lost or damaged, that article of transport, if not owned or otherwise supplied by the carrier, is considered one separate shipping unit. 3. Unit of account means the unit of account mentioned in article 26.

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4. By agreement between the carrier and the shipper, limits of liability exceeding those provided for in paragraph 1 may be fixed. Article 7. Application to non-contractual claims 1. The defences and limits of liability provided for in this Convention apply in any action against the carrier in respect of loss or damage to the goods covered by the contract of carriage by sea, as well as of delay in delivery whether the action is founded in contract, in tort or otherwise. 2. If such an action is brought against a servant or agent of the carrier, such servant or agent, if he proves that he acted within the scope of his employment, is entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke under this Convention. 3. Except as provided in article 8, the aggregate of the amounts recoverable from the carrier and from any persons referred to in paragraph 2 of this article shall not exceed the limits of liability provided for in this Convention. Article 8. Loss of right to limit responsibility 1. The carrier is not entitled to the benefit of the limitation of liability provided for in article 6 if it is proved that the loss, damage or delay in delivery resulted from an act or omission of the carrier done with the intent to cause such loss, damage or delay, or recklessly and with knowledge that such loss, damage or delay would probably result. 2. Notwithstanding the provisions of paragraph 2 of article 7, a servant or agent of the carrier is not entitled to the benefit of the limitation of liability provided for in article 6 if it is proved that the loss, damage or delay in delivery resulted from an act or omission of such servant or agent, done with the intent to cause such loss, damage or delay, or recklessly and with knowledge that such loss, damage or delay would probably result. Article 9. Deck cargo 1. The carrier is entitled to carry the goods on deck only if such carriage is in accordance with an agreement with the shipper or with the usage of the particular trade or is required by statutory rules or regulations. 2. If the carrier and the shipper have agreed that the goods shall or may be carried on deck, the carrier must insert in the bill of lading or other document evidencing the contract of carriage by sea a statement to that effect. In the absence of such a statement the carrier has the burden of proving that an agreement for carriage on deck has been entered into; however, the carrier is not entitled to invoke such an agreement against a third party, including a consignee, who has acquired the bill of lading in good faith. 3. Where the goods have been carried on deck contrary to the provision of paragraph 1 of this article or where the carrier may not under paragraph 2 of this article invoke an agreement for carriage on deck, the carrier, notwithstanding the provisions of paragraph 1 of article 5, is liable for loss of or damage to the goods, as well as for delay in delivery, resulting solely from the carriage on deck, and the extent of his liability is to be determined in accordance with the provisions of article 6 or article 8 of this Convention, as the case may be. 4. Carriage of goods on deck contrary to express agreement for carriage under deck is deemed to be an act or omission of the carrier within the meaning of article 8. Article 10. Liability of the carrier and actual carrier 1. Where the performance of the carriage or part thereof has been entrusted to an actual carrier, whether or not in pursuance of a liberty under the contract of carriage by sea to do so, the carrier nevertheless remains responsible for the entire carriage according to the provisions of this Conven­ tion. The carrier is responsible, in relation to the carriage performed by the actual carrier, for the acts and omissions of the actual carrier and of his servants and agents acting within the scope of their employment.

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2. All the provisions of this Convention governing the responsibility of the carrier also apply to the responsibility of the actual carrier for the carriage performed by him. The provisions of paragraphs 2 and 3 of article 7 and of paragraph 2 of article 8 apply if an action is brought against a servant or agent of the actual carrier. 3. Any special agreement under which the carrier assumes obligations not imposed by this Convention or waives rights conferred by this Convention affects the actual carrier only if agreed to by him expressly and in writing. Whether or not the actual carrier has so agreed, the carrier nevertheless remains bound by the obligations or waivers resulting from such special agreement. 4. Where and to the extent that both the carrier and the actual carrier are liable, their liability is joint and several. 5. The aggregate of the amounts recoverable from the carrier, the actual carrier and their servants and agents shall not exceed the limits of liability provided for in this Convention. 6. Nothing in this article shall prejudice any right of recourse as between the carrier and the actual carrier. Article 11. Through carriage 1. Notwithstanding the provisions of paragraph 1 of article 10, where a contract of carriage by sea provides explicitly that a specified part of the carriage covered by the said contract is to be performed by a named person other than the carrier, the contract may also provide that the carrier is not liable for loss, damage or delay in delivery caused by an occurrence which takes place while the goods are in the charge of the actual carrier during such part of the carriage. Nevertheless, any stipulation limiting or excluding such liability is without effect if no judicial proceedings can be instituted against the actual carrier in a court competent under paragraph 1 or 2 of article 21. The burden of proving that any loss, damage or delay in delivery has been caused by such an occurrence rests upon the carrier. 2. The actual carrier is responsible in accordance with the provisions of paragraph 2 of article 10 for loss, damage or delay in delivery caused by an occurrence which takes place while the goods are in his charge.

PA RT I I I . L I A B I L I T Y O F T H E S H I P P E R Article 12. General rule The shipper is not liable for loss sustained by the carrier or the actual carrier, or for damage sustained by the ship, unless such loss or damage was caused by the fault or neglect of the shipper, his servants or agents. Nor is any servant or agent of the shipper liable for such loss or damage unless the loss or damage was caused by fault or neglect on his part. Article 13. Special rules on dangerous goods 1. The shipper must mark or label in a suitable manner dangerous goods as dangerous. 2. Where the shipper hands over dangerous goods to the carrier or an actual carrier, as the case may be, the shipper must inform him of the dangerous character of the goods and, if necessary, of the precautions to be taken. If the shipper fails to do so and such carrier or actual carrier does not otherwise have knowledge of their dangerous character: (a) the shipper is liable to the carrier and any actual carrier for the loss resulting from the shipment of such goods, and (b) the goods may at any time be unloaded, destroyed or rendered innocuous, as the circum­ stances may require, without payment of compensation. 3. The provisions of paragraph 2 of this article may not be invoked by any person if during the carriage he has taken the goods in his charge with knowledge of their dangerous character. 4. If, in cases where the provisions of paragraph 2, subparagraph (b), of this article do not apply or may not be invoked, dangerous goods become an actual danger to life or property, they may be unloaded, destroyed or rendered innocuous as the circumstances may require, without payment of

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compensation except where there is an obligation to contribute in general average or where the carrier is liable in accordance with the provisions of article 5.

PA RT I V. T R A N S P O RT D O C U M E N T S Article 14. Issue of bill of lading 1. When the carrier or the actual carrier takes the goods in his charge, the carrier must, on demand of the shipper, issue to the shipper a bill of lading. 2. The bill of lading may be signed by a person having authority from the carrier. A bill of lading signed by the master of the ship carrying the goods is deemed to have been signed on behalf of the carrier. 3. The signature on the bill of lading may be in handwriting, printed in facsimile, perforated, stamped, in symbols, or made by any other mechanical or electronic means, if not inconsistent with the law of the country where the bill of lading is issued.

Article 15. Contents of bill of lading 1. The bill of lading must include, inter alia, the following particulars: (a) the general nature of the goods, the leading marks necessary for identification of the goods, an express statement, if applicable, as to the dangerous character of the goods, the number of packages or pieces, and the weight of the goods or their quantity otherwise expressed, all such particulars as furnished by the shipper; (b) the apparent condition of the goods; (c) the name and principal place of business of the carrier; (d) the name of the shipper; (e) the consignee if named by the shipper; (f) the port of loading under the contract of carriage by sea and the date on which the goods were taken over by the carrier at the port of loading; (g) the port of discharge under the contract of carriage by sea; (h) the number of originals of the bill of lading, if more than one; (i) the place of issuance of the bill of lading; (j) the signature of the carrier or a person acting on his behalf; (k) the freight to the extent payable by the consignee or other indication that freight is payable by him; (l) the statement referred to in paragraph 3 of article 23; (m) the statement, if applicable, that the goods shall or may be carried on deck; (n) the date or the period of delivery of the goods at the port of discharge if expressly agreed upon between the parties; and (o) any increased limit or limits of liability where agreed in accordance with paragraph 4 of article 6. 2. After the goods have been loaded on board, if the shipper so demands, the carrier must issue to the shipper a ‘‘shipped’’ bill of lading which, in addition to the particulars required under paragraph 1 of this article, must state that the goods are on board a named ship or ships, and the date or dates of loading. If the carrier has previously issued to the shipper a bill of lading or other document of title with respect to any of such goods, on request of the carrier, the shipper must surrender such document in exchange for a ‘‘shipped’’ bill of lading. The carrier may amend any previously issued document in order to meet the shipper’s demand for a ‘‘shipped’’ bill of lading if, as amended, such document includes all the information required to be contained in a ‘‘shipped’’ bill of lading. 3. The absence in the bill of lading of one or more particulars referred to in this article does not affect the legal character of the document as a bill of lading provided that it nevertheless meets the requirements set out in paragraph 7 of article 1.

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Article 16. Bills of lading: reservations and evidentiary effect 1. If the bill contains particulars concerning the general nature, leading marks, number of packages or pieces, weight or quantity of the goods which the carrier or other person issuing the bill of lading on his behalf knows or has reasonable grounds to suspect do not accurately represent the goods actually taken over or, where a ‘‘shipped’’ bill of lading is issued, loaded, or if he had no reasonable means of checking such particulars, the carrier or such other person must insert in the bill of lading a reservation specifying these inaccuracies, grounds of suspicion or the absence of reasonable means of checking. 2. If the carrier or other person issuing the bill of lading on his behalf fails to note on the bill of lading the apparent condition of the goods, he is deemed to have noted on the bill of lading that the goods were in apparent good condition. 3. Except for particulars in respect of which and to the extent to which a reservation permitted under paragraph 1 of this article has been entered: (a) the bill of lading is prima facie evidence of the taking over or, where a ‘‘shipped’’ bill of lading is issued, loading, by the carrier of the goods as described in the bill of lading; and (b) proof to the contrary by the carrier is not admissible if the bill of lading has been transferred to a third party, including a consignee, who in good faith has acted in reliance on the description of the goods therein. 4. A bill of lading which does not, as provided in paragraph 1, subparagraph (k) of article 15, set forth the freight or otherwise indicate that freight is payable by the consignee or does not set forth demurrage incurred at the port of loading payable by the consignee, is prima facie evidence that no freight or such demurrage is payable by him. However, proof to the contrary by the carrier is not admissible when the bill of lading has been transferred to a third party, including a consignee, who in good faith has acted in reliance on the absence in the bill of lading of any such indication. Article 17. Guarantees by the shipper 1. The shipper is deemed to have guaranteed to the carrier the accuracy of particulars relating to the general nature of the goods, their marks, number, weight and quantity as furnished by him for insertion in the bill of lading. The shipper must indemnify the carrier against the loss resulting from inaccuracies in such particulars. The shipper remains liable even if the bill of lading has been transferred by him. The right of the carrier to such indemnity in no way limits his liability under the contract of carriage by sea to any person other than the shipper. 2. Any letter of guarantee or agreement by which the shipper undertakes to indemnify the carrier against loss resulting from the issuance of the bill of lading by the carrier, or by a person acting on his behalf, without entering a reservation relating to particulars furnished by the shipper for insertion in the bill of lading, or to the apparent condition of the goods, is void and of no effect as against any third party, including a consignee, to whom the bill of lading has been transferred. 3. Such letter of guarantee or agreement is valid as against the shipper unless the carrier or the person acting on his behalf, by omitting the reservation referred to in paragraph 2 of this article, intends to defraud a third party, including a consignee, who acts in reliance on the description of the goods in the bill of lading. In the latter case, if the reservation omitted relates to particulars furnished by the shipper for insertion in the bill of lading, the carrier has no right of indemnity from the shipper pursuant to paragraph 1 of this article. 4. In the case of intended fraud referred to in paragraph 3 of this article the carrier is liable, without the benefit of the limitation of liability provided for in this Convention, for the loss incurred by a third party, including a consignee, because he has acted in reliance on the description of the goods in the bill of lading. Article 18. Documents other than bills of lading Where a carrier issues a document other than a bill of lading to evidence the receipt of the goods to be carried, such a document is prima facie evidence of the conclusion of the contract of carriage by sea and the taking over by the carrier of the goods as therein described.

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PA RT V. C L A I M S A N D A C T I O N S Article 19. Notice of loss, damage or delay 1. Unless notice of loss or damage, specifying the general nature of such loss or damage, is given in writing by the consignee to the carrier not later than the working day after the day when the goods were handed over to the consignee, such handing over is prima facie evidence of the delivery by the carrier of the goods as described in the document of transport or if no such document has been issued, in good condition. 2. Where the loss or damage is not apparent, the provisions of paragraph 1 of this article apply correspondingly if notice in writing is not given within 15 consecutive days after the day when the goods were handed over to the consignee. 3. If the state of the goods at the time they were handed over to the consignee has been the subject of a joint survey or inspection by the parties, notice in writing need not be given of loss or damage ascertained during such survey or inspection. 4. In the case of any actual or apprehended loss or damage the carrier and the consignee must give all reasonable facilities to each other for inspecting and tallying the goods. 5. No compensation shall be payable for loss resulting from delay in delivery unless a notice has been given in writing to the carrier within 60 consecutive days after the day when the goods were handed over to the consignee. 6. If the goods have been delivered by an actual carrier, any notice given under this article to him shall have the same effect as if it had been given to the carrier, and any notice given to the carrier shall have effect as if given to such actual carrier. 7. Unless notice of loss or damage, specifying the general nature of the loss or damage, is given in writing by the carrier or actual carrier to the shipper not later than 90 consecutive days after the occurrence of such loss or damage or after the delivery of the goods in accordance with paragraph 2 of article 4, whichever is later, the failure to give such notice is prima facie evidence that the carrier or the actual carrier has sustained no loss or damage due to the fault or neglect of this shipper, his servants or agents. 8. For the purpose of this article, notice given to a person acting on the carrier’s or the actual carrier’s behalf, including the master or the officer in charge of the ship, or to a person acting on the shipper’s behalf is deemed to have been given to the carrier, to the actual carrier or to the shipper, respectively.

Article 20. Limitation of actions 1. Any action relating to carriage of goods under this Convention is time-barred if judicial or arbitral proceedings have not been instituted within a period of two years. 2. The limitation period commences on the day on which the carrier has delivered the goods or part thereof or, in cases where no goods have been delivered, on the last day on which the goods should have been delivered. 3. The day on which the limitation period commences is not included in the period. 4. The person against whom a claim is made may at any time during the running of the limitation period extend that period by a declaration in writing to the claimant. This period may be further extended by another declaration or declarations. 5. An action for indemnity by a person held liable may be instituted even after the expiration of the limitation period provided for in the preceding paragraphs if instituted within the time allowed by the law of the State where proceedings are instituted. However, the time allowed shall not be less than 90 days commencing from the day when the person instituting such action for indemnity has settled the claim or has been served with process in the action against himself.

Article 21. Jurisdiction 1. In judicial proceedings relating to carriage of goods under this Convention the plaintiff, at his option, may institute an action in a court which, according to the law of the State where the court

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is situated, is competent and within the jurisdiction of which is situated one of the following places: (a) the principal place of business or, in the absence thereof, the habitual residence of the defendant; or (b) the place where the contract was made provided that the defendant has there a place of business, branch or agency through which the contract was made; or (c) the port of loading or the port of discharge; or (d) any additional place designated for that purpose in the contract of carriage by sea. 2. (a) Notwithstanding the preceding provisions of this article, an action may be instituted in the courts of any port or place in a Contracting State at which the carrying vessel or any other vessel of the same ownership may have been arrested in accordance with applicable rules of the law of that State and of international law. However, in such a case, at the petition of the defendant, the claimant must remove the action, at his choice, to one of the jurisdictions referred to in paragraph 1 of this article for the determination of the claim, but before such removal the defendant must furnish security sufficient to ensure payment of any judgement that may subsequently be awarded to the claimant in the action. (b) All questions relating to the sufficiency or otherwise of the security shall be determined by the court of the port or place of the arrest. 3. No judicial proceedings relating to carriage of goods under this Convention may be instituted in a place not specified in paragraph 1 or 2 of this article. The provisions of this paragraph do not constitute an obstacle to the jurisdiction of the Contracting States for provisions or protective measures. 4. (a) Where an action has been instituted in a court competent under paragraph 1 or 2 of this article or where judgement has been delivered by such a court, no new action may be started between the same parties on the same grounds unless the judgement of the court before which the first action was instituted is not enforceable in the country in which the new proceedings are instituted; (b) for the purpose of this article the institution of measures with a view to obtaining enforce­ ment of a judgment is not to be considered as the starting of a new action; (c) for the purpose of this article, the removal of an action to a different court within the same country, or to a court in another country, in accordance with paragraph 2(a) of this article, is not to be considered as the starting of a new action. 5. Notwithstanding the provisions of the preceding paragraphs, an agreement made by the parties, after a claim under the contract of carriage by sea has arisen, which designates the place where the claimant may institute an action, is effective. Article 22. Arbitration 1. Subject to the provisions of this article, parties may provide by agreement evidenced in writing that any dispute that may arise relating to carriage of goods under this Convention shall be referred to arbitration. 2. Where a charter-party contains a provision that disputes arising thereunder shall be referred to arbitration and a bill of lading issued pursuant to the charter-party does not contain a special annotation providing that such provision shall be binding upon the holder of the bill of lading, the carrier may not invoke such provision as against a holder having acquired the bill of lading in good faith. 3. The arbitration proceedings shall, at the option of the claimant, be instituted at one of the following places: (a) a place in a State within whose territory is situated: (i) the principal place of business of the defendant or, in the absence thereof, the habitual residence of the defendant; or (ii) the place where the contract was made, provided that the defendant has there a place of business, branch or agency through which the contract was made; or (iii) the port of loading or the port of discharge; or (b) any place designated for that purpose in the arbitration clause or agreement. 4. The arbitrator or arbitration tribunal shall apply the rules of this Convention.

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APPENDIX VIII

5. The provisions of paragraphs 3 and 4 of this article are deemed to be part of every arbitration clause or agreement, and any term of such clause or agreement which is inconsistent therewith is null and void. 6. Nothing in this article affects the validity of an agreement relating to arbitration made by the parties after the claim under the contract of carriage by sea has arisen.

PA RT V I . S U P P L E M E N TA RY P R O V I S I O N S Article 23. Contractual stipulations 1. Any stipulation in a contract of carriage by sea, in a bill of lading, or in any other document evidencing the contract of carriage by sea is null and void to the extent that it derogates, directly or indirectly, from the provisions of this Convention. The nullity of such a stipulation does not affect the validity of the other provisions of the contract or document of which it forms a part. A clause assigning benefit of insurance of the goods in favour of the carrier, or any similar clause, is null and void. 2. Notwithstanding the provisions of paragraph 1 of this article, a carrier may increase his responsibilities and obligations under this Convention. 3. Where a bill of lading or any other document evidencing the contract of carriage by sea is issued, it must contain a statement that the carriage is subject to the provisions of this Convention which nullify any stipulation derogating therefrom to the detriment of the shipper or the con­ signee. 4. Where the claimant in respect of the goods has incurred loss as a result of a stipulation which is null and void by virtue of the present article, or as a result of the omission of the statement referred to in paragraph 3 of this article, the carrier must pay compensation to the extent required in order to give the claimant compensation in accordance with the provisions of this Convention for any loss of or damage to the goods as well as for delay in delivery. The carrier must, in addition, pay compensation for costs incurred by the claimant for the purpose of exercising his right, provided that costs incurred in the action where the foregoing provision is invoked are to be determined in accordance with the law of the State where proceedings are instituted.

Article 24. General average 1. Nothing in this Convention shall prevent the application of provisions in the contract of carriage by sea or national law regarding the adjustment of general average. 2. With the exception of article 20, the provisions of this Convention relating to the liability of the carrier for loss of or damage to the goods also determine whether the consignee may refuse contribution in general average and the liability of the carrier to indemnify the consignee in respect of any such contribution made or any salvage paid.

Article 25. Other conventions 1. This Convention does not modify the rights or duties of the carrier, the actual carrier and their servants and agents, provided for in international conventions or national law relating to the limitation of liability of owners of seagoing ships. 2. The provisions of articles 21 and 22 of this Convention do not prevent the application of the mandatory provisions of any other multilateral convention already in force at the date of this Convention relating to matters dealt with in the said articles, provided that the dispute arises exclusively between parties having their principal place of business in the States members of such other convention. However, this paragraph does not affect the application of paragraph 4 of article 22 of this Convention. 3. No liability shall arise under the provisions of this Convention for damage caused by a nuclear incident if the operator of a nuclear installation is liable for such damage:

THE HAMBURG RULES

541

(a) under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended by the Additional Protocol of 28 January 1964 or the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or (b) by virtue of national law governing the liability for such damage, provided that such law is in all respects as favourable to persons who may suffer damage as either the Paris or Vienna Conventions. 4. No liability shall arise under the provisions of this Convention for any loss of or damage to or delay in delivery of luggage for which the carrier is responsible under any international convention or national law relating to the carriage of passengers and their luggage by sea. 5. Nothing contained in this Convention prevents a Contracting State from applying any other international convention which is already in force at the date of this Convention and which applies mandatorily to contracts of carriage of goods primarily by a mode of transport other than transport by sea. This provision also applies to any subsequent revision or amendment of such international convention.

Article 26. Unit of account 1. The unit of account referred to in article 6 of this Convention is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in article 6 are to be converted into the national currency of a State according to the value of such currency at the date of judgment or the date agreed upon by the parties. The value of a national currency, in terms of the Special Drawing Right, of a Contracting State which is a member of the International Monetary Fund is to be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect at the date in question for its operations and transactions. The value of a national currency in terms of the Special Drawing Right of a Contracting State which is not a member of the International Monetary Fund is to be calculated in a manner determined by that State. 2. Nevertheless, those States which are not members of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 of this article may, at the time of signature, or at the time of ratification, acceptance, approval or accession or at any time thereafter, declare that the limits of liability provided for in this Convention to be applied in their territories shall be fixed as: 12,500 monetary units per package or other shipping unit of 37.5 monetary units per kilo­ gramme of gross weight of the goods. 3. The monetary unit referred to in paragraph 2 of this article corresponds to sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. The conversion of the amounts referred to in paragraph 2 into the national currency is to be made according to the law of the State con­ cerned. 4. The calculation mentioned in the last sentence of paragraph 1 and the conversion mentioned in paragraph 3 of this article is to be made in such a manner as to express in the national currency of the Contracting State as far as possible the same real value for the amounts in article 6 as is expressed there in units of account. Contracting States must communicate to the depositary the manner of calculation pursuant to paragraph 1 of this article, or the result of the conversion mentioned in paragraph 3 of this article, as the case may be, at the time of signature or when depositing their instruments of ratification, acceptance, approval or accession, or when availing themselves of the option provided for in paragraph 2 of this article and whenever there is a change in the manner of such calculation or in result of such conversion.

PA RT V I I . F I N A L C L A U S E S Article 27. Depositary The Secretary-General of the United Nations is hereby designated as the depositary of this Convention.

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Article 28. Signature, ratification, acceptance, approval, accession 1. This Convention is open for signature by all States until 30 April 1979 at the Headquarters of the United Nations, New York. 2. This Convention is subject to ratification, acceptance or approval by the signatory States. 3. After 30 April 1979, this Convention will be open for accession by all States which are not signatory States. 4. Instruments of ratification, acceptance, approval and accession are to be deposited with the Secretary-General of the United Nations.

Article 29. Reservations No reservations may be made to this Convention.

Article 30. Entry into force 1. This Convention enters into force on the first day of the month following the expiration of one year from the date of deposit of the 20th instrument of ratification, acceptance, approval or accession. 2. For each State which becomes a Contracting State to this Convention after the date of the deposit of the 20th instrument of ratification, acceptance, approval or accession, this Convention enters into force on the first day of the month following the expiration of one year after the deposit of the appropriate instrument on behalf of that State. 3. Each Contracting State shall apply the provisions of this Convention to contracts of carriage by sea concluded on or after the date of the entry into force of this Convention in respect of that State.

Article 31. Denunciation of other conventions 1. Upon becoming a Contracting State to this Convention, any State party to the International Convention for the Unification of Certain Rules relating to Bills of Lading signed at Brussels on 25 August 1924 (1924 Convention) must notify the Government of Belgium as the depositary of the 1924 Convention of its denunciation of the said Convention with a declaration that the denunciation is to take effect as from the date when this Convention enters into force in respect of that State. 2. Upon the entry into force of this Convention under paragraph 1 of article 30, the depositary of this Convention must notify the Government of Belgium as the depositary of the 1924 Convention of the date of such entry into force, and of the names of the Contracting States in respect of which the Convention has entered into force. 3. The provisions of paragraphs 1 and 2 of this article apply correspondingly in respect of States parties to the Protocol signed on 23 February 1968 to amend the International Convention for the Unification of Certain Rules relating to Bills of Lading signed at Brussels on 25 August 1924. 4. Notwithstanding article 2 of this Convention, for the purposes of paragraph 1 of this article, a Contracting State may, if it deems it desirable, defer the denunciation of the 1924 Convention and of the 1924 Convention as modified by the 1968 Protocol for a maximum period of five years from the entry into force of this Convention. It will then notify the Government of Belgium of its intention. During this transitory period, it must apply to the Contracting States this Convention to the exclusion of any other one.

Article 32. Revision and amendment 1. At the request of not less than one-third of the Contracting States to this Convention, the depositary shall convene a conference of the Contracting States for revising or amending it. 2. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to this Convention, is deemed to apply to the Convention as amended.

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Article 33. Revision of the limitation amount and unit of account or monetary unit 1. Notwithstanding the provisions of article 32, a conference only for the purpose of altering the amount specified in article 6 and paragraph 2 of article 26, or of substituting either or both of the units defined in paragraphs 1 and 3 of article 26 by other units is to be convened by the depositary in accordance with paragraph 2 of this article. An alteration of the amounts shall be made only because of a significant change in their real value. 2. A revision conference is to be convened by the depositary when not less than one-fourth of the Contracting States so request. 3. Any decision by the conference must be taken by a two-thirds majority of the participating States. The amendment is communicated by the depositary to all the Contracting States for accep­ tance and to all the States signatories of the Convention for information. 4. Any amendment adopted enters into force on the first day of the month following one year after its acceptance by two-thirds of the Contracting States. Acceptance is to be effected by the deposit of a formal instrument to that effect with the depositary. 5. After entry into force of an amendment a Contracting State which has accepted the amendment is entitled to apply the Convention as amended in its relations with Contracting States which have not within six months after the adoption of the amendment notified the depositary that they are not bound by the amendment. 6. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to this Convention, is deemed to apply to the Convention as amended. Article 34. Denunciation 1. A Contracting State may denounce this Convention at any time by means of notification in writing addressed to the depositary. 2. The denunciation takes effect on the first day of the month following the expiration of one year after the notification is received by the depositary. Where a longer period is specified in the notification, the denunciation takes effect upon the expiration of such longer period after the notification is received by the depositary. DONE at Hamburg, this thirty-first day of March one thousand nine hundred and seventy-eight, in a single original, of which the Arabic, Chinese, English, French, Russian and Spanish texts are equally authentic. IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized by their respec­ tive Governments, have signed the present Convention.

A N N E X I I . C O M M O N U N D E R S TA N D I N G A D O P T E D B Y T H E U N I T E D

N AT I O N S C O N F E R E N C E O N T H E C A R R I A G E O F G O O D S B Y S E A

It is the common understanding that the liability of the carrier under this Convention is based on the principle of presumed fault or neglect. This means that, as a rule, the burden of proof rests on the carrier but with respect to certain cases, the provisions of the Convention modify this rule.

APPENDIX IX

Limitation of Liability for Maritime Claims:

Summary of Contracting States

L O N D O N C O N V E N T I O N O N L I M I TAT I O N O F L I A B I L I T Y F O R M A R I T I M E

CLAIMS 1976

Contracting States1 Albania Algeria Australia Azerbaijan Bahamas Barbados Belgium Benin Bulgaria China Congo

Croatia Denmark* Dominica Egypt Equatorial Guinea Estonia Finland* France Georgia Germany* Greece

Guyana India Ireland Jamaica Japan Latvia Liberia Lithuania Marshall Islands Mauritius Mexico

Netherlands New Zealand Nigeria Norway Poland St Lucia Samoa Sierra Leone Singapore Spain Sweden*

Switzerland Syrian Arab Republic Tonga Trinidad and Tobago Turkey United Arab Emirates United Kingdom* Vanuatu Yemen

* Denounced

P R O TO C O L O F 1 9 9 6 TO A M E N D T H E C O N V E N T I O N O N L I M I TAT I O N O F LIABILITY FOR MARITIME CLAIMS Albania Australia Bulgaria Denmark Finland

Germany Jamaica Malta Norway Russian Federation

Sierra Leone St Lucia Samoa Spain Sweden

Syrian Arab Republic Tonga United Kingdom

AT H E N S C O N V E N T I O N R E L AT I N G TO T H E C A R R I A G E O F PA S S E N G E R S

AND THEIR LUGGAGE BY SEA 1974

Contracting States3 Argentina Bahamas Barbados Belgium China Croatia Dominica Egypt

Equatorial Guinea Georgia Germany Greece Guyana Hong Kong Ireland Jordan

Latvia Liberia Luxembourg Malawi Marshall Islands Poland Russian Federation Spain

545

Switzerland Tonga United Kingdom4 Ukraine Vanuatu Yemen Yugoslavia

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APPENDIX IX

Amount 1 9 7 6 P R O TO C O L TO T H E AT H E N S C O N V E N T I O N R E L AT I N G TO T H E C A R R I A G E O F PA S S E N G E R S A N D T H E I R L U G G A G E B Y S E A 1 9 7 4 (Entered into force 10 April 1989.) Argentina Bahamas Barbados Belgium China Croatia Dominica Georgia

Germany Hong Kong Ireland Latvia Liberia Luxembourg Marshall Islands Poland

Russian Federation Spain Switzerland Ukraine United Kingdom Vanuatu Yemen

1 9 9 0 P R O TO C O L TO T H E AT H E N S C O N V E N T I O N R E L AT I N G TO T H E C A R R I A G E O F PA S S E N G E R S A N D T H E I R L U G G A G E B Y S E A 1 9 7 4 (Entered into force 1 June 1990.) Croatia Egypt Germany Spain Switzerland Tonga 2 0 0 2 P R O TO C O L TO T H E AT H E N S C O N V E N T I O N R E L AT I N G TO T H E C A R R I A G E O F PA S S E N G E R S A N D T H E I R L U G G A G E B Y S E A 1 9 7 4 (Entered into force 1 May 2003.) Albania Finland Germany Latvia Norway

Spain Sweden Syria United Kingdom

HAGUE RULES 1924 Algeria Argentina Australia Bahamas Barbados Belgium Bolivia Ceylon Chile Croatia Cuba Cyprus Denmark Dominica

Ecuador Egypt Estonia Fiji Finland France Georgia Germany Grenada Hong Kong Hungary Iran Ireland Israel

Italy Ivory Coast Jamaica Japan Jordan Kenya Kuwait Latvia Lebanon Luxembourg Madagascar Mauritius Monaco Netherlands

Nigeria Norway Paraguay Peru Poland Portugal Romania Senegal Seychelles Sierra Leone Singapore Slovenia Solomon Islands Spain

Sweden Switzerland Syria Tanzania Tonga Trinidad & Tobago Turkey United Kingdom United States of America Yugoslavia Zaire

S U M M A RY O F C O N T R A C T I N G S TAT E S

547

Note The Hague Rules as enacted by the Carriage of Goods by Sea Act 1924 have been superseded in the United Kingdom by the Hague-Visby Rules. However, in cases where the Hague-Visby Rules do not apply by operation of law, the Hague Rules may still be applicable by contract.

S U M M A RY O F L I M I T S HAGUE-VISBY RULES 1968 Enacted or substantially adopted by Argentina Belgium Cameroon Canada China Congo Croatia Denmark Ecuador Egypt Finland

France Georgia Germany Greece Hong Kong Ireland Italy Latvia Liberia Lebanon Luxembourg

Mauritius Netherlands Norway Paraguay Philippines Poland Singapore Spain Sri Lanka Sweden Switzerland

Syria Tonga United Kingdom5 (Carriage of Goods By Sea Act 1971) United States of America Uruguay Vatican City Zaire

Amount The higher of 30 francs Poincare (*2 SDRs) per kilo or 10,000 francs Poincare (*666.67 SDRs) per package or unit.

HAMBURG RULES Ratified or acceded to by Austria Barbados Botswana Brazil Burkhina Fasso Burundi Cameroon Chile Congo, Democratic Republic of Czech Republic Czechoslovakia Denmark Ecuador

Egypt Finland France Gambia Georgia Germany Ghana Guinea Hungary Jordan Kenya Lebanon Lesotho Madagascar

Malawi Mexico Morocco Nigeria Norway Pakistan Panama Philippines Portugal Romania Senegal Sierra Leone Singapore Slovakia

St Vincent & Grenadines Sweden Syrian Arab Republic Tanzania, Republic of Tunisia Uganda United States of America Venezuela Zaire Zambia

Amount

Loss or damage 835 SDRs per package or other shipping unit or 2.5 SDRs per kilo of gross weight of the goods lost or damaged whichever is the higher.

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APPENDIX IX

Delay Two and a half times the freight payable for the goods delayed or the total freight payable under the contract of carriage, whichever is the lower.

NOTES 1. As at 19 October 2005. 2. The U.K. has declared its ratification to be effective also in respect of: Belize Bermuda British Virgin Is. Cayman Is. Falkland Is. Gibraltar Guernsey Isle of Man Jersey Montserrat Pitcairn St. Helena & Dependencies Turks & Caicos U.K. Sovereign-based areas of Akrotiri and Dhekelia in Cyprus. 3. July 2005. 4. The U.K. has declared its ratification to be effective also in respect of: Bermuda British Virgin Is. Cayman Is. Falkland Is. Gibraltar Guernsey Isle of Man Jersey Montserrat Pitcairn St. Helena & Dependencies 5. The U.K. has declared its ratification also to be effective in respect of: Bermuda British Antarctic Territory British Virgin Is. Cayman Is. Falkland Is. & Dependencies Gibraltar Hong Kong Isle of Man Montserrat Turks & Caicos

APPENDIX X

Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 THE STATES PARTIES TO THIS PROTOCOL CONSIDERING that it is desirable to revise the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at Athens on 13 December 1974, to provide for enhanced compensation, to introduce strict liability, to establish a simplified procedure for updating the limitation amounts, and to ensure compulsory insurance for the benefit of passengers RECALLING that the 1976 Protocol to the Convention introduces the Special Drawing Right as the Unit of Account in place of the gold franc HAVING NOTED that the 1990 Protocol to the Convention, which provides for enhanced compensation and a simplified procedure for updating the limitation amounts, has not entered into force Have agreed AS FOLLOWS: Article 1 For the purposes of this Protocol: 1 ‘‘Convention’’ means the text of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. 2 ‘‘Organization’’ means the International Maritime Organization. 3 ‘‘Secretary-General’’ means the Secretary-General of the Organization. Article 2 Article 1, paragraph 1 of the Convention is replaced by the following text: 1 (a) ‘‘carrier’’ means a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by that person or by a performing carrier; (b) ‘‘performing carrier’’ means a person other than the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or a part of the carriage; and (c) ‘‘carrier who actually performs the whole or a part of the carriage’’ means the perform­ ing carrier, or, in so far as the carrier actually performs the carriage, the carrier. Article 3 1 Article 1, paragraph 10 of the Convention is replaced by the following: 10 ‘‘Organization’’ means the International Maritime Organization. 2 The following text is added as Article 1, paragraph 11, of the Convention: 11 ‘‘Secretary-General’’ means the Secretary-General of the Organization.

549

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Article 4 Article 3 of the Convention is replaced by the following text: Article 3 Liability of the carrier 1 For the loss suffered as a result of the death of or personal injury to a passenger caused by a shipping incident, the carrier shall be liable to the extent that such loss in respect of that passenger on each distinct occasion does not exceed 250,000 units of account, unless the carrier proves that the incident: (a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character; or (b) was wholly caused by an act or omission done with the intent to cause the incident by a third party. If and to the extent that the loss exceeds the above limit, the carrier shall be further liable unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier. 2 For the loss suffered as a result of the death of or personal injury to a passenger not caused by a shipping incident, the carrier shall be liable if the incident which caused the loss was due to the fault or neglect of the carrier. The burden of proving fault or neglect shall lie with the claimant. 3 For the loss suffered as a result of the loss of or damage to cabin luggage, the carrier shall be liable if the incident which caused the loss was due to the fault or neglect of the carrier. The fault or neglect of the carrier shall be presumed for loss caused by a shipping incident. 4 For the loss suffered as a result of the loss of or damage to luggage other than cabin luggage, the carrier shall be liable unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier. 5 For the purposes of this Article: (a) ‘‘shipping incident’’ means shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship; (b) ‘‘fault or neglect of the carrier’’ includes the fault or neglect of the servants of the carrier, acting within the scope of their employment; (c) ‘‘defect in the ship’’ means any malfunction, failure or non-compliance with applica­ ble safety regulations in respect of any part of the ship or its equipment when used for the escape, evacuation, embarkation and disembarkation of passengers; or when used for the propulsion, steering, safe navigation, mooring, anchoring, arriving at or leav­ ing berth or anchorage, or damage control after flooding; or when used for the launching of life saving appliances; and (d) ‘‘loss’’ shall not include punitive or exemplary damages. 6 The liability of the carrier under this Article only relates to loss arising from incidents that occurred in the course of the carriage. The burden of proving that the incident which caused the loss occurred in the course of the carriage, and the extent of the loss, shall lie with the claimant. 7 Nothing in this Convention shall prejudice any right of recourse of the carrier against any third party, or the defence of contributory negligence under Article 6 of this Convention. Nothing in this Article shall prejudice any right of limitation under Articles 7 or 8 of this Convention. 8 Presumptions of fault or neglect of a party or the allocation of the burden of proof to a party shall not prevent evidence in favour of that party from being considered. Article 5 The following text is added as Article 4bis of the Convention: Article 4bis Compulsory insurance 1 When passengers are carried on board a ship registered in a State Party that is licensed to carry more than twelve passengers, and this Convention applies, any carrier who actually

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performs the whole or a part of the carriage shall maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover liability under this Convention in respect of the death of and personal injury to passengers. The limit of the compulsory insurance or other financial security shall not be less than 250,000 units of account per passenger on each distinct occasion. 2 A certificate attesting that insurance or other financial security is in force in accordance with the provisions of this Convention shall be issued to each ship after the appropriate authority of a State Party has determined that the requirements of paragraph 1 have been complied with. With respect to a ship registered in a State Party, such certificate shall be issued or certified by the appropriate authority of the State of the ship’s registry; with respect to a ship not registered in a State Party it may be issued or certified by the appropriate authority of any State Party. This certificate shall be in the form of the model set out in the annex to this Convention and shall contain the following particulars: (a) name of ship, distinctive number or letters and port of registry; (b) name and principal place of business of the carrier who actually performs the whole or a part of the carriage; (c) IMO ship identification number; (d) type and duration of security; (e) name and principal place of business of insurer or other person providing financial security and, where appropriate, place of business where the insurance or other financial security is established; and (f) period of validity of the certificate, which shall not be longer than the period of validity of the insurance or other financial security. 3 (a) A State Party may authorize an institution or an Organization recognised by it to issue the certificate. Such institution or organization shall inform that State of the issue of each certificate. In all cases, the State Party shall fully guarantee the completeness and accuracy of the certificate so issued, and shall undertake to ensure the necessary arrangements to satisfy this obligation. (b) A State Party shall notify the Secretary-General of: (i) the specific responsibilities and conditions of the authority delegated to an institu­ tion or organization recognised by it; (ii) the withdrawal of such authority; and (ii) the date from which such authority or withdrawal of such authority takes effect. An authority delegated shall not take effect prior to three months from the date from which notification to that effect was given to the Secretary-General. (c) The institution or organization authorized to issue certificates in accordance with this paragraph shall, as a minimum, be authorized to withdraw these certificates if the conditions under which they have been issued are not complied with. In all cases the institution or organization shall report such withdrawal to the State on whose behalf the certificate was issued. 4 The certificate shall be in the official language or languages of the issuing State. If the language used is not English, French or Spanish, the text shall include a translation into one of these languages, and, where the State so decides, the official language of the State may be omitted. 5 The certificate shall be carried on board the ship, and a copy shall be deposited with the authorities who keep the record of the ship’s registry or, if the ship is not registered in a State Party, with the authority of the State issuing or certifying the certificate. 6 An insurance or other financial security shall not satisfy the requirements of this Article if it can cease, for reasons other than the expiry of the period of validity of the insurance or security specified in the certificate, before three months have elapsed from the date on which notice of its termination is given to the authorities referred to in paragraph 5, unless the certificate has been surrendered to these authorities or a new certificate has been issued within the said period. The foregoing provisions shall similarly apply to any modification which results in the insurance or other financial security no longer satisfying the requirements of this Article.

552

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7 The State of the ship’s registry shall, subject to the provisions of this Article, determine the conditions of issue and validity of the certificate. 8 Nothing in this Convention shall be construed as preventing a State Party from relying on information obtained from other States or the Organization or other international organizations relating to the financial standing of providers of insurance or other financial security for the purposes of this Convention. In such cases, the State Party relying on such information is not relieved of its responsibility as a State issuing the certificate. 9 Certificates issued or certified under the authority of a State Party shall be accepted by other States Parties for the purposes of this Convention and shall be regarded by other States Parties as having the same force as certificates issued or certified by them, even if issued or certified in respect of a ship not registered in a State Party. A State Party may at any time request consultation with the issuing or certifying State should it believe that the insurer or guarantor named in the insurance certificate is not financially capable of meeting the obliga­ tions imposed by this Convention. 10 Any claim for compensation covered by insurance or other financial security pursuant to this Article may be brought directly against the insurer or other person providing financial security. In such case, the amount set out in paragraph 1 applies as the limit of liability of the insurer or other person providing financial security, even if the carrier or the performing carrier is not entitled to limitation of liability. The defendant may further invoke the defences (other than the bankruptcy or winding up) which the carrier referred to in paragraph 1 would have been entitled to invoke in accordance with this Convention. Furthermore, the defendant may invoke the defence that the damage resulted from the wilful misconduct of the assured, but the defendant shall not invoke any other defence which the defendant might have been entitled to invoke in proceedings brought by the assured against the defendant. The defendant shall in any event have the right to require the carrier and the performing carrier to be joined in the proceedings. 11 Any sums provided by insurance or by other financial security maintained in accordance with paragraph 1 shall be available exclusively for the satisfaction of claims under this Convention, and any payments made of such sums shall discharge any liability arising under this Convention to the extent of the amounts paid. 12 A State Party shall not permit a ship under its flag to which this Article applies to operate at any time unless a certificate has been issued under paragraphs 2 or 15. 13 Subject to the provisions of this Article, each State Party shall ensure, under its national law, that insurance or other financial security, to the extent specified in paragraph 1, is in force in respect of any ship that is licensed to carry more than twelve passengers, wherever regis­ tered, entering or leaving a port in its territory in so far as this Convention applies. 14 Notwithstanding the provisions of paragraph 5, a State Party may notify the SecretaryGeneral that, for the purposes of paragraph 13, ships are not required to carry on board or to produce the certificate required by paragraph 2 when entering or leaving ports in its territory, provided that the State Party which issues the certificate has notified the Secretary-General that it maintains records in an electronic format, accessible to all States Parties, attesting the existence of the certificate and enabling States Parties to discharge their obligations under paragraph 13. 15 If insurance or other financial security is not maintained in respect of a ship owned by a State Party, the provisions of this Article relating thereto shall not be applicable to such ship, but the ship shall carry a certificate issued by the appropriate authorities of the State of the ship’s registry, stating that the ship is owned by that State and that the liability is covered within the amount prescribed in accordance with paragraph 1. Such a certificate shall follow as closely as possible the model prescribed by paragraph 2. Article 6 Article 7 of the Convention is replaced by the following text: Article 7 Limit of liability for death and personal injury 1 The liability of the carrier for the death of or personal injury to a passenger under Article 3 shall in no case exceed 400,000 units of account per passenger on each distinct occasion.

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Where, in accordance with the law of the court seized of the case, damages are awarded in the form of periodical income payments, the equivalent capital value of those payments shall not exceed the said limit. 2 A State Party may regulate by specific provisions of national law the limit of liability prescribed in paragraph 1, provided that the national limit of liability, if any, is not lower than that prescribed in paragraph 1. A State Party, which makes use of the option provided for in this paragraph, shall inform the Secretary-General of the limit of liability adopted or of the fact that there is none. Article 7 Article 8 of the Convention is replaced by the following text: Article 8 Limit of liability for loss of or damage to luggage and vehicles 1 The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 2,250 units of account per passenger, per carriage. 2 The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 12,700 units of account per vehicle, per carriage. 3 The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 shall in no case exceed 3,375 units of account per passenger, per car­ riage. 4 The carrier and the passenger may agree that the liability of the carrier shall be subject to a deductible not exceeding 330 units of account in the case of damage to a vehicle and not exceeding 149 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage. Article 8 Article 9 of the Convention is replaced by the following text: Article 9 Unit of Account and conversion 1 The Unit of Account mentioned in this Convention is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph l, and Article 8 shall be converted into the national currency of the State of the court seized of the case on the basis of the value of that currency by reference to the Special Drawing Right on the date of the judgment or the date agreed upon by the parties. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect on the date in question for its operations and transactions. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is not a member of the International Monetary Fund, shall be calculated in a manner determined by that State Party. 2 Nevertheless, a State which is not a member of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 may, at the time of ratification, acceptance, approval of or accession to this Convention or at any time thereafter, declare that the Unit of Account referred to in paragraph 1 shall be equal to 15 gold francs. The gold franc referred to in this paragraph corresponds to sixty-five and a half milligrams of gold of millesimal fineness nine hundred. The conversion of the gold franc into the national currency shall be made according to the law of the State concerned. 3 The calculation mentioned in the last sentence of paragraph 1, and the conversion men­ tioned in paragraph 2 shall be made in such a manner as to express in the national currency of

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the States Parties, as far as possible, the same real value for the amounts in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph 1, and Article 8 as would result from the application of the first three sentences of paragraph 1. States shall communicate to the Secre­ tary-General the manner of calculation pursuant to paragraph 1,or the result of the conversion in paragraph 2, as the case may be, when depositing an instrument of ratification, acceptance, approval of or accession to this Convention and whenever there is a change in either. Article 9 Article 16, paragraph 3, of the Convention is replaced by the following text: 3 The law of the Court seized of the case shall govern the grounds for suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of any one of the following periods of time: (a) A period of five years beginning with the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later; or, if earlier (b) a period of three years beginning with the date when the claimant knew or ought reasonably to have known of the injury, loss or damage caused by the incident. Article 10 Article 17 of the Convention is replaced by the following text: Article 17 Competent jurisdiction 1 An action arising under Articles 3 and 4 of this Convention shall, at the option of the claimant, be brought before one of the courts listed below, provided that the court is located in a State Party to this Convention, and subject to the domestic law of each State Party governing proper venue within those States with multiple possible forums: (a) the court of the State of permanent residence or principal place of business of the defendant, or (b) the court of the State of departure or that of the destination according to the contract of carriage, or (c) the court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State, or (d) the court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State. 2 Actions under Article 4bis of this Convention shall, at the option of the claimant, be brought before one of the courts where action could be brought against the carrier or perform­ ing carrier according to paragraph 1. 3 After the occurrence of the incident which has caused the damage, the parties may agree that the claim for damages shall be submitted to any jurisdiction or to arbitration. Article 11 The following text is added as Article 17bis of the Convention: Article 17bis Recognition and enforcement 1 Any judgment given by a court with jurisdiction in accordance with Article 17 which is enforceable in the State of origin where it is no longer subject to ordinary forms of review, shall be recognised in any State Party, except (a) where the judgment was obtained by fraud; or (b) where the defendant was not given reasonable notice and a fair opportunity to present the case.

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2 A judgment recognised under paragraph 1 shall be enforceable in each State Party as soon as the formalities required in that State have been complied with. The formalities shall not permit the merits of the case to be re-opened. 3 A State Party to this Protocol may apply other rules for the recognition and enforcement of judgments, provided that their effect is to ensure that judgments are recognised and enforced at least to the same extent as under paragraphs 1 and 2. Article 12 Article 18 of the Convention is replaced by the following text: Article 18 Invalidity of contractual provisions Any contractual provision concluded before the occurrence of the incident which has caused the death of or personal injury to a passenger or the loss of or damage to the passenger’s luggage, purporting to relieve any person liable under this Convention of liability towards the passenger or to prescribe a lower limit of liability than that fixed in this Convention except as provided in Article 8, paragraph 4, and any such provision purporting to shift the burden of proof which rests on the carrier or performing carrier, or having the effect of restricting the options specified in Article 17, paragraphs 1 or 2, shall be null and void, but the nullity of that provision shall not render void the contract of carriage which shall remain subject to the provisions of this Convention. Article 13 Article 20 of the Convention is replaced by the following text: Article 20 Nuclear damage No liability shall arise under this Convention for damage caused by a nuclear incident: (a) if the operator of a nuclear installation is liable for such damage under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended by its Additional Protocol of 28 January 1964, or the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or any amendment or Protocol thereto which is in force; or (b) if the operator of a nuclear installation is liable for such damage by virtue of a national law governing the liability for such damage, provided that such law is in all respects as favourable to persons who may suffer damage as either the Paris or the Vienna Conventions or any amendment or Protocol thereto which is in force. Article 14 Model certificate 1 The model certificate set out in the annex to this Protocol shall be incorporated as an annex to the Convention. 2 The following text is added as Article 1bis of the Convention: ‘‘Article 1bis Annex The annex to this Convention shall constitute an integral part of the Convention.’’ Article 15 Interpretation and application 1 The Convention and this Protocol shall, as between the Parties to this Protocol, be read and interpreted together as one single instrument.

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2 The Convention as revised by this Protocol shall apply only to claims arising out of occurrences which take place after the entry into force for each State of this Protocol. 3 Articles 1 to 22 of the Convention, as revised by this Protocol, together with Articles 17 to 25 of this Protocol and the annex thereto, shall constitute and be called the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 2002. Article 16 The following text is added as Article 22bis of the Convention. Article 22bis Final clauses of the Convention The final clauses of this Convention shall be Articles 17 to 25 of the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. References in this Convention to States Parties shall be taken to mean references to States Parties to that Protocol.

FINAL CLAUSES Article 17 Signature, ratification, acceptance, approval and accession 1 This Protocol shall be open for signature at the Headquarters of the Organization from 1 May 2003 until 30 April 2004 and shall thereafter remain open for accession. 2 States may express their consent to be bound by this Protocol by: (a) signature without reservation as to ratification, acceptance or approval; or (b) signature subject to ratification, acceptance or approval followed by ratification, acceptance or approval; or (c) accession. 3 Ratification, acceptance, approval or accession shall be effected by the deposit of an instrument to that effect with the Secretary-General. 4 Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to this Protocol with respect to all existing States Parties, or after the completion of all measures required for the entry into force of the amendment with respect to those States Parties shall be deemed to apply to this Protocol as modified by the amendment. 5 A State shall not express its consent to be bound by this Protocol unless, if Party thereto, it denounces: (a) the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at Athens on 13 December 1974; (b) the Protocol to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at London on 19 November 1976; and (c) the Protocol of 1990 to amend the Athens Convention relating to the Carriage of Pas­ sengers and their Luggage by Sea, done at London on 29 March 1990, with effect from the time that this Protocol will enter into force for that State in accordance with Article 20. Article 18 States with more than one system of law 1 If a State has two or more territorial units in which different systems of law are applicable in relation to matters dealt with in this Protocol, it may at the time of signature, ratification, acceptance, approval or accession declare that this Protocol shall extend to all its territorial units or only to one or more of them, and may modify this declaration by submitting another declaration at any time. 2 Any such declaration shall be notified to the Secretary-General and shall state expressly the territorial units to which this Protocol applies.

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3 In relation to a State Party which has made such a declaration: (a) references to the State of a ship’s registry and, in relation to a compulsory insurance certificate, to the issuing or certifying State, shall be construed as referring to the territorial unit respectively in which the ship is registered and which issues or certifies the certifi­ cate; (b) references to the requirements of national law, national limit of liability and national currency shall be construed respectively as references to the requirements of the law, the limit of liability and the currency of the relevant territorial unit; and (c) references to courts, and to judgments which must be recognised in States Parties, shall be construed as references respectively to courts of, and to judgments which must be recog­ nised in, the relevant territorial unit.

Article 19 Regional Economic Integration Organizations 1 A Regional Economic Integration Organization, which is constituted by sovereign States that have transferred competence over certain matters governed by this Protocol to that Organization, may sign, ratify, accept, approve or accede to this Protocol. A Regional Economic Integration Organization which is a Party to this Protocol shall have the rights and obligations of a State Party, to the extent that the Regional Economic Integration Organization has competence over matters governed by this Protocol. 2 Where a Regional Economic Integration Organization exercises its right of vote in matters over which it has competence, it shall have a number of votes equal to the number of its Member States which are Parties to this Protocol and which have transferred competence to it over the matter in question. A Regional Economic Integration Organization shall not exercise its right to vote if its Member States exercise theirs, and vice versa. 3 Where the number of States Parties is relevant in this Protocol, including but not limited to Articles 20 and 23 of this Protocol, the Regional Economic Integration Organization shall not count as a State Party in addition to its Member States which are States Parties. 4 At the time of signature, ratification, acceptance, approval or accession the Regional Economic Integration Organization shall make a declaration to the Secretary-General specifying the matters governed by this Protocol in respect of which competence has been transferred to that Organization by its Member States which are signatories or Parties to this Protocol and any other relevant restrictions as to the scope of that competence. The Regional Economic Integration Organization shall promptly notify the Secretary-General of any changes to the distribution of competence, including new transfers of competence, specified in the declaration under this paragraph. Any such declarations shall be made available by the Secretary-General pursuant to Article 24 of this Pro­ tocol. 5 States Parties which are Member States of a Regional Economic Integration Organization which is a Party to this Protocol shall be presumed to have competence over all matters governed by this Protocol in respect of which transfers of competence to the Organization have not been specifically declared or notified under paragraph 4.

Article 20 Entry into force 1 This Protocol shall enter into force twelve months following the date on which 10 States have either signed it without reservation as to ratification, acceptance or approval or have deposited instruments of ratification, acceptance, approval or accession with the Secretary-General. 2 For any State which ratifies, accepts, approves or accedes to this Protocol after the conditions in paragraph 1 for entry into force have been met, this Protocol shall enter into force three months after the date of deposit by such State of the appropriate instrument, but not before this Protocol has entered into force in agreement with paragraph 1.

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Article 21 Denunciation 1 This Protocol may be denounced by any State Party at any time after the date on which this Protocol comes into force for that State. 2 Denunciation shall be effected by the deposit of an instrument to that effect with the SecretaryGeneral. 3 A denunciation shall take effect twelve months, or such longer period as may be specified in the instrument of denunciation, after its deposit with the Secretary-General. 4 As between the States Parties to this Protocol, denunciation by any of them of the Convention in accordance with Article 25 thereof shall not be construed in any way as a denunciation of the Convention as revised by this Protocol. Article 22 Revision and Amendment 1 A Conference for the purpose of revising or amending this Protocol may be convened by the Organization. 2 The Organization shall convene a Conference of States Parties to this Protocol for revising or amending this Protocol at the request of not less than one-third of the States Parties. Article 23 Amendment of limits 1 Without prejudice to the provisions of Article 22, the special procedure in this Article shall apply solely for the purposes of amending the limits set out in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph 1 and Article 8 of the Convention as revised by this Protocol. 2 Upon the request of at least one half, but in no case less than six, of the States Parties to this Protocol, any proposal to amend the limits, including the deductibles, specified in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph 1, and Article 8 of the Convention as revised by this Protocol shall be circulated by the Secretary-General to all Members of the Organiza­ tion and to all States Parties. 3 Any amendment proposed and circulated as above shall be submitted to the Legal Committee of the Organization (hereinafter referred to as ‘‘the Legal Committee’’) for consideration at a date at least six months after the date of its circulation. 4 All States Parties to the Convention as revised by this Protocol, whether or not Members of the Organization, shall be entitled to participate in the proceedings of the Legal Committee for the consideration and adoption of amendments. 5 Amendments shall be adopted by a two-thirds majority of the States Parties to the Convention as revised by this Protocol present and voting in the Legal Committee expanded as provided for in paragraph 4, on condition that at least one half of the States Parties to the Convention as revised by this Protocol shall be present at the time of voting. 6 When acting on a proposal to amend the limits, the Legal Committee shall take into account the experience of incidents and, in particular, the amount of damage resulting therefrom, changes in the monetary values and the effect of the proposed amendment on the cost of insurance. 7 (a) No amendment of the limits under this Article may be considered less than five years from the date on which this Protocol was opened for signature nor less than five years from the date of entry into force of a previous amendment under this Article. (b) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as revised by this Protocol increased by six per cent per year calculated on a compound basis from the date on which this Protocol was opened for signature. (c) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as revised by this Protocol multiplied by three.

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8 Any amendment adopted in accordance with paragraph 5 shall be notified by the Organization to all States Parties. The amendment shall be deemed to have been accepted at the end of a period of eighteen months after the date of notification, unless within that period not less than one fourth of the States that were States Parties at the time of the adoption of the amendment have communi­ cated to the Secretary-General that they do not accept the amendment, in which case the amendment is rejected and shall have no effect. 9 An amendment deemed to have been accepted in accordance with paragraph 8 shall enter into force eighteen months after its acceptance. 10 All States Parties shall be bound by the amendment, unless they denounce this Protocol in accordance with Article 21, paragraphs 1 and 2 at least six months before the amendment enters into force. Such denunciation shall take effect when the amendment enters into force. 11 When an amendment has been adopted but the eighteen-month period for its acceptance has not yet expired, a State which becomes a State Party during that period shall be bound by the amendment if it enters into force. A State which becomes a State Party after that period shall be bound by an amendment which has been accepted in accordance with paragraph 8. In the cases referred to in this paragraph, a State becomes bound by an amendment when that amendment enters into force, or when this Protocol enters into force for that State, if later.

Article 24 Depositary 1 This Protocol and any amendments adopted under Article 23 shall be deposited with the Secretary-General. 2 The Secretary-General shall: (a) inform all States which have signed or acceded to this Protocol of: (i) each new signature or deposit of an instrument of ratification, acceptance, approval or accession together with the date thereof; (ii) each declaration and communication under Article 9, paragraphs 2 and 3, Article 18, paragraph 1 and Article 19, paragraph 4 of the Convention as revised by this Pro­ tocol; (iii) the date of entry into force of this Protocol; (iv) any proposal to amend the limits which has been made in accordance with Article 23, paragraph 2 of this Protocol; (v) any amendment which has been adopted in accordance with Article 23, paragraph 5 of this Protocol; (vi) any amendment deemed to have been accepted under Article 23, paragraph 8 of this Protocol, together with the date on which that amendment shall enter into force in accordance with paragraphs 9 and 10 of that Article; (vii) the deposit of any instrument of denunciation of this Protocol together with the date of the deposit and the date on which it takes effect; (viii) any communication called for by any Article of this Protocol; (b) transmit certified true copies of this protocol to all States which have signed or acceded to this Protocol. 3 As soon as this Protocol comes into force, the text shall be transmitted by the Secretary-General to the Secretariat of the United Nations for registration and publication in accordance with Article 102 of the Charter of the United Nations.

Article 25 Languages This Protocol is established in a single original in the Arabic, Chinese, English, French, Russian and Spanish languages, each text being equally authentic. DONE AT LONDON this first day of November two thousand and two.

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IN WITNESS WHEREOF the undersigned, being duly authorised by their respective Governments for that purpose, have signed this Protocol. ***

ANNEX CERTIFICATE OF INSURANCE OR OTHER FINANCIAL SECURITY IN RESPECT OF LIABILITY FOR THE DEATH OF AND PERSONAL INJURY TO PASSENGERS Issued in accordance with the provisions of Article 4bis of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 2002, Name of Ship

Distinctive number or letters

IMO Ship Identification Number

Port of Registry

Name and full address of the principal place of business of the carrier who actually performs the carriage.

This is to certify that there is in force in respect of the above-named ship a policy of insurance or

other financial security satisfying the requirements of Article 4bis of the Athens Convention relating

to the Carriage of Passengers and their Luggage by Sea, 2002.

Type of Security ...................................................................................................................................

Duration of Security .............................................................................................................................

Name and address of the insurer(s) and/or guarantor(s)

Name .....................................................................................................................................................

Address .................................................................................................................................................

................................................................................................................................................................

This certificate is valid until ........................................................................................................

Issued or certified by the Government of ................................................................................... ................................................................................................................................................................ (Full designation of the State) OR The following text should be used when a State Party avails itself of Article 4bis, paragraph 3: The present certificate is issued under the authority of the Government of ..................................... full designation of the State) by .............................................. (name of institution or organisation) At ........................................ On ......................................... (Place) (Date) ...................................................................................... (Signature and Title of issuing or certifying official)

Explanatory Notes: 1 If desired, the designation of the State may include a reference to the competent public authority of the country where the Certificate is issued. 2 If the total amount of security has been furnished by more than one source, the amount of each of them should be indicated. 3 If security is furnished in several forms, these should be enumerated. 4 The entry ‘‘Duration of Security’’ must stipulate the date on which such security takes effect. 5 The entry ‘‘Address’’ of the insurer(s) and/or guarantor(s) must indicate the principal place of business of the insurer(s) and/or guarantor(s). If appropriate, the place of business where the insurance or other security is established shall be indicated.

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ATHENS CONVENTION RELATING TO THE CARRIAGE OF

PASSENGERS AND THEIR LUGGAGE BY SEA, 2002

(Consolidated text of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 and the Protocol of 2002 to the Convention) Article 1 Definitions In this Convention the following expressions have the meaning hereby assigned to them: 1 (a) ‘‘carrier’’ means a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by that person or by a performing carrier; (b) ‘‘performing carrier’’ means a person other than the carrier, being the owner, charterer or operator of a ship, who actually performs the whole or a part of the carriage; (c) ‘‘carrier who actually performs the whole or a part of the carriage’’ means the performing carrier, or, in so far as the carrier actually performs the carriage, the carrier; 2 ‘‘contract of carriage’’ means a contract made by or on behalf of a carrier for the carriage by sea of a passenger or of a passenger and his luggage, as the case may be; 3 ‘‘ship’’ means only a seagoing vessel, excluding an air-cushion vehicle; 4 ‘‘passenger’’ means any person carried in a ship, (a) under a contract of carriage, or (b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods not governed by this Convention; 5 ‘‘luggage’’ means any article or vehicle carried by the carrier under a contract of carriage, excluding: (a) articles and vehicles carried under a charter party, bill of lading or other contract primarily concerned with the carriage of goods, and (b) live animals; 6 ‘‘cabin luggage’’ means luggage which the passenger has in his cabin or is otherwise in his possession, custody or control. Except for the application, of paragraph 8 of this Article and Article 8, cabin luggage includes luggage which the passenger has in or on his vehicle; 7 ‘‘loss of or damage to luggage’’ includes pecuniary loss resulting from the luggage not having been re-delivered to the passenger within a reasonable time after the arrival of the ship on which the luggage has been or should have been carried, but does not include delays resulting from labour disputes; 8 ‘‘carriage’’ covers the following periods: (a) with regard to the passenger and his cabin luggage, the period during which the passenger and/or his cabin luggage are on board the ship or in the course of embarkation or disembarkation, and the period during which the passenger and his cabin luggage are transported by water from land to the ship or vice-versa, if the cost of such transport is included in the fare or if the vessel used for this purpose of auxiliary transport has been put at the disposal of the passenger by the carrier. However, with regard to the passenger, carriage does not include the period during which he is in a marine terminal or station or on a quay or in or on any other port installation; (b) with regard to cabin luggage, also the period during which the passenger is in a marine terminal or station or on a quay or in or on any other port installation if that luggage has been taken over by the carrier or his servant or agent and has not been re-delivered to the passenger; (c) with regard to other luggage which is not cabin luggage, the period from the time of its taking over by the carrier or his servant or agent on shore or on board until the time of its re-delivery by the carrier or his servant or agent; 9 ‘‘international carriage’’ means any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State;

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10 ‘‘Organization’’ means the International Maritime Organization. 11 ‘‘Secretary-General’’ means the Secretary-General of the Organization. Article lbis Annex The annex to this Convention shall constitute an integral part of the Convention. Article 2 Application 1 This Convention shall apply to any international carriage if: (a) the ship is flying the flag of or is registered in a State Party to this Convention, or (b) the contract of carriage has been made in a State Party to this Convention, or (c) the place of departure or destination, according to the contract of carriage, is in a State Party to this Convention. 2 Notwithstanding paragraph 1 of this Article, this Convention shall not apply when the carriage is subject, under any other international convention concerning the carriage of passengers or luggage by another mode of transport, to a civil liability regime under the provisions of such convention, in so far as those provisions have mandatory application to carriage by sea. Article 3 Liability of the carrier 1 For the loss suffered as a result of the death of or personal injury to a passenger caused by a shipping incident, the carrier shall be liable to the extent that such loss in respect of that passenger on each distinct occasion does not exceed 250,000 units of account, unless the earner proves that the incident: (a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character; or (b) was wholly caused by an act or omission done with the intent to cause the incident by a third party. If and to the extent that the loss exceeds the above limit, the carrier shall be further liable unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier. 2 For the loss suffered as a result of the death of or personal injury to a passenger not caused by a shipping incident, the carrier shall be liable if the incident which caused the loss was due to the fault or neglect of the carrier. The burden of proving fault or neglect shall lie with the claimant. 3 For the loss suffered as a result of the loss of or damage to cabin luggage, the carrier shall be liable if the incident which caused the loss was due to the fault or neglect of the carrier. The fault or neglect of the carrier shall be presumed for loss caused by a shipping incident. 4 For the loss suffered as a result of the loss of or damage to luggage other than cabin luggage, the carrier shall be liable unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier. 5 For the purposes of this Article: (a) ‘‘shipping incident’’ means shipwreck, capsizing, collision or stranding of the ship, explo­ sion or fire in the ship, or defect in the ship; (b) ‘‘fault or neglect of the carrier’’ includes the fault or neglect of the servants of the carrier; acting within the scope of their employment; (c) ‘‘defect in the ship’’ means any malfunction, failure or non-compliance with applicable safety regulations in respect of any part of the ship or its equipment when used for the escape, evacuation, embarkation and disembarkation of passengers, or when used for the propulsion, steering, safe navigation, mooring, anchoring, arriving at or leaving berth or

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anchorage, or damage control after flooding; or when used for the launching of life saving appliances; and (d) ‘‘loss’’ shall not include punitive or exemplary damages. 6 The liability of the carrier under this Article only relates to loss arising from incidents that occurred in the course of the carriage. The burden of proving that the incident which caused the loss occurred in the course of the carriage, and the extent of the loss, shall lie with the claimant. 7 Nothing in this Convention shall prejudice any right of recourse of the carrier against any third party, or the defence of contributory negligence under Article 6 of this Convention. Nothing in this Article shall prejudice any right of limitation under Articles 7 or 8 of this Convention. 8 Presumptions of fault or neglect of a party or the allocation of the burden of proof to a party shall not prevent evidence in favour of that party from being considered.

Article 4 Performing carrier 1 If the performance of the carriage or part thereof has been entrusted to a performing carrier, the carrier shall nevertheless remain liable for the entire carriage according to the provisions of this Convention. In addition, the performing carrier shall be subject and entitled to the provisions of this Convention for the part of the carriage performed by him. 2 The carrier shall, in relation to the carriage performed by the performing carrier, be liable for the acts and omissions of the performing carrier and of his servants and agents acting within the scope of their employment. 3 Any special agreement under which the carrier assumes obligations not imposed by this Convention or any waiver of rights conferred by this Convention shall affect the Performing carrier only if agreed by him expressly and in writing. 4 Where and to the extent that both the carrier and the performing carrier are liable, their liability shall be joint and several. 5 Nothing in this Article shall prejudice any right of recourse as between the carrier and the performing carrier.

Article 4bis Compulsory insurance 1 When passengers are carried on board a ship registered in a State Party that is licensed to carry more than twelve passengers, and this Convention applies, any carrier who actually performs the whole or a part of the carriage shall maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover liability under this Convention in respect of the death of and personal injury to passengers. The limit of the compulsory insurance or other financial security shall not be less than 250,000 units of account per passenger on each distinct occasion. 2 A certificate attesting that insurance or other financial security is in force in accordance with the provisions of this Convention shall be issued to each ship after the appropriate authority of a State Party has determined that the requirements of paragraph 1 have been complied with. With respect to a ship registered in a State Party, such certificate shall be issued or certified by the appropriate authority of the State of the ship’s registry; with respect to a ship not registered in a State Party, it may be issued or certified by the appropriate authority of any State Party. This certificate shall be in the form of the model set out in the annex to this Convention and shall contain the following particulars: (a) name of ship, distinctive number or letters and port of registry; (b) name and principal place of business of the carrier who actually performs the whole or a part of the carriage; (c) IMO ship identification number; (d) type and duration of security;

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(e) name and principal place of business of insurer or other person providing financial security and, where appropriate, place of business where the insurance or other financial security is established; and (f) period of validity of the certificate, which shall not be longer than the period of validity of the insurance or other financial security. 3 (a) A State Party may authorize an institution or an organization recognised by it to issue the certificate. Such institution or organization shall inform that State of the issue of each certificate. In all cases, the State Party shall fully guarantee the completeness and accuracy of the certificate so issued, and shall undertake to ensure the necessary arrangements to satisfy this obligation. (b) A State Party shall notify the Secretary-General of: (i) the specific responsibilities and conditions of the authority delegated to an institution or organization recognised by it; (ii) the withdrawal of such authority; and (iii) the date from which such authority or withdrawal of such authority takes effect. An authority delegated shall not take effect prior to three months from the date from which notification to that effect was given to the Secretary-General. (c) The institution or organization authorized to issue certificates in accordance with this paragraph shall, as a minimum, be authorized to withdraw these certificates if the conditions under which they have been issued are not complied with. In all cases the institution or organization shall report such withdrawal to the State on whose behalf the certificate was issued. 4 The certificate shall be in the official language or languages of the issuing State. If the language used is not English, French or Spanish, the text shall include a translation into one of these languages, and, where the State so decides, the official language of the State may be omitted. 5 The certificate shall be carried on board the ship, and a copy shall be deposited with the authorities who keep the record of the ship’s registry or, if the ship is not registered in a State Party, with the authority of the State issuing or certifying the certificate. 6 An insurance or other financial security shall not satisfy the requirements of this Article if it can cease, for reasons other than the expiry of the period of validity of the insurance or security specified in the certificate, before three months have elapsed from the date on which notice of its termination is given to the authorities referred to in paragraph 5, unless the certificate has been surrendered to these authorities or a new certificate has been issued within the said period. The foregoing provi­ sions shall similarly apply to any modification which results in the insurance or other financial security no longer satisfying the requirements of this Article. 7 The State of the ship’s registry shall, subject to the provisions of this Article, determine the conditions of issue and validity of the certificate. 8 Nothing in this Convention shall be construed as preventing a State Party from relying on information obtained from other States or the Organization or other international organizations relating to the financial standing of providers of insurance or other financial security for the purposes of this Convention. In such cases, the State Party relying on such information is not relieved of its responsibility as a State issuing the certificate. 9 Certificates issued or certified under the authority of a State Party shall be accepted by other States Parties for the purposes of this Convention and shall be regarded by other States Parties as having the same force as certificates issued or certified by them, even if issued or certified in respect of a ship not registered in a State Party. A State Party may at any time request consultation with the issuing or certifying State should it believe that the insurer or guarantor named in the insurance certificate is not financially capable of meeting the obligations imposed by this Convention. 10 Any claim for compensation covered by insurance or other financial security pursuant to this Article may be brought directly against the insurer or other person providing financial security. In such case, the amount set out in paragraph 1 applies as the limit of liability of the insurer or other person providing financial security, even if the carrier or the performing carrier is not entitled to limitation of liability. The defendant may further invoke the defences (other than the bankruptcy or winding up) which the carrier referred to in paragraph 1 would have been entitled to invoke in accordance with this Convention. Furthermore, the defendant may invoke the defence that the damage resulted from the wilful misconduct of the assured, but the defendant shall not invoke any

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other defence which the defendant might have been entitled to invoke in proceedings brought by the assured against the defendant. The defendant shall in any event have the right to require the carrier and the performing earner to be joined in the proceedings. 11 Any sums provided by insurance or by other financial security maintained in accordance with paragraph 1 shall be available exclusively for the satisfaction of claims under this Convention, and any payments made of such sums shall discharge any liability arising under this Convention to the extent of the amounts paid. 12 A State Party shall not permit a ship under its flag to which this Article applies to operate at any time unless a certificate has been issued under paragraphs 2 or 15. 13 Subject to the provisions of this Article, each State Party shall ensure, under its national law, that insurance or other financial security, to the extent specified in paragraph 1, is in force in respect of any ship that is licensed to carry more than twelve passengers, wherever registered, entering or leaving a port in its territory in so far as this Convention applies. 14 Notwithstanding the provisions of paragraph 5, a State Party may notify the Secretary-General that, for the purposes of paragraph 13, ships are not required to carry on board or to produce the certificate required by paragraph 2 when entering or leaving ports in its territory, provided that the State Party which issues the certificate has notified the Secretary-General that it maintains records in an electronic format, accessible to all States Parties, attesting the existence of the certificate and enabling States Parties to discharge their obligations under paragraph 13. 15 If insurance or other financial security is not maintained in respect of a ship owned by a State Party, the provisions of this Article relating thereto shall not be applicable to such ship, but the ship shall carry a certificate issued by the appropriate authorities of the State of the ship’s registry, stating that the ship is owned by that State and that the liability is covered within the amount prescribed in accordance with paragraph 1. Such a certificate shall follow as closely as possible the model prescribed by paragraph 2. Article 5 Valuables The carrier shall not be liable for the loss of or damage to movies, negotiable securities, gold, silverware, jewellery, ornaments, works of art, or other valuables, except where such valuables have been deposited with the carrier for the agreed purpose of safe-keeping in which case the carrier shall be liable up to the limit provided for in paragraph 3 of Article 8 unless a higher limit is agreed upon in accordance with paragraph 1 of Article 10. Article 6 Contributory fault If the carrier proves that the death of or personal injury to a passenger or the loss of or damage to his luggage was caused or contributed to by the fault or neglect of the passenger, the Court seized of the case may exonerate the carrier wholly or partly from his liability in accordance with the provisions of the law of that court. Article 7 Limit of liability for death and personal injury 1 The liability of the carrier for the death of or personal injury to a passenger under Article 3 shall in no case exceed 400,000 units of account per passenger on each distinct occasion. Where, in accordance with the law of the court seized of the case, damages are awarded in the form of periodical income payments, the equivalent capital value of those payments shall not exceed the said limit. 2 A State Party may regulate by specific provisions of national law the limit of liability pre­ scribed in paragraph 1, provided that the national limit of liability, if any, is not lower than that prescribed in paragraph 1. A State Party, which makes use of the option provided for in this

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paragraph, shall inform the Secretary-General of the limit of liability adopted or of the fact that there is none. Article 8 Limit of liability for loss of or damage to luggage and vehicles 1 The liability of the carrier for the loss of or damage to cabin luggage shall in no case exceed 2,250 units of account per passenger, per carriage. 2 The liability of the carrier for the loss of or damage to vehicles including all luggage carried in or on the vehicle shall in no case exceed 12,700 units of account per vehicle, per carriage. 3 The liability of the carrier for the loss of or damage to luggage other than that mentioned in paragraphs 1 and 2 shall in no case exceed 3,375 units of account per passenger, per carriage. 4 The carrier and the passenger may agree that the liability of the carrier shall be subject to a deductible not exceeding 330 units of account in the case of damage to a vehicle and not exceeding 149 units of account per passenger in the case of loss of or damage to other luggage, such sum to be deducted from the loss or damage. Article 9 Unit of Account and conversion 1 The Unit of Account mentioned in this Convention is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph 1, and Article 8 shall be converted into the national currency of the State of the court seized of the case on the basis of the value of that currency by reference to the Special Drawing Right on the date of the judgment or the date agreed upon by the parties. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is a member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect on the date in question for its operations and transactions. The value of the national currency, in terms of the Special Drawing Right, of a State Party which is not a member of the International Monetary Fund, shall be calculated in a manner determined by that State Party. 2 Nevertheless, a State which is not a member of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 1 may, at the time of ratification, acceptance, approval of or accession to this Convention or at any time thereafter, declare that the Unit of Account referred to in paragraph l shall be equal to 15 gold francs. The gold franc referred to in this paragraph corresponds to sixty-five and a half milligrams of gold of millesimal fineness nine hundred. The conversion of the gold franc into the national currency shall be made according to the law of the State concerned. 3 The calculation mentioned in the last sentence of paragraph 1, and the conversion mentioned in paragraph 2 shall be made in such a manner as to express in the national currency of the States Parties, as far as possible, the same real value for the amounts in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph 1, and Article 8 as would result from the application of the first three sentences of paragraph 1. States shall communicate to the Secretary-General the manner of calculation pursuant to paragraph 1, or the result of the conversion in paragraph 2, as the case may be, when depositing an instrument of ratification, acceptance, approval of or accession to dais Convention and whenever there is a change in either. Article 10 Supplementary provisions on limits of liability 1 The carrier and the passenger may agree, expressly and in writing, to higher limits of liability than those prescribed in Articles 7 and 8. 2 Interest on damages and legal costs shall not be included in the limits of liability prescribed in Articles 7 and 8.

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Article 11 Defences and limits for carriers’ servants If an action is brought against a servant or agent of the carrier or of the performing carrier arising out of damage covered by this Convention, such servant or agent, if he proves that he acted within the scope of his employment, shall be enled to avail himself of the defences and limits of liability which the earner or the performing carrier is entitled to invoke under this Convention.

Article 12 Aggregation of claims 1 Where the limits of liability prescribed in Articles 7 arid 8 take effect, they shall apply to the aggregate of the amounts recoverable in all claims arising out of the death of or personal injury to any one passenger or the loss of or damage to his luggage. 2 In relation to the carriage performed by a performing carrier, the aggregate of the amounts recoverable from the carrier and the performing carrier and from their servants and agents acting within the scope of their employment shall not exceed the highest amount which could be awarded against either the carrier or the performing carrier under this Convention, but none of the persons mentioned shall be liable for a sum in excess of the limit applicable to him. 3 In any case where a servant or agent of the carrier or of the performing carrier is entitled under Article 11 of this Convention to avail himself of the limits of liability prescribed in Articles 7 and 8, the aggregate of the amounts recoverable from the earner, or the performing carrier as the case may be, and from that servant or agent, shall not exceed those limits.

Article 13 Loss of right to limit liability 1 The carrier shall not be entitled to the benefit of the limits of liability prescribed in Articles 7 and 8 and paragraph 1 of Article 10, if it is proved that the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. 2 The servant or agent of the carrier or of the performing carrier shall not be entitled to the benefit of those limits if it is proved that the damage resulted from an act or omission of that servant or agent done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result.

Article 14 Basis for claims No action for damages for the death of or personal injury to a passenger, or for the loss of or damage to luggage, shall be brought against a carrier or performing carrier otherwise than in accordance with this Convention.

Article 15 Notice of loss or damage to luggage 1 The passenger shall give written notice to the carrier or his agent: (a) in the case of apparent damage to luggage: (i) for cabin luggage, before or at the time of disembarkation of the passenger; (ii) for all other luggage, before or at the time of its re-delivery;

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(b) in the case of damage to luggage which is not apparent, or loss of luggage, within fifteen days from the date of disembarkation or re-delivery or from the time when such re-delivery should have taken place. 2 If the passenger fails to comply with this Article, he shall be presumed, unless the contrary is proved, to have received the luggage undamaged. 3 The notice in writing need not be given if the condition of the luggage has at the time of its receipt been the subject of joint survey or inspection.

Article 16 Time-bar for actions 1 Any action for damages arising out of the death of or personal injury to a passenger or for the loss of or damage to luggage shall be time-barred after a period of two years. 2 The limitation period shall be calculated as follows: (a) in the case of personal injury, from the date of disembarkation of the passenger; (b) in the case of death occurring during carriage, from the date when the passenger should have disembarked, and in the case of personal injury occurring during carriage and resulting in the death of the passenger after disembarkation, from the date of death, provided that this period shall not exceed three years from the date of disembarkation; (c) in the case of loss of or damage to luggage, from the date of disembarkation or from the date when disembarkation should have taken place, whichever is later. 3 The law of the Court seized of the case shall govern the grounds for suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of any one of the following periods of time: (a) A period of five years beginning with the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later; or, if earlier (b) a period of three years beginning with the date when the claimant knew or ought reason­ ably to have known of the injury, loss or damage caused by the incident. 4 Notwithstanding paragraphs 1, 2 and 3 of this Article, the period of limitation may be extended by a declaration of the carrier or by agreement of the parties after the cause of action has arisen. The declaration or agreement shall be in writing.

Article 17 Competent jurisdiction 1 An action arising under Articles 3 and 4 of this Convention shall, at the option of the claimant, be brought before one of the courts listed below, provided that the court is located in a State Party to this Convention, and subject to the domestic law of each State Party governing proper venue within those States with multiple possible forums: (a) the Court of the State of permanent residence or principal place of business of the defendant, or (b) the Court of the State of departure or that of the destination according to the contract of carriage, or (c) the Court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State, or (d) the Court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State. 2 Actions under Article 4bis of this Convention shall, at the option of the claimant, be brought before one of the courts where action could be brought against the carrier or performing carrier according to paragraph 1. 3 After the occurrence of the incident which has caused the damage, the parties may agree that the claim for damages shall be submitted to any jurisdiction or to arbitration.

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Article 17bis Recognition and enforcement 1 Any judgment given by a court with jurisdiction in accordance with Article 17 which is enforceable in the State of origin where it is no longer subject to ordinary forms of review, shall be recognised in any State Party, except (a) where the judgment was obtained by fraud; or (b) where the defendant was not given reasonable notice and a fair opportunity to present his or her case. 2 A judgment recognised under paragraph 1 shall be enforceable in each State Party as soon as the formalities required in that State have been complied with. The formalities shall not permit the merits of the case to be re-opened. 3 A State Party to this Protocol may apply other rules for the recognition and enforcement of judgments, provided that their effect is to ensure that judgments are recognised and enforced at least to the same extent as under paragraphs 1 and 2. Article 18 Invalidity of contractual provisions Any contractual provision concluded before the occurrence of the incident which has caused the death of or personal injury to a passenger or the loss of or damage to the passenger’s luggage, purporting to relieve any person liable under this Convention of liability towards the passenger or to prescribe a lower limit of liability than that fixed in this Convention except as provided in Article 8, paragraph 4, and any such provision purporting to shift the burden of proof which rests on the carrier or performing carrier, or having the effect of restricting the options specified in Article 17, paragraphs 1 or 2, shall be null and void, but the nullity of that provision shall not render void the contract of carriage which shall remain subject to the provisions of this Convention. Article 19 Other conventions on limitation of liability This Convention shall not modify the rights or duties of the carrier, the performing carrier, and their servants or agents provided for in international conventions relating to the limitation of liability of owners of seagoing ships. Article 20 Nuclear damage No liability shall arise under this Convention for damage caused by a nuclear incident: (a) if the operator of a nuclear installation is liable for such damage under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended by its Additional Protocol of 28 January 1964, or the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or any amendment or Protocol thereto which is in force; or (b) if the operator of a nuclear installation is liable for such damage by virtue of a national law governing the liability for such damage, provided that such law is in all respects as favourable to persons who may suffer damage as either the Paris or the Vienna Conven­ tions or any amendment or Protocol thereto which is in force. Article 21 Commercial carriage by public authorities This Convention shall apply to commercial carriage undertaken by States or Public Authorities under contract of carriage within the meaning of Article 1.

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Article 22 Declaration of non-application 1 Any Party may at the time of signing, ratifying, accepting, approving or acceding to this Convention, declare in writing that it will not give effect to this Convention when the passenger and the carrier are subjects or nationals of that Party. 2 Any declaration made under paragraph 1 of this Article may be withdrawn at any time by a notification in writing to the Secretary-General. Article 22bis Final clauses of the Convention The final clauses of this Convention shall be Articles 17 to 25 of the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. Refer­ ences in this Convention to States Parties shall be taken to mean references to States Parties to that Protocol. FINAL CLAUSES [Articles 17 to 25 of the Protocol of 2002 to the Athens Convention relating to the Carnage of Passengers and their Luggage by Sea, 1974.] Article 17 Signature, ratification, acceptance, approval and accession 1 This Protocol shall be open for signature at the Headquarters of the Organization from 1 May 2003 until 30 April 2004 and shall thereafter remain open for accession. 2 States may express their consent to be bound by this Protocol by: (a) signature without reservation as to ratification, acceptance or approval; or (b) signature subject to ratification, acceptance or approval followed by ratification, acceptance or approval; or (c) accession. 3 Ratification, acceptance, approval or accession shall be effected by the deposit of an instrument to that effect with the Secretary-General. 4 Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to this Protocol with respect to all existing States Parties, or after the completion of all measures required for the entry into force of the amendment with respect to those States Parties shall be deemed to apply to this Protocol as modified by the amendment. 5 A State shall not express its consent to be bound by this Protocol unless, if Party thereto, it denounces: (a) the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at Athens on 13 December 1974; (b) the Protocol to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, done at London on 19 November 1976; and (c) the Protocol of 1990 to amend the Athens Convention relating to the Carnage of Passengers and their Luggage by Sea, done at London on 29 March 1990, with effect from the time that this Protocol will enter into force for that State in accordance with Article 20. Article 18 States with more than one system of law 1 If a State has two or more territorial units in which different systems of law are applicable in relation to matters dealt with in this Protocol, it may at the time of signature, ratification, acceptance,

AT H E N S C O N V E N T I O N

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approval or accession declare that this Protocol shall extend to all its territorial units or only to one or more of them, and may modify this declaration by submitting another declaration at any time. 2 Any such declaration shall be notified to the Secretary-General and shall state expressly the territorial units to which this Protocol applies. 3 In relation to a State Party which has made such a declaration: (a) references to the State of a ship’s registry and, in relation to a compulsory insurance certificate, to the issuing or certifying State, shall be construed as referring to the territorial unit respectively in which the ship is registered and which issues or certifies the certifi­ cate; (b) references to the requirements of national law, national limit of liability and national currency shall be construed respectively as references to the requirements of the law, the limit of liability and the currency of the relevant territorial unit; and (c) references to courts, and to judgments which must be recognised in States Parties, shall be construed as references respectively to courts of, and to judgments which must be recog­ nised in, the relevant territorial unit. Article 19 Regional Economic Integration Organizations 1 A Regional Economic Integration Organization, which is constituted by sovereign States that have transferred competence over certain matters governed by this Protocol to that Organization, may sign, ratify, accept, approve or accede to this Protocol. A Regional Economic Integration Organization which is a Party to this Protocol shall have the rights and obligations of a State Party, to the extent that the Regional Economic Integration Organization has competence over matters governed by this Protocol. 2 Where a Regional Economic Integration Organization exercises its right of vote in. matters over which it has competence, it shall have a number of votes equal to the number of its Member States which are Parties to this Protocol and which have transferred competence to it over the matter in question. A Regional Economic Integration Organization shall not exercise its right to vote if its Member States exercise theirs, and vice versa. 3 Where the number of States Parties is relevant in this Protocol, including but not limited to Articles 20 and 23 of this Protocol, the Regional Economic Integration Organization shall not count as a State Party in addition to its Member States which are States Parties. 4 At the time of signature, ratification, acceptance, approval or accession the Regional Economic Integration Organization shall make a declaration to the Secretary-General specifying the matters governed by this Protocol in respect of which competence has been transferred to that Organization by its Member States which are signatories or Parties to this Protocol and any other relevant restrictions as to the scope of that competence. The Regional Economic Integration Organization shall promptly notify the Secretary-General of any changes to the distribution of competence, including new transfers of competence, specified in the declaration under this paragraph. Any such declarations shall be made available by the Secretary-General pursuant to Article 24 of this Pro­ tocol. 5 States Parties which are Member States of a Regional Economic Integration Organization which is a Party to this Protocol shall be presumed to have competence over all matters governed by this Protocol in respect of which transfers of competence to the Organization have not been specifically declared or notified under paragraph 4. Article 20 Entry into force 1 This Protocol shall enter into force twelve months following the date on which 10 States have either signed it without reservation as to ratification, acceptance or approval or have deposited instruments of ratification, acceptance, approval or accession with the Secretary-General. 2 For any State which ratifies, accepts, approves or accedes to this Protocol after the conditions in paragraph 1 for entry into force have been met, this Protocol shall enter into force three months

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after the date of deposit by such State of the appropriate instrument, but not before this Protocol has entered into force in agreement with paragraph 1. Article 21 Denunciation 1 This Protocol may be denounced by any State Party at any time after the date on which this Protocol comes into force for that State. 2 Denunciation shall be effected by the deposit of an instrument to that effect with the SecretaryGeneral. 3 A denunciation shall take effect twelve months, or such longer period as may be specified in the instrument of denunciation, after its deposit with the Secretary-General. 4 As between the States Parties to this Protocol, denunciation by any of them of the Convention in accordance with Article 25 thereof shall not be construed in any way as a denunciation of the Convention as revised by this Protocol. Article 22 Revision and Amendment 1 A Conference for the purpose of revising or amending this Protocol maybe convened by the Organization. 2 The Organization shall convene a Conference of States Parties to this Protocol for revising or amending this Protocol at the request of not less than one-third of the States Parties. Article 23 Amendment of limits 1 Without prejudice to the provisions of Article 22, the special procedure in this Article shall apply solely for the purposes of amending the limits set out in Article 3, paragraph 1, Article 4bis, paragraph 1, Article 7, paragraph 1 and Article 8 of the Convention as revised by this Protocol. 2 Upon the request of at least one half, but in no case less than six, of the States Parties to this Protocol, any proposal to amend the limits, including the deductibles, specified in Article 3, paragraph 1 Article Obis paragraph 1 Article 7, paragraph 1, and Article 8 of the Convention revised by this Protocol shall be circulated by the Secretary-General to all Members of the Organization and to all States Parties. 3 Any amendment proposed and circulated as above shall be submitted to the Legal Committee of the Organization (hereinafter referred to as ‘‘the Legal Committee’’) for consideration at a date at least six months after the date of its circulation. 4 All States Parties to the Convention as revised by this Protocol, whether or not Members of the Organization, shall be entitled to participate in the proceedings of the Legal Committee for the consideration and adoption of amendments. 5 Amendments shall be adapted by a two-thirds majority of the States Parties to the Convention as revised by this Protocol present and voting in the Legal Committee expanded as provided for in paragraph 4, on condition that at least one half of the States Parties to the Convention as revised by this Protocol shall be present at the time of voting. 6 When acting on a proposal to amend the limits, the Legal Committee shall take into account the experience of incidents and, in particular, the amount of damage resulting therefrom, changes in the monetary values and the effect of the proposed amendment on the cost of insurance. 7 (a) No amendment of the limits under this Article may be considered less than five years from the date on which this Protocol was opened for signature nor less than five years from the date of entry into force of a previous amendment under this Article. (b) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as revised by this Protocol increased by six per cent per year calculated on a compound basis from the date on which this Protocol was opened far sig­ nature.

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(c) No limit may be increased so as to exceed an amount which corresponds to the limit laid down in the Convention as revised by this Protocol multiplied by three. 8 Any amendment adopted in accordance with paragraph 5 shall be notified by the Organization to all States Parties. The amendment shall be deemed to have been accepted at the end of a period of eighteen months after the date of notification, unless within that period not less than one fourth of the States that were States Parties at the time of the adoption of the amendment have communi­ cated to the Secretary-General that they do not accept the amendment, in which case the amendment is rejected and shall have no effect. 9 An amendment deemed to have been accepted in accordance with paragraph 8 shall enter into force eighteen months after its acceptance. 10 All States Parties shall be bound by the amendment, unless they denounce this Protocol in accordance with Article 21, paragraphs 1 and 2 at least six months before the amendment enters into force. Such denunciation shall take effect when the amendment enters into force. 11 When an amendment has been adopted but the eighteen-month period for its acceptance has not yet expired, a State which becomes a State Party during that period shall be bound by the amendment if it enters into force. A State which becomes a State Party after that period shall be bound by an amendment which has been accepted in accordance with paragraph 8. In the cases referred to in this paragraph, a State becomes bound by an amendment when that amendment enters into force, or when this Protocol enters into force for that State, if later. Article 24 Depositary 1 This Protocol and any amendments adopted under Article 23 shall be deposited with the Secretary-General. 2 The Secretary-General shall: (a) inform all States which have signed or acceded to this Protocol of: (i) each new signature or deposit of an instrument of ratification, acceptance, approval or accession together with the date thereof; (ii) each declaration and communication under Article 9, paragraphs 2 and 3, Article 18, paragraph 1 and Article 19, paragraph 4 of the Convention as revised by this Pro­ tocol; (iii) the date of entry into force of this Protocol; (iv) any proposal to amend the limits which has been made in accordance with Article 23, paragraph 2 of this Protocol; (v) any amendment which has been adopted in accordance with Article 23, paragraph 5 of this Protocol; (vi) any amendment deemed to have been accepted under Article 23, paragraph 8 of this Protocol, together with the date on which that amendment shall enter into force in accordance with paragraphs 9 and 10 of that Article; (vii) the deposit of any instrument of denunciation of this Protocol together with the date of the deposit and the date on which it takes effect; (viii) any communication called for by any Article of this Protocol; (b) transmit certified true copies of this Protocol to all States which have signed or acceded to this Protocol. 3 As soon as this Protocol comes into force, the text shall be transmitted by the Secretary-General to the Secretariat of the United Nations for registration and publication in accordance with Article 102 of the Charter of the United Nations. Article 25 Languages This Protocol is established in a single original in the Arabic, Chinese, English, French, Russian and Spanish languages, each text being equally authentic.

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DONE AT LONDON this first day of November 2002. IN WITNESS WHEREOF the undersigned, being duly authorised by their respective Govern­ ments for that purpose, have signed this Protocol. ANNEX CERTIFICATE OF INSURANCE OR OTHER FINANCIAL SECURITY IN RESPECT OF LIABILITY FOR THE DEATH OF AND PERSONAL INJURY TO PASSENGERS Issued in accordance with the provisions of Article 4bis of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 2002 Name of Ship

Distinctive number or letters

IMO Ship Identification Number

Port of Registry

Name and full address of the principal place of business of the carrier who actually performs the carriage.

This is to certify that there is in force in respect of the above-named ship a policy of insurance or

other financial security satisfying the requirements of Article 4bis of the Athens Convention relating

to the Carriage of Passengers and their Luggage by Sea, 2002.

Type of Security ...................................................................................................................................

Duration of Security .............................................................................................................................

Name and address of the insurer(s) and/or guarantor(s)

Name .....................................................................................................................................................

Address .................................................................................................................................................

................................................................................................................................................................

This certificate is valid until ........................................................................................................

Issued or certified by the Government of ................................................................................... ................................................................................................................................................................ (Full designation of the State) OR The following text should be used when a State Party avails itself of Article 4bis, paragraph 3: The present certificate is issued under the authority of the Government of ..................................... full designation of the State) by .............................................. (name of institution or organisation) At ........................................ On ......................................... (Place) (Date) ...................................................................................... (Signature and Title of issuing or certifying official) Explanatory Notes: 1 If desired, the designation of the State may include a reference to the competent public y authority of the country where the Certificate is issued. 2 If the total amount of security has been furnished by more than one source, the amount of each of them should be indicated. 3 If security is furnished in several forms, these should be enumerated. 4 The entry ‘‘Duration of Security°’ must stipulate the date on which such security takes effect. 5 The entry ‘‘Address’’ of the insurer(s) and/or guarantor(s) must indicate the principal place of business of the insurer(s) and/or guarantor(s). If appropriate, the place of business where the insurance or other security is established shall be indicated.

APPENDIX XI

Admiralty Claims

Part 61

Contents of this Part Rule 61.1 Scope and interpretation ... Rule 61.11 Limitation claims ... . 61.1 Scope and interpretation (1) This Part applies to admiralty claims. (2) In this Part— (a) ‘‘admiralty claim’’ means a claim within the Admiralty jurisdiction of the High Court as set out in section 20 of the Supreme Court Act 19811; (b) ‘‘the Admiralty Court’’ means the Admiralty Court of the Queen’s Bench Division of the High Court of Justice; (c) ‘‘claim in rem’’ means a claim in an admiralty action in rem; (d) ‘‘collision claim’’ means a claim within section 20(3)(b) of the Supreme Court Act 1981; (e) ‘‘limitation claim’’ means a claim under the Merchant Shipping Act 19952 for the limitation of liability in connection with a ship or other property; (f) ‘‘salvage claim’’ means a claim— (i) for or in the nature of salvage; (ii) for special compensation under Article 14 of Schedule 11 to the Merchant Shipping Act 1995; (iii) for the apportionment of salvage; and (iv) arising out of or connected with any contract for salvage services; (g) ‘‘caution against arrest’’ means a caution entered in the Register under rule 61.7; (h) ‘‘caution against release’’ means a caution entered in the Register under rule 61.8; (i) ‘‘the Register’’ means the Register of cautions against arrest and release which is open to inspection as provided by the practice direction; (j) ‘‘the Marshal’’ means the Admiralty Marshal; (k) ‘‘ship’’ includes any vessel used in navigation; and (l) ‘‘the Registrar’’ means the Queen’s Bench Master with responsibility for Admiralty claims. (3) Part 58 (Commercial Court) applies to claims in the Admiralty Court except where this Part provides otherwise. (4) The Registrar has all the powers of the Admiralty judge except where a rule or practice direction provides otherwise. ... . 1. 1981 c. 54; section 20 was amended by the Merchant Shipping (Salvage and Pollution) Act 1994 (c. 28), section 1(6) and Schedule 2, paragraph 6; the Merchant Shipping Act 1995 (c. 21), section 314(2) and Schedule 13, paragraph 59 and by the Merchant Shipping and Maritime Security Act 1997 (c. 28), section 29(1) and Schedule 6, paragraph 2. 2. 1995 c. 21.

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61.11 Limitation claims (1) This rule applies to limitation claims. (2) A claim is started by the issue of a limitation claim form as set out in the practice direc­ tion. (3) The— (a) claimant; and (b) at least one defendant must be named in the claim form, but all other defendants may be described. (4) The claim form— (a) must be served on all named defendants and any other defendant who requests service upon him; and (b) may be served on any other defendant. (5) The claim form may not be served out of the jurisdiction unless— (a) the claim falls within section 22(2)(a), (b) or (c) of the Supreme Court Act 19813; (b) the defendant has submitted to or agreed to submit to the jurisdiction of the court; or (c) the Admiralty Court has jurisdiction over the claim under any applicable Convention; and the court grants permission in accordance with Section III of Part 6. (6) An acknowledgment of service is not required. (7) Every defendant upon whom a claim form is served must— (a) within 28 days of service file— (i) a defence; or (ii) a notice that he admits the right of the claimant to limit liability; or (b) if he wishes to— (i) dispute the jurisdiction of the court; or (ii) argue that the court should not exercise its jurisdiction, file within 14 days of service (or where the claim form is served out of the jurisdiction, within the time specified in rule 6.22) an acknowledgment of service as set out in the practice direction. (8) If a defendant files an acknowledgment of service under paragraph (7)(b) he will be treated as having accepted that the court has jurisdiction to hear the claim unless he applies under Part 11 within 14 days after filing the acknowledgment of service. (9) Where one or more named defendants admits the right to limit— (a) the claimant may apply for a restricted limitation decree in the form set out in the practice direction; and (b) the court will issue a decree in the form set out in the practice direction limiting liability only against those named defendants who have admitted the claimant’s right to limit liability. (10) A restricted limitation decree— (a) may be obtained against any named defendant who fails to file a defence within the time specified for doing so; and (b) need not be advertised, but a copy must be served on the defendants to whom it applies. (11) Where all the defendants upon whom the claim form has been served admit the claimant’s right to limit liability— (a) the claimant may apply to the Admiralty Registrar for a general limitation decree in the form set out in the practice direction; and (b) the court will issue a limitation decree. (12) Where one or more of the defendants upon whom the claim form has been served do not admit the claimant’s right to limit, the claimant may apply for a general limitation decree in the form set out in the practice direction. (13) When a limitation decree is granted the court— (a) may—

3. 1981 c. 54.

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(i) order that any proceedings relating to any claim arising out of the occurrence be stayed; (ii) order the claimant to establish a limitation fund if one has not been established or make such other arrangements for payment of claims against which liability is limited; or (iii) if the decree is a restricted limitation decree, distribute the limitation fund; and (b) will, if the decree is a general limitation decree, give directions as to advertisement of the decree and set a time within which notice of claims against the fund must be filed or an application made to set aside the decree. (14) When the court grants a general limitation decree the claimant must— (a) advertise it in such manner and within such time as the court directs; and (b) file— (i) a declaration that the decree has been advertised in accordance with paragraph (a); and (ii) copies of the advertisements. (15) No later than the time set in the decree for filing claims, each of the defendants who wishes to assert a claim must file and serve his statement of case on— (a) the limiting party; and (b) all other defendants except where the court orders otherwise. (16) Any person other than a defendant upon whom the claim form has been served may apply to the court within the time fixed in the decree to have a general limitation decree set aside. (17) An application under paragraph (16) must be supported by a declaration— (a) stating that the applicant has a claim against the claimant arising out of the occurrence; and (b) setting out grounds for contending that the claimant is not entitled to the decree, either in the amount of limitation or at all. (18) The claimant may constitute a limitation fund by making a payment into court. (19) A limitation fund may be established before or after a limitation claim has been started. (20) If a limitation claim is not commenced within 75 days after the date the fund was estab­ lished— (a) the fund will lapse; and (b) all money in court (including interest) will be repaid to the person who made the payment into court. (21) Money paid into court under paragraph (18) will not be paid out except under an order of the court. (22) A limitation claim for— (a) a restricted decree may be brought by counterclaim; and (b) a general decree may only be brought by counterclaim with the permission of the court. ...

PRACTICE DIRECTION PART 61.11 61.11—Limitation claims 10.1 The claim form in a limitation claim must be— (1) in form ADM15; and (2) accompanied by a declaration— (a) setting out the facts upon which the claimant relies; and (b) stating the names and addresses (if known) of all persons who, to the knowledge of the claimant, have claims against him in respect of the occurrence to which the claim relates (other than named defendants), verified by a statement of truth. 10.2 A defence to a limitation claim must be in form ADM16A. 10.3 A notice admitting the right of the claimant to limit liability in a limitation claim must be in form ADM16.

578

APPENDIX XI

10.4 An acknowledgment of service in a limitation claim must be in form ADM16B. 10.5 An application for a restricted limitation decree must be in form ADM17 and the decree issued by the court on such an application must be in form ADM18. 10.6 An application for a general limitation decree must be in form ADM17A. 10.7 Where— (1) the right to limit is not admitted; and (2) the claimant seeks a general limitation decree in form ADM17A, The claimant must, within 7 days after the date of the filing of the defence of the defendant last served or the expiry of the time for doing so, apply for an appointment before the Registrar for a case management conference. 10.8 On an application under rule 61.11(12) the Registrar may— (1) grant a general limitation decree; or (2) if he does not grant a decree— (a) order service of a defence; (b) order disclosure by the claimant; or (c) make such other case management directions as may be appropriate. 10.9 The fact that a limitation fund has lapsed under rule 61.11(20)(a) does not prevent the establishment of a new fund. 10.10 Where a limitation fund is established, it must be— (1) the sterling equivalent of the number of special drawing rights to which [the claimant] claims to be entitled to limit his liability under the Merchant Shipping Act 1995; together with (2) interest from the date of the occurrence giving rise to his liability to the date of payment into court. 10.11 Where the claimant does not know the sterling equivalent referred to in paragraph 10.10(1) on the date of payment into court he may— (1) calculate it on the basis of the latest available published sterling equivalent of a special drawing right as fixed by the International Monetary Fund; and (2) in the event of the sterling equivalent of a special drawing right on the date of payment into court being different from that used for calculating the amount of that payment into court the claimant may— (a) make up any deficiency by making a further payment into court which, if made within 14 days after the payment into court, will be treated, except for the purpose of the rules relating to the accrual of interest on money paid into court, as if made on the date of that payment into court; or (b) apply to the court for payment out of any excess amount (together with any interest accrued) paid into court. 10.12 An application under paragraph 10.11(2)(b)— (1) may be made without notice to any party; and (2) must be supported by evidence proving, to the satisfaction of the court, the sterling equivalent of the appropriate number of special drawing rights on the date of payment into court. 10.13 The claimant must give notice in writing to every named defendant of— (1) any payment into court specifying— (a) the date of the payment in; (b) the amount paid in; (c) the amount and rate of interest included; and (d) the period to which it relates; and (2) any excess amount (and interest) paid out to him under paragraph 10.11(2)(b). 10.14 A claim against the fund must be in form ADM20. 10.15 A defendant’s statement of case filed and served in accordance with rule 61.11(15) must contain particulars of the defendant’s claim. 10.16 Any defendant who is unable to file and serve a statement of case in accordance with rule 61.11(15) and paragraph 10.15 must file a declaration, verified by a statement of truth, in form ADM21 stating the reason for his inability.

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10.17 No later than 7 days after the time for filing claims [or declarations], the Registrar will fix a date for a case management conference at which directions will be given for the further conduct of the proceedings. 10.18 Nothing in rule 61.11 prevents limitation being relied on by way of defence.

APPENDIX 12

Section 20 Supreme Court Act 1981

‘‘(1) The Admiralty jurisdiction of the High Court shall be as follows, that is to say— (a) . . . . (b) jurisdiction in relation to any of the proceedings mentioned in subsection (3) (c) . . . .

...

(3) The proceedings referred to in subsection (1)(b) are— ... (c) any action by shipowners or other persons under the Merchant Shipping Act 1995 for the limitation of the amount of their liability in connection with a ship or other property. ... (7) The preceding provisions of this section apply— (a) in relation to all ships . . . whether British or not . . . and wherever the residence or domicile of their owners may be; (b) in relation to all claims, wherever arising . . . ’’

581

Index

Abandonment of vessel

Argentina, 165

Brazil, 193, 194

governing law, 251

Greece, 251

Spain, 411–412

Accident compensation scheme in New Zealand,

334

Acts or omissions

Athens Convention 1974, 103

Brazil, 193, 197

Chile, 206, 210

China, 214

conduct barring limitation, 32–34

Croatia, 220

Finland, 231, 235

France, 237, 238, 242, 243

Greece, 258

Hague-Visby Rules, 141, 145–146, 153

Hong Kong, 261

India, 266

Japan, 284

Korea, 296, 299

Netherlands, 317, 319, 325

Norway, 343–350

package limitation, 141, 145–146, 153

Poland, 369

salvors, 12

Singapore, 373, 375, 379

Slovenia, 392, 394

Spain, 409, 415

Turkey, 440

United States, 459

Venezuela, 462, 467

Actual carriers

definition of, 155, 156

Hamburg Rules, 148–149

Actual fault or privity

bar to other actions, constitution of fund as, 76

conduct barring limitation, 31–32, 40–41

fire, 26

governing law, 79

Netherlands, 319

Nigeria, 340

Pakistan, 353

privity, meaning of, 32

Singapore, 373, 374–375, 378

South Africa, 402

theft, 26

Admissions, 61–63, 352, 384

Agents. See Servants or agents Aggregation of claims Argentina, 165

Athens Convention 1974, 105–106 Belgium, 184

Brazil, 194

Canada, 200

charterers, 10

Chile, 207

China, 215

collisions, 58

Croatia, 220

distinct occasion, meaning of, 58

Finland, 232

France, 239

Hong Kong, 63

Israel, 276

Japan, 285–287, 293

Limitation Convention 1957, 58

Limitation Convention 1976, 57–58 limitation fund, distribution of, 70

loss of life, 105

Malta, 306

Mexico, 314

Netherlands, 321

New Zealand, 330

Norway, 345

Pakistan, 354

passengers, 58

personal injuries, 105

persons entitled to limit liability, 10

Philippines, 363

salvage, 58

South Africa, 406

Sweden, 420

Venezuela, 464

Air transport. See Warsaw Convention Air-cushioned vehicles Athens Convention 1974, 99

Belgium, 186

exclusions from liability, 16, 89

Hong Kong, 260, 262

Netherlands, 318

Spain, 414

Alter egos, 31, 36–37, 353 373–379 Applicable law. See Governing law Arbitration Australia, 178

583

584

INDEX

Arbitration—cont.

Canada, 203

Hong Kong, 263

limitation fund, constitution of, 66

South Africa, 398

Argentina, 163–167

abandoning vessel in favour of creditors, 165

aggregation of claims, 165

Athens Convention 1974, 166, 167

bar to other actions, constitution of fund as, 166

carriers, 164

claims subject to limitation, 164

conduct barring limitation, 164

containers or pallets, package limitation and,

166–167

conversion of gold coins into local currency, 167

costs, 165

counterclaims, 164

crew, 164

disponent owners, 164

distribution of fund, 165

exclusions from limitation, 164

fault, 164

federal country, as, 163

financial limits, 164–165

gold value, 166, 167

governing law, 166

Hague Rules, 166, 167

judicial sale, 165

jurisdiction, 163

legal system, 163

limitation fund, 164–165

amount of, 165

bar to other actions, 166

constitution of, 165–166

distribution of fund, 165

loss of life, 165

masters, 164

National Congress, 163

Navigation Act, 163–167

package limitation, 166–167

passengers, 166

personal injuries, 165

persons entitled to limit liability, 164

precedent, 163, 167

shipowners’ limit of liability, 163–166

sources of law, 163

unit limitation, 166–167

Armed forces, ships belonging to

Australia, 171

Brazil, 195

Croatia, 221

Denmark, 224, 225

Finland, 233

Arrest

bar to other actions, constitution of fund as,

74–78

Brazil, 194

cautions against, 74–75

caveats against, 74–75

France, 241

Germany, 248

Arrest—cont.

New Zealand, 334

Norway, 349

United States, 449

As packed, meaning of, 144

Athens Convention 1974, 95–109. See also Athens

Convention, Protocol 2002 to

acts or omissions, 103

agents, 106

aggregation of claims, 105–106

aircushion vehicles, 99

application, 100–101

Argentina, 166, 167

Australia, 169, 179

Brazil, 195

burden of proof, 101–102

carriage,

commercial carriage by public authorities, 109

contract of, 98

domestic, 96, 100

international, 97, 100–101

limit per, 54

periods of, 97

carriers, 97–98

conduct, 106

definition, 97–98

liability of, 101

performing, 97–98, 101–105

servants, limits for, 104–105

Chile, 205

claims subject to limitation, 21

commercial carriage by public authorities, 109

conduct, 32–34, 39, 106

contracts of carriage, 98

invalidity of contractual provisions, 108

contributory fault, 102

conventions, other, 109

criminal offences, 96

Croatia, 221

damages, 105

interest on, 104

luggage, loss or damage to, 99

time bar, 107–108

defects in ship, 102

defences, 104–105

definition of passengers, 99

definitions, 96–100

Denmark, 223, 224, 227

distinct occasions, meaning of, 54

domestic carriage, 96, 100

embarkation to disembarkation, liability from, 100

entry into force, 53, 95–96

exclusion of liability, 108

fault or neglect, 101–102

Finland, 234

France, 242

Germany, 248

Greece, 255–256

hire of vessels, 99

Hong Kong, 262–264

interest, 104

international carriage, 97, 100–101

INDEX

Athens Convention 1974—cont. Ireland, 271, 272

Japan, 293

joint and several liability, 97

jurisdiction, competent, 108

Korea, 299

loss or damage, luggage, 97, 99–100 valuables, 101

loss of life, 54–55, 101–109 loss of right to limit liability, 105

luggage, cabin, 97, 99–100, 102

damages, 99–100 definition, 97, 99

loss or damage to, 97, 99–100, 103, 106–107 meaning of, 97

notice of loss or damage to, 106–107 pecuniary loss, 99–100 Malta, 306, 309

maximum amounts, 104

Merchant Shipping Act 1995, 4, 96, 98, 104

Mexico, 315

Netherlands, 325

New Zealand, 327, 328, 334

Norway, 343, 346

notice, application of convention, 96

luggage, loss or damage to, 106–107 nuclear damage, 109

number of passengers, 53–54 Pakistan, 351

performing carriers, 97–98, 101–105 personal injuries, 54–55, 101–109 Philippines, 364

pleasure craft, 98

Poland, 368

public authorities, commercial carriage by, 109

recklessness, 106

remoteness, 99–100 SDRs, 6, 53–55 , 103–104 sea-going ships, 55–56 servants or agents, 104–106 ships, 98–99 definition, 98–99 sea-going, 98–99 Singapore, 389

Slovenia, 391, 394

Spain, 415–416 sub-contractors, 98

Sweden, 422

terminals, quays or ports, vessels in, 100

theft, 101

tickets, 98

time bar, 107–108 UK, given domestic effect in the 4, 6, 53, 55–56, 95–96 valuables, loss or damage to, 101

Venezuela, 466

Athens Convention, Protocol 2002 to, 4, 6, 53–55,

111–132

acceptance of, 126–127

585

Athens Convention, Protocol 2002 to—cont. accession, 126–127 amendment, 129–130 application, 125

approval, 126–127 Brussels Regulation 2001, 128

burden of proof, 114, 116, 124

carriers, meaning of, 112

contractual provisions, invalidity of, 124

Croatia, 221

cruise ships, liability of, 132

defects in ships, 114, 115

definitions, 111–112 Denmark, 223, 227

denunciation, 128–129 depositary, 131

economic integration organisations, 127–128 enforcement of judgments, 123–124 entry into force, 95, 104, 111, 128

fault or neglect, 114–116, 120

final clauses, 126

first tier limit, 120

good practice framework, 131–132 implementation, 132

insurance, 131–132 certificates of, 116–119, 125

compulsory, 116–119 cruise ships, liability of, 132

evidence of liability insurance, 111–112, 119

International Maritime Organization, 112–113 interpretation, 125

jurisdiction, competent, 122–124 languages, 131

limitation fund, 115–116 limits, amendment of, 129–130 loss of life, 114, 120–123, 131–132 luggage, loss or damage to, 114–116, 120–124 Malta, 309

maximum amount, 115

motor vehicles, loss or damage to, 120–121 Nigeria, 341

nuclear damage, 124–125 performing carriers, definition of, 112

personal injuries, 114, 120–123, 131–132 ratification, 126–127 recognition of judgments, 123–124 regional economic integration organisations, 127–128 resolutions, 131–132 revision, 129–130 SDRs, 114–115, 118, 121

second tier limit, 120

Secretary General of the IMO, 112–113 security, provision of financial, 123, 125, 131–132

shipping incidents, definition of, 115

signature, 126–127 Spain, 415–416 strict liability, 115–116, 119–120 system of law, states with more than one, 127

time bar, 121–122 suspension or interruption of, 121–122 UK, implementation in the, 96

586

INDEX

Athens Convention, Protocol 2002 to—cont. units of account, 121

Warsaw Convention, 115

Australia, 169–179

advertisements of determinations, 177

arbitration agreements, 178

armed forces, ships belonging to, 171

Athens Convention, 169, 179

averting or minimising loss, 170

bars to limitation, 174–176 calculating the amount of the limit, 176

cargo, removal, destruction or rendering harmless of, 170

carriers, 178

charterers, 178

conduct barring limitation, 174–176 containers, 177, 178

costs, 176

Crown, 172

damages, 179

documents of carriage, 178

drilling vessels, 173

financial limits of liability, 178

guarantees, 175

Hague Rules, 178

Hague-Visby Rules, 169, 177, 178

Hamburg Rules, 169, 177, 178

Himalaya clause, 178

jurisdiction, 171–172 Limitation Convention 1957, 169, 171, 174

Limitation Convention 1976, 169, 170–177

protocol to, 173

retrospective effect of, 172–173 limitation funds, 171

constitution of, 171, 174–175 deposits, 175

freely transferable, meaning of, 175

guarantees, 175

loss of life, 179

loss of right to limit, 178

luggage, 170

New South Wales, 179

package limitation, 177

passenger claims, 169–170, 179

personal injuries, 169–170, 179

persons entitled to limit, 173–174 priority, 171, 177

procedure, 171, 176–177 Protocol to the Limitation Convention 1976, 173

public liability crisis, 179

recreational activities, harm arising from, 179

Salvage Convention 1989, 170

salvors, 170, 174

scope of application, 178

SDRs, 176, 178

sea-going ships, 174

service, 176–177 shipowners, 170, 174

slot charterers, 178

sovereign immunity, 171

tickets, 170

tonnage, calculation of, 176

Australia—cont. Trade Practices Act 1974, 170

unit limitation, 177

United States, 448, 450, 459

warranties, 170

Warsaw Convention, 176

Western Australia, 170

wreck removal expenses, 170–171 Averting or minimising loss Australia, 170

China, 213

Civil Liability Convention, 30

claims subject to limitation, 24–25 exclusions, 30

Finland, 230

Germany, 245

Japan, 282–283 Malta, 304

Norway, 344, 348

Singapore, 377–378 Sweden, 418

Baggage. See Luggage, loss or damage to Bar to other actions, constitution of fund as actual fault or privity, 76

Argentina, 166

arrest, protection from, 74–78 attachment, 75

Australia, 174–176 Canada, 200

carriers, liability of, 113–114 cautions against arrest, 74–75 caveats against arrest, 74–75 charterers, 75–76 Chile, 208

China, 215

Civil Procedure Rules, 74–75 Croatia, 220–221 Finland, 233

France, 241

Hong Kong, 259–260 indemnity claims, 75

Israel, 275

Japan, 288

jurisdiction, submission to, 77–78 Limitation Convention 1957, 76

Limitation Convention 1976, 74–78 limitation fund, 208

Mexico, 314

Netherlands, 321–322 New Zealand, 332

Pakistan, 355

Philippines, 363

praecipes, 74–75 release of vessels, 76–77 Slovenia, 393

Spain, 412–413 submission to jurisdiction, 77–78 Sweden, 421–422 time charterers, 75–76 United Kingdom, 65, 74–78 Venezuela, 465

INDEX

Belgium, 181–189

aggregation of claims, 184

aircushion vehicles, 186

Brussels Convention 1968, 184–185

cargo removal expenses, 181

claims subject to limitation, 181–182

collision claims, 184–185

conduct barring limitation, 182

counterclaims, 182

denunciations, 187–189

employment contracts, 182

euro, 183–184

exclusions from liability, 182

financial limits of liability, 183–184

floating cranes or equipment, 187

floating platforms, 186

general average, 182

governing laws, 186

insurers, 181

jurisdiction agreements, 184–185

Limitation Convention 1924, 187–188

Limitation Convention 1957, 187–188

Limitation Convention 1976, 181–189

limitation funds,

cash, 185

constitution of, 184–186

deposits, 185

distribution, 185

opposition to or caveats, 185

loss of life, 181–189 mutual obligation to other states to permit limitation, 187

nuclear damage, 182

oil pollution, 182

passenger claims, 183

personal injuries, 181–189

persons entitled to limit liability, 181

procedure, 185

property damage, 181–189

salvage, 182

scope of protection, 186–187

SDRs, 183, 184

sea-going vessels, 187, 188

servants under employment contracts, 182

tonnage limitation, 183, 188

units of account, 183, 184

vessels, special types of, 186–187

wreck removal expenses, 181–182

Bills of lading

claims subject to limitation, 20

containers, 138–139

delivery without original, 20

descriptions, 141, 143–145, 147

Finland, 235

France, 244

Germany, 250

Greece, 256–257

Hague Rules, 136, 138–140, 151

Hague-Visby Rules, 141, 143–145

Hamburg Rules, 147, 151

Malta, 310

misstatements, 141

587

Bills of lading—cont.

package limitation, 136, 138–140, 143–145

Philippines, 366

Poland, 368–369

Singapore, 375

South Africa, 398, 407

Turkey, 441

Venezuela, 466, 467

Brazil, 191–197

abandonment of ships to creditors, 193, 194

acts or omissions, 193, 197

aggregation of claims, 194

armed forces, vessels of, 195

arrest, 194

Athens Convention 1974, 195

cargo, value of, 195–196

carriage of goods by sea, 195–197

charterers, 191–192, 196

Civil Code, 196

claims subject to limitation, 192

exclusions from limitation, 192–193

financial limits of liability, 193–194

foreign sea-going ships, 191

freight, value of, 195–197

Limitation Convention 1924, 191–196

Limitation Convention 1957, 191, 195

Limitation Convention 1976, 191

limitation fund, constitution of, 194

loss of life, 191–195

loss or damage, 193, 197

Mercosur Partial Agreement on Multimodal

Transport, 195, 196–197

multimodal transport, 195–197

nature of limitation systems, 193

operators, 191–192, 196–197

passengers, 195

personal injuries, 191–195

persons entitled to limit liability, 191–192

pollution, 193

procedure, 194

property damage, 191–196

scope of application, 195

SDRs, 196, 197

sea-going ships, 191–192, 195–196

security, 194

shipowners, 191–192, 196

tonnage limitation, 193–194,195–196

vessels, type of, 195

Warsaw Convention, 196

wreck removal, 194

British ships, 41

Brussels Convention 1968, 82, 184–185, 254

Brussels Regulation 2001, 82–85, 128, 255, 323

Builders

India, 265

shipowners, 8, 9

South Africa, 401

Bulk cargo

Hague Rules, 137

Japan, 292

package limitation, 137

United States, 137

588

INDEX

Bunkers Civil Liability Convention, 28

claims subject to limitation, 19, 20, 23

exclusions from liability, 28

Norway, 343

Cabin luggage, 97, 99–100, 102

Canada, 199–203 aggregation of claims, 200

amounts, 202

arbitration, 203

bar to other actions, constitution of funds as, 200

claims subject to limitation, 199

conduct barring limitation, 200

counterclaims, 200

denunciations, 201

distribution of fund, 200

docks, canals or ports, owners of, 199

exclusions from limitation, 200

financial limits of liability, 200, 202

governing law, 200–201 Hague-Visby Rules, 202

Hamburg Rules, 202, 203

judicial proceedings, 203

jurisdiction, 203

Limitation Convention 1976, 199–211 limitation fund, bar to other actions, constitution of funds as, 200

constitution of, 200

distribution of fund, 200

loss of life, 199–202 loss of right to limit, 202

mutual obligation to other states to permit limitation, 201

package limitation, 202

passengers, 201–202 personal injuries, 199–202 persons entitled to limit liability, 199

property damage, 199–201 Protocol to the Limitation Convention 1976, 200

scope of application, 201, 202

SDRs, 200, 202

shipowners, definition of, 199

small ships, 201

unit limitation, 202

units of account, 201

vessels, special types of, 201

Canals, 199

Cargo. See also Cargo, removal, destruction or

rendering harmless of, Containers and pallets as packed, meaning of, 144

Brazil, 195–196 bulk, 137, 292

cargoworthiness, 441

contents unknown, meaning of, 144

deck, 51, 152–153, 335–336, 358, 439

exclusions from liability, 30

heavy, 142

Japan, 292

light, 142

quantity unknown, meaning of, 143–144

Cargo—cont. said to contain, meaning of, 143, 144

Slovenia, 392

Turkey, 438–442 United States, 137

weight, number and quantity unknown, 139–140, 143–144 Cargo, removal, destruction or rendering harmless of Australia, 170

Belgium, 181

claims subject to limitation, 24, 158–160 Germany, 245, 246

Greece, 252

Japan, 282

Korea, 296

Malta, 304

Norway, 344, 348

Pakistan, 353

Singapore, 374

Spain, 414

Sweden, 418

Carriage of goods. See also Hague Rules, Hague-

Visby Rules, Hamburg Rules Brazil, 195–197 China, 217

Croatia, 222

Denmark, 223, 226–227 Finland, 234–235 France, 243–244 Philippines, 365–366 South Africa, 395, 406–408 Carriers actual carriers, 148–149 definition of, 155, 156

Argentina, 164

Athens Convention 1974, 97–98, 101–105 protocol, to, 112

Australia, 178

bar to other actions, constitution of fund as, 113–114 definition, 155

Hague Rules, 155

Hague-Visby Rules, 155

Hamburg Rules, 148–149, 155, 156

meaning, 112, 155

NVOCCs (non-vessel operating common carriers), 281

performing, 97–98, 101–105, 112

Singapore, 386

Turkey, 432, 433, 436, 438–443

Cautions against arrest, 74–75

Caveats against arrest, 74–75

Charterers. See also Charterparties

aggregation of claims, 10

Australia, 178

bar to other actions, constitution of fund as, 75–76 Brazil, 191–192, 196

China, 213

Croatia, 219, 222

Denmark, 223

Finland, 229, 235

INDEX

Charterers—cont. France, 237

Greece, 256–257 Hague Rules, 155

Hague-Visby Rules, 155

Hamburg Rules, 155

Japan, 281

Limitation Convention 1976, 8, 9–11, 42, 156

Malta, 303

Netherlands, 317

New Zealand, 328

Norway, 344

Pakistan, 351–352 persons entitled to limit liability, 8, 9–11, 42, 155

shipowners, 8–9, 11

Singapore, 373, 386

slot, 11, 178, 352

Slovenia, 392

South Africa, 401

Turkey, 431–433 Charterparties. See also Charterers carriage contracts, definition of, 155

Hague Rules, 155

Hague-Visby Rules, 155

Hamburg Rules, 155

Korea, 296

Charts, 19, 31–32

Chile, 205–211

acts or omissions, 206, 210

aggregation of claims, 207

Athens Convention 1974, 205

bar to other actions, constitution of fund as, 208

carriage contracts, stipulations in, 211

claims subject to limitation, 205–206 Commercial Code, 205, 207, 208–211

conduct barring limitation, 206

counterclaims, 206

damages, 206, 210

date of entry into force of limitation system, 209

delay, 210, 211

distribution of fund, 207, 208

environmental damage, 209

exclusions from limitation, 206

financial limits of liability, 206–207 freight, value of, 210

general average, 206

governing law, 208

Hamburg Rules, 209

insurers, 205

interest, 210

Limitation Convention 1957, 205

Limitation Convention 1976, 205

limitation fund, advertising, 208

amount of, 208

bar to other actions, constitution as, 208

constitution of, 207–209 distribution of, 207, 208

loss of life, 205–209 loss of right to limit, 210

non-contractual terms, application to, 211

oil pollution, 209

589

Chile—cont. operators, 205

package limitation, 210

passengers, 209

personal injuries, 205–209 persons entitled to limit liability, 205

priority, 208

property damage, 205–209 recklessness, 206, 210

salvage, 206

scope of application, 210–211 SDRs, 207

security, 208

servants or agents, 210

set off, 206

shipowners, 205

tort, liability in, 211

unit limitation, 210

units of account, 206–207 wreck removal, 209

China. See People’s Republic of China

Choice of law, 457–458

Civil Liability Convention

averting or minimising loss, 28

bunker spills, 28

Denmark, 224

economic loss, 28

exclusions from liability, 27–28, 30

Finland, 230

Hong Kong, 260

Italy, 280

Japan, 283–284 Korea, 297

Netherlands, 318–319 Nigeria, 341

Norway, 343

reinstatement measures, 28

Singapore, 377

Slovenia, 391, 394

Spain, 415

Sweden, 422

Venezuela, 461

Civil Procedure Rules, 62

bar to other actions, constitution of fund as, 74–75 costs, 73

Limitation Convention 1976, 58

limitation fund, distribution of, 70

Claim forms, 62–64

Claims. See Aggregation of claims, Claims subject

to limitation, Counterclaims Claims subject to limitation Argentina, 164

Athens Convention, 21

Belgium, 181–182 bills of lading, delivery without original, 20

board, acts or omissions caused by people on, 18–19 Brazil, 192

bunkers, 19, 20, 23

Canada, 199

590

INDEX

Claims subject to limitation—cont. cargo, removal, destruction or rendering harmless of, 24

charts, 19

Chile, 205–206 China, 213

collision damages, 25

consequential losses, 20, 23, 159–160

Croatia, 219

damages, 18, 21, 25

delay, claims resulting from, 21

Denmark, 224

drydock, ships in, 20

easements, 22

Finland, 229–230 France, 237–238 freight, loss of right to earn, 22

unearned, 20

general average, 23–24 Hague Rules, 158–159 Hague-Visby Rules, 158–159 Hamburg Rules, 159

Hong Kong, 260

indemnity, basis for, 18, 25

independent contractors, 26

infringement of rights, 22

Ireland, 272

Israel, 275, 279

Japan, 282–283 Korea, 296–297 Limitation Convention 1957, 18, 22, 159–160

Limitation Convention 1976, 17–26 list of, 17

loss averting or minimising, 24–25 damage to cargo, or, 158–160 loss of life, 21

maintenance, 20

Malta, 303–304 Merchant Shipping Act 1995, 21

Mexico, 313

Netherlands, 318–319 New Zealand, 328–329 Norway, 344–345 operation of ships, 19–20 Pakistan, 352

passage, right of, 22

passengers, loss of life or injury to, 21

personal injuries, 20–21 Philippines, 362

pollution, 19, 22–24 profits, loss of, 22

Protocol to the Limitation Convention, 21

psychiatric injury, damages for, 20–21 remoteness, 20–21 repair, 20

salvage, 19, 23–25 sea-going ships, 21

Singapore, 375–378, 387, 389

Slovenia, 392

South Africa, 395, 402

Claims subject to limitation—cont. Spain, 414

substitute vessels, hiring, 159

supplies, 20

Sweden, 418

tugs, damage to, 18, 20, 25

United Kingdom, limitation in, 18

United States, 453–454 use, loss of, 22

unsafe ports, 19

Venezuela, 462

wayleaves, 22

wreck removal expenses, 18, 22–24, 26

CLC. See Civil Liability Convention

Collisions

aggregation of claims, 58

Belgium, 184–185 claims subject to limitation, 25

Norway, 348

Spain, 411–412 Compensation. See Damages Conduct barring limitation, 31–41 acts or omissions, 32–34 actual fault or privity, 31–32, 41

alter egos, 31, 36–37 Argentina, 164

Athens Convention 1974, 32–34, 39, 106

Australia, 174–176 Belgium, 182

British ships, 41

Canada, 200

counterclaims, 41–43 charts, up-to-date, 31–32 Chile, 206

China, 214

Croatia, 220

Denmark, 224

fault or privity, 31–32, 40

Finland, 231

France, 238

Hague-Visby Rules, 32–36, 39, 145–146, 153–154 Hamburg Rules, 32–34, 154–155 intent to cause such loss, meaning of, 37

Israel, 275

Japan, 284

Korea, 297

liability insurance cover, loss of, 41

Limitation Convention 1957, 40

Limitation Convention 1976, 31–41 loss, meaning of, 35

Marine Insurance Act 1906, 41

Merchant Shipping Act 1894, 41

Merchant Shipping Act 1995, 41

Mexico, 314

Netherlands, 319

New Zealand, 329

Norway, 345

onus of proof, 39–40 package limitation, 145–146, 153–155 Pakistan, 353

P&I insurance, 35

personal acts or omissions, 32–34

INDEX

Conduct barring limitation—cont. personal injuries, 36

Philippines, 362

privity, meaning of, 32

property damage, 41

recklessness, 33, 35–40 shipowners, identification of, 31

Singapore, 377–378, 387–388 South Africa, 402–403 Spain, 415

such loss, meaning of, 35–37 Sweden, 418–419 theft, 41

Venezuela, 462–463 Warsaw Convention 1929, 32–33, 35–36, 40

Conflict of laws

Greece, 255

Singapore, 372

Turkey, 444–445 United States, 457

Constitution of the limitation fund. See also Bar to

other actions, constitution of fund as Admiralty Court, 68

Admiralty jurisdiction, 66–68 arbitration, 66

Argentina, 165–166 Australia, 171, 174–175 Belgium, 184–186 Brazil, 194

Canada, 200

cash, 69

China, 215

choice of jurisdiction, 66–68 commencement of proceedings, 68

Croatia, 220

Denmark, 224, 225–226 distribution, 68

Finland, 232

France, 239–240, 241

freely transferable, meaning of requirement that fund is, 78

governing law, 78–79 Greece, 251, 253–254 guarantees, 69

Hazardous and Noxious Substances Convention, 68

Hong Kong, 261

India, 268–269 insurers, set up by, 69

interest rate, 68–70 Israel, 276

Japan, 286–287 Korea, 298

limitation fund, 207–209 Malta, 307–308 Merchant Shipping Act 1995, 67–69 Mexico, 314

Netherlands, 321, 323

New Zealand, 330, 332

Nigeria, 342

Norway, 348–350 Pakistan, 354–355

Constitution of the limitation fund—cont. persons who can constitute funds, 69

Philippines, 363

Poland, 367

Singapore, 372, 383–384 Slovenia, 393

South Africa, 397

Spain, 410, 412–413 Sweden, 420–422 United Kingdom, 64, 66–69 United States, 447, 455

Venezuela, 464–465 Containers and pallets Argentina, 166–167 Australia, 177, 178

bills of lading, 138–139 Finland, 235

France, 243

Hague Rules, 137–140 Hague-Visby Rules, 138, 141, 142–145, 147

Hamburg Rules, 138

Japan, 290–292 Malta, 310

package limitation, 137–145, 147, 166–167 Philippines, 365–366 Poland, 368

Sweden, 424

United States, 137–138 Venezuela, 466–467

Contents unknown, meaning of, 144

Contract. See also Service, contracts of

Athens Convention 1974, 98, 108

protocol, to, 124

Belgium, 182

Charterparties, 155

Chile, 211

employment contracts, 30, 182

France, 242

Greece, 258

Hague Rules, 149–151, 155

Hague-Visby Rules, 149–151, 155

Hamburg Rules, 155

package limitation, 149–151 passengers, 95

Rome Convention 1980 257

Spain, 414

Turkey, 427–440 unfair contract terms, 95

United States, 453

Contribution, 455–456

Costs

account, payments on, 73

Argentina, 165

Australia, 176

Civil Procedure Rules, 73

claims, as part of, 72

conduct, 73

contesting the right to limit, of, 73

Denmark, 224

Finland, 230

follow the event, 73

general costs, 72–73

591

592 Costs—cont.

Germany, 248–249

governing law, 72

limitation fund, distribution of, 72–73

Norway, 345, 349

South Africa, 402

Sweden, 418, 420

Counterclaims

Argentina, 164

Belgium, 182

Canada, 200

Chile, 206

China, 214

conduct barring limitation, 41–43

Croatia, 220

Finland, 231

France, 238

Japan, 284

Limitation Convention 1957, 41–43

Limitation Convention 1976, 41–43

Malta, 305

Mexico, 314

negligence, 42

Netherlands, 322

New Zealand, 329

Norway, 345

Pakistan, 353

Philippines, 362

salvage, 42

Sweden, 419

Venezuela, 463

Crew. See also Masters

Argentina, 164

crewing agents, 9

Croatia, 219

Finland, 230, 231

Greece, 251–252, 258

Hong Kong, 261

Korea, 299

liens, 355

Pakistan, 365

Singapore, 373

Slovenia, 392

South Africa, 401

Turkey, 437, 440

United States, 453

Venezuela, 461, 463

Criminal offences

Athens Convention 1974, 96

Spain, 409–410, 415

Croatia, 219–222

acts or omissions, 220

aggregation of claims, 220

Athens Convention 1974, 221

protocol to, 221

bar to other actions, constitution of fund as,

220–221

carriage of goods by sea, 222

charterers, 219, 222

claims subject to limitation, 219

conduct barring limitation, 220

counterclaims, 220

INDEX

Croatia—cont.

crew, 219

damages, 219

denunciations, 221

distribution of fund, 220

exclusions from liability, 219

financial limits of liability, 220

governing law, 221

Hague Rules, 222

Hague-Visby Rules, 222

limitation amounts, 221–222

Limitation Convention 1976, 219–220

limitation fund,

bar to other actions, constitution of fund as, 220–221

constitution of, 220

distribution of, 220

loss of life, 219–221

loss of right to limit, 222

managers, 219

masters, 219

operators, 219, 222

package limitation, 222

passengers, 221–222

personal injuries, 219–222

persons entitled to limit liability, 219

property damage, 219–221

recklessness, 220

salvors, 219

scope of application, 222

SDRs, 220, 221–222

set off, 220

shipowners, 219, 222

subrogation, 220

unit limitation, 222

units of account, 220

vessels, special types of, 221

warships, 221

Cruise ships, 54, 132

Cyprus, forum shopping and, 82

Damage. See Loss or damage to goods Damages accident compensation scheme in New Zealand, 334

Athens Convention 1974, 99, 104–105, 107–108

Australia, 179

Chile, 206, 210

claims subject to limitation, 18, 21, 25

Croatia, 219

Denmark, 226, 227

general average, 26–27

Greece, 255, 258

Hague-Visby Rules, 145

Japan, 282–284, 291

luggage, loss or damage to, 99–100

Netherlands, 323

New Zealand, 328, 334

package limitation, 145

Pakistan, 352, 354

psychiatric harm, 20–21

salvage, 26–27, 42

INDEX

Damages—cont.

Singapore, 377, 381

South Africa, 406

Spain, 411

time bar, 107–108

Turkey, 435–437, 439

United Kingdom, 60

United States, 450

workmen’s compensation, 258

Death. See Loss of life Deck cargo

Hague Rules, 152

Hague-Visby Rules, 153

New Zealand, 335–336

package limitation, 152, 153

Pakistan, 358

tonnage limitation, 51

Turkey, 439

Delay

Chile, 210, 211

China, 213, 217

claims subject to limitation, 21

Denmark, 226–227

Finland, 230, 234

France, 242

Germany, 245

Hague Rules, 145

Hague-Visby Rules, 145–146

Hamburg Rules, 147–148, 149, 155, 159

Malta, 304

Netherlands, 325

Norway, 344, 347

package limitation, 145–149, 152, 155

Pakistan, 352

Singapore, 377

Sweden, 418, 423–424

Turkey, 436, 438, 441, 442

United States, 459

Venezuela, 467

Denmark, 223–227

Athens Convention 1974, 223, 224

protocol to, 223, 227

carriage of goods by sea, 223, 226–227

charterers, 223

Civil Liability Convention, 224

claims subject to limitation, 224

conduct barring limitation, 224

costs, 224

damages, 226, 227

delay, 226–227

distribution of fund, 225, 226

drilling units, 225

exclusions from liability, 224

financial limits of liability, 224, 225

freight, value of, 226–227

guarantees, 225

Hague-Visby Rules, 223, 224, 226

interest, 224

judgments, reservation in, 225

Limitation Convention 1976, 223–225

protocol to, 223–225

Denmark—cont. limitation fund,

administration, 226

constitution of, 224, 225–226

distribution of, 225, 226

notice on establishment of, 226

reservation in judgments, 225

luggage, loss or damage to, 227

managers, 223

mobile platforms and offshore units, 224

non-commercial service, ships in, 224, 225

oil pollution, 224

operators, 223

passengers, 223, 227

persons entitled to limit liability, 223–224

platforms or mobile offshore units, 225

priority, 225

SDRs, 224, 225, 227

security, 225–226

shipowners, 223

tonnage limitation, 224

tort, claims in, 223

warships, 224, 225

wreck removal, 224

Deviation

Hague Rules, 151–153

package limitation, 151–153

Singapore, 387–388

Turkey, 439

United States, 453

Distinct occasion, meaning of, 54, 58

Distribution of the fund

additional future liability, 71

aggregation of claims, 70

applicable national law, 71

Argentina, 165

Belgium, 185

Canada, 200

Chile, 207, 208

China, 215

Civil Procedure Rules, 70

constitution of the fund, 68

costs, 72–73

Croatia, 220

Denmark, 225, 226

Finland, 232–233

France, 240–241

governing law, 78–79

Greece, 253–254

Hong Kong, 261

interest, 69–70

Israel, 276

Italy, 280

Japan, 287–288

liens, 73–74

Malta, 308

Merchant Shipping Act 1995, 73–74

Mexico, 314

New Zealand, 331–332

Norway, 348–350

Pakistan, 355

Philippines, 363

593

594

INDEX

Distribution of the fund—cont. Singapore, 383–386 subrogation, 70–71 Sweden, 420–421 United Kingdom, 65, 69–74 United States, 456–457 Venezuela, 464–465 Divers, 12, 19

Docks, 20, 199

Drilling units

Australia, 173

Denmark, 225

exclusions from liability, 89

Finland, 233–234

France, 241

Greece, 252

New Zealand, 333

Pakistan, 356–357

Sweden, 422

United Kingdom, 89

Easements, 22

EC law. See European Union, jurisdiction in the

Economic integration organisations, 127–128

Economic loss, 28, 229–230

Employees. See Crew, Masters, Servants or agents

Enforcement of judgments, 123–124

Environment. See Oil pollution

European Union, jurisdiction in the

Athens Convention, Protocol 2002 to, 128

Brussels Convention 1968, 82, 184–185, 254

Brussels Regulation 2001, 82–85, 255, 321

civil and commercial matters, 82–83

domicile, 83–85

exclusive jurisdiction, 83

forum non conveniens, 86

governing law, 82–86

irreconcilable judgments, risk of, 86

jurisdiction agreements, 83

Lugano Convention 1988, 82, 254

pending actions, 85

place of harmful event, 84

related actions, 85–86

seised, court first, 85–86

stay of proceedings, 86

Exclusions. See Exclusions from limitation, Exclusions of liability Exclusions from limitation

aircushion vehicles, 16, 89

averting or minimising loss, 30

Argentina, 164

Brazil, 192–193

bunker spills, 28

Canada, 200

cargo, removal, destruction or rendering harmless

of, 30

Chile, 206

China, 213–214

Civil Liability Convention, 27–28, 30

averting or minimising loss, 28

bunker spills, 28

economic loss, 28

Exclusions from limitation—cont. Civil Liability Convention—cont. reinstatement measures, 28

claims, 26–31 Croatia, 219

Denmark, 224

drilling, vessels used for, 89

economic loss, 28

employment contracts, 30

Finland, 230–231 floating platforms, 17, 89

general average, 26–27, 30

Hague Rules, 27

Hague-Visby Rules, 27

Hong Kong, 260–261 inland waterways, 16, 88

Ireland, 272

Israel, 275

Japan, 283–284 Limitation Convention 1957, 26–27 Limitation Convention 1976, 16–17, 26–31, 86–92 list of excluded claims, 26–31 Malta, 304–305 Mexico, 313

New Zealand, 329

non-sea-going ships, 15, 87–88 Norway, 344–345 nuclear damage, 29, 30

Pakistan, 352–353 persons entitled to limit liability, 16–17 Philippines, 362

pollution, 27–28 Protocol to Limitation Convention 1976, 27

salvage, 26–27, 30

Lloyd’s Open Form, 27

Salvage Convention 1989, 27, 30

service, contracts of, 29–30 special compensation, 27, 30

service, contracts of, 29–30 Singapore, 374–375, 389

small ships, 87, 88

Sweden, 418

wreck removal expenses, 30, 31

Exclusions of liability. See also Himalaya clause

Athens Convention 1974, 108

Belgium, 182

Malta, 309

passengers, 95

Singapore, 386–387 Turkey, 439, 440

unfair contract terms, 95

Fatal accidents. See Loss of life Fault. See also Actual fault or privity Argentina, 164

Athens Convention 1974, 101–102 protocol, to, 114–116, 120

conduct barring limitation, 31–32, 40

contributory, 102

Turkey, 429, 434–435, 442

Ferries, 54

INDEX

Financial limits of liability Argentina, 164–165 Australia, 178

Belgium, 183–184 Brazil, 193–194 Canada, 200, 202

Chile, 206–207 China, 214–215, 217

Croatia, 220

Denmark, 224, 225

Finland, 231, 235

France, 238–239, 243

Israel, 275

Japan, 284–285, 290

Korea, 297

Malta, 310

Mexico, 314

New Zealand, 329, 335

Nigeria, 340

Norway, 345

Pakistan, 353–354, 359

Philippines, 363, 364, 366

Singapore, 380–383, 388

Slovenia, 392–393, 394

South Africa, 406–407 Sweden, 419–420, 423–424 Venezuela, 463, 465–467 Finland, 229–235 acts or omissions, 231, 235

aggregation of claims, 232

Athens Convention 1974, 234

averting or minimising loss, 230

bar to other actions, constitution of fund as, 233

bills of lading, 235

carriage of goods by sea, 234–235 charterers, 229, 235

Civil Liability Convention, 230

claims subject to limitation, 229–230 conduct barring limitation, 231

containers or pallets, 235

costs, 230

counterclaims, 231

crew, 230, 231

delay, 230, 234

distribution of fund, 232–233 drilling vessels, 233–234 economic loss, 229–230 environmental damage, 230

exclusions from liability, 230–231 financial limits of liability, 231, 235

general average, 230

governing law, 233

Hague Rules, 234

Hague-Visby Rules, 235

Hamburg Rules, 234

identification, 231

insurance contracts, 229

interest, 230

Limitation Convention 1976, 229–230 protocol to, 229, 233

595

Finland—cont. limitation fund, bar to other actions, constitution of fund as, 233

constitution of, 232

distribution of, 232–233 loss of life, 229–234 loss of right to limit, 235

luggage, loss or damage to, 234

managers, 229

masters, 230, 231

mobile platforms, 234

Nordic countries, transport between, 235

nuclear damage, 230

oil pollution, 230

operators, 229, 231

package limitation, 235

passengers, 234

personal injuries, 229–234 persons entitled to limit liability, 229

pleasure craft, 233

property damage, 229–234 recklessness, 231, 235

salvors, 229–230, 232, 233

scope of application, 233–236 SDRs, 231, 234, 235

shipowners, 229

tonnage limitation, 231

unit limitation, 235

units of account, 231

vessels, special types of, 234–235 warships, 233

wreck removal, 230

Fire

actual fault or privity, 26

Hong Kong, 261

Limitation Convention 1976, 26

recklessness, 26

United Kingdom, 26

United States, 454–455 wilful intent, 26

Floating units. See also Mobile platforms and

offshore units Belgium, 186–187 exclusions from liability, 17, 89

Greece, 252

Netherlands, 318

Pakistan, 357

Spain, 414

Forum non conveniens, 86, 458

Forum shopping

Cyprus, 82

governing law, 80–82 stay of proceedings, 80–82 France, 237–244 acts or omissions, 237, 238, 242, 243

agents, 237

aggregation of claims, 239

arrest, 241

Athens Convention 1974, 242

bar to other actions, constitution of fund as, 241

bills of lading, 244

596 France—cont.

carriage contracts, 242

carriage of goods by sea, 243–244

charterers, 237

claims subject to limitation, 237–238

conduct barring limitation, 238

containers, 243

counterclaims, 238

delay, 242

distribution of fund, 240–241

drilling vessels, 241

exclusions from liability, 238

financial limits of liability, 238–239, 243

general average, 238

governing law, 241

Hague Rules, 243

Hague-Visby Rules, 243

Hamburg Rules, 243

limitation accounts, 242–243

Limitation Convention 1957, 237

Limitation Convention 1976, 237–242

protocol, 237

limitation fund,

bar to other actions, constitution of fund as,

241

constitution of, 239–240, 241

distribution of, 240–241

loss of life, 237–242

loss of right to limit, 243

loss or damage to goods, 242–243

luggage, loss or damage to, 242–243

managers, 237

masters, 237

non-commercial uses, vessels with, 241

nuclear damage, 238

oil pollution, 238

operators, 237

package limitation, 243

passengers, 242–243

personal injuries, 237–242

persons entitled to limit liability, 237

pleasure boats, 241

priority, 240

property damage, 237–242

recklessness, 238, 242, 243

salvors, 237, 238

scope of application, 241–242, 244

SDRs, 239, 242, 243

security, 239

set off, 238

shipowners, 237

tonnage limitation, 239

unit limitation, 243

units of account, 239

vessels, special types of, 241–242

wreck removal, 238

Freight

Brazil, 195–197

Chile, 210

claims subject to limitation, 20, 22

Denmark, 226–227

freight forwarders, 156

INDEX

Freight—cont. Greece, 251

loss of right to earn, 22

Spain, 411

Turkey, 426–437, 438, 443

unearned, 20

United States, 447, 453, 455

Fund Convention, 391, 394, 415, 461

General average Belgium, 182

Chile, 206

China, 213

claims subject to limitation, 23–24 damages, 26–27 exclusions from liability, 26–27, 30

Finland, 230

France, 238

Germany, 246

Malta, 305

New Zealand, 329

Norway, 345

Pakistan, 352

Singapore, 377

Slovenia, 392

Sweden, 417, 418

Venezuela, 462

Germany, 245–250

arrest, 248

Athens Convention 1974, 248

averting or minimising loss, 245

bills of lading, 250

cargo, removal, destruction or rendering harmless of, 245, 246

Commercial Code, 245, 246, 248

costs, 248–249 delay, 245

general average, 246

guarantees, 248–249 Hague Rules, 250

Hague-Visby Rules, 250

inland waterways, 247

ISM Code, 246

legal framework, 245–246 Limitation Convention 1976, 245–249 protocol to, 245, 248

limits, 247–248 loss of life, 245, 247–249 loss or damage to goods, 248

luggage, loss or damage to, 248

oil pollution, 246, 249

other states, proceedings in, 249

package limitation, 250

P&I club undertakings, 249

passengers, 247–248 personal injuries, 245, 247–249 procedure, 248–249 recklessness, 246, 250

salvors, 245–246 SDRs, 247–248, 250

sea-going ships, 246

shipowners, 246

INDEX

Germany—cont. tonnage limitation, 247

wreck removal, 245, 246, 249

Gold francs

Malta, 302

Nigeria, 340

Singapore, 381, 382

South Africa, 403–404, 406

Gold value

Argentina, 166, 167

Hague Rules, 140, 150–151 Malta, 310

New Zealand, 335

package limitation, 140, 150–151 Pakistan, 359

Goods. See Loss or damage to goods

Governing law

actual fault or privity, 79

Argentina, 166

Belgium, 186

burden of proof, 79–80 Canada, 200–201 Chile, 208

China, 215

constitution of fund, 78–79 costs, 72

Croatia, 221

distribution of fund, 78–79 European Union, jurisdiction in the, 82–86 Finland, 233

forum shopping, 80–82 France, 241

Greece, 252–253 interest, 78

Israel, 276–277 Italy, 280

Japan, 288

Korea, 297–298 Limitation Convention 1957, 65–66, 79–80 limitation fund, distribution of, 71

Malta, 308

Mexico, 314

national laws, 80

Netherlands, 324

New Zealand, 332

Norway, 350

Pakistan, 355–356 Philippines, 363

Singapore, 372–386 South Africa, 399

time limits, 79

United Kingdom, 65–66, 78–86 Venezuela, 465

Greece, 251–258

abandonment of ship, 251

acts or omissions, 258

affreightment, contracts of, 258

Athens Convention 1974, 255–256 bills of lading, 256–257 Brussels Convention 1968, 254

Brussels Regulation 2001, 255

cargo removal, 252

597

Greece—cont. carriage contracts, 258

charterers, 256–257 conflict of laws, 255

creditors’ meetings, 254

crew, 251–252, 258

damages, 255, 258

declaratory actions, 254

distribution of fund, 253–254 drilling vessels, 252

earlier law, relevance of, 251–252 floating rigs, 252

foreign limitation proceedings, recognition of, 255

freight, value of, 251

governing law, 252–253 guarantees, 254

Hague Rules, 257

Hague-Visby Rules, 256–258 Hamburg Rules, 257

inland waterways, 252

international carriage, 257

jurisdiction, 253–254 Limitation Convention 1976, 251–253 constitution of, 251, 253–254 distribution of, 253–254 loss of life, 251–256 loss of right to limit, 258

Lugano Convention 1988, 254

luggage, loss or damage to, 255–256 maritime liens, 254

masters, 251–252 operators, 251–252 package limitation, 257

passengers, 255–256 personal injuries, 251–256 pilots, 251–252 pollution, 255

ports, carriage between Greek, 256–257 procedure, 253–254 property damage, 251–255 recognition of foreign limitation proceedings, 255

release of property, 254

Rome Convention 1980, 257

scope of application, 251–252 SDRs, 256, 257

sea-going ships, 252

servants or agents, 258

shipowners, 251–252 small ships, 252

time bar, 256, 258

tort, claims in, 256, 258

unit limitation, 257

workmen’s compensation, 258

wreck removal, 252

Guarantees

Australia, 175

Denmark, 225

Germany, 248–249 Greece, 254

Korea, 298

limitation fund, constitution of, 69

Netherlands, 321

598

INDEX

Guarantees—cont. New Zealand, 331

Singapore, 383–384 Slovenia, 393

Hague Rules, 133–134. See also Package limitation

under the Hague Rules

Australia, 178

bills of lading, ad valorem, 151

carriage contracts, definition of, 155

carriers, definition of, 155

charterers, 155

charterparties, 155

claims subject to limitation, 158–159

Croatia, 222

exclusions from liability, 27

Finland, 234

France, 243

Germany, 250

Greece, 257

Hague-Visby Rules, 134–160

Hamburg Rules, 134–160

Himalaya clauses, 156–157

Ireland, 271, 273

Japan, 290

Malta, 309

Mexico, 315

New Zealand, 335

Nigeria, 340–341

Pakistan, 351, 358

persons entitled to limit liability, 155–157

Philippines, 361

Poland, 368–369

servants or agents, 156–157

shipowners, 155

Singapore, 388–389

Slovenia, 393–394

South Africa, 406–407

substitute vessels, hiring, 159

tonnage limitation, 134–136, 151

Turkey, 428, 439, 441–442

UK, given domestic effect in the 4, 6

Venezuela, 466

Hague-Visby Rules, 133–134. See also Package

limitation under the Hague-Visby Rules

Australia, 169, 177, 178

bills of lading, ad valorem, 151

Canada, 202

carriage contracts, definition of, 155

carriers, definition of, 155

charterers, 155

charterparties, 155

claims subject to limitation, 158–159

conduct barring limitation, 32–36, 39

containers, 138

Croatia, 222

Denmark, 223, 224, 226

exclusions from liability, 27

Finland, 235

France, 243

Germany, 250

Greece, 256–258

Hague-Visby Rules—cont.

Hague Rules, 134–160

Hamburg Rules, 134–160

Himalaya clauses, 156

Hong Kong, 264

independent contractors, 157–158

Ireland, 271, 273

Japan, 290–293

Korea, 295, 299

Mexico, 315

Netherlands, 325–328

New Zealand, 327, 328, 335–337

Norway, 343

package limitation, 134–136

Pakistan, 351, 358–359

persons entitled to limit liability, 155–158

Philippines, 361

Poland, 368–369

ranking, 135

revision, 133

servants or agents, 157

shipowners, 155

Singapore, 372, 386–389

Slovenia, 391

South Africa, 406–408

Spain, 416

Sweden, 424

Turkey, 441

UK, given domestic effect in the 4, 6

Venezuela, 467

Hamburg Rules, 133–134. See also Package

limitation under the Hamburg Rules

actual carriers, definition of, 155, 156

Australia, 169, 177, 178

bills of lading, 151

Canada, 202, 203

carriage contracts, definition of, 155

carriers, definition of, 155

charterers, 155

Chile, 209

claims subject to limitation, 159

conduct barring limitation, 32–34

containers, 138

delay, 159

entry into force, 4, 133

Finland, 234

France, 243

Greece, 257

Hague Rules, 134–160

Hague-Visby Rules, 134–160

independent contractors, 158

Nigeria, 341

Pakistan, 351, 359

persons entitled to limit liability, 155–156, 158

servants or agents, 158

shipowners, 155

Singapore, 389

Sweden, 424

tonnage limitation, 134–136, 151

Venezuela, 466

Harbour authorities

Limitation Convention 1976, 17.50

INDEX

Harbour authorities—cont.

persons entitled to limit liability, 17

United Kingdom, 17

Hazardous and Noxious Substances Convention

Limitation Convention 1976, protocol to, 43–44,

94

limitation fund, constitution of, 68

Malta, 305

Mexico, 313

Norway, 343

Himalaya clause

Australia, 178

Hague Rules, 156–157

Hague-Visby Rules, 146, 156

independent contractors, 146

package limitation, 146

Pakistan, 352

servants or agents, 156–157

Singapore, 386, 388–389

Historical overview of limitation in UK, 5–6

Hire

Athens Convention 1974, 99

Hague Rules, 159

substitution of vessels, 159

HNS. See Hazardous and Noxious Substances

Convention

Hong Kong, 259–264

acts or omissions, 261

aggregation of claims, 263

air-cushioned vehicles, 260, 262

arbitration, 263

Athens Convention 1974, 262–264

notice of application of, 263

protocol, 264

bar to other actions, constitution of fund as, 262

Basic Law, 259–260

China, 259

Civil Liability Convention, 260

claims subject to limitation, 260

crew, 261

distribution of fund, 261

exclusions from liability, 260–261

executive, 259

fire, 261

Hague-Visby Rules, 264

interest, 261

judicature, 259

jurisdiction, 262, 263

legislature, 259

Limitation Convention 1976, 260–262, 264

limitation fund,

bar to other actions, constitution of fund as,

262

constitution of, 261

distribution of, 261

Limitation Ordinance, retrospective application of,

262–264

limits, 261

loss of life, 261

loss or damage to goods, 261, 264

luggage, loss or damage to, 263

nuclear damage, 260–261

599

Hong Kong—cont. oil pollution, 260

passengers, 262–264 People’s Republic of China, 259

personal injuries, 261, 263

ratification of treaties, 259–260 regional carriage, meaning of, 264

shipowners, 261

ships, meaning of, 262

Special Administrative Region, 259

stay of proceedings, 261

theft or robbery, 261

time bar, 263

tonnage limitation, 261

unit limitation, 264

units of account, 261

valuables, loss or damage to, 261

Hovercrafts

Hovercraft Convention 1998, 13

Limitation Convention 1976, 12–13 New Zealand, 333

persons entitled to limit liability, 12–13 South Africa, 401

United Kingdom, 89–90 IMO (International Maritime Organization), 3,

112–113

Incidents, definition of shipping, 115

Indemnities

bar to other actions, constitution of fund as, 75

claims subject to limitation, 18, 25

Japan, 283

United States, 455–456

Independent contractors

claims subject to limitation, 26

Hague-Visby Rules, 146, 153, 157–158

Hamburg Rules, 148, 158

Himalaya Clause, 146

Japan, 282

Korea, 296

Limitation Convention 1976,13

package limitation, 146, 148, 153

persons entitled to limit liability, 13

servants or agents, 157–158

Singapore, 386

Sweden, 417

wreck removal, 26

India, 265–270

acts or omissions, 266

arrested ships, release of, 269–270

burden of proof, 267–268

cargo, removal, destruction or rendering harmless

of, 267

charterers, 265–266

Civil Liability Convention, 267

claims subject to limitation, 266–267

crew, 265–266, 267

damages, 266

exclusions from liability, 267

financial limits of liability, 268

general average, 267

governing law, 267

600 India—cont.

insurers, 270

Limitation Convention 1957, 265

Limitation Convention 1976, 265, 268

limitation fund, constitution of, 268–269

loss of life, 266, 268

loss or damage to goods, 266, 268

luggage, loss or damage to,

managers, 265–266

masters, 265–266, 267

nuclear damage, 267

oil pollution, 267

operators, 265–266

personal injuries, 266, 268

persons entitled to limit liability, 265–266

priority, 268

release of arrested ships, 269–270

salvors, 266, 267, 270

security, 268–270

servants, 265–267

service, contracts of, 267

shipbuilders, 265

shipowners, 265–269, 270

tonnage limitation, 268

wreck removal, 267

Inflation, 3

Inland waterways

exclusions from liability, 16, 88

Germany, 247

Greece, 252

Malta, 309

Netherlands, 318

Spain, 414

Insurance. See also Insurers Athens Convention, Protocol 2002 to, 111–112, 116–119, 125, 131–132

certificates, 116–119, 125

compulsory, 116–119

conduct barring limitation, 41

cruise ships, 132

evidence of liability, 111–112, 119

Finland, 229

liability,

conduct barring limitation, 41

evidence, 111–112, 119

Limitation Convention 1976, 3, 15–16

loss of, 41

P&I insurance, 35, 249

Poland, 368

United States, 456, 459

Insurers

Belgium, 181

Chile, 205

China, 213

India, 270

Japan, 281

Korea, 296

Limitation Convention 1976, 15–16

limitation fund, constitution of, 69

Malta, 303

Marine Insurance Act 1906, 15

New Zealand, 328

INDEX

Insurers—cont.

Pakistan, 351

persons entitled to limit liability, 15–16

Slovenia, 392

Sweden, 418

third party rights, 15–16

United Kingdom, 15

United States, 459

Venezuela, 461

Interest

Athens Convention 1974, 104

Chile, 210

Denmark, 224

Finland, 230

governing law, 78

Hong Kong, 261

limitation fund, constitution of, 68–70

Netherlands, 321

Norway, 345, 349

Pakistan, 359

Singapore, 385–386

Slovenia, 393

South Africa, 402

Spain, 412

Sweden, 418, 420

International Maritime Organization (IMO), 3, 112–113 Ireland, 271–273

Athens Convention 1974, 271, 272

claims subject to limitation, 272

exclusions from limitation, 272

Hague Rules, 271, 273

Hague-Visby Rules, 271, 273

Limitation Convention 1924, 271

Limitation Convention 1957, 271

Limitation Convention 1976, 271, 273

loss of life, 271–272

nuclear ships, 272

package limitation, 273

passengers, 272

personal injuries, 271–272

persons entitled to limit liability, 271–272

property damage, 271–272

salvors, 271–272

sea-going ships, 271–272

shipowners, 271–272

unit limitation, 273

wreck removal, 272

Irreconcilable judgments, 86

ISM Code, 246

Israel, 275–277

aggregation of claims, 276

bar to other actions, constitution of fund as, 276

claims subject to limitation, 275

conduct barring limitation, 275

date of entry into force of present limitation

system, 277

denunciations, 277

distribution of fund, 276

exclusions from liability, 275

financial limits of liability, 275

governing law, 276–277

INDEX

Israel—cont.

Limitation Convention 1957, 275

limitation fund, 276

bar to other actions, constitution of fund as,

276

constitution of, 276

distribution of, 276

mutual obligations to other states to permit

limitation, 277

persons entitled to limit liability, 275

scope of application, 277

SDRs, 276

units of account, 276

vessels, special types of, 277

Italy, 279–280

calculation of the limit, 279

Civil Liability Convention, 280

claims subject to limitation, 279

distribution of the fund, 280

governing law, 280

jurisdiction, 280

Limitation Convention 1976, 279

loss of right to limit, 280

persons entitled to limit, 279

oil pollution, 280

procedure, 280

South Africa, 395–401

Japan, 281–293

acts or omissions, 284

aggregation of claims, 285–287, 293

Athens Convention 1974, 293

averting or minimising loss, 282–283

bar to other actions, constitution of fund as, 288

bulk cargo, 292

burden of proof, 284

cargo, removal of, 282

charterers, 281

Civil Liability Convention, 283–284

claims subject to limitation, 282–283

conduct barring limitation, 284

containers or pallets, 290–292

corporations, 281

counterclaims, 284

damages, 282–284, 291

date of entry into force of present limitation

system, 289

denunciations, 289

distribution of fund, 287–288

exclusions from liability, 283–284

financial limits of liability, 284–285, 290

governing law, 288

Hague Rules, 290

Hague-Visby Rules, 290–293

indemnity claims, 283

independent contractors, 282

insurers, 281

jurisdiction, 282, 286–287

Limitation Convention 1957, 289

Limitation Convention 1976, 281, 289

601

Japan—cont.

limitation fund,

bar to other actions, constitution of fund as,

288

constitution of, 286–287

distribution of, 287–288

loss of life, 281–290

loss of right to limit, 292–293

loss or damage to goods, 282

luggage, loss or damage to, 282

managers, 281

mutual obligations to other states to permit

limitation, 289

nuclear damage, 284

NVOCCs (non-vessel operating common carriers),

281

oil pollution, 283–284

operators, 281

package limitation, 290–293

passengers, 284, 286, 289–290, 293

personal injuries, 281–290

persons entitled to limit liability, 281–282

property damage, 281–289

recklessness, 284, 293

salvors, 281–284, 286

scope of application, 289, 290, 293

SDRs, 285, 291–292

sea-going ships, 289

security, 287

servants, 281–284

service, contracts of, 284

shipowners, 281–284

small ships, 289

stevedores, 282

tonnage limitation, 284–285

tort, claims in, 292–293

unit limitation, 290

units of account, 284–285, 289–292

vessels, special types of, 289

wreck removal, 282

Joint and several liability

Athens Convention 1974, 97

Hamburg Rules, 147–148, 154–155

Judgments

Athens Convention, Protocol 2002 to, 123–124

Denmark, 225

enforcement, of, 123–124

European Union, jurisdiction in the, 86

irreconcilable, 86

recognition, of, 123–124

Jurisdiction. See also European Union, jurisdiction

in the, Governing law

Admiralty, 66–68, 447–448

Argentina, 163

Athens Convention 1974, 108

protocol, to, 122–124

Australia, 171–172

bar to other actions, constitution of fund as,

77–78

Belgium, 184–185

Canada, 203

choice of, 66–68

602 Jurisdiction—cont. Greece, 253–254 Hong Kong, 262, 263

Italy, 280

Japan, 282, 286–287 limitation fund, constitution of, 66–68 Netherlands, 322–324 New Zealand, 332, 337

Norway, 350

Pakistan, 352, 356

service outside the, 63

Singapore, 384

Slovenia, 391

South Africa, 396–399 United States, 447–448, 450

Venezuela, 464

Knowledge or privity, United States in, 451–454, 459

Korea, 295–299

acts or omissions, 296, 299

agents, 296, 299

Assessment Decisions, 298–299 Athens Convention 1974, 299

burden of proof, 299

cargo, raising, removal, destruction or rendering harmless, 296

charterers, 296

Civil Liability Convention, 297

claims subject to limitation, 296–297 Commercial Code, 295

conduct barring limitation, 297

crew, 299

financial limits of liability, 297

global limitation, 295–299 governing law, 297–298 guarantees, 298

Hague-Visby Rules, 295, 299

independent contractors, 296

insurers, 296

Limitation Convention 1976, 295–297 limitation fund, constitution of, 298

loss of life, 299

luggage, loss or damage to, 299

negligence, 297

oil pollution, 297

package limitation, 299

passengers, 299

persons entitled to limit liability, 295–296 priority, 297

procedure, 298–299 recklessness, 297, 299

SDRs, 297–299 servants, 296, 299

shipowners, 296–297 stevedores, 296

terminal operators, 296

time limits, 298

wreck removal, 296–297 Languages Athens Convention, Protocol 2002 to, 115–116

INDEX

Languages—cont. Limitation Convention 1976, 93

Liens

crew, 355

Greece, 254

limitation fund, distribution of, 73–74 Pakistan, 355

Singapore, 386

Turkey, 431–433, 438

United States, 457

Limitation Convention 1924

Belgium, 187–188 Brazil, 191–196 Ireland, 271

Limitation Convention 1976, 3, 93

Poland, 368

South Africa, 400

United Kingdom, 5

Limitation Convention 1957

aggregation of claims, 58

Australia, 169, 171, 174

bar to other actions, constitution of fund as, 76

Belgium, 187–188 Brazil, 191, 195

Chile, 205

claims subject to limitation, 18, 22, 159–160

conduct barring limitation, 40

counterclaims, 41–43 exclusions from liability, 26–27 France, 237

governing law, 65–66, 79–80 India, 265

Ireland, 271

Israel, 275

Japan, 289

Limitation Convention 1976, 3, 93

Nigeria, 339

Philippines, 361

Poland, 368

shipowners, 8, 156

Singapore, 371–374, 377, 379, 382–383, 388

South Africa, 400, 402

Sweden, 422

United Kingdom, 5

United States, 459

Limitation Convention 1976, 7–94. See also United

Kingdom, Limitation Convention 1976 in the agents, 13

aggregation of claims, 57–58 amendment, 92, 94

Australia, 169, 170–177 bar to other actions, constitution of fund as, 74–78 Belgium, 181–189 Brazil, 191

calculation of limitation tonnage, 51–52 Canada, 201

charterers, 8, 9–11, 42, 156

Chile, 205

Civil Procedure Rules, 58

claims, aggregation of, 57–58

INDEX

Limitation Convention 1976—cont. claims—cont. subject to limitation, 17–26

conduct barring limitation, 31–41

counterclaims, 41–43

Croatia, 219–220

Denmark, 223–225

denunciation, 92, 93

depositary, 93

entry into force, 4, 93

exclusions, 86–92

claims, 26–31

persons, 16–17

vessels, 16–17

Finland, 229–230

fire, damage by, 26

France, 237–242

general limits, 48–52

Germany, 245–249

harbour authorities, 17, 50

Hong Kong, 260–262, 264

hovercraft, 12–13

IMO, 3

independent contractors, 13

India, 265, 269

inflation, 3

insurance, 3, 15–16

Ireland, 271, 273

Italy, 279

Japan, 281, 289

Korea, 295–297

languages, 93

liability insurers, 15–16

Limitation Convention 1924, 3, 93

Limitation Convention 1957, 3, 93

limitation fund,

establishment, 3

revision of, 92

without constitution of a, 58–59

loss or damage to valuables, 26

Malta, 301–309

managers, 13–14, 42

masters, 13, 14

Merchant Shipping Act 1995, 3

Mexico, 313

mortgagees in possession, 8

deeds of covenant, 14

operation and management of ships by, 13–14

persons entitled to limit, 14

national laws, 3

Netherlands, 317–323

Nigeria, 339

Norway, 343–346, 350

operation or management of ships, 13–14, 42

optional provisions, 3

Pakistan, 351–352

passenger claims, 44–45, 52–57

persons entitled to limit liability, 7–17, 155–156

Philippines, 361, 363

Poland, 367–368

Practice Direction, 58

priority, 50

603

Limitation Convention 1976—cont. reservations, 94

retrospectivity, 172–173 revision of limitation amount and unit of account, 92, 94

right of limitation, 7–43 salvage, 12, 42, 44, 50

scope of application of Convention, 86–92 SDRs, 49–50 sea-going ships, 12–13 seaworthiness, 13

shipowners, 7–9, 13–14, 155

responsibility of, 13–14 servants of, 13

ships, excluded, 16–17 sea-going, 12–13 Singapore, 371, 373, 377–379, 385–386

slot charterers, 11

Slovenia, 391–393 South Africa, 400

Spain, 412–416 stevedores, 13

Sweden, 417

tonnage limitation, 50–52 Turkey, 427, 429, 444–445

unbreakable limit, 3

unit of account, 45–48, 57

revision of, 92, 94

United States, 459

valuables, loss or damage to, 26

Venezuela, 461, 464

wilful intent or recklessness, 3

Limitation decrees, 63–64

Limitation fund. See also Bar to other actions,

constitution of fund as, Constitution of fund, Distribution of fund Argentina, 165–166 Australia, 171, 174–175 Belgium, 184–186 Canada, 200

China, 215

Denmark, 224–227 Finland, 232–233 France, 239–241 Hong Kong, 261–262 Israel, 276

Japan, 286–288 Limitation Convention 1976, 3, 58–59, 92

loss of life, 49–50 Mexico, 314

Netherlands, 319–323, 325

New Zealand, 330–332 Norway, 348–340 Pakistan, 354–355 passengers, 52–53 personal injuries, 49–50 property damage, 49–50 revision of, 92

Singapore, 372, 383–384 Slovenia, 393

Spain, 412–413

604

INDEX

Limitation fund—cont. United Kingdom, 59–62, 64–86 United States, 455–457, 459

Venezuela, 464–465 without constitution of, 58–59

Limitation periods. See Time bar

Lis pendens, 85, 323

LOF (Lloyd’s Open Form), 27

Loss. See Averting or minimising loss, Loss of life,

Loss of right to limit liability, Loss or damage to goods, Luggage, loss or damage to

Loss of life, 52–56, 89

aggregation of claims, 105

Argentina, 165

Athens Convention 1974, 54–55, 101–109 protocol, to, 114, 120–123, 131–132 Australia, 179

Belgium, 181–189 Brazil, 191–195 Canada, 199–202 Chile, 205–209 China, 213–216 claims subject to limitation, 21

Croatia, 219–221 Finland, 229–234 France, 237–242 Germany, 245, 247–249 Greece, 251–256 Hong Kong, 261

India, 266, 268

Ireland, 271–272 Italy, 280

Japan, 281–290 Korea, 299

limitation funds, 49–50 Malta, 304, 306

Mexico, 313–314 Netherlands, 320

New Zealand, 328, 334

Nigeria, 340

Norway, 344, 346–347 Pakistan, 351–358 Philippines, 364–365 Poland, 367–368 Singapore, 374–378, 381

Slovenia, 392, 394

South Africa, 399–406 Spain, 414–416 Sweden, 417–422, 424

Turkey, 435, 440

United States, 453, 454

Venezuela, 461–466 Loss of right to limit liability Athens Convention 1974, 105

Australia, 178

Canada, 202

Chile, 210

China, 217

Croatia, 222

Finland, 235

France, 243

Greece, 258

Loss of right to limit liability—cont.

Hague Rules, 151–153

Japan, 292–293

Malta, 310

New Zealand, 335–336

package limitation, 151–153

Philippines, 366

South Africa, 402, 406–407

Sweden, 424

Venezuela, 467

Loss or damage to goods. See also Luggage, loss or damage to

actual fault or privity, 26

Athens Convention 1974, 101

Belgium, 181–189

Brazil, 191–197

Canada, 199–201

Chile, 205–209

China, 213–216

conduct barring limitation, 41

Croatia, 219–221

France, 237–243

Germany, 248

Greece, 251–255

Hague Rules, 140, 151–152

Hague-Visby Rules, 142, 145, 153–154

Hamburg Rules, 147–149, 155

Hong Kong, 261, 264

India, 266, 268

Ireland, 271–272

Japan, 281–289

Limitation Convention 1976, 26

limitation funds, 49–50

Malta, 304

Mexico, 313–314

motor vehicles, 120–121

Nigeria, 340

Norway, 344, 347–348

package limitation, 140, 142, 145, 147–149,

151–155

Pakistan, 351–357

Poland, 367–368

Singapore, 374, 387

South Africa, 399–406

Spain, 416

Sweden, 417–423

theft, 26, 41, 261

Turkey, 436, 441–443

United States, 453–455

Venezuela, 461–465

Lugano Convention 1988, 82, 254

Luggage, loss or damage to

Athens Convention 1974, 97, 99–100, 103,

106–107

protocol, to, 114–116, 120–124

Australia, 170

cabin, 97, 99–100, 102

China, 216

damages, 99–100

definition, 97, 99

Denmark, 227

Finland, 234

INDEX

Luggage, loss or damage to—cont. France, 242–243 Germany, 248

Greece, 255–256 Hong Kong, 263

Japan, 282

Korea, 299

meaning of, 97

Netherlands, 325

New Zealand, 334, 337

Norway, 343, 344, 347

notice of loss or damage to, 106–107 pecuniary loss, 99–100 Philippines, 364–365 Poland, 368

Spain, 416

Sweden, 423

Turkey, 440

Venezuela, 466

Maintenance, 20

Malta, 301–311 aggregation of claims, 306

Athens Convention 1974, 306, 309

protocol to, 309

averting or minimising loss, 304

bills of lading, 310

cargo, removal, destruction or rendering harmless of, 304

charterers, 303

claims subject to limitation, 303–304 conduct barring limitation, 305

containers or pallets, 310

counterclaims, 305

date of entry into force of present limitation system, 309

delay, 304

distribution of fund, 308

exclusions from liability, 304–305 exclusions of liability clauses, 309

financial limits of liability, 310

general average, 305

gold francs, 302

gold value, 310

governing law, 308

Hague Rules, 309

Hazardous and Noxious Substances Convention, 305

inland waterways, 309

insurers, 303

language, 303

Limitation Convention 1976, 301–309 limitation fund, constitution of, 307–308 distribution of, 308

loss of life, 304, 306

loss of right to limit, 310

managers, 303

nuclear damage, 305

operators, 303

package limitation, 309–310 passengers, 304, 306, 309

Malta—cont.

personal injuries, 304, 306

persons entitled to limit liability, 303

property damage, 304

release of property, 308

salvors, 303–304

scope of application, 309, 310–311

SDRs, 306, 307–308

sea-going ships, 306

security, 308

servants, 305

service, contracts of, 305

shipowners, 303, 305

ships, meaning of, 303

small ships, 309

tonnage limitation, 305–306, 311

unit limitation, 309–310

units of account, 306

vessels, special types of, 309

wreck removal, 304

Managers

Croatia, 219

Denmark, 223

Finland, 229

France, 237

India, 265–266

Japan, 281

Limitation Convention 1976, 13–14, 42

Malta, 303

mortgagees in possession, 13–14

Netherlands, 317

New Zealand, 328

Norway, 344

Pakistan, 351

persons entitled to limit liability, 42

shipowners, 8, 9

Singapore, 373

Slovenia, 392

South Africa, 401

United States, 459

Venezuela, 461

Marine Insurance Act 1906, 15, 41

Masters

Argentina, 164

Croatia, 219

Finland, 230, 231

France, 237

Greece, 251–252

India, 265–266, 267

liens, 355

Limitation Convention 1976, 13, 14

persons entitled to limit liability, 14

Singapore, 373

Slovenia, 392

South Africa, 401

Spain, 411, 415

Turkey, 440

United States, 453

Venezuela, 463

Merchant Shipping Act 1995, 5, 59–60, 93

Athens Convention 1974, 4, 96, 98, 104

claims subject to limitation, 21

605

606

INDEX

Merchant Shipping Act 1995—cont.

conduct barring limitation, 41

Limitation Convention 1976, 3

limitation fund,

constitution of, 67–69 distribution of, 73–74

SDRs, 48–49

tonnage limitation, 51, 88

Mercosur Partial Agreement on Multimodal Transport, 195, 196–197 Mexico, 313–315

aggregation of claims, 314

Athens Convention 1974, 315

bar to other actions, constitution of fund as, 314

claims subject to limitation, 313

conduct barring limitation, 314

counterclaims, 314

distribution of fund, 314

exclusions from liability, 313

financial limits of liability, 314

governing law, 314

Hague Rules, 315

Hague-Visby Rules, 315

Hazardous and Noxious Substances Convention,

313

Limitation Convention 1976, 313

limitation fund,

bar to other actions, constitution of fund as, 314

constitution of, 314

distribution of, 314

loss of life, 313–314

passengers, 315

personal injuries, 313–314

persons entitled to limit liability, 313

property damage, 313–314

scope of application, 314

SDRs, 314

units of account, 314

Minimising loss. See Averting or minimising loss Mobile platforms and offshore units. See also Floating units

Denmark, 224

Finland, 234

Singapore, 371–372

Mortgages

deeds of covenant, 14

mortgagees in possession, 8, 13–14

operation and management of ships, 13–14

persons entitled to limit, 8, 14

shipowners, 8, 14

Turkey, 428

Motor vehicles, loss or damage to

Athens Convention, Protocol 2002 to, 120–121

China, 216

Spain, 414

Multimodal transport, 195–197 Mutual obligation to other states to permit limitation

Belgium, 187

Canada, 201

China, 216

Israel, 277

Mutual obligation to other states to permit limitation—cont.

Japan, 289

New Zealand, 333

Pakistan, 357

Negligence Athens Convention 1974, 101–102 protocol, to, 114–116, 120

counterclaims, 42

Korea, 297

Pakistan, 359–360

Philippines, 362, 364–366

Poland, 369

salvors, 42

Slovenia, 392, 394

Spain, 411

Sweden, 418, 423–424

United States, 451–454

Venezuela, 462, 466, 467

Netherlands, 317–326

acts or omissions, 317, 319, 325

actual fault or privity, 319

aggregation of claims, 321

air-cushioned vehicles, 318

amounts, 319–320

Athens Convention 1974, 325

bar to other actions, constitution of fund as,

321–322

Brussels Regulation 2001, 323

charterers, 317

Civil Liability Convention, 318–319

claims subject to limitation, 318–319

conduct barring limitation, 319

corporations, 319

counterclaims, 322

damages, 323

delay, 325

floating platforms, 318

governing law, 324

guarantees, 321

Hague-Visby Rules, 325–326

inland waterways, 318

interest, 321

jurisdiction, 322–324

Limitation Convention 1976, 317–323

protocol to, 317

limitation fund, 319–320

bar to other actions, constitution of fund as,

321–322

constitution of, 321, 323

distribution of, 325

lis pendens, 323

loss of life, 320

luggage, loss or damage to, 325

managers, 317

oil pollution, 318–319

operators, 317

package limitation, 325

passengers, 320, 325

personal injuries, 320

persons entitled to limit liability, 317

INDEX

Netherlands—cont.

preferred claims, 318

procedure, 324–325

recklessness, 319, 325–326

salvors, 317, 320

SDRs, 320, 325

sea-going ships, 317–318

security, 321–323

set off, 322

shipowners, 317

ships, definition of, 317–318

tonnage limitation, 320

unit limitation, 325

units of account, 320

New Zealand, 327–337

accident compensation scheme, 334

aggregation of claims, 330

arrest, 334

Athens Convention 1974, 327, 328, 334

bar to other actions, constitution of fund as, 332

carriage of goods by sea,

charterers, 328

claims subject to limitation, 328–329

conduct barring limitation, 329

counterclaims, 329

damages, 328, 334

date of entry into force of present limitation

system, 333

deck cargo, 335–336

denunciations, 333

distribution of fund, 331–332

drilling platforms, 333

exclusions from liability, 329

financial limits of liability, 329, 335

fundamental breach doctrine, 336

general average, 329

gold value, 335

governing law, 332

guarantees, 331

Hague Rules, 335

Hague-Visby Rules, 327, 328, 335–337

hovercraft, 333

insurers, 328

jurisdiction, 332

jurisdiction agreements, 337

Limitation Convention 1976, 327–333

limitation fund, 330–331

bar to other actions, constitution of fund as,

332

constitution of, 330, 332

distribution of, 331–332

loss of life, 328, 334

loss of right to limit, 335–336

luggage, loss or damage to, 334, 337

managers, 328

mutual obligations to other states to permit

limitation, 333

nuclear damage, 329

oil pollution, 329

package limitation, 334, 335, 337

passengers, 328, 334

personal injuries, 328, 334

607

New Zealand—cont.

persons entitled to limit liability, 328

pleadings in limitation causes, 330

recklessness, 329, 335–336

salvors, 328–329

scope of application, 333, 336–337

SDRs, 330, 335

security, 331, 334

servants, 328

service, contracts of, 329

shipowners, 328

ships, definition of, 333

tonnage limitation, 329

units of account, 330

vessels, special types of, 333

wreck removal, 329

Nigeria, 339–342

actual fault or privity, 340

Athens Convention 1974, 341

Civil Liability Convention, 341

codification, 339

existing position, 339–340

gold francs, 340

Hague Rules, 340–341

Hamburg Rules, 341

limitation amount, 340

Limitation Convention 1957, 339

Limitation Convention 1976, 339

limitation fund,

constitution, 342

distribution, 342

loss of life, 340

oil pollution, 341

package limitation, 341

personal injuries, 340

procedure, 341–342

property damage, 340

tonnage limitation, 340

update legislation, need to, 339

Non-vessel operating common carriers (NVOCCs),

281

Norway, 343–350

acts or omissions, 345

aggregation of claims, 345

arrest, 349

Athens Convention 1974, 343, 346

averting or minimising loss, 344, 348

bareboat charterers, 344

Bunker Convention, 343

cargo, removal, destruction or rendering harmless

of, 344, 348

charterers, 344

Civil Liability Convention, 343

claims subject to limitation, 344–345

clean-up operations, 348

collisions, 348

conduct barring limitation, 345

costs, 345, 349

counterclaims, 345

delay, 344, 347

disponent owners, 344

distribution of fund, 348–350

608 Norway—cont. exclusions from liability, 344–345 financial limits of liability, 345

general average, 345

governing law, 350

groundings, 348

Hague-Visby Rules, 343

Hazardous and Noxious Substances Convention, 343

interest, 345, 349

jurisdiction, 350

Limitation Convention 1976, 343–346, 350

protocol to, 343–344, 346–347 limitation fund, administrators, appointment of, 349

constitution of, 348–350 distribution of, 348–350 notice, 349

loss of life, 344, 346–347 luggage, loss or damage to, 343, 344, 347

managers, 344

nuclear damage, 345

oil pollution, 343, 345, 349

operators, 344

passengers, 343, 346–347 personal injuries, 344, 346–347 persons entitled to limit liability, 344

procedure, 349

property damage, 344, 347–348 salvors, 344, 345, 348

SDRs, 346–348 security, 349

servants, 345

shipowners, 344, 345

tonnage limitation, 346–348 unit limitation, 347

vicarious liability, 344

wreck removal, 344, 348

Nuclear damage

Athens Convention 1974, 109

protocol, to, 124–125 Belgium, 182

China, 213

conventions, on, 29

exclusions from liability, 29, 30

Finland, 230

France, 238

Hong Kong, 260–261 India, 267

Ireland, 272

Japan, 284

Malta, 305

New Zealand, 329

Norway, 345

nuclear ships, damage caused by, 29, 30

Pakistan, 353

Singapore, 377

Slovenia, 392

Spain, 415

Sweden, 418

Venezuela, 462

INDEX

NVOCCs (non-vessel operating common carriers),

281

Offshore units. See Mobile platforms and offshore units Oil pollution. See also Civil Liability Convention Belgium, 182

Brazil, 193

Chile, 209

China, 213

claims subject to limitation, 19, 22–24 Denmark, 224

exclusions from liability, 27–28 Finland, 230

France, 238

Fund Convention, 391, 394, 415, 461

Germany, 246, 249

Greece, 255

Hong Kong, 260

India, 267

Italy, 280

Japan, 283–284 Korea, 297

Netherlands, 317

New Zealand, 329

Nigeria, 341

Norway, 343, 345, 349

Pakistan, 352

segregated ballast, 51

Singapore, 377

Slovenia, 394

Spain, 415

Sweden, 418

United States, 454

Venezuela, 461, 462

Omissions. See Acts or omissions

Operators

Brazil, 191–192, 196–197 Chile, 210

China, 213

claims subject to limitation, 19–20 Croatia, 219, 222

Denmark, 223

Finland, 229, 231

France, 237

Greece, 251–252 India, 265–266 Japan, 281

Limitation Convention 1976, 13–14, 42

Malta, 303

mortgagees in possession, 13–14 Netherlands, 317

Norway, 344

Pakistan, 351

parts of ships, interests in, 11

persons entitled to limit liability, 8, 9, 11, 13–14, 42

shipowners, 8, 9

Singapore, 373

South Africa, 401

Spain, 411

Sweden, 417

INDEX

Operators—cont.

Turkey, 431–432

United States, 459

Venezuela, 461

Owners. See Shipowners Package limitation. See also Package limitation under the Hague Rules, Package limitation under the Hague-Visby Rules Argentina, 166–167

Australia, 177

Canada, 202

China, 217

containers and pallets, 166–167

Croatia, 222

Finland, 235

France, 243

Germany, 250

Greece, 257

Hague Rules, 134–136

Hague-Visby Rules, 134–136

Hamburg Rules. 134–136

Ireland, 273

Japan, 290–293

Korea, 299

Malta, 309–310

Netherlands, 325

New Zealand, 334, 335, 337

Nigeria, 341

Pakistan, 359–360

Philippines, 365–366

Poland, 369

Slovenia, 394

South Africa, 406–407

Sweden, 424

Turkey, 441, 443

Venezuela, 466–467

Package limitation under the Hague Rules, 134–140

£100 sterling, 140

bills of lading, 136, 138–140

bulk cargo, 137

containerised cargo, 137–140

contract, where rules apply as a matter of,

149–151

deck cargo, 152

defences, 146

delay, 145

descriptions, 138–140

deviation, 151–153

gold value, 140, 150–151

loss of right to rely on package limitation,

151–153

loss or damage to cargo, 140, 151–152

lower package limits, carriers’ reliance on,

149–151

matter of law, application as a, 149

pallets, 137–40

Paramount clause, 136

per package or unit, meaning of, 137

tort, claims in, 146

value and nature of goods, 136

weight, number and quantity unknown, 139–140

609

Package limitation under the Hague-Visby Rules, 134–136, 140–146

acts or omissions, 141, 145–146, 153

as packed, meaning of, 144

bills of lading,

descriptions in, 141, 143–145 misstatements in, 141

conduct, 145–146, 153–154

containers or pallets, 141, 142–145

contents unknown, meaning of, 144

contract, where rules apply as a matter of,

149–151

damages for delay, 145

deck cargo, 153

delay, 145–146

enumeration, 144–145

heavy cargo, 142

Himalaya clauses, 146

independent contractors, 146, 153

light cargo, 142

loss or damage to goods, 142, 145, 153–154

lower package limits, carriers’ reliance on,

149–151

matter of law, application as a, 149

maximum amount, agreement on, 141

quantity unknown, meaning of, 143–144

recklessness, 141, 145–146, 153–154

said to contain, meaning of, 143, 144

SDRs, 141, 142

seaworthiness, due diligence and, 153

servants or agents, claims against, 146, 153

stevedores, 146

tort, claims in, 146

value and nature of goods, 141

weight unknown, meaning of, 143–144

Package limitation under the Hamburg Rules, 134–136, 146–149

actual carriers, liability of, 148–149

bills of lading, descriptions in, 147

conduct, 154–155

containers or pallets, 147

contract, where rules apply as a matter of,

149–151

delay, 147–148, 149, 155

independent contractors, 148

joint and several liability, 149

loss of right to limit liability, 147–148, 154–155

loss or damage to goods, 147–149, 155

lower package limits, carriers’ reliance on,

149–151

matter of law, application as a, 149

recklessness, 148, 155

SDRs, 148

servants or agents, claims against, 147–148, 155

tort, claims in, 147

units of account, 147

Pakistan, 351–360

admissions, 352

aggregation of claims, 354

alter ego rule, 353

Athens Convention 1974, 351

bar to other actions, constitution of fund as, 355

610 Pakistan—cont. cargo, removal, destruction and rendering harmless of, 353

charterers, 351–352 claims subject to limitation, 352

compensation, 354

conduct barring limitation, 353

counterclaims, 353

damages, 352

date of entry into force of present limitation system, 357

deck cargo, 358

delay, 352

denunciations, 357

distribution of fund, 355

drilling vessels, 356–357 exclusions from liability, 352–353 fault or privity, 353

financial limits of liability, 353–354, 359

floating platforms, 357

general average, 352

gold value, 359

governing law, 355–356 Hague Rules, 351, 358

Hague-Visby Rules, 351, 358–359 Hamburg Rules, 351, 359

Himalaya Clause, 352

insurers, 351

interest, 359

jurisdiction, 352, 356

Limitation Convention 1976, 351–352 protocol to, 351

limitation fund, bar to other actions, constitution of fund as, 355

constitution of, 354–355 distribution of, 355

loss of life, 351–358 loss of right to limit, 359–360 loss or damage to goods, 351–353 luggage, loss or damage to, managers, 351

masters’ liens, 355

mutual obligations to other states to permit limitation, 357

negligence, 359–360 nuclear damage, 353

oil pollution, 352

operators, 351

package limitation, 359–360 passengers, 357–358 personal injuries, 351–358 persons entitled to limit liability, 351–352 priority, 355

property damage, 351–357 recklessness, 353

salvors, 352

scope of application, 356–357, 358, 360

SDRs, 354, 358

seamen’s’ liens, 355

security, 355

set off, 356

INDEX

Pakistan—cont.

shipowners, 352

slot charterers, 352

tonnage limitation, 354–356

tort, claims in, 352

UNCTAD, 358–359

unit limitation, 359

units of account, 353–354, 357–358

vessels, special types of, 356–357

wreck removal, 353

Pallets. See Containers and pallets

P&I insurance, 35, 249

Paramount clause, 136

Parts of ships, interests in, 11

Passage, right of, 22

Passenger claims. See also Athens Convention 1974,

Luggage, loss or damage to

aggregation of claims, 58

Argentina, 166

Australia, 169–170, 179

Brazil, 195

Canada, 201–202

Chile, 209

China, 216

claims subject to limitation, 21

common law, 95

contract, 95

Croatia, 221–222

cruise ships, 54

definition, 99

Denmark, 223, 227

exclusion clauses, 95

ferries, 54

Finland, 234

France, 242–243

Germany, 247–248

Greece, 255–256

Hong Kong, 262–264

India, 272

Japan, 28, 286, 289–290, 293

Korea, 299

limitation clauses, 95

Limitation Convention 1976, 44–45, 52–57

protocol to, 44–45, 53–56

limitation fund, calculation of, 52–53

loss of life, 52–56, 89

Malta, 304, 306, 309

Mexico, 313–314

Netherlands, 320, 325

New Zealand, 328, 334

non-sea-going ships, 55–56

Norway, 343, 346–347

number of passengers, 52–54, 88

Pakistan, 357–358

personal injuries, 52–56, 89

Philippines, 364–365

Poland, 268

SDRs, 46, 52–57

Singapore, 382, 389

Slovenia, 394

small ships, 88

Spain, 415–416

INDEX

Passenger claims—cont. Sweden, 422–424 tickets, 95

Turkey, 432, 433, 435, 440–442

unfair contract terms, 95

United Kingdom, in, 55–57 United States, 455

units of account, 44–45 Venezuela, 465–466

Pending actions, 85, 323

People’s Republic of China, 213–217

acts or omissions, 214

aggregation of claims, 215

averting or minimising loss, 213

bar to other actions, constitution of fund as, 215

carriage of goods by sea, 217

charterers, 213

claims subject to limitation, 213

conduct barring limitation, 214

counterclaims, 214

date of entry into force of present limitation system, 216

delay, 213, 217

denunciations, 216

distribution of fund, 215

exclusions from liability, 213–214 financial limits of liability, 214–215, 217

general average, 213

governing law, 215

Hong Kong, 259

insurers, 213

limitation fund, bar to other actions, constitution of fund as, 215

constitution of, 215

distribution of, 215

loss of life, 213–216 loss of right to limit, 217

luggage, loss or damage to, 216

mutual obligations to other states to permit limitation, 216

nuclear damage, 213

oil pollution, 213

operators, 213

package limitation, 217

passengers, 216

personal injuries, 213–216 persons entitled to limit liability, 213

property damage, 213–216 recklessness, 214

salvors, 213, 214–215 scope of application, 216, 217

SDRs, 215

servants, 213

set off, 214

shipowners, 213

tonnage limitation, 215

unit limitation, 217

units of account, 214–215, 216

vehicles, loss or damage to passengers’, 216

vessels, special types of, 216

Personal injuries, 52–56, 89

aggregation of claims, 105

Argentina, 165

Athens Convention 1974, 54–55, 101–109 protocol, to, 114, 120–123, 131–132 Australia, 169–170, 179

Belgium, 181–189 Brazil, 191–195 Canada, 199–202 Chile, 205–209 China, 213–216 claims subject to limitation, 210–21 conduct barring limitation, 36

Croatia, 219–222 Finland, 229–234 France, 237–242 Germany, 245, 247–249 Greece, 251–256 Hong Kong, 261, 263

India, 266, 268

Ireland, 271–272 Japan, 281–290 limitation funds, 49–50 Malta, 304, 306

Netherlands, 320

New Zealand, 328, 334

Nigeria, 340

Norway, 344, 346–347 Pakistan, 351–358 Philippines, 364–365 Poland, 367–368 Singapore, 374–378, 381

Slovenia, 392, 394

South Africa, 399–406 Spain, 441–416 Sweden, 417–424 Turkey, 435, 440

United States, 453, 455–456 Venezuela, 461–466 Persons entitled to limit liability, 155–158 agents, 13

aggregation of claims, 10

Argentina, 164

Australia, 173–174 Belgium, 181

Brazil, 191–192 Canada, 199

charterers, 8, 9–11, 42

Hague/Hague-Visby/Hamburg Rules, 155

Limitation Convention 1976, 155

Chile, 205

China, 213

Croatia, 219

Denmark, 223–224 exclusions, 16–17 Finland, 229

France, 237

freight forwarders, 156

Hague Rules, 155–157 Hague-Visby Rules, 155–158 Hamburg Rules, 155–156, 158

harbour authorities, 17

611

612

INDEX

Persons entitled to limit liability—cont.

hovercraft, 12–13

independent contractors, 13

India, 265–266

insurers, liability, 15–16

Ireland, 271–272

Israel, 275

Italy, 279

Japan, 281–182

Korea, 295–296

Limitation Convention 1976, 7–17, 155–156

Malta, 303

managers, 42

masters, 14

Mexico, 313

mortgagees in possession, 8

deeds of covenant, 14

operation and management of ships by, 13–14

responsibility for, 14

Netherlands, 317

New Zealand, 328

Norway, 344

operators, 8, 9, 11, 13–14, 42

Pakistan, 351–352

parts of ships, interests in, 11

Philippines, 362

salvors, 12

servants and agents of carriers, 156–158

Hague Rules, 156–157

Hague-Visby Rules, 157–158

Hamburg Rules, 158

shipowners, 7–9, 14

Hague/Hague-Visby/Hamburg Rules, 155

Limitation Convention 1976 155

responsibility of, 13

ships,

operation and management of, 13–14

sea-going, 12–13

Singapore, 373–374, 386, 388–389

slot charterers, 11

Slovenia, 392

South Africa, 401–402

stevedores, 13

Sweden, 417–418

Turkey, 431–433, 444

United States, 450–451, 459

Venezuela, 461

Philippines, 361–366

agents, 361–362

aggregation of claims, 363

Athens Convention 1974, 364

bar to other actions, constitution of fund as, 363

bills of lading, 366

carriage of goods by sea, 365–366

claims subject to limitation, 362

conduct barring limitation, 362

containers, 365–366

counterclaims, 362

denunciations, 364

distribution of fund, 363

exclusions from liability, 362

financial limits of liability, 363, 364, 366

Philippines—cont.

force majeure, 365

governing law, 363

Hague Rules, 361

Hague-Visby Rules, 361

limitation amounts, 364

Limitation Convention 1957, 361

Limitation Convention 1976, 361

limitation fund,

bar to other actions, constitution of fund as, 363

constitution of, 363

distribution of, 363

loss of life, 364–365

loss of right to limit, 366

luggage, loss or damage to, 364–365

negligence, 362, 364–366

package limitation, 365–366

passengers, 364–365

personal injuries, 364–365

persons entitled to limit liability, 362

scope of application, 364–366

security, 365

servants, 365

shipowners, 361–362

tickets, 365

unit limitation, 365–366

units of account, 363

vessels, special types of, 363

Pilots

Greece, 251–252

Spain, 411

Sweden, 418

Pleasure craft

Athens Convention 1974, 98

Finland, 233

France, 241

Poincare franc, 49

Poland, 367–369

acts or omissions, 369

Athens Convention 1974, 368

bills of lading, 368–369

container or pallets, 368

Hague Rules, 368–369

Hague-Visby Rules, 368–369

insurance, 368

Limitation Convention 1924, 368

Limitation Convention 1957, 368

Limitation Convention 1976, 367–368

protocol, 368

limitation fund, constitution, 367

loss of life, 367–368

luggage, 368

negligence, 369

package limitation, 369

passengers, 368

personal injuries, 367–368

property damage, 367–368

SDRs, 367, 368

unit of account, 367

Pollution. See Oil pollution Ports. See Terminals, quays or ports

INDEX

Practice directions, 62, 64

Priority Australia, 171, 177

Chile, 208

Denmark, 225

France, 240

Hague-Visby Rules, 135

India, 268

Korea, 297

Limitation Convention 1976, 50

Pakistan, 355

Singapore, 381

United States, 456

Privity. See Actual fault or privity

Property damage. See Loss or damage to goods

Protocol to 1976 Convention

adoption, of, 4

Australia, 173

Canada, 200

claims subject to limitation, 21

Denmark, 223–225 entry into force, 43

exclusions from liability, 27

Finland, 229, 233

France, 237

general limits, 44

Germany, 245, 248

Hazardous and Noxious Substances Convention, 43–44, 94

Hong Kong, 264

increase in amounts, 43–44 Netherlands, 317

New Zealand, 327–333 Norway, 343–344, 346–347 Pakistan, 351

passenger claims, 44–45, 53–56 Poland, 367

salvors, 50

small ships, tonnage of, 43

Spain, 412, 414–415 UK, adoption in the, 4 –6 unit of account, 45–48

Psychiatric harm, damages for, 20–21

Public liability crisis in Australia, 179

Quantity unknown, meaning of, 143–144 Recklessness Athens Convention 1974, 106

Chile, 206, 210

China, 214

conduct barring limitation, 33, 35–40 Croatia, 220

definition, 37–38 Finland, 231, 235

fire, 26

France, 238, 242, 243

Germany, 246, 250

Hague-Visby Rules, 38–39, 141, 145–146, 153–154 Hamburg Rules, 148, 155

Japan, 284, 293

613

Recklessness—cont. Korea, 297, 299

Limitation Convention 1976, 3

Netherlands, 319, 325–326 New Zealand, 329, 335–336 package limitation, 141, 145–146, 148, 153–155 Pakistan, 353

Singapore, 373, 379–380 Spain, 415, 416

theft, 26

United States, 459

Venezuela, 466

Recognition of judgments, 123–124

Regional economic integration organisations,

127–128 Related actions, 85–86 Release bar to other actions, constitution of fund as, 76–77 Greece, 254

India, 269–270 Malta, 308

Remoteness, 20–21, 99–100

Repair

claims subject to limitation, 20

shipowners, 8, 9

Rome Convention 1980, 257

Said to contain, meaning of, 143–144 Sale. See Judicial sale Salvors and salvage act, neglect or defaults, salvor’s responsibility for, 12

aggregation of claims, 58

Australia, 170, 174

Belgium, 182

Chile, 206

China, 213, 214–215 claims subject to limitation, 19, 23–25 counterclaims, 42

Croatia, 219

damages, 26–27, 42

divers, 12, 19

exclusions from liability, 26–30 Finland, 229–230, 232, 233

France, 237, 238

Germany, 245–246 India, 266, 267, 270

Ireland, 271–272 Japan, 281–284, 286

Limitation Convention 1976, 12, 42, 44, 50

Lloyd’s Open Form, 27

Malta, 303–304 negligence, 42

Netherlands, 317, 320

New Zealand, 328–329 Norway, 344, 345, 348

operating from a vessel, 50

Pakistan, 352

persons entitled to limit liability, 12

Protocol to the Limitation Convention 1976, 50

remuneration, 42

614 Salvors and salvage—cont. Salvage Convention 1989, 27, 30

same occurrence, claims arising out of the, 42

service, contracts of, 29–30 set off, 42

Singapore, 373–374, 376–378, 382

Slovenia, 392–393 Spain, 411

special compensation 27, 30

Sweden, 417–418, 419, 422

tonnage, 12, 50

Turkey, 437

United States, 459

Venezuela, 462

SDRs

Athens Convention 1974, 6, 53–55, 103–105 protocol, to, 114–115, 118, 121

Australia, 176, 178

Belgium, 183, 184

Brazil, 196, 197

Canada, 200, 202

Chile, 207

China, 215

Croatia, 220, 221–222 Denmark, 224, 225, 227

Finland, 231, 234, 235

France, 239, 242, 243

Germany, 247–248, 250

Greece, 256, 257

Hague-Visby Rules, 141, 142

Hamburg Rules, 148

Israel, 276

Japan, 285, 291–292 Korea, 297–299 Limitation Convention 1976, 49–50 Malta, 309, 310–311 Merchant Shipping Act 1995, 48–49 Mexico, 314

Netherlands, 320, 325

New Zealand, 330, 335

Norway, 346–348 package limitation, 141, 142, 148

Pakistan, 354, 358

passengers, 46, 52–57 Poincare franc, 49

Poland, 367, 368

Singapore, 381, 382

Slovenia, 392–393 South Africa, 403–408 Spain, 416

Sweden, 419–420, 423–424 tonnage, 48–49 United Kingdom, 61, 84

value of, 49

Venezuela, 463, 466

Sea-going ships

Athens Convention 1974, 55–56 Australia, 174

Belgium, 187, 188

Brazil, 191–192, 195–196 claims subject to limitation, 21

Germany, 246

INDEX

Sea-going ships—cont.

Greece, 252

Ireland, 271–172

Japan, 289

Limitation Convention 1976, 12–13

Malta, 306

Netherlands, 317–318

persons entitled to limit liability, 12–13

Spain, 413–414

United States, 456

Seamen. See Crew Seaworthiness

due diligence, 13, 153, 386–387

Hague-Visby Rules, 153

Limitation Convention 1976, 13

package limitation, 153

shipowners, due diligence of, 13

Singapore, 386–387

Turkey, 439, 440–442

United States, 451

Venezuela, 467

Secretary-General of IMO, 112–113 Security. See also Guarantees

Brazil, 194

Chile, 208

Denmark, 225–226

France, 239

India, 268–270

Japan, 287

Malta, 308

Netherlands, 321–323

New Zealand, 331, 334

Norway, 349

Pakistan, 355

Philippines, 365

Singapore, 383–384

Sweden, 420

United States, 448

Venezuela, 464

Servants or agents. See also Crew, Masters

Athens Convention 1974, 104–106

Belgium, 182

Chile, 210

China, 213

crewing agents, 9

employment contracts, 30, 182

France, 237

Greece, 258

Hague Rules, 156–157

Hague-Visby Rules, 146, 153, 157

Hamburg Rules, 147–148, 155, 158

Himalaya clauses, 156–157

independent contractors, 157–158

Japan, 281–284

Korea, 296, 299

Limitation Convention 1976, 13

Malta, 305

New Zealand, 328

Norway, 345

package limitation, 146–148, 153, 155

persons entitled to limit liability, 13, 156–158

Philippines, 361–362, 365

INDEX

Servants or agents—cont. Singapore, 373, 375, 386, 389

Spain, 411

Sweden, 417–418 third parties, 156–157 Turkey, 440

United States, 453–454 Venezuela, 461, 462

workmen’s compensation, 258

Service

Australia, 176–177 jurisdiction, outside the, 63

United Kingdom, 62–64 Service, contracts of India, 267

Japan, 284

Malta, 305

New Zealand, 329

salvage, 29–30 United Kingdom, 30

Venezuela, 462

Shipbuilders. See Builders

Shipmanagers. See Managers

Shipowners

Argentina, 163–166 Australia, 170, 174

beneficial owners, 7

Brazil, 191–192, 196

Canada, 199

charterers, 8, 9, 11

Chile, 205

China, 213

conduct barring limitation, 31

crewing agents, 9

Croatia, 219, 222

definition, 8–9, 11

Denmark, 223

disponent, 164, 344

due diligence, 13

Finland, 229

France, 237

Germany, 246

Greece, 251–252 Hague Rules, 155

Hague-Visby Rules, 155

Hamburg Rules, 155

Hong Kong, 261

India, 265–269, 270

interested in the ship, persons, 8

Ireland, 271–272 Japan, 281–284 Korea, 296–297 Limitation Convention 1957, 8, 156

Limitation Convention 1976, 7–9, 13–14, 155

Malta, 303, 305

managers, 8, 9

mortgagees in possession, 8, 14

Netherlands, 317

New Zealand, 328

Norway, 344, 345

operators, 8, 9

Pakistan, 352

615

Shipowners—cont. persons entitled to limit liability, 13, 155

Philippines, 361–362 registration, 7

seaworthiness, 13

shipbuilders, 8, 9

shiprepairers, 8, 9

Singapore, 373, 377, 383–384

slot charterers, 11

Slovenia, 392

South Africa, 396–397, 401–402 Spain, 411

Sweden, 417

Turkey, 430–438 United States, 448, 451–454, 457–459 Venezuela, 461

Shipping incidents, definition of, 115

Ships. See Vessels

Singapore, 371–389

acts or omissions, 373, 375, 379

actual fault or privity, 373, 374–375, 378

admissions of liability, 384

agents, 375, 386, 389

alter egos, 378–379 Athens Convention 1974, 389

averting or minimising loss, 377–378 bills of lading, 375

burden of proof, 379

cargo, removal, destruction or rendering harmless of, 374

carriers, 386

charterers, 373, 386

Civil Liability Convention, 377

claims subject to limitation, 375–378, 387, 389

conduct barring limitation, 377–378, 387–388 conflicts of law, 372

crew, 373

damages, 377, 381

delay, 377

deviation, 387–388 distribution of fund, 383–386 exclusions from liability, 374–375, 389

exclusion of liability, 386–387 financial limits of liability, 380–383, 388

foreign law, admissibility of, 372

general average, 377

gold francs, 381, 382

governing law, 372–386 guarantees, 383–384 Hague Rules, 388–389 Hague-Visby Rules, 372, 386–389 Hamburg Rules, 389

Himalaya clauses, 386, 388–389 independent contractors, 386

interest, 385–386 jurisdiction, 384

knowledge, 379–380 liens, 386

Limitation Convention 1957, 371, 372–374, 377,

379, 382–383, 388

Limitation Convention 1976, 371, 373, 377–379,

385–386

616

INDEX

Singapore—cont. limitation fund, constitution of, 372, 383–384 distribution of, 383–386 loss of life, 374–378, 381

loss or damage to goods, 374, 387

managers, 373

masters, 373

navigation or management of the ship, 375, 378

nuclear damage, 377

offshore mobile units, 371–372 oil pollution, 377

operators, 373

passengers, 382, 389

personal injuries, 374–378, 381

persons entitled to limit liability, 373–374, 386,

388–389 priority, 381

property damage, 376

recklessness, 373, 379–380 salvors, 373–374, 376–378, 382

SDRs, 381, 382

seaworthiness, due diligence and, 386–387 security, 383–384 servants, 373, 386, 389

shipowners, 373, 377, 383–384

ships, definition of, 371–372 standard of proof, 380

subrogation, 385

tonnage limitation, 375, 381–383 valuables, 374

Warsaw Convention, 379

wreck removal, 374

Slot charterers, 11, 178

Slovenia, 391–394

acts or omissions, 392, 394

appeals, 391

Athens Convention 1974, 391, 394

bar to other actions, constitution of fund as, 393

cargo, removal, destruction or rendering harmless of, 392

charterers, 392

Civil Liability Convention, 391, 394

claims subject to limitation, 392

conventions, 391

crew, 392

financial limits, 392–393, 394

Fund Convention, 391, 394

general average, 392

guarantees, 393

Hague Rules, 393–394 Hague-Visby Rules, 391

insurers, 392

interest, 393

jurisdiction, 391

Limitation Convention 1976, 391–393 limitation fund, bar to other actions, constitution of fund as 393

constitution of, 393

distribution of, 393

loss of life, 392, 394

managers, 392

Slovenia—cont.

Maritime Code, 391–392

masters, 392

negligence, 392, 394

nuclear damage, 392

oil pollution, 394

package limitation, 394

passengers, 394

personal injuries, 392, 394

persons entitled to limit liability, 392

salvors, 392–393

SDRs, 392–393

shipowners, 392

tonnage limitation, 392–393

tort, claims in, 392

unit limitation, 394

unit of account, 393

wreck removal, 392

Small ships

Canada, 201

exclusions from liability, 87, 88

Greece, 252

Japan, 289

Limitation Convention 1976, protocol to, 43

Malta, 309

passengers, 88

tonnage of 43, 88

United Kingdom, 88

South Africa, 395–408

actual fault or privity, 402

Admiralty Court, 396–399

aggregation of claims, 406

arbitration, 398

bills of lading, 398, 407

builders, 401

carriage of goods by sea, 395, 406–408

charterers, 401

claims subject to limitation, 395, 402

conduct barring limitation, 402–403

costs, 402

crew, 401

damages, 406

exclusive jurisdiction, 396–399

financial limits of liability, 406–407

gold franc, 403–404, 406

governing law, 399

Hague Rules, 406–407

Hague-Visby Rules, 406–408

hovercrafts, 401

interest, 402

jurisdiction, 395–401

Limitation Convention 1924, 400

Limitation Convention 1957, 400, 402

Limitation Convention 1976, 400

limitation fund, constitution of, 397

loss of life, 399–406

loss of right to limit, 402, 406–407

managers, 401

masters, 401

operators, 401

package limitation, 406–407

personal injuries, 399–406

INDEX

South Africa—cont.

persons entitled to limit liability, 401–402

precedent, 399

property damage, 399–406

SDRs, 403–408

shipowners, 396–397, 401–402

ships, definition of, 400–401

stay of proceedings, 398

tonnage limitation, 405

unit limitation, 406–407

units of account, 403–405

South Korea. See Korea

Sovereign immunity in Australia, 171

Spain, 409–416

abandonment, limitation by, 411–412

acts or omissions, 409, 415

agents, 411

air-cushion vehicles, 414

Athens Convention 1974, 415–416

protocol to 415–416

bar to other actions, constitution of fund as,

412–413

breach of contract claims, 414

cargo, removal, destruction or rendering harmless

of, 414

Civil Liability Convention, 415

claims subject to limitation, 414

collisions, 411–412

Commercial Code 1885, 410–412

conduct barring limitation, 415

criminal offences, 409–410, 415

damages, 411

floating platforms, 414

freight, 411

Fund Convention, 415

Hague-Visby Rules, 416

inland waterways, 414

interest, 412

Limitation Convention 1976, 412–416

protocol on, 412, 414–415 limitation fund, bar to other actions, constitution of fund as, 412–413

commencement of proceedings, 412

constitution of, 410, 412–413

loss of life, 414–416

loss or damage to goods, 416

luggage, loss or damage to, 416

masters, 411, 415

negligence, 411

nuclear damage, 415

oil pollution, 415

operators, 411

passengers, 415–416

personal injuries, 414–416

pilots, 411

recklessness, 415, 416

salvors, 411

scope of application, 413

SDRs, 416

sea-going ships, 413–414

shipowners, 411

617

Spain—cont. stay of proceedings, 410

time bar, 410

units of account, 414–415 unlimited liability principle, 409, 415

vehicles, loss or damage to passengers’, 416

vessels, types of, 413–414 value of the, 411–412 vicarious liability, 411

wreck removal, 414

Special compensation, 27, 30

Special drawing rights. See SDRs

Statements of truth, 62

Stay of proceedings

European Union, jurisdiction in the, 86

forum shopping, 80–82 Hong Kong, 261

South Africa, 398

Spain, 410

United Kingdom, 63–64 United States, 449

Stevedores

Hague-Visby Rules, 146

Japan, 282

Korea, 296

Limitation Convention 1976, 13

package limitation, 146

persons entitled to limit liability, 13

Strict liability

Athens Convention, Protocol 2002 to, 115–116, 119–120 Turkey, 429

Substitution of vessels, 159

Supplies, 20

Sweden, 417–425

aggregation of claims, 420

Athens Convention 1974, 422

averting or minimising loss, 418

bar to other actions, constitution of fund as, 421–422 cargo, removal, destruction or rendering harmless of, 418

Civil Liability Convention, 422

claims subject to limitation, 418

conduct barring limitation, 418–419 containers or pallets, 424

costs, 418, 420

counterclaims, 419

date of entry into force of present limitation system, 422

delay, 418, 423–424 denunciations, 422

distribution of fund, 420–421 drilling vessels, 422

employees, 417

exclusions from liability, 418

financial limits of liability, 419–420, 423–424 general average, 417, 418

Hague-Visby Rules, 424

Hamburg Rules, 424

independent contractors, 417

618 Sweden—cont.

insurers, 418

interest, 418, 420

Limitation Convention 1957, 422

Limitation Convention 1976, 417

limitation fund,

bar to other actions, constitution of fund as, 421–422

constitution of, 420–422

distribution of, 420–421

loss of life, 417–422, 424

loss of right to limit, 424

loss or damage to valuables, 423

luggage, loss or damage to, 423

Maritime Code, 417

negligence, 418, 423–424

Nordic countries, cooperation with, 417

nuclear damage, 418

oil pollution, 418

operators, 417

package limitation, 424

passengers, 422–424

personal injuries, 417–424

persons entitled to limit liability, 417–418

pilots, 418

property damage, 417–422

salvors, 417–418, 419, 422

scope of application, 423–425

SDRs, 419–420, 423–424

security, 420

servants, 418

shipowners, 417

subcarriers, 424–425

tonnage limitation, 419, 422

tort, claims in, 418

unit limitation, 424

units of account, 419–420

valuables, loss or damage to, 423

vessels, special types of, 422

wreck removal, 418

Terminals, quays or ports

Athens Convention 1974, 100

Canada, 199

Korea, 296

unsafe ports, 19

Theft

actual fault or privity, 26

Athens Convention 1974, 101

conduct barring limitation, 41

Hong Kong, 261

United Kingdom, 26

wilful intent, 26

Tickets

Athens Convention 1974, 98

Australia, 170

passengers, 95

Philippines, 365

unfair contract terms, 95

Time bar Athens Convention 1974, 107–108 protocol, to, 121–122

INDEX

Time bar—cont. governing law, 79

Greece, 256, 258

Hong Kong, 263

Korea, 298

Spain, 410

suspension or interruption of, 121–122 United Kingdom, 63–64 United States, 449–450 Tonnage limitation Australia, 176

Belgium, 183, 188

Brazil, 193–194,195–196 calculation, 51–52, 176

China, 215

conventions, 52

deck cargo, ships carrying, 51

Denmark, 224

earning capacity, 51

Finland, 231

Germany, 247

gross, 51–52 Hague Rules, 134–136, 151

Hague-Visby Rules, 134–136, 151

Hamburg Rules, 134–136, 151

Hong Kong, 261

India, 268

International Tonnage Certificates, 52

Japan, 284–285 Limitation Convention 1976, 50–52 Malta, 305–306, 311

measurement rules, 51

Merchant Shipping Act 1995, 51, 88

net, 51

Netherlands, 320

New Zealand, 329

Nigeria, 340

Norway, 346–348 oil tankers, segregated ballast, 51

Pakistan, 354–356 registered, 50–51 re-measurement, 51–52 Singapore, 375, 381–383 Slovenia, 392–393 small ships, 88

South Africa, 405

Sweden, 419, 422

transitional provisions, 52

variation on, 51

Venezuela, 463

Tort, claims in

Chile, 211

Denmark, 223

Greece, 256, 258

Hague Rules, 146

Hague-Visby Rules, 146

Hamburg Rules, 147

Japan, 292–293 package limitation, 146, 147

Pakistan, 352

Slovenia, 392

Sweden, 418

INDEX

Tort, claims in—cont. Turkey, 427–431, 434–437, 439

Tugs, 18, 20, 25

Turkey, 427–445

acts or omissions, 440

agents, 440

asset, limitation by, 433–434, 436–437 bills of lading, 441

burden of proof, 429, 435

cargo, care of, 439

carrying by shipowner on own behalf of, 438

loss or damage to, 441–442 cargoworthiness, 441

carriage of goods by sea, carriers, 432, 433, 436, 438–443

charterers, 431–433 Commerce Act, 428, 431, 434–443

commercial ventures, need for, 432

conflict of laws, 444–445 contract, 427–440 crew, 437, 440

damages, 435–437, 439

deck cargo, 439

delay, 436, 438, 441, 442

deviation, 439

due diligence, 441

exemption clauses, 439, 440

fault, 429, 434–435, 437, 442

Forceful Execution and Bankruptcy Act, 428

freight, 436–437, 438, 443

garnishment, 433

grounds for liability, 435–436, 440–445 Hague Rules, 428, 439, 441–442

Hague-Visby Rules, 441

liens, 431–433, 438

Limitation Convention 1976, 427, 429, 444–445

loss of life, 435, 440

loss or damage to goods, 436, 441–443 luggage, loss or damage to, 440

market value, limits pursuant to, 443

masters, legal transactions entered into by the, 437

vicarious liability, 440

material damages, 435–436 methods used in limiting liability, 433–434, 442–443 moral damages, 435, 440

mortgaged vessels, sale of, 428

national laws, 427–428 nationality, 444

new voyage, dispatching ship on, 438

Obligations Act, 427–431, 434–435, 438–439, 442

operators, 431–432 package limitation, 441, 443

passengers, 432, 433, 435, 440–442

personal injuries, 435, 440

persons entitled to limit liability, 431–433, 444

proximate cause, 440

rescue operations, 437

salvors, 437

619

Turkey—cont.

seaworthiness, 439, 440–442

seizure, 433

servants, 440

shipowners, 430–438

strict liability, 429

tort, claims in, 427–431, 434–437, 439

unit limitation, 441, 443

unjustified enrichment, 427–428, 430, 439

unlimited liability, 430, 433, 439

value, limitation by, 434, 437–440

vicarious liability, 429–431, 434, 436, 439–440

voyageworthiness, 441

Unfair contract terms, 95

Unit limitation

Argentina, 166–167

Australia, 177

Canada, 202

Chile, 210

China, 217

Croatia, 222

Finland, 235

France, 243

Greece, 257

Hong Kong, 264

Ireland, 273

Japan, 290

Malta, 309–310

Netherlands, 325

Norway, 347

Pakistan, 359

Philippines, 365–366

Slovenia, 394

South Africa, 406–407

Sweden, 424

Turkey, 441, 443

Venezuela, 466–467

Unit of account. See also SDRs

Athens Convention, Protocol 2002 to, 121

Belgium, 183, 184

Canada, 201

Chile, 206–207

China, 214–215, 216

Croatia, 220

Finland, 231

France, 239

gold francs, 310, 403–404, 406

Hamburg Rules, 147

Hong Kong, 261

Israel, 276

Japan, 284–285, 289–292

Limitation Convention 1976, 45–48, 57, 92, 94

protocol to, 45–48

Malta, 306

Mexico, 314

Netherlands, 320

New Zealand, 330

package limitation, 147

Pakistan, 353–354, 357–358

passengers, 44–45

Philippines, 363

620

INDEX

Unit of account—cont.

Poincare francs, 49

Poland, 367

revision of, 92, 94

Slovenia, 393

South Africa, 403–405

Spain, 414–415

Sweden, 419–420

Venezuela, 463–466

United Kingdom Athens Convention 1974, 4, 6, 53, 55–56, 95–96 protocol, to, 96

Hague Rules, 151

Hague-Visby Rules, 4, 6

historical overview, 5–6

insurance, 15

legislation, 5

Limitation Convention 1924, 5

Limitation Convention 1957, 5

Limitation Convention 1976, 5–6

Merchant Shipping Act 1894, 5

Merchant Shipping Act 1995, 5

passengers, 55–57

Protocol to Limitation Convention 1976, 5–6

Responsibility of Shipowners Act 1733, 5

United Kingdom, Limitation Convention 1976 in the, 5–6, 59–94

admissions of liability, 61–63

Civil Protection Rules, 62

claim forms, 62–64

claims subject to limitation, 22

commencement of actions, 60–62

constitution of the fund, 64, 66–69

damages, 60

declarations, 62

defence, limitation as, 60

distribution of the fund, 65, 69–74

domestic effect in the 3–4

domicile, 62–63

drilling, vessels used for, 89

entry into force, 93

fire, 26

governing law, 65–66, 78–86

harbour authorities 17

hovercrafts, 89–90

jurisdiction, service outside the, 63

limitation decrees, 63–64

advertising, 63–64

restricted, 63

stay of proceedings, 63–64

limitation funds, 59–60

admission of liability, 61–62

amount of, 60–61

bar to other actions, 65, 74–78

commencement of actions, 60–61

constitution of the fund, 64, 66–69

distribution of the fund, 65, 69–74

establishment of, 60–62

form for claims against the, 6

governing law, 65–66, 78–86

increases in, 61

lapsing of, 64

United Kingdom, Limitation Convention 1976 in the—cont. limitation funds—cont. obligation to establish a, 60–61 Protocol, 4–6 repayment of, 64

Merchant Shipping Act 1995, 59–60, 93

non-sea-going ships, 88

payments into court, 64

place of performance, 62–63 Practice Direction, 62, 64

procedural, convention as, 83

procedure, 62–64 protocol, adoption of, 4

reservations, 94

SDRs, 61, 64

service, 62, 64

outside the jurisdiction, 63

service, contracts of, 30

small ships, 88

statements of truth, 62

stay of proceedings, 63–64 theft, 26

time limits, 63–64 wreck removal expenses, 31

United States, 447–459

acts or omissions, 459

Admiralty jurisdiction, 447–448 advance freight, 453

agents, 454

arrest, 449

Athens Convention 1974,

attachment, 449

basis for limiting liability, 447–448 bulk cargo, 137

burden of proof, 451, 459

charterers, 448, 450, 459

choice of forum, 449

choice of law, 457–458 claims subject to limitation, 453–454 complaints, filing, 448–449 concursus principle, 449–450, 456

conflict of laws, 457

containers, 137–138 contracts, 453

contribution, 455–456 crew, 453

damages, 450

delay, 459

denying limitation, grounds for, 451–452 deviation, 453

distribution of fund, 456–457 exclusive jurisdiction, 450

extraterritoriality, 450

federal court actions, 448, 450

Federal Rules of Civil Procedure, 448

Fire Statute, 454–455 flotilla doctrine, 451

foreign vessels or shipowners, 457–458 forum non conveniens, 458

freight, 447, 453, 455

grounds for denying limitation, 451–452

INDEX

United States—cont.

indemnities, 455–456

injunctions, 449–450

insurance, 456, 459

insurers, 459

jurisdiction, 447–448, 450

knowledge or privity, 451–454, 459

late claims, filing, 449

liens, 457

Limitation Convention 1957, 459

Limitation Convention 1976, 459

limitation fund, 455–457

constitution of, 447, 455

distribution of, 456–457

separate funds, 456

zero, amounting to, 459

loss of life, 453, 456

loss of right to limit,

loss or damage to goods, 453–455

luggage, loss or damage to,

maintenance and cure payments, 454

managers, 459

masters, 453

monition period, 449

multiple funds, payment of, 450

negligence, 451–454

notice of claims, 448

oil pollution, 454

operators, 459

passengers, 455

personal contracts, 453

personal injuries, 453, 455–456

persons entitled to limit liability, 450–451, 459

priorities, 456

privity or knowledge, 451–454, 459

procedural requirements, 448–450

procedural/substantive distinction, 457

recklessness, 459

salvors, 459

sea-going vessels, 456

seaworthiness, 451

security, 448

servants, 453–454

shipowners, 448, 451–454, 457–459

single claimant rule, 449–450

stay of proceedings, 449

time bar, 449–450

value, limitation based on, 448, 450, 455–456

vessels,

definition, 456

foreign, 457–458

types of, 450–451

wreck removal, 459

Unsafe ports, 19

Valuables

Athens Convention 1974, 101

Hong Kong, 261

Limitation Convention 1976, 26

Singapore, 374

Sweden, 423

621

Vehicles, loss or damage to

Athens Convention, Protocol 2002 to, 120–121

China, 216

Spain, 416

Venezuela, 461–467

acts or omissions, 462, 467

aggregation of claims, 464

animals, 467

Athens Convention 1974, 466

bar to other actions, constitution of fund as, 465

bills of lading, 466, 467

Bustamante Code, 465

Civil Liability Convention, 461

claims subject to limitation, 462

conduct barring limitation, 462–463

containers or pallets, 466–467

counterclaims, 463

crew, 461, 463

date of entry into force of present limitation

system, 465

delay, 467

distribution of fund, 464–465

due diligence, 467

financial limits of liability, 463, 465–467

Fund Convention, 461

general average, 462

governing law, 465

Hague Rules, 466

Hague-Visby Rules, 467

Hamburg Rules, 466

insurers, 461

jurisdiction, 464

Limitation Convention 1976, 461, 464

limitation fund,

bar to other actions, constitution of fund as, 465

constitution of, 464–465

distribution of, 464–465

liquidation of, 465

live animals, 467

loss of life, 461–466

loss of right to limit, 467

luggage, loss or damage to, 466

managers, 461

Maritime Commerce Law, 461

masters, 463

negligence, 462, 466, 467

nuclear damage, 462

oil pollution, 461, 462

operators, 461

package limitation, 466–467

passengers, 465–466

personal injuries, 461–466

persons entitled to limit liability, 461

property damage, 461–465

recklessness, 466

salvors, 462

scope of application, 467

SDRs, 463, 466

seaworthiness, 467

security, 464

servants, 461, 462

622

INDEX

Venezuela—cont.

service, contracts of, 462

shipowners, 461

tonnage limitation, 463

unit limitation, 466–467

units of account, 463–466

Vessels. See also Abandonment of vessel, Air-

cushioned vehicles, Drilling units, Floating

units, Pleasure craft, Sea-going ships, Small

ships

armed forces, ships belonging to, 171

Athens Convention 1974, 98–99

Belgium, 186–187

Brazil, 195

British ships, 41

Canada, 201

China, 216

Croatia, 221

cruise ships, 54, 132

defects, in, 102, 114, 115

definition, 98–99

ferries, 54

Finland, 234–235

France, 241–242

Hong Kong, 262

Israel, 277

Japan, 289

Limitation Convention 1976, 12–13, 16–17

Malta, 303, 309

Netherlands, 317–318

New Zealand, 333

NVOCCs (non-vessel operating common carriers),

281

Pakistan, 356–357

parts of ships, interests in, 11

persons entitled to limit liability, 12–14

Philippines, 363

Singapore, 371–372

South Africa, 400–401

Spain, 411–414

substitution, 159

Sweden, 422

United States, 450–451, 456–458

Vicarious liability Norway, 344

Spain, 411

Turkey, 429–431, 434, 435, 439–440

Voyageworthiness, 441

War ships. See Armed forces, ships belonging to

Warsaw Convention

Athens Convention, Protocol 2002 to, 115

Australia, 176

conduct barring limitation, 35–36

loss, types of, 35–36

Singapore, 379

Wayleaves, 22

Weight, number and quantity unknown, 139–140,

143–144

Wilful intent, 3, 26

Workmen’s compensation, 258

Wreck removal

Australia, 170–171

Belgium, 181–182

Brazil, 194

Chile, 209

claims subject to limitation, 18, 22–24, 26

Denmark, 224

exclusions from liability, 30, 31

Finland, 230

France, 238

Germany, 245, 246, 249

Greece, 252

independent contractors, 26

India, 267

Ireland, 272

Japan, 282

Korea, 296–297

Malta, 304

New Zealand, 329

Norway, 344, 348

Pakistan, 353

Singapore, 374

Slovenia, 392

Spain, 414

Sweden, 418

United Kingdom, 31

United States, 459