Convention on Limitation of Liability for Maritime Claims
The Convention on Limitation of Liability for Maritime Claims is an IMO treaty that was concluded in London in November 1976. It entered into force in 1986 and superseded the 1957 Brussels Convention of the same name. As of October 2016, 54 states are party to the convention.
Chapter 1 of the Convention is the Right of Limitation. Chapter 1 of the 1976 Limitation Convention for Maritime Claims includes:
- Article 1: Persons entitled to limit liability,
- Article 2: Claims subject to limitation,
- Article 3: Claims excepted from limitation,
- Article 4: Conduct barring limitation and
- Article 5: Counterclaims.
The following will discuss two major issues: Article 1: Persons entitled to limit liability and Article 2: Claims subject to limitation, on the problems faced by the previous 1957 Convention and the reason of the improvement made.
Article 1: Persons entitled to limit liability
The 1957 Brussels Convention stated the provisions of the convention will apply to the charter, manager and operators of the ship, and to the master, members of the crew. It has been criticized that an independent agent might not be able to limit the liability as the wordings restrict to one who is involved in the operation of the ship. The Tojo Maru case is the significant example showing this problem.
The most important changes in the 1976 limitation convention is that, "salvors" have been added to the list of persons or parties who may limit their liability in accordance with the rules of the Convention.
The Article 1 of the 1976 Convention increase coverage of entitlement of limitation to shipowner, charterers, managers, operators, slavors, insurer of the parties and any person for whose act, neglect or default the shipowner or salvor is responsible.
The 1976 convention recognizes two categories of person entitled to limit, shipowner and salvors. The distinction was introduced to minimize the effect of the decision in the "Tojo Maru".
Article 2: Claims subject to limitation
The 1957 Brussels Convention claimed that the limitation was restricted:
- to acts or omissions done by person on board or in the navigation or management of the ship, or
- in loading, carriage or discharge of its cargo, or
- in embarkation, carriage or disembarkation of its passengers.
The Limitation in the 1957 Brussels Convention was only available in respect of claims sounding in damages. These restrictions become unfortunate nowadays. In order to solve this problem, The 1976 Convention replaced the list with a wider definition of claims which are subject to limitation.
The Convention refers to events occurring “on board or in direct connection with the operation of the ship, or with salvage operations, and consequential loss resulting therefrom”.
According to the 1976 conventions, the basis of liability shall be subject to limitation of liability The range of claims in respect of which the right to limit liability is available is greater than those under the 1957 Convention. The two major principal differences are:
- Claims qualify for limitation whatever the basis of liability may be.
- Claims qualify for limitation if they arise on board or in direct connection with the operation of the ship or with salvage operation.
With a better amendment in the right to limitation, the 1976 convention provides a good protection for the parties.
The Convention on Limitation of Liability for Maritime Claims 1976 recognized the defects of the 1957 Conventions. Compared with the 1957 Convention, the 1976 Convention provides a better protection and coverage for the parties.
Although 65 states have ratified the convention, it has only 54 state parties because a number of ratifying states have denounced the convention. New Zealand has ratified the convention and will cease to be a party in October 2017.
- Peracomo Inc. v. TELUS Communications Co.— Canadian case concerning the Convention
- Hill, C. (1995), Maritime Law, 4th ed, LLP Reference Publishing, London
- Griggs, P., Williams, R.(1998), Limitation of Liability for Maritime Claims, 3rd ed, LLP Reference Publishing, London