National Considerations in Implementing the LLMC Convention
This presentation by Prof. Dr. Norman A. Martinez Gutierrez discusses the international legal framework governing global limitation of liability for maritime claims, focusing on the LLMC Convention. It explores the distinction between global limitation and particular liability regimes, outlines key aspects of the LLMC Convention, and emphasizes the importance of incorporating and effectively implementing the convention in domestic law by considering national considerations.
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National Considerations in the Implementation of the National Considerations in the Implementation of the LLMC Convention in Domestic Law LLMC Convention in Domestic Law A Presentation delivered by Prof. Dr. Norman A. Martinez Gutierrez A Presentation delivered by Prof. Dr. Norman A. Martinez Gutierrez at the IV Adriatic Maritime Law Conference at the IV Adriatic Maritime Law Conference Portoro Portoro , 23 , 23- -25 May 2019 25 May 2019
International Legal Framework The current international regime regulating global limitation of liability for maritime claims is based on the 1976 Convention on Limitation of Liability for Maritime Claims (LLMC Convention), as amended by the 1996 Protocol thereto (itself amended by Resolution LEG.5(99) adopted by the IMO Legal Committee on 19 April 2012).
Global Limitation vs. Particular Liability Regimes The LLMC Convention is not a liability convention. The basis of liability for any given claim may be found under general law (contracts or tort), or under any of the conventions establishing particular liability regimes such as: - the conventions on the carriage of goods by sea; - the conventions on carriage of passengers and their luggage by sea; - the conventions on liability and compensation for pollution damage; and - the convention on liability for the removal of wrecks.
The LLMC Convention The LLMC Convention prescribes the necessary legal framework for the exercise the right of global limitation of liability. It provides, inter alia: the list of persons entitled to limit liability; the claims subject to and excepted from limitation; the conduct barring limitation; the limits of liability; and issues relating to the constitution and distribution of the limitation fund.
Incorporation vs. Implementation The LLMC Convention was as most conventions are drafted in a broad language to make it attractive for as many States as possible. For this reason, a number of areas which could have been objectionable by some States were left in the Convention as options or possible reservations . With this in mind, this presentation will address some of the national considerations which have to be taken into account in the incorporation and effective implementation of the LLMC Convention in domestic law. This topic is of great importance because if a State is not able to appreciate the possible impact of these particularities, it may not be able to benefit fully from the benefits that the Convention can offer.
Adriatic States Parties to the LLMC Regimes LLMC Convention 1976 LLMC Protocol 1996 Albania Croatia Italy Montenegro Slovenia
Claims Subject to Limitation Article 2 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 connexion with the operation of the ship or with salvage operations, and consequential loss resulting therefrom; [ ] (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; [ ]
Reservations Article 18 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 or of any amendment or protocol thereto. No other reservations shall be admissible to the substantive provisions of this Convention.
The Costa Concordia was 114,147 tons; Under the latest regime, the limit of liability for wreck removal costs would have been 49,874,394; It is reported that the overall costs for the Costa Concordia s wreck removal were over 1 billion.
Reservations CROATIA The instrument of accession of the Republic of Croatia was accompanied by the following reservation: Pursuant to Article 18 paragraph 1 of the Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the Protocol of 1996, the Republic of Croatia reserves 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 of any amendment or protocol thereto.
Reservations Malta The instrument of accession by Malta contained the following reservations and declarations: "(a) Pursuant to Article 18(1)(a) and (b) of the 1976 Convention as amended by the 1996 Protocol, Malta reserves the right to exclude the application of Article 2, paragraphs 1(d) and (e), and 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, which arise from occurrences which take place after the coming into force of that Convention as part of the Law of Malta.
Claims Excepted from Limitation Article 3 The rules of this Convention shall 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 Convention on Civil Liability for Oil Pollution Damage, dated 29 November 1969 or of any amendment or Protocol thereto which is in force; [ ]
Limits of Liability Article 6 [ ] 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. [ ]
Declaration by Singapore The Republic of Singapore, pursuant to article 6, paragraph 3, of the Convention, notifies that it has provided in its national law that claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have priority over other claims under article 6, paragraph 1(b), of the Convention.[ ]
Singapore Merchant Shipping Act 136. (1) 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. (2) For the purposes of paragraph 3 of Article 6 of the Convention, it is hereby provided that a claim in respect of damage to harbour works, basins, waterways or aids to navigation has priority over any other claim under paragraph 1(b) of that Article. (3) 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.
Limits of Liability for Passengers Article 7 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 15 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.
Declaration by Sweden to 1996 Protocol The Secretary-General received, on 3 July 2015, the following notification by the Government of Sweden: The Government of Sweden is making use of the option in article 15(3bis) of the 1976 Convention on Limitation of Liability for Maritime Claims as amended by the 1996 Protocol to regulate, by specific provisions of national law, the system of limitation of liability to be applied to passengers. National law in Sweden will as of 2 September 2015 provide a higher limit of liability in respect of claims arising from the loss of life or personal injury to passengers of a ship, namely 250 000 Units of Account.
Declaration by Finland to 1996 Protocol The Secretary-General received, on 19 June 2017, the following notification by the Government of Finland: The Government of Finland is making use of the option in Article 15(3bis) of the 1976 Convention on Limitation of Liability for Maritime Claims as amended by the 1996 Protocol to 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. National law in Finland will as of 5 September 2017 provide a higher limit of liability in respect of claims arising from the loss of life or personal injury to passengers of a ship, namely 250 000 Units of Account multiplied by the number of passengers which the ship is authorized to carry according to the ship s certificate.
Limitation of liability without constitution of a limitation fund Article 10 1. Limitation of liability may be invoked notwithstanding that a limitation fund as mentioned in Article 11 has not been constituted. 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. [ ]
Limitation of liability without constitution of a limitation fund Spanish Law 14/2014 of 24 July on Maritime Navigation Article 403. Condition for the right to limit 1. To be able to validly invoke the right to limit liability before the Spanish courts, the shipowner must set up the corresponding limitation fund, in the amounts established in this chapter together with the legal interests accrued from the date of the accident that gave rise to liability. 2. The fund may be constituted by depositing the corresponding sum or by providing a sufficient guarantee in the judgment of the Court.
Constitution of the fund Article 11 1. [ ] 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. [ ]
Constitution of the fund The Atlantik Confidence [2013] EWHC 1904 Comm In this case the English High Court had to decide whether a P&I Guarantee was acceptable under English Law so as to constitute a limitation fund for maritime claims. Upon an analisys of the applicable legislation, Simon J concluded that: without a specific statutory provision that a guarantee is acceptable the rule remains that a fund may only be constituted by making a payment into court . The Court of Appeal reversed this in its judgement of 6th March 2014, allowing the constitution of the limitation fund by means of a letter of guarantee - Kairos Shipping Ltd and Others v Enka & Co LLC and Others [2014] 1 Lloyd's Rep. 586.
Governing Law Article 14 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 connexion therewith, shall be governed by the law of the State Party in which the fund is constituted.
Scope of Application 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. [ ]
Scope of Application Article 15 1. [ ] 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.
Declaration by Switzerland to the LLMC Convention "In accordance with article 15, paragraph 2, of the Convention on Limitation of Liability for Maritime Claims, 1976, we have the honour to inform you that Switzerland has availed itself of the option provided in paragraph 2(a) of the above- mentioned article. Since the entry into force of article 44a of the Maritime Navigation Order of 20 November 1956, the limitation of the liability of the owner of an inland waterways ship has been determined in Switzerland in accordance with the provisions of that article [ ]
Declaration by Malta to 1996 Protocol [ ] (b) Malta intends to make use of the option provided for in Article 15(2)(b) of the 1976 Convention as amended by the 1996 Protocol to regulate by specific provisions of national law the system of limitation of liability to be applied to ships less than 300 tons. National law in Malta will apply the provisions of the 1976 Convention as amended by the 1996 Protocol to such ships. However, for such ships, Article 6 will have effect as if Article 6(1)(a)(i) refers to 1,000,000 Units of Account and Article 6(1)(b)(i) refers to 500,000 Units of Account.
Declaration by Spain to 1996 Protocol The instrument of accession by Spain contained the following reservation: "1. In accordance with paragraph 2(b), article 15 of the Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the Protocol of 1996, the limit of liability for ships not exceeding 300 gross tonnage shall be regulated by specific provisions of the national law of the Kingdom of Spain, such that, in respect of those ships, the limit of liability, calculated in accordance with paragraph 1(a) and (b), article 6 of the Convention, shall be half of the liability limit applicable to a ship not exceeding 2,000 gross tonnage. [ ]
Scope of Application Article 15 [ ] 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 States Parties are in no way involved. [ ]
Thank You For Your Attention! Thank You For Your Attention! For further information contact: Prof. Dr. Norman A. Martinez Gutierrez IMO International Maritime Law Institute University of Malta Campus Msida, MSD 2080, Malta Email: norman.martinez@imli.org Tel: +356 2131 9343 (ext 106)
