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Lloyd's Maritime and Commercial Law Quarterly

MARITIME CLAIMS LIMITATION AND TOWAGE

The Janus

BIMCO towage and limitation

The Baltic and International Maritime Council (BIMCO) Towhire and Towcon contracts are two of the several forms of commonly used international standard arrangements by which tow owners arrange towage. They contain provisions which govern responsibility for damage to third parties in their common Art. 18. Instead of operating on familiar civil law bases, liability is allocated between the towage parties according to whether the damage occurred through the action of tug or tow, whosoever’s fault it might have been: a system sometimes called knock-for-knock. Integrating such a system with the limitation of maritime liability regime by reference to tonnage has presented difficulties. The problem has been addressed by recent authority but the solution adopted may not be ideal.
The BIMCO contract for Towhire provides by Art. 18 (which is subtitled “Liabilities” ):
2. (a) The following shall be for the sole account of the Tugowner…whether or not the same is due to breach of contract, negligence or any other fault on the part of the Hirer, his servants or agents: (i) Loss or damage of whatsoever nature, howsoever caused to or sustained by the Tug or any property on board the Tug. (ii) Loss or damage of whatsoever nature caused to or suffered by third parties by reason of the contact with the Tug or obstruction created by the presence of the Tug…(b) The following shall be for the sole account of the Hirer without any recourse to the Tugowner, his servants or agents, whether or not the same is due to breach of contract, negligence or any fault on the part of the Tugowner, his servants or agents: (i) Loss or damage of whatever nature, howsoever caused to or sustained by the Tow. (ii) Loss or damage of whatsoever nature caused to or sustained by third parties or their property by reason of contact with the Tow or obstruction caused by the presence of the Tow. (iii) Loss or damage of whatsoever nature suffered by the Hirer or by third parties in consequence of the loss or damage referred to in (i) and (ii) above…
The Towcon contract follows Towhire terms very closely but under Towcon towage is for an ascertainable specified task or voyage rather than on Towhire’s daily basis and Towcon provides for payment in a lump sum. Towcon Art. 18 replicates the Towhire provision.
Under a BIMCO agreement then, liability to a third party is capable of being transferred by a process of imputation to the owners of the tug from its usual legal location with a master who has made a mistake. This abrogation of the usual principles of contractual and negligent liability might seem unattractive but the BIMCO arrangement has great advantages in its predictability and clarity of outcome. Towage entails two parties, vessels which are often in separate ownership and sometimes two sets of crews serving different masters. In such a context the subtle system of metropolitan liability would make for complicated and drawn out evidential disputes. Within itself BIMCO is a tried and tested solution where outcomes are simple. Nevertheless a problem arises in fitting BIMCO’s unusual terms into the larger scheme.
A sea lane will contain vessels and cargoes of very varied worth. Some of the risks that may arise through liabilities to third parties can be out of proportion to the resources of some of those who participate in maritime venture. Thus it is a long established feature of
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