Lloyd's Maritime and Commercial Law Quarterly
WRECK REMOVAL CLAIM UNDER THE LIMITATION CONVENTION
Thomas Leung*
The Star Centurion
Introduction
Limitation of liability has always played a pivotal role in promoting maritime commerce. It recognises the perilous nature of maritime transportation and protects shipowners from the potentially crippling financial consequences of legal disputes.1 Successive international Conventions on the subject have been concluded, in 1924, 1957 and 1976. Under these Conventions, shipowners are prima facie able to limit their liability, subject to limited exceptions and/or reservations. Unsurprisingly, the scope of the limitation has been hotly disputed.
Perusahaan Perseroan v Trevaskis (The Star Centurion)2, decided recently by the Hong Kong Court of Final Appeal (“HKCFA”) concerns shipowners’ ability to limit their liability against wreck removal expenses under the Convention on Limitation of Liability for Maritime Claims 1976 (“LLMC 1976”), which has 55 contracting states.3 LLMC 1976, Art.2(1) provides, inter alia, that:
“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;
…
(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 …”
Article 18(1) states that a contracting state can “reserve the right to exclude the application of Art.2, para.1(d) and 1(e). No other reservations shall be admissible to the substantive provisions of this Convention”.
Difficulties arise regarding the scope of Art.2(1) if a contracting state by reservation disapplies Art.2(1)(d): is a claim for wreck removal expenses brought by private parties (usually owners of the shipwreck after being compelled by the harbour authorities to remove the wreck or pay for the same), as opposed to that directly brought by harbour authorities, limitable? The Supreme Court of the Netherlands in Scheepvaartbedrijf MS Amasus BV v ELG Haniel Trading GmbH (“Amasus”)4 answered the question in the negative.
* Solicitor (England & Wales and Hong Kong). I would like to thank the anonymous referee for comments on an earlier draft. The usual caveat applies.
1. British Columbia Telephone Co v Marpole Towing Ltd [1971] SCR 321, 338 (Ritchie J).
2. [2023] HKCFA 20 (“Star Centurion CFA”): affg [2021] HKCFI 396; [2021] 2 HKLRD 4 (“Star Centurion CFI”) and [2022] HKCA 1089; [2022] 4 HKLRD 37 (“Star Centurion CA”).
3. International Maritime Organization, Status of IMO Treaties (published 5 September 2023) https://wwwcdn.imo.org/localresources/en/About/Conventions/StatusOfConventions/Status%202023.pdf (“Status of IMO Treaties”). There are 55 contracting states for the Convention on Limitation of Liability for Maritime Claims 1976 (“LLMC 1976”). The Protocol of 1996 amended LLMC 1976 (“LLMC PROT 1996”) and has 63 contracting states. The present case concerns wreck removal issue and does not involve the articles amended by the LLMC PROT 1996. For the position of Hong Kong, see infra, fn.6.
4. ECLI:NL:HR:2018:140, Netherlands Supreme Court, 2 February 2018, at https://uitspraken.rechtspraak.nl/#!/details?id=ECLI:NL:HR:2018:140. For an English summary, see Centre of Maritime Law, Faculty of Law, National University of Singapore at https://cmlcmidatabase.org/scheepvaartbedrijf-ms-amasus-bv-v-elg-haniel-trading-gmbh.
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