-GOVERNMENTAL MARITIME .... '1 ... uLTATlVE ORGANIZATION

r~ATIONAL CONFERENCE ON LINITll.TION OF LI1J3ILITY FOR NI.IRITIME CLAIMS, 1976 /.galldn i teo 6 IMCO

LEG/COln;'.5/6/Add.l 28 Ootober 1976

Oriainalz ENGLISH

CONSIDEnATION OF DRAFT J}T~~ATIONAL CONVENTION ON LIMITATION OF l.I.iillILITY FOR MARITIME CLAD/iS

(0) .QB,oGrvat1ons and ProP.2fla.le by International Oraaniznt1ons on the draft Artioles

Sinoe the prepaxation of d.oo\ll1lent LEG/CONF. 5/6 the Seoretariat has received from the Baltio and International Meritine Conferenoe (BIMCO)

the observations and proposals attaohed hereto.

For ,..10111 of lConomv. thl, document I, printed In • limitad numll<tr. Delegates ar. klndlv eskad to bring thalr copl. to mlltlngs and not to rlIqullt additional copies.

LEG/CONF.5/6/Add.l

THE BALTIC AND INTERNATIONAL MARITIME CONFERENCE

Comment8 on the draft Intel'Ylatiorzal Con/JeHt~~OYl on

Limi tation 0 f Liabi Zi til f.01' MaM: time CZahns

The Balt; c and International Mar; time Conference ("BIt4CO"), whose

activities are world wide with members in 87 countries, endorses the views

expressed by the International Chamber of Shipping in pages 4 to 9 of

LEG/CONF.5/6 and in addition submits the following comments on the draft Convention.

Article 1

Paragraph 6 of this Article does not make clear what the position of an insurer will be when the assured has been in breach of Art; cle 4,

and a di rect recourse action is brought against the insurer. In this

situation, the insurer should still be entitled to limit his 1iability .. a principle recogn i . by Article VII (8) of the International Convention

on Civil Liability for Oil Pollution Damage, 1969. It is important

that insurers should not be exposed to unlimited liability in the event

of an assured being in breach of Article 4. and 50 paragraph 6 should be

reworded along the following lines: "An insurer' of /·':o.bilIt;,Ij foY' nluimn

:; ub,jec:t to limi tation in aocordarwe with the ¥'ule<l of th iF. CiJl1/Jrm t /:01'1

:~Izcll be ent'itZed to the benefits e2"anted to the ClsDw'ed b!J this Con­

))entlon, i2"'f'espeative of the aS8ured himself belne denled the 2"iaht to

Il'>I1:t by AY'tiate 4 of t:his Convention."

Article 2

The phrase "in dlY'ect oonnexioH with the opoY'atiol1 oj' the sMp" in ['Jaragraph l(a) is unclear in scope: suppose~ for instance, that ship A

sinks, and later ship B strikes the wreck - would ship Bls claim against

ship A be subject to limitation? The problem is that after ship A has

sunk, the "opemt1:on P of it could be said to have ceased. It is also

to be noted that paragraph l(d) might not cover such a claim and that it is covered by Article l~ paragraph 3, of the 1957 Limitation Convention.

- :5 - Im/C01:rF. 5/6/ Add.1

A phrase is needed to more clearly indicate that damage suffered outside

the shi p, and caused 'iJy the shi p. is covered. Perhaps the relevant

phrase caul d be amended to read "o(!(!ur'Y'ing on t'oaY'd OY' 1.:n diY'G{)t

(!omleotion wi th the opeY'at'ion 9!2 d-i.sppsUion of' the ship".

Article 3

It was clearly the intention of the Legal Committee that the

right to l"imit liability should apply to all claims for pollution damage

other than those covered by the 1969 Internati onal Convention on Ci vil

Liability for Oil Pollution Damage (the "CLC") but this may well not be

the case havi ng regard to the phrase in raragraph (b) " ..• Or' to nationaL

l.egislation gi?!ing effe(!t to that Convrmtion". In some States legis-

lation "giving effeot" to the CLC goes beyond the provisions of that

Convention. One example is Section 15 of the U.K. Merchant Shipping (Oil Pollution) Act 1971, which Iflakes an owner liable for the cost of

preventive measures where, for inst.ance. non-persistent oil has been

spilled. Is a claim pursuant to such a section to be unlimitable

because it is subject to a provision of national legis'/ation giving

effect to the CLC? It is quite clear that the Merchant Shipping (Oil

Pollution) Act 1971 is "legislatio'rl giving effect to" the CLC and that

Section 15 is a provision of it. The present wording could, therefore,

lead to unnecessary litigation in some jurisdiction5. The difficulty would be overcome and the required result achieved by substituting the

present phrase by: "0Y' to national. legislation onl.y in 80 faY' as it giveR

effect to that Convent~:onll.

Art~ cle 4

BIMCO be 1 ieves that the Convent; on wi 11 not serve a useful pur­

pose unless the right to limit "liability is made virtually unbreakable.

BIMCO therefore endorses the proposal that the words in square brackets

should be deleted. The conc~pt, which would be contained in Article 4

if this proposal were adopted, would then be in accord with modern

developments in international mal~itime and aviation law.

LEG/CON)'. 5/6/ Add.1 - 4 -

Article 6

SIMCO believes that the most economic way of achieving a fair limitation system would be to adopt the alternative text and accordingly recommends its dcceptance.

Salvors' liabi1it~,: BIMCO suggests that it is reasonable that there should be a limit to salvors' liability when not operating from a ship, not significantly greater than the limit wh'ich would apply

when the salvor is operating from a ship. Before undertaking salvage

operations a salvor must know the limit of his potential liability and

it is in the interests of all that salvvrs should be encouraged to take prompt action, since this could well avert what otherwise might be a major catastrophe.

There seems no basis in justice for th~ proposed sub-paragraph (c)

to paragraph 2 of the basic text under which Contracting States may in

their national legislation give priority to claims for damage to harbour works. etc. and wreck removal over other property claims. It is sub-mitted that this proposal should be t"ejected.

SIMCO concurs with the view that the minimum tonnage should remain at 300 tor,s.

Article 8

BIMCO endorses the view that Special Dt-awing Rights should be adopted as the sole unit of account. If States are given the option of employing

a different unit, this would detract from the adoption of SDRs and so would weaken the essenti al uni form 1 aw asrect of the Convent; on.

Arti cle 10

The establishment of a limitation fund can be viewed as essentially a procedural issue and 50 apt for regulation by national laws. However,

in the interests of reducing the administrative costs of the Convention,

it is recolTl11ended that the option of States to make the constitution of a fund a prerequisite to limitation should be deleted.

- 5 - LlIlG/OONF.5/6/Add..l

Arti c1e 1,

SIMCO respectfully agrees with Articles 11A and 12 as proposed

by the Australian Government (see pages 25 to 29, LEG/CONF.5/4). but it should be made clear that a judgment ranking for distribution in accordance with these proposals is a "claim against the fund" within

the meaning of Article 13(1).

In any event Article 12. paragraph 2, of the draft Convention

(Article 12, paragraph 4 of the Australian proposal) would be more appropriately worded if the phrase "a aZaim against the fW1d" were

deleted in favour of "a cZaim subject to limitation".

Arti cle 13 --SIMCO fully supports the recommendations made by ICS in connection

with paragraphs 1 and 2 of this Article.

Art; ele 15

If paragraph 2 is to be adopted the reference in sub-paragraph (a)

to "inland wateruays" will require clarifh:ation. For example are the

Great Lakes and the St. Lawrence Ri ver "inZand watet"IJays".