001C Admiralty Law Sg2021

Master of Laws (LLM)
Postgraduate Diploma in Laws

Postgraduate Certificate in Laws
Admiralty law
Module C: Safety
regulations in
navigation, liabilities
and limitation of liability
Revised edition, 2021

A. Mandaraka-Sheppard
M. Tsimplis
LWM01C
This Study Guide was prepared for the University of London by:
̆ Dr Aleka Mandaraka-Sheppard (LLB, LLM, PhD, Dip.IArb), formerly Head of the

Shipping Law Unit, University College London – Founder and Chairman of the
London Shipping Law Centre.
̆ Professor Mikis Tsimplis (BSc, LLM, PhD) Professor of Law, City University of Hong
Kong.
This is one of a series of Study Guides published by the University. We regret that
owing to pressure of work the authors are unable to enter into any correspondence
relating to, or arising from, the Guide.
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Contents
Contents
Chapter 1: Introduction..........................................................................................1
1.1 Admiralty law...........................................................................................................1
1.2 Course aims and outcomes................................................................................. 2
1.3 Introduction to Module C..................................................................................... 2
1.4 How to use this Study Guide ............................................................................. 3
1.5 Preparation for the course................................................................................... 5
1.6 Allocating your time.............................................................................................6
1.7 The examination.................................................................................................... 7
Chapter 2: Seamanship and the Collision Regulations (COLREGS)................ 11
Introduction...................................................................................................................11
2.1 The COLREGS.......................................................................................................... 12
Chapter 3: Criminal liability for navigational incidents ............................... 17
Introduction...................................................................................................................17
3.1 Breach of the COLREGS........................................................................................17
3.2 Statutory offences under the Merchant Shipping Act 1995................... 18
3.3 Involuntary manslaughter for breach of duty of care............................. 18
Chapter 4: Civil liability for collision damage.................................................. 21
Introduction.................................................................................................................. 21
4.1 Who may be liable? Standard of care and burden of proof.................... 21
4.2 Causation ..............................................................................................................24
4.3 Claims for personal injury or loss of life and claims for damage to or
loss of property............................................................................................................26
4.4 Collision with an innocent third ship or with a non-ship .................... 27
4.5 Remoteness of damages and mitigation of loss........................................28
4.6 Assessment of the quantum of damages.....................................................31
Chapter 5: Limitation of liability........................................................................35
Introduction.................................................................................................................. 35
5.1 Scope of the 1976 London Convention on Limitation of Liability for
Maritime Claims..........................................................................................................36
5.2 Who is entitled to limit liability?...................................................................36
5.3 Claims subject to limitation of liability .......................................................38
5.4 Claims excluded from limitation of liability ............................................ 40
5.5 Conduct barring limitation of liability......................................................... 41
5.6 Right to a limitation decree and the establishment of a limitation
fund................................................................................................................................ 44
5.7 Forum shopping for limitation rights.......................................................... 46
i
Admiralty law: Module C
Notes
ii
Chapter 1: Introduction
1.1 Admiralty law

Admiralty law belongs to the category of private law and, as such, it
regulates the rights and duties of people whose object of trade is a
ship. Although the subject comprises areas of the law which regulate
conduct of seamen at sea while navigating or assisting other ships
in need, the subject encompasses many more other areas of the law
(as you will find out by studying this subject). However, it does not
include the law relating to the carriage of goods by sea, international
trade law and marine insurance. These are complementary subjects
and are covered by separate courses in the University of London series.
Admiralty law is the core subject of shipping law (or maritime law, in a
sense), which means that you will comprehend shipping law better by
studying this subject.
In particular, when studying this subject you will learn about the
following areas of law in each of the four Study Guides:
• Module A: Admiralty jurisdiction; claims in rem and in personam;
maritime liens; ship arrest ship arrest as security for civil liability
claims.
• Module B: ownership and management of ships and the liabilities
that might be involved; intimately related areas to this are the laws
relating to the sale and purchase of second-hand ships as well as to
shipbuilding.
• Module C: the law of liabilities arising from negligence at sea and
limitation of liability.
• Module D: the law relating to assistance given at sea and in ports.
Admiralty law has developed from sources common to many maritime
nations and, as such, it is useful to many international lawyers (and
even to non-lawyers) who wish to know about the areas covered by the
subject. Through the ratification of international conventions by most
maritime nations, the internal municipal laws of different countries
show greater similarity to one another. Its substance is, therefore, of
direct interest to nationals of many maritime nations (even though the
law to be studied is common law and has been developed over the
years by the English courts). Thus, many of the principles you will learn
are applied by non-English courts as well.
1.1.1 Study sequence

The Study Guide for each of the four modules is self-contained
(Modules A–D); for example, you can learn about admiralty jurisdiction
without knowledge of the other modules. However, you will need
to understand some concepts which are unique to admiralty law by
looking them up in the textbook.
It is advisable that the study of the subject of admiralty law is
approached in the order of presentation (A to D) and Module C must
be attempted before Module D.
1
1.2 Course aims and outcomes

Aims of the course
The primary aims of this course are to enable you to:
• learn the legal principles related to admiralty law
• acquire a deeper understanding of difficult legal concepts
• widen your knowledge of maritime law and commercial reality
• develop lateral thinking.
These skills will be essential for both the final examination and future work
opportunities.
Course learning outcomes

By the end of this course you should be able to:
• interpret maritime statutes, conventions and contractual terms in specialised
maritime contracts
• explain the legal principles and concepts derived from court decisions and
international conventions
• critically analyse admiralty law
• apply legal principles and statutory provisions to practical situations
• distinguish between the principles applicable to different sets of
circumstances.
1.3 Introduction to Module C

In this module you will learn about the standards applicable to the
navigation of ships and the liabilities arising out of collisions. While
the duty of care between ships is largely that imposed by the law
of negligence, there are important particularities that need to be
addressed:
• The standard of care for the navigation of a ship is enshrined in
the good seamanship standard, which in turn involves appropriate
compliance with the Collision Regulations.
• The International Collision Convention 1910, as enacted in the
Merchant Shipping Act 1995, introduces rules for apportionment of
liability as well as time bars which are specific for collisions.
• The procedural aspects for a collision claim are distinct and involve
early statements made by the parties involved.
• As discussed in Module A of the course, jurisdiction in personam is
restricted by the Collision (Jurisdiction) Convention 1952 which is
enacted under s.22 of the Senior Courts Act 1981.
• Limitation of liability of shipowners and others for maritime claims
may constrain recovery for collision claimants as well as other
claimants.
A significant part of this module concerns the International Regulations
for Preventing Collision at Sea (COLREGS) as amended. The COLREGS
cover all vessels upon the high seas and other navigable waters.
2
Learning objectives for Module C

By the end of this module and having completed the relevant readings, you
should be able to discuss:
• complex issues of collisions between ships
• how liabilities are dealt with by statute
• how such liabilities can be limited by international conventions.
Learning outcomes for Module C

By the end of this module, and having completed the Essential readings and
activities, you should be able to discuss:
• liability principles for collisions at sea
• the role of the Collision Regulations in establishing the standard of care for
navigation
• the criminal liabilities that may arise from breach of the Collision Regulations
and statutory duties
• the civil liabilities in relation to damage to property, or personal injury, or loss
of life, and apportionment of damages
• the principles of limitation of liability and when the right to limit can be lost.
1.4 How to use this Study Guide

This Study Guide acts as a focal point for the study of Admiralty law on
the Postgraduate Laws programme. It is designed to guide you through
the various important elements of the subject and, in particular,
the difficult areas which you need to master for the examination. In
addition to giving guidance on the sources in which you will find the
information required for your gradual learning, you are also given
learning outcomes and activities for each chapter, which you must
complete before you move to the next area of study. Some feedback
and advice as to how to approach your answers are also given.
It is impossible in this Study Guide to deal with all the areas in which
you need to expand your knowledge. The Guide simply draws up the
boundaries of the course, and it is recommended that you search for
more reading. The Guide includes suggestions about Essential reading
as well as Useful further reading in each of the chapters.
Without lectures or seminars to attend, you are in charge of your time
allocated to your study and, therefore, it must be used sensibly and
constructively.
This course requires a systematic and methodical approach not only
because of the difficulty of the subject but also because you will not
have lectures, tutorials or group pressure from other students that you
would have were you to complete the course internally. Those of you
from civil law jurisdictions, or non-lawyers, will require even more time
to devote to the subject because of the different way of learning a
common law subject. The role of case-law in common law jurisdictions
cannot be understated, not only for learning and understanding the
law, but also for your success in the course.
3
1.4.1 Case-law and statutes

The exam assesses the module outcomes. This is done in through
essay questions, which ask you to write an essay critically analysing or
explaining a legal principle or development, and problem questions,
normally drawn from real factual situations of previous court cases
with, perhaps, some additional points not necessarily fully discussed
in court. In order to answer both types of questions you need to be
aware of court decisions and their rationale. It is therefore strongly
recommended that you read the suggested case-law as well as the
case-law cited in the readings. This will enable you to:
• acquire the ability to make the legal argument in support of your
case
• understand the limitations of each court decision
• develop a critical view as to the correctness of the majority, and any
dissenting, judgments forming the decisions
• learn the importance of the commercial reality surrounding a
particular case.
To be able to remember the cases (of which there are many), it is
advisable that you devise a method that is suitable for you. The human
memory is enhanced if the principles of cases are noted in clear and
succinct notes, either by using a card system or another clear form of
note taking. Mind maps have a more long-term effect on learning than
a linear method of note taking. This method is described in a book by
Tony Buzan: The Mind Map Book (BBC Worldwide Publishing, 2009).
In addition to case-law the other main legal sources for studying
admiralty law are the statutory provisions of the Merchant Shipping Act
1995, as well as other statutory instruments and legislative acts and the
international maritime and other conventions. These, together with the
case-law, are synthesised in a coherent discussion of admiralty law in the
Study Guide and, more comprehensively, in the textbook (see below).
Admiralty law evolves continuously. It is good practice to learn how
to keep yourself updated by searching for new leading authorities,
statutory instruments and international conventions. The Online
Library subscribes to several databases including LexisLibrary, Westlaw
and Lloyds Law Reports: https://onlinelibrary.london.ac.uk/
In view of the strict time limit during the examination, you will be
required to remember important decisions and statutes.
1.4.2 Reading
This Study Guide is based on the set textbook:
• Modern maritime law: Volumes 1 and 2 by Aleka Mandaraka-Sheppard.
This is a comprehensive text, which has been chosen by the University
for your study and is supplemented by additional references provided
in this Guide. Throughout this course, the textbook will be referred to
as ‘Sheppard’. It is available via VLeBooks in the Online Library.
References to other important books and materials are also made
in the Useful further reading. You should expand your knowledge
by referring to these other sources as well, particularly if they are
emphasised in the text.
4
Essential reading
Primary textbook
• Mandaraka-Sheppard, A. Modern maritime law (Volumes 1 and 2). (Abingdon:
Informa Law, 2014) 3rd edition [ISBN 9780415843201] Vol.2, Chapter 9.
• Module A refers to Volume 1: Jurisdiction and risks and Modules B, C and D refer
to Volume 2: Managing risks and liabilities.
Useful further reading
• Gault, S. et al Marsden and Gault on collisions at sea. (London: Sweet & Maxwell,
2016) 14th edition [ISBN 9780414045750].
• Tsimplis, M. ‘The liabilities of the vessel’ in Baatz, Y. (ed.) Maritime law. (Informa
Law from Routledge, 2020) 5th edition [ISBN 9780367496708].
1.5 Preparation for the course

Bear in mind that the reading required for any postgraduate course
is remarkable and for this subject, in particular, you are required to
study a number of important decisions. But you are guided on how to
proceed and which sources to pay more attention to than others.
It is therefore extremely important to at least complete all the Essential
reading. The suggested materials, including the Useful further reading,
help you to complete the picture: this will all become clear to you at
the end. The required study is extensive and you will not be able to do
all your reading at the last minute. Studying gradually, while making
clear notes, will enable you to obtain a better understanding of this
exciting and difficult subject.
1.5.1 Self-assessment questions

Self-assessment can tell you how well you understand the topic
of study. For self-assessment to be effective, however, you need to
understand the assessment criteria.
In addition to the learning objectives and outcomes for each module,
Admiralty law has some overarching aims for the whole course
(see 1.2).
There are also specific learning objectives and outcomes for each
module, to help with your self-assessment (see 1.3).
The self-assessment questions – like the examination questions –
always cover several learning objectives and are assessed against the
general and specific learning outcomes.
Example (from Module A): ‘Explain the priority of claims for actions in rem.’
This question requires an explanation of where an action in rem can be
initiated.
• This engages with the objective ‘the enforcement procedures
available under the Admiralty jurisdiction of the High Court’.
• It also requires an understanding of ‘the concept of maritime liens,
their significance in enforcing the claim which gives rise to a maritime
lien and conflict of laws’ in order to explain why these have priority.
• It further covers ‘the procedure of arrest and release of the ship
from arrest and the consequences for the shipowner, the claimant
and any third party’ in order to explain how/when the priority
issues arise and who decides them. 5
• And of course it also covers ‘the order of priorities in the payment of

claims by the court’, which refers to the case-law and its rationale.
The question also reflects the two course learning outcomes:
• ‘explain the legal principles and concepts derived from court
decisions and international conventions’
• ‘distinguish between the principles applicable to different sets of
circumstances’
and to a lesser extent covers:
• ‘critically analyse admiralty law’ and
• ‘apply legal principles and statutory provisions to practical situations’.
Of course, self-assessment is also concerned with how well each
outcome is met and – for those outcomes and skills that reflect
synthetic and critical ability – how well the various learning outcomes
are integrated. In other words, when you use self-assessment you not
only have to ask ‘Have I done a particular task?’, but also ‘How well have
I done the particular task?’
Stating the law correctly and accurately is, for example, one level,
providing the correct source (whether it is a case or a statute), is a
second, and being able to critically analyse the law is a third level.
Self-assessment will help you to identify areas where your performance
is good and where it is less good. This will enable you to improve in
those areas where you fall below your own standards. By comparing
your legal statements with those made in the Essential and Useful
further reading you will be able to identify where your expression and
writing technique is not precise enough or where you have simply
made a mistake.
So the self-assessment questions are learning tools to improve your
awareness of what you know and how well you know it. You do not
need to treat them as sample examination questions or complete them
within the time normally allowed in the examination. They are simply
another stage of preparation which you must start after you complete
the work in each module. When you have completed a task, you might
like to upload your answers to the Student Café on the VLE and seek
comments from your peers. Peer evaluation is an excellent method of
assessment.
1.6 Allocating your time

It is impossible to say how much time you should set aside for studying
Admiralty law because each student has individual learning rates
depending on personal circumstances, fluency in English and any prior
study of law.
However, as a full-time Postgraduate Laws student you are expected
to spend approximately 120 hours studying and preparing for the
examination for each module of this course. It is advisable to set aside
a specific amount of time each week to study each module, increasing
the amount of time dedicated to studying in the six weeks before the
examination. Some topics of the syllabus will require considerably more
time than others.
6
1.7 The examination

Important: The information and advice given in the following
section is based on the examination structure used at the time this
Study Guide was written. However, the University can alter the
format, style or requirements of an examination paper without
notice. Because of this, we strongly advise you to check the
instructions on the paper you actually sit.
The course outcomes for each module will be assessed by an unseen
written examination of 45 minutes’ length, with reading time. To the
extent that there are any prerequisites for this module, knowledge
of the materials covered in those prerequisites may be necessary to
answer the questions on the examination of this module.
1.7.1 How to approach the examination questions

The overarching course aims (see 1.2) and the specific learning
objectives and outcomes for each module (see 1.3) encompass both
declarative and functional knowledge:
• Declarative knowledge in our context is what you know about the
relevant area of admiralty law (including the source and how to
reference it).
• Functional knowledge concerns the things you can do with
it. These could be a synthesis, a comparison, a critique or an
application of the law to specific facts.
Examination questions are generally in two forms:
• An essay question could ask you to synthesise, compare, criticise or
agree/disagree with a statement (in many cases quite a provocative
or exaggerated one).
• A problem question could ask you to apply the law to a number of
facts and, unavoidably, synthesise the outcomes into some sort of
advice or analysis.
Both types of questions therefore test the same knowledge. In both
cases declarative knowledge must be demonstrated and supported.
Functional knowledge is also tested by both methods, although in
slightly different ways.
• Essay questions emphasise the ability to correctly identify the
issue raised by the question, describe the arguments and counter
arguments, synthesise the declarative knowledge so that it answers
the question asked and so demonstrates your relevant knowledge.
• In problem questions the important first step is to identify the
issues raised by the facts given. Then you need to demonstrate your
knowledge of the law relevant to the facts and synthesise them so
as to give the potential outcomes of such a case.
Some further guidance is given below on each type of examination
question.
Remember that a good structure, an accurate description of the law
and its limitations with appropriate references is needed in both cases
– as well as appropriate reasoning.
7
Therefore, a poor answer to a question on salvage, for example, would

generally describe the law of salvage instead of focusing on the
question or the facts of the problem. And even with a good structure,
an answer will be poor if it does not state the law correctly. Only good
legal knowledge combined with good functional knowledge will result
in a good answer. That is why it is essential that you not only learn
admiralty law but also develop the required functional skills through
the various activities and self-assessment questions. You should also
practise answering past examination questions, initially without time
constraints and then with the actual examination time limit.
Remember that you are studying for a Masters degree and this requires
more extensive and in-depth declarative knowledge than undergraduate
courses, and significantly improved functional knowledge. This can only
be acquired by broader reading, accurate analysis of the law and the
development of critical and synthesising skills.
A final and very important point: time in the examination is limited.
Every minute you spend adding irrelevant information is a minute
wasted, when you could have been doing something to gain marks.
So make sure that you are selective in what information you use when
answering an examination question.
Essay questions
Structure
Properly structuring an answer to an essay question will facilitate your
writing, and ensure that it is logical and that the conclusions follow a
logical flow. In general there should be at least three sections:
• First, an Introduction, identifying the limits of the answer and
perhaps the policy or commercial reasons why it is important.
• Second, the main part of the essay identifying and discussing
the arguments for and against, demonstrating the declarative
knowledge (i.e. what the law is, what the source is: statute/case),
what are the problems/unclear issues/unsatisfactory aspects.
Here you should also develop your arguments based on what you
know. Arguments do not need to be one sided: an accurate and
dispassionate analysis is much better than a one-sided analysis. This
section can have more than one sub-section discussing specific
arguments for dealing with partial issues that affect the main part
of the discussion.
• Finally, a concluding section where a clear answer to the question is
given on the basis of the arguments made earlier. Where there are
competing arguments, explain here why you prefer one to another,
and how these affect your answer.
Content
• Demonstrate a good understanding of the topic. You should not
only make accurate statements on the law but also discuss only the
relevant aspects of the law, instead of a general exposition.
• Reference the right legal sources and materials. The primary
textbook is very comprehensive so you are not expected to refer,
in a written examination, to all the case-law. However, reference to
the basic sources are needed to get a pass mark, and discussion of
8
further sources – including material from the Useful further reading

– will get higher marks (always remembering that this is only part
of the tested learning outcomes).
• Be able to analyse and/or synthesise the law. This must be based on
decided case-law and/or statute, whichever is appropriate.
• Give a dispassionate and rational analysis of the issues involved
by referring to the relevant legal principles or policy objectives.
Discussing only some of the arguments in order to make your
answer more persuasive is not good practice because it implies
lack of knowledge of the counter arguments. It is good practice to
examine all the arguments and counter arguments one by one and
assess them against each other.
• Always keep your discussion relevant to and focused on the
question asked. You may have read something remotely relevant
or prepared an essay on a similar – but not exactly the same –
question. Trying to fit what you have prepared or read as part of the
answer to another question will not gain you a good mark.
Problem questions
A problem question has advantages and disadvantages when
compared with an essay question. The advantage is that because
problem questions are normally based on several legal issues there is
a better chance that you will be aware of at least some of them. The
disadvantage is that identifying these issues is by itself part of the
examination – a part of functional knowledge. Missing out one or more
makes the answer incomplete, with consequently poorer marks.
Structure
An answer to a problem question can be structured in different ways:
• You can follow the temporal steps in the case. This way you can
discuss every part and identify the issues. This is a very basic
structure, and in the end you should bring all the sections together.
• Another common structure is to identify the major legal issues or
risks, discuss the facts surrounding them and come to a conclusion
on each of them. In the end you should provide a synthesis
according to the question asked (e.g. advise A or discuss).
• For liability problems perhaps the best technique is to identify
the damages, the parties that suffered them and complete your
analysis by looking practically at each of the potential claims and
counterclaims.
You can use other structures, but important elements to always include
are:
• identifying the issues
• explaining and documenting the applicable law
• discussing the facts of the question and the extent to which those
facts permit different outcomes to those in the existing case-law
• performing the task required (advise, discuss, etc.) in the conclusion.
9
Content
• Demonstrate a good understanding of the topic. You should not
only state the law accurately but also explain whether existing
case-law can be distinguished from the facts of the problem, why
and with what potential outcomes.
• Reference the right legal sources and materials. Avoid trying to
demonstrate how much of the case-law you know – use only what
is relevant.
• Show your ability to apply the law to the facts of the case – and
arrive at an outcome.
• Provide alternative analyses where the facts are inadequate. If facts
are missing, then either state what your assumption is in order to
continue your answer or – a better option leading to higher marks
if done correctly – state alternatives and their outcomes.
• Give a relevant analysis of the facts and the case-law, focused on
the problem question asked. If, for example, there are three parties
involved – A, B and C – and you are asked to advise A, do not
concern yourself with any disputes between B and C, unless these
affect A too.
10
Chapter 2: Seamanship and the Collision Regulations (COLREGS)
Chapter 2: Seamanship and the

Collision Regulations (COLREGS)
Introduction
Safety of navigation is of paramount importance. The lives of seafarers
and passengers, the marine environment and the property carried as
cargo on board the ship are all at stake where navigation is unsafe. Safe
navigation requires generally accepted and uniformly implemented
rules of conduct for ships. These developed from custom into the
Collision Regulations (COLREGS) – the International Regulations
for Preventing Collision at Sea – a code of conduct which was then
adopted by the International Maritime Organisation (IMO) as an
international convention. During this evolution the COLREGS have
been updated in order to accommodate new types of ships, new
equipment and new methods of organising navigation in busy areas.
The COLREGS play a dual role:
• They are professional standards for seafarers, breach of which can
lead to fines and penalties for the officer who violates them.
• In addition, and more importantly for this course, their breach is
linked with the establishment of civil liability for collision damage.
However, the way the COLREGS establish civil liability has been
changing with time. Before the Merchant Shipping Act 1854, liability
attached to whichever ship was at fault, or equally if both ships were
to blame. The 1854 Act changed this rule and there was no division of
loss if one ship was in breach of the COLREGS, even if the other ship
contributed to the collision by its fault.
The position was again changed under the Merchant Shipping Act
1862, which restored the equal division of loss rule and established
a deeming provision of presumption of fault if there was a breach of
the regulations. This meant that proof of breach of the regulations was
enough to establish actionable fault on the part of the defendant. The
burden of proof shifted to the defendant who had to disprove fault.
This could be done by showing that the circumstances made departure
from the rules necessary. The presumption of fault principle was
preserved in the Merchant Shipping Act 1894, s.419(4).
However, Art.4 of the Maritime Convention Act 1911 established that
a breach of the COLREGS does not give rise to a presumption of fault.
This means that, in order to establish civil liability, the claimant has to
prove that there was a culpable fault (negligence) by the defendant
which was causative of the collision damage. The Maritime Convention
Act 1911 established, by s.1, the rule of division of loss in proportion
to the degree of blame, instead of the equal division of loss as under
the old Admiralty law rule. This is the law today, which can be found in
s.187 of the Merchant Shipping Act 1995 (MSA 1995).
The COLREGS were first codified by the Brussels Collision Convention
1910. They were first adopted as an international convention by
11
the IMO in 1972 and since then have been amended several times.
It is important to keep in mind that, in addition to the changes
implemented by technological developments and new navigational
arrangements – for example, the establishment of traffic separation
schemes in busy areas – the wording of provisions also changed. As
a result, older case-law may not always reflect the legal requirements
under the rules as they stand today.
The COLREGS apply to ‘all vessels’ (Rule 1). The definition of vessel
under Rule 3 is wide and certainly includes ships, which are defined
more narrowly under s.313 of the MSA 1995.
The objective of the COLREGS is the avoidance of collisions. Thus,
departure from the COLREGS is permitted when this is essential in
order to avoid the risk of collision (Rule 2) or where local rules have
been implemented by the coastal state (Rule 1). Furthermore, the
conduct required by the ordinary practice of seamen or by the special
circumstances of a case must be observed, and the COLREGS do not
excuse such deviation from what is good seamanship.
However, agreeing with another ship over the VHF on conduct
contradictory to the collision regulations is a misuse of the
communication system. See The ‘Mount Apo’ and the ‘Hanjin Ras Laffan’
[2019] SGHC 57.
Learning outcomes
By the end of this chapter, and having completed the Essential readings and
activities, you should be able to:
• discuss the particular features of the COLREGS
• define what constituted breaches of the COLREGS in decided cases.
Essential reading
• Sheppard, Vol. 2, Chapter 9, Introduction and section 1.
2.1 The COLREGS

The COLREGS are a code of good practice endorsed by law. There are
38 Rules and four annexes. The Rules are divided in parts:
• Part A: General
• Part B: Steering and Sailing
• Part C: Lights and Shapes
• Part D: Sound and Light Signals
• Part E: Exemptions.
There is extensive case-law for the various COLREGS, some of which
are more frequently infringed than others. There are no more serious
or less serious infringements, but the courts, when they apportion
liability, do look at the degree each infringement contributed to the
collision and the damage within the factual matrix of each incident.
The COLREGS included in Part B apply in any condition of visibility.
Rule 5 of Part B requires ‘proper look-out’ by sight and hearing as well
as by all available means appropriate in the prevailing circumstances.
This is to identify any risk of collision early in order to avoid it. In The
12
Maritime Harmony [1982] 2 Lloyd’s Rep 400 such an infringement was

evident as in heavy fog there was no proper radar watch. The lack of a
proper look-out is one of the most frequently occurring contributors to
collisions (see also The Mineral Dampier [2001] 2 Lloyd’s Rep 419).
Rule 6 of Part B requires that ‘safe speed’ is observed. What is safe
speed depends on the ship and the conditions it encounters. The
COLREGS require that in determining safe speed various factors have
to be taken into account, such as visibility, traffic, night time, wind
and current direction as well as the draught in relation to the available
depth of water; plus the situational awareness obtained through a
proper look-out.
One example is The Roseline [1981] 2 Lloyd’s Rep 410, where the ship’s
speed was twice as much as required in the circumstances of dense
fog and the close proximity between the two colliding ships. However,
slow speed may by itself be unsafe speed.
Rule 7 provides how navigation officers are to determine whether a
risk of collision exists. In determining the risk of collision the following
considerations should be taken into account:
• a risk shall be deemed to exist if the compass bearing of an
approaching vessel does not appreciably change
• a risk may exist even when an appreciable bearing change is
evident when approaching a very large vessel, or approaching a
vessel at close range.
For an example of a situation of danger see The Bow Spring [2004] 1
Lloyd’s Rep 647.
Notably, Rule 7(1) states that if there is doubt whether a collision
risk exists then it must be presumed that such a risk exists. Thus, a
precautionary approach is taken and this requires that the ship must
take action even if its officers are not certain whether there is a risk of
collision.
Rule 8 of Part B outlines general principles for reacting to a risk of
collision. Such actions must be in accordance with the principle of
good seamanship. If course is altered then this must be obvious
enough to be observable by the other ship. Slowing down or even
reversing the engines is also permissible.
Rule 9 regulates the conduct of ships in narrow channels. Ships
should keep as near to the outer limit of the channel which lies on
their starboard side as is safe and practicable. For an example of
infringement see The Konigen Juliana [1975] 2 Lloyd’s Rep 111 HL.
Rule 10 regulates the conduct of vessels within traffic separation
schemes. Such schemes are designated, for example, in straits or in
the approaches of ports, and operate by declaring two lanes along
the strait. Ships are required to cross the strait following the lane that
goes in their direction of travel. Ships are discouraged from crossing
the separation scheme but when they have to do so they must cross at
right angles from the direction of flow (for an example see The Siboeva
v The Vitastar [2002] 2 Lloyd’s Rep 210).
13
The second section of Part B of the COLREGS applies to ships in sight

of each other (Rule 11). Rule 12 is about the conduct of sailing vessels
when in sight of each other.
Rule 13 deals with overtaking. This can be done on either side of the
vessel being overtaken. However, an overtaking vessel should keep out
of the way of the vessel being overtaken. For an example see The Nowy
Sacz [1976] 2 Lloyd’s Rep 682.
Rule 14 deals with a head-on situation. In such a case both vessels
should alter their course to starboard (The Argo Hope [1982] 2 Lloyd’s
Rep 559).
Rule 15 deals with a crossing situation. The vessel which has the other
on its starboard should keep out of the way and avoid crossing ahead
of the vessel (for an example see The Toni [1974] 1 Lloyd’s Rep 489).
Rule 16 provides that the action by the ‘give way’ vessel should be
to keep well clear of the other and the ‘stand on’ vessel should keep
its course and speed. However, Rule 17 of the COLREGS requires the
‘stand on’ vessel to act in order to avoid the collision if it becomes
apparent that the ‘give way’ vessel does not act according to the
requirements of the COLREGS.
Rule 18 defines which is the ‘give way’ vessel when different types
of vessel become in sight of each other. For example, a sailing vessel,
a fishing boat engaged in fishing, a vessel restricted in its ability to
manoeuvre or a vessel not under command must be avoided by a
power-driven vessel.
Rule 19 deals with restricted visibility and provides that in such a
situation all means of observation should be used and caution should
be taken. See, for example, The Ercole [1977] 1 Lloyd’s Rep 516 in which
both ships took the wrong actions. See also Owners of the ship ‘Bulk
Atlanta’ v Owners of the ship ‘Forest Pioneer’ [2007] EWHC 84 (Admlty).
Part C of the COLREGS concerns the lights (during the night) and the
shapes (during the day) that each vessel must display in order to notify
the other users of the sea of its presence and its particular situation.
Part D of the COLREGS concerns light and sound signals used for the
communication between ships.
Part E provides for exemptions in the various technical requirements.
The application of the collision regulations is not always clear cut. See
The Alexandra I and Ever Smart [2017] EWHC 453 (Admlty), [2017] 1
Lloyd’s Rep 666 where it was held that the crossing rule did not apply
when a ship navigates out of a narrow channel and another navigates
towards that channel with a view to entering it.
See also the Dream Star a case of the Singapore High Court [2017]
SGHC 220, [2017] 2 Lloyd’s Rep 538 where the operation of COLREGS 13
and 15 are discussed.
14
Activities 2.1–2.3
2.1 Explain when not following the COLREGS is permissible.
2.2 Particular difficulties arise when two, or more, of the COLREGS have to be
applied together. Read Nautical Challenge Ltd v Evergreen Marine (UK) Ltd
[2017] EWHC 453 (Admlty). How does the court verify the events leading to
the collision? How do the COLREGS interact with each other?
2.3 What is ‘safe speed’ and what is ‘good look-out’ in accordance with case-law?
Feedback is available at the end of this chapter.
2016) 14th edition [ISBN 9780414045750], Chapter 5 and specifically the
current COLREGS (para.5-058 onwards).
• Veal, R. and M. Tsimplis ‘The integration of unmanned ships into the lex
maritima’ (2017) Lloyd’s Maritime & Commercial Law Quarterly 303–35.
Self-assessment questions
1. To what types of ships and to which areas of the sea do the COLREGS apply?
2. Under which circumstances can a ship act against the COLREGS?
3. What is good seamanship and how does it relate to the COLREGS?
4. Do the COLREGS which apply when ships are in sight of each other also apply
when there is fog?
5. What should the ship that has the ‘right of way’ do according to the COLREGS?
6. Which rules were conflicting in Nautical Challenge Ltd v Evergreen Marine (UK)
Ltd [2017] EWHC 453 (Admlty) and how was the conflict resolved?
7. What are the navigational standards when new types of ships or marine craft,
e.g. autonomous or uncrewed, are developed?
8. The COLREGS concern normally two ships. When there are three ships
converging to a point, the first heading south, the second heading east and
the third heading west, how should each of them act to be compliant with
the COLREGS?
Reminder of learning outcomes
Having completed this chapter, and the Essential readings and activities, you
should be able to:
• discuss the particular features of the COLREGS
• define what constituted breaches of the COLREGS in decided cases.
15
Feedback to activities: Chapter 2

Activity 2.1
Read carefully COLREGS, Rule 1 (b, c and e) and Rule 2.
Activities 2.2 and 2.3
Self-explanatory: case law is needed to answer them.
Back
16
Chapter 3: Criminal liability for navigational incidents
Chapter 3: Criminal liability for

navigational incidents
Introduction
The COLREGS are enforced by imposing criminal liability on those who
breach them.
In addition, under English law, criminal liabilities of the crew and
officers of the shipping company can arise from the breach of statutory
offences (mainly under the Merchant Shipping Act 1995 (MSA 1995)).
Intentional acts or acts undertaken with culpable negligence could be
punishable under criminal law.
Furthermore, the Corporate Manslaughter and Corporate Homicide
Act 2007 applies if the harm resulting in death is sustained in the UK,
or within the territorial sea limits of the UK or on board a UK registered
ship (Art.28(3)). This Act provides for criminal liability for companies
and organisations.
Similar principles will apply in the courts of other jurisdictions as varied
by national law, although criminal liability for corporations is not
generally available in all legal systems.
Learning outcomes
• state the consequences of breach of statutory offences
• discuss the intricacies and difficulties involved in convicting a company for
involuntary manslaughter.
Essential reading
• Sheppard, Vol. 2, Chapter 9, section 2.
3.1 Breach of the COLREGS

A failure to comply with the COLREGS can, irrespective of whether a
collision is actually caused, be an offence under the general criminal
law or specific statutory provisions.
The Merchant Shipping (Distress Signals and Prevention of Collisions)
Regulations 1996 (SI 1996/75), enacting the COLREGS in the UK,
provide under reg.6 that:
the owner of a vessel, the master and any person for the time
being responsible for the conduct of the vessel shall each be
guilty of an offence
which is punishable by a fine or imprisonment for a maximum of two
years.
Regulation 6(2) also states that:
it shall be a defence for any person charged … to show that he took
all reasonable precautions to avoid the commission of the offence.
17
As a consequence, where the officer on watch commits a breach of

the COLREGS, the owner and the master in addition to that officer are
all liable for conviction. However, the owner and the master can avoid
liability where they can demonstrate that they have done all that they
should have in order to avoid the breach.
3.2 Statutory offences under the Merchant

Shipping Act 1995
There are various statutory offences but the most important ones for
the present purposes are the following, the details of which you will
find in the Essential reading.
• Not giving assistance to vessels after a collision or to vessels and
persons in distress is a criminal offence which applies to senior
officers of a ship (ss.92–93 of the MSA 1995).
• Breach of duties to keep proper documentation on board the ship
such as log books and charts, and report to other ships in the vicinity
and to the authorities dangers in navigation are also serious offences.
• Criminal sanctions are attached to oil pollution damage which may
result after a collision and these are dealt with under the legislation
concerning pollution damage (see s.131 of the MSA 1995 as well as
US pollution legislation and the EU directives).
• The most serious offences for both the owner and the master of a
ship are those under ss.98 and 100 of the MSA 1995. These concern
dangerously unsafe ships and unsafe operations of ships. For an
example of this see The Safe Carrier [1994] 1 Lloyd’s Rep 589 HL,
which you must now read before you do the activities below.
3.1 What does the prosecution have to prove for a conviction under s.100 of the
MSA 1995?
3.2 Whose fault must it be in the hierarchy of the company to prove the breach?
3.3 What is the difference between the offences under s.98 and s.100?
2016) 14th edition [ISBN 9780414045750] Chapter 22.
3.3 Involuntary manslaughter for breach of duty

of care
Essential reading
• Sheppard, Vol. 2, Chapter 9, sections 2.3–2.4.
Individuals can be prosecuted for involuntary manslaughter when

their actions are intentional or negligent and lead to death, in addition
to whatever consequences they may have for breaching any relevant
statutory provisions. Such prosecution succeeds if the action of the
accused satisfies the test of gross negligence and that action caused the
death.
18
Chapter 3: Criminal liability for navigational incidents
Corporations can also be criminally liable under common law. However,

in such cases the test must be satisfied by the contact of someone who
acts, in the eyes of the law, as the alter ego of the corporation. This has
been proven to be a difficult test to satisfy.
The Corporate Manslaughter and Corporate Homicide Act 2007
(CMCHA 2007) has altered this position by prescribing criminal liability
for ‘organisations’ if the way in which its activities are managed or
organised causes a person’s death and amounts to a ‘gross breach of a
relevant duty of care owed by the organisation to the deceased’. Thus,
criminal liability no longer requires an act by someone embodying the
company. It suffices that the wording of the Act is satisfied. Section
18 of the CMCHA 2007 abolishes the liability of corporations for
manslaughter at common law.
Under the Act an organisation could be held liable if it breaches a
‘relevant duty of care’ owed to the victim and this causes the death
of the victim, and, in addition, if the way in which its activities are
managed or organised by senior management is a substantial element
in the breach of the relevant duty of care.
Section 1(4)(c) of the CMCHA 2007 defines ‘senior management’ as
those persons who play a significant role in making decisions on
at least a substantial part of how the organisation’s activities are
managed/organised. This will depend on the particular organisational
structure of the company charged.
The relevant duties of care are specified in s.2 and include ‘the carrying
on by the organisation of any other activity on a commercial basis’ and
‘the use … by the organisation of any … vehicle or other thing’ (s.2(1)
(iii)). There have been successful prosecutions under this Act.
The CMCHA 2007 applies in the territorial area of the UK, including the
territorial sea and for loss of life onboard a British registered ship only.
3.4 State the principles of criminal negligence of individuals as derived from the
decision in The Adomaco [1995] 1 AC 171.
3.5 How would those principles apply to corporations?
3.6 Why could the corporation, the shipowning company of the Herald of Free
Enterprise [1989] 88 Cr App R 10, not be convicted?
3.7 How has the legislator overcome the problem arising from the non-
conviction of the corporation in the above decision?
19
1. The ship Safer Carrier left the port of Southampton destined for Liverpool.
Two hours after departure its engines stopped and it required assistance.
The investigation indicated that the breakdown of engines was caused by
the negligence of the chief engineer who was not trained properly and was
employed hastily by the shipowning company. Are the shipowner and the
master liable for prosecution under the MSA 1995?
Would your answer differ if the ship had collided due to the engine
breakdown, causing significant loss of life?
2. Why was CMCHA 2007 needed to facilitate criminal prosecution of
corporations?
3. How does CMCHA 2007 achieve its objective? What is its effect on
manslaughter in common law?

should be able to:
• state the consequences of breach of statutory offences
• discuss the intricacies and difficulties involved in convicting a company for
involuntary manslaughter.

Read how the House of Lords approached the interpretation of s.100 in The Safe
Carrier (which was s.31 at that time under the previous Act).
Back
Read Vol. 2, Chapter 4 of Sheppard to expand your knowledge on how liability can be
attributed to a corporate body.
You will appreciate that it is very difficult to establish criminal negligence on the part
of a corporation unless the directing mind to the corporation (e.g. the directors) are
themselves guilty of criminal negligence. The Coroner in Herald of Free Enterprise
[1989] 88 Cr App R 10 did not find sufficient evidence to convict the corporation of
P & O shipping company, unless the directing mind of the company could be guilty
of manslaughter. Bingham LJ, sitting at the judicial review of the case, approved the
Coroner’s ruling.
Activity 3.7
Read the CMCHA 2007 and the commentary in the relevant section of this guide.
Back
20
Chapter 4: Civil liability for collision damage
Chapter 4: Civil liability for collision

damage
Introduction
This chapter covers a very important and difficult area of the law
regarding the principles of establishing civil liability, burden of proof,
causation, apportionment of liability and measure of damage arising
from collisions between ships.
Learning outcomes
• explain the principles and concepts in relation to multiple liabilities arising
from collisions between ships, or collisions between ships and non-ships
• apply these principles to practical scenarios
• illustrate how liability is apportioned between those whose fault has been
culpable and causative of the collision
• advise claimants claiming property damage or loss and those who suffer
personal injury, or the relatives of those who lost their lives, how to proceed in
their claims against the relevant ships
• apply the principles of remoteness of damages, mitigation of loss and
measure of the quantum of damages to practical problems
• advise on how the quantum of damages arising from collisions between ships
is assessed.
Essential reading
4.1 Who may be liable? Standard of care and

burden of proof
Essential reading
When ships collide, they are normally under the command of the master
of the ship. The master is responsible for taking all precautions in order
to avoid a collision. The negligent act which causes the collision may be
that of the master or one committed by an officer or a seafarer. In such
a case the actual wrongdoer would be liable in negligence. However,
a mariner, even a master mariner, would not normally be financially
able to satisfy claims for collision damage. Vicarious liability makes the
employer of the master and the crew, whether the shipowner or demise
charterer, liable for the negligence of their employees. This way access
to the person who has the benefit of using the ship and the financial
ability to compensate claimants is established.
However, claims arising from collisions between ships or a ship and
another object can have various legal bases. Each legal basis has its
21
own threshold that has to be satisfied so that the claimant can recover
damages, differing time bars, exceptions, jurisdictional requirements
and extent and type of damages covered.
Passengers, cargo owners and seafarers claiming against the carrying
ship will have claims based in contract and, in many countries, will also
enjoy statutory protection imposing minimum liability on the carrier
and employer respectively. Claims by the same claimants against the
non-carrying ship will be based in tort, normally the tort of negligence.
Third party claims, for example, claims for pollution damage, wreck
removal and damage to docks, could be under strict liability regimes
enabling claimants to be compensated quickly.
In all cases, even where the liability is strict, indemnity claims could
then be brought against the wrongdoer in negligence, contract or
other legal basis, thus permitting partial or full recovery for the party
strictly or otherwise liable.
Following a collision, salvage and towage assistance may also be
needed and then the incurred expenditure may also be recoverable
against the party that caused the collision damage.
Collisions affect a large number of entities. Typically, shipowners and
demise charterers, as well as various time and voyage charterers, all
lose the use of the ship. Their entitlements and obligations as between
them would then be determined on the basis of their contractual
arrangements (i.e. the charterparties).
Not all of them, however, would have a right of recovery of the losses
against the other ship involved in the collision. They all certainly lose
the use of the ship temporarily or, in some cases, permanently. However,
their claim against the other ship is in negligence, but pure economic
loss is not normally recoverable under English law in collision cases.
For a claimant to establish civil liability in negligence it must prove the
facts of culpable fault giving rise to liability. A breach of the COLREGS
will be an indication of negligence, although mere breach of the
COLREGS will not be a presumption of fault. The claimant needs to
show that a duty was owed to the claimant by the defendant and that
there was a breach of such duty which caused the damage claimed. It
has long been established that the common law duty of care is owed to
other ships at sea (The Dundee [1823] 1 Hagg Ad 109) and most claims
for collision damage are based on breaches of this duty.
There is a three-stage test (Caparo Industries v Dickman [1990] 1 All ER
568 HL) that needs to be satisfied. In straightforward cases of direct
physical damage to property, death or personal injury by the act of
the defendant, the three-stage test can easily be satisfied. Such cases
include physical damage caused by a collision between two or more
ships (see The Hua Lien [1991] 1 Lloyd’s Rep 309 PC).
On the contrary, in cases where no physical damage, death or personal
injury has resulted from the breach of the duty of care but only
economic loss has been suffered, the three-stage test is more difficult
to be satisfied. The difficulty of recovery in such cases has led to the
general rule that pure economic losses are not recoverable under
English law. The few exceptions available are not relevant to collisions.
22
The burden of proof of negligence at common law and, therefore, in

collision cases, is on the claimant (read Heranger v Diamond [1939] AC
94 HL). The claimant must prove:
• breach of duty of care
• that the breach caused the collision and the damages claimed
• that the damages are not too remote.
The law accepts that in some cases the facts ‘speak for themselves’; in
other words the facts are enough to discharge this burden of proof (e.g.
in clear daylight a ship collides with another ship which is anchored
at port). This is known as res ipsa loquitor. In such cases the burden of
proof shifts to the defendant to explain how the incident happened
(read The Merchant Prince [1892] P 179 and The Kite [1933] P 154 in the
Essential reading).
The standard of care is that expected of a reasonable and careful
person being in the same position. For collisions caused by
navigational errors good seamanship provides the standard. The test
is objective. However, all servants of the shipowner and the ship’s
manager have a duty to other ships navigating the same seas, and
ought to foresee that carelessness on their part would be likely to
cause harm to others. This means that where the collision is caused by
an act of negligence in the maintenance, surveying or equipping of the
ship, or manning and supplying, liability in negligence can be attached
to the shipowner or the ship’s manager even if there is no culpable
fault in the navigation of the ship.
In collision cases a ship can be at fault even without physical contact
with another ship, for example, where the manoeuvre of a ship forces
another ship to run aground in order to avoid a collision or where
the other ship is pushed on the dock because of the waves created
by another ship which is navigated at an unsafe speed. In such cases
liability in negligence may attach (for examples see The Ore Chief [1974]
2 Lloyd’s Rep 427; The Miraflores v The Abadesa [1967] AC 826).
4.1 State the three-stage test of the duty of care in negligence cases.
4.2 Explain how and when the shipowner may become liable for the negligence
of the master and the crew.
4.3 Consider whether the shipowner would also be liable where the damage
is caused by a malicious act by the master in the navigation of the ship,
causing damage to the third party.
4.4 Discuss the circumstances in which a breach of the COLREGS by the master
of the ship can play a role in establishing the shipowner’s liability for collision
damage.
4.5 What is the rule of proving negligence in admiralty law? Is it any different
from common law? What has to be proved?
4.6 What does res ipsa loquitur mean and how does it affect the burden of proof
in collision cases?
4.7 Explain the difference between strict liability, liability in negligence and liability
in negligence with a reversed burden of proof. Give an example of each.
23
4.2 Causation
Essential reading
• Merchant Shipping Act 1995, ss.187–189. Available via Lexis in the Online Library.
Negligence on the part of a defendant must have caused the collision

and the damage claimed to be actionable.
The claimant must prove:
• breach of duty
• the breach caused the collision
• the breach caused the damage claimed.
A breach of the COLREGS which has not been causative of the collision
– or even if it has been causative of the collision, it has not caused the
damage – will not create liability for damages for the wrongdoer.
A simple example of a non-causative fault would be this: a vessel
failed to sound a fog signal to indicate its presence to the other ship; a
collision occurred; but if it is proved that its presence was known to the
other ship through the radar observation, the failure to sound the fog
signal would not be causative of the collision.
The claimant must discharge that there was culpable fault by the
defendant and that the breach caused the collision. In other words,
that the collision would not have happened but for the breach of duty.
This ‘but for’ test is useful in order to eliminate irrelevant factual causes.
(Read The Humbergate [1952] 1 Lloyd’s Rep 168 as an example.)
In collision cases in which facts become complicated by multiple
successive faults and contributing causes of the ships involved, the ‘but
for’ test will not suffice. Therefore, in these cases the test is whether or
not one or more cause(s) was the most probable cause(s).
Once this stage of factual causation is proved (known as causation in
fact), the court has to ascertain which of the relevant causes is to be
regarded in law as the cause from which the damage arose; this is the
third tier of the claimant’s burden of proof. In other words, the claimant
has to prove the cause which gave rise to the liability of the defendant
(known as causation in law). For example, a fault may have contributed
to the collision but it may not have contributed to the damage claimed.
Where there are multiple breaches of the duty of care the court will
look not only at the extent to which these contributed to the collision
but also to how much each contributed to the damage, the causative
potency of the culpable fault. (Read The Statute of Liberty [1971] 2
Lloyd’s Rep 277 HL; The Devotion II [1979] 1 Lloyd’s Rep 509. See also the
Court of Appeal decision in Nautical Challenge Ltd v Evergreen Marine
(UK) Ltd [2019] 1 Lloyd’s Rep 130.)
Therefore, the courts look at:
• what faults were committed by the relevant ships
• which of those faults contributed to the loss or damage claimed
(liability).
24
Throughout the process of determining causation (in fact and in law),

the defendant will raise their probable defences. The main defences
rely on shifting the causation of the damage away from the defendant’s
acts.
• For the defence of inevitable accident read The Marpesa (1872) LR
vol. 4 (PC) 212; The Merchant Prince [1892] P 179; and The Frosta
[1973] 2 Lloyd’s Rep 348 as examples.
• For the defence of novus actus interveniens read The City of Lincoln
(1890) 15 PD 15 and contrast with The Fritz Thyssen [1967] 2 Lloyd’s
Rep 199.
• For the defence of the ‘agony of the moment’ see, for example,
The Bywell Castle (1879) 4 PD 219. See Tian E Zuo [2018] SGHC 93,
[2018] 2 Lloyd’s Rep 297 a multiple ship collision at Singapore for a
discussion of this defence.
The aforementioned defences were developed before apportionment
of liability was adopted in collision cases or in the general English law
of negligence.
The contributory negligence defence, if successful, will result in
apportionment of loss between the guilty ships.
Apportionment between ships is founded in statute under s.187 of
the MSA 1995. Contributory negligence is to be decided on a broad
common sense approach: The Anneliese [1970] 1 Lloyd’s Rep 355; The
Miraflores v The Abadesa [1967] AC 826.
In Nordlake v Seaeagle [2015] EWHC 3605 (Admlty) the Nordlake
collided with the Indian warship Vindhyagiri following actions to avoid
a collision with the container vessel Seaeagle. The Indian state sued
the owners of the Nordlake in the Indian courts. The owners of the
Nordlake brought a claim against the owners of the Seaeagle in the
Admiralty Court in England asking for apportionment of liability, taking
into account that in addition to these three ships there were other
naval ships which were allegedly being navigated negligently and
contributed to the collision. The owner of the warships (i.e. the Indian
state), was not a party to the proceedings and any decision would not
be binding on it. The court held that s.187 requires the apportionment
of liability to take into account not only the causative fault of the ships
which were party to the action, but also any other ship, despite the fact
that those vessels were not party to the action before the court.
The apportionment of liability can be very complex. The court will look
at the nature and quality of faults rather than the number of faults on
each side; also at types of faults in terms of seriousness and the extent
to which such faults contributed to the collision or to the damage.
In other words, the court will look at blameworthiness and causative
potency of the various negligent acts in order to apportion liability
between tortfeasors.
An innocent ship which has suffered damage due to the faults of the
other ships is not covered by the wording of s.187 of the MSA 1995.
Its position is that it can claim against any of the wrongdoers, who are
liable jointly and severally, for the whole damage to the innocent ship.
The paying wrongdoer can claim contribution against the other for the
proportion of the other’s fault to the damage caused to the innocent
25
party, either at the time of apportionment of liability under s.187 of the

MSA 1995 or by bringing separate proceedings later under the Civil
Liability (Contribution) Act 1978.
Contributory negligence in cases of collision between a ship and a
non-ship is dealt with by a different statute, namely the Law Reform
(Contributory Negligence) Act 1945. Prior to that year, and unlike the
Admiralty law rule, there was no recovery at common law by a claimant
who was also at fault.
4.8 What are the elements of the burden of proof of the claimant?
4.9 What is the test of factual causation when there is one cause and how is this
test modified when there are multiple successive causes?
4.10 What does the defendant have to prove when they raise the defence of
inevitable accident?
4.11 What are the differences between the defence of ‘inevitable accident’ and
the defence of ‘agony of the moment’?
4.12 Why is it important that an innocent party to a collision does not become
negligent after the collision? (Read The Oropesa [1943] 74 LlL Rep 86 (CA) and
The Hendrick [1964] 1 Lloyd’s Rep 371.)
4.13 Was the grounding after the collision in The City of Lincoln (1890) 15 PD 15
a novus actus interveniens to the loss suffered by the claimant? Contrast the
facts in The Fritz Thyssen [1967] 2 Lloyd’s Rep 199.
4.14 When and how does the proportionate fault rule in admiralty law apply?
State its particular requirements.
4.15 What would be the effect of successive subsequent causes on the loss
suffered by the first collision? Compare The Paludina [1927] AC 16 HL with
The Calliope [1970] 1 Lloyd’s Rep 84, 96–98. Was the defence of novus actus
interveniens relevant here?
4.16 What are the options of a claimant cargo owner following a collision
between two ships?

4.3 Claims for personal injury or loss of life and

claims for damage to or loss of property
Essential reading
• Sheppard, Vol. 2, Chapter 9, sections 3.8 and 3.9.
• Merchant Shipping Act 1995, ss.188, 189, 190. Available via Lexis in the Online
Library.
The Merchant Shipping Act 1995 is the basis for claims for damage to
property and for loss of life and personal injury. Claimants for loss of
life and personal injury arising from a collision are treated differently
from property damage claimants. The major difference is that the
whole claim for loss of life and personal injury can be brought against
26
any of the negligent ships (joint and several liability), while a claim for
property damage can only be brought against a contributing ship and
only to the extent of the apportioned negligence.
Thus, in a collision where three ships have contributed by, let’s say:
• A: 40 per cent
• B: 35 per cent
• C: 25 per cent,
a claim for loss of life and personal injury can be brought against any
of A, B or C for the full amount. This facilitates the recovery for such a
claimant. Of course only one recovery of damages is possible and there
are indemnity claims between A, B and C on the basis of s.189 MSA 1995
to ensure that the end distribution of liability is that agreed or prescribed
by the court. Contribution is also available under the Civil Liability
(Contribution) Act 1978 which permits such contribution at common law.
By contrast, a claimant for property damage will have to sue all three
shipowners in order to recover its damage as it can only recover
proportionally from each of them. The proportionate fault rule of
admiralty law applies to all property claims, including cargo claims
for damage to or loss of the cargo carried on board either ship. So,
under English law, a cargo owner cannot claim 100 per cent of its claim
from one tortfeasor. It has been argued that since the cargo owner
is innocent (i.e. is not involved in any fault which contributed to the
collision), they should be able to recover from either tortfeasor 100 per
cent in the same way as any other innocent third party. For an analysis
of the issues involved in this respect and the reason why the cargo
owner is treated differently from personal injury claimants read extracts
from The Drumlanrig [1911] AC 16 HL, set out in the Essential reading.
The same rule is followed by other maritime nations which have ratified
the Brussels Collision Convention 1910, with the exception of the USA.
In the US a cargo claimant can recover 100 per cent of its damage from
any of the contributing ships. This does encourage cargo owners to
claim against the non-carrying ship as the claim against the carrying
ship may be excluded through the operation of exceptions of liability or
reduced by contractual liability. In such a case the cargo claimant avoids
the contract of carriage. The ‘Both to blame collision’ clause is inserted
in charterparties and insurance contracts to adjust the liability between
the parties involved (read more about this in Sheppard, Vol. 2, Chapter 9,
section 3.9).
4.4 Collision with an innocent third ship or with a

non-ship
When an innocent ship suffers damage due to a collision between two
or more ships the liability of the several tortfeasors will be joint and
several. Either of them can be sued for the total damage to the innocent
third party. Contribution between the joint tortfeasors will come into
play either during the trial for the apportionment of their respective
liabilities, or separately under the Civil Liability (Contribution) Act 1978,
once there is payment by the one tortfeasor to the innocent third party
claimant (The Devonshire [1912] P 21; The Cairnbahn [1914] P 25).
27
Another complication arises when a ship collides with an object which

is not by definition a ship. If that other object is not negligent the
position is similar to that of an innocent ship. However, where there has
been contributory negligence on the part of the non-ship the relevant
sections of the MSA 1995 which apportion liability (ss.187–190) do not
apply (see The Ellen M [1967] 2 Lloyd’s Rep 247; The Mearsk Colombo
[2001] 2 Lloyd’s Rep 275; The Belle Usk [1955] 2 Lloyd’s Rep 421).
In such cases the relevant statute applicable to the defence of
contributory negligence is the Law Reform (Contributory Negligence)
Act 1945. This Act does not require an individual assessment of the
faults of each party as is the case under s.187 of the MSA 1995 relating
to collisions between two or more ships at fault. The claimant’s
conduct, if they have contributed to the collision, is contrasted with the
defendant’s conduct in the liability action; for the apportionment of
liability, contributory negligence is taken into account.
Moreover, if in this situation there is an issue of liability caused to
an innocent third party, for which both tortfeasors (i.e. the ship and
the non-ship) would be jointly and severally liable, contribution to
liability paid by the one tortfeasor to the innocent third party will
be determined in the action for contribution under the Civil Liability
(Contribution) Act 1978, which may be joined with the main liability
action. Contribution criteria under the 1978 Act are based on what is
just and equitable, not on individual culpability.
4.17 If the loss of or damage to property on board a ship which collides with
another is really the loss of an innocent third party, explain why these claims
are treated differently from claims for personal injury or death caused by the
collision.
4.18 Explain the principles and the statutory basis of contribution between joint
tortfeasors for claims of damage to property and for claims of personal injury.
4.19 On the facts that a ship collided with a suspended bridge which was about
to be opened but failed, how would you advise your client shipowner for
the damage caused to the bridge, if it was found that, apart from the failure
of the ship’s steering gear, the mechanism of the bridge was also in need of
repairs and that fact contributed to the collision?

4.5 Remoteness of damages and mitigation of loss

Essential reading
• Sheppard, Vol. 2, Chapter 9, sections 3.11 and 3.12.
Once causation is established, the last element of the claimant’s

burden of proof is to show that the damage claimed was reasonably
foreseeable and thus it was not too remote.
28
Once this last part of the claimant’s burden of proof is discharged by

proving that the damages claimed were reasonably foreseeable by
the defendant, the next question will be whether or not the claimant
mitigated their loss.
The remoteness rule has been evolving over time. The leading
decision for the law before 1960 was Re Polemis [1921] 2 KB 560 CA,
which involved damage caused to the ship by the negligence of
the stevedores who had been appointed by the charterers. The test
established by this decision in determining the issue of what damages
are recoverable was that the defendant was liable for all direct and
natural consequences of their negligence even if such damages could
not reasonably have been foreseen.
In 1960, however, this issue was re-examined in The Wagon Mound
(No.1) and the Privy Council disapproved of the decision in Re Polemis.
But because the function of the Privy Council is advisory, it could
not expressly overrule the decision – only the House of Lords could
overrule its own decisions and those of lower courts. However, the
principle set by the Privy Council on the test of what damages are
recoverable has been the acceptable law ever since.
You must read both The Wagon Mound (No.1) [1961] PC 388 and The
Wagon Mound (No.2) [1967] 1 AC 617 PC, which followed, involving
different parties but the same facts which arose out of the same
incident at a ship repair wharf in Sydney Harbour. The Wagon Mound
(No.2) clarified further the issue of the remoteness of damages.
Briefly, the facts were these: while the Wagon Mound was bunkering
there was an oil spill due to the negligence of the ship’s crew. The oil
spill spread to a repair wharf where welding repairs on another ship
had been taking place. Molten metal from the welding fell and set fire
to floating cotton waste, which in turn ignited the oil that had been
spilled on the water and drifted quite a distance to the wharf. The fire
then spread to the wharf and surrounding area. The wharf owners sued
the demise charterers of the Wagon Mound claiming damages caused
to the wharf.
The central issue in The Wagon Mound (No.1) was whether or not the
extensive damage suffered by the wharf due to the spread of the fire
in the surrounding area was too remote and therefore not recoverable.
So it had to be decided whether or not the test to be applied should be
that in Re Polemis, or whether a new test should be pronounced. If the
test in Re Polemis were to be acceptable, then all the damage caused
to the wharf would be a direct consequence of the negligence of the
defendant to allow the spread of oil which caught fire on the water. If
the test was based on what was reasonably foreseeable, the defendant
would not be liable for all the damage caused to the wharf by the fire,
other than the fouling of the wharf by oil.
It was found on the evidence that the defendant could not reasonably
be expected to have known that the furnace oil was capable of being
set afire when spread on water. However, the judge in The Wagon
Mound (No.1) and the Supreme Court of New South Wales in Australia
were bound by Re Polemis, and held the defendants liable for all
the damage which was the direct consequence of their negligence,
29
although neither court approved the test of Re Polemis. Therefore, the

case was taken to the Privy Council. (Note that the Privy Council is
the highest court for cases which have been decided by courts of the
Commonwealth. Australia was one of the Commonwealth countries.)
It was decided that the test of reasonable foreseeability which
applies to determining culpability should also apply to determining
compensation.
In The Wagon Mound (No.2) the claimant was the owner of the two
ships which were undergoing repairs at the wharf and were seriously
damaged due to the fire. The defendant was the demise charterer
of the Wagon Mound, who was found in this case liable by the Privy
Council for the damage caused to the ships under repair.
More recently, a very important change in the law has been brought
in by the House of Lords in relation to the issue of whether the
impecuniosity of the claimant is a factor too remote to be taken into
account. In the old House of Lords decision, The Liesbosch [1933] AC
449 HL, the cost of hiring a dredger in place of the lost dredger (which
was lost due to the defendant’s fault) was categorised as a separate
head of damage to the cost of buying a new dredger (which the
claimant could not afford) in order to continue the contract of dredging
and prevent penalties under that contract. The cost of hiring was
considered to have been caused by a separate cause which, in this case,
was said to have been the impecuniosity of the claimant.
The Court of Appeal in The Sivand [1998] 2 Lloyd’s Rep 97, on similar
facts, distinguished The Liesbosch as it could not overrule it. This
decision has now been overruled by the House of Lords in Lagden
v O’Connor (a non-shipping case) [2004] 1 AC 1067. The principle
established by this decision is that a wrongdoer has to take their
victim as they find them and bear the consequences, if it is reasonably
foreseeable that the injured party will have to borrow money or incur
some other type of expenditure to mitigate their loss. (Another case
critical of the older law is the Privy Council decision in Alcoa Minerals of
Jamaica v Broderick [2002] 1 AC 371.)
To conclude on the issue of remoteness of damages, the claimant must
show that the kind of damage suffered was reasonably foreseeable,
and they do not have to show that the defendant should also have
foreseen the exact way in which the damage was sustained.
The rule of foreseeability runs all the way through the process of
deciding culpability, which caused the collision and the damages, as
well as in determining remoteness of damages.
With regard to the issue of mitigation of loss by the claimant, the sole
relevant criterion is the reasonableness of the steps which the claimant
took in mitigation. Provided they took reasonable steps they would
be entitled to recover their loss and the costs incurred in mitigation of
loss; questions of foreseeability are not relevant here (Hobhouse LJ in
The Sivand).
30
4.20 Explain the principle of the contemporary remoteness rule.
4.21 Was the extensive damage suffered by the wharf in The Wagon Mound
(No.1) recoverable and, if not, why? What was decided by the Privy Council?
4.22 What was the difference between The Wagon Mound (No.1) and The Wagon
Mound (No.2) on the facts?
4.23 What is the most essential factor to be taken into account in proving that
the damage is not too remote? In other words, what must be reasonably
foreseeable?
4.24 Would it matter if the extent of the damage is greater than what was
expected?
4.25 Explain the principle of mitigation of loss.
4.26 What was the principle set out by The Liesbosch and what is now established
by Lagden v O’Connor in relation to the impecuniosity of a claimant?
4.27 What was the position of the claimant in The Sivand?

4.6 Assessment of the quantum of damages

Essential reading
• Sheppard, Vol. 2, Chapter 9, section 3.12.
The general principle in theory is restitutio in integrum, which is the

right of the claimant to be put in the same position as if the loss or
injury had not been suffered (The Clarence (1850) 3 W Rob 285).
In reality, however, there can be no exact way of assessing the quantum
of damages. Values are not always precisely assessed. Profit lost must
be within anticipated margins of foreseeable loss. Moreover, recovery
can be reduced by statutory rights available to the owners of the guilty
ships who are normally entitled to limit their liability, as you will see
in the next chapter. Broadly, the claimant can recover for physical and
consequential financial loss but not for pure economic loss.
Pure economic loss is loss not flowing from loss of proprietary rights
damaged in the collision, but, for example, loss based on contractual
rights (The Mineral Transporter [1985] 2 All ER 935).
After the liability issues are determined by the court, the Registrar
determines the quantum of damages, and there are various rules about
this established by the authorities, as you will read in the Essential
reading. The Lagden case was raised as the basis for claiming extended
losses arising from the delays in the ship repair after a collision following
a refusal by the insurers to pay. However, the claim for extended
damages failed in this case on causation grounds (Nautical Challenge Ltd
v Evergreen Marine (UK) Ltd (No 2) [2019] 1 Lloyd’s Rep 543).
The assessment of the loss is estimated on the basis of the time of the
loss (The Baltic Surveyor and Timbuktu [2002] 1 Lloyd’s Rep 623).
31
The damages recoverable in collision cases are damages in negligence.

There are statutory regimes especially for pollution damage which
may affect the type of damage that can be recovered, the rules about
consequential damages and the applicable limits of liability.
4.28 State what would be recoverable in a case of a total loss of a ship due to a
collision.
4.29 How is the value of a lost ship ascertained, and what is the relevant time to
assess such value?
4.30 What damages can a claimant expect from a partial loss of their ship?
4.31 In the absence of the 1992 Civil Liability Convention, would the owners of
local shops situated in a beach resort which is polluted by a ship be able to
claim their financial loss from the guilty ship under a claim in negligence?
4.32 In the absence of the 1992 Civil Liability Convention, would fishing boats
be able to claim, from a ship which caused pollution in a fishing area, loss of
profit arising from a ban on fishing following an escape of oil from the ship
which had grounded there under a claim in negligence?
4.33 Would damage to beaches and consequential loss of revenue to the
beaches caused by pollution be recoverable? Find out the reasons why The
Braer and The Sea Empress can be distinguished (see the pollution legislation
Schedule 4, and s.170(1) of the MSA 1995).
No feedback provided.
1. Explain the requirements for establishing liability in negligence under English
law.
2. In a collision between two or more ships, what are the rights against the
negligent ships for property damage and loss claimed for
(a) damage done to an innocent ship?
(b) cargo damage on one of the guilty ships?
(c) cargo damage on an innocent ship?
(d) damage done to a buoy?
(e) damage done to docks?
Assume that all damages were caused by the collision.
3. What is the time bar applicable to collision claims? Distinguish between
claims in personam and in rem and discuss the powers the court has to extend
them.
4. Ship A is anchored in clear weather with its starboard anchor while its port
anchor is hanging just above the water. The passing Ship B’s rudder gets stuck
and as a result Ship B hits the anchor of Ship A and sinks. Discuss the liability
for collision damage.
5. Tug A tows Ship B towards the port of Liverpool under a contract of towage
which provides for payment on docking at Liverpool port. Ship C navigates
negligently and collides with Ship B which sinks, blocking the port. Discuss
the options Tug A has in recovering damages.
Also discuss the claims that can be brought by ships blocked inside the port
and ships delayed waiting outside the port.
6. Explain the roles foreseeability and remoteness of damage play in determining
the recovery of damages in collision claims.
32

should be able to:
• explain the principles and concepts in relation to multiple liabilities arising
from collisions between ships, or collisions between ships and non-ships
• apply these principles to practical scenarios
• illustrate how liability is apportioned between those whose fault has been
culpable and causative of the collision
• advise claimants claiming property damage or loss and those who suffer
personal injury, or the relatives of those who lost their lives, how to proceed in
their claims against the relevant ships
• apply the principles of remoteness of damages, mitigation of loss and
measure of the quantum of damages to practical problems
• advise on how the quantum of damages arising from collisions between ships
is assessed.
33

Activity 4.1–4.7
You will find the answers in the Essential reading and the decisions stated in the
essential reading. As regards to the second question there has been a decision on
employers’ vicarious liability for wilful default of employees, which makes the employer
liable for his employees’ deliberate wrongdoing only on proof of close connection
between the work the servant had been employed to do and the wrongdoing; but
the employer will not be liable because the guilty servant had − by reason of his
employment − the opportunity to commit wrongdoing (Frans Maas Ltd v Samsung
Electronics [2004] 2 Lloyd’s Rep 251).
Rightly so, the test seems to be tight in favour of the employer.
Back
In answering the above questions it would be useful to remind yourself that:
(i) there is no equal division of loss in admiralty law
(ii) there is no need for there to be an actual physical collision between ships for a
fault to be culpable and causative to the collision
(iii) there must be fault or faults of two or more ships for s.187 MSA 1995, and hence
the rule of apportionment of liability, to apply; if there is a fault of a ship and a
non-ship causing the collision, s.187 will not apply (in such cases the Law Reform
(Contributory Negligence) Act 1945 will apply)
(iv) for the defence of novus actus interveniens to be successful there must be a
cause which amounts to a separate and independent cause
(v) for sub-apportionment of liability in relation to loss suffered by subsequent
events or negligence after the first collision, the question would be whether or
not the effect of the first collision was continuing and causative of the second or
subsequent event which caused further damage.
Back
You have already sufficient guidance in this subsection and in the Essential reading;
read also The Bernina (1888) 13 App Cas 1 HL (being authoritative for claims of loss of
life).
Additionally, read The Ellen M (being relevant to collision of a ship with an opening
bridge); The Belle Usk (a ship struck a pier to avoid collision); Mearsk Colombo
(contributory negligence of berth master and crane owner).
Back
Apart from reading the extracts of the decisions in Wagon Mound 1 and 2 from the
Essential reading you will also find assistance in answering Activities 4.21–4.24 from
cases such as The Trecarrell [1973] 1 Lloyd’s Rep 402, The Arzew [1981] 1 Lloyd’s Rep
142 (on the kind of damage), The City of Lincoln [1890] P 15 on the extent of damage,
The Metagama [1928] 29 LlL Rep 253 HL and The Sivand on mitigation.
Back
No feedback provided.
34
Chapter 5: Limitation of liability
Introduction
Shipowners and certain others connected with the operation of a ship
enjoy the privilege of limiting their liability. Because liability is limited
and known the shipowner can deposit with an appropriate court the full
amount it may be liable for and thus be free of further liability or legal
actions and security measures against its property – such as ship arrest
– in respect of these claims. The shipowner can therefore avoid multiple
litigation and security demands in various jurisdictions and continue
trading, leaving the claimants and the court managing the limitation
fund to arrange for the distribution of the claims. Furthermore, the
shipowner can be insured to the limits of liability, thus having the
means to provide the necessary funds and continue trading.
Limitation of liability was originally developed to reduce the personal
exposure of the shipowner and protect its property in cases where the
ship’s master and crew were negligent or acted intentionally. Limitation
of liability has expanded in time to cover more persons and also to better
protect those entitled to it by making it almost an undisputable right.
Global limitation regimes are of national or international character. The
only purpose for these is the establishment of the right to limit liability
without altering the applicable substantive liability rules.
In this section we will deal with global limitation regimes. There are,
however, special liability regimes for, inter alia, oil pollution. Carriage of
goods or passengers also provide for an entitlement to limited liability
but this is coupled with liability rules which modify the ordinary legal
position. These will not be discussed here.
Three international conventions provide shipowners (and certain
others) with an almost global ability to limit. These conventions are:
• the 1924 Limitation Convention
• the International Convention relating to the Limitation of Liability
of Owners of Sea-Going Ships (Brussels 1957) (1957 Limitation
Convention)
• the Convention on Limitation of Liability for Maritime Claims
(London 1976) (1976 LLMC), together with the Protocol of 1996
amending the 1976 LLMC (1996 LLMC). The limits of liability of the
1996 LLMC have been further increased by a 2012 Protocol.
The 1976 LLMC (as amended) applies whether the claims are classified
as occurring in tort, delict, contract or on some other basis. However,
not every claim against a shipowner is subject to limitation of liability
under these conventions.
35
Learning outcomes
• explain the concept and principles of limitation of liability
• identify the claims which are subject to limitation of liability
• compare the test of breaking the limit between the different convention regimes
• apply the principles as interpreted by the courts in decided cases to practical
scenarios.
Essential reading
• Sheppard, Vol. 2, Chapter 14 sections 1 and 2.
5.1 Scope of the 1976 London Convention on

Limitation of Liability for Maritime Claims
Essential reading
• Sheppard, Vol. 2, Chapter 14, sections 1 and 2
The 1976 LLMC and its 1996 Protocol are in force in the UK. An
amendment to the 1996 Protocol was agreed on 19 April 2012 and
came into force on 8 June 2015. The UK enacted the new limits which
are, since 30 November 2016, in force in the UK. We will refer to the
amended 1976 LLMC as the 1996 LLMC.
The Protocol has not changed the substance of the Convention but has
increased the limits of liability considerably, by 250 per cent.
The Convention and the Protocol set out a mechanical formula for
limitation based on the tonnage of the vessel in relation to which
liability has arisen which is multiplied by a unit of account, known as
the Special Drawing Rights (SDR). A maximum global fund is thus set
up for all the claimants who rank equally, pari passu; in other words, no
claimant has priority to be paid but claimants for personal injury or loss
of life are given priority. The higher limits provided by the Protocol will
only apply to claims arising out of an occurrence which took place after
the entry into force of the Protocol for each individual state.
The Privy Council, in The Cape Bari [2016] UKPC 20, has confirmed that
the right to limit liability can be excluded contractually but this requires
clear wording.
5.2 Who is entitled to limit liability?

Essential reading
Article 1 of the 1996 LLMC prescribes that ‘shipowners’, salvors, persons

for whose acts the shipowner or the salvor are responsible and the
insurers of particular liabilities have the right to limit their liability. The
registered owner, the charterer, the manager and the operator of a
seagoing ship are deemed to be within the convention’s definition of a
shipowner and thus entitled to limit their liability. The liability of these
persons for actions against the ship (in rem) is also subject to limitation.
36
Demise charterers also enjoy the right to limit liability. The term
‘charterer’ includes a time charterer and voyage as well as slot charterers.
The ship’s managers and operators are also entitled to limit their
liability. The ordinary meaning of the words would certainly include the
managing owners but it is uncertain whether managers and operators
of a part of the shipping activity, for example, recruitment, would be
covered.
Persons for whose act, neglect or default the shipowner or the salvor
are responsible are also entitled to limited liability. The purpose of this
provision is to avoid circumvention of the right to limit by claimants
suing the individual wrongdoer rather than the shipowner.
When salvors operate from a ship they are considered to be shipowners
and therefore are entitled to limit their liability. However, when they
do not operate from a ship they will not fall under the definition of a
shipowner (The Tojo Maru). The 1976 LLMC was modified so that salvors
are always entitled to limit their liability.
Liability insurers of shipowners in respect of claims subject to limitation
are also given the right to limit liability under the 1976 LLMC.
Persons entitled to limit liability under the 1976 LLMC may of course
bring claims against each other. Their contractual relationship will
determine the legal basis of such claims. If, for example, there is a
cargo claim against the charterer, the charterer would be entitled to
limit their liability against the cargo owner. However, if the charterer
pays the claim in full and then tries to recover from the shipowner,
the shipowner would be entitled to limit their liability against the
charterer in exactly the same way as if the claim was directly from the
cargo owner against the shipowner. However, when the cargo claim is
brought against the shipowner who pays up and then tries to recover
from the charterer, in such a case is the charterer also entitled to invoke
limitation of liability against the shipowner? Such a result would be a
significant expansion of the scope of limitation beyond the protection
of the shipowner, who may consequently face limited recovery for
damages incurred in their shipping business.
The historical development of limitation of liability suggests that a
charterer would only be entitled to limit their liability where they act
‘in the shoes’ of the shipowner. To this effect were the first instance
decisions in The Aegean Sea and in The CMA Djakarta. However, the first
instance decision in The CMA Djakarta was unanimously reversed by
the Court of Appeal. The Court of Appeal noted that the construction of
any international convention should be made without any English law
preconceptions and that it must not be controlled by domestic principles
of construction. This has been confirmed in the Supreme Court decision
Gard Marine and Energy Limited v China National Chartering Company
Limited and others (Ocean Victory) [2017] UKSC 35. It also noted that the
ordinary meaning of the word ‘charterer’ includes a charterer, whether it
acts as a charterer or in any other capacity. As a result, charterers as well
as managers and operators enjoy the same rights as shipowners, thus
making the effect of the 1996 LLMC much wider than shipowners would
have expected.
37
5.3 Claims subject to limitation of liability

Essential reading
Claims under Art.2 and not excluded by Art.3 of the 1976 LLMC are
subject to limitation.
Loss of life, personal injury, loss of or damage to property claims, as
well as consequential losses, are all subject to limitation provided that
they occur either on board or in direct connection with the operation
of the ship or a salvage operation (Art.2(1)). While damage on board
is rather well defined, the extent of the term ‘direct connection
with the operation of the ship’ is not as easy to determine. The term
expresses the ‘necessary linkage’ between the loss suffered and ‘the
ship in respect of which a claim is made’ (see Caspian Basin Specialised
Emergency Salvage Administration v Bouygues Offshore SA (The Caspian
Basin) [1997] 2 Lloyd’s Rep 507, at p.522).
In The Caspian Basin, Rix J considered whether a claim for loss of a tow
arising in part out of misrepresentation as to the tug’s bollard pull and
brake horsepower (BHP) was a claim ‘occurring ... in direct connection
with the operation of the ship’ within Art.2(1)(a) of the 1976 LLMC. His
decision was based on the fact that the loss claimed was that of the tow
which he held to be in direct connection with the operation of the ship.
(See also The Breydon Merchant [1992] 1 Lloyd’s Rep 373 and The Darfur
[2004] 2 Lloyd’s Rep 469.) In The Aegean Sea [1998] 2 Lloyd’s Rep 39
destruction of the bunkers, pollution damage and clean-up costs
arising from the grounding of a vessel on rocks because of the breach
of a safe port warranty under an ASBATANKVOY charterparty were also
‘in direct connection with the operation of the ship’.
In The CMA Djakarta cargo claims arising from the shipment of
undeclared dangerous goods under a charterparty were also
considered to be ‘in direct connection with the operation of the ship’
and thus subject to limitation.
Both in The Aegean Sea and The CMA Djakarta, which involved
indemnity claims by the shipowners against the charterers, all five
judges considered the wording of Art.2(1)(a) as incapable of including
in the limitation right damage suffered by the ship by reference to
which the limits of liability are calculated. Therefore, such claims, usually
brought by the owner against the charterer, are not subject to limitation
of liability. The Supreme Court has approved these decisions on the
point in The Ocean Victory [2017] LLR Insurance and Reinsurance 291.
In The Darfur, following the collision of the Darfur with the Happy
Fellow, claims by the charterer of the Darfur against the shipowner
in respect of the Darfur being off hire, increased insurance costs to
cover the deviation after the collision, discharge and transhipment
costs for the cargo, loss of use of the relevant containers for the
period between the casualty and transhipment, hiring, bunkering and
insuring alternative tonnage, loss of business and loss of profit were all
considered to be claims consequential to the loss of the vessel and thus
not subject to limitation.
38
Under Art.2(1)(c) claims in respect of other loss resulting from

infringement of rights other than contractual rights, occurring in direct
connection with the operation of the ship or salvage operations, are
also subject to limitation of liability. While Art.2(1)(a) is concerned with
losses and damage linked with property damage or loss of life, Art.2(1)
(c) covers claims from parties that may have suffered losses not linked
to property damage.
In The Aegean Sea loss of use and loss of profit by users of the sea and
the coasts, in particular owners of fishing boats and yachts, fish and
shellfish farm owners, local shop owners, local municipalities, local
governments and the coastal state were held to fall in this category.
The category is very broad, and taking into account that Art.2 is not
restricted in general by the legal nature of the claim, the only evident
exclusion is that of contractual rights as expressed in the provision
itself. Therefore, any actionable rights available through national or
international law to users of the coastal environment or any relevant
infrastructure are probably included in this section and are thus subject
to limitation. Recovery of freight not earned and lost following damage
to the ship has been held not to fall within this category of claims as it
is based on a contractual right.
Under Art.2(1)(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
are also subject to limitation of liability. Claims for wreck raising, removal,
etc. differ from other property and consequential claims in the sense
that the party claiming could be under a duty to keep the waterways
clear of objects and therefore public funding will probably have to
meet the costs that exceed limitation. To avoid this consequence (see
The Stonedale (No.1) [1955] 2 Lloyd’s Rep 9, [1956] AC 1 for the earlier
position) the UK has made a reservation in respect of this provision
(MSA 1995, Schedule 7, Part II, Art.3(1)) and all claims in respect of wreck
raising, removal, etc. are not subject to limitation of liability.
Article 2(1)(e) provides that claims in respect of removal, destruction
or rendering harmless of the cargo of a ship are subject to limitation
of liability. This section concerns cargo-related operations in general
irrespective of whether the ship is distressed or sunk.
Article 2(1)(f ) provides for claims of a person other than the person
liable in respect of measures taken in order to avert or minimise loss
for which the person liable may limit their liability in accordance with
the 1996 LLMC. It further provides for losses caused by such measures
to be subject to limitation of liability. These claims are, in essence,
assistance services and clean-up costs undertaken by persons who
cannot be considered as salvors. This provision avoids the situation by
which a claim would be limited but the claim for prevention of the loss
would be unlimited. In The Breydon Merchant a claim by cargo owners
against the shipowner for salvage liability caused by unseaworthiness
was considered to be within this article, as it was a claim for measures
taken to prevent or minimise the loss to cargo for which the shipowner
would have been able to limit liability.
39
5.4 Claims excluded from limitation of liability

Essential reading
Any claim which does not fall within the wording of Art.2 is not subject
to limitation of liability. In addition, for general policy reasons some
claims under Art.2 are expressly exempted from limitation of liability.
These exemptions can be found in Art.3. In particular, claims for salvage
including special compensation under Art.14 of the 1989 Salvage
Convention are not subject to limitation. Otherwise, salvors may
become reluctant to undertake salvage. However, the exemption only
covers direct claims from salvors and not indemnity claims for salvage
expenses under the contract of carriage.
Claims for oil pollution damage covered by the International Convention
on Civil Liability for Oil Pollution Damage 1992 are also excluded because
the 1992 Convention contains an independent special liability regime
which includes limits of liability. Damages arising from nuclear damage
which are subject to national or international legislation and damages by
nuclear ships are also excluded under Art.3(c).
The final category of claims excluded from limitation is described in
Art.2(e) which concerns the servants of the owner and salvors. Their
claims are not universally excluded from limitation, but it is left to the
law governing their contract to decide whether these will be allowed
in full or limited to any amount which is higher than that under Art.6
of the 1996 LLMC. Section 185(4) MSA 1995 excludes from limitation of
liability personal injury and death as well as property loss claims made
by a person employed under a contract of service governed by the law of
any part of the UK. The application of the particular section of MSA 1995
depends on whether the established relationship between such parties
and the shipowner is a contract of service. In The Margaretha Maria
[2002] 2 Lloyd’s Rep 293 the Court of Appeal considered that a claim by
the estate of drowned fishermen who were working on the vessel under
a share profits arrangement meant that losses as well as profits were
to be shared. In addition, the deceased paid tax and national insurance
on the basis that they were self-employed. These indicated that the
deceased were not under a contract of service and their claims were not
covered by the exemption under Art.3(3); thus they were subject to the
shipowner’s right to limited liability.
The claims exempted under Art.3 cover direct claims against a
shipowner. These ought to be paid in full to the claimant. However,
if after payment the shipowner seeks an indemnity from another
shipowner, for example a charterer, the indemnity claim is not
generally a claim covered by Art.3, and the second shipowner does
have the right to limit liability.
Read from the Essential reading the sections with regard to who is
entitled to limit (Art.1 of the Convention) and for what claims (Art.2 of
the Convention); there are some claims which are totally excluded from
limitation (Art.3 of the Convention) and some others for which liability
is not just limited but excluded (s.186 MSA 1995).
40
5.1 Explain the claims for which limitation of liability is available to the
shipowner of a seagoing ship.
5.2 To what extent does the legal basis of the claim affect the right to limitation
of liability?
5.3 Advise a charterer if they can limit their liability for claims made against
them by the owner of the ship; if they can limit, should the limitation be
based on the type of claim or on the charterer’s capacity in which they were
acting when their liability was incurred?
5.4 State the claims for which limitation is not permitted.
5.5 In a case of collision between two ships in which both ships are to blame
and their respective damages are apportioned, consider whether limitation
of liability will apply before or after the set-off of damages.

• Reynolds, B. and M. Tsimplis Shipowners’ limitation of liability. (Kluwer
International, 2012) [ISBN 9789041124654].
• Griggs, P., R. Williams and J. Farr Limitation of liability for maritime claims.
(Abingdon: Informa Law (Lloyd’s Shipping Law Library), 2004) 4th edition
[ISBN 9781843113201].
5.5 Conduct barring limitation of liability

Essential reading
• Sheppard, Vol. 2, Chapter 14, section 7. See also Vol. 2, Chapter 4, sections 1–3.
The right to limit liability confers a number of benefits on the

shipowner. First, since the liability is limited and known the shipowner
can insure itself. Second, by providing the limitation amount to the
court it has essentially discharged all its liability for the claims subject
to limitation, and the ship and other assets should be free from other
actions, for example, arrest.
However, the history of limitation of liability indicates that where the
right to limit liability can be removed easily two consequences follow:
• Claimants will routinely challenge the right simply to prevent
the shipowner from limiting liability and thus sustaining actions
against the shipowner’s ships and exerting commercial pressure.
• Judges would in several cases be tempted to find such negligence
in order to satisfy claims, especially where loss of life or personal
injury was suffered.
Under both the 1957 Limitation Convention and the 1976 LLMC as
amended, for the right of limited liability to be removed there must
be an act or omission by the shipowner. This requirement does not
include acts by servants or agents of the shipowner but only acts of
those officials of the shipowning company who embody the company.
Therefore, cases under the 1957 Limitation of Liability Convention
41
remain relevant with respect to the question of identifying those

whose actions or omissions are those of the shipowner.
However, the type of action that led to losing the right to limit liability
differs significantly between the two legal regimes. Until the coming
into force of the 1976 LLMC the test for removing the right to limit
liability was that of the 1957 Limitation Convention. The burden of proof
was on the company claiming to limit liability, and in particular it had to
show that the loss or damage occurred without its actual fault or privity.
Privity was interpreted in the same way as under s.39(5) of the Marine
Insurance Act 1906. Therefore, the leading case on whose privity would
be relevant is The Eurysthenes [1976] 2 Lloyd’s Rep 171, a case in which
Lord Denning MR at the Court of Appeal set the benchmark of the
test. Both the case and the principle derived from s.39(5) of the Marine
Insurance Act 1906 are set out in the Essential reading.
For examples of cases on limitation see Lennard’s Carrying Co v Asiatic
Petroleum [1915] AC 705; The Lady Gwendolen [1965] 1 Lloyd’s Rep
335; The Marion [1984] 2 Lloyd’s Rep 1; The Garden City [1982] 2 Lloyd’s
Rep 382.
The test under the 1976 LLMC became much tighter. Article 4 of the
Convention requires:
a person liable shall not be entitled to limit his liability if it is
proved that the loss resulted from his personal act or omission,
committed with intent to cause such loss, or recklessly and with
knowledge that such loss would probably result.
So the burden of proof under the 1976 LLMC is upon the person
seeking to break limitation.
The test is evidently very difficult to satisfy because it requires a
number of elements to be present at the time the act or omission in
question took place.
For collisions, two possible interpretations have been outlined. The Court
of Appeal stated that in a collision between Ships A and B the test under
Art.4 could have two interpretations: either that the cargo-/shipowners
of Ship A must prove that the owner of Ship B intended that it should
collide with Ship A, or acted recklessly with the knowledge that it was
likely to do so; or that the claimant merely has to prove that the owner of
Ship B intended that their ship should collide with another ship, or acted
recklessly with the knowledge that it was likely to do so (The Leerort
[2001] 2 Lloyd’s Rep 291). The Court of Appeal did not decide which of
the two interpretations is the correct one.
The generally accepted strictness of the test, which only slightly
lowers the requirement from one of an intentional act, has led to
the statement that as far as collisions are concerned Art.4 cannot, in
general, be satisfied. Consequently, the liability of the shipowner will
be limited in all but the most exceptional cases and the court will issue
a declaration to this effect, i.e. a limitation decree would be directly
available to the shipowner.
However, the limitation decree was not granted in an exceptional
case (The Saint Jacques II and Gudermes). The facts of the case can be
summarised as follows: a fishing vessel which routinely navigated the
42
Channel at the wrong side of the traffic separation scheme, under

the command of its owner who was also the master, collided with an
oncoming vessel. The owner/master admitted that the navigation
was reckless but claimed that the element of knowledge was missing
because the real test was one that required knowledge of the particular
loss that occurred, which in this case was collision damage caused to the
specific vessel and that, as at the time of the collision he was in his cabin
sleeping, he did not have such knowledge. The question was whether
the limitation decree would be issued without a hearing as suggested
for the routine collision cases in The Leerort. The judge declined to grant
the limitation decree as he considered this to be a case where there was
a reasonable prospect that Art.4 could be fulfilled. The case was settled
before reaching the court. Thus, the case provides only an example of
what type of conduct may be considered as possibly risking the loss
of the right to limit liability and confirms the discretion of the courts to
issue a limitation decree, but arguably not much more.
In a Canadian case, the Canadian Supreme Court – reversing the lower
courts’ decisions – held that the defendant fisherman was entitled
to limit liability despite the fact that the damage was caused by an
intentional act (Peracomo Inc v Société Telus Communications Co, 2014
SCC 29). The master and owner of a fishing vessel got his fishing
gear caught in a cable belonging to a communication company and,
thinking that it was abandoned, brought it on board and cut it with
an electric saw. This happened twice. As the fisherman was also the
owner of the fishing boat his actions were the company’s actions. The
Canadian Appeal Court held that as a result of cutting the cable he
was deprived from the right to limit liability. Notably, the conduct was
also considered wilful misconduct, enabling the insurers to avoid the
contract of insurance. The decision with respect to the right to limit
liability was reversed by the Supreme Court of Canada on the basis
that the fisherman did not intend to cause the specific loss. Thus, the
Supreme Court read the test for limitation as one that is not satisfied
by any intentional act or omission but only by an intentional act or
omission which is undertaken with knowledge that such damage
would probably result. The Supreme Court confirmed the decision of
the Appeal Court with respect to the insurance contract.
The right to limit liability was removed for the first time under the 1996
LLMC before an English court in The Atlantik Confidence [2016] EWHC
2412 (Admlty), [2016] 2 Lloyd’s Rep 525 where the judge held that
the ship had been scuttled. The court decided that the appropriate
approach was the same as that followed when determining ‘whether
a hull underwriter had proved on the balance of probabilities that
a vessel was scuttled’ with a standard of proof which ‘would fall not
far short of the rigorous criminal standard’. This statement does not
necessarily contradict that made in The Realice [2014] SCC 29 because
in The Atlantik Confidence the possession of the required knowledge,
under Art.4, of the resulting damage was not challenged.
43
5.6 Compare and contrast the articles providing for the test of breaking the
right to limit under the Athens Convention, the Hague-Visby Rules, the
Warsaw Convention and the 1976 LLMC.
5.7 Compare and contrast what is required to break the limit under the 1957
Limitation Convention and the 1976 LLMC respectively.
5.8 Whose act of omission would be important to take into account under the
1976 LLMC and under the 1957 Limitation Convention?
5.9 Whose misconduct would be attributed to the company for the purpose
of breaking the limit under the 1957 Limitation Convention and the 1976
LLMC?
5.10 Is the test for determining ‘recklessness and with knowledge’ objective or
subjective?
Read: Goldman v Thai Airways [1983] 3 All ER 693, 698 (in the context of the
Warsaw Convention); The Leerort [2001] 2 Lloyd’s Rep 291; The Saint Jacques
[2003] 1 Lloyd’s Rep 203 (in the context of the 1976 LLMC); and The Realice
[2014] SCC 29; The Atlantik Confidence [2016] EWHC 2412 (Admlty)
5.11 Who bears the burden of proof for breaking the limitation under the 1957
Limitation Convention and the 1976 LLMC?
5.12 Should that conduct be related to a particular loss? How have the words
‘loss’ or ‘such loss’ been interpreted by the courts?
5.13 Under what circumstances does:
(a) the insurer
(b) the salvor
lose the right to limit liability?

• Lord Mustill ‘Ships are different – or are they?’ [1993] 4 LMCLQ 490.
• Steel, D. ‘Ships are different: the case for limitation of liability’ [1995] 1
LMCLQ 77.
5.6 Right to a limitation decree and the

establishment of a limitation fund
Essential reading
Under English law, shipowners and others seeking to limit liability can
choose the jurisdiction in which to establish the limitation fund (The
Falstria [1988] 1 Lloyd’s Rep 495). By Art.11 of the 1976 LLMC the fund
can be constituted by the person liable (or their insurer), who seeks
to limit liability by depositing the sum, or a guarantee, required under
the Convention with interest and costs in a Convention jurisdiction.
Once it is established, claimants will be invited to submit their claims to
the limitation fund. In this way the person seeking to limit liability has
chosen the regime of limitation which is applicable in that jurisdiction.
The English procedure permits the fund to be established by payment
into court, by any other way the court accepts, or a combination of the
44
two (Civil Procedure Rue 61.11.18). English law does not require as a
prerequisite to a limitation action that the English courts must have
jurisdiction on the merits with respect to one or more claims arising
from the incident in relation to which limitation of liability is claimed.
As a result, a limitation decree can be granted to any shipowner who
applies to the English court and fulfils the requirements of the 1976
LLMC even if it is clear that the merits of the dispute will have to be
determined elsewhere.
Read The Caspian Basin [1997] 2 Lloyd’s Rep 507, [1998] 2 Lloyd’s Rep
461 CA; The Po [1991] 2 Lloyd’s Rep 206; and The Happy Fellow [1998] 1
Lloyd’s Rep 13 CA.
The effect of establishing the limitation fund under Art.11 of the
1976 LLMC in any of the Convention state parties is that a person
having made a claim against the fund shall be barred from exercising
their rights for such a claim against any assets of the person who has
constituted the fund (Art.13(1) of the 1976 LLMC). The court in which
the fund has been constituted has discretion to stay any proceedings
relating to any claims arising out of that occurrence, which are pending
against the person by whom the fund has been constituted (Sched.7,
Part II, para.8(3) of the MSA 1995).
Furthermore, the arrest of the relevant ship or any other property (of
the person who constituted the fund) within the jurisdiction of a state
party for a claim which may be raised against the fund, or any security
given, may be released by an order of the court of the same state party
(Art.13(2)), unless the claimant can show that there is either a real
chance of breaking the limit or that their claim does not come within
the 1976 LLMC (see The Bowbelle [1990] 1 Lloyd’s Rep 532, 535).
Once the release of the ship has been ordered there will be a bar to
other actions, but the person seeking to limit claims for which the
ship has been released shall be deemed to have submitted to the
jurisdiction of the court (Sched.7, Part II, para.10 of the MSA 1995).
Such release is mandatory if the limitation fund has been constituted
in the place where the incident giving rise to liability took place, or
in the port of disembarkation in respect of personal claims, or in the
port of discharge concerning damage to cargo, or in the state where
the arrest is made (Art.13(2)). However, Arts.13(1) and 13(2) will apply
only if the claimant may bring their claim against the fund before the
court administers the fund, and the fund is actually available and freely
transferable in respect of that claim (Art.13(3))
The fund will be distributed pari passu among claimants and no
lien or other right in respect of any ship or property shall affect the
proportionate distribution, in which, under Art.12 of the 1976 LLMC,
the fund is distributed among the several claimants (Sched.7, Part II,
para.9 of the MSA 1995). Claims for personal injury or loss of life are
treated preferentially to other claims.
In Eleni Maritime Ltd. v Heung-A Shipping Co Ltd [2017] HKCFI 795, the
High Court of Hong Kong held that the period set by the court for
claims to be filed against a limitation of liability fund does not override
the statutory limitation periods and was that period extended as in this
case there was good reason.
45
5.7 Forum shopping for limitation rights

• Forum shopping by way of limitation actions is not prohibited by the
courts provided the court is satisfied that substantial justice can be
done for the interests of all parties. Each case will be determined on
its own facts. However, it seems that the courts will discourage forum
shopping on the basis of higher limitation applicable by the 1976
LLMC (Herceg Novi v The Ming Galaxy [1998] 1 Lloyd’s Rep 167 CA).
• Outside the European Conventions concerning Jurisdiction and
Enforcement of Judgments there is flexibility for forum shopping
and the application of the forum non-conveniens doctrine (Herceg
Novi v The Ming Galaxy; The Caspian Basin).
• There is no rule that the liability and the limitation actions cannot
be decided in different jurisdictions (The Caspian Basin).
• Special rules apply when the proceedings are brought in EU
member states to the European Conventions concerning
Jurisdiction and Enforcement of Judgments. But the Conventions
by Art.4 permit a member state to apply its own domestic law in
cases in which the primary rules of the Conventions, such as the
domicile rule and the exclusive jurisdiction rules, are not infringed.
• Also, by Art.9 of the Recast Regulation, the limitation action cannot
be split from the liability action.
• Once a limitation fund is established, there will be a bar to other
proceedings by Art.13 of the 1976 LLMC. Any other actions
instituted later in other EU member state jurisdictions will have
to be stayed pursuant to Art.22 of Brussels or Art.28 of the EC
Regulation, being related actions (The Happy Fellow).
Note that the law is likely to change at the end of the year but the
way it will change is unclear and depends on whether there will be
an agreement between the UK and the EU.
• Article 11 of the 1976 LLMC provided for the constitution of a
limitation fund in any state party to this Convention in which legal
proceedings were instituted in respect of underlying claims. Both
Arts.11 and 13 prohibited a claimant who claimed against the fund
to have any rights against any other assets of the person seeking to
limit liability in any jurisdiction of state parties (ICL Vikraman [2003]
EWHC 2320 (Comm)).
• But the protection afforded by Art.13(2) was concerned with
the jurisdiction of state parties to the Limitation Convention. If
security is sought or is given in a non-state party, Art.13(2) does
not empower a court of a state party to order the release of such
security (ICL Vikraman).
• ‘Legal proceedings’ under Art.13(2) of the 1976 LLMC may include
arbitration (ICL Vikraman).
46
1. Discuss the procedural and financial role limitation of liability plays.
2. Which of the following claims are subject to limitation of liability:
(a) A claim by a shipowner against the salvor of the ship for damage to the
ship arising from negligence.
(b) A claim by a salvor against the shipowner for special compensation under
Art.14 of the 1989 Salvage Convention.
(c) A claim by a charterer against the shipowner for cargo damage due to a
charterparty breach.
(d) A claim by a shipowner against the charterer for a charterparty breach
which damaged the ship and left it out of service for months.
3. Explain whose actions remove the entitlement by a shipowner to limitation.
How would this test apply to charterers and operators of ships?
4. When should a claimant try to force a shipowner to limit liability in a
Limitation Convention 1957 contracting state instead of a contracting state to
the 1976 LLMC as amended by the 1996 Protocol?
5. What type of knowledge is required for removing the right to limit liability?
6. What is the fate of in rem priority when a limitation of liability fund is
established?
7. How do English courts view limitation of liability rights? Do such rights affect
the exercise of the court’s discretion in relation to forum conveniens?
8. Which claims are excluded from limitation of liability under the English
implementation of the 1996 LLMC as amended?
9. Can a contract remove the right to limit liability from a party entitled to such
limitation under English law? (You need to read The Cape Bari [2016] UKPC 20.)

should be able to:
• explain the concept and principles of limitation of liability
• identify the claims which are subject to limitation of liability
• compare the test of breaking the limit between the different convention
regimes
• apply the principles as interpreted by the courts in decided cases to practical
scenarios.
47

Read the Court of Appeal in CMA CGM SA v Classica Shipping [2004] EWCA Civ
114, in which the Court of Appeal disagreed with the view of the judges in both The
Aegean Sea [1998] 2 Lloyd’s Rep 39 and The CMA Djakarta [2003] 2 Lloyd’s Rep 50.
Read an old decision on the point Stoomvaart Maatschappij Nederland v Peninsular
and Oriental SN (1882) 7 App Cas 795.
Back
Read Sheppard, Vol. 2, Chapter 14, section 7.
Note that the wording in the Warsaw Convention also includes the act or omission
of servants or agents, while in the 1976 Convention it is only the personal act or
omission of the person seeking to limit. Also the word ‘recklessness’ alone without the
additional words ‘with knowledge’ is interpreted differently; read the House of Lords
decision in R v G [2003] 3 WLR 1060 for a new interpretation of the word ‘recklessness’
in the context of the Criminal Damage Act 1971. In this case the House of Lords put
emphasis on the defendant’s awareness of a risk which existed, or would result, and
in the circumstances known to him, it was unreasonable to take the risk. Contrast
this test with that set out by the Court of Appeal in Goldman v Airways, in which the
emphasis was that the prosecution should prove that the defendant did an act which
in fact created an obvious risk and that he did not give any thought to the possibility of
there being such a risk. Which test would be more difficult for the prosecution to meet?
It seems that the test of the House of Lords requires more factual and precise evidence.
Do you agree?
Read the cases on the concept of ‘alter ego’, the identification doctrine (Tesco
Supermarkets v Natrass [1972] AC 153, 174) and the special rule of attribution as
explained in the Meridian case [1995] 3 All ER 918 (Sheppard, Vol. 2, Chapter 4). A good
example of an owner who was also the skipper of the guilty boat which contravened
the Collision Regulations is St Jacque II and Gudermes [2003] 1 Lloyd’s Rep 203.
Read Sheppard, Vol. 2, Chapter 4 and additionally the MSC Rose M [2002] 2 Lloyd’s
Rep 399, The Leerort [2001] 2 Lloyd’s Rep 291.
Back
48
Sample examination questions

These questions appeared in the October 2017 paper.
Question 1
Containership A is approaching the anchoring area of a port when the engine
fails. Despite desperate efforts by the master and crew to stop the ship it
collides with the starboard side of the anchored tanker B. B was undergoing
chemical cleaning of her holds by the crew and the collision led to the death
of several crew members who came in contact with the chemicals. Bunker oil
from both ships escaped and polluted the areas. Following the collision A is
towed into the port but sinks, blocking the port’s entrance. The sinking was due
to an unintentional mistake by the master of the towing tug. Tanker B sinks at
its anchorage, creating significant risks for other ships approaching the area.
In particular ship C, who in trying to avoid the oil spill and the wreck of B, runs
aground and gets severely damaged. The bunker oil spill from the grounding
of ship C drifts to a nearby wharf where ship D is being repaired. Due to the
operation of an oxyacetylene torch some material catches fire, falls into the sea
and sets fire to the bunker oil. The fire destroys both the wharf and the ship under
repair.
Discuss the civil liability for damages suffered and the rights of parties to limit
such liability.
Question 2
Discuss both:
a) The claims for which a shipowner can limit liability under the Limitation of
Liability Convention 1976 as amended; and
b) The procedural options available to a shipowner exercising the right to limit
liability.
49
Advice on answering the questions

Question 1
Outline answer:
1. Liability for original collision: Provided that B is anchored properly, at a location
where anchoring is not prohibited, and is showing the appropriate lights and
signals, the collision would be either due to negligence in the management of the
ship’s engine or an inevitable accident (The Merchant Prince). In the latter case the
owners of A must present strong evidence that ‘no amount of reasonable care and
skill would have prevented the collision’.
2. By contrast, the liability for the loss of life and any personal injury of the seafarers
on board B could be due to faults of A (if the inevitable accident case fails) and/or B
(if the work undertaken by the crew members was prohibited while anchored or no
warning to the workers to stop working was given when the other ship was seen),
or perhaps under the Employer’s Liability (Defective Equipment) Act 1969 or other
breach of employer’s obligation which gives rise to civil liability. Claimants can go
against both ships for joint and several liability, unless A is exonerated under the
inevitable accident defence.
If A is negligent it can limit under LLMC as enacted in the UK. Same holds for B –
claim covered under Art.2(1)(a).
3. Although B is a tanker it appears it is not laden. If it does not have residues of
previous cargoes of persistent oil the liability for bunker oil for both ships is subject
to s.153A of the MSA 1995 enacting the Bunker Oil Pollution Convention 2001. This
imposes strict liability on the shipowner, defined as registered owner, bareboat
charterer, manager and operator of the ship. Where there is more than one ship
involved in the bunker oil pollution damage then the liability is joint and several
(Art.5 of the Convention). The Convention preserves rights of limitation under
national laws and international conventions. Claims fall under Art.2(1)(c) (The
Aegean Sea) of the LLMC.
4. The sinking of A is caused by negligence by the towing tug and (perhaps) partly
by the original collision. The towing tug’s mistake probably breaks the chain of
causation and removes any liability linked to the collisions. It then becomes a
matter of the contractual or salvage arrangements between the tug and A (not
expected to be resolved here). The delays of ships coming in or wanting to come
out of the ports are not recoverable in negligence (Anglo–Algerian v Houlder
[1908] 1 KB 659).
Tug entitled to limit liability. A not entitled to limit for wreck removal (MSA 1995,
Sched.7, Part II).
5. The damage of ship C may be partly due to the wreck of B, caused by the original
collision and perhaps some negligence in navigation on behalf of C (see Miraflores
v Abadesa for the rules of apportionment). Limitation applies to the net payment
in collision claims.
6. Bunker oil spillage by C creates strict liability on C’s shipowner, bareboat charterer,
manager and operator for pollution damage. However, the damage caused to
the wharf and ship D are not covered by the definition of pollution damage and
therefore are based in tort. Therefore, fault of C for the oil spillage must be shown
before the foreseeability of the damage is discussed. The facts are similar to the
Wagon Mound and the two cases need to be referred to. Bunker pollution liability
subject to limitation as above. However, it is doubtful whether the damage by
fire falls directly under Art.2(1)(a) of the LLMC or is consequential damage of the
running aground incident.
Back
50
Question 2
Outline answer:
All claims listed in 1976 LLMC, Art.2 are subject to limitation, whether the liability arises
in contract, tort or by statute (The Breydon Merchant). The words ‘whatever the basis
of liability may be’ cover all types of liability and do not restrict to liability for damages.
a) The list of claims under Art.2 of the 1976 LLMC as amended by the 1996 Protocol and
the 2012 Protocol and as enacted under Sched.7 to the MSA 1995 must be discussed.
– claims in respect of loss of life or personal injury …
‘Direct connection with the operation of the ship’ expresses the ‘necessary linkage’
between the loss suffered and ‘the ship in respect of which a claim is made’. The
Caspian Basin.
Some of the following case-law must be included:
A claim for loss of a tow arising in part out of misrepresentation as to a tug’s bollard
pull and b.h.p. was a claim ‘occurring… in direct connection with the operation of the
ship’ within Art.2(1)(a) of the 1976 LLMC (The Caspian Basin). A claim by the charterer
for salvage contribution is subject to Art.2(1)(a) even if not accompanied with physical
damage to the cargo (The Breydon Merchant).
In The Aegean Sea destruction of the bunkers, pollution damage and clean-up
costs arising when a vessel grounded on rocks because of the breach of a safe port
warranty under an ASBATANKVOY charterparty ‘were also in direct connection with
the operation of the ship’.
Similarly, in The CMA Djakarta cargo claims arising from the shipment of undeclared
dangerous goods under a charterparty were considered to be in direct connection with
the operation of the ship and thus subject to limitation.
However, both in The Aegean Sea and The CMA Djakarta, which involved indemnity
claims by the shipowners against the charterers, all five judges considered the wording
of Art.2(1)(a) as incapable of including in the limitation right damages suffered by the
ship by reference to which the limits of liability are calculated.
Thus, in The Darfur, following the collision of The Darfur with The Happy Fellow,
claims by the charterer of The Darfur against the shipowner in respect of The Darfur
being off-hire, increased insurance costs to cover the deviation after the collision,
discharge and transhipment costs for the cargo, loss of use of the relevant containers
for the period between the casualty and transhipment, hiring, bunkering and insuring
alternative tonnage, loss of business and loss of profit were all considered to be claims
consequential to the loss of the vessel and thus not subject to limitation.
– claims in respect of loss resulting from delay in the carriage by sea of cargo,
passengers or their luggage
Claims for delays are expressly included in the 1976 LLMC. There is no definition of
luggage and therefore it arguably encompasses in its ordinary meaning all type of
luggage including valuables. It is unclear whether vehicles in passenger ferries are to be
included in this definition.
– claims in respect of other loss resulting from infringement of rights other than
contractual rights, occurring in direct connection with the operation of the ship
or salvage operations
This sub-paragraph significantly enhances the scope of claims subject to limitation
of liability. In The Aegean Sea loss of use and loss of profit by users of the sea and the
coasts, in particular, owners of fishing boats and yachts, fish and shellfish farm owners,
local shop owners, local municipalities, local governments and the coastal states, were
held to fall in this category. The category is very broad and taking into account that
Art.2 is not restricted in general by the legal nature of the claim the only exclusion
51
is that of contractual rights as expressed in the article itself. Recovery of freight not
earned and lost following damage to the ship has been held not to fall within this
category of claims as it is a contractual right (The Aegean Sea).
– 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
The UK has made a reservation in respect of this article, which is presently inapplicable
in the UK (s.185 MSA 1995, Sched.7, Part II, para.3).
– claims in respect of the removal, destruction or the rendering harmless of the
cargo of the ship
This sub-paragraph concerns cargo related operations in general irrespective of
whether the ship is distressed or sunk. It would, for example, cover a claim by cargo
owners for the jettison or confiscation of cargo partly infected, which makes discharge
of the whole cargo, whether infected or not, illegal. It would also cover the destruction
or raising of a container with toxic substances lost to the sea.
– claims of a person other than the person liable in respect of measures taken in
order to avert or minimize loss for which the person liable may limit his liability in
accordance with this Convention, and further loss caused by such measures
The wording of these claims describes, in essence, salvage or similar services as well
as clean-up costs taken by others that cannot be considered as salvors. This sub-
paragraph avoids the situation by which a claim would be limited but the claim for
prevention of the loss would be unlimited. In The Breydon Merchant a claim by the
cargo owners against the shipowner for salvage liability caused by unseaworthiness
was considered to be within this sub-paragraph as it was a claim for measures taken
to prevent or minimise the loss to cargo for which (loss to cargo) the shipowner would
have been able to limit.
Art.3 excludes from limitation of liability:
– Salvage claims. This is consistent with the policy to encourage salvors.
– 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 – these are limited by the CLC where
it is in force.
– Nuclear damage liability when covered by an international convention.
– Claims against the shipowner of a nuclear ship for nuclear damage.
– Claims by the servants if under the law governing the contract of service between the
shipowner and such servants the shipowner is not entitled to limit his liability in respect
of such claims. Section 185(4) of the MSA 1995 excludes from limitation of liability
personal injury and death as well as property loss claims made by a person employed
under a contract of service governed by the law of any part of the UK.
b) A shipowner entitled to limit liability can use limitation as a defence and without
the constitution of a limitation fact (Art.10 of the LLMC and Civil Procedure Rule 61 and
Practice Direction 61). In such a case limitation will operate to limit the specific claim.
Therefore, if other claims are pursued in relation to the same incident limitation will
operate in each case separately.
A shipowner can also apply for a limitation decree either against named defendants
or against the world. The advantage of this is that there is a court declaration for the
right to limit liability. The conditions of serving the notice differ when there are named
defendants and when it is against the world.
Where a limitation decree is sought constitution of a limitation fund is an obligation.
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52
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Master of Laws (LLM)

Postgraduate Diploma in Laws

Revised edition, 2021

̆ Dr Aleka Mandaraka-Sheppard (LLB, LLM, PhD, Dip.IArb), formerly Head of the

Published by the University of London

1.1 Admiralty law

1.1.1 Study sequence

1.2 Course aims and outcomes

Course learning outcomes

1.3 Introduction to Module C

Learning objectives for Module C

Learning outcomes for Module C

1.4 How to use this Study Guide

1.4.1 Case-law and statutes

1.5 Preparation for the course

1.5.1 Self-assessment questions

• And of course it also covers ‘the order of priorities in the payment of

1.6 Allocating your time

1.7 The examination

1.7.1 How to approach the examination questions

Therefore, a poor answer to a question on salvage, for example, would

further sources – including material from the Useful further reading

Chapter 2: Seamanship and the

2.1 The COLREGS

Maritime Harmony [1982] 2 Lloyd’s Rep 400 such an infringement was

The second section of Part B of the COLREGS applies to ships in sight

Feedback to activities: Chapter 2

Chapter 3: Criminal liability for

3.1 Breach of the COLREGS

As a consequence, where the officer on watch commits a breach of

3.2 Statutory offences under the Merchant

3.3 Involuntary manslaughter for breach of duty

Individuals can be prosecuted for involuntary manslaughter when

Corporations can also be criminally liable under common law. However,

Reminder of learning outcomes

Feedback to activities: Chapter 3

Chapter 4: Civil liability for collision

4.1 Who may be liable? Standard of care and

The burden of proof of negligence at common law and, therefore, in

Negligence on the part of a defendant must have caused the collision

Throughout the process of determining causation (in fact and in law),

party, either at the time of apportionment of liability under s.187 of the

Useful further reading

4.3 Claims for personal injury or loss of life and

4.4 Collision with an innocent third ship or with a

Another complication arises when a ship collides with an object which

Useful further reading

4.5 Remoteness of damages and mitigation of loss

Once causation is established, the last element of the claimant’s

Once this last part of the claimant’s burden of proof is discharged by

although neither court approved the test of Re Polemis. Therefore, the

Useful further reading

4.6 Assessment of the quantum of damages

The general principle in theory is restitutio in integrum, which is the

The damages recoverable in collision cases are damages in negligence.

Reminder of learning outcomes

Feedback to activities: Chapter 4

Chapter 5: Limitation of liability

5.1 Scope of the 1976 London Convention on

3.2 Statutory offences under the Merchant

3.3 Involuntary manslaughter for breach of duty

4.1 Who may be liable? Standard of care and

4.3 Claims for personal injury or loss of life and

4.4 Collision with an innocent third ship or with a

5.1 Scope of the 1976 London Convention on

5.6 Right to a limitation decree and the