55 Asian Legal Business | November 2024 1. Potential conclusion one: the claim against the non-spilling ship is limitable 1.1 Limitation of liability for maritime claims is an ancient concept in international shipping law. Its original intent was to encourage investment in maritime commerce by providing a legal framework that offers preferential protection to shipowners due to the unique risks inherent in the shipping industry. Although advancements in technology have enhanced ships’ ability to withstand maritime risks, severe maritime accidents can still occur. When they do, the unique challenges of the marine environment and the relatively isolated conditions aboard ships often lead to significant consequences, including loss of life, pollution, and damage to both ships and cargo. The fire aboard the X-Press Pearl, the grounding of the Ruo Chao leading to fuel leakage, and the collision of the DALI causing the collapse of the Baltimore Bridge in recent years all illustrate that the shipping industry remains high-risk, and the principle of limitation of liability for maritime claims continues to serve as a crucial stabiliser for the shipping market. 1.2 As the regime of limitation of liability for maritime claims has evolved and improved, the international community has successively adopted the International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships, 1957 (the “1975 Convention”), the Convention on Limitation of Liability for Maritime Claims, 1976 (the “1976 Convention”), and the Protocol of 1996 to amend the Convention on Limitation of Liability for Maritime Claims, 1976 (the “1996 Protocol”). A vote was held in April 2012 to raise the limits of shipowners’ liability and the new limitation regime has come into effect among contracting states to the 1996 Protocol on 8 June 2015 (For contracting states to the 1957 Convention and the 1976 Convention, i.e. non-parties to the 1996 Protocol, the new regime does not apply). However, the fact that the contracting states only opted to raise the limits rather than abolish the system altogether indicates a continuing international consensus that the limitation of liability regime remains a necessity in modern shipping industry. 1.3 Given the high-risk nature of the shipping industry and the reasonable necessity of the existence of the principle of limitation of liability for maritime claims, recognising the right of non-spilling ships to limitation appears to better align with the demands of both international and domestic shipping markets. It also responds appropriately to the current business environment and economic realities. 2. Potential conclusion two: the claim against non-spilling ships is not limitable 2.1 Under Article 9 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Disputes over Ship Collisions (the “Provisions”), “[w]ith respect to claims for the costs of raising, removing, destructing or rendering harmless a ship which is sunk, wrecked, stranded or abandoned as a result of a ship collision, including the cargo onboard, the liable party may not invoke limitation under Chapter XI of the Maritime Code.” In its judgment on CMA CGM Florida, the Supreme People’s Court has made it clear that the non-spilling ship, as a party at fault for the collision, should bear corresponding responsibility for oil pollution damage. In this way, for the “liable party” in Article 9 of the Provisions, in addition to referring to the owners of the sunk, wrecked, stranded or abandoned oilspilling ship, shouldn’t it extend to the owners of the non-spilling ship which is at fault for the collision causing the oil spill? If so, it follows that the claim for oil pollution damage against the non-spilling ship should also be treated as non-limitable by reason of the Provisions. 2.2 Although the person suffering from oil pollution damage has the options to seek full compensation from the owners of the oil-spilling ship, or to turn directly to the owners of the non-spilling ship for compensation in proportion to their share of fault for the collision, the claim against the spilling ship and the claim against the non-spilling ship are both oil pollution damage claims in terms of nature, differing only in the objects being pursued. For a claim of the same nature, if one object of the claim is recognised as entitled to limitation and the other is not, this would in essence discriminate against the claimant based on the choice of the object being pursued, thereby undermining the claimant’s interests. Should the claim against the non-spilling ship be treated as limitable and where there is a limitation fund set up by the non-spilling ship, the claimant will inevitably choose to seek full compensation from the spilling ship, foregoing the right to go after the nonspilling ship for an appropriate share of compensation. After all, the claim made against the non-spilling ship would be subject to the limitation fund, which is to be shared among all creditors and hence can significantly reduce the amount recoverable by the claimant. As such, it seems to be more in line with considerations at the legal theory level and in practical operation to also treat the claim made by the person suffering from oil pollution damage against the non-spilling ship as non-limitable. In conclusion, when a SPRO simultaneously makes a claim for clean-up costs against the spilling ship and the non-spilling ship, there seems to be a completely opposite answer on both positive and negative sides to the new proposition as to whether the legal nature of the same claim should be treated differently (i.e. whether it should be treated as a limitable or non-limitable claim) due to different objects being pursued. How should the legal value here be balanced? It is hoped that this article can trigger more in-depth discussions and research from readers, which may help find the optimal solutions to practical legal issues. The Greater Bay Area
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