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International Civil Litigation and the Pollution of the Marine Environment

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International Civil Litigation and the Pollution of the Marine Environment
  1 INTERNATIONAL CIVIL LITIGATION AND THE POLLUTION OF THE MARINE ENVIRONMENT Prof. Dr. Frank Smeele 1. Introduction 1.   Whenever a major accident occurs to a ship – whether a fire or an explosion on boardof the ship, or a collision with another ship, or the ship running aground or sinking and beco-ming a wreck – it is likely that this casualty will result in considerable physical damage to theship and its cargo, and in some cases also in loss of life or personal injury to crew membersand passengers aboard the ship. Obviously this may have huge financial implications for par-ties interested in ship and cargo and for crew members, passengers and their relatives. How-ever a maritime casualty not only affects parties involved in the ship’s operation but alsothird parties. Depending on the circumstances of the incident and the nature of the resultingdamage, (many) third parties from various countries are likely to suffer losses as well. A fewexamples may help to draw the picture. States may be affected e.g. if wreck removal andclean-up operations become necessary, but also the financial interests and livelihoods of pri-vate individuals and businesses, such as local hotels and restaurants who lose earnings fromtourists when the coast line becomes covered by a thick layer of crude oil or fisheries whotemporarily or permanently lose access to their fishing grounds. Indirectly, the financial inte-rests of many more parties will be affected by the disaster as its consequences ripple onthrough the local and national economy. This group includes the sub-buyers and final usersof the goods, as well as underwriters, whether Hull and Machinery (H&M) underwriters orProtection & Indemnity (P&I) insurers of the ship or marine cargo underwriters.2.   Besides the multitude of interests likely to be affected by a maritime casualty invol-ving a ship, there is also a potential for exceptional financial losses resulting from it. It wasreported in 2008 that the costs of clean-up operations in Alaska following the Exxon Valdezoil spill in 1989 had reached the figure of US$ 3,5 Billion and still counting. But not only oiltankers and ships carrying other hazardous cargoes are capable of generating such enor-mous losses. Modern container vessels with over 12,000 TEU capacity may easily have car-goes on board worth hundreds of millions of Euros, as is illustrated by the fires involving them.v. “Hanjin Pennsylvania” in 2002 and the m.v. “Hyundai Fortune” in 2006, and the volun-tary grounding of the “MSC Napoli” in 2007.  2 2. Limitation conventions 3.   Obviously, this extreme potential for damage entails the risk that the ship-owner willbe held liable to compensate all of these losses in full. It was in order to protect the shippingindustry against this extreme liability exposure that the notion of limitation of liability of theship-owner was first developed. 1 The basic idea is that in case of a maritime disaster invol-ving his ship, a ship-owner is to be released from all his liabilities to anyone, if he puts a limi-ted amount of money, the fund, at the disposal of his joint creditors.4.   Originally, this privilege was granted to ship-owners under national law, but as from1924 a variety of international conventions dealing with limitation of liability of the ship-ow-ner has come into being. 2 These conventions can be divided in two groups, i.e. on the onehand the limitation conventions of more or less general application, which are:  –  1924 Brussels Convention 3 ,  –  1957 Brussels Convention 4 ,  –  1979 Protocol to the 1957 Convention 5 ,  –  1976 London Convention (LLMC) 6 ,  –  1996 LLMC as amended by the 1996 Protocol 7 ,  –  1988 Strasbourg Convention (CLNI) 8 . 1 For a comparative history of the ship-owner’s right to limitation of liability under German, French, En-glish and American law, see: P.K. Sotiropoulos, Die Beschränkung der Reederhaftung  , diss. Hamburg,1962. See also: J.J. Donovan, ‘The srcins and developments of limitation of shipowner’s liability’, Tulane Law Review  54 (1979) No. 4, p. 1000 2 For an up-to-date overview of the dates of entry into force and the status as to ratifications of variouslimitation conventions, see:http://www.imo.orgunder the heading Conventions, “Status of Conven-tions Summary” and “Status of Conventions by Country”. 3 International convention for the unification of certain rules relating to the limitation of the liability ofowners of sea-going vessels, Brussels 25.8.1924, International Transport Treaties  , ed. by J.E. de Boer,Kluwer, Deventer (Looseleaf) I-23 seq. (cited: ITT). The 1924 Convention entered into force on 2 June1931. 4 International convention relating to the limitation of the liability of owners of sea-going ships, Brussels,10.10.1957, ITT  , I-76 ff. The 1957 Convention entered into force on 31.5.1968. 5 Protocol amending the International convention relating to the limitation of the liability of owners ofsea-going ships dated 10 October 1957, Brussels 21.12.1979, ITT  , I-309 ff. 6 Convention on limitation of liability for maritime claims, London, 19.11.1976, ITT  , I-247 ff. LLMC 1976entered into force on 1 December 1986 and as per 28.2.2009 had 52 contracting states, representing49.08 % of the world’s shipping tonnage. Based on information provided by the U.N. International Mari-time Organization (IMO) on its of status of Conventions. 7 Protocol of 1996 to amend the convention on limitation of liability for maritime claims, 1976, London,2.5.1996, ITT  , I-561 ff. The LLMC 1996 entered into force on 13.5.2004 and already has 34 contractingstates representing 35.48% of world tonnage. 8 Strasbourg convention on the limitation of liability of owners of inland navigation vessels (CLNI), 4.11.1988, ITT  , II-87 ff. CLNI 1988 entered into force on 1.9.1997 and has 4 contracting states.  3 and on the other hand the conventions in relation to the civil liability and/or limitation of lia-bility and/or compensation of specific types of damage (hereafter to be called: special con-ventions), which are: –   1969 Civil liability convention for oil pollution damage (CLC) 9 , –   1976 CLC as amended by the 1976 Protocol (CLC 1976) 10 , –   1992 CLC as amended by the 1992 Protocol (CLC 1992) 11 , –   1971 International Fund Convention (IFC) 12 , –   1976 IFC as amended by the 1976 Protocol (IFC 1976) 13 , –   1992 IFC as amended by the 1992 Protocol (IFC 1992) 14 , –   2003 Supplementary Fund Protocol to IFC 15 , –   1989 Civil liability convention carriage of dangerous goods by road, rail and in-land navigation vessels (CRTD) 16 , –   1996 Liability convention for hazardous and noxious substances (HNS) 17 , –   2001 Civil liability convention for bunker oil pollution damage (Bunker) 18 , –   2007 Wreck Removal Convention (WRC). 19  5.   A remarkable common feature of this second group of conventions is that whilst re-cognizing 20 the principle of limitation of liability by the ship-owner, these conventions also 9 Brussels, 29.11.1969, ITT  , I-167 ff. CLC 1969 entered into force on 19.6.1975 and as per 31.3.2009 stillhas 38 contracting states representing 2.89% of world tonnage. 10 London, 19.11.1976, ITT  , I-265 ff. CLC 1976 entered into force on 8.4.1981 and as per 31.3.2009 has 53contracting states representing 56.41% of world tonnage. 11 London, 27.11.1992, ITT  , I-459 ff. It is worth observing that the Protocol to amend CLC of 25.5.1984, ITT  ,I-355 ff. did never enter into force. CLC 1992 entered into force on 30.5.1996 and as per 31.3.2009 hasno less than 121 contracting states representing 96.39% of world tonnage. 12 International convention on the establishment of an international fund for compensation for oil pollu-tion damage, London, 18.12.1971, ITT  , I-185 ff. IFC 1971 entered into force on 16.10.1978. After manydenunciations as per 31.3.2009 it has 20 contracting states left. CMI Yearbook 2007-2008  , p. 440 ff. 13 London, 19.11.1976, ITT  , I-268 ff. IFC 1976 entered into force on 22.11.1994 and as per 31.3.2009 has 31contracting states representing 47.33% of world tonnage. 14 London, 27.11.1992, ITT  , I-476 ff. IFC 1992 entered into force on 30.5.1996 and as per 31.3.2009 has 103contracting states representing 94.12% of world tonnage. 15 Protocol of 2003 to the international convention on the establishment of an international fund for com-pensation for oil pollution damage 1992, London, 16.5.2003, ITT  , I-711 ff. The Supplementary Fund Pro-tocol 2003 entered into force on 3.3.2005 and as per 31.3.2009 has 23 contracting states representing19.84% of world tonnage. 16 Convention on civil liability for damage caused during carriage of dangerous goods by road, rail, and in-land navigation vessels (CRTD), Geneva 10.10.1989, ITT  IV-81 ff. CRTD 1989 has not entered into force. 17 International convention on liability and compensation for damage in connection with the carriage ofhazardous and noxious substances by sea, London, 3.5.1996, ITT  , I-573 ff. HNS1996 has not yet enteredinto force despite 13 ratifications of states representing 13.64% of world tonnage as per 31.3.2009. 18 International convention on civil liability for bunker oil pollution damage, London, 23.3.2001, ITT  , I-655ff. Bunkers 2001 recently entered into force on 21.11.2008 and as per 31.3.2009 already has 38 contrac-ting states representing 75.50% of world tonnage. 19 International convention on the removal of wrecks, Nairobi 18.5.2007, ITT  , I-759 ff. As per 31.3.2009WRC 2007 has not been ratified by any state or entered into force.  4 aim to ensure a proper level of compensation for damage resulting from oil pollution and ha-zardous or noxious substances. To this end all these special conventions impose a strict liabi-lity 21 and a compulsory insurance obligation 22 on the ship-owner 23 and provide for a directright of action of injured parties against the liability underwriters of the ship-owners. 24   3. Beneficiaries of limitation or immunity 6.   The various limitation conventions have in common that besides the ship-owner, also(diverging) groups of other persons involved in the operation of the ship, benefit from thestatutory limitation of liability. In this respect there are two systems in use. Under the gene-ral limitation conventions, the right to limitation of liability is extended to a wider group ofpersons, whose legal position is equated to that of the ship-owner. In contrast, under thespecific limitation conventions all liability and the right to limit is channelled towards theship-owner 25 and roughly the same group of persons around the ship-owner is granted im-munity from liability. 26 Below, for easy reference these groups of persons either entitled tolimitation of liability or immune from liability altogether, will be referred to jointly as benefi-ciaries of limitation or immunity.7.   Depending on the particular convention the group of beneficiaries of limitation or im-munity may include one or more of the following parties: – the ship-owner 27 , – the salvor 28 , – the carrier 29 , – the operator 30 , – the charterer 31 , – the hirer 32 or – the manager 33 of the 20 Whereas CLC 1992, IFC 1992, Supplementary Fund 2003, CRTD 1989 and HNS 1996 provide for limitationfunds of their own, Bunker 2001 and WRC 2007 clarify that they do not affect any right to limitation ofthe ship-owner under any applicable national or international regime such as LLMC. See: art. 6 Bunker2001, art. 10-2 WRC2007. 21 See art. III-1 CLC 1992, art. 7-1 HNS, art. 3-1 Bunker and art. 10-1 WRC. For the rather limited grounds ofexemption available to the ship-owner, see art. III-2 and III-3 CLC 1992, art. 7-2 and 7-3 HNS, art. 3-2 and3-3 Bunker and art. 10-1 (a), (b) and (c) WRC. See also art. 5-4 CRTD. 22 See art. VII-1 CLC 1992, art. 12 HNS, art. 7-1 Bunker and art. 12-1 WRC. 23 The only exception is CRTD 1989 which imposes the strict liability and compulsory insurance obligationon the carrier  , see art. 5-1 and 13-1 CRTD 1989. 24 See art. VII-8 CLC, art. 12-8 HNS, art. 7-10 Bunker, art. 12-10 WRC and art. 15 CRTD. 25 An exception is provided by art. 5-1 CRTD in which all liability is channelled, not to owner of the vehicle,but to the (contractual) carrier of dangerous goods. 26 See art. III-4 (a) to (f) CLC 1992, art. 7-5 (a) to (f) HNS, art. 5-7 (a) to (g) CRTD. 27 See art. 1 1924 Convention, art. 1 1957 Convention, art. 1-1 LLMC, art. 1-1 CLNI, art. 5-7 (c) CRTD, art. V-1 CLC 1992, art. 9-1 HNS, art. 6 Bunker. 28 See art. 1-1 LLMC, art. 1-1 CLNI, art. 5-7 (d), (e) and (f) CRTD, art. III-4 (d) and (e) CLC, art. 7-5 (d) and (e)HNS, art. 6 Bunker. 29 See art. 9-1 CRTD. 30 See art. 10 1924 Convention, art. 6-2 1957 Convention, art. 1-2 LLMC, art. 1-2 CLNI, art. 5-7 (c) CRTD, art.III-4 CLC1992, art. 7-5 (c) HNS, art. 1-3 Bunker. 31 See art. 10 1924 Convention, art. 6-2 1957 Convention, art. 1-2 LLMC, art. 1-2 CLNI, art. 5-7 (c) CRTD, art.III-4 (c) CLC1992, art. 7-5 (c) HNS, art. 6 Bunker. 32 See art. 5-7 (c) CRTD.  5 ship, – their respective agents and servants 34 , – the crew members 35 and – the pilot or anyother person, who without being a crew member, performs services for the ship. 36 Further-more, if the applicable law allows an action in rem  against the ship or a direct action againstthe liability underwriters of the ship-owner, then the ship 37 , respectively the liability under-writers 38 are entitled to invoke limitation of liability as well.8.   It is a general principle common to the general and special limitation conventionsthat the beneficiaries of limitation or immunity lose this protection if it is proven that the da-mage “resulted from his personal act or omission, committed with the intent to cause suchdamage, or recklessly and with knowledge that such damage would probably result.” 39 Un-der the older limitation conventions the right to limit of the ship-owner was understood tobe a limit to his vicarious liability as employer for the acts and faults of his servants, not aright to limit for his own faults. Consequently there was no right to limit if “the occurrencegiving rise to the claim resulted from the actual fault or privity of the owner”. 40 This resultedin many cases in which the right to limit was successfully contested under the 1957 Conven-tion. 41 The modern approach, which was introduced with CLC 1969 and LLMC 1976, aimed tomake the limits of liability virtually “unbreakable”. 42 It seems that this objective has beenachieved, because internationally there are hardly any cases where the right to limit is lost 43 , 33 See art. 6-2 1957 Convention, art. 1-2 LLMC, art. 1-2 CLNI, art. 5-7 (c) CRTD, art. III-4 (c) CLC 1992, art. 7-5 (c) HNS, art. 1-3 Bunker. 34 See: art. 6-2 1957 Convention, art. 1-4 and 9-2 LLMC, art. 1-3 and 9-3 CLNI, art. 5-7 (a) and (g) CRTD, art.III-4 (a) and (f) CLC1992, art. 7-5 (a) and (f) HNS, art. 6 Bunker. 35 See art. 6-2 1957 Convention, art. 1-4 LLMC, art. 1-3 CLNI, art. 5-7 (a) CRTD, art. III-4 (a) CLC 1992, art. 7-5 (a) HNS, art. 6 Bunker. 36 See art. 1-4 LLMC, art. 1-3 CLNI, art. 5-7 (b) CRTD, art. III-4 (b) CLC1992, art. 7-5 (b) HNS, art. 6 Bunker. 37 See art. 1-5 LLMC, art. 1-4 CLNI, art. 6 Bunker. 38 See art. 1-6 LLMC, art. 1-5 CLNI, art. 15-2 CRTD, art. V-11 and art. VII-8 CLC 1992, art. 9-11 and art. 12-8HNS, art. 6 and art. 7-10 Bunker. 39 See art. 4 LLMC, art. 4 CLNI, art. 10-1 CRTD, art. V-2 CLC and art. 9-2 HNS. 40 See art. 1-1 and art. 6-3 1957 Convention, and art. 2 1924 Convention. 41 See e.g. The Lady Gwendolen [1965] 1 Lloyd's Rep. 335, 335 (CA); The Marion [1984] 2 Lloyd’s Rep  . 1;Cour d’appel (CA) Aix-en-Provence 9.6.1988, Droit Maritime Français (DMF) , 1989, 708, CA Aix-en-Provence 14.12.1988, DMF  1990, 248. 42 See: F. Berlingieri (ed.), The Travaux Préparatoires of the LLMC Convention, 1976 and of the Protocol of 1996  , Antwerp, CMI, 2000, p. 123, No. [8]. 43 See e.g. the decision of the Court of Appeal (CA) The Hague 26.2.2002 S&S  2002, 60 [ The Pioner Onegi  ]setting aside the earlier decision of 23.4.1998 of the Court of Rotterdam in which – subject to furtherevidence – the loss of the right to limit by the ship-owner was considered possible on the alleged factsof the case. The Pioner Onegi  had left the port of Antwerp in a very unstable condition because of toomany containers stowed above deck and capsized at the first bend in the river Scheldt on its way to sea.It was alleged that an employee at the head-office had pressured the master to take on board too muchcargo. The CA The Hague decided that even if that was true, it did not constitute a “personal act oromission, committed with the intent to cause such damage, or recklessly and with knowledge that suchdamage would probably result” on the part of the ship-owner, as required under art. 4 LLMC to breakthe right to limit.
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