Study On The Limitation Of Liability For Maritime Claims

The limitation of liability for maritime claims is the continuation and development of the peculium and noxae dare in Roman law. It has contributed to balancing the interests of various parties concerned, and promoting the smooth development of the shipping industry. Thus it should be preserved, and at the same time be appropriately amended to reflect the current situation. This dissertation analyzes and discusses difficulties and problems in application of limitation of liability both in international and domestic level, and then puts forward some amendment suggestions. Various research methods are applied, and among them are historical analysis, legislative comparison, legal interpretation, logical analysis, case study and comparison, factual analysis and systematical study.With regard to the issue of the person entitled to limit his liability, the dissertation argues that a ship under construction, but already launched and intended for use in navigation, as well as an inland water ship, should be included in the extension of the "ship" defined and regulated by China's limitation of liability legislations. The charterer entitled to limit liability should include bareboat charterer and time charterer, while voyage charterer, space or slot charterer be excluded. Under current Chinese law, a ship manager may be incorporated into the "ship operator" and be entitled to limit his liability accordingly. However, the scope of this definition should not be further extended to include a non-vessel operating common carrier. Whether the liability insurer has the right to limit liability depends on whether the victims are entitled to initiate a direct action against the liability insurer.In determining the claims subject to limitation, various specific conditions should be carefully examined and distinguished. The basic criterion to distinguish limitable and unlimitable claims is whether the property loss or personal injury (on the premise of being directly connected with the operation of the ship) is on or off the ship. Whether oil pollution compensations are limitable claims or not depends on domestic oil pollution legislations. In China, in consideration of the fact that International Convention on Civil Liability for Oil Pollution Damage (CLC) to which China joined only applying to foreign legal relations, whether oil pollution compensations are limitable claims depends on whether foreign factors are involved in the parties legal relations. Claims within persons entitled to limitation of liability are also subject to limitation, but loss or damage of the ship concerned is not a limitable claim.With regard to the acts or omissions of losing limitation of liability, the Convention on Limitation of Liability for Maritime Claims,1976 sets up so high standards of fault and proof of evidence, that the right to limit liability is nearly impossible to be deprived. ISM rules will have some impacts on this issue. Shipowners who release the goods without presentation of original bill(s) of lading will lose the right of limitation of liability. As for Chinese judicial practice, there are some misunderstandings about the acts or omissions of losing limitation of liability, and the right of limitation of liability is not fully realized. These misunderstandings should be corrected.When determining the limit amount of liability, the dissertation argues that certain principles should be followed, such as one limit amount for one accident, priority of claims in respect of loss of life or personal injury, a joint and several liability before limitation of liability, setting off claims before limitation of liability, and proper amount of limitation. As for sea towage, the calculation of the amount of limitation of liability under non-fleet theory matches the principle of liability of sea towage and should be adopted in China. While using the Special Drawing Right (SDR) as the unit of account of the limitation amount for maritime claims, the time for its exchange for RMB in limitation cases should be different between the case with constitution of limitation fund and the case without constitution of the limitation fund. Interest of limitation fund should be calculated on the basis of the SDR interest rate. It is suggested that Article 277 of Chinese Maritime Code should be amended, stipulations in respect of the limit amount of 0.8 million RMB by the Supreme People's Court be repealed, and the wording in Article 5 of the Limitation Amount Regulation by the Ministry of Communication be clarified.Procedure for Confirmation of Right of Limitation of Liability is an indispensable procedure for applying for limitation of liability for maritime claims. The study shows that there are loopholes in China's legislations on the procedure of limitation of liability. A proposal for amendments is put forward finally.