Marine Limitation Of Liability Legal Issues

Limitation of Liability for Maritime Claims is a rule that the persons liable may limit their compensation of liability for loss or damage after the occurrence of a maritime accident. It is one of the unique features of Maritime Law, which is different from the principle of indemnity in accordance with actual loss or damage in Civil Law. According to Lord Denning MR, it is 'a rule of public policy which has its origin in history and its justification in convenience. It is a right given to promote the general health of trade and in truth is no more than a way of distributing the insurance risk.'If the person liable wants to limit his liability, he must comply with several legal conditions simultaneously, including sea-going ship, persons entitled to limitation of liability, claims subjected to limitation, claims excepted from limitation and limitation amount And he isn't engaged in conducts barring limitation. Otherwise, he will not limit his compensation of liability.According to the provisions of Maritime Code of China, shipowners, salvors and insurer of liability may limit their liabilities as 'persons entitled to limitation of liability'. The term 'shipowners' is defined as including the charterer and the operator of the sea-going ship. If the claims are made against the persons for whose act, neglect or default the shipowners or salvors are responsible, such persons may limit their liabilities in accordance with the provisions of Maritime Code of China. As the definition of 'shipowners' appears to be confined to the persons normally involved in the possession or operation of the vessel, the author considers that NVOCC, as a common carrier to perform the contract of carriage of goods by sea, will not limit his compensation of liability on account of non-vessel possession and operation.The author deems, that the right of limitation of liability is pleaded by the party liable either as a seperate petition for a limitation action or as an affirmative defense to the action brought by the claimants. The action for Limitation of Liability for Maritime Claims is an affirmative action that the persons liable apply for the Maritime Count to affirm the legal relationships with the claimers and limit their liabilities. And it is not in personam action but in rem action. Because the parties liable must answer toa petition or bring to an action and limitation amount is calculated based not on the value of arrested property but on the tonnage of the vessel.In Maritime Procedure Law of The People's Republic of China, it is not established the Chapter of 'Procedure For Limitation of Liability for Maritime Claims'. The author considers that the specialized procedure for limitation of liability for maritime claims shall include several main procedures: the application for limitation of liability the examination of the Count the constitution of Limitation Fund for maritime claims the announcement the registration of the claims the distribution of the FundIn short, there are still many disputable problems on Limitation of Liability for Maritime Claims. The author merely puts forward her own standpoints to the above problems.