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Owners’ liability

Owners’ liability. EVE DE CONING 22 85 02 46 e.d.coning@jus.uio.no Room 561, Domus Nova. Limitation of liability. Limit of liability = cap on compensation payable Long traditions 1976 London Convention = Chapter 9 NMC Who can limit? - Section 171 reder shipowner charterer

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Owners’ liability

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  1. Owners’ liability EVE DE CONING 22 85 02 46 e.d.coning@jus.uio.no Room 561, Domus Nova

  2. Limitation of liability • Limit of liability = cap on compensation payable • Long traditions • 1976 London Convention = Chapter 9 NMC • Who can limit? • - Section 171 • reder • shipowner • charterer • operator • directly connected with salvage • insurer

  3. Limitation of liability • What claims can be limited • - Two categories of claim • - Section 172 • - Section 172a • - minus section 173 • - Section 172 • ‘regardless of the basis of liability’

  4. Limitation of liabilty • What claims can be limited (cont.)? • Section 172b • http://www.youtube.com/watch?v=rBu_E2TpoBM&feature=related • http://www.youtube.com/watch?v=MrsPI4XBip8

  5. Limitation of liability • How are liability caps worked out? • - Based on vessel’s size (tons = Tonnage Convention Section 172 no 6) • - Larger vessel, more liable • - SDR (special drawing rights) Section 505 • http://www.imf.org/external/np/fin/data/rms_five.aspx

  6. Limitation of liability • How are liability caps worked out (cont.)? • - Section 175 (corresp. Section 172) • No 2 personal injury claims • No 3 property damage • - Section 175a (corresp. Section 172a) wreck/cargo removal • - Salvage vessels Section 175 no 5 • - Proportional liability Section 176 1st

  7. Recap global limitation and intro pollution liability • Chapter 9 liability: • - 1976 London Convention • - ’global’ liability regime • - based on domestic tort = ’add on’ to ordinary rules • - ’caps’ compensation payable • Pollution liability • - oil pollution: bunker and bulk • - ’cap’ on compensation, but limit is higher • - IMO (International Maritime Organization) Conventions • - Different from Ch 9/global/1976 London Cvn liability: • SUPPLANTS ORDINARY DOMESTIC TORT RULES, NOT MERELY AN ’ADDITION’ TO ORDINARY RULES.

  8. POLLUTION LIABILITY • Two accident scenarios: • Oil tankers = Ch 10.II NMC = 3 IMO Conventions: • The International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC) • The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (FC) • The Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (SP)

  9. POLLUTION LIABILITY • Tier system: Third tier: 2003 Supplementary Fund Max 750m SDR Size: 547 SDR MC section 201 Second tier: 1992 Fund Max 203m SDR Size: 13 - 198,5m SDR MC section 201 First tier: CLC Liability Max 90m SDR MC section 194

  10. POLLUTION LIABILITY • Bunker oil pollution = Ch 10.I NMC • The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001(BC01) • HNS pollution = not yet in force • The International Convention on Civil Liability and Compensation for Damage in Connection with the Carriage of Harmful and Noxious Substances by Sea, 1996 (HNS96) (as amended by the Protocol of 2010) • Our focus: Tanker pollution/oil carried in bulk

  11. CLC POLLUTION LIABILITY • WHEN DOES THE CLC APPLY? • ’Oil pollutiondamage’; Section 191 2nd para a) and b) NMC • - propertydamage, butpsychologicaldamage? • - environmentaldamage? • - Owner’sowncosts? • ’Ship’; Section 191 3rd NMC • ’Oil’; Section 191 4th NMC • IF THE CLC APPLIES, IT APPLIES EXCLUSIVELY; Section 193 NMC

  12. CLC POLLUTION LIABILITY • MATERIAL RULES – THE FOUR MAIN COMPONENTS: • CHANNELING OF LIABILITY • - Claimagainsttheowner – only; Section 193 1st NMC • - ’Owner’ = ’registeredowner’; Section 191 5th NMC • - List ofexempted persons; Section 193 2nd NMC • - unless gross negligence; Section 193 2nd last NMC • - Right ofrecourse; Section 193 3rd rd w. 2nd c) NMC • - unless gross negligence; Section 193 3rd last NMC • - Hebei Spirit? • 2. STRICT, NOT ABSOLUTE, LIABILITY • LIMITATION OF LIABILTY • INSURANCE

  13. CLC POLLUTION LIABILITY • MATERIAL RULES – THE FOUR MAIN COMPONENTS: • CHANNELING OF LIABILITY • STRICT, NOT ABSOLUTE, LIABILITY • - Strictliabilty; Section 191 1st NMC • - Exemptions; Section 192 • LIMITATION OF LIABILTY • INSURANCE

  14. CLC POLLUTION LIABILITY • MATERIAL RULES – THE FOUR MAIN COMPONENTS: • CHANNELING OF LIABILITY • STRICT, NOT ABSOLUTE, LIABILITY • LIMITATION OF LIABILTY • - CLC limitation = min 4,5m SDR/max 89,7m SDR; Sec 194 1st NMC • - Limitationbarred ’gross negligence’; MC Sec 194 3rd NMC, cf Art V.2 CLC ’intent or recklesswithknowledge’ • - FC limitation = 203m SDR/NOK 1,8b; Sec 201 NMC, Art 4.4(a)-(b) FC • - SP limitation = 750m SDR/NOK 6,75b; Sec 201 NMC, • INSURANCE

  15. CLC POLLUTION LIABILTY • MATERIAL RULES – THE FOUR MAIN COMPONENTS: • CHANNELING OF LIABILITY • STRICT, NOT ABSOLUTE, LIABILITY • LIMITATION OF LIABILTY • INSURANCE • Compulsory; Section 197 NMC • Direct action; Section 200 NMC • - owner insolvent? • - limit, evenifowner is grosslynegligent • - all exceptions as owner

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