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| 1. Introduction
The CMI has suggested to the Legal Committee of IMO to carry out an investigation into the manner in which the 1976 LLMC Convention has been implemented by States Parties1 and into the manner in which its provisions have been interpreted and applied. Uniformity is in fact not achieved by ratification, but through the action taken by States Parties in order to implement the Convention and through the subsequent interpretation of its provisions, and the knowledge of the manner in which its provisions have been interpreted by the Courts of the States Parties would increase the prospects of their uniform interpretation. The proposal of the CMI has been endorsed by the Legal Committee of IMO at its 80th session2 and by the Assembly at its 21st session.3 In order to collect the necessary information in respect of all States Parties a questionnaire has been prepared (Annex IV). 2. The purpose of the study On the basis of the responses to the questionnaire received as of 15 October 2000 (Annex V) and of the analysis of the manner in which the individual articles of the LLMC Convention have been implemented by the States Parties in respect of which such responses have been received (Annex VI) a tentative assessment can be made of the level of actual legislative uniformity and of the prospect of uniform interpretation of the provisions of the Convention. Such assessment can in turn enable some views to be expressed in respect of which methods of implementation are likely to ensure a higher degree of actual uniformity. 3. The purpose of conventions on uniform law Before making such assessments it is however deemed useful, by way of an introduction, to make some general remarks on the purpose of the conventions containing rules of substantive law. It is thought that such purpose is not only that of ensuring actual uniformity of the laws on a given subject but, also, of enabling all interested parties to find out how the relevant convention has been implemented. This is an easy task if the convention has been given the force of law. It is less easy if instead its provisions have been enacted without adopting the language of the convention verbatim, or have been enacted only in part, for instance because some of its provisions conform with general rules of the national law and it is therefore considered unnecessary to reproduce them, or their provisions are scattered in different parts of a wider text. The question, therefore, that ought to be considered is whether, in case a convention is implemented in such a manner, the obligation arising out of the ratification of such convention is actually fulfilled. In this connection it is worth noting that some maritime conventions expressly allow Contracting States a certain flexibility in their implementation. For example, the 1924 Brussels Bills of Lading Convention provides in its Protocol that the High Contracting Parties may give effect to the Convention either by giving it the force of law or by including in their national legislation in a form appropriate to that legislation the rules adopted under the Convention. Identical provisions may be found in the 1968 Visby Protocol to that Convention (Article 16) and in the 1967 Brussels Convention on Maritime Liens and Mortgages (Article 14(1)). Whatever may be the answer to the question of validity of such method of implementation, the fact remains that the ratification entails an obligation to give effect to the convention by enacting its provisions into the domestic legal system. It must therefore be ascertained whether the method of implementation adopted in each particular case yields such result or not.
4. Implementation by ratification and publication and by giving the force of law to the provisions of the LLMC Convention Although there is, from a constitutional point of view, a difference between the States in which a convention becomes part of the national legal system following its ratification and publication and the States in which an ad hoc Act giving the force of law to a convention is required for that purpose, the result is the same. The former technique, used in several countries of continental Europe, has for the LLMC Convention been adopted by Croatia, France, Greece, the Netherlands and Spain, The latter technique, used mainly in common law countries, has been adopted by Australia, Bahamas, Barbados, Canada, Germany, Hong Kong China, Ireland, Mexico and the United Kingdom. In all such countries, therefore, the Convention has been implemented word for word, save for the provisions in respect of which an option to regulate the subject matter differently is granted (Article 6(3), Article 10(1), Article 15(1), (2) and (3)) or a reservation is permitted (Article 2(1)(d) and (e)) and, in respect of Canada,4 save for the limits of liability, which are those of the 1996 Protocol. However, notwithstanding the implementation of Article 11(1) in its original text, in several countries there appear to be in force provisions in conflict with the rule whereby a fund may be constituted with the Court in any State Party in which legal proceedings are instituted in respect of claims subject to limitation. This seems to be the case in Australia, Belgium, France, Greece, Hong Kong China, the Netherlands and the United Kingdom.
5. Implementation by means of the incorporation of all or part of the provisions of the Convention in a national law Some States (Japan) have enacted an ad hoc law which regulates the limitation of liability of shipowners for maritime claims based on the provisions of the Convention. Others (Denmark, Finland, Georgia, New Zealand, Norway and Sweden) have incorporated certain provisions of the Convention in a wider national act, such as a maritime code5 or an act regulating generally the law of transport.6 It is therefore necessary to establish whether and to which extent the national rules correspond to the provisions of the Convention. As it appears from Annex VI the individual articles of the Convention have been implemented practically without any change by certain countries, while they have been implemented with more significant changes or their implementation has been omitted by other countries. The table which follows gives a general, albeit not precise, picture of the situation. The names of the countries of the first group are printed in bold type and the names of the countries of the second group have been printed in italics. Article 1: Denmark, Finland, Japan, Norway - Georgia, New Zealand, Sweden Article 2: Japan, New Zealand - Denmark, Finland, Georgia, Norway, Sweden Article 3: Georgia, Japan, New Zealand - Denmark, Finland, Norway, Sweden Article 4: Georgia (probably), Japan, New Zealand - Denmark, Finland, Norway, Sweden Article 5: Denmark, Finland, Georgia, Japan, Norway, Sweden - New Zealand Article 6: Denmark, Finland, Japan, New Zealand, Norway, Sweden - Georgia Article 7: Japan, New Zealand - Denmark, Finland, Georgia, Norway, Sweden Article 8: Denmark, Finland, Japan, New Zealand, Norway, Sweden - Georgia Article 9: Japan, New Zealand - Denmark, Finland, Georgia, Norway, Sweden Article 10: Denmark, Finland, Norway, Sweden - Georgia, Japan, New Zealand Article 11: Japan - Denmark, Finland, Georgia, New Zealand, Norway, Sweden Article 12: Denmark, Finland, Japan - Georgia, New Zealand, Norway, Sweden Article 13: Denmark, Finland, Japan, Norway. Sweden - Georgia, New Zealand The table below shows the position country by country: Denmark has implemented practically without changes Articles 1, 5, 6(1) except for the minimum limit for warships and ships employed on a non-commercial service, 6(2), (4) and (5), 7(1), 8, 9(1)(a) and (c), 10, 12 and 13; has implemented with some changes Articles 2, 3, 4 and 11; has not implemented Articles 7(2) and 9(1)(b) and (2). Finland has implemented practically without changes Articles 1, 5, 6(1) except for the minimum limit applicable to warships and ships employed on a non-commercial service, 6(2), (4) and (5), 7(1), 8, 9(1)(a) and (c), 10, 12 and 13; has implemented with some changes Articles 2, 3, 4 and 11; has not implemented Articles 7(2) and 9(1)(b) and (2). Georgia has implemented practically without changes Articles 3, 4 (probably), 5, 6(1) and (2), 9(1)(a), 11(2) and 12(1); has implemented with some changes Articles 1, 2, 8, 11(1); has not implemented Articles 6(4) and (5), 7, 9(1)(b) and (c) and 9(2), 10, 11(3), 12(2), (3) and (4) and 13. Japan has implemented practically without changes Articles 1, 2(a), (b), (c) and (f), 3(a)-(d), 4, 5, 6(1), (2), (4) and (5), 7, 8(1), 9, 11, 12 and 13; has not implemented Article 2(d) and (e) and 3(e). New Zealand has implemented practically without changes Articles 2, 3, 4, 7, 8(1), 9, 12(1); has implemented with some changes Articles 1, 6 (the option granted by Article 15(2)(b) having been exercised) and 13 and has not implemented Articles 5, 10, 11, 12(2)-(4). Norway has implemented practically without changes Articles 1, 2(1)(b)-(f) and (3), 5, 6(1) except for the minimum limit applicable to warships and ships employed on a non-commercial service, 6(2), (4) and (5), 7(1), 8(1), 10, 12(1), (2) and (4) and 13; has implemented with some changes Articles 2(1)(a), 3, 4, 9(1)(a) and (c) and 11; has not implemented Articles 7(2), 9(1)(b), 9(2) and 12(3). Sweden has implemented practically without changes Articles 2(1)(b)-(f) and (3), 5, 6(1) except for the minimum limit applicable to warships and ships employed on a non-commercial service, 6(2), (4) and (5), 7(1), 8, 9(1)(a) and (c), 10, 12 and 13; has implemented with some changes Articles 1, 2(1)(a), 3, 4, 11; has not implemented Articles 7(2), 9(1)(b) and (2). The changes and omissions do not always entail an actual modification of the Convention regime, but certainly create difficulties and uncertainties as to the interpretation of the domestic provisions and may adversely affect the uniform interpretation of the Convention. However from the responses to the Questionnaire it appears that in Denmark, Finland, Japan, Norway and Sweden the international origin of the provisions with which a convention is implemented and the travaux préparatoires of such convention are taken into consideration. In the above summary reference has not been made to Article 14 of the Convention since this is merely a private international law rule. Provisions on the limitation procedure exist in the great majority of the States parties and those which have been made available may be found in Annex VII.
6. Permissible variations The Convention allows a limited flexibility to States Parties in the implementation of the Convention. This is done in various manners. (a) The operation of certain provisions is made conditional to the rules of the applicable national law. (i) Article 3(2) provides that claims by servants of the shipowner or salvor are excluded from limitation if under the law governing the contract of service the shipowner is not entitled to limit his liability in respect of such claims or if under such law he is permitted to limit his liability to an amount greater than that provided under Article 6. Since, however, no provision to such effect exists, it follows that Article 3(e) does not apply and the claims in question are subject to limitation under Article 2(a). (ii) Pursuant to Article 10(1) States Parties may provide that a person liable may only invoke the right to limit liability if a limitation fund has been constituted. This option has been exercised by Japan and the Netherlands. (b) The rule set out in Article 12(1), whereby the fund is distributed in proportion to the established claims, may be departed from, as respects claims other than those for loss of life and personal injury, for claims in respect of damage to harbour works, basins and waterways and aids to navigation (Article 6(3)). Such option has been exercised by Australia and Poland. (c) The scope of application of the Convention may be restricted by States Parties in the cases specified by paragraphs 1, 2, 3 and 4 of Article 15. (i) In accordance with Article 15(1) the Convention shall apply whenever any person referred to in Article 1 seeks to limit his liability before a court of a State Party. Nevertheless each State Party may exclude from the application of the Convention any person who has not his habitual residence or his principal place of business in a State Party or any ship which does not fly the flag of a State Party. A State Party wishing to avail itself of this possibility should enact a provision to that effect. It seems that of the States Parties for which replies to the questionnaire have been received only Poland has exercised this option. (ii) Although Article 1(2) provides that the Convention shall apply to seagoing ships and this provision seems to exclude ships intended for navigation on inland waterways from the scope of application of the Convention, in accordance with Article 15(2)(a) such ships seem to be governed by the Convention, unless a national system of limitation is applicable. Article 15(2)(a) in fact provides that a State Party may regulate by specific provisions of national law the system of limitation of liability to be applied to vessels which are according to the law of that State ships intended for navigation on inland waterways. This option has been exercised by Germany, the Netherlands, Poland and Switzerland, whilst Belgium and the U.K. apply the provisions of the Convention to ships employed in inland navigation and in France there is no limitation of liability for ships intended for navigation on inland waterways. (iii) In accordance with Article 15(2)(b) a State Party may enact limits of liability other than those of the Convention for ships of less than 300 tons. Several states have availed themselves of this possibility (France, Germany, Japan, the Netherlands, Poland and United Kingdom). (iv) Article 15(3) provides that a State Party may enact a special system of limitation to be applied to cases in which nationals of other States Parties are not involved. No one of the States Parties for which replies to the questionnaire have been received has taken such a step. However, in Spain it is not settled whether the Convention would apply in such a case. (v) In accordance with Article 15(4) of the Convention Denmark, Finland, Norway and Sweden have established higher limits of liability for ships constructed for or adapted to and engaged in drilling. (d) A reservation to exclude the application of Article 1(2)(d) and (e) is permitted by Article 18. The following States have made a reservation to exclude the application of Article 1(2)(d) and (e): Belgium, France, Germany, Japan, the Netherlands. The United Kingdom has made a reservation to exclude the application of Article 1(2)(d) and to exclude the application of Article 1(2)(e) with regard to Gibraltar only and Hong Kong China has made a reservation to exclude the application of Article 1(2)(d). 7. Constitution and Distribution of the Limitation Fund This is dealt with in Articles 10 to 14 of the 1976 Limitation Convention. These articles provide a framework of universal principles but also allow to States Parties a number of specific permitted variations. Article 14 then records that subject to these principles the Rules for constitution and distribution of a limitation fund and the appropriate rules of procedure shall be governed by the lex fori. It is noteworthy that the predecessor of the 1976 LLMC, the 1957 Convention on Limitation of the Liability of the Owners of Sea Going Ships, contained very few provisions dealing with the constitution and distribution of a limitation fund. The implementation by the States Parties to the 1976 Convention therefore required new thinking in the legislatures concerned, and it cannot be surprising that there are differences. a. Article 10 - Limitation without constitution of a Limitation Fund It has long been possible in many states to plead limitation of liability as a defence without the need to deposit the funds to constitute a fund. The logic of such a practice is evident. In the majority of cases involving limitation of liability there is only one claimant — usually a cargo damage claimant — who may well have demanded and received security for its claim in the form of a P and I Club or other letter of guarantee. No useful purpose is served in such cases in requiring the limiting shipowner or other person liable to deposit the money with the court. This practice is not referred to in the 1924 and 1957 convention, although it has applied in the common law countries for many years. However the draftsmen of the 1976 Convention allowed States Parties to provide in their national law that a person liable may only invoke the right to limit liability if a limitation fund has been constituted. This derogation from the general principle was not in the nature of a reservation and did not require notification to the Secretary General as was required by reservations exercised in accordance with article 18. Of the respondents to the CMI questionnaire, only Japan and the Netherlands require the constitution of a limitation fund as a prerequisite to limitation of liability. Croatia has indicated that amendments to the existing law to make this a requirement are in the legislative pipeline. Georgia has advised that article 10 has not been enacted, but that the relevant article of the Maritime Code makes the constitution of a limitation fund optional. b. Article 11 - Constitution of the Fund The term "constitute" in the context of a limitation fund appeared for the first time in Article 2 (2) of the 1957 Convention. Previous English statutes had referred to a fund being "set up" (Merchant Shipping Act 1894 s.503) or "established" (Merchant Shipping (Oil Pollution) Act 1971 and Merchant Shipping Act 1995 s.159). The difference is, however, semantic, and the 1999 Admiralty Practice Direction uses in para 9.6(1) the word "constitute". The 1976 Convention addressed for the first time the form in which the fund should be constituted. The essence of the 1957 Convention was that "bail or other security" should be provided to avoid the arrest of the ship in question or procure its release from arrest, and that such bail or other security should be available to meet all the potential claimants against the limitation fund (art. 5). Article 4 left all questions as to the constitution and distribution of the limitation fund to national law. Article 11(2) of the 1976 Convention expressly provides that the fund may be constituted either by depositing the sum in question with the court or by producing a guarantee acceptable under the legislation of the state party where the fund is constituted and considered adequate by the court or other competent authority. It appears therefore that three possible variations are permitted by this article: i. The use of the word "may" in the first lines of paragraphs 1 and 2 indicates that the constitution of a limitation fund is not a mandatory requirement for limited liability. This is of course consistent with article 10. It appears however that only Spain and Georgia have construed this wording is this particular manner. ii. Paragraph 2 allows the State Party to legislate that a guarantee is acceptable in lieu of cash. Of the respondents to the CMI questionnaire, only Belgium, Georgia, Netherlands and Norway have indicated that their legislation gives such flexibility to the court administering the limitation proceedings. iii. The words "in which legal proceedings are instituted" in the first sentence of Paragraph 1 appears to indicate that legal proceedings against the defendant must be commenced before that defendant can constitute a limitation fund. Such an interpretation would prevent a pre-emptive constitution of a limitation fund by the defendant following a casualty which produces many claims. Such an action would have the benefit to bringing all the claimants to the same forum and should expedite payment to the victims. The Australian legislation, almost uniquely among the CMI respondents, expressly provides that a limitation action may be commenced "where a claim is made, or expected to be made…" in respect of any liability which may be limited." The Canada Shipping Act also refers to a "claim made or apprehended." The response from Greece indicates that the position there is similar. c. Article 12 - Distribution of the Fund This article substantially reproduces paragraphs 2, 3, and 4 of article 3 of the 1957 Convention, although paragraph 3 is new. A noteworthy absentee from this article is any reference to the establishment, to the satisfaction of the parties, or, failing agreement between them, to that of the court, that the party seeking limitation of liability is entitled to it. Under the legislation giving effect to the 1957 Convention and its predecessors, the English law courts required the person liable to discharge the burden of proving the absence of fault or privity ("faute personnelle"), a burden which proved very difficult to discharge in cases such as the "Lady Gwendolen" and the "Marion". By contrast, the courts in the civil law jurisdictions on the continent of Europe retained the general principle that the burden of proof lay with the claimant to demonstrate the existence of fault or privity if they sought to deprive the owner or other person liable of the right to limited liability. The 1976 Convention sought to correct this difference of approach, and the wording of article 4 of the 1976 Convention places the burden of proof on the claimant with the words "if it is proved that the loss resulted from his personal act or omission…". That interpretation has been confirmed in England by the Admiralty Judge in the case of the "Capetan San Luiz". The Admiralty Practice Direction contains express provision in para 9.1(7) requiring the claimant on whom a limitation claim form has been served to serve a defence to the limitation claim within 28 days of service upon them of the limitation claim form, or to file a notice that they admit the right of the owner or other relevant party to limit liability. The time scale is certainly short, and is unlikely to be sufficient to obtain sufficient evidence of intentional personal acts or recklessness on the part of the limiting party. Apart from those of the Netherlands, and a brief mention in the Norwegian Maritime Code, the procedural rules submitted by CMI member associations do not contain express provisions dealing with the exercise of a challenge to the entitlement of the party liable to limitation of liability. It seems that this right, which is enshrined in article 4 of the 1976 Convention, is simply left to the discretion of the court administering the limitation proceedings. d. Article 13 - Bar to other Actions This article reproduces the substance of paragraphs 1,2,3 and 4 of the 1957 Convention. The drafting of those paragraphs, and more particularly of the English statute which gave them the force of law in England, was severely criticised by Lord Denning in the case of the "Putbus" in 1969. That was a good example of the dangers of "translating" an international convention into English statutory language, rather than simply annexing the entire convention as a schedule to the enabling statute; the practice adopted with the 1976 Convention. The wording of this article has already given rise to some difficulty. When a ship is arrested and a limitation fund has been deposited (to use a neutral word) in a contracting state, but in circumstances where the arresting party is mounting a serious challenge to the right of the owner to limitation of liability, is the fund "constituted" such that the arresting court is obliged to release the ship from arrest in accordance with article 13(2) The words "release shall always be ordered" in the second part of that paragraph are strong indeed, and do not appear to allow much discretion to the arresting judge. Yet is seems difficult to believe that the draftsmen of this paragraph intended such a result where the arrestor can at the time of the arrest show at least a prima facie case of wilful wrongdoing or recklessness on the part of the owner or person liable. This issue was raised in France in the case of the "Heidberg" and the application for the release of the vessel from arrest after the constitution of the limitation fund was rejected on the ground that the right to limitation had already been denied buy a judgment, albeit not final (for a summary of the case see Bonassies, Le droit positif français en 1996, 1997 DMF, Hors série n.1, paragraph 25). The Administrator of the Proceedings The 1976 Convention does not contain any provision dealing with who shall administer the Limitation Fund, but expressly leaves all such matters to the law of the State Party where the fund is constituted (article 14). In many countries the relevant procedural rules leave this in the hands of the maritime court in question, but there are express provisions for the appointment of an appropriately experienced and qualified person in Denmark ("Director of the Fund"), Finland ("Administrator of the Fund"), France ("un juge-commissaire et un liquidateur" ), Greece ("junior judge and liquidator"), Netherlands ("supervisory judge and a liquidator"), Norway ("Fund Administrator"), and United Kingdom ("Admiralty Registrar"). e. Article 14 - Governing Law This article has already been referred to above. It reproduces the substance of articles 1(6), 4, and 5(5) of the 1957 Convention, and demonstrates the extent to which this convention has left matters on the hands of the national laws and procedures of the States Parties. This convention is therefore a fertile ground for divergent application and interpretation. The opportunity for sharing experiences and problems which is provided by this CMI study will, it is hoped, provide a chance to minimise those divergences.
8. A comparison between the various methods of implementation The unification of law is best served if the text of a Convention is enacted by the State Parties without any change in its wording. It will then be easier to ensure a uniform interpretation and application of the provisions of the Conventions in the States Parties. If other methods are chosen, such as that of adaptation of the text of the Convention to the structure of the national maritime or commercial code, there will always be a risk of discrepancies between the Convention and the text adapted to the national codes of the States Parties as well as the risk that the international origin of the domestic provisions be ignored and that the domestic provisions be interpreted under the background of the general national law rather than of the travaux préparatoires of the Convention. However, it appears that, as far as the States Parties for which replies to the questionnaire have been received are concerned, the discrepancies do not relate to the most important provisions of the Convention. What counts more in fact is the unification of the main limitation of liability issues: amounts of limitation, safeguards for avoiding a duplication of funds, constitution of fund, conduct barring limitation etc. On these main issues a satisfactory degree of unification has been reached. It may, however, be pointed out that, although Article 11(1) provides that the fund may be constituted in any State Party in which legal proceedings are instituted in respect of claims subject to limitation, several States Parties have enacted provisions prescribing an exclusive jurisdiction of their courts. It is encouraging to note that from the replies to the questionnaire it results that in the States Parties the interpretation of the international conventions in general (and consequently also the interpretation of the LLMC 1976 Convention) shall take into account the international origin of the rules and the need for a uniform interpretation as well as the ‘’travaux préparatoires’’ and to some extent also interpretations by courts of other States Parties.
1 A list of the States who have ratified or acceded to the Convention is annexed hereto as Annex I. |
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