“Where a person who operates the vessel without owning it or the principal charterer is liable under one of the heads enumerated in Article 1, the provisions of this Convention are applicable to him.”
“(a) Loss of life of, or personal injury to, any person being carried in the ship, and loss of, or damage to, any property on board the ship; (b) Loss of life of, or personal injury to, any other person, whether on land or on water, loss of or damage to any other property or infringement of any rights caused by the act, neglect or default of any person on board the ship for whose act, neglect or default the owner is responsible or any person not on board the ship for whose act, neglect or default the owner is responsible … (c) Any obligation or liability imposed by any law relating to the removal of wreck and arising from or in connection with the raising, removal or destruction of any ship which is sunk, stranded or abandoned (including anything which may be on board such ship) and any obligation or liability arising out of damage caused to harbour works, basins and navigable waterways.”
“Subject to paragraph (3) of this Article, the provisions of this Convention shall apply to the charterer, manager and operator of the ship, and to the master, members of the crew and other servants of the owner, charterer, manager or operator acting in the course of their employment, in the same way as they apply to an owner himself: Provided that the total limits of liability of the owner and all such other persons in respect of personal claims and property claims arising on a distinct occasion shall not exceed the amounts determined in accordance with Article 3 of this Convention.”
“(1) Shipowners and salvors, as hereinafter defined, may limit their liability in accordance with the rules of this Convention for claims set out in Article 2. (2) The term ‘shipowner’ shall mean the owner, charterer, manager and operator of a seagoing ship. (3) Salvor shall mean any person rendering services in direct connexion with salvage operations.
“A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.”
“1. The limits of liability determined in accordance with Article 6 shall apply to the aggregate of all claims which arise on any distinct occasion: (a) Against the person or persons mentioned in paragraph 2 of Article 1 and any person for whose act, neglect or default he or they are responsible; or (b) Against the shipowner of a ship rendering salvage services from that ship and the salvor or salvors operating from such ship and any person for whose act, neglect or default he or they are responsible; or (c) Against the salvor or salvors who are not operating from a ship or who are operating solely on the ship to, or in respect of which, the salvage services are rendered and any person for whose act, neglect or default he or they are responsible.” (a) Against the person or persons mentioned in paragraph 2 of Article 1 and any person for whose act, neglect or default he or they are responsible; or (b) Against the shipowner of a ship rendering salvage services from that ship and the salvor or salvors operating from such ship and any person for whose act, neglect or default he or they are responsible; or (c) Against the salvor or salvors who are not operating from a ship or who are operating solely on the ship to, or in respect of which, the salvage services are rendered and any person for whose act, neglect or default he or they are responsible.”
“47. … To put it no higher, it would be surprising if, say, the owners having constituted a fund by reason of the perceived need to limit exposure to cargo-owners, the charterers could invoke the very same fund as deemed to be constituted by them as well and furnishing a limit to all the claims for which the members of the class were liable, including the cross-claim between the owners and the charterers.”
“10. … As I read these provisions, the duty of a Court is to ascertain the ordinary meaning of the words used, not just in their context but also in the light of the evident object and purpose of the convention. The Court may then, in order to confirm that ordinary meaning, have recourse to what may be called the travaux préparatoires and the circumstances of the conclusion of the convention. I would, for my part, regard the existence and terms of a previous international convention (even if not made between all the same parties) as one of the circumstances which are part of a conclusion of a new convention but recourse to such earlier convention can only be made once the ordinary meaning has been ascertained. Such recourse may confirm that ordinary meaning. It may also sometimes determine that meaning but only when the ordinary meaning makes the convention ambiguous or obscure or when such ordinary meaning leads to a manifestly absurd or unreasonable result.”
“29.
“34. This decision will mean that a charterer’s ability to limit will depend on the type of claim that is brought against him rather than the capacity in which he was acting when his liability was incurred. It may be said this construction of the 1976 Convention is less certain and less straightforward than trying to ascertain the capacity in which the charterer is acting. I do not think, however, that that would be right. To analyse a claim is primarily a legal task and is a familiar one to charterers, their insurers and advisers. The capacity in which a charterer acts is primarily a factual matter which may require evidence as well as analysis of a somewhat esoteric legal concept. It is doubtless inaccurate to say that of all the claims that could be brought by an owner against a charterer, it will only be liability to indemnify the shipowner in respect of cargo claims that he will be able to limit. But I cannot at the moment easily think of any other category where limitation is likely to apply.”
“71. … I agree that Longmore LJ’s conclusions in that regard were correct for the reasons he gave and do not need to revisit them.”
“75. Like Longmore LJ in para 10, I would regard the existence and terms of a previous international Convention (even if not made between all the same parties) as one of the circumstances which are part of a conclusion of a new Convention but recourse to such earlier Convention can only be made once the ordinary meaning has been ascertained. It may also sometimes determine that meaning but only when the ordinary meaning makes the Convention ambiguous or obscure or when such ordinary meaning leads to a manifestly absurd or unreasonable result.”
“100. In The CMA Djakarta at [21], Longmore LJ noted that the rejection of the argument that a charterer could only limit in respect of liabilities incurred qua owner did not conclude the inquiry in that case, ‘because it is still necessary to ascertain whether a claim for damage to the ship by reference to which a charterer seeks to limit his liability is a claim which falls within art.2 … [and] whether the charterers can limit their liability for any of the other claims brought by the shipowners …’. Likewise here, the rejection of Mr Smith KC’s overarching submission that Article 2 only applies to claims in respect of loss suffered originally by an outsider does not conclude the inquiry; and I have already explained why Conti’s claim against MSC does not fall within Article 2.1(a). 101. MSC did not rely only on Article 2.1(a), however. It relied also on Articles 2.1(e) and 2.1(f). In that regard, the technique deployed was to treat Conti as having made a series of claims, by reference to losses said by MSC to be of different types, and to subject each to scrutiny against the language of Article 2.1(e) and/or 2.1(f) (as the case may be). I do not regard that as an appropriate technique in the present case. 102. Conti’s claim against MSC was that dangerous cargo had been shipped in breach of charter resulting in massive damage to the ship. In calculating their award of damages, the arbitrators included the amounts of many items of expenditure incurred by Conti, duly scrutinised by the arbitrators to the extent that points arose on whether those amounts should be included. (Conti put before the arbitrators around 3,000 individual invoices to evidence the costs it said it had incurred as a result of the casualty.) That means, as will often be the case with damaged ships, that damages have been assessed by reference to actual costs incurred (scrutinised for causal connection and reasonableness, to the extent points on that arose) rather than by reference to either a more abstract assessment of the reasonable cost required to restore an undamaged ship to Conti or evidence of the ship’s pre-casualty and damaged sale values. However, the nature of the exercise, in law, was still that of putting a (negative) value on the damage to the ship (inclusive of losses consequential upon that damage) in respect of which Conti made its claim, and awarding that amount as damages. 103. I consider that to be a complete answer to MSC’s reliance on tonnage limitation in this case. That is to say, I think the correct claim characterisation in this case is that, from the perspective of the Amended 1976 Convention, Conti made good in the arbitration a claim (singular) in respect of damage to the ship (including consequential loss resulting from having a damaged ship); and tonnage limitation does not apply to such a claim. Although the primary focus of the reasoning in The CMA Djakarta (and in The Aegean Sea to the extent not disapproved in The CMA Djakarta) was on Article 2.1(a) in particular, in my view it supports my reading of Article 2.1, and my conclusion, that a claim properly characterised as a claim in respect of damage to the ship cannot sensibly be, and on the language of Article 2.1 is not, a claim subject to tonnage limitation by reference to the tonnage of the damaged ship in question. … 115. For the reasons given above, in my judgment Conti’s claim against MSC, as pursued and made good in the arbitration, is not subject to tonnage limitation under any part of Article 2.1 of the Amended 1976 Convention. It was a claim in respect of damage to the ship (including consequential loss resulting therefrom); and that is not a limitable claim.”
“164. If … it is necessary to consider MSC’s reliance upon Article 2.1(e)/(f) in relation to the groups of expenses incurred by Conti that were allowed for in the arbitrator’s assessment of quantum, then: (i) Conti’s claim in respect of cargo handling costs at Wilhelmshaven would not be within Article 2.1(e), because Article 2.1(e) concerns only claims by a party not involved in the operation of the ship for having had to deal with cargo that needed to be removed, destroyed or rendered harmless, and does not cover a claim between an owner and a time charterer in respect of the cost of cargo handling undertaken pursuant to the charter (whether by reference to the clauses concerning responsibility for cargo operations or as part of a claim for damages for breach of the charter); (ii) Conti’s claim in respect of firefighting water removal and disposal costs would not be within Article 2.1(e), because that would require the costs to be characterised, in substance, as cargo handling costs, which is questionable but in any event (i) above would then apply, and would not be within Article 2.1(f), because, upon the proper construction of Article 2.1(f), that would require the sole purpose of the firefighting effort to have been mitigation of cargo loss or damage and that is not the position on the facts; (iii) Conti’s claim in respect of burnt waste removal and disposal costs would not be within Article 2.1(e), because (as with the cost of dealing with the firefighting water) that would require, in substance, that the costs be characterised as cargo handling costs, which is questionable but in any event (i) above would then apply; and (iv) Conti’s claim in respect of the payments it made to national authorities, to ensure lawful passage for the ship to Wilhelmshaven as a port of refuge, would not be within Article 2.1(f), because that would require the sole purpose of making for Wilhelmshaven to have been to mitigate cargo loss or damage, and that is not the position on the facts.” (i) Conti’s claim in respect of cargo handling costs at Wilhelmshaven would not be within Article 2.1(e), because Article 2.1(e) concerns only claims by a party not involved in the operation of the ship for having had to deal with cargo that needed to be removed, destroyed or rendered harmless, and does not cover a claim between an owner and a time charterer in respect of the cost of cargo handling undertaken pursuant to the charter (whether by reference to the clauses concerning responsibility for cargo operations or as part of a claim for damages for breach of the charter); (ii) Conti’s claim in respect of firefighting water removal and disposal costs would not be within Article 2.1(e), because that would require the costs to be characterised, in substance, as cargo handling costs, which is questionable but in any event (i) above would then apply, and would not be within Article 2.1(f), because, upon the proper construction of Article 2.1(f), that would require the sole purpose of the firefighting effort to have been mitigation of cargo loss or damage and that is not the position on the facts; (iii) Conti’s claim in respect of burnt waste removal and disposal costs would not be within Article 2.1(e), because (as with the cost of dealing with the firefighting water) that would require, in substance, that the costs be characterised as cargo handling costs, which is questionable but in any event (i) above would then apply; and (iv) Conti’s claim in respect of the payments it made to national authorities, to ensure lawful passage for the ship to Wilhelmshaven as a port of refuge, would not be within Article 2.1(f), because that would require the sole purpose of making for Wilhelmshaven to have been to mitigate cargo loss or damage, and that is not the position on the facts.”
“Article 31 General rule of interpretation 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of the treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. 3. There shall be taken into account, together with the context: (a) any subsequent agreements between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended. Article 32 Supplementary means of interpretation Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.”
“32. The appellants do not suggest that the travaux préparatoires disclose a ‘bull’s eye’ but Mr John Kimbell KC for the appellants submitted that this was only required where they are used to ‘determine’ rather than to ‘confirm’ the meaning resulting from the application of article 31. I accept that submission. The use of supplementary material to confirm a meaning is not subject to the restrictions set out in article 32(a) and (b). They only apply when the material is relied upon to determine the meaning. Moreover, confirmation may consist of finding support for a given meaning. It does not necessitate the identification of a ‘definite legislative intention’. It may, for example, include material which helps to identify the object and purpose of the treaty or provisions within the treaty. That will be a useful aid to interpretation but it is unlikely to disclose a definite legislative intention.”
“45 … are only consistent with all those identified as within the class of shipowner having a common potential exposure to the relevant claims and a common interest in funding the limit of liability, all the more so when no provision is made for allocation of the cost of putting up the fund among the members of the class.”
“41. … Article 6 of the 1957 Convention applied its provisions to charterers ‘in the same way as they apply to an owner himself’. This phraseology strongly suggests, in my judgment, that the relevant charterer has to be exposed to one or more of the prescribed claims in a setting analogous to that which would usually implead an owner.”
“85. Where under the terms applicable to the contractual or other legal relationship between two insiders, one bears towards the other legal liability for a casualty (here, MSC’s liability to Conti for this casualty, as determined by the arbitrators), the burden of establishing a limitation fund for the benefit of them both (and all other insiders) must fall on the former. Self-evidently a claim by the latter, if they constitute the fund, for the value of the fund thus constituted, is not itself limitable. Anything else would be absurd. If in this case Conti had established the limitation fund, then on the arbitrators’ findings as to liability under the time charter, Conti would have been entitled to be compensated by MSC for the cost of having done so.”