1.6 International effects of limitation fund
The establishment of a limitation fund in one of the state parties to the 1996 Convention does not necessarily bar claimants from enforcing limitable claims by separate legal action brought against the shipowner in other state parties. Ordinarily, however, international conventions designed to create internationally uniform limitation regimes also contain provisions on the reciprocal recognition by state parties of limitation funds established in other state parties. The 1992 Liability Convention and 2001 Bunker Convention provide for such mutual recognition, implemented by MC §§ 189, 196, 203 and 205. However, the rules on mutual recognition in Article 13 of the 1976 and 1976/1996 global limitation conventions are different and are kept in rather flexible language, cf. MC § 178. This is of importance because worldwide and even in the EU/ EEA area a large group of states remain state parties to the 1976 Convention, while another large group, including the Nordic and most European states, are state parties only to the amended 1976/1996 Convention.
According to the 1996 Convention Article 13 and MC § 178, the rules on mutual recognition only apply to limitation funds established according to the 1996 Convention, and only if actually established in a 1996 state party where the casualty or the arrest of the ship took place, except if recognition is granted merely on a discretionary basis. However, MC § 178 is not applicable to limitation funds established according to the un-amended 1976 Convention (ND 2007 p. 370 NSC).
In the EU/EEA area, however, decisions by courts on establishment or other matters relating to limitation of liability and limitation funds in another member state are subject to the Brussels I Regulation (EC) No. 44/2001 and the Lugano Convention 2007 Articles 27 and 33, containing uniform rules on jurisdiction of courts, lis pendens and recognition of judgments. Consequently, legal actions and decisions relating to limitation of liability in the courts of an EU/EEA state are ordinarily subject to recognition in the other EU/EEA states. In this context, however, it is not relevant whether or not such EU/EEA state is party to the 1996 or the 1976 convention, or whether or not the conditions are met for mutual recognition of limitation funds in 1996 Convention Article 13 and MC § 178 (ND 2007 p. 370 NSC and ND 2005 p. 631 DSC). (11)