MarIus

2.4.1 Persons entitled to limitation

In general, shipowners and salvors, as defined in MC § 171 (Article 1, paragraph (1) to (3) of the Convention), may invoke each or both of the new limitation regimes in order to “limit their liability” for the maritime claims brought by legal actions or arrest of a ship before a Norwegian court (MC § 182). Consistent with Article 1, paragraph 2 of the Convention, MC § 171 provides that the term shipowner – as the person entitled to limitation of liability – means “the owner, charterer, manager and operator” of the ship. The liability of the owner also includes the liability in an action brought against the ship itself.

The problem with this definition is that the owner of a ship is not generally liable for any damage occurring in connection with the operation of the ship. The general rule set out in MC § 151 is that the person liable for such damage, is the “reder” – the actual operator of the ship. Generally, MC § 151 does not apply to a shipowner not being also the actual operator of the ship, but § 151 is without prejudice to special rules imposing personal liability for particular types of claims on the owner of the ship. This difference between the personal liability of the shipowner and the actual operator of the ship may be important because, at present, the shipowner is quite often not the actual operator of the ship. In the context of the limitation regimes, however, this is rather insignificant.

While in MC § 171 “rederen” – the actual operator – appears as the person primarily entitled to limitation of liability, this provision also lists the shipowner as such as being entitled to limitation of any personal liability for maritime claims. This means that MC § 171, by including the “charterer” of the ship, also caters for problems arising for ships on bare boat charter parties. Ordinarily, the bare boat charterer assumes a general responsibility for providing a crew, as well as the technical and commercial operation of the ship, and, consequently, assumes the role as the actual operator – the “reder” or “chartered owner” – of the ship. (25)

Other types of charterers of the ship, e.g. time charterers, rarely assume such wide responsibilities as a bare boat charterer. Even if MC § 171 also includes the “charterer”, the extent to which a charterer, not being the actual operator, is nonetheless entitled to limitation, is a much debated question. (26). In any event, a “manager” of the ship is not entitled to limitation unless he, by the management agreement, assumes tasks equivalent to those of an actual operator of the ship. (27) Accordingly, the terms “charterer” and “manager” in MC § 171 are likely to be subject to rather restrictive interpretation in the context of the limitation regimes.

2.4.2 Salvage operations

According to Article 1, paragraph (1) “salvors, as hereinafter defined, may limit their liability in accordance with the rules of this Convention for claims set out in Article 2”, viz. any liability for limitable claims. The term “salvor”, as defined in Article 1, paragraph (3), means “any person rendering services in direct connection with salvage operations”, including removal and clean-up “operations referred to in Article 2, paragraph 1 (d), (e) and (f)”. Although providers of salvage services to a ship in distress may also be entitled to limitation of liability for limitable claims in respect of damage caused during salvage operations, different limits of liability apply to “salvors” operating from their own ship, compared to other providers of salvage services, cf. the Convention Article 9, paragraph 1. These provisions are likely to cause difficulties.

A “salvor” operating from his own ship is, according to the Convention Article 2, paragraph 1, entitled to limit his liability for claims in respect of damage arising in direct connection with the salvage services rendered. (28) Thus, any liability in tort incurred by the provider of salvage services for claims in respect of damage actually caused to a third party in direct connection with the salvage operation carried out, is covered by the express provision in Article 2, paragraphs 1 (a) and (c) and MC § 172, paragraphs 1 (a) and (c). Quite another matter is whether the operator of the ship receiving the salvage services rendered may also be liable and entitled to limit such liability for the damage caused during salvage operations, cf. the Convention Article 9, paragraphs 1 (a) and (b). This presupposes that there is a basis for also holding the owner or operator of this ship liable for such claims. If not, only the rules on limitation and limits applicable to “salvors” will apply.

Ordinarily, a salvor or provider of salvage service acquires a right to salvage reward or other remuneration for the salvage services rendered according to a request by the owner or operator of the ship. The prevailing view is that such claims against the owner or operator of a ship in distress have a contractual or quasi-contractual basis. Accordingly the exemptions from limitation in the Convention Article 3, paragraph 1 and Article 2, paragraph 2, second sentence include all claims in respect of salvage operations or services. Thus, MC § 173, paragraph 1 expressly provides that this includes both salvage awards and remunerations according to the contract for services rendered in direct connection with salvage operations. (29)

Consistent with this provision, according to the Convention Article 2, paragraph 1 (f) the owner or operator of the ship may not limit the liability for claims in respect of the cost of loss-prevention measures purporting to limit the extent of liability for other claims against the owner or operator, unless the claim is actually brought by a third party. However, a salvor and other service provider is not such a third party when he carries out work for or on behalf of the shipowner or operator having requested or been contracted for the services rendered. (30) At present, however, MC § 172 paragraph 1 (4) is relevant only for treaty-based limitation, cf. MC §§ 172a, paragraph 3 and 179 (infra note 33).

2.4.3 1996 Convention and salvage operations

The provisions on salvors and salvage operations in the 1976 Convention Article 1, paragraphs (1) and (3) were implemented by MC (1983) § 171. The 1996 Convention Article 1 contains the same provisions. Nevertheless, MC § 171 needed redrafting when the Convention was ratified with the reservation allowed for by its Article 18, because the Convention Article 1, paragraph (3) contains a specific reference to Article 2, paragraphs 1 (d), (e) and (f). The Article 18 reservation, excluding the claims in Article 2, paragraphs 1 (d) and (e) from the treaty-based limitation regime, meant that these claims became subject to the new national limitation regime. This change clearly had an impact on the definitions of “salvors” and “salvage operation” in Article 1 and MC § 171. In addition, this exclusion also meant that Article 2, paragraph 1 (f) would no longer apply to the cost of the typical loss-prevention operation referred to in Article 2, paragraphs 1 (d) and (e). (31) Accordingly, when implementing the 1996 Convention in 2005, the drafting of both MC (1983) §§ 171 and 172, paragraph 1 (f) had to be reconsidered.

The result thereof was that the provision in Article 2, paragraph (f) should apply only in connection with claims subject to treaty-based limitation according to MC § 172. This is now expressly stated in MC § 172, paragraph 1 (4). In the context of the national limitation regime, however, an equivalent rule covering the cost of loss-prevention measures, such as that set out in Article 2, paragraph 1 (d) and (e), only where carried out by third parties, (32) was likely to discourage shipowners from carrying out their own loss-prevention measures. For a shipowner, the own cost of such measures constitutes merely a part of the claims in respect of the removal and cleanup operations for which the shipowner is liable subject to a limit substantially higher than in the treaty-based regime, cf. MC § 175a. (33) Consequently, MC § 172a, paragraph (3) now covers all loss-prevention cost in respect of claims covered by MC § 172a, whether incurred by third parties or by the shipowner, cf. MC § 179.

The new provisions in MC §§ 172, paragraph 1 (4) and 172a, paragraph (3), however, required a redraft of MC (1983) § 171, defining the right to limitation of “salvors” and persons rendering “services in direct connection with salvage operations”. In order to avoid any restriction of MC § 171, the reference in MC (1983) § 171 to § 172 paragraphs 1 (d), (e) and (f) was consequently replaced in MC (2005) § 171, paragraph 1, second sentence, by express reference both to MC § 172, paragraph 1 (4) and to MC § 172a paragraph 3. (34) This entailed a similar amendment to MC § 173, paragraph 1.