Liabilities in Maritime Law, a case and comparative approach with Ecuador

By |2018-06-27T16:18:58+00:00September 22nd, 2016|Uncategorized|0 Comments

                        Leonidas Villagran

A marine incident as a collision is able to generate multiple claims that at the time of assessment will consider the applicable law and also different kinds of liabilities and the possibility to limit such liability.

As an example, the vessel “A” arriving to the Port of Stockholm suddenly veers to Port and hits a Passenger Ferry which was ready to sail and with passengers. Both vessels result with damages in their hulls, two passengers in the Ferry are injured and their luggage destroyed. Moreover, as a result of the collision the vessel “A” begins to leak a considerable amount of bunker into the harbour.

The place of the incident, the place of departure and destination, the flag that the ship is flying , the place of registration of the vessel and also the place the carriage contract was made take strong importance to asses liabilities and potential claims. In this case is noted that the incident took place in Sweden. This leads to determine that in respect to this particular incident some international regulations apply in regard to liabilities, as follows:

• The International Convention for The Unification of Certain Rules of Law related to Collision between vessels 1910 (The Brussels Collision Convention)
• Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREGs)
• The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (The Bunker Convention)
• The Athens Convention regarding to the Carriage of Passengers and their Luggage by Sea, 2002 Protocol (Athens Convention protocol 2002)
• The Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents
• The London Convention on Limitation of Liability for Maritime Claims (LLMC), as amended by the 1996 Protocol (LLMC1996), including 2012 amendment.
• Directive 2004/35/CE Of The European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage
The above example provides different regimes of liabilities, as fault liability, strict and presumed liability.
Liability in Fault
The universal rule is that losses due to a shipping incident as a collision per se does not generate automatic liability due that it is necessary to establish fault. This is the clear sense of the Brussels Collision Convention which also abolished all legal presumptions of fault in regard to liabilities in collisions.

Shipowners involved in a collision are able to rely in defenses and provide evidence to demonstrate that there is no fault in their part, and of course to prove that the fault comes from other vessel or that the collision is of a fortuity nature or inevitable accident – as an example due to latent machinery failure-, or at least the fault in the collision is to be blamed to both vessels involved in order to share liabilities.

Strict Liability
Strict liability is a special kind of liability by which fault is not relevant. This is the foundation of the “polluter pays principle” where in pollution cases ships involved in the pollution incident are liable jointly and individually for the occurrence and there is no need to establish fault nor negligence as in The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 following the principles of the The International Convention on Civil Liability for Oil Pollution Damage (CLC).

The Athens Convention regarding to the Carriage of Passengers and their Luggage by Sea (2002 Protocol) provides the regime of strict liability for carriers in favor of their passengers at the occurrence of a shipping incident that causes death or injuries up to 250,000 SDR per passenger.

Presumed Liability
But if such amount is exceeded then the carrier is liable up to 400,000 and fault in the shipping incident is to be presumed on the carrier. By law the burden of proof belongs to the carrier if he contests liability. This means that the carrier will have to provide evidence that the shipping incident that caused the death and/or injuries of his passengers was not a result of his fault or his servants. If such evidence is not provided then the presumption is maintained and liability is confirmed.

Same provisions appear in The Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents.

If death or personal injuries of passengers is not a result of a shipping incident but other incidents the claimant is entitled to provide proof of negligence by the carrier. Shipping incident has been defined as shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship.

Common characteristics for claims regarding pollution and injured passengers in shipping incidents which bring the Bunker Convention 2001 and the Athens Convention, 2002 Protocol are that Shipowners are entitled to compulsory insurance and claimants have direct action against insurers which in most of the cases are the P&I Clubs. The insurer is able to escape liability if there is evidence of intentional or willful misconduct from the ship-owner.

It is to note that for both types of claims there is option for limitation of liability either for the shipowner and insurers under the The London Convention on Limitation of Liability for Maritime Claims (LLMC), as amended by the 1996 Protocol (LLMC1996), including 2012 amendment.

In regard to liabilities related to passengers according to the LLMC 1996 the maximum aggregate liability of the carrier is the amount of 175,000 SDR multiplied by the number of passengers which is authorized to carry according to the ships’s certificate . This is an amendment to the art. 4 of the LLMC Convention which abolished the maximum of 25 million SDR per passenger of the LLMC 76.

In respect to damages to property as a result of pollution, limitation of liability under the amendments to LLMC 96 are according to a chart by which ships not exceeding 2,000 gross tonnage is 1.51 million SRD, and for larger ships a calculation according the exceeding tonnage .

In the case of death or injuries to people as a result of a pollution incident strict liability is generated and the LLMC96 considers a total limit of liability for all claims, which is 3.02 million SDR (up from 2 million SDR). In case of larger vessels a specific chart operates as in the property claims.

These International Conventions have the purpose to provide quick remedy to incidents that harm the environment and passengers affected in a shipping incident while preserving the maritime industry within the regime of limitation of liability.

A comparative approach in regard to Ecuador

Ecuador has not ratified the Brussels Collision Convention 1910. Is part of the Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREGs) which provides guidelines for the vessels to prevent collisions and therefore if such provisions are not followed then it is possible to determine fault.

The Ecuadorian Code of Commerce incorporates the principle of liability in fault. Moreover the Code states that collisions are to be presumed as of fortuit nature. This is a presumption of no fault. If fortuitness is confirmed then the affected party or parties will bear their own losses. If fault is determined to one Master then he will pay all damages. If the incident is not considered as of a fortuit nature and there is no determination of fault then each one of the vessels will bear the repairs in a half and half basis, as determined by experts.

The Commerce Code introduces a sui generis provision in regard to statute of limitation. Any action in tort to claim damages in a collision that does not generate a total loss to the other vessel is considered expired if there is no letter of protest notified 24 hours after the Master is able to protest , and if a lawsuit is not brought in one month counted from the notification of the letter of protest.

In regard to a passenger vessel if an incident as in the example happens in Ecuador it is more likely that the Athens Convention will not apply unless the place of departure or destination or the flag of the passsenger vessel is from a State party of the Convention or at least the contract of carriage was executed is a signatory country. This is because Ecuador is not part of the Athens Convention. Therefore passengers are not benefited from the principles of strict liability or presumed liability, and there is no direct actions against insurers.

Ecuador has not ratified the Bunker Convention nor the LLMC 1976 nor its Protocol 2002. Therefore in a pollution incident in its waters by bunker from a non tanker vessel, these international conventions will not apply and in consequence claimants are not able to exercise direct action against insurers and defendants cannot rely on limitation of liability for these claims.

Compliance with the LLMC may be mandatory for those vessels in international operation that have to navigate in other jurisdictions where the Bunker Convention applies. This is the example of Panama. Any vessel trying to cross the Panama Canal or simply navigate in their waters should bear the blue card which certifies compliance with the compulsory insurance as directed in the Convention.

The Constitution of Ecuador in force on 2008 incorporated strict liability in environmental damages and stated that there is no statute of limitation for actions to persue and prosecute this kind of damages. This include sanctions, and also compensations to the environment and affected people.

According to The Maritime Police Act an investigation should be opened when a contamination issue arises . Fortuitness can be the conclusion of the authorities but only if this is previously alleged. If guiltyness is declared the vessel or the entity (including Ports, corporations, etc) is fined up to US$20 , and the obligation to pay for the cleaning and other damages without prejudice of criminal charges. In major pollution incidents is normal to have a prosecutor’s investigation to verify the ocurrence of an environmental felony

Even if the Maritime authority has not found negligence and therefore there is no possibility for fines, it is the implicit obligation for the polluter the cleaning and to correct damages produced due to the contamination. This is the application of the strict liability principle.

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