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Dato'
Jude P Benny, a Partner in the
International Shipping Law Firm
JTJB (Singapore) and a leading
maritime lawyer in Asia, in an
exclusive contribution to this
column discusses on the importance
of lawyers in handing maritime
disputes to chose very carefully
where to ground jurisdiction for
any given claim.
The
wrong choice of jurisdiction, he
advises shipowners, could prove
costly.
Benny,
a maritime consultant with Jude
Benny Consultants Sdn Bhd, credit
to fame include the handling of
Malaysian government’s case in
Singapore against various
corporations in the Republic for
dumping waste illegally in KTM’s
land.
It
has become increasingly important
to select your forum for
litigation very carefully, in
international ship collision
cases. One mistake can allow the
other party to limit liability to
a fraction of the true losses
suffered, and expose lawyers to
negligence suits.
The
concept of limitation of liability
is a creature of statute.
It
enables a shipowner to limit its
total liability for losses which
have occurred, under circumstances
for which it must answer, but
without its fault or privity.
One
may well ask why shipowners should
form a select breed when other
tortfeasers are left to fend for
themselves to the full extent of
their purses. In the words
of Lord Denning MR in The Bramley
Moore [1964] 1 ALL ER 105, “I
agree that there is not much room
for justice in this rule; but
limitation of liability is not a
matter of justice.
It
is a rule of public policy which
has its origin in history and its
justification in convenience”
There
are two important Conventions that
govern the concept and quantum of
limitation of liability.
First,
The International Limitation
Convention of 1957, and second,
the 1976 Convention on Limitation
of Liability.
The
1957 and 1976 conventions are the
distillation of many years of
legislation, case law and
commercial input.
The
1957 convention still retains the
concept of ‘actual fault or
privity’. The words were
interpreted to mean not just
affirmative or positive acts by
way of fault by the shipowner, but
that the shipowner was guilty of
an act or omission to do something
which it ought to have done.
By
the 1976 convention, the test of
‘actual fault or privity’ was
changed for a test of whether
‘the loss resulted from the
shipowner’s personal act or
omission, committed with the
intent to cause such loss or
recklessly and with knowledge that
such loss would probably
result’.
It
will be readily appreciated that
the words adopted in the 1976
convention make it far more
difficult to ‘break’
limitation, i.e., deprive the
shipowner of the right to limit
its liability. One has to
show ‘intent’ – a
near-impossibility, evidentially
speaking. The 1957
convention offers less resistance
under ‘actual fault or privity’.
In
either case, incidents arising
from events such as negligent
navigation, will not trigger a
break of limitation. The right to
limit is there precisely for
circumstances such as these.
Given
the fact that some maritime
nations, such as the UK, have
adopted the 1976 convention, and
others, such as Malaysia and
Singapore, have remained with the
1957 convention, the possibility
arises for lawyers to choose very
carefully where to ground
jurisdiction for any given claim.
This
is brought into sharper focus by
virtue of the fact that the 1976
convention generally leads to
higher levels of compensation as
compared to the 1957 convention.
As
a consequence of the above, forum
shopping has become the order of
the day for the modern shipping
lawyer.
Using
the right jurisdiction can now
lead to savings or gains running
into millions.
One
will have to be very conversant
with the conventions, before
leaving home with the shopping
cart.
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