1. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Owners’ liability EVE DE CONING 22 85 02 46 e.d.coning@jus.uio.no Room 561, Domus Nova

2. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Limitation of liability -Limit of liability = cap on compensation payable -Long traditions -1976 London Convention = Chapter 9 NMC -Who can limit? - Section 171 reder shipowner charterer operator directly connected with salvage insurer

3. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Limitation of liability What claims can be limited - Two categories of claim - Section 172 - Section 172a - minus section 173 - Section 172 ‘regardless of the basis of liability’

4. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Limitation of liabilty What claims can be limited (cont.)? Section 172b http://www.youtube.com/watch?v=rBu_E2TpoBM&feature=related http://www.youtube.com/watch?v=MrsPI4XBip8

5. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Limitation of liability How are liability caps worked out? - Based on vessel’s size (tons = Tonnage Convention Section 172 no 6) - Larger vessel, more liable - SDR (special drawing rights) Section 505 http://www.imf.org/external/np/fin/data/rms_five.aspx

6. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Limitation of liability How are liability caps worked out (cont.)? - Section 175 (corresp. Section 172) No 2 personal injury claims No 3 property damage - Section 175a (corresp. Section 172a) wreck/cargo removal - Salvage vessels Section 175 no 5 - Proportional liability Section 176 1st

7. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO

8. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO Recap global limitation and intro pollution liability -Chapter 9 liability: - 1976 London Convention - ’global’ liability regime - based on domestic tort = ’add on’ to ordinary rules - ’caps’ compensation payable -Pollution liability - oil pollution: bunker and bulk - ’cap’ on compensation, but limit is higher - IMO (International Maritime Organization) Conventions - Different from Ch 9/global/1976 London Cvn liability: SUPPLANTS ORDINARY DOMESTIC TORT RULES, NOT MERELY AN ’ADDITION’ TO ORDINARY RULES.

9. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO POLLUTION LIABILITY -Two accident scenarios: -Oil tankers = Ch 10.II NMC = 3 IMO Conventions: The International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC) The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (FC) The Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (SP)

10. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO POLLUTION LIABILITY Tier system: First tier: CLC Liability Second tier: 1992 Fund Third tier: 2003 Supplementary Fund Max 90m SDR MC section 194 Max 203m SDR Size: 13 - 198,5m SDR MC section 201 Max 750m SDR Size: 547 SDR MC section 201

11. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO POLLUTION LIABILITY -Bunker oil pollution = Ch 10.I NMC The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001(BC01) -HNS pollution = not yet in force The International Convention on Civil Liability and Compensation for Damage in Connection with the Carriage of Harmful and Noxious Substances by Sea, 1996 (HNS96) (as amended by the Protocol of 2010) Our focus: Tanker pollution/oil carried in bulk

12. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO CLC POLLUTION LIABILITY WHEN DOES THE CLC APPLY? a)’Oil pollution damage’; Section 191 2nd para a) and b) NMC - property damage, but psychological damage? - environmental damage? - Owner’s own costs? a)’Ship’; Section 191 3rd NMC b)’Oil’; Section 191 4th NMC IF THE CLC APPLIES, IT APPLIES EXCLUSIVELY; Section 193 NMC

13. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO CLC POLLUTION LIABILITY MATERIAL RULES – THE FOUR MAIN COMPONENTS: 1.CHANNELING OF LIABILITY - Claim against the owner – only; Section 193 1st NMC - ’Owner’ = ’registered owner’; Section 191 5th NMC - List of exempted persons; Section 193 2nd NMC - unless gross negligence; Section 193 2nd last NMC - Right of recourse; Section 193 3rd rd w. 2nd c) NMC - unless gross negligence; Section 193 3rd last NMC - Hebei Spirit? 2. STRICT, NOT ABSOLUTE, LIABILITY 3.LIMITATION OF LIABILTY 4.INSURANCE

14. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO CLC POLLUTION LIABILITY MATERIAL RULES – THE FOUR MAIN COMPONENTS: 1.CHANNELING OF LIABILITY 2.STRICT, NOT ABSOLUTE, LIABILITY - Strict liabilty; Section 191 1st NMC - Exemptions; Section 192 3.LIMITATION OF LIABILTY 4.INSURANCE

15. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO CLC POLLUTION LIABILITY MATERIAL RULES – THE FOUR MAIN COMPONENTS: 1.CHANNELING OF LIABILITY 2.STRICT, NOT ABSOLUTE, LIABILITY 3.LIMITATION OF LIABILTY - CLC limitation = min 4,5m SDR/max 89,7m SDR; Sec 194 1st NMC - Limitation barred ’gross negligence’; MC Sec 194 3rd NMC, cf Art V.2 CLC ’intent or reckless with knowledge’ - FC limitation = 203m SDR/NOK 1,8b; Sec 201 NMC, Art 4.4(a)-(b) FC - SP limitation = 750m SDR/NOK 6,75b; Sec 201 NMC, 3.INSURANCE

16. © DET JURIDISKE FAKULTET UNIVERSITETET I OSLO CLC POLLUTION LIABILTY MATERIAL RULES – THE FOUR MAIN COMPONENTS: 1.CHANNELING OF LIABILITY 2.STRICT, NOT ABSOLUTE, LIABILITY 3.LIMITATION OF LIABILTY 4.INSURANCE -Compulsory; Section 197 NMC -Direct action; Section 200 NMC - owner insolvent? - limit, even if owner is grossly negligent - all exceptions as owner