In January 2019, the Antea, owned by the plaintiff, collided with the Star Centurion, owned by the defendant, while the latter vessel was lying at anchor in Indonesian waters. As a result of the collision, the Star Centurion sank. The defendant commenced in personam proceedings against the plaintiff in Hong Kong. Shortly after the collision, salvors were engaged to remove pollutants from the wreck. The Indonesian Ministry of Transportation issued a wreck removal order requiring the defendant to raise, remove and render harmless the wreck. The salvors were engaged under a new contract to continue removing the remaining pollutants from the wreck and to provide caretaker services to prevent other vessels from colliding with the wreck pending its removal. Subsequently, another salvor was engaged to remove, render harmless and dispose of the vessel, including anything that was on board the vessel, in compliance with the wreck removal order.

In October 2019, the plaintiff commenced this action against the defendant to limit its liability in respect of the collision. In April 2020, the parties entered into a settlement agreement providing, amongst other things, that the Antea was 100% to blame for the collision. In May 2020, a limitation decree was granted by consent, without prejudice to the present application. The plaintiff constituted a limitation fund by paying into Court the sum of HKD 175,062,000.

On 22 June 2020, the defendant sought a declaration 'that part of the claim by Trevaskis Ltd, their heirs, successors and/or assigns (including one to be entitled to be indemnified) against the Plaintiff in respect of the raising, removal, destruction or the rendering harmless of the ship "STAR CENTURION" which is sunk and wrecked including anything that is or has been on board such ship, not be subject to limitation under the Article 2 of the Convention on Limitation of Liability for Maritime Claims 1976 and/or the Limitation Fund constituted by the Plaintiff pursuant to the order herein dated 6 May 2020'.

By Sch 2 of the Merchant Shipping (Limitation of Shipowners Liability) Ordinance, Cap 434 (the Ordinance), the Convention on Limitation of Liability for Maritime Claims 1976 (the LLMC 1976) was enacted in Hong Kong. Under s 15 of the Ordinance, the application of art 2.1.d of the LLMC 1976 was put in suspension.

The defendant said that:

1. For a claim to be subject to limitation of liability, it must fall within the scope of art 2 of the LLMC 1976;
2. Section 15(3), when read together with s 12, specifically suspends the operation of art 2.1.d from having the force of law in Hong Kong, until such time as the Chief Executive makes an order under s 15(1) of the Ordinance;
3. The Chief Executive has not made any such order;
4. Thus, the clear intention of the legislature is that any claim within the scope of art 2.1.d is at present specifically excluded as a limitable claim under the Ordinance.

The plaintiff said that:

1. The defendant has a claim for consequential loss as a result of the collision. Such loss is made up of various constituents, one of which is the cost of wreck removal;
2. The claim for consequential loss (including wreck removal) clearly falls within art 2.1.a (or in the alternative, art 2.1.c);
3. It has long been the law that a recourse claim for wreck removal is subject to limitation;
4. There is nothing in the language of Ordinance to disentitle the plaintiff from relying on limitation for a claim within art 2.1.a.

Held: Declaration granted.

In the context of the LLMC 1976, the English Supreme Court has held that, so far as the Convention is in its own words incorporated into domestic law, the task of the Court is to construe the Convention as it stands 'without any English law preconceptions'. The interpretation of international Conventions must not be controlled by domestic principles, but by reference to 'broad and general principles of construction', including those enshrined in the Vienna Convention on the Law of Treaties 1969 (arts 31 and 32): The Ocean Victory [2017] 1 WLR 1793 [72]-[74] (Lord Clarke) (see CMI16): 'The duty of a court is to ascertain the ordinary meaning of the words used, not just in their context but also in the light of the evident object and purpose of the Convention. The court may then, in order to confirm that ordinary meaning, have recourse to the travaux préparatoires and the circumstances of the conclusion of the Convention.'

Ordinary meaning

Article 2.1.d was formulated in very wide terms and was no doubt intended to be extensive in its application. This intention was confirmed by para 1 ('whatever the basis of liability may be') and para 2 ('even if brought by way of recourse or for indemnity … or otherwise'). On the face of the provisions, it can be seen that the various heads under art 2.1 may overlap in their scope. When wreck removal claims are specifically provided for under a separate head, the maxim of generalia specialibus non derogant naturally applies. The more general terms of art 2.1.a (or art 2.1.c) should give way to the specific terms of art 2.1.d when the claim is for wreck removal. Another way to approach the matter is to consider arts 2.1.a and 2.1.d in juxtaposition. Bearing in mind the wide terms of arts 2.1 and 2.2, it is fairly plain that the appropriate gateway for a wreck removal claim is art 2.1.d.

The matter should also be considered in light of the provisions of art 8 [sic: 18] of the LLMC 1976. Article [18.1] allowed State Parties to opt out of limiting claims under arts 2.1.d and 2.1.e, but not claims under the other heads. Hong Kong has indeed opted out of art 2.1.d until an order of the Chief Executive has been made pursuant to s 15(1) of the Ordinance. Two important points arose from art [18]. First, there was a good reason for the claims under art 2.1.d to be separately categorised, as they might be excluded by individual State Parties. Secondly, to construe a wreck removal claim as falling within both arts 2.1.a and 2.1.d would render it meaningless to opt out of art 2.1.d.

It follows that the construction advocated by the plaintiff would not be consistent with the LLMC 1976 as whole, nor with the exclusion of art 2.1.d under s 15 of the Ordinance. The above analysis also fortifies the application of the maxim generalia specialibus non derogant. According to the ordinary meaning of the provisions, construed in their context and purpose, the defendant's wreck removal claim falls within art 2.1.d exclusively, and is not subject to limitation under art 2. This construction is also consistent with the majority view of the Full Court of the Supreme Court of Queensland in The Tiruna [1987] 2 Lloyd’s Rep 666.

Legal history

The history of the legislation and the case law (both of which originated from the UK), as well as the earlier LLMC 1957, contain nothing which militates against the above construction.

In any case, the LLMC 1976 was regarded as having 'radically altered the position' in introducing a harmonised and uniform set of rules in relation to limitation of liability around the world: see The Cape Bari [2017] 1 All ER (Comm) 189 at [10]. Lord Clarke further observed at [13]:

There are critical differences between the 1976 Convention and its predecessor, the 1957 Convention. In particular, art 1.1 confers on 'shipowners' and 'salvors' (as defined) a statutory entitlement to limit their liability in respect of claims falling within the categories listed in art 2, which provides by art 2.1 that the claims listed 'whatever the basis of liability may be, shall be subject to limitation of liability', which makes clear that the right to limit now exists whether the claim is brought in contract, tort, or otherwise. The 1957 Convention and preceding regimes contained no equivalent provision. Thus, prior to the 1976 Convention, owners were unable to limit their liability where the claim was based on a contractual liability to indemnify (as opposed to a damages claim within a listed category - typically a claim in negligence).

Cases decided prior to the LLMC 1976 are thus of little assistance.

The plaintiff's submission that there is nothing in the Ordinance which has the effect of removing the plaintiff's right to limit a wreck removal claim based on recourse, which has long been recognised under English law, is incorrect. First, the distinction between a wreck removal claim based on recourse and one founded in debt based on a statutory right (see The Stonedale (No 1) [1956] AC 1) appears to be unique to English law. As observed by Lord Clarke in The Cape Bari, the LLMC 1976 sought to unify the rules on limitation of liability applied in the maritime world. Secondly, the language of arts 2.1 and 2.2 of the LLMC 1976 clearly evidenced an intention to abandon the distinction found in English law. In other words, wreck removal claims regardless of their causes of action are treated in the same way – they are subject to limitation under the LLMC 1976, unless the State Party concerned has opted out of it.

Travaux préparatoires

Finally, there was nothing much of assistance in the travaux préparatoires, with the exception that the suggestion that wreck removal claims by public authorities be given different treatment was not adopted in the LLMC 1976, thus fortifying the proposition that art 2.1.d was designed to embrace all wreck removal claims.

[For the unsuccessful appeal to the Court of Appeal, see Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd [2022] HKCA 1089 (CMI1951).]