The plaintiff's vessel Antea collided with and sank Trevaskis Ltd's vessel Star Centurion in Indonesian waters. The plaintiff brought an action against the defendants (Trevaskis Ltd and all other persons claiming or being entitled to claim damages arising from the collision) to limit its liability. The defendants issued a summons for a declaration that part of Trevaskis Ltd's claim in respect of the raising, removal, destruction, or the rendering harmless of the Star Centurion was not subject to limitation under art 2 of the LLMC 1976 and/or the limitation fund constituted by the plaintiff.

In Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd [2021] HKCFI 396 (CMI1260) Anthony Chan J granted the declaration, holding that Trevaskis Ltd's wreck removal claim fell within art 2.1.d of the LLMC 1976 exclusively, and was therefore excluded from the limitation regime under s 15 of the Merchant Shipping (Limitation of Shipowners Liability) Ordinance Cap 434 (the Ordinance) through a reservation made under art 18.1 of the LLMC 1976.

The plaintiff appealed to the Court of Appeal, contending that the wreck removal claim did not only fall within art 2.1.d of the LLMC 1976, but also within arts 2.1.a and 2.1.c, which are not excluded by the Ordinance. The Judge was in error in holding that the more general terms of arts 2.1.a and 2.1.c should give way to the specific terms of art 2.1.d in this situation, applying the maxim of generalia specialibus non derogant.

Held: Appeal dismissed.

The plaintiff argued that the legislative history and English case law on the LLMC 1957 should have a significant impact on the proper construction of the relevant provisions of the LLMC 1976. The plaintiff further argued that art 1.1.b of the LLMC 1957 was similar in effect to arts 2.1.a and 2.1.c combined in the LLMC 1976, and art 1.1.c of the LLMC 1957 was similar to art 2.1.d of the LLMC 1976. It was provided in the Protocol of Signature that any State at the time of signing, ratifying, or acceding to the LLMC 1957 might make a reservation of the right to exclude art 1.1.c. The UK made such a reservation. The LLMC 1957 was not directly incorporated into the law of the UK. Instead, the changes were given effect to by the Merchant Shipping (Liability of Shipowners and Others) Act 1958 (UK), which amended the Merchant Shipping Act 1894 (UK) in an awkward and inelegant way.

Further radical changes to limitation of shipowners liability were introduced in the LLMC 1976. With the entry into force of the LLMC 1976, the UK and Continental approaches to limitation finally merged. It sought to produce a harmonised and uniform set of rules in relation to limitation of liability for maritime claims around the world. The significant changes were: the raising of the amount of the limitation fund to what was perceived to be the maximum insurable level; a re-definition of the circumstances in which the limit could be broken such that the entitlement to limit could only be challenged in quite exceptional circumstances; and the extension of the benefit of limitation to salvors not working on board a ship, which in effect reversed the decision in The Tojo Maru [1972] AC 242 (CMI2165).

The overall effect was 'completely to transform the law' in relation to the rights of shipowners and others to limit liability. Under the LLMC 1957, a successful claimant was entitled to full reimbursement of its claim unless the defendant was able to positively prove its right to limit liability by establishing that there was no 'fault or privity' on its part. The LLMC 1976 reverses the burden of proof; it entitles the paying party to limit its liability unless the claimant proves that the person liable is guilty of 'conduct barring limitation'.

The UK ratified the LLMC 1976 on 31 January 1980. Hong Kong was included in the ratification. In keeping with its policy of unlimited liability for wreck removal expenses, by art 18.1 of the LLMC 1976, the UK made a reservation in respect of 'the application of article 2, paragraph 1(d)' on its own behalf, and on behalf of Hong Kong. The Merchant Shipping Act 1979 (UK) included provisions which gave effect to the LLMC 1976 and were extended to Hong Kong by the Merchant Shipping Act 1979 (Hong Kong) Order 1980 (UK), since amended by the Merchant Shipping Act 1979 (Hong Kong) (Amendment) Orders 1981 and 1984 (UK). These Orders were replaced by the Ordinance enacted in 1993, as it was necessary to enact local legislation to replace the UK enactments to enable their legal effect to continue after 1997.

When China resumed the exercise of sovereignty over Hong Kong, a notification dated 5 June 1997 was made by the Minister of Foreign Affairs of the PRC to the IMO that the LLMC 1976 will continue to apply to Hong Kong with effect from 1 July 1997 and it was further declared that with respect to Hong Kong, 'it reserves the right in accordance with Article 18(1), to exclude the application of the Article 2(1)(d)'. On 9 February 2015, China acceded on behalf of Hong Kong to the 1996 Protocol to amend the LLMC 1976. The instrument of accession was accompanied by the declaration that Hong Kong 'shall not be bound by article 2, paragraph 1(d)' of the LLMC 1976.

The plaintiff submitted that in construing the LLMC 1976, it is relevant to have regard to the LLMC 1957 and the case law on the previous Convention. The plaintiff referred to the decision of the English Court of Appeal in The Putbus [1969] P 136 and the decision of the Singapore Court of Appeal in The Seaway [2005] 1 SLR 435, contending that substantially the same question arose under the LLMC 1957, and that the Courts in the above cases held that the temporary suspension of art 1.1.c in the LLMC 1957 (similar to art 2.1.d in the LLMC 1976) had no effect on the owner's right to limit liability for wreck removal under art 1.1.b (the equivalent to arts 2.1.a and 2.1.c combined). However, the defendants submitted that The Putbus and The Seaway must be read in light of the manner in which the LLMC 1957 was implemented in the UK and Singapore, and that the Courts in both cases had disavowed the notion that they were construing art 1.1 of the LLMC 1957.

This Court agrees with the Judge’s approach that the ordinary meaning of the relevant provisions in the LLMC 1976 should first be ascertained in their context and in light of the object and purpose of the Convention, by reference to broad and general principles of construction, without any preconception of the case law decided prior to the Convention. To confirm the ordinary meaning thus ascertained, one may then have recourse to the travaux préparatoires and the circumstances of the conclusion of the Convention, including the terms of a previous international Convention. In this particular situation, in light of the history of the English enactments that have been set out earlier, and the peculiar manner in which the UK Parliament gave effect to the LLMC 1957 by amendments to domestic legislation, it would not be helpful to have recourse to the previous case law as an aid to construction.

The maxim of generalia specialibus non derogant has been applied in two cases concerned with claims for wreck removal expenses. In both instances, it was held that limitation of liability under the wider provision (art 1.1.b of the LLMC 1957 and art 2.1.a of the LLMC 1976 respectively) could not be invoked. The Tiruna [1987] 2 Lloyd's Rep 666 was a decision of the Full Court in the Supreme Court of Queensland; the holding concerning the limitation of liability for wreck removal expenses under art 1.1.c of the LLMC 1957 was on an obiter basis and by a majority (Kelly SP and McPherson J, with Macrossan J dissenting). Shipping Co MS Amasus BV v ELG Haneil Trading GmbH (CMI160) was a decision of the Supreme Court (Hoge Raad) of the Netherlands.

In Amasus, the Supreme Court noted that the subjects referred to in art 2.1 of the LLMC 1976 may overlap, and that a claim may be subject to limitation on various grounds listed. A recourse claim with regard to salvage from a shipowner that falls under arts 2.1.d and 2.1.a can also be regarded as a claim referred to in art 2.1.a under certain circumstances. The Court went on to say:

Based on the system of the [LLMC 1976], this concurrence does not lead to questions of interpretation because the same limits (regulated in Article 6 etc [of the Convention]) apply in both cases. However, this is different if a signatory State has made the reservation of Article 18(1) and on the basis thereof a different regime applies to that signatory state with regard to claims falling under that reservation, as is the case for the Netherlands. In view of the content and scope of [art 18.1], that other special regime takes precedence as a special rule ('lex specialis') over the competence of Article 2(1) opening lines and under (a). The Court of Appeal has therefore rightly stated … that the reservation of [art 18.1] also precludes an appeal to that limitation option.

The Supreme Court addressed an alternative argument that the reservation in art 18.1 exclusively pertains to recourse claims by waterway authorities and does not apply to claims by shipowners. This argument was rejected.

This Court agrees with the Judge on the proper construction of the ordinary meaning of the relevant provisions in the LLMC 1976, and that the plaintiff's claim was excluded from the limitation regime under the Ordinance through the reservation made under art 18.1.

[For the unsuccessful appeal to the Court of Final Appeal, see Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd [2023] HKCFA 20 (CMI2253)].