This was a collision between the appellant's ship, the Antea, and the Star Centurion in Indonesian waters. As a result of the collision, the Star Centurion was a total loss. The Indonesian Ministry of Transportation issued a wreck removal order requiring the owner of the Star Centurion to raise the wreck, remove it, and render it harmless. The appellant accepted that the Antea was entirely responsible for the collision.

The owner of the Star Centurion commenced proceedings in Hong Kong against the appellant claiming damages for the loss of the vessel, and a right to be indemnified by the appellant in respect of the wreck removal expenses. The appellant commenced proceedings to limit its liability pursuant to the LLMC 1976, as incorporated into Hong Kong law by the Merchant Shipping (Limitation of Shipowners Liability) Ordinance (Cap 434) (the Ordinance).

The appellant constituted a limitation fund in Hong Kong by paying HKD 175,062,000 into Court. The respondents sought a declaration that the appellant was not entitled to limit its liability to the respondents for the wreck removal expenses, based on the disapplication by the Ordinance of art 2.1.d of the Convention, as permitted by art 18.1 of the Convention. The Court of First Instance granted the declaration sought by the respondents, holding that their wreck removal claim was not subject to limitation under art 2 (Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd [2021] HKCFI 396 (CMI1260)). The Court of Appeal dismissed the appellant’s appeal (Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd [2022] HKCA 1089 (CMI1951)).

The Appeal Committee of this Court granted leave to appeal to this Court on the following question:

Where a Contracting State has enacted [the Convention] Article 2(1) in full into local law but has, by a provision of local law (pursuant to Article 18), disapplied (permanently or temporarily) head (d), is a shipowner nonetheless entitled to limit its liability for a Private Recourse Claim under head (a), or does the existence and/or suspension of head (d) exclude the shipowner’s reliance upon head (a) for such claims?

Held: Appeal dismissed.

Articles 1-15 of the Convention were incorporated into the law of Hong Kong by s 12 of the Ordinance. Section 12 provides: 'Subject to this Part, the provisions of the Convention on Limitation of Liability for Maritime Claims, 1976 set out in Schedule 2 … have the force of law in Hong Kong.'

Schedule 2 of the Ordinance sets out the provisions of the Convention incorporated into Hong Kong law. Article 1.1 provides that shipowners (and salvors) may limit their liability in accordance with the rules of this Convention for claims set out in art 2. Article 2.1 describes the kinds of claims that are subject to limitation under the Convention. Article 3 concerns claims for salvage and art 4 refers to conduct barring limitation.

Reference to the full terms of art 2.1 shows that the kinds of claims set out in art 2.1 concern kinds of loss, that is to say factual categories of loss or expense, rather than to causes of action or legal rights, contraventions of which are the basis of the liability limited by art 2.1. That this is so is confirmed by the chapeau to art 2.1; it is also confirmed by art 2.2, which is in the following terms:

Claims set out in paragraph 1 shall be subject to limitation of liability even if brought by way of recourse or for indemnity under a contract or otherwise. However, claims set out under paragraph 1 (d), (e) and (f) shall not be subject to limitation of liability to the extent that they relate to remuneration under a contract with the person liable.

Given that there are 56 Contracting States that are bound by the Convention, it is readily understandable that the availability of limitation should not depend on the legal basis of the liability subject to limitation. The legal basis of that liability may vary across the diverse parties to the Convention.

Article 18.1 of the Convention states that any signatory may 'reserve the right to exclude the application of Article 2 paragraph 1(d) and (e). No other reservations shall be admissible to the substantive provisions of this Convention'. Hong Kong has reserved that right in relation to art 2.1.d. The application of art 2.1.d is currently suspended by s 15 of the Ordinance.

Neither party has suggested that any law other than that of Hong Kong is applicable to the respondents' claims against the appellant or to the limitation of the appellant's liability. There is no suggestion that the question presented to this Court might be affected by the circumstances that s 15 is concerned with claims arising from the removal of wrecks from Hong Kong's waterways, and that the removal in question occurred in Indonesian waters and under Indonesian law.

The Convention must be interpreted in accordance with arts 31 and 32 of the Vienna Convention on the Law of Treaties 1969, to give full effect to the ordinary meaning of the words used in their context and in light of its evident object and purpose. The appellant argued that the generalia maxim is applicable only if the putative specific provision is an exception to a general provision. It argued that art 2.1.d is not an exception to art 2.1.a. It sought to contrast art 2.1 with art 3 which expressly overrides art 2. It was said that there is no room for the operation of the generalia maxim as between the various claims set out in art 2.1 because the various paras did not purport to express a general rule and then make exceptions from it. To the extent that the appellant's approach seeks to direct attention away from the task of seeking the ordinary meaning of the words of the Convention and onto the task of construing the maxim itself, that approach is to be deprecated.

In seeking to give art 2.1.d a coherent operation within the Convention as a whole, it is a compelling consideration that art 2.1.d occurs in an immediate context of factual categories of loss or expense and is expressly and specifically concerned with claims for wreck removal expenses. In contrast, art 2.1.a makes no reference to wreck removal at all. Article 2.1.d is not only specific; it is also unqualified in its scope in that it makes no difference between claims by harbour authorities and other shipowners. It is comprehensive of any claim in respect of wreck removal and all such claims; the exclusion from limitability expressly contemplated by art 18 is no less comprehensive in its scope.

Article 18.1 of the Convention is an important aspect of the context in which art 2.1 is to be understood. Article 18.1 assumes that a claim of the kind set out in art 2.1.d is identifiable as such so that it can be disapplied by the legislature of a Contracting State. Article 18.1 contemplates that any claim in respect of wreck removal expenses may be excluded from the Convention's scheme for the limitation of liability of shipowners. Any claim, and all claims, in respect of wreck removal are included in art 2.1.d, and may be disapplied pursuant to art 18.1 because it is a claim in respect of wreck removal even if it is also possible to describe it as a claim for loss consequential upon damage to property. The breadth of what may be excluded under art 18.1 is no less than the breadth of what is included by the application of art 2.1.d. It cannot be supposed that art 18.1 contemplates that the legislature of a Contracting State would act in vain in disapplying art 2.1.d. The evident purpose of art 18.1 can be achieved only if reservation by a Contracting State is effective in disapplying art 2.1.d, even though the expenses of wreck removal might also fall within the language in which other kinds of claims are described in art 2.1.

In the context in which art 2.1.d appears, the expression 'in respect of' is used to indicate connection between a kind of loss or expense and a claim to recover that loss or expense suffered against a shipowner. Each relevant loss or expense is described as a matter of fact and without reference to any particular class of claimant or the legal rights of that claimant. Article 2.1 is explicit that the right to limit is conferred 'whatever the basis of liability may be'. Article 2.2 is explicit that the right to limit liability for a claim is conferred in respect of a specified kind of lesser expense 'even if brought by way of recourse or for indemnity under a contract or otherwise'. The context also includes art 18.1, which contemplates that a signatory may reserve the right to exclude the application of art 2.1.d. In this context, the plane on which the relationship between the claim and the liability in art 2.1.d is, is that of the relationship between the claim and the factual basis of occurrence of the loss or expense in respect of which the claim is made. That is no less so because the claim might be based on a legal liability arising from the wrongful sinking of the ship which was required to be removed. On that plane, the respondents' claim to recover the expenses of wreck removal is a claim in respect of wreck removal.

It would reduce art 2.1 to incoherence to read the Convention as providing that a Contracting State may disapply art 2.1.d and thus exclude from limitation of liability a claim for recovery of the expense of removing the wreck of a ship that has sunk, while at the same time providing that limitation of liability remains available to limit the same claim for recovery of the same expense for no reason other than that the expense is a consequence of the sinking of the same ship.

The appellant further argues that art 2.1.d is concerned only with claims by harbour authorities so that its disapplication leaves recourse claims described in art 2.1.a subject to limitation. For a number of reasons, this distinction is without substance.

First, the appellant's argument under this rubric necessarily means that art 2.1.d should be read as if it provides 'claims by harbour authorities in respect of' wreck removal. The appellant did not identify any reason for reading these extra words into the Convention to confine the otherwise comprehensive language in which it is expressed.

Secondly, the proposed qualification of the otherwise comprehensive language of art 2.1.d is inconsistent with the evident indifference of art 2.1 to the identity of the claimant, as well as to the legal basis on which any claimant may assert a liability against a shipowner.

Thirdly, to the extent that the appellant argued that reference may properly be made to the travaux préparatoires of the Convention, no suggestion can be found there that claims in respect of wreck removal expenses should be confined in the way the appellant argues.

Fourthly, the Supreme Court (Hoge Raad) of the Netherlands in Scheepvaartbedrijf MS Amasus BV v ELG Haniel Trading GmbH (CMI160) is persuasive authority against the appellant. In that case, the Court noted the absence of support in the Convention and the travaux préparatoires for the contention that the Netherlands' reservation of art 2.1.d was confined to claims by harbour authorities. The Court emphasised both the importance of 'the safety of shipping traffic, which … can be promoted by parties other than waterway authorities, through [the activities] described in [arts 2.1.d and 2.1.e]', and the absence of any justification for the outcome that an innocent 'shipowner would not be able to seek recourse against the person who caused the collision to the same extent as for a waterway authority to take recourse against the ship owner'. In arguing the contrary, the appellant relied upon the Norwegian case of Twitt Navigation Ltd v The State/Ministry of Defence (CMI1726) in which the Hordaland District Court came to a different conclusion. That decision is of little persuasive force, given that the Judge seems to have concluded that on an 'objective interpretation' of the Convention, both authority and recourse claims are subsumed under art 2.1.d, but nevertheless departed from that interpretation. That departure was in deference to an understanding which the Judge derived from the travaux préparatoires and a consideration of the LLMC 1957. These considerations afford no acceptable ground to disregard the Judge's evident conclusion as to the ordinary meaning of the words of the Convention.

One may agree with the reasoning of the Netherlands Court in Amasus as to the purpose of the reservation contemplated by art 18 and given effect by s 15(3) of the Ordinance. Unlimited liability of a shipowner liable for wreck removal expenses may help to ensure that, so far as possible, the burden of those expenses is not borne by harbour authorities. That possibility is minimised by ensuring that an innocent shipowner with a recourse claim against a negligent ship will not be left unable to bear the burden of wreck removal expenses (and meet its liability to the harbour authority) by reason of the absence of full recourse against the wrongdoer for those expenses.

The reasoning of the majority in the Full Court of the Supreme Court of Queensland in Barameda Enterprises Pty Ltd v O'Connor [1987] 2 Lloyd's Rep 666 is also persuasive in relation to the effect of the disapplication of art 2.1.d of the Convention.

The appellant relied upon the The Putbus [1969] P 136 (CMI2144) and The Seaway [2005] 1 SLR 435, decisions dealing with overlapping heads of claim under the provisions of the 1957 Convention. The appellant argued that the Convention does not sufficiently indicate an intention to alter the position as to the limitability of recourse claims relating to wreck removal expenses established by these decisions. There is a threshold objection to the appellant's approach. The task of the Court is to interpret the Convention in its own terms, not with a predisposition in favour of maintaining the preconceptions of English law reflected in earlier cases.

In any event, The Putbus was not a decision upon the effect of the disapplication of the head of claim analogous to art 2.1.d of the Convention upon the right to limitation, but upon the relevant provisions of the Merchant Shipping Act 1894 (UK). The question posed by the relationship between overlapping provisions of the 1957 Convention did not arise.

Similarly, The Seaway was concerned with the operation of the Singaporean equivalent of the Merchant Shipping Act. Once again, no issue as to overlapping provisions of the 1957 Convention arose.