This claim arose from a fire on board the X-Press Pearl resulting in the total loss of the ship and cargo on 2 June 2021 off Colombo, Sri Lanka. The ship was owned by the fourth claimant, EOS RO Pte Ltd, bareboat chartered to the fifth claimant, Killiney Shipping Pte Ltd, and time chartered to the first claimant, Sea Consortium Pte Ltd (t/a X-Press Feeders). The second and third related claimants, X-Press Container Line (UK) Ltd and X-Press Container Line (Singapore) Pte Ltd, were also involved in the commercial arrangements for the ship.

At the time of the casualty, the ship was carrying containers under a variety of contractual arrangements including: i) a written agreement for transport services between the first three claimants and Maersk A/S (Maersk); ii) a fixed slots contract between the first claimant and Bengal Tiger Line Pte Ltd (BTL); and iii) a connecting carrier agreement between the first claimant and MSC Mediterranean Shipping Co SA (MSC).

The claimants were granted permission to constitute a limitation fund. The limitation amount was calculated to be SDR 19,159,937, equivalent to GBP 19,990,325.57, and an LOU was accordingly issued by the London Steam-Ship Owners' Mutual Insurance Association Ltd.

The Admiralty Registrar subsequently granted the claimants a limitation decree limiting their liability pursuant to art 6 of the LLMC 1976 as amended by the 1996 Protocol (as amended in 2012) (the Convention).

Sri Lanka commenced proceedings against the claimants in Singapore. Sri Lanka disputed the claimants' entitlement to limit their liability, invoking art 4 of the LLMC. Sri Lanka sought the setting aside of the limitation decree. There was also an issue as to who was the 'shipowner' under art 1.2 of the Convention. MSC, Maersk and BTL applied for orders that: i) they were shipowners under art 1.2 of the Convention; ii) they were entitled to limit their liability; and iii) the limitation fund constituted by the claimants covered them.

Held: BTL, MSC, and Maersk are art 1.2 'shipowners' entitled to limit liability under the Convention. This declaration does not affect any question as to the impact, if any, of a determination of the art 4 application in due course upon the limitation fund or claims, if any, that the claimants may have for indemnity or contributions in relation to the funding of it.

In The MSC Napoli [2008] EWHC 3002 (Admlty), [2009] 1 Lloyd’s Rep 246 (CMI800), Teare J held that the relevant slot charterers were 'shipowners' as defined by art 1.2 of the Convention. Each was a 'charterer … of a seagoing ship', which did not require that they had a right to use or direct the use of the entire cargo-carrying capacity of the ship. As part of giving the art 1.2 definition a proper, purposive construction, in its context within the Convention, Teare J noted ([16]):

The convention encourages [international trade by way of sea carriage] by limiting the liabilities which arise on a distinct occasion. Such liabilities obviously include cargo claims. If charterers who had issued bills of lading as carriers were not within the definition of shipowner cargo claimants could direct their claims at the charterers and so avoid the limit … . The charterers would have a claim against the shipowner but he would be able to limit his liability, thus leaving the charterers to bear the excess of the cargo claim over the limit. The inclusion of charterers within the definition of shipowners ensures that this does not happen.

He concluded ([17]) that as a matter of ordinary language there was no reason to say that 'charterer' in art 1.2 did not include a slot charterer; and that treating slot charterers as outsiders in that regard would discourage the use of slot chartering, which had become a well-established and efficient way to organise the carriage of goods.

The particular contractual arrangements under which a putative art 1.2 'charterer' enjoyed the services of the ship in question will always need to be examined before a decision can be reached on whether they are indeed within that definition. It should normally be sufficient for a party to be considered an art 1.2 'charterer' that its relevant contract obligates an owner or disponent owner to make part of the carrying capacity of a ship available to that party for the carriage of goods which that party will have contracted, or will be obligated to contract, to undertake as carrier. A party to whom space on a ship is contracted for the performance by it, delegated to the ship, of its contractual obligations as carrier, will generally be an art 1.2 'charterer', given the ordinary connotation of that word and the purpose of the Convention. That may mean that businesses that would describe themselves, in the modern jargon, as NVOCCs (non-vessel operating common carriers) rather than as (slot or any other kind of) charterers, will also be art 1.2 'charterers', subject always to reviewing the precise terms of their contractual arrangements with the ships whose services they use.

On an examination of the relevant contracts, each of BTL, MSC, and Maersk was a 'shipowner' within art 1.2 of the Convention in relation to the casualty, because each was a 'charterer' of the ship within the meaning of that term as it appears in the art 1.2 definition of 'shipowner'. The Admiralty Registrar’s order permitting the claimants to constitute a limitation fund provides that: 'Under Article 11(3), Chapter III of Schedule 7 of the Act [i.e. the Merchant Shipping Act 1995] the Limitation Fund shall be deemed constituted by all persons referred to in Article 9 of Schedule 7 of [that] Act'. It would therefore be otiose and possibly confusing to issue an overlapping declaration on that issue specifically concerning BTL, MSC, and Maersk.