Three related companies seek a decree limiting their alleged liability for damage caused by the anchor of the barge Stema Barge II to an underwater cable carrying electricity from France to England. The cable owner, RTE Réseau de Transport d'Électricité SA (RTE), accepts that Splitt Chartering APS, as the registered owner of the barge, and Stema Shipping A/S, as charterer or operator of the barge, are entitled to limit their liability. The only issue is whether Stema Shipping (UK) Ltd (Stema UK), a company said to be the operator of the barge whilst it was at anchor off Dover, is within the class of persons entitled to limit their liability pursuant to the LLMC 1976, which has the force of law pursuant to the Merchant Shipping Act 1995 (UK).

RTE's claim for the damage to the cable is subject to limitation pursuant to art 2 of the LLMC 1976, in that it is a claim in respect of damage to property occurring in direct connection with the operation of the ship. The limit of liability provided by the LLMC 1976 is 5,309,200 Special Drawing Rights (SDRs), the equivalent of approximately GBP 5.5 million. That limit applies to the aggregate of all claims arising on a distinct occasion against those entitled to limit (see art 9 of the LLMC 1976). The damages sought by RTE are well in excess of the limit.

Stema UK argues that it was the operator of the barge, and if necessary also the manager of the barge. As to the meaning of manager and operator in art 1 of the LLMC 1976, Stema UK made these submissions. 'Manager' includes anyone who manages a ship, or part of a ship, or an aspect of the operation of a ship. A manager may deal with the full combination of commercial, physical ('technical') and crewing management, or just part of the overall management role. Similarly, 'operator' includes anyone who operates a ship, or part of a ship, or an aspect of a ship. It includes anyone who operates the commercial or physical working of a ship. Management and operation may overlap or cover the same ground. The number of activities for which Stema UK was responsible off Dover could be said to amount to management and control such that Stema UK could properly be described as the manager of the barge off Dover.

RTE argues that the operator of a vessel is the person or entity which has 'direct responsibility for the management and control of the ship' as regards 'the commercial, technical and crewing operations of the ship'. That person was Stema Shipping A/S, not Stema UK. It was absurd to describe the barge master or a crewmember as the operator of the barge. Further, it was insufficient for Stema UK to say that it did things to operate the barge. It had to show that it had the status of the operator of the barge.

Held: It is appropriate to describe Stema UK as the operator of the barge off Dover. Stema UK is therefore entitled to limit liability.

Articles 1 and 2 of the LLMC 1976 describe the persons entitled to limit and the claims which are subject to the limit. The LLMC 1976, like other international Conventions, is to be construed as it stands, without any English law preconceptions, but by reference to broad and generally acceptable principles of construction: James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1978] AC 141; Fothergill v Monarch Airlines Ltd [1981] AC 251. In CMA CGM SA v Classica Shipping Co Ltd (The CMA Djakarta) [2004] 1 Lloyd’s Rep 460 (CMI728) it was said that assistance in identifying such principles was to be found in the Vienna Convention on the Law of Treaties 1969. The effect of these provisions was described in The CMA Djakarta at [10] as follows: '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 what may be called the travaux préparatoires and the circumstances of the conclusion of the convention.' The Court should avoid placing a gloss on the words used in the Convention which is not apparent from the words used. This approach was approved by the Supreme Court in The Ocean Victory [2017] 1 Lloyd’s Rep 521 (CMI16).

Although the principal issue has been as to the meaning of 'operator' it is difficult to discuss the meaning of operator without having some understanding of the meaning of 'manager', to which it must be closely related. The textbooks are agreed that there is no authority on the meaning of manager. In the latter half of the twentieth century the scope and reach of the owner’s duties, and hence of the manager’s duties, has developed and expanded. The International Safety Management Code (ISM) was adopted by the International Maritime Organisation (IMO) in 1993 and became mandatory for certain classes of vessel in 1998. Owners were required to have a Safety Management System (SMS) for the safe management and operation of ships and for pollution prevention. The present role of the manager of a ship is typically that of a person entrusted by the owner with the duty of devising and maintaining an SMS to ensure the safe operation of the vessel and the prevention of pollution, crewing the vessel with appropriately qualified and trained personnel, maintaining the vessel, finding employment for it and preparing it for trading. Some owners may entrust those tasks to one or more directors or senior personnel, others may entrust them to a separate company within the same corporate group as the owner and yet others may entrust them to independent third party companies which offer a management service. Managers may be responsible for all safety, manning, technical and commercial tasks or only for some of them. The 'manager of the ship' is thus the person entrusted by the owner with sufficient of the tasks involved in ensuring that a vessel is safely operated, properly manned, properly maintained and profitably employed to justify describing that person as the manager of the ship. If a person is entrusted with just one limited task it may be inappropriate to describe that person as the manager of the ship.

The LLMC 1976 confers the right to limit not only on the manager but also on the operator. It is very difficult to separate management from operation. The two activities are very closely related and connected. Any attempt to draw a bright line between management and operation would be fraught with difficulty. The ordinary meaning of 'the operator of a ship' includes 'the manager of a ship'. Indeed, in many cases involving a conventional merchant ship there may be little scope for operator to have any wider meaning than that of manager. The present case does not involve a conventional merchant ship but a dumb barge, laden with cargo, which is towed from the loading port to the discharge location, left there by the tug and thereafter attended by a company which places crew on board with instructions to operate the machinery of the dumb barge. The question which arises in these circumstances is whether the ordinary meaning of 'the operator of a ship' in art 1.2 of the LLMC 1976 can include those who physically operate the machinery of the ship and those who cause the machinery of the ship to be physically operated, or whether the ordinary meaning of 'the operator of a ship' is limited to the manager of the ship. The ordinary meaning of the verb 'to operate' when applied to a ship can extend to the physical operation of the vessel’s machinery. The question, however, is whether the ordinary meaning of the phrase 'the operator of the ship' in the context of the LLMC 1976 can include those who physically operate the ship or those who cause the ship to be physically operated.

It is necessary to consider whether the master and crew of a vessel could be the operator within the meaning of art 1.2. Article 1.4 of the LLMC 1976 provides: 'If any claims set out in Article 2 are made against any person for whose act, neglect or default the shipowner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this Convention.' This makes it clear that, although the master can be said to operate or work the ship individually or in association with the other officers and crew, it cannot have been intended that s/he was within the class of operator referred to in art 1.2. For if s/he was, art 1.4 would have been unnecessary. Reading art 1 as a whole therefore suggests that 'operator' is used at a higher level of abstraction, one which has a notion of management and control over the operation of the ship. It is to be noted that under art 6.2 of the LLMC 1957 the right to limit was available to 'the charterer, manager and operator of the ship, and to the master, members of the crew ...'. Thus under that Convention also 'operator' did not include the master and crew because they were specifically referred to in addition to the operator.

Those who cause an unmanned ship to be physically operated have some management and control over the ship. If, with the permission of the owner, they send their employees on board the ship with instructions to operate the ship’s machinery in the ordinary course of the ship’s business, they can be said to be the operator of the ship within the ordinary meaning of that phrase, though they may not be the manager of it. That the operator of a ship can include those who would not qualify as the manager of the ship is also suggested by the use of the word 'operator' in addition to the word 'manager' in art 1.2.

The ordinary meaning of 'the operator of the ship' is to be understood in the light of the object and purpose of the LLMC 1976. The purpose of owners, charterers, managers and operators being able to limit their liability is to encourage the provision of international trade by way of sea carriage. The ordinary meaning of that phrase is one which includes those who, with the permission of the owner, send their employees on board with instructions to operate the vessel’s machinery in the ordinary course of the ship's business. This is consistent with and promotes that purpose. When the owner of a dumb barge arranges for the barge to carry a cargo by sea from one place to another the barge, on arrival at the destination, is unmanned. If it has to be anchored and secured so as to remain safely at anchor whilst waiting for the cargo to be discharged the owner has to arrange for the necessary work to be done, that is, for the barge’s equipment and machinery to be operated. If the owner arranges for an associated company to do that work and it is done negligently so that loss or damage is caused to others, it would not encourage the provision of international trade by sea carriage if the owner could limit its liability for the loss or damage but the associated company which operated the barge at the discharge location could not do so.

Article 2 of the LLMC 1976 defines the claims subject to the right to limit and includes claims for loss or damage to property occurring in direct connection with 'the operation of the ship'. The operation there referred to must be the physical operation of the ship on a particular day. It is the operation of the ship which must cause the loss or damage; the ship must be the perpetrator of the loss or damage. Thus art 1 refers to 'the operator of a ship' and art 2 refers to 'the operation of the ship'. Since 'the operator of a ship' in art 1 must be understood in the context of the Convention as a whole, it would be right in principle to take into account the use of the phrase 'the operation of the ship' in art 2. Since the latter must refer to the physical operation of the ship it might be said to be consistent with it to construe the former as encompassing those who send their employees on board the ship to operate the ship’s machinery in the ordinary course of its business, though they may not be the manager of it. However, since art 2 refers to the physical operation of the ship, reference to that article would tend to narrow the meaning of 'the operator of the ship' to those who physically operate it and so exclude those acting as manager. The ordinary meaning of 'the operator of the ship' clearly can include the manager and so reference to art 2 serves only to confuse. It cannot assist in elucidating the meaning of those entitled to limit pursuant to art 1. It only defines the claims subject to the right to limit.

The decision of the Federal Court of Australia in ASP Ship Management Pty Ltd v The Administrative Appeals Tribunal [2006] FCAFC 23 (CMI1909) that the ordinary meaning of 'the operator of a ship' is restricted to the person or entity which has direct responsibility for the management and control of the ship as regards the commercial, technical and crewing operations of the ship, cannot be regarded as determining the meaning of 'the operator of the ship' in the LLMC 1976. The context of the question before the Federal Court was different from the context of the question before this Court. The LLMC 1976 has a different purpose from that of the Australian statute which was construed by the Federal Court. Also, the Australian statute used different language and did not include both a reference to the manager and to the operator.

The first reference to 'a person who operates a vessel' in a limitation Convention was in the LLMC 1924. Article 10 provided that 'where a person who operates the vessel without owning it ... is liable under one of the heads enumerated in article 1, the provisions of this convention are applicable to him'. It is difficult to understand the reference to 'a person who operates the vessel without owning it' as being to anyone other than the professional manager appointed by an owner to manage its vessel. Before the rise of the professional manager, ship management in the late nineteenth century was carried out by the 'ship’s husband' who was initially one of the ship’s owners and later the managing owner. The first reference to manager and operator was in the LLMC 1957 which, by art 6.2, applied its provisions to the 'charterer, manager and operator of the ship ... in the same way as they apply to the owner himself'. The next and final reference was in art 1.2 of the LLMC 1976. On the one hand, it could be suggested that the juxtaposition of the manager and operator in the 1957 and 1976 Conventions, coupled with the likely use of operator in the 1924 Convention to mean manager, indicates that the terms are being used interchangeably. On the other hand, it could be said that manager was first used in 1957 to reflect the fact that manager was the word used in the industry more often than operator but that it was nevertheless thought appropriate to add the word operator as well. On balance therefore the Convention history does not materially assist. The travaux préparatoires to the LLMC 1976 reveal no discussion as to the meaning of manager or operator, though there was a discussion as to whether the class of persons entitled to limit should extend to those who render a service in direct connection with the navigation or management of the ship.

The ordinary meaning of 'the operator of a ship' in art 1.2 of the LLMC 1976 thus embraces not only the manager of the ship but also the entity which, with the permission of the owner, directs its employees to board the ship and operate it in the ordinary course of the ship’s business.

[For the successful appeal to the Court of Appeal, see Splitt Chartering APS v Saga Shipholding Norway AS [2021] EWCA Civ 1880 (CMI1650).]