Malta enacts liability convention

Malta enacts liability convention

ON November 21, 2003, Malta published a legal notice bringing into force the Merchant Shipping (Limitation of Liability for Maritime Claims) Regulations, 2003, which in turn will bring into effect in Malta the Limitation of Liability Convention of 1976, as amended by the 1996 protocol.

Ann Fenech, of Fenech & Fenech, writes, “The notice also sets out how the fund under the convention can be constituted from a procedural point of view. This is certainly welcome given that the current regime is the 1954 Limitation of Liability Convention. Because there are no provisions whatsoever to assist in the creation of the fund with the Maltese courts, numerous requests have been made over the years by maritime lawyers in Malta for the setting up of such funds limiting liability. As a consequence of the clear gap in how to go about actually constituting such a fund, however, no fund has ever been constituted, at least to my knowledge.”

BIMCO publishes ISPS clause

IN response to growing demand from the industry, BIMCO has published a standard ISPS clause for time charter parties. According to BIMCO, many owners and charterers are presently concluding time charters with periods that will overrun the July 1, 2004, latest implementation date for the ISPS Code.

“Among the measures imposed by the ISPS Code are requirements which shipowners can only meet with the co-operation of the charterers, such as providing information about the full style contact details of the charterers and any sub-charterers,” says Soren Larsen, BIMCO’s deputy secretary general.

“Delays, costs and expenses may well be incurred in connection with security measures taken by the local port authority or other relevant authority according to the ISPS Code, the burden of which must be borne by the owners or charterers, or shared between them. It is the allocation of liability between the owners and charterers for these delays, costs and expenses that the BIMCO ISPS clause aims to address.”

The first part of the new clause sets out the basic requirement for the owners to comply with the relevant parts of the ISPS Code as of July 1, 2004. Owners are also required to provide the charterers with documentary evidence of their compliance and give full style contact details of the operating owners’ company security officer. The second part of the clause addresses the charterers’ reciprocal obligations to provide the owners with their full style contact details and those of any sub-charterers.

According to BIMCO, not only does the clause provide that all delays, costs or expenses arising out of security measures taken by the port facilities or other relevant authority in accordance with the ISPS Code will be for the charterers’ account, irrespective of the security level imposed in the particular port or area, it also addresses the owners’ liabilities and makes it clear that the owners are accountable for all measures taken to comply with the Ship Security Plan.

A first for sub-time charterers

THE New Zealand High Court has ordered that time charterers and sub-time charterers who act as carriers under bills of lading are entitled to limit their liability in accordance with the provisions of the London Convention 1976. According to Neil Beadle at the Auckland office of Phillips Fox, although the London Convention covers charterers, it is believed that this is the first order in favour of time charterers, indeed any charterer, in any country applying the convention.

The effect of the order is to limit the sub-charterer’s potential liability, if any proved at trial, to about $4million, rather than approximately $12million. The court also found that New Zealand law does not require either that an applicant admit liability in order to get a decree nor set up a limitation. Therefore, sub-charterers who are defending the cargo claims have obtained an order limiting liability, and are entitled to defend the proceeding to trial without giving security as a condition of the order.