Who is an “operator of a seagoing ship” for the purposes of the 1976 Limitation Convention?

In a recent blog post I commented on various gaps in the limitation regime and the Admiralty court has now given guidance as to how another gap may be plugged – namely whilst an “operator of a seagoing ship” is a “person entitled to limit liability” pursuant to article 1.2 of the 1976 Limitation Convention, what is meant by the term “operator”? That is a term that is not defined in the Convention nor in the travaux preparatoires to the Convention, Furthermore, the issue has not been considered in any prior case and there is no helpful commentary in any of the leading textbooks on the subject.

In the case of the “Stema Barge II”(2020) EWHC 1294 (Admlty) Teare J has engaged in a careful and cogent analysis of the issue. The judge notes firstly that article 2.1 refers to the “manager and operator of a seagoing ship” and comments that in many instances there is considerable overlap between “manager” and “operator” and that the terms may often be used interchangeably:

“I therefore consider that the ordinary meaning of “the operator of a ship” includes the “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”. (para 74)

However, he goes on to say that a person may be an “operator” even if that person does not engage in the more conventional management activities which would include manning, fuelling, technical and safety supervision, trading, deployment of the ship etc.

The “Stema Barge II” was an unmanned dumb barge which required unique handling as explained by the judge:.

“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” (to use a neutral word) by a company which places men 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 article 1(2) 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.” (para 75)

The judge concludes that:

“I have therefore concluded that the ordinary meaning of “the operator of a ship” in article 1(2) of the 1976 Limitation Convention 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 her in the ordinary course of the ship’s business.”

Whilst the facts of the case may have been somewhat special the decision may have an impact on the wider issue of who is deemed to be an “operator” of an unmanned ship and whether an entity that operates the controls of an unmanned ship “in the ordinary course of the ship’s business” from shore can limit its liability. It is true that in the case of the “Stema Barge II” the entity that sought the right to limit had actually boarded the barge in order to be able to operate its machinery. However, it does not seem that the physical boarding of the vessel should necessarily be a restricting factor and there are indications  that the judge was thinking in more general terms. For example, he makes the following more general observations:

“The question which arises in these circumstances is whether the ordinary meaning of “the operator of a ship” in article 1(2) can include those who physically operate the machinery of the ship and those who cause the machinery of the ship to be physically operated…” (para 75)

“Those who cause an unmanned ship to be physically operated…” (para 81)

It is true that the judge says at para 74 that:

“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.”

However, it is equally true that an unmanned ship is not a “conventional merchant ship.”

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