Poralu Marine Australia Pty Ltd v MV Dijksgracht –  FCAFC 147 is a recent decision from the Federal Court of Australia on identifying what constitutes the contract of carriage of goods by sea, and what terms are applicable to that contract. It will not necessarily be the transport document that is issued on loading, in this case a sea waybill. The cargo of 23 pontoons and 11 pallets was carried from Ireland to Australia and it was alleged that three pontoons were discharged damaged having been loaded in sound condition. Poralu commenced two actions for damages arising from the alleged damage to three of the pontoons, both in bailment and the tort of negligence. The first action was in rem against the vessel and its owner, said to be Dijksgracht CV (DCV), a Netherlands company. The second was an action in personam against Spliethoff Transport (ST) as carrier and Rederij Dijksgracht (RD), said to be the shipowner.
There were various contenders for the contract of carriage by sea; the second recap email; the booking note; the sea waybill. At first instance,  FCA 1038, Stewart J found that the contract was concluded in the booking note which applied the law of the Netherlands and stated specifically that liability was limited to £100 lawful money of the UK per package or unit. The Hague-Visby Rules did not apply to the contract of carriage and accordingly the package limitation was the very low figure of £100 in sterling. By virtue of the Himalaya clause in the bill of lading the shipowner was able to rely on the limitation figure in the contract of carriage.
On appeal the Federal Court of Australia has upheld the decision that the shipowner could rely on the Himalaya clause in the standard form of bill of lading which formed part of the contract of carriage. However, it overruled the decision as to what constituted the contract of carriage and what was the applicable limitation of liability thereunder.
The Federal Court found that the contract of carriage was contained in the second recap email, which preceded the booking note. This specified English law and was subject to the terms of the contemplated bill of lading which contained clause 3(a) a clause paramount which reads:
“1 Except in case of US Trade, the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, as enacted in the country of shipment, shall apply to this Bill of Lading.
2 If no such enactment is in force in the country of shipment, the articles I-VIII inclusive of the said Convention shall apply.
3 In trades where the International Brussels Convention 1924 as amended by the Protocols signed at Brussels on 23 February 1968 and 21 December 1979 (the Hague-Visby Rules) apply compulsorily, the provisions of the Hague-Visby Rules shall be considered incorporated in this Bill of Lading.
5 If the Hague Rules are applicable otherwise than by national law, in determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.”
The fact that the contract contemplated the issue of a bill of lading, even though a sea waybill was eventually issued, was enough potentially to engage the Hague-Visby Rules, as held by the English Court of Appeal in The Maersk Tangier  EWCA Civ 778. As for the sea waybill, that was a mere receipt.
The contract did not fall under Article 10(a) as Ireland, where the goods were loaded, was not a Contracting State, but did fall under Article 10(c) by virtue of paragraph 1 of the clause paramount in the contemplated bill of lading. Ireland had enacted the Hague-Visby Rules domestically and therefore, in line with the decision of the English Court of Appeal in The Superior Pescadores  EWCA Civ 101, involving a similarly worded clause paramount, the reference to “the Hague Rules…as enacted in the country of shipment” referred to the “Hague-Visby Rules as amended by the 1979 Protocol”. As a result, those Rules applied to the contract of carriage so that the relevant package limitation would be calculated in accordance with the operation of the SDR Protocol unless, at the trial, Art 4(5)(e) was found to apply (namely, because the damage to the pontoons resulted from an act or omission of the carrier done with intent to cause damage or recklessly and with knowledge that damage would probably result).
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.”
Whilst the adoption of the 1976 Limitation Convention has brought much clarity to the implementation of limitation rights, it is not a complete code and there are a number of important issues that are not regulated by the Convention and which are left to be determined by the lex loci of the place where the fund is constituted. Article 14: Governing Law, of the Convention specifies that:
“Subject to the provisions of this Chapter the rules relating to the constitution and the distribution of a limitation fund, and all rules of procedure in connection therewith, shall be governed by the law of the State Party in which the fund is constituted”.
In the recent case of As Fortuna Opco BV and another v Sea Consortium Pte Ltd and Others the Singapore High Court has given helpful guidance in relation to two such issues.
Limitation fund interest
Article 11 of the Convention specifies that a limitation fund should include interest “from the date of the occurrence giving rise to liability until the date of the constitution of the fund” but makes no provision for subsequent interest. This is, presumably, since the fund has traditionally been established by way of deposit and it was assumed that the fund would continue to earn its own interest thereafter in accordance with the law of the country of deposit. However, this assumption has been undermined by the fact that the courts of (at least some) countries are now prepared to allow a limitation fund to be established by the provision of security in the form of a guarantee or P & I letter of undertaking (LOU) if satisfied of the sufficiency of that security. In such circumstances, a fund constituted by a LOU would not automatically earn interest during the period of its currency.
In the As Fortuna Opco case the parties agreed that:
the LOU should include interest from the date of the incident to the date of the constitution of the fund at the same rate as that which would have applied if the fund had been constituted by payment into court; and that
provision ought to be made for post-constitution interest where a limitation fund is constituted by way of a guarantee or LOU.
The Convention itself does not specify what rate of interest should apply to the constitution of the fund. Accordingly, the rate is to be determined pursuant to Article 14 in accordance with the law of the place where the fund is constituted. In the case of the UK the relevant rate is that specified by the Secretary of State in the Merchant Shipping (Liability of Shipowners and Others (New Rate of Interest) Order 2004. i.e. one per cent more than the base rate quoted from time to time by the Bank of England. Since there was no equivalent legislation in force in Singapore, the Singapore court held that the pre-constitution interest rate should be that which corresponded to the statutory interest rate on judgement debts in Singapore, namely 5.33%.
However, the parties disagreed regarding the rate of post-constitution interest. The ship owners argued that the rate should approximate that which would actually be earned by a payment into court, which they considered to be 2%. However, the cargo interests argued that a fair interest rate should be that which applied to the pre-constitution period (i.e. 5.33%) since by not making a payment into court, the ship owners would gain an advantage by their ability to benefit from the higher interest rate that the money could probably earn on deposit in the open market.
In determining this issue the court was guided by the fact that article 11.2 of the Convention provides that the guarantee or LOU should be “acceptable under the legislation of the State Party where the fund is constituted and considered to be adequate by the Court or other competent authority” . In considering what is “acceptable” and/or “adequate” the judge held that:
“…it should place the claimants in a position no worse than if the limitation fund had been constituted by payment into court. I therefore considered that an LOU ought to make provision for post-constitution interest at a rate which approximates the interest which could be earned on a limitation fund paid into court during the period that the fund remains in court.”
The court also opined that since the ship owners were entitled under the Convention to establish a limitation fund by the provision of a guarantee or LOU rather than by a payment into court, the court’s role was to ensure that the claimants against the fund should not be in a worse position in such circumstances. However, provided they were not put in a worse position, there was no reason why the court should restrict any benefit that the ship owners might incur as a result of proceeding in this manner. Consequently, having made enquiry as to the rate of interest earned previously on moneys paid into court pursuant to other types of proceedings, held that the appropriate post- constitution interest rate should be 2.5%.
Limitation proceedings Costs
The fundamental principles relating to the allocation of costs in a limitation action brought under the 1976 Convention were described by Clarke J in the “Captain San Luis” At pages 578-9 of the judgement the judge emphasised the difference that has been brought by Article 4 of the 1076 Convention as follows:
“There is a radical difference between the case where the shipowner must prove that the damage occurred without his actual fault or privity before he is entitled to a decree and the case where the shipowner is entitled to a decree unless the claimant proves either that he intended to causethe loss or that he acted recklessly and with knowledge that damage would probably result.”
He then went on to conclude:
“a fair balance is struck between the parties if it is held that the shipowner must pay the costs of proving those matters which he must prove in order to obtain a decree and that the claimant must pay the costs of investigating and determining the facts which the Convention provides that he must prove if, at the end of the day, he fails to establish those facts.
However, the Captain San Luis was a case in which the shipowner’s right to limit was contested and in the As Fortuna Opco case the Singapore High Court considered allocation of costs in a case in which the right to limit was uncontested. Having distinguished the Captain San Luis on this ground he court made the following detailed order:
36 “In the light of the foregoing discussion, the following principles should apply to costs of uncontested limitation decrees:
(a) The shipowner should pay the claimants’ costs in relation to those matters for which the burden of proof lies on the shipowner. These would include establishing the shipowner’s prima facie right to limit liability pursuant to Arts 1, 2 and 3 of the 1976 Convention and determining the limitation amount pursuant to Arts 6 and 7 of the 1976 Convention. Where an LOU is used to constitute the limitation fund, it will also include establishing the LOU’s adequacy and acceptability.
(b) In respect of matters for which the burden of proof lies on the claimant (eg, facts required to break limitation pursuant to Art 4 of the 1976 Convention), while the claimant is entitled to seek and be given such information as to enable it to decide whether or not to dispute the shipowner’s right to limit its liability, each party should bear its own costs in this regard.
(c) Where an application for discovery is made pursuant to O 70 r 37(6), the costs of such discovery application should follow the event.
(d) The foregoing principles are subject always to costs being in the discretion of the court.
37 For the foregoing reasons, I ordered the Plaintiffs to pay the Defendants’ costs in relation to:(a) the establishment of the Plaintiffs’ prima facie right to limit liability pursuant to Arts 1, 2and 3 of the 1976 Convention;(b) the calculation of the size of the limitation fund; and(c) the consideration of the adequacy and acceptability of the draft LOU”
Such clarification is sensible and welcomed albeit that there may still inevitably be cases in which the demarcation line between the various heads of costs will be blurred.
The cost of providing the fund
A more complex problem which was not considered in the As Fortuna Opco case arises in relation to the cost of establishing a limitation fund particularly where that fund has to be established in the form of a cash deposit or guarantee.
Article 11 of the Convention provides that:
“Any person alleged to be liable may constitute a fund”
“A fund constituted by one of the persons (that are entitled to limit pursuant to Article 1) or his insurer shall be deemed constituted by all (such) persons…
In most cases the fund will be established by the shipowner since that is the “person” that is most vulnerable to arrest. However, once established, the fund will be available to protect the interest of any of the other “persons” that are entitled to limit pursuant to Article 1. For example, cargo claims may be brought against both ship owners and charterers and charterers may wish to limit their liability by relying on a limitation fund that has been constituted by the ship owners.
David Steel J, observed at first instance in the “CMA Djakarta” that whilst the Convention provides expressly that the limitation fund would protect the “common exposure” of the various parties that were defined under the rubric of “shipowner”:
“no provision is made for allocation of the cost of putting up the fund among the members of the class.”
and again at para 60:
“Not only are questions of responsibility for supplying funds outside the convention…”
Therefore, how is the cost of providing and subsequently administering the fund to be allocated if it is proved in due course that parties other than the “person” that has constituted the fund seek to take advantage of the fund either wholly or partly in order to limit their liability? Since the Convention does not regulate this issue it is presumably to be determined pursuant to article 10 in accordance with the law of the forum, and the answer to the problem may, therefore, differ depending on what that law provides.
If the issue were to be determined in accordance with the law of England and Wales it may be that the most fruitful avenue to follow is the law relating to unjust enrichment. In a nutshell, there is unjust enrichment when one person acquires a benefit at the expense of another in circumstances which are unjust and is required to make restitution to the person that has provided the benefit.
In the case of Benedetti v Sawiristhe Supreme Court held that four factors must usually be established in order to establish a case of unjust enrichment, namely:
the defendant has been enriched; and
this enrichment is at the claimant’s expense; and
this enrichment at the claimant’s expense is unjust; and
there is no applicable bar or defence.
The provision of a limitation Fund that is intended to protect the interests of “persons” other than those of the ship owners is likely to satisfy requirements 1 and 2. However, requirements 3 and 4 may be more difficult to justify. On the one hand, it was held in Owen v Tateand McDonald v Coys of Kensington (Sales) Ltd that the person that has benefitted need not have specifically requested the benefit and it is sufficient that he has freely accepted the benefit.
However, it may be argued that by electing to establish a limitation fund, the ship owners do so fully appreciating and accepting that such a fund will automatically benefit not only them but also all the other “persons” identified in articles 9 and 11.3 of the Convention and that, consequently, although there is enrichment of such “persons”, there is no ”unjust” enrichment. Or, to make the same point differently, it cannot be said that the enrichment is “unjustified” if it is simply a voluntary bestowal of a benefit.
Nevertheless, it is noteworthy in this regard that Scarman LJ said the following in Owen v Tate:
“The fundamental question is whether in the circumstances it was reasonably necessary in the interests of the volunteer or the person for whom the payment was made, or both, that the payment should be made – whether in the circumstances it was “just and reasonable” that a right of reimbursement should arise.”
The underlined words would seem to suggest that there is a case for unjust enrichment even if the relevant voluntary act benefits the volunteer as well as the receiver of the benefit.
The concept that since there is a “common exposure” and a “common interest” of all “persons” that are entitled to limit, such “persons” should share the cost of providing the fund was emphasised by David Steel J at first instance in the “CMA Djakarta”:
“These provisions are only consistent with all those identified as within the class of shipowner having a common potential exposure to the relevant claims and a common interest in funding the limit of liability,…”
Furthermore, given the references to, the “just result” and the “fair balance” for allocating costs that was adopted in the “Captain San Luis”, it would appear that a creditable argument could be raised to satisfy criteria numbers 3 and 4.
 The Court of Appeal of |England and Wales recognised the sufficiency of a limitation fund established by a P and I letter of undertaking in the case of the “Atlantic Confidence”
 For a more detailed commentary see Chapter 10 entitled “Limitation of Liability: Recent important developments in the United Kingdom other common law jurisdictions” of Maritime Liabilities in a Global and Regional Context, Informa 2019
JD Irving Ltd v. Siemens Canada Ltd (The SPM 125) 2016 FC 287 (Federal Court of Canada)
The shipowners, JDI, engaged a firm of marine consultants to prepare stability calculations in respect of the loading of a cargo of large industrial equipment on and off the barge SPM125. During the loading process, the cargo was damaged and the owner of the cargo brought an action against the carrier claiming damages (CAD$45,000,000). The cargo owner also brought an action against the firm of marine consultants and the naval architect (who was the principal of that firm and had carried out the calculations) for the same amount.
The question that arose in this case was whether the firm of consultants had a right to limit their liability under the Convention on Limitation of Liability for Maritime Claims 1976, as amended by the Protocol of 1996, which has been incorporated into Canadian law by Part 3 of the Marine Liability Act.
Article 1(4) of the Convention stipulates:
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.
There is no firm judicial reasoning on this point and differing opinions have been expressed in text books. The Court has subscribed to the view that Article 1(4) would afford limitation to a person if the shipowner or salvor has vicarious liability for the actions of that person. This would be the case when the negligence of a master or crew member gives rise to a claim by a third party against the owner or salvor. The crew or master in that case would accordingly have a right to limit their liability under the Convention. However, the relationship between an employer and an independent contractor would not usually give rise to a claim for vicarious liability and on that basis, such contractors are not afforded a right to limit their liability under Article 1(4) of the Convention. Applying this reasoning, it was held that the marine consultants in the present case could not enjoy the right of limitation.
The decision is a significant one as it adopts a new yardstick in determining whose actions a shipowner and/or salvor is responsible for in the context of the application of Article 1(4) of the Limitation Convention 1976 as amended by 1996 Protocol. The relevant party is able to limit its liability if the shipowner and/or salvor has vicarious liability for the actions of that party. Apart from marine consultants, classification societies, freight forwarders and logistics experts are likely to fall under this category. The judgment is not binding on English courts but obviously its reasoning needs to be considered carefully when the issue does arise, in addition, it sends a strong warning to the liability insurers of independent contractors as lack of the prospect of limitation would mean a huge increase in the exposure that they might face!
Under article 4 of the 1976 LLMC the right to limit is lost if the party challenging limitation can prove that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. This is an extremely high hurdle to surmount and the right to limit has been regarded as virtually unbreakable – until now.
In The Atlantik Confidence Kairos Shipping Ltd & Anor v Enka & Co LLC & Ors  EWHC 2412 (Admlty) (11 October 2016)Teare J. held that the right to limit was lost in circumstances where the cargo was lost following a decision by the owners to scuttle the vessel. Cargo had managed to establish that the vessel was lost due to a deliberate starting of a fire by the master and chief engineer upon the instructions of the alter ego of the Owners, Mr. Ahmet Ali Agaoglu, the sole shareholder and director. Teare J. concluded: “In those circumstances the loss of the cargo resulted from his personal act committed with the intent to cause such loss. The loss of the cargo was the natural consequence of his act as he must have appreciated. There can be no doubt that he intended the cargo to be lost just as much as he intended the vessel to be lost.”
Since 2000 the EU has become increasingly active in the maritime sphere as regards safety and the environment. This has led to a series of Directives, set out below, which will cease to have effect under the implementing statutory instruments in the UK on repeal of the European Communities Act 1972.
First off, there is the series of Directives generated under the third maritime safety package, known as ERIKA III, which entered into force on 17th June 2009.
– Directive 2009/21/EC on compliance with flag state requirements
– Directive 2009/15/EC and Regulation (EC) No. 391/2009 on common rules and standards for ship inspections and survey organisations
– Directive 2009/16/EC on port State control
– Directive 2009/17/EC establishing a Community vessel traffic monitoring and information system
– Directive 2009/18/EC establishing the fundamental principles governing the investigation of accidents in the maritime transport sector
– Directive 2009/20/EC on the insurance of shipowners for maritime claims
This gives Member States the power to expel from their ports vessels which do not have a certificate showing liability for maritime claims up to the limits in the 1976 LLMC as amended by the 1996 Protocol.
Erika III also produced a Regulation.
Regulation (EC) No. 392/2009 on the liability of carriers of passengers by sea in the event of accidents. This brought the 2002 Protocol to the Athens Convention into force within the EU in 2012. The UK has ratified the Protocol and on 28 May 2014 brought it into domestic law through a statutory instrument The Merchant Shipping (Convention Relating to the Carriage of Passengers and their Luggage by Sea) Order 2014 deriving from the powers conferred by sections 183(4) and (6) and 184(1) and (3) of the Merchant Shipping Act 1995
Other notable Directives in the maritime sphere are
Directive 2005/35/EC of the European Parliament and of the Council of 7 September 2005 on ship–source pollution and on the introduction of penalties for infringements
This criminalises ship source pollution in cases of ‘serious negligence’ and was the subject of a decision of the ECJ in 2008 in the Intertanko case C-308/06 in which it decided that the legality of the Directive could not be assessed in the light of either MARPOL or UNCLOS.
Directive 2012/33/ on the Sulphur Content of Maritime Fuels.
This came into effect on 1 January 2015 and requires ships sailing in the English Channel, the North Sea and the Baltic Sea (the North European emission control area) to use bunker oil with a maximum 0.1% sulphur or apply alternative methods in order to achieve the same effect.
Directive 2013/30/EUon the safety of offshore oil and gas operations and amending Directive 2004/35/EC
This was the EU response to the ‘Deepwater Horizon’ blowout in 2010. The Directive aims to prevent the occurrence of a ‘Deepwater Horizon’ in offshore installations in the EU but also addresses, in part, the response should such an incident occur, through three provisions. First, art. 38 extends the territorial scope of the Environmental Liability Directive 2004 (the ‘ELD’) from coastal waters to waters within the exclusive economic zone or the continental shelf of Member States, up to 370 km from shore. Second, art.7 requires Member States to ensure that the licensee is financially liable for the prevention and remediation of “environmental damage” – i.e. damage falling within the ELD – caused by offshore oil and gas operations carried out by, or on behalf of, the licensee or the operator. Third, art.4 requires Member States “to require the licensee to maintain sufficient capacity to meet their financial obligations resulting from liabilities for offshore oil and gas operations.” and, when granting or transferring licenses, to take due account of, inter alia, “the applicant’s financial capabilities, including any financial security, to cover liabilities potentially deriving from the offshore oil and gas operations in question including liability for potential economic damages where such liability is provided for by national law”. These provisions came into effect on 19 July 2015.
It is, of course, open for Parliament to provide for the continuation of the statutory instruments implementing these Directives.
There might be some over-arching legislation saying, for example, that all UK laws implementing any EU Directive were repealed (perhaps with specified exceptions); or that they would all remain in force (again perhaps with exceptions). If the ECA were repealed, any secondary legislation based on s2(2) ECA would need to be saved from lapsing if it was to continue in force. EU Regulations, which are directly applicable (i.e. they do not need further implementation in the UK to come into force) will cease to have effect if the UK were to repeal the ECA.
There is no reason why EU-based UK law could not remain part of UK law, but the Government would have to make sure it still worked without the UK being in the EU.
The Government would probably come up with a mechanism for allowing changes to be made to secondary legislation (Statutory Instruments) made under the ECA or other ‘parent’ acts. There could also be general amendments, such as replacing references to ‘the Commission’ or ‘Council’ with references to ‘the Secretary of State’.
The devolved legislatures would have to deal with EU legislation they have transposed into Scottish, Welsh or Northern Irish laws. It would also be necessary to amend the relevant parts of the devolution legislation, which might require a Legislative Consent Motion under the Sewel Convention.
Two recent decisions of foreign courts as to the effect of the 1976 LLMC. The first is the decision of the Danish Maritime and Commercial Court in the MOL Comfort that the constitution of a limitation fund in Japan, another state party to the 1976 LLMC, does not bar proceedings before it in relation to the loss resulting in the constitution of the fund. The legal effect of the constitution of the fund in Japan would not come into force until enforcement of the judgment is sought. In the UK Schedule 7, paragraph 8(3) of the Merchant Shipping Act 1995 gives the court power to “stay any proceedings relating to any claim arising out of that occurrence which are pending against the person by whom the fund has been constituted.”
The second is the decision in The Yuriy Arshenevskiy of the Indian High Court (LMLN 946 – 04 March 2016) that it was not a pre-condition for maintainability of a suit for constitution of a limitation fund that there should have been a prior proceeding in the Indian court against the vessel or her owner. This is the position previously reached in the English Court of Appeal in The Western Regent  2 Lloyd’s Rep 359. The court also decided that: section 352 of the Merchant Shipping Act 1958 as amended by the Amendment Act 63 of 2002 meant that the shipowner had an absolute right to limit, and; the expression “as amended from time to time” used in the definition of the “Convention” in section 352B of the Merchant Shipping Act 1958 captured all future amendments to the 1976 Convention, and accordingly the 1996 Protocols applied, although they came into effect after the 2002 Act came into force. The court also held that the shipowners were not estopped from establishing a limitation fund because they had made an earlier application to establish a fund in China which had been withdrawn.