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On Limitation of Shipowners' Liability.—I

Published online by Cambridge University Press:  21 May 2009

A. Korthals Altes
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Extract

On December 15th, 1960 the Ministerial Decree of September 5th, 1960 relating to limitation of liability of owners of seagoing ships came into force. At the same time the Decree of February 7th, 1952 was withdrawn.

The alteration concerns mainly the increase of the amount per ton for which limitation of liability may be invoked by virtue of Sect. 474, 525 and 541 Neth. Comm. Code.

This Decree is—as we may expect—a harbinger of a more profound adaptation of the Dutch Code to the «International Convention Relating to Limitation of Liability of Owners of Seagoing ships», which was signed by our representatives ad referendum at the Brussels Diplomatic Conference of October 1957.

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Articles
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Netherlands International Law Review , Volume 10 , Issue 2 , June 1963 , pp. 139 - 155
Copyright
Copyright © T.M.C. Asser Press 1963

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References

1. Staatsblad 1960, nr 374Google Scholar: see Cleveringa, , Zeerecht, 1961, pp. 193 ff.Google Scholar, Mulderije, , Verenigde Verzekerings Pers, 1962, nr. 3.Google Scholar

2. Tractatenblad 1958, nr. 46.Google Scholar

3. Conference Diplomatique, Proces-Verbaux (infra abbreviated P.V.), official edition, Brussels 1958.Google Scholar

4. At chapter (a), infra. See Van der Feltz, , Neth. Int. Law Journal 1953–1954, p. 385 ff.Google Scholar, Cleyeringa, , paper for Neth. Maritime Law Ass. (N.V.Z.) 1958Google Scholar; Schadee, in Nederlands Juristenblad, p. 381 f.f.Google Scholar

5. For this title: Cleveringa, , o.c. 1961, p. 194Google Scholar. The Convention gives, in art. VI (2), explicitly to the operator (“reder”, “armateur”, “Reeder”), manager and charterer, the same rights as to the owner (“eigenaar”, “propriétaire”, “Eigentümer”); therefore, we will speak infra always of “owner” in the both senses of the English word “Owner”.

6. In Dutch doctrine, distinctions on limitation may be found in Meyers, , Algemeent Leer van het Burgerlijk Recht I, 1948, pp. 45–47Google Scholar and Scholten, , Opening Lecture, 1962, pp. 3–4Google Scholar, Meyers considered limitation of shipowners' liability, (c), a mere species of genus (a); in our view these ought to be distinguished. Scholten correctly separated (a) and (c): “formally (Article 1406 Civil Code) does not constitute limitation of liability, because no liability is in existence as far as the indemnity due is modified but this concept has in its main line the same ratio as limitation of liability”.

I would word the distinction as follows: Article 1406 contains primarily a limitation of claim and, in consequence, limited liability. Articles 474 etc. Commercial Code, only contain a limitation of liability. Both concepts, seen as fractions, have the same denominator: “limitation”; the numerators are respectively: “claims” and “liability”. In this line Schadee's paraphrasing (loc. cit. nt. 4) of concept (c) as: “confined claims” (“Beknotte Vorderingen”), might give rise to confusion, because such definition would be more true for concept (a); in the text of his paper, however, Schadee clearly classifies the concept under (c).

Asser-Rutten, , Verbintenissenrecht, III, 1958, p. 44 note 2Google Scholar, distinguished (c) from (b) which was not done in the previous edition. Meyers submits the question whether a “natural obligation” (“obligatio naturalis”) remains after payment in all three cases, but does not give a reply.

Cleveringa considers a “natural obligation” to remain after a shipowner has paid out his limitation fund. We did not find any support for this submission and doubt its correctness.

In any case, under concept (a) no author considers a “natural obligation” extant, which might be one more reason to distinguish (a) from (c). We would submit that the ratio of limitation of shipowners' liability — a favor commercii as to be set out infra — does not allow a “natural obligation” to remain after division of the limitation fund.

7. See Marsden, , Law of Collisions, 1961, pag. 135 f.f.Google Scholar

8. Under this title, enlightening paper by Moors, in Vlaams Rechtskundig Weekblad, 11 1953, p. 247 f.f.Google Scholar

9. See for historical background in particular the important discussion in Marsden, o.c. chapter VI; further: Ktistakis, , Reederhaftung, thesis, 1930, p. 9, f.f.Google Scholar; Miller, Dawson, Address (Ass. Avarage Adjusters) 1953Google Scholar; Brown, J. of Supreme Court in the Main vs Williams, 1894, 152 U.S. 126.Google Scholar

10. Dig. IV, 9, 3, 1.Google Scholar

11. Supporter of the “noxae dedito” or “deodandum” theory: Holmes, , Common Law, (ed. 1923) p. 26Google Scholar: Lectures, 1 (1923), passim; likewise: Sieveking, , Bull. CMI. nr. 12, p. 76Google Scholar and Senegallia, , Revue Dor, 1939, 4Google Scholar; Opposing this, correctly in our view, Prodromides, , thesis, 1919, p. 149 f.f.Google Scholar; Pfeiffer, , Responsabilité de l'armateur, thesis, 1954Google Scholar, correctly observes that this theory serves to support the argument that the owner would be limitedly liable propter rem which is, in his opinion, a debatable hypothesis (which, however, is still found in Smeesters, , Droit Maritime, I, nr 109/nr 167).Google Scholar

Meyers, , opus cit., p. 48Google Scholar, observes “that in a. few countries the abandonment retained the nature of a turn-over of an object to creditors like the “noxae dedito”.

12. In Rhodos already much earlier hi force in the form of a “Koinonia”.

13. See texts in Hanseatisch Rechts- und Gerichtszeitschrift, 01 1939: e. 18 (sea-water damage); C.144 (deck cargo); c. 155 and 182 (collisions).Google Scholar

14. Portugal still has a similar rule: compare Cod. Comm. Artide 492 (1) with (2): “actos e omisce” with “obrigafoes”.

15. Hanse-rezess, , 1614, X, IIGoogle Scholar; Marine, Danish Statute 1561, 56Google Scholar. Wuestendoerfer, , Neuzeitliches Seehandelsrecht, 1950, p. 145Google Scholar mentions a similar Statute of Danzig, 1455.

16. De jure belli ac pads, II. II. 13.Google Scholar

17. Arrest 21 dec. 1629; See Bynckershoek, , Quaestiones Iuris Privatae IV (20)Google Scholar. Various authors, among whom Ktistakis (o.c., pp. 35, 42), see in the Netherlands the cradle of the abandonment-system.

18. II, 12, par. 3.

19. B. II, tit. 8, 2.

20. (1734), Abbott, , p. 639Google Scholar, regarding “embezzlement” by the crew of a shipment of gold.

21. Stat. 7 George II. c.15.

22. George, III. c. 36 (1)Google Scholar; George, III. c. 159 (1) and (2).Google Scholar

23. Revised Stat. s. 4283; Code, 46 par. 183. Limitation of liability in the U.S.A. was reviewed by Symmers in Papers on Marine Ins. Matters, II, 1951.

24. U.S. Code 461, par. 183 b.; this rule is not unfrequently misunderstood. First property and personal injury claims share pro rata in the fund amounting to the value of the vessel and her freight. If in this settlement the personal claims were not fully indemnified, the amounts reserved for them, are to be increased until the total amount reserved for these claims, is equal to $ 60.— per ton of the wrongdoing vessel (the amount is not increased with a fund of $ 60.— per ton).

25. In Finland, Sweden, Denmark and Norway in 1874, 1891, 1892 resp. 1893, later on changed into the “optional” system, see infra; Hungry, , Draft Stat. 1st 01 1894.Google Scholar

26. Wüstendörfer, , Neuz, Seehandelsrecht, 1950, p. 144 (c.f. further H.G.B., par. 774).Google Scholar

27. See title thesis Schilthuis, , 1909Google Scholar: further Helm, “Probleme des Rechts der beschränkten Reederhaftung”, Zs Handels- und Konkursrecht, 1960, p. 65 f.f., in particular p. 77/79.Google Scholar

28. By virtue of article XVI (end) the English text has the same standing as the French text.

29. See Hill, , Brighton, 1954Google Scholar (CMI, Madrid Conference, 1955)Google Scholar: “if those cases had not gone a certain way, it would have led to a public outcry that would have forced the British government to take action.”

30. See for this original purpose, paper Cleveringa, N.V.Z. 1958Google Scholar; Brussels, P. V., 1958 p. 107/108Google Scholar; Madrid, P. V. Conf., ed. C.M.I. 1955, p. 191Google Scholar (compare with the conclusions of the Sub-committee, Antwerp 1955, which expressed itself in favour of this concept!).

31. Belgium, Brazil, Canada, Germany, France, Great Britain, India, Israel, Italy, Yugoslavia, Holland, Peru, Poland, Spain, Vatican State, Sweden and Switzerland. Until January 1st, 1963, Iran, Norway, Finland and Ghana followed. Only England, France and Spain did ratify.

32. See Marsden, o.c. Further commentaries in DMF, 09 1959, p. 570.Google Scholar

33. See DMF, 1959, p. 504Google Scholar; DMF 1960, p. 444.Google Scholar

34. This is of utmost importance for Holland. This country as per January 1st, 1963, has almost 8% of its total tonnage (376.811 against 5.037.000 b.r.t.) in vessels smaller than 500 b.r.t.: 921 of, in total, 1525 merchant vessels. The average age of the Dutch coaster in use was 9,2 years per January 1, 1961. If a gross survey of sales figures is followed over 1961 in respect of vessels sold at this age, their market-value amounts roughly to about D.fl. 200.000.—.

A decrease in the building of new ships, increasing in turn the average age, again will unfavourably influence the average market-value.

35. Grenander, , Brighton 1954Google Scholar (CMI, Madrid, P. V. 1955)Google Scholar considered the question to be of more academic than practical importance. His research over the years 1880–1939 yielded only three or four examples of more than one accident per voyage.

36. Did the American court aim at these nations particularly when it denied the “Theo-genaitor” her right to invoke limitation of liability, observing: “It is time that admiralty courts protect responsible shipping against old and underpowered, shadowy-owned tramps flying the flag of any nation and manned by the flotsam of the world” (1961 AMC 1957)?

37. See Pfeiffer, , op.cit.supra, note IIGoogle Scholar. Lebanon incorporated the same flexible system in its Commercial Code, Article 94 (1947).

38. See for this Snijders, , N.J.B. 1957, p. 29 f.f.Google Scholar

39. See i.a. Madrid, P. V., p. 191Google Scholar: in Antwerp (May 1955) the sub-committee linked the system of “cross liabilities” with a limitation “de plein droit” (as of law). A contrario: as last-mentioned principle was expressly rejected in the ultimately resulting Convention, it may be considered obvious that, consequently, the representatives dropped “cross liabilities”, to accept “single-liability”.

40. District Court Rotterdam, February 16th, 1960, S&S, 1960, nr 29.

41. England: “Khedive” v. “Voorwaarts”, App. Cas. 7.795; IV (Asp.) 567; the Neth, S.S.Co (S.M.N.) owners of the “Voorwaarts” were vis à vis the “Khedive” in a similar situation as the Dutch Crown vis à vis the “Nelly”. U.S.A.: “Ella Warley” v. “North Star”, 1882, 106 U.S. 17.

42. Woltman, , Beperkte Aansprakelijkheid, thesis 1936, p. 149 f.f.Google Scholar

43. Cleveringa, loc. cit., p. 789Google Scholar; Van Oven, , Uniformerende werking van het Brüssels Aanvaringstractaat, thesis, p. 208 f.f. at 215Google Scholar; Snijders, , loc.cit. p. 32.Google Scholar

44. Hurd, , Marine Insurance, 1952, p. 122–123; at p. 35/36, p. 127/128Google Scholar example is given of a settlement between the owners themselves, and between the respective owners and their underwriters under the R.D.C.

45. See IV. Asp., loc. cit supra, p. 576; further: Loeff, , P.V. Brussels, p. 129 f.f.Google Scholar