The Merchant Shipping Code of Ukraine adopted in 1994 established rules regarding the limitation of liability of shipowners.
A. Global Limitation
Ukraine is not a party to either of the 1976 or the 1957 Limitation Conventions. But the shipowner’s right to limit liability is a statutory right in Ukraine.
Chapter X of MSC regulates the aspects of global limitation of shipowner.
Persons entitled to limit liability:
- a shipowners, defined as the owners, bareboat or demise charters a sea-going vessel. Such persons are entitled to limit liability in respect of claims against the ship herself.
Claims subject to limitation.
Article 349 of the MSC defines the categories of claim which are subject to limitation. These are the following:
a) claims in respect of :
- loss of life or personal injury
- loss of or damage to property located on board of the ship
b) claims in respect of :
- damage to a person or to property of a person being not on board
- occurring in connection with the operation of the ship.
Claims excluded from limitation:
There is no right to limit liability in respect of the following categories of claims:
a) claims for salvage or general average contribution.
This exclusion applies to direct claims made by a salvor or a party who as incurred general average sacrifice or expense. It does not apply to recourse from a person who has settled such a claim in the first instance and is seeking a recovery.
b) claims by servants of the shipowner whose duties are connected with the ship if
under the law governing the relevant contract of service with such servant the shipowner is not entitled to limit liability to the sum stated in article 352 of MSC.
c) claims in respect of the raising or removal of property which is sunk
d) claims for oil pollution or pollution of substance harmful to sea when this incident is governed by the Chapter 4 of the MSC
e) claims against the shipowner of a nuclear ship for nuclear damage
The limits of liability:
The MSC contains two separate limits in respect of the following categories of claim:
a) claims for loss of life or personal injury
b) other claims
The limits of liability contained in the MSC are calculated by reference to the net tonnage of the ship plus the volume for machinery and apply in respect of claims arising on any one distinct occasion:
a) claims for loss of life or personal injury:
Tonnage not exceeding 500 unit of capacity 333000 SDR
For a ship exceeding 500 unit , the following sums must be added to 333000 SDR:
tonnage between 501 and 3000 units extra 500 SDR per unit
tonnage between 3001 and 30000 units extra 333 SDR per unit
tonnage between 30001 and 70000 units extra 250 SDR per unit
tonnage in excess of 70000 units extra 167 SDR per unit
b) other claims:
Tonnage not exceeding 500 unit of capacity 167000 SDR
For a ship exceeding 500 unit , the following sums must be added to 167000 SDR:
tonnage between 501 and 30000 units extra 167 SDR per unit
tonnage between 30001 and 70000 units extra 125 SDR per unit
tonnage in excess of 70000 units extra 83 SDR per unit
Article 14 f MSC defines that GLOBAL LIMITATION contained in the Chapter X applies only to shipowners whose ships fly the flag of Ukraine.
Shipowners of non-Ukrainian flagged vessels is not recommended to seek to limit their liability pursuant to Ukrainian Maritime Code (MSC).
B. Package Liability
In Ukraine , a shipowner’s liability for the loss of or damage to cargo carried under a bill of lading is regulated by statute. The Chapter V of Merchant Shipping Code of Ukraine establishes rules for the carriage of cargo in Ukraine which provide that a carrier is subject to number of specified responsibilities and duties relating to the carriage of cargo. At the same time MSC also grant the carrier a number of rights and immunities in the event that cargo is lost or damaged.
The carrier’s responsibility and duties:
a) the carrier s obliged to exercise due diligence to make the ship seaworthy and cargoworthy prior to the commencement of the voyage
b) the carrier is obliged to properly and carefully load, handle, stow, carry. Care for and discharge the goods
c) after receiving the goods, the carrier is obliged to issue to the shipper a bill of lading.
The carrier’s rights and immunities:
Neither the carrier nor the ship is responsible for loss or damage arising or resulting from:
a) act, neglect, or default of the master, mariner, pilot in the navigation or in the management of the ship
b) act of God
c) perils, dangers and accidents of the sea or other navigable waters
d) fire unless caused by the actual fault or privity of the carrier
e) saving life or property at sea
f) actions or orders of the state authorities ( arrest, detention, quarantine etc)
g) act of war and riots
h) act of omission of the shipper or receivers
i) latent defects
j) insufficiency of packing
k) insufficiency or inadequacy of marks
l) strikes or lockout or stoppage or restraint of labour from whatever cause, whether partial or general
m) action to prevent from pollution
n) from shortage of cargo at destination in case the cargo was carried in sound ship’s compartments or containers sealed by shippers
The carrier’s rights of limitation.
If the bill of lading is an ad valorem bill of lading the carrier is not entitled to limit liability. In these circumstances, the carrier may be liable for loss or damage, subject to the terms of the contract up to the value stated in the bill of lading.
Unless the value of the goods have been declared by the shipper and inserted in the bill of lading, the carrier is entitled to limit liability to either:
- 666,67 SDR per unit or
- 2,0 SDR per kilo of the gross weight,
of goods lost or damaged, whichever is the higher amount.
Prepared by A.Nikityuk from Azovlloyd P&I Service Ltd, Ukraine