Leonidas Villagran

Lecture on Liabilities in Maritime Law for students of the Technological Business University of Guayaquil
A maritime incident, such as a collision, can generate multiple claims. During the analysis, it is essential to consider the applicable law, as well as different types of liability and the possibility of limiting liability.

For example, a container ship maneuvering to berth in the Port of Stockholm suddenly turns toward the port and collides with a pleasure craft that was ready to depart with passengers. Both vessels report hull damage, two passengers on the pleasure craft are injured, and their luggage is destroyed. Furthermore, as a result of the collision [1], the cargo ship begins to spill a considerable amount of bunker fuel into the bay.

The location of the incident, the port of departure and destination, the ship’s flag, its place of registry, and also the place where the contract of carriage was executed are all of great importance when analyzing liability and potential claims. In this case, it should be noted that the incident occurred in Sweden. This leads to the conclusion that, with respect to this particular incident, certain international regulations regarding liability are applicable, such as:

The International Convention for the Unification of Certain Rules of Law relating to Collision between Ships, 1910 (The Brussels Convention on Collision).

The Convention on International Regulations for the Prevention of Collisions at Sea, 1972 (COLREGs).

The International Convention on Civil Liability for Bunker Pollution Damage, 2001 (The Bunker Convention).
The Athens Convention relating to the Carriage of Passengers and Their Luggage by Sea, Protocol 2002 (Athens Convention, Protocol 2002).
Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents.
The London Convention on Limitation of Liability for Maritime Claims, as amended by the 1996 Protocol (LLMC 1996), including the 2012 amendment. Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability for the prevention and remediation of environmental damage.

The example mentioned provides different liability regimes, such as culpable, strict, and presumptive liability.

Fulfillable Liability
The universal rule is that damage resulting from a maritime incident such as a collision does not automatically generate liability, as it is necessary to establish who is at fault. This is the clear intent of the 1910 Brussels Convention on the Prevention of Collisions at Sea, which abolished all legal presumptions of fault in relation to liability for collisions.

Shipowners whose vessels are involved in a collision may justify and prove that there is no fault on their part, that the fault lies with the other vessel, or that the collision is of a fortuitous or unavoidable nature, such as due to unknown engine damage, or at least that the fault in the collision should be attributed to both vessels to share responsibility.

The general rule under the Brussels Convention is that if a collision is merely an accident, caused by force majeure, or if the cause is uncertain, the damages are borne by the affected parties, even if one of the vessels is at anchor. However, if the collision is the fault of one of the vessels [2], the liability rests with the faulty vessel. If two or more vessels are at fault, then liability is proportionate to the degree of fault, unless the degree cannot be determined, in which case liability is shared equally. This applies to damage to cargo, personal effects of the crew, passengers, and other persons on board. Even with respect to third parties, a vessel is not liable beyond the proportions indicated.

However, the Convention makes a distinction when it comes to death or personal injury. In this case, the at-fault vessels are jointly and severally liable, including third parties, without prejudice to the right of recourse of one vessel against another.

The time limit for claiming compensation is two years, in accordance with the Convention. And issuing a letter of protest or any other formality is not a prerequisite for a claim for compensation.

Strict Liability
Strict liability is a special type of liability in which the determination of fault is irrelevant. It is the basis of the “polluter pays” principle, which states that in cases of pollution, ships involved in such incidents are jointly and severally liable, and there is no need to establish fault or negligence, as established by the Bunker Convention, which follows the principles of the International Convention on Civil Liability for Oil Pollution Damage (CLC) [3]. The Athens Convention on the Carriage of Passengers and Their Luggage by Sea (2002 Protocol) establishes the strict liability regime for carriers in favor of their passengers in relation to incidents during transport that cause death or injury, up to 250,000 SDR [4] per passenger.

Presumptive Liability
If the damages exceed the specified amount, the carrier is liable up to 400,000 SDRs, and the carrier is presumed to be at fault for the incident.

This means that the burden of proof rests with the defendant if they deny liability. They must provide sufficient evidence to prove that the incident causing death or injury to passengers was not the result of negligence on the part of the carrier or its employees. If such evidence is not provided, the presumption remains, and liability is confirmed.

Similar provisions appear in Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 concerning the liability of carriers by sea in respect of their passengers in the event of accidents.

If the death or injury to passengers is not the result of an incident during transport but relates to another incident, the claimant may present evidence of negligence on the part of the carrier. It is important to mention that a transport incident has been defined as shipwreck, capsizing, collision, grounding of the vessel, explosion or fire on board, or vessel deficiency.

Common characteristics of claims related to pollution and passengers injured or killed in transport incidents under the 2001 Bunkers Convention and the 2002 Athens Convention, Protocol 1, are that shipowners are required to obtain insurance and that claimants have the right to direct action against insurers, which in most cases are P&I Clubs. Insurers can avoid liability if they can provide evidence of intentional misconduct on the part of the shipowner.

It is important to note that for both types of claims, there is an option to limit liability for both shipowners and insurers under the LLMC Convention and LLMC 1996, including the 2012 amendment.

Regarding passenger liability under LLMC 1996, the maximum aggregate liability for the carrier is 175,000 SDRs multiplied by the number of passengers the carrier is authorized to carry, as per the ship’s certificate. This is an amendment to Article 4 of the LLMC Convention, which abolished the maximum of 25 million SDRs per passenger specified in LLMC 1976. Regarding property damage resulting from pollution, the liability limit under the LLMC 1996 amendments is calculated according to a table. For ships under 2,000 gross tons, the limit is 1.51 million SDRs, and for larger ships, it is calculated based on the excess tonnage.

In the event of death or injury to persons as a result of a pollution incident, strict liability arises, and the LLMC 96 establishes a total liability limit for all claims, which is 3.02 million SDRs (up to 2 million SDRs). For larger vessels, the limit is based on a specific table, as in the case of property claims.

These international conventions aim to provide swift solutions to incidents that damage the environment and affect passengers in maritime transport incidents, while preserving the maritime industry through the liability limitation regime.

The impact compared to Ecuador: Ecuador has not ratified the 1910 Brussels Convention on Collisions at Sea. However, the Commercial Code in force since 2019 has incorporated the principles of this Convention. Furthermore, Ecuador is a party to the International Convention on Regulations for Preventing Collisions at Sea, 1972 (COLREGs), which provides guidelines for ships to prevent collisions. Consequently, if these provisions are not followed, liability can be determined.

Regarding a passenger ship, if the incident occurs in Ecuador, the Athens Convention will most likely not apply unless the ship’s port of departure or destination, or its flag, is that of a State Party to the Convention, or the contract of carriage was issued by a State Party. This is because Ecuador has not joined the Athens Convention. Therefore, passengers do not benefit from the principles of strict liability or presumed liability, and there is no direct recourse against insurers.

Furthermore, it must be taken into consideration that Ecuador has not ratified the Bunkers Convention, the 1976 LLMC, or its 2002 protocol.

Therefore, with respect to a pollution incident in its waters caused by a non-tanker vessel, these conventions do not apply. Consequently, claimants cannot take direct action against insurers, and defendants cannot invoke the limits of liability for these claims.

Compliance with the LLMC may be mandatory for vessels operating internationally that must navigate in other jurisdictions where the Bunkers Convention is in force. This is the case in Panama. Every vessel attempting to cross the Panama Canal or simply navigate its waters must carry the Blue Card, which certifies compliance with the mandatory insurance as established in that convention.

The Ecuadorian Constitution, in effect since 2008, incorporated strict liability for environmental damage and established that there is no statute of limitations for actions seeking redress and penalties for this type of damage. This includes sanctions, as well as compensation for the environment, affected communities, and individuals. The application of strict liability is still not very clear in the legislation. In fact, the new Organic Law of Navigation recognizes strict liability when pollution occurs, but it does not specify how the authorities should proceed, and the regulations for this law are still pending.

In principle, an investigation should be initiated when a pollution incident occurs [6]. The authorities may conclude that the pollution was an act of God, but only if this has been previously alleged. The Ministry of the Environment also has jurisdiction to verify violations of environmental regulations. In serious cases of pollution, the Public Prosecutor’s Office may initiate an investigation to verify the possible commission of an environmental crime.

If maritime or environmental authorities find no negligence or fault, and consequently there is no basis for fines, the implicit obligation remains for the polluter to cover the costs of cleanup and damages caused by the pollution. This is the application of the principle of strict liability.

[1] Collision is the term used when two vessels collide.

[2] According to the Brussels Convention, if the pilot acted negligently, the vessel assumes responsibility, even if it arises from a binding contract.

[3] This convention expressly refers to pollution from tankers.

[4] SDR: Special Drawing Rights, which currently has an approximate value of US$1,389.