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Limitation of Liability – who is the “operator” of the vessel?

Limitation of Liability – who is the “operator” of the vessel | BDM Blog | BDM Law

The Court of Appeal has provided much-needed guidance on the meaning of an “operator” within the Limitation Convention. In so doing, it reversed Teare J’s first instance decision which we previously reported on here. The Court of Appeal held that the term “operator” involved something more than mere operation of the machinery of the vessel or providing personnel. The term related to “operation” at a higher level of abstraction involving management or control of the vessel.

In the present case, it was held that Stema UK were not the operators of the barge. At most, they were assisting Stema A/S, the charterers of the barge, in their operation of the barge. It was clear that Stema A/S were exercising an ongoing and direct supervisory role at all material times: the crew followed checklists which they had created and acted under their instructions. In addition, Splitt, the owners of the barge, remained responsible for it and the decision to leave it at anchor during the storm was not Stema UK’s but Splitt’s.

The Court further held that whilst there could be more than one operator of a vessel, a court should not readily find that a vessel had more than one operator. For the sake of completeness, the issue of whether Stema UK were “the managers” of the barge was also considered. Teare J held that “the manager” of a vessel was the person entrusted by its owner with sufficient tasks involved in ensuring that it was safely operated, properly manned, properly maintained and profitably employed. He also held that, for the purposes of Art 1(2) of the Limitation Convention, the ordinary meaning of “the operator of a ship” included “the manager of a ship”. However, in this case, Stema UK’s assistance to Stema A/S in operating the barge’s machinery off Dover and monitoring the weather was not sufficient for them to be properly described as the managers of the barge.

The availability of limitation is a vital consideration in any casualty as highlighted in another recent article here. The Limitation Convention restricts the remedy to certain categories of persons which is why this decision is potentially important.

The full case report is available online by clicking here.

Benita Cheung - author profile
Benita Cheung
Managing Associate
Constantin von Hirsch - author profile
Constantin von Hirsch
BDM is a specialist shipping law firm offering high quality legal advice and representation at a reasonable price. Please follow us on social media by clicking below.

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