Lloyd's Maritime and Commercial Law Quarterly
NATURE OF LIMITATION CLAIM
The Breydon Merchant
The application of the proviso contained in Art. 3 of the Convention Relating to the Limitation of Liability for Maritime Claims 1976, that the Rules of the Convention shall not apply to claims for salvage, arose for consideration recently in the Admiralty Court in The Breydon Merchant.1 Cargo owners had a claim against the owners of the Breydon Merchant for damages for breach of the contract of carriage. They contended that the vessel had been unseaworthy at the commencement of the voyage and, as a result, she suffered a serious engine room fire and had required salvage services. Consequently cargo would be obliged to pay the salvors their due proportion of the salvage reward. Meanwhile, the shipowners had claimed a decree limiting their liability. The issue between the parties was whether the cargo owners’ claim was a claim in respect of which the shipowners were entitled to limit their liability, arising as it did from the necessary provision and performance of salvage services.
In the Admiralty Court, Sheen, J., held that: (1) The cargo owners’ claim was in respect of loss of or damage to property occurring on board the Breydon Merchant and consequential loss resulting therefrom; and (2) the cargo owners were not making, nor of course could they make, a claim for salvage against the shipowners—they were claiming damages for breach of contract. In the premises, the cargo owners’ claim against the shipowners was not in whole or in part a claim for salvage; therefore, the proviso in Art. 3 of the Convention had no application in the present case. The claim fell within the provisions of Art. 2(l)(a) of the Convention and accordingly was subject to limitation.
The Admiralty Judge also considered whether the cargo owners’ claim came within the provisions of Art. 2(l)(a) and (f) and the first sentence of Art. 2(2). Paragraph 1(a) covers claims, inter alia, in respect of loss of life or personal injury or loss or damage to property occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom. The learned judge held that, as the salvors had a lien upon the cargo for their reward, the cargo could have been arrested and sold. The amount due to the salvors in respect of each parcel was, therefore, damage to that cargo, the measure of damages in a claim for damage to cargo being the diminution in the value of that cargo, whether it results from physical damage, actionable delay or by reason of a lien for salvage.
In the alternative, Sheen, J., also held that the claim came within Art. 2(1)(f) and the first sentence of Art. 2(2), which provide:
- (f) claims of a person other than the person liable in respect of measures taken in order to avert or minimize loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures.
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