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Limitation – damage to vessel caused by charterers not subject to Convention on the Limitation of Liability for Maritime Claims, 1976.

The Facts

By charter party on an amended NYPE form, owners chartered their container vessel to the charterers.

During the currency of the charter party, there was an explosion and fire on the vessel causing substantial damage to the vessel and the cargo.

Owners claimed damages from the charterers in the sum of USD 26M.


Arbitrators found in favour of the owners. David Steel J upheld the arbitrators and followed Thomas J in the Aegean Sea, holding that, to qualify for limitation, charterers had to have been acting qua owners.

Longmore LJ, Waller and Neuberger LJJ concurring, found that the ordinary wording of the Convention meant that the charterers were generally entitled to limitation and that their right was not qualified by having to act as owners.

Charterers could not succeed, however, because the damage to the vessel was not the damage envisaged by the Convention which was, generally speaking, damaged caused by the vessel itself and not damage to the vessel itself.

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Charter Party Casebook