The Aspects Involved in a Ship Collision

In my opinion, this present case involves five aspects which are collision, salvage, general average and oil pollution, and limitation of liability. Each aspect will be discussed as below respectively.

A. The Collision: As a matter of substantive law, collisions at sea involve the application of the law of negligence. The party which claims for the damage should establish the existence of a duty of care owed to it, that duty has been breached and the damage caused by that breach.

1. The Duty of Care: In accordance to The Dundee [1] , there is a mutual duty of reasonable care between the crews of the Bacchus and the Neptune, since they navigated in the same sea. And also they have the duty to exercise reasonable care in management of vessels-Brown v Mallett [2] . Both crews should have ‘reasonably foreseen’ that their actions would be likely to injure those they ‘ought reasonably to contemplate’ as being so affected-Donoghue v Stevenson [3] .

2. Breach of Duty: It is a difficult issue of law to establish. The defendant’s conduct must have fallen below the legal standard of care that required him. In the general law of negligence, the conduct of those navigating a ship involved in a collision will be judged by the standards of prudent seamanship [4] .

In the context of the law of maritime collisions, collisions usually result from the negligence of the crews which the ship-owner will be vicariously liable as their employer. The test as to whether there has been professional negligence is the standard of the ordinary skilled man exercising and professing to have the relevant skills-Bolam v Friern Hospital [5] . The relevant standard is largely found in the Convention on the International Regulations for Preventing Collisions at Sea 1972(‘the Collision Regulations’), which developed from the practice and custom of seamen [6] .

In the present case, Jupiter and Pluto agreed to submit to the jurisdiction of the Commercial Court in London in respect of the collision and for that Court to apply English law. An important factor in assessing compliance with those standards will be the extent to which the Collision Regulations have been followed. The 1972 Regulations are given effect in English law by the Merchant Shipping Regulations 1996.

A breach of the Collision Regulations, while indicative of negligence, is not conclusive-Maritime Conventions Act 1911, s. 4(1). The onus is on the claimant to prove the breach-The Heranger [7] , on the balance of probabilities-The City of London [8] .

(1)The Bacchus: In the present case, the Bacchus has the Neptune on her starboard, so the Bacchus is ‘give way’ vessel. Therefore, she shall keep out of the way and shall, if the circumstances of the case admit, avoid crossing ahead of the other vessel-Collision Regulations, r.15. In attempting to cross ahead of the Neptune and without noticing the warning by lights and siren from the Neptune, there is a clear violation of r.15. This violation is a continuing one, with mo corrective action, thus the Bacchus also fails in her obligation to take positive action made in ample time, with due regard to the observance of good seamanship-r.8(a). Such a wrongful inaction might be negligence according to the higher standard of professional seamanship-The Dundee.

(2) The Neptune: As a ‘stand on’ vessel, the Neptune’s duty is to keep her speed and course-r.17 (a) (i). However, according to r.17 (a) (ii), the Neptune may take action to avoid collision by her manoeuvre alone, as soon as it become apparent to her that the Bacchus was not taking appropriate action in compliance with these Rules. So at the time when she made a modest turn was made r.17 (a) (ii) already applied and required her to take avoiding action which means while the primary duty of this ‘stand on’ vessel was to keep her course and speed she may take action to avoid collision by her manoeuvre alone then this rule applied and the Neptune was obliged to take avoiding action under r.17 (a) (ii); it was not necessary to express a concluded view as to whether there would otherwise have been a breach of r.17 (a) (i)-The Topaz and Irapua [9] .

Moreover, under r.17 (b), when the Neptune found herself so close that collision could not be avoided by the Bacchus alone, she shall take action as would best aid to avoid collision. In this case, it was established that the proper manoeuvre for the Neptune to do would have been a hard turn to port which just made a modest turn. This action was not best aid to avoid this collision and clearly violates r.17 (b). Furthermore, this action is also likely to be below the standard of ordinary skilled men exercising and professing to have the skill of crew-The Dundee.

(3) Conclusion on Breach of Duty: On the balance of probabilities-The City of London, it seems likely that the Bacchus breached her duty in attempting to cross ahead of the Neptune while the Neptune was in breach in just making a modest turn which was established not enough to avoid the collision. However, about the Neptune’s breach, it will depend on whether the court applies The Topaz and Irapua, or distinguishes it, respectively.

3 Damage Caused by the Breach of Duty: Even if the claimant establishes breach by the defendant, it must still prove that its loss was actually caused by that breach, in that the loss would not have occurred but for the breach-Barnett v Chelsea and Kensington HMC [10] . This applies when both vessels are at fault-The Mineral Dampler [11] . Both vessels merely had to comply with the crossing rules, but for the Bacchus’s falling in this regard, the collision would not have happened, and so causation is established here. In regard to the Neptune, when the Bacchus was attempting to cross ahead of her, a modest turn to port at the time in question was not enough; the situation appeared to call for a hard turn, and it was negligent of the crew to turn only a modest one. Therefore, this fault was causative of the collision inescapably.

Given all the above, providing a claim is brought within two years of the collision-s.190 (3) (a), (b) [12] , each party would be able to bring successful claims in negligence.

4 Apportionment: Where both vessels are to blame, the loss must be apportioned between them- The Woodrop-Sims [13] , in proportion to the degree to which each was at fault in navigating-Merchant Shipping Act 1995, s.187(1), The Norwhale [14] , noting the ‘nature and quality’ of the faults, rather than their number. Having conducted the factual exercise, the court would have a strong sense of the relative blameworthiness of each vessel in this case.

It could not properly be said that the Neptune’s faults were so minor that she should attract only a de minims share of the blame. There was a real fault and decisive action under r. 17 (a) (ii) or inappropriate action under r.17 (b) would have avoided the collision. However, the Neptune’s fault came about in circumstances forced on her by lamentable conduct on the part of the Bacchus involving a complete failure to attempting to cross ahead of the Neptune or to take any action whatsoever to avoid it. These grave faults on the part of those on board Bacchus were inexcusable and resulted in her being overwhelmingly to blame for the collision. Therefore, a fair apportionment may be 80/20 in favour of the Neptune-The Topaz and Iraqua.

B. Salvage:

1. Sisyphus SA: Sisyphus SA offered salvage services to the Neptune and a LOF2000 salvage contract was signed with SCOPIC incorporated. This is a ‘no cure, no pay’ contract and the salvor agrees to use their best endeavour to save the property- clause A. It is stated that the issue arises in the salvage serviced between Sisyphus SA and the Neptune is that how to calculate the salvage remuneration.

LOF (Lloyd’s Open Form) is a particular form of contract, which developed and proved popular with professional salvors [15] . Under English Law, the International Convention on Salvage 1989 has been incorporated in the Merchant Shipping Act 1995, Sch11 which now governs the salvage law. Moreover, Art 13 and Art 14 are the relevant provisions about how to calculate the salvage remuneration.

As a result of discontent by salvors at the calculation of Art 14 remuneration after The Nagasaki Spirit [16] , in 1999, a new clause was drafted to give salvors an alternative basis of remuneration. The clause was the Special Compensation P&I Club clause (the SCOPIC clause), and its provisions only affect the relationship between the salvor and the shipowner [17] . According to clause 1 in SCOPIC 2007, invoking the clause completely replaces the right of the salvor to claim under Art 14, even in respect of services performed before the invocation of the clause, however, the provisions of Art 14(5) and (6), continue to remain effective. Therefore, the main provisions of salvage law which govern the present case under English law are Art 13 and SCOPIC clause.

Contrary to ‘no cure, no pay’ principle, it follows that the award can never exceed the value of the property salved. Accordingly, the first step in assessing any reward for salvage is to fix the value of the salved property. In the present case, the subsequent explosion of the vessel producing a low value salved fund which were only some cargo and the wreck value, if any, of the vessel. Therefore, the salvage remuneration under Art 13 would not be high.

As SCOPIC has been invoked, assuming that the notice arrived to Pluto and the US$3 million had been built up- SCOPIC clause 3, the salvage award should also be calculated under SCOPIC. And as the salved value is low, it is likely that the SCOPIC award is higher than that calculated under Art 13. In this case, the SCOPIC award is payable, and the extra award will be payable by the owner of the Neptune only to the extent that it exceeds the total Article 13 Award- SCOPIC clause 6.

In another circumstance, if the SCOPIC award is lower than the Art 13 award which is less likely for the Neptune salvage, the payable remuneration will be that the Art 13 award discounted by 25% of the difference between the Art 13 and the amount of SCOPIC remuneration- SCOPIC clause 7.

2. Hesperides Salvors Inc.: The Atlas which is a station-keeping salvage tug owned by Hesperides Salors Inc. assisted the Bacchus and also, LOF2000 was signed and SCOPIC incorporated and invoked. The station-keeping salvage tug is different from other tugs which are just happened to be available, therefore, if successful, the Art 13 award will be high. Clearly, this salvage service is successful, so the value of the salved property is high.

As the SCOPIC has been invoked in the first place, clause 3 obliges the shipowner to put up security for the salvor’s claim under the clause in the amount of US$3,000,000 within two days of the clause being invoked. In the present case the shipoewner Jupiter failed to do so, if that is the case, clause 4 entitles the salor to withdraw from the SCOPIC clause, provided that the security is still outstanding at the date of withdrawal. Assuming that the salvor did not want to withdraw it as it did not mention in the fact, so the SCOPIC clause is still invoked by the salvor under clause 2. Then clause 9 (ii) entitles the shipowner to terminate by giving five days’ notice. In the event of such termination the assessment of SCOPIC remuneration will be done in the ordinary way up to the expiration of the notice period, since the exercise of a right to terminate an obligation to pay presupposes a pre-existing obligation to pay monies already earned [18] .

There is another question arising here which is whether the LOF continues in force if the shipowner terminate SCOPIC. It may be that since the sub-clause contemplates the contractors demobilizing, a shipowner’s notice is intended to have the effect of terminating LOF [19] . Therefore, salvor may earn an Article 13 award.

C. General Average: General average is a right of contribution as between the various interests in a sea voyage. The right arises whenever extraordinary sacrifices have been made or extraordinary expenses incurred by one interest for the preservation of the other interests in the common adventure. According to this principle, it is concluded that there is no general average issue arising for the Neptune, then the focus will be on the Bacchus.

As the B/L contained that general average would be adjusted according to the York-Antwerp Rules 1994 and which contained a choice of law clause in favour of English Law, therefore, if there is loss which can be treated as general average, this issue is governed by common law and York-Antwerp Rules 1994.

Jettisoning cargo in order to light the vessel so that the vessel can be towed to a port of refuge is satisfied the the definition of general average given by both the S66 (2) of the Marine Insurance Act 1906 and Rule A of York-Antwerp Rules 1994 [20] and it is the most common instance for the common safety of the adventure. Therefore this act can trigger the general average. In addition, according to Rule 6 of York-Antwerp Rules 1994, the salvage expenses shall be also allowed in general average except the special compensation. Then, the next issue arises which is which parties need to contribute and to what extent.

As mentioned above, the parties which get interest from the loss have to share the loss. Here, the interest parties would be the shipowner and the cargo owner whose cargo was not jettisoned. The relevant interests are valued at the termination of the adventure with discharge at the port of destination-Rule G. Moreover, the value of jettisoned cargo and salvage expenses will be apportioned among all of the other cargo owners and the ship in accordance with the value of their respective interests and no party will receive full reimbursement. The specific calculation will be done by professional general average adjustor according to York Antwerp Rules 1994.

D. Oil pollution: In order to deal with the oil pollution, the 1992 CLC/Fund regime provides for two tiers of available compensation. Furthermore, there is a third layer provided by The new 2003 Protocol.

1. The Neptune: This vessel is an oil tanker.

a. Pollution in Sicily of Italy: Since Italy is a party to the 1992 CLC, 1992 Fund and the 2003 Protocol [21] , all the three tiers discussed above can be available to the pollution happened in Sicily.

As the Neptune is sea-going vessels-Art 1(1) and the oil leaking from them are persistent-Art 1 (5), also pollution damage caused in the territorial sea of a State which is a party of the Convention- Art 2, this compensation can be governed by the 1992 CLC. Therefore, the three-tier compensation can be available to the victim.

First, the victim which is the Italy or the local authority of Sicily can bring a claim against the shipowners and their CLC insurers. As discussed above, the collision is both to blame situation, so the Jupiter SA and the Pluto Inc and their CLC insurers have no exempt fall in the category in Art 3. However, the 1992 CLC allows the shipowners to limit their liability to an amount determined by the size of the ship. After 1 November 2003, the limits are as follows: for a ship not exceeding 5000 units of gross tonnage, 4510000 SDR; with a tonnage between 5000 and 140000 units of tonnage, 4150000 SDR, plus 631 SDR for each additional unit of tonnage; and for a ship of 140000 units of tonnage or over, 89770000 SDR [22] . The CLC insurer is also entitled to limit his own CLC liability under the regime-Art 7(8).

In the circumstance that the reason that the victim which cannot get the full compensation under the 1992 CLC falls into the category stipulated in Art 4(1) of the 1992 Fund Convention, it can look to the second tier which is to bring a claim to the Fund. In the present case, since no circumstance falls into Art 4(2) and (3) defences, the Fund is obliged to compensate. However, the Fund can also limit its liability, which is 203 million SDR [23] .

The victim can also claim for the Supplementary Fund if it has been unable to obtain full and adequate compensation for an ‘established claim’ for such damage under the terms of the 1992 Fund Convention, because the total damage exceeds, or there is a risk that it will exceed, the applicable limit of compensation laid down the 1992 Fund Convention in respect of any one incident. The aggregate amount of compensation which will be available for the victim will be 750 million SDR because Italy is a party to the 1992 CLC, 1992 Fund and the 2003 Protocol- 2003 Protocol, Art 4(2).

There is still one issue arising here which is whether the company which cancels the whale-watching expeditions can claim compensation to this system. According to the IOPC’s Claims Manual, a claimant’s expense/loss or damage is admissible only if and to the extent that, it can be considered as caused by contamination resulting from the spill: there must be a reasonably close link of causation between the expense/loss or damage covered by the claim and the contamination caused by the spill. Here, there is no close link between the contamination and the cancellation of the activity, since the cancellation is because of the dead whale. Therefore, it is stated that the company is not entitled to claim to the Fund.

b. Pollution in Spain: The regime does not provide a right to compensation to a claimant whose loss is of an indirect relational pure economic nature: the ‘but for’ test is not applicable, and the shipowner is not liable to compensate an indeterminate number of claimants. A claim is not accepted solely because a pollution incident occurs.

In The Sea Empress [24] , the claimant’s resultant loss arose from its inability to carry out processing and packing and deliveries of processed and packed whelks at points far away from the contaminated areas, and the court concluded that this was a form of secondary economic loss, which was outside the intended scope of a statute which was closely focused on physical contamination and its consequences. If this case applies, the claim arising for pollution in Spain may fail.

2. The Bacchus: This is not an oil tanker, so it does not apply the above regime. The Bunkers Convention governs this kind of situation and under this convention there is only one compensation layer, also the shipowner can limit his liability.

E. Limitation of liability: It is a special regime only arising in marine basis. The advantage of this procedure is that the establishment of the fund will cap the relevant parties’ liability to all claimants and not just the particular claimant who has commenced proceedings against the shipowner. Assuming that the 1976 Convention is applied in this present case, each vessel will be discusses below.

1. The Neptune: The first issue is who can limit liability. According to Art 1 of the 1976 Convention, Pluto Inc which is the shipowner and also the masters and crew and other employee of it can limit their liability. Although Art 1 says that salvor can also limit, it is irrelevant here, because it seems no liability arising here for the salor in the present case. Limitation can be invoked either by way of the party liable either through a limitation action or by pleading limitation by way of defence. The act of invoking limitation of liability does not constitute admission of liability- Art 1 (7).

The next issue then is which claims can be subject to limitation. In order to figure out this issue, it is necessary to know which claims might happen to against the Pluto Inc or its employees. As have already discussed above, there will be a salvage expense which happens because of SCOPIC invocation, and also there will be oil pollution compensation. However, art 3 excludes some claims from limitation. According to that, claims for salvage and for oil pollution damage cannot be limit under this regime. Moreover, the cargo owner of the Neptune might claim against it, however, it is highly likely that as the carrier, it can exempt its liability under Hague/ Hague-Visby Rules. As the vessel has already gone, it is stated that Pluto Inc might not build the limitation fund under Art 6.

2. The Bacchus: The Jupiter AS is as a shipowner and also its employees can limit their liability.

As have already discussed above, the collision is both to blame situation and it has concluded that the Bacchus might take main responsibility for that, therefore, the other vessel will have a claim against it for the vessel destroyed and subsequent oil pollution compensation which the Neptune has to pay, and also the cargo owner of the Neptune might act a claim against it in tort. Art 2(1) provides six headings of claim in respect of which limitation can be claimed, and the above claims will fall in that category. There are also claims by salvor, contribution of general average and oil pollution compensation. However, art 3 excludes those claims from limitation.

The final question in this aspect is that how is the limitation figure calculated. The limitation fund is a tonnage- based fund. Under Art 6, a more complex calculation is required to find the limitation funds. As there is no specific figure of the vessels’ tonnage, the exact number cannot be worked out.