Seismic Shipping Inc & Anor v Total E & P UK Plc

A shipowner may invoke limitation of liability under the 1976 maritime limitation Convention without first constituting a limitation fund and without awaiting liability proceedings in England. Article 11 does not restrict the independent right conferred by article 10. English procedural law therefore permits a pre-emptive limitation claim where the court has personal jurisdiction over the defendant.

An English limitation decree does not by itself make foreign liability proceedings unconscionable. The decree limits enforcement against the limitation fund rather than qualifying the claimant’s substantive foreign-law right. In the absence of a contractual forum obligation or other unconscionable conduct, the foreign court should determine what effect to give the English decree.

A seismic survey vessel’s streamers struck a marker buoy attached to an installation in the Scottish sector of the North Sea. The vessel’s owners and demise charterers admitted liability to the installation’s owner, Total, and obtained an English decree limiting their liability under the Merchant Shipping Act 1995. Total had commenced proceedings in Texas but had not brought underlying liability proceedings in England.

The Admiralty Court, in [2005] EWHC 460 (Comm), reported at [2005] 2 All ER (Comm) 51, granted the limitation decree but refused to restrain the Texas proceedings. Total appealed against the decree, contending that English underlying proceedings were a jurisdictional prerequisite. The owners cross-appealed against the refusal of an anti-suit injunction.

1. Both appeals were dismissed. Clarke LJ gave the leading judgment. Rix LJ gave concurring reasons, and Sir Martin Nourse agreed with both judgments.

2. Articles 1 and 2 of the 1976 Convention confer the right to limit liability. That right may be invoked without constituting a fund under article 10, or in association with a fund under article 11. The Convention contains no general jurisdictional provision restricting where limitation may be invoked. Article 10 contains no express or necessarily implied requirement that a claimant must first institute underlying proceedings in the forum.

3. Article 11 is permissive and governs the constitution of a limitation fund. Even if a fund may be constituted only where underlying proceedings have been instituted, it does not follow that limitation without a fund may be invoked only there. The United Kingdom did not adopt the optional second sentence of article 10.1, which would have permitted national law to make constitution of a fund a condition of invoking limitation. Section 20 of the Supreme Court Act 1981 and CPR Part 61 therefore authorised the English claim because Total was subject to the court’s personal jurisdiction. The restricted limitation decree stood.

4. The governing touchstone for an anti-suit injunction was unconscionable conduct. Concurrent foreign proceedings are not inherently vexatious or oppressive. The court must exercise caution and respect international comity, particularly where no contractual jurisdiction or arbitration obligation has been broken.

5. The English limitation decree did not qualify Total’s substantive right to damages under Texas law. It limited the extent to which liability could be enforced against the limitation fund. It was for the Texas court to decide whether to recognise or enforce the English decree. Continuing the Texas proceedings was therefore not unconscionable, and the refusal of an injunction was upheld.

1. Court of Appeal (Civil Division): In [2005] EWCA Civ 985 , unanimously dismissed Total’s appeal against the limitation decree and the owners’ appeal against the refusal of an anti-suit injunction.
2. Admiralty Court: In [2005] EWHC 460 (Comm), reported at [2005] 2 All ER (Comm) 51, granted the owners a restricted limitation decree but refused their application to restrain Total’s Texas proceedings.