Splitt Chartering APS & Ors v Saga Shipholding Norway AS & Ors

Under article 1(2) of the Limitation Convention 1976, “the operator of a ship” is not confined to the person responsible for the vessel’s overall management. It may include an entity which, with the owner’s permission, places its employees on an unmanned ship to operate its machinery in the ordinary course of its business.

The concepts of manager and operator substantially overlap. Whether an entity is an operator depends on the circumstances viewed in the round. More than one operator may exist at the same time or during different periods. A company that physically operated an unmanned barge off Dover was therefore entitled to limit liability.

The claimants sought limitation of liability for damage allegedly caused by the anchor of the unmanned barge STEMA BARGE II to an electricity cable. The registered owner and charterer or operator were accepted to be entitled to limit under the Limitation Convention 1976, given effect by section 185 of the Merchant Shipping Act 1995.

The issue was whether Stema Shipping (UK) Ltd, which placed personnel on the barge while it lay off Dover, anchored and secured it, operated its machinery and participated in decisions concerning its safety, was also “the operator of a seagoing ship” within article 1(2).

1. The Convention had to be construed according to the ordinary meaning of its words, in context and in light of its object and purpose, without English-law preconceptions. The Court considered the approach in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd, [1978] AC 141, Fothergill v Monarch Airlines Ltd, [1981] AC 251, and CMA CGM SA v Classica Shipping Co Ltd (The CMA Djakarta), [2004] 1 Lloyd’s Rep 460.

2. “The manager of the ship” means the person entrusted by the owner with sufficient tasks involved in ensuring that the vessel is safely operated, properly manned, properly maintained and profitably employed. A person entrusted with only one limited task may merely assist in management.

3. “The operator of a ship” includes the manager and may extend beyond the manager. It includes an entity which, with the owner’s permission, directs its employees to board an unmanned ship and operate it in the ordinary course of the ship’s business. The master and crew are not operators within article 1(2), because article 1(4) separately protects persons for whose acts, neglect or default the shipowner is responsible.

4. The definite article and singular form do not prevent there being more than one operator. The question is whether, at the relevant time, the facts justify describing the person as the operator of the ship. The Australian decision in ASP Ship Management PTY Limited v The Administrative Appeals Tribunal, [2006] FCAFC 23, was helpful by analogy but did not determine the Convention’s meaning because it concerned a different statutory language, context and purpose.

5. Stema UK’s employees anchored and secured the barge, operated its machinery, maintained its generators, monitored its position and participated in the decision whether it should remain at anchor during storm conditions. Stema A/S retained an operational and managerial role, but Stema UK was not merely assisting it. Viewed in the round, Stema UK was the operator of the barge off Dover.

6. Stema UK was accordingly entitled to limit its alleged liability under the Convention.

First-instance limitation action. No appellate history was stated in the judgment.