Splitt Chartering APS & Ors. v Stema Shipping (UK) Limited & Ors.

For the purposes of article 1(2) of the Convention on Limitation of Liability for Maritime Claims 1976, an operator of a ship must have a real role in its management or control. Mere physical operation of machinery, or provision of personnel to perform that work, does not suffice. This remains so for an unmanned vessel.

A company acting under the supervision of the owner or established operator ordinarily assists with the vessel’s operation; it does not thereby become a further operator or manager entitled to limit liability. The definite article in article 1(2) does not itself prevent more than one operator, but a second operator should not readily be found.

An unmanned barge, laden with rock armour, was anchored off Dover pending discharge. During a storm its anchor dragged and damaged an undersea electricity cable. The registered owner, charterer and Stema Shipping (UK) Ltd sought declarations limiting their liability under the Convention on Limitation of Liability for Maritime Claims 1976.

RTE accepted that the owner and charterer could limit liability, but disputed Stema UK’s entitlement. Although Stema UK supplied personnel who anchored and attended the barge, operated machinery during discharge, monitored conditions and discussed weather precautions, Stema A/S retained responsibility and decision-making control.

Teare J held that Stema UK was an operator and entitled to limit liability: [2020] EWHC 1294 (Admlty). RTE appealed. Stema UK contended by respondent’s notice that it was alternatively the barge’s manager.

Disposition

1. The appeal was allowed. Stema UK’s claim for a declaration that it was entitled to limit liability was dismissed.

2. Article 1(2) of the Convention on Limitation of Liability for Maritime Claims 1976 required an operator to have management or control of the vessel at a level above the mere working of its machinery. Article 1(4), and the rejected proposal to extend protection to persons rendering services directly connected with a ship’s operation, confirmed that crew and analogous service providers were not themselves operators merely because of that work. The same construction applied to an unmanned vessel.

3. The Court accepted the approach in ASP Ship Management Pty Ltd v Administrative Appeals Tribunal [2006] FCAFC 23. Providing crew does not itself make the provider an operator. The ordinary meaning of the open-textured terms manager and operator could therefore require management and control. The decision concerning the distinct and well-defined category of charterer in CMA CGM SA v Classica Shipping Co Ltd (The CMA Djakarta) [2004] EWCA Civ 114 did not require a different result.

4. Stema UK had no such management or control. Its personnel followed checklists supplied by Stema A/S. They acted for, on behalf of, and under the supervision of Splitt and Stema A/S. Stema A/S retained the decision whether the barge should remain at anchor during the storm. Stema UK therefore assisted the established operator; it did not become a second or alternative operator.

5. The definite article in article 1(2) did not limit a ship to one operator, although a court should be slow to characterise an assisting party as a further operator. Stema UK’s limited role also could not make it the manager of the barge.

• Court of Appeal (Civil Division) Allowed RTE’s appeal and dismissed Stema UK’s claim for a declaration that it could limit liability: [2021] EWCA Civ 1880.
• High Court of Justice, Queen’s Bench Division, Admiralty Court Teare J held that Stema UK was the operator of the barge and declared that its liability was limited: [2020] EWHC 1294 (Admlty).