MSC Mediterranean Shipping Company S.A. v Stolt Tank Containers B.V. & Ors.

Under the Amended 1976 Convention, limitability depends on the legal character of the claim, not merely on the factual chain of causation. A claim for damage to a ship, including consequential loss resulting from that damage, is not limitable under Article 2.1(a) or otherwise merely because the damage was caused by loss of or damage to cargo.

Article 2.1(a) covers claims in respect of loss of or damage to property other than the ship, including consequential loss. Article 2.1(e) concerns casualty-intervention or aftermath liabilities for removing, destroying or rendering cargo harmless, rather than an owner’s claim against a time charterer concerning cargo operations undertaken under the charter. Article 2.1(f) requires mitigation measures whose sole purpose was to avert loss for which the person liable could limit.

MSC, the time charterer of the container ship MSC Flaminia, sought a general limitation decree under the Amended 1976 Convention in respect of Conti’s claims arising from an explosion and fire caused by auto-polymerisation of dangerous cargo.

Conti, the registered owner, had recovered substantial damages against MSC in London arbitration, including salvage, cargo handling, firefighting-water disposal, waste removal, repair and related expenditure. The court had previously rejected Conti’s Article 4 defence and tried the remaining defence, namely that Conti’s claims fell outside the Convention’s scope under Article 2.

The central issues were whether the claims were claims in respect of cargo loss or damage, consequential loss, cargo removal under Article 2.1(e), or mitigation measures under Article 2.1(f), or were instead claims in respect of damage to the ship.

1. Claim dismissed. Conti’s claim, whether treated as one claim or as separate groups of expenditure, was not subject to tonnage limitation under Article 2.1.
2. Applying Articles 31 and 32 of the Vienna Convention on the Law of Treaties 1969, the phrase claims in respect of loss of or damage to property focuses on the nature of the right of redress enforced by the claim. It is not determined by tracing factual causation backwards. A claim remains a cargo claim where ship damage caused the cargo loss, and a claim remains a ship-damage claim where cargo damage caused the ship damage.
3. Conti’s claim was properly characterised as a claim in respect of damage to the ship, including consequential loss resulting from having a damaged ship. The fact that the casualty and expenditure were factually caused by cargo damage did not convert the claim into a limitable cargo claim under Article 2.1(a).
4. The court rejected Conti’s broader submission that claims between insiders could never be limitable unless they passed on liability originally suffered by an outsider. A charterer’s claim against an owner for loss of charterer-owned cargo, and an owner’s claim against a charterer for loss of owner-owned containers, could fall within Article 2.1(a).
5. Alternatively, cargo handling costs incurred by an owner during a time charter were not claims within Article 2.1(e) where the claim was between owner and charterer concerning responsibility under the charter. Firefighting-water and burnt-waste disposal costs were not brought within Article 2.1(e) on the facts. Article 2.1(f) required mitigation measures whose sole purpose was to mitigate limitable loss; firefighting and diversion were also undertaken to save the ship.
6. The court therefore rejected MSC’s limitation defence in respect of all categories of Conti’s awarded losses.