Sea Consortium Pte Ltd & Ors v Bengal Tiger Line Pte Ltd & Ors

A party may qualify as a “charterer” and therefore a “shipowner” under Article 1(2) of the Convention on Limitation of Liability for Maritime Claims 1976 as amended by the 1996 Protocol (as amended in 2012) without having rights over the whole cargo capacity of a ship. A contract making part of a ship’s carrying capacity available for the carriage of goods which the party undertakes as carrier will generally suffice. The contractual arrangements must nevertheless be examined in each case. Slot-charter terminology, payment for unused slots and the absence of a minimum-volume commitment are relevant but not necessarily decisive.

The claim arose from the loss of the container ship X-Press Pearl following a fire and sinking off Colombo in 2021. The claimants had constituted a limitation fund and obtained a limitation decree under Article 6 of the Convention.

MSC Mediterranean Shipping Company S.A., Bengal Tiger Line Pte. Ltd and Maersk A/S each applied for a declaration that it was a “shipowner” under Article 1(2), and was therefore entitled to limit liability in respect of the casualty. No party opposed the applications. The central issue was whether each applicant’s contractual arrangements with the claimants made it a “charterer” within Article 1(2).

1. Applications granted. Each of Bengal Tiger Line Pte. Ltd, MSC Mediterranean Shipping Company S.A. and Maersk A/S was a “shipowner” within Article 1(2) because each was a “charterer” of the ship in relation to the casualty voyage.
2. In The MSC Napoli [2008] EWHC 3002 (Admlty), Teare J had held that slot charterers were “charterers” under Article 1(2), and that the definition did not require a right to use or direct the use of the ship’s entire cargo-carrying capacity. The court agreed that this reasoning was not dependent on the contractual payment being described as slot charter hire or being payable for allocated slots whether used or unused.
3. The relevant inquiry is contractual. It will normally be sufficient that the contract obliges an owner or disponent owner to make part of the ship’s carrying capacity available for goods which the contracting party has undertaken, or is obliged, to carry as carrier. The precise contractual arrangements must always be examined.
4. Bengal Tiger’s fixed-slots contract was materially identical to the slot charters in The MSC Napoli. MSC’s Connecting Carrier Agreement was also a slot charter, although payment was made only for slots used. That distinction did not take MSC outside Article 1(2).
5. Although Maersk’s Agreement for Transport Services used less typical charter terminology and involved no payment for unused slots, its provisions concerning bills of lading, carriage liabilities and cargo claims showed that Maersk contracted as carrier and hired cargo-carrying space for performing those commitments. It therefore fell within Article 1(2).
6. The declarations did not affect any future question concerning the Article 4 application, the limitation fund or claims for indemnity or contribution.