MSC Mediterranean Shipping Company SA v Conti 11 Container Schiffahrts-GmbH & Co KG MS “MSC Flaminia”

A charterer may limit its liability under the 1976 Convention for claims by a shipowner, including claims concerning losses originally suffered by that owner. The Convention contains no owners’ original loss qualification.

Limitability depends on the nature and proper characterisation of the claim. A claim for loss of or damage to the limiting vessel, or consequential loss resulting from that damage, falls outside article 2.1(a). Nevertheless, a claim arising from damage to the vessel may qualify independently under another sub-paragraph of article 2.1. Thus, costs of removing or rendering harmless cargo may be limited under article 2.1(e), even where they also form part of the vessel’s repair costs. The Convention is interpreted according to its terms, without a presumption favouring either a wide or narrow application.

Following an explosion and fire aboard the container ship “MSC Flaminia”, its owner, Conti, incurred extensive expenditure on securing a port of refuge, handling and decontaminating cargo, removing firefighting water and removing contaminated waste. An arbitral tribunal awarded Conti approximately US$200 million against the time charterer, MSC, for breach of charter obligations concerning dangerous cargo and for outstanding hire.

MSC sought to limit its liability under the 1976 Convention on Limitation of Liability for Maritime Claims, given force by section 185 of the Merchant Shipping Act 1995. The Admiralty Court held that the relevant claims were not limitable: [2022] EWHC 2746 (Admlty). The Court of Appeal dismissed MSC’s appeal, holding that a charterer could not limit liability for losses originally suffered by the owner: [2023] EWCA Civ 1007.

The Supreme Court considered whether that owners’ original loss qualification existed and whether the four disputed claims fell within article 2.1 of the Convention.

1. The appeal was allowed in part. Lord Hamblen, giving the unanimous judgment, held that a charterer may limit liability for claims by an owner, including losses originally suffered by that owner. Articles 1.1 and 2.1 define the relevant claims by reference to the categories specified in article 2. They neither distinguish between owners and other persons within the extended definition of shipowner nor impose an owners’ original loss qualification. Reading in that qualification would gloss the treaty language and create unjustified asymmetry between owners and charterers, managers and operators.

2. The 1976 Convention must be interpreted in accordance with its ordinary meaning, context, object and purpose under articles 31 and 32 of the Vienna Convention on the Law of Treaties 1969. Neither the Convention’s history nor the machinery for aggregating claims and constituting a single fund justified the proposed qualification. Concerns that owners might claim against a fund deemed to be constituted on their behalf were substantially addressed by the established exclusion of claims for damage to the limiting vessel. Article 10 also permits limitation without a fund.

3. There is no interpretative presumption that article 2 should receive either a wide or narrow application. Its agreed terms govern the extent of limitation.

4. Article 2.1(a) concerns the nature and proper characterisation of the claim, rather than every factual cause contributing to it. The four claims were incurred to enable repair of the vessel and were therefore claims for damage to the vessel, or losses consequential upon that damage. They did not become claims arising from cargo damage merely because damaged cargo caused or contributed to the casualty. Accordingly, none was limitable under article 2.1(a).

5. Article 2.1(f) concerns measures taken to avert or minimise a loss for which liability may be limited. Payments connected with obtaining a port of refuge and the cost of removing firefighting water were repair costs, not mitigation costs. If an indivisible measure addressed both limitable and non-limitable loss, it would qualify only where averting or minimising limitable loss was its main or dominant purpose.

6. The cost of discharging and decontaminating cargo was limitable under article 2.1(e). That provision focuses on the nature of the claim and permits limitation for removing or rendering harmless cargo. A claim may have more than one character. Its connection with damage to the vessel does not prevent it falling within another sub-paragraph of article 2.1. The owner’s presentation of its recovery as a single vessel-damage claim likewise could not prevent an independently qualifying component from being limited.

7. MSC was therefore entitled to limit liability only for the costs of discharging sound and damaged cargo and decontaminating that cargo at Wilhelmshaven.

1. United Kingdom Supreme Court: Allowed MSC’s appeal on the owners’ original loss issue, upheld the conclusion that only the cargo-discharge and decontamination costs were limitable, and rejected Conti’s additional grounds: [2025] UKSC 14.
2. Court of Appeal: Dismissed MSC’s appeal, holding that a charterer could not limit liability for losses originally suffered by the owner. It concluded, obiter, that the cargo-discharge and decontamination costs fell within article 2.1(e): [2023] EWCA Civ 1007.
3. Admiralty Court: Held that none of Conti’s relevant claims was subject to limitation, characterising the recovery as a single claim for damage to the vessel and resulting loss: [2022] EWHC 2746 (Admlty).
4. Arbitration: The tribunal awarded Conti approximately US$200 million for indemnity or damages arising from the shipment of dangerous cargo and for outstanding hire.