Who can limit their liabilities under the Limitation Convention 1976? Shipowners and salvors.

What is a "shipowner"? The owner, charterer, manager or operator of a ship.

But what is a "manager", and what is an "operator"?

The Admiralty Court handed down its first-ever judgment on this question.

In November 2016 a large dumb barge was moored off Dover. Storm Angus struck, with storm force winds up to force 9, and the barge dragged its anchor.

RTE own the England-France electricity connection. They allege that the barge's anchor tripped an undersea cable causing ?55 million worth of damage. Parties interested in the barge claimed to be entitled to limit their liabilities (if any) to about £5.5 million, based on tonnage.

It was accepted by RTE that the owners and charterers of the barge could limit. But they denied that a third entity, Stema UK, could limit its liability. They said that Stema UK merely provided some services to the barge, but was not "the operator" or "the manager".

Teare J explained that, under the 1976 Limitation Convention, a "manager" is the person entrusted by the owner with sufficient of the tasks involved in ensuring that a vessel is safely operated, properly manned, properly maintained and profitably employed to justify describing that person as the manager of the ship. If a person is entrusted with just one limited task it may be inappropriate to describe that person as the manager of the ship.

As for "operator", the learned judge decided that it includes the manager, and that in many cases involving conventional merchant ships there may be little scope for operator to have any wider meaning. However, in the case of a dumb barge, operator includes those who, with permission of the owner, send their employees on board with instructions to operate the ship's machinery in the ordinary course of the ship's business.

Stema UK can therefore limit its liability.

A more detailed article is included on our website. www.quadrantchambers.com/news/who-can-limit-john-passmore-qc

John Passmore QC represented the limitation claimants, including the operator Stema UK. He worked with Alistair Johnston, Maria Borg Barthet, Danyel White, Debo Fletcher and Christopher Chane at Campbell Johnston Clark. John and CJC also worked with Stewart Buckingham QC in a related collision action against a cargo vessel called SAGA SKY. Chirag Karia QC represented RTE. Nigel Jacobs QC and Nichola Warrender represented the owners of SAGA SKY.

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