Liabilities for Injuries and Damage: A Maritime Law Report

This report analyzes the liabilities arising from a maritime casualty involving the Panamax bulk carrier m/s Lima. The incident occurred in a UK port while the vessel, carrying iron ore and under pilotage and tug assistance, collided with a beacon and breakwater due to a tug's unexpected speed reduction. The analysis covers the tug and tow relationship, the pilot's actions, and the potential liabilities of the shipowner, Andromeda Shipping Company Ltd. The report discusses third-party liabilities, including damage to fixed and floating objects, cargo loss, and oil pollution, referencing relevant maritime conventions and insurance clauses. It examines the relationship between the tug and tow, and their liabilities to third parties, considering the UK Standard Conditions for Towage. The report concludes by assessing the damages to the vessel and the legal implications for all parties involved. This report provides a comprehensive overview of the legal and financial ramifications of the incident and the distribution of liabilities.

Liabilities for injuries and Damage
following a casualty

Table of Contents
Introduction...........................................................................................................................................2
Main Context.........................................................................................................................................2
Analysis of the incident.....................................................................................................................2
Tug and tow relationship with the accident...................................................................................2
The Pilot and his/her involvement.................................................................................................3
Potential liabilities of the owners of the m/s Lima.............................................................................3
Third party liabilities.....................................................................................................................3
Own damage..................................................................................................................................4
The relationship between tug and tow and their liabilities to third parties.....................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7
1

Introduction
The maritime law consists of the agreements and laws that govern activities and behaviour on
seas. The law monitors how people carry out their businesses on the waters. In this case,
Panamax bulk carrier m/s Lima (43,287 GT) on 15 August 2018 was entering into a port in
the UK carrying 65200 tonnes cargo of iron ore which was under the tug assistance and
pilotage. The cargo was transferred to Ore Imports Ltd that had purchased from the Universal
Exim Ltd in Antwerp. An accident occurred when the Little Giant decreased its speed
without informing it to the m/s Lima. The pilot gives "hard to starboard" order for avoiding
running into the tug which led to collision into the beacon and breakwater. The beacon
destroyed and engine room and two cargos were flooded. The crew suffered from a minor
bruise but the vessel sinks. Around 250 tons of heavy fuel oil flowed into the water (Melton,
2010). The owner of m/s Lima Andromeda Shipping Company Ltd suffered due to the
damages and losses.
Main Context
Analysis of the incident
Tug and tow relationship with the accident
Tug is a small and powerful boat which is generally used to tug and pull huge vessels. In this
case, a ship was fully loaded with 65,200 tons of iron ore entering a port in the United
Kingdom. Tug assistance was responsible to pull m/s Lima towards the harbour. The Little
Giant suddenly reduced speed without informing the pilot of m/s Lima. The pilot of m/s Lima
gave an order of "hard to starboard to avoid running over the tug'. Somehow it managed to
avoid a collision but m/s Lima hit hard the beacon and breakwater (Bell-Rehwoldt, 2005). It
can be noticed that the tug was responsible for the accident as tug did not inform the pilot of
m/s Lima about reducing the speed of the boat which is unethical. There should be
appropriate coordination and communication between the two drivers as per the UK standard
conditions and rules for towage and services. Tug assistance should have informed the pilot
of m/s Lima about reducing the speed of the boat. As per the UK standard conditions and
rules for the towage and other services, the tug was responsible for the accident (Richardson,
2003).
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The Pilot and his/her involvement
The pilot of the m/s Lima tried his/her best to avoid the accident. The pilot did not take the
risk because the ship was fully loaded and requested for the tug to help. Even when tug
reduced the speed without informing the pilot of m/s Lima he/she gave an order of "hard to
starboard" in order to avoid a collision which was a good decision (Donner, 2018). Pilot
succeeded and managed to save the tug. However, as the ship was in motion it was hard to
stop it and in the result, it hits beacon and breakwater. The ship destroyed but crew staffs
managed to survive. The accident could have become more dangers and it might have cost
the lives of crews of both ship and tug (Lemus, 2012).
Potential liabilities of the owners of the m/s Lima
Third party liabilities
Panamax bulk carrier m/s Lima damaged fixed and floating objects that are a beacon,
breakwater, loss of the cargo. The bailment is a legal relationship which is associated with the
physical possession of the property. One party (bailee) takes the responsibility of goods of
another party (bailor). Bailor/bailee creates a relationship based on independent obligations
and rights. Bailee is responsible for taking care of the goods. Bailee may not implement each
and every precaution for preventing damage or loss but obliged to take care of the property of
bailor.
The owner of m/s Lima is labile for the damages done to the third party (Domingo, 2011).
The practice of covering such liability is referred to as the “running down” clause. Nowadays,
it is known as “collision liability” clause. IHC and ITCH labelled the clause as three-fourth
collision liability because indemnity insurance is being agreed by underwriters for 75 per cent
of liability of assured in relation to the specific incident. Liability of underwriter is limited to
a maximum of three-fourths of the vessels' insured value. Owner of the ship has to cover
remaining one-fourth of liability and 75% excess if any liability of the insured value of the
vessel. The response of ship-owner to reality is to establish insurance for remaining one-
fourth and excess liability in indemnity and protection cover form (Donner, 2018).
H&M insurance terms and condition standard in most markets cover collision liability of
owner in full. IHC 2003 offers alternative 38 optional clauses which are "4/4ths collision
liability". Hull insurance when the ship becomes liable for collision then it covers the
following:
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 Damage or loss to any other property or vessel on another vessel.
 Loss or delay of use of the other property or vessel (Legislation, 1987).
 The salvage or general average under the contract or other property or vessel.
In the UK market, a standard hull condition excludes liability for a personal or real thing or
property except for other property or vessels. The ship-owner has been exposed to any third
party liabilities which may not be covered under the hull insurance (Gilman, 2003). In this
case, m/s Lima is liable for floating or fixed objects which led to the tort and can also arise
under the statute or contract. The ship-owner is responsible personally and ensures a duty of
care in order to avoid damages to others. When a ship makes a contact with an object and
incapable to avoid the contact then the ship is to be blamed for causing the contact.
It is found that m/s Lima damaged the breakwater and beacon with the collision. Owner of
the ship is responsible to pay for the damages caused to the properties. Two cargo of Ore
Imports Ltd were flooded into the water from the ship. Owner of m/s has to pay for the losses
caused to Ore Imports Ltd. Apart from this, 250 tons of heavy fuel oil flooded into the water
which is considered to be oil pollution. The International Convention on the Civil Liability
for the Bunker Oil Pollution Damage is the convention which was being adopted to ensure
that effective, prompt and adequate compensation is being available to individuals who
suffered due to the damages caused by oil spill carried as fuel in bunkers of the ship (Imo,
2018). The convention is being applied to the damages caused to territories consisting of the
territorial sea and economic areas of states parties. Owner of m/s is liable for the oil pollution
and has to bear the amount for the damages.
General average charges for a lien on cargo can be exercised only by the owner of the ship in
possession of products. It is the duty of ship-owner to protect the interest of other owners of
cargo by retaining the possession of products in respect to contribution in general average
outstanding. There are difficulties to assess the amount of contributions and time needed for
the adjustment of general average. The customary procedure is that products are to be
delivered in exchange of stock securities afforded by the general average deposit, general
average bond or both.
The cargo was being consigned to Ore Imports Ltd that was purchased from the Universal
Exim limited in Antwerp, Belgium on Dat Incoterms 2010 terms. Incoterms are referred to
the set of uniform rules which codifying analysis of trade terms explaining obligations and
rights of both seller and buyer in the international transaction. It is designed for transferring
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the risk to buyer from seller in a convenient place where products can be examined. If the
damage is discovered at the destination then it would be not possible to determine where the
damage occurs after or before (DiMento & Hickman, 2012). A dispute would be issued under
FOB/CFR Incoterms. It will help to make understand that the risk will be with the purchaser
once the products are taken by the combined transport operator for carriage.
Own damage
The vessel of Andromeda Shipping Company Ltd was damaged massively. The massive hull
damage occurred which results in the sinking of the vessel and crew suffered from a minor
bruise. Owner of the ship suffered a loss because the vessel sank completely (Harrison,
2011). According to the maritime law, the tug is liable for the damages to Andromeda
Shipping Company Ltd. Tug assistance was carrying out his duty on the basis of the UK
Standard Conditions for Towage and other Services (1986). Agreement between the hirer and
tug owner should include and subject to all terms and conditions. The condition states that the
towing consisting of pulling, pushing, moving, holding and guiding by the pilot of the vessel
and tug should be defined likewise (Kirton & Madunic, 2009).
Constructive total loss (CTL) is a concept related to marine insurance. The concept is referred
to the intermediate loss from between actual and partial total loss. If the requirement of
constructive total loss is met then assured can claim for the vessel’s total loss. Apart from
this, assured can claim for constructive total loss or can select claim for partial loss. The Gard
rules state that there is general coverage for legal costs consisting of defending claims costs
(Clarksons, 2018). The liability of carriage is always subjected to overriding applications of
provisions of Limitation of Liability for Maritime Claims (LLMC). The convention as per
the Merchant shipping act 1995 implements International Convention 1976 on the Limitation
of Liability for Maritime Claims which consists of the following limits:
 In respect to claims for personal injury or loss of life
 One million SDRs for the ships not exceeding three tons
 Two million SDRs for the ships not exceeding two thousand tons
 800 SDRs for each tone between 2001 to 30000 tons and 600 SDRs for each tone
between 30001 to 70000 tons.
The total liability is relied on whether the following were only the property claims or
personal claims or both. The limits are as follows:
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 206.67 SDR per ton for personal claims
 66.67 SDR per ton of the property claims
 For a combination of property and personal claims, a sum of 2254 SDR per ton has
been divided into two. 140 SDR per ton of the personal claims and 66.67SDR per ton
of the property claims. If the first portion is not able to cover the personal claims then
the unpaid balance can be used for the payment of the property claims.
Personal claim = 43287 tones
Property claim = 65200 tones
Personal claim = 43287*140= 6060180
Property claim = 65200*66.67= 4346884
The relationship between tug and tow and their liabilities to third parties
The "whilst towing" expression should cover the commencing period when tug is in the
position of receiving the direct orders from pilot of the vessel to commence pushing, holding,
escorting, standing, guiding or moving by vessel for picking up lines or wires, ropes when the
line of towing has been passed by or to the tender or tug. The final orders ended when the
pilot of the vessel ceases pulling, pushing, holding, escorting, moving standing or guiding to
cast off lines or wires, ropes have been carried out (Hopkins & Nav, 1998). Tug is
responsible for safety clear the ship. Tug owner is liable for the damaging the vessel by not
following an appropriate instruction. The clauses provision 4 (a) and 4 (b) is to be applicable
to any of the claims. The hirer needs to prove that the damage occurred due to the failure of
reasonable care by tug assistance. Clause 4 (b) and 4 (a) is being applied to all the claims that
arise when there are any damages caused by either tender or tug.
Conclusion
The case has clearly depicted that the m/s Lima damaged properties due to lack of reasonable
care from the tug assistance. The owner of the vessel is liable for the damaged caused to third
parties. Tugs assistance is liable for loss caused to the owner of the ship. The laws and rules
would be applied to each of the circumstances under which the liable parties have to pay for
damages (Admiraltylawguide, 2018). The rules and regulations need to be followed by all the
parties as per law.
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References
Admiraltylawguide. (2018). International Convention on the Arrest of Ships (Geneva 1999).
Retrieved from http://www.admiraltylawguide.com/conven/arrest1999.html
Bell-Rehwoldt, S. (2005). Law (2nd ed.). Detroit: Lucent Books.
Clarksons. (2018). UK Standard Conditions for Towage and Other Services (Revised 1986) |
Clarkson. Retrieved from https://www.clarksons.com/uk-standard-conditions-for-
towage-and-other-services-(revised-1986)/
DiMento, J., & Hickman, A. (2012). Environmental governance of the great seas (5th ed.).
Cheltenham, UK: Edward Elgar.
Donner, P. (2018). Commercial Law and Marine Insurance. 10-80, 1.
Domingo, R. (2011). New global law (10th ed.). New York: Cambridge Univ Press.
Donner, P. (2018). Limitation Of Liability, Arrest, Liens And Mortgages, 1, 7-47.
Gilman, S. (2003). Sustainability and national policy in UK port development. Maritime
Policy & Management, 30(4), 275-291. doi: 10.1080/0308883032000145591
Harrison, J. (2011). Making the law of the sea (3rd ed.). Cambridge, UK: Cambridge
University Press.
Hopkins, F., & Nav, M. (1998). Business And Law For The Shipmaster (7th ed.). Great
Britain: Brown,Son & Ferguson.
Imo. (2018). International Convention on Civil Liability for Bunker Oil Pollution Damage
(BUNKER). Retrieved from
http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-
Convention-on-Civil-Liability-for-Bunker-Oil-Pollution-Damage-(BUNKER).aspx
Kirton, J., & Madunic, J. (2009). Global law (6th ed.). Farnham: Ashgate.
Legislation. (1987). Pilotage Act 1987. Retrieved from
http://www.legislation.gov.uk/ukpga/1987/21/pdfs/ukpga_19870021_en.pdf
Lemus, L. (2012). Dan Malika Gunasekera, Civil Liability for Bunker Oil Pollution
Damage. Ocean Yearbook Online, 26(1), 705-709. doi: 10.1163/22116001-92600032
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Melton, B. (2010). The law (7th ed.). New York: Chelsea House Pub.
Richardson, J. (2003). The Merchants Guide (1st ed.). UK: P&O Nedlloyd.
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