Cyprus: limitation of liability
Gregoris Leontiou
G Leontiou, Nicosia
Up until 2005, Cyprus applied the provisions of the United Kingdom Merchant Shipping Act 1894, section 503, with regards to limitation of liability for shipowners. Under the provisions of this section, shipowners were permitted to limit their liability based on the gross tonnage of the ship without deduction on account of the engine room.
Cyprus gave effect to the Convention on Limitation of Liability for Maritime Claims of 1976 and the Protocol of 1996 amending the said Convention (the 'LLMC Convention') by virtue of Law 20 (III) of 2005.
As from 8 June 2015, the limits under the 1996 Protocol have automatically been increased by 51 per cent through the tacit acceptance procedure, and these new limits are accordingly applicable in Cyprus.
It is also noted that Cyprus, as a Member State of the European Union, applies Regulation (EC) No 392/2009, which lays down the EU legal framework relating to liability and insurance for the carriage of passengers by sea.
With regards to limitation of liability in respect of oil spillage and pollution issues, Cyprus has ratified the International Convention on Civil Liability for Oil Pollution Damage of 1969 and its protocols of 1976 and 1992 by virtue of Law No 63 of 1989, as this has been amended.[1] Cyprus also applies the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea of 1996, by virtue of Law No 21(III)/2004, as well as the International Convention on Civil Liability for Bunker Oil Pollution Damage, by virtue of Law No 19 (III) of 2004.
Conduct barring limitation
Whether a shipowner may successfully limit his/her liability depends on the relevant provisions of each applicable law or convention.
Under Article 4 of the LLMC Convention: '[a] person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result'.
According to Article 2 of the LLMC Convention, once a shipowner establishes that the claim falls within its provisions, the shipowner has the right to limit his/her liability, unless the claimant satisfies the court that the conditions of Article 4 are met. Therefore, the burden of proof rests on the claimant.[2]
Similar provisions are found in Regulation (EC) No 392/2009;[3] Law No 21(III)/2004, applying the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea of 1996;[4] and Law No 19 (III) of 2004, applying the International Convention on Civil Liability for Bunker Oil Pollution Damage.[5]
Different provisions apply in respect of Law No 63 of 1989, ratifying the International Convention on Civil Liability for Oil Pollution Damage of 1969 and its protocols of 1976 and 1992. Under this Convention, a shipowner will not be able to avail himself/herself of the limitation of liability provided under Article V(1) if the incident occurred as a result of the shipowner's actual fault or privity.[6]
Notes
[1] See Law No 47(III) of 2005 ratifying the amendments of 18 October 2000 of the 1992 protocol of the Convention.
[2] See The Capitan San Louis [1993] 2 Lloyd's Rep 573; although this is a decision of the Queen's Bench Division of England and Wales, it will be of persuasive authority for the Cyprus courts, as it is interpreting the provisions of a convention, which are in pari materia with the provisions of the applicable Cyprus law.
[3] See Art 13 of the Regulation.
[4] See Art 2(2) of the Convention.
[5] See Art 6 of the Convention.
[6] See Art V(2) of the Convention