Statutory limitations of liability for vessels and other transportation interests in Japan
Kohji Hayakawa
Atsumi & Sakai, Tokyo
Statutory limitation of liability
Japan has ratified the Protocol of 1996 to amend the Convention on Limitation of Liability for Maritime Claims 1976. This has been reflected in the domestic Act on Limitation of Liability of Shipowners (the 'Act'). The new limitation came into effect in June 2015. In addition, the Act on Liability for Oil Pollution Damage provides for the limitation of liability of the owners of tankers in the event of tanker oil pollution.
On the other hand, there are no other statutory limitations of liability for other transportation interests. Japan is not a signatory to the Athens Convention and there are no limitations of liability in respect of passenger or luggage claims. In addition, any limitation or waiver of liability for a passenger's claim in respect of loss of life or personal injury would be null and void under the Commercial Code of Japan (Article 591). Such claims are treated the same as ordinary claims in Japan.
Exceptions to limitation
Under the Act, 'shipowner' refers to an owner or charterer (including a bareboat charterer), and shipowners and salvors may limit their liability. Conversely, claims with respect to the removal of a ship's wreck or cargo are not subject to limitation (Article 2.2 of the Act). A non-vessel operating common carrier shall also not be permitted to limit its liability in limitation proceedings. Furthermore, claims relating to rescue at sea or contribution in general average, as well as claims relating to the duties of the employees of shipowners or salvors, are exempt from the limitation process (Article 4 of the Act).
Typical defences
Definitions of 'vessel'
Under the limitation proceedings in Japan, the definition of 'vessel' is often discussed. Under the Act, it is simply defined as 'a vessel that is used for seagoing voyages'. Recently, the Fukuoka High Court held that the shipowner of a vessel operating in 'partly sheltered waters' under the Ship Safety Act of Japan can apply for the limitation proceedings. The court also held that the definition of 'a vessel that is used for seagoing voyages' should be judged based on common knowledge as to whether it is used in sea areas (Fukuoka High Court, 4 February 2021, Hanrei Times 1497-119).
Intention or reckless act by the claimant
A liable shipowner or salvor shall not be entitled to limit his/her liability if it is proven that the loss resulted from the individual's personal act or omission committed with intent to cause such loss or recklessly and with knowledge that such loss would probably result (Article 3.3 of the Act). Recently, the Hiroshima High Court held that the reckless act must be proven by the person requesting the barring of limitation proceedings, and that the court will determine whether the shipowner's executive was aware of the possibility of damage occurring and engaged in reckless behaviour based on that awareness, conduct that a reasonable person would not normally engage in (Hiroshima High Court, 21 February 2020, Hanrei Jiho 2490-35). Although this defence is often argued, there has been no precedent case in Japan in which the limitation was broken for this cause.