Perusahaan Perseroan (Persero) Pt Pertamina v Trevaskis Ltd And Others

CACV 102/2021

[2022] HKCA 1089

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 102 OF 2021

(ON APPEAL FROM HCAJ NO 98 OF 2019)

________________________

________________________

________________________

J U D G M E N T

________________________

Hon Kwan VP:

1. This appeal brought by the plaintiff raises a question of the proper construction of section 15 of the Merchant Shipping (Limitation of Shipowners Liability) Ordinance, Cap 434 (“the Ordinance”) and certain provisions of the Convention on Limitation of Liability for Maritime Claims 1976 (“1976 Convention”), which have the force of law in Hong Kong as provided in section 12 of the Ordinance and Schedule 2 thereto. We are concerned in particular with articles 2(1)(a), 2(1)(c), 2(1)(d) and 18(1) in the 1976 Convention.

2. The plaintiff’s vessel “ANTEA” collided with Trevaskis Ltd’s vessel “STAR CENTURION” whilst the latter was lying at anchor in Indonesian waters; as a result STAR CENTURION sank. The plaintiff brought this action (HCAJ 98/2019) against the defendants (Trevaskis Ltd and all other persons claiming or being entitled to claim damages arising from the collision) to limit its liability. The defendants issued a summons in this action (“the Summons”) for a declaration that part of the claim by Trevaskis Ltd in respect of the raising, removal, destruction or the rendering harmless[1] of STAR CENTURION not be subject to limitation under article 2 of the 1976 Convention and/or the limitation fund constituted by the plaintiff.

3. By his decision on 22 February 2021 (“the Decision”)[2], Anthony Chan J granted the declaration sought in the Summons, holding that on the proper construction of the relevant provisions, the wreck removal claim of Trevaskis Ltd fell within article 2(1)(d) exclusively, and was therefore excluded from the limitation regime under the Ordinance through a reservation made under article 18(1).

4. Article 2(1) sets out the claims that shall be subject to limitation of liability. Article 2(1)(d) covers “claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship”. The operation of article 2(1)(d) has been suspended by section 15(3) of the Ordinance. As it was held that the present wreck removal claim fell exclusively within that article, the claim was not subject to limitation.

5. The plaintiff contended before the judge and on appeal that the subject wreck removal claim did not just fall within article 2(1)(d) but also within articles 2(1)(a) and (c), which are not affected by the suspension in section 15(3). The judge was in error in holding that the more general terms of articles 2(1)(a) and (c) should give way to the specific terms of article 2(1)(d) in this situation, applying the maxim of generalia specialibus non derogant[3] , that the sub-paragraphs in article 2(1) should be regarded as mutually exclusive, and that the claim here fell exclusively within article 2(1)(d).

Factual background

6. The relevant background matters were summarised in §§4 to 13 of the Decision and are as follows:

“4. The facts are not in dispute and may be succinctly stated as follows. On 13 January 2019, “ANTEA” collided with “STAR CENTURION” whilst STAR CENTURION was lying at anchor in Indonesian waters. As a result of the Collision, STAR CENTURION sank.

5. On 14 January 2019, Trevaskis Ltd, the owner of STAR CENTURION commenced in personam proceedings against the plaintiff, the owner of ANTEA in HCAJ 3/2019.

6. Shortly after the Collision, salvors were engaged to remove pollutants from the wreck. On 24 January 2019, the Indonesian Ministry of Transportation issued a Wreck Removal Order requiring the defendants to raise, remove and render harmless the wreck[4].

7. On 3 February 2019, the salvors were engaged under a new contract to continue removing the remaining pollutants from the wreck and to provide caretaker services to prevent other vessels from colliding with the wreck pending its removal.

8. On 28 May 2019, another salvor was engaged to remove, render harmless and dispose of the vessel including anything that was on board the vessel in compliance with the Wreck Removal Order.

9. On 10 October 2019, the plaintiff commenced this action against the defendants to limit their liability in respect of the Collision. On 28 April 2020, the plaintiff and Trevaskis Ltd entered into a settlement agreement whereby it was agreed, inter alia, that ANTEA was 100% to blame for the Collision.

10. On 6 May 2020, a limitation decree was granted by Master Ho by consent[5]. The limitation decree was made expressly without prejudice to the present application. On 26 May 2020, the plaintiff constituted a Limitation Fund in this action by paying into court the sum of HK$175,062,000.

11. The Summons was filed on 22 June 2020.

12. As of 6 August 2020, the Wreck Removal Claims in question (including claims in relation to wreck buoyage) amounted to US$17,780,994.36[6] (or about HK$139 million). Since the wreck removal operations are still underway, the quantum of these claims will increase with time.

13. Given that the Wreck Removal Claims alone are approaching the size of the Limitation Fund, the defendants’ recovery in respect of the loss of STAR CENTURION[7] will be significantly impaired if such Claims are to be subject to limitation.”

Legislative history

7. In light of the submissions of Mr Alder, who appeared for the plaintiff throughout, that the legislative history and English case law on the earlier Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships in 1957 (“1957 Convention”) should have significant impact on the proper construction of the provisions under discussion in the 1976 Convention, I would give an account of the legislative history to make the ensuing discussion intelligible.

8. The right of a shipowner to limit his liability for damage caused to a third party dated back to the 17^th century and was very much a continental concept. The UK enacted its first legislation in 1733, which provided for limitation of liability in respect of theft by master or crew, without knowledge or privity of the shipowner. The rights of limitation of liability were extended through the early part of the 19^th century and were consolidated in the Merchant Shipping Act 1894, which covered limitation of liability in cases of loss of life or personal injury or loss or damage to property[8].

9. Under section 503(1)(d) of the 1894 Act, a claim that a shipowner was “liable to damages” for loss or damage caused to another vessel or goods or other things on board caused by reason of “improper navigation of the ship” taking place without the actual fault or privity of the shipowner, was subject to limitation. By section 1 of the Merchant Shipping (Liability of Shipowners and Others) Act 1900, the limitation of liability of shipowners set by section 503 was extended to all cases where, without their actual fault or privity, “any loss or damage is caused to property or rights of any kind, whether on land or on water, or whether fixed or moveable, by reason of the improper navigation or management of the ship”.

10. Because of the way section 503 was framed (the vital words are “be liable to damages”), the English courts interpreted the provision as allowing shipowners to limit liability sounding in damages only. Thus, claims under statute by water authorities against shipowners for wreck raising expenses, not being claims in damages but recoverable as debt, were not subject to limitation[9]. Claims by a shipowner against another shipowner for wreck removal expenses as damages for negligence were held by English courts[10] to be limitable, as they were damages within the meaning of section 503 of the 1894 Act and/or section 1 of the 1900 Act[11].

11. In 1957, the UK entered into the 1957 Convention. Article 1(1) provided that a shipowner may limit his liability in respect of claims arising from any of the following occurrences, unless the occurrence giving rise to the claim resulted from the actual fault or privity of the shipowner:

“(a) loss of life of, or personal injury to, any person being carried in the ship, and loss of, or damage to, any property on board the ship;

(b) loss of life of, or personal injury to, any other person, whether on land or on water, loss of or damage to any other property or infringement of any rights caused by the act, neglect or default of any person on board the ship for whose act, neglect or default the owner is responsible or any person not on board the ship for whose act, neglect or default the owner is responsible: Provided however that in regard to the act, neglect or default of this last class of person, the owner shall only be entitled to limit his liability when the act, neglect or default is one which occurs in the navigation or management of the ship or in the loading, carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers;

(c) any obligation or liability imposed by...