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fund in accordance with the limits giving effect to the increased limits
prescribed by the 1976 Convention. of the 1996 Protocol. The court held
that the expression ‘Convention’
Legal analysis as defined by the Act expressly
Despite strident objections from included amendments made to it
cargo claimants, the owner argued from time to time. In the result, the
that its right to limit was absolute Court had no hesitation in finding
and unconditional as all it needed to that the 1996 Protocol was, in fact, an
demonstrate was that the claim was amendment to the Convention which
capable of limitation under Section was already embraced by the Act.
352 A of the Act. Section 352 A of the
Act corresponds broadly to Article The limitation action was accordingly
2 of the 1976 Convention. As it was decreed and the owner permitted
undisputed that the claim was one to set up a limitation fund. Security
for loss/damage to property, ie it was posted by the owner was ordered
a claim capable of limitation, it was to be returned to it upon deposit of
submitted that the court’s scrutiny the higher amounts contemplated
was limited to determining whether by the 1996 Protocol.
there was any statutory exception
to limitation such as conduct barring Comment
limitation as envisaged by Article 4 The judgment is groundbreaking
of the 1976 Convention. The court, considering that the Indian courts
after carefully considering the have for the first time endorsed the
statutory provisions of the Act, right of a shipowner to limit liability
concluded that Article 4 was wholly by constituting a limitation fund,
absent from the Act and that there albeit at the higher limits stipulated in
was no equivalent statutory provision the 1996 Protocol. It provides much
in the Act excluding or suggesting needed clarity on this branch of the
any exception to limitation. law, which is welcome news for the
shipping industry and all participants
The court therefore rejected the in international trade. As a result, one
cargo claimant’s argument to read hopes that the expensive and time-
into or add Article 4 of the 1976 consuming litigation of challenging the
Convention to the Act as it would be owner’s conduct with the objective of
tantamount to judicial legislation. The seeking higher limits of liability will be a
court held that the object of the 1976 thing of the past in the Indian context.
Convention was to make limitation
virtually ‘unbreakable’. The omission The co-author, Zarir Bharucha, and
of Article 4 of the 1976 Convention his team successfully represented
from Part XA of the Act would not the plaintiff shipowner.
therefore make any meaningful
difference in practice as was
contended by the liability claimants3.
3 Since ‘…persons seeking to limit liability are
given what is described by the Courts as a In respect of the issue as to whether
virtually unbreakable right to limit…’: at the figures of limitation are to be
para.37 of the grounds of judgment. ‘…If calculated on the basis of the 1976
nearly 40 years…of the regime of the 1976
Convention or the 1996 Protocol,
Convention has not thrown up a single
instance throughout the world of successful
the court rejected the shipowner’s
breaking of limitation, it would not be unwise argument that the lower limits of
for the Indian Parliament to do away the 1976 Convention should apply,
completely with the very concept of which the owners contended was
breaking of limitation…’: at para.39 of the based upon a lack of any domestic
grounds of judgment legislation or amendment to the Act