At present, amongst the Comité Maritime International (CMI) International Working Groups (IWG) is one with the longest name, which gives quite some insight on its activity – the IWG for the Unified Interpretation on the Test for Breaking the Owner’s Right to Limit Liability under the IMO Liability and Compensation Conventions.

In accordance with its Constitution, the purpose of Comité Maritime International (CMI) is “to contribute by all appropriate means and activities to the unification of maritime law in all its aspects”. For over 125 years the CMI has been engaged in this is important work in various areas of maritime law.

One of the specific institutions inherent to maritime law is the limitation of shipowner’s liability. Previously the CMI’s International Sub-Committee on Limitation of Liability in Maritime Law had done a lot of work for the unification of this institution.

In 2004 a questionnaire was prepared and distributed to the national maritime law associations NMLA’s with a view to finding out what rules of procedure had been enacted in the States parties to the Convention on Limitation of Maritime Claims (LLMC) and to the Conventions on Civil Liability for Oil Pollution Damage 1969 and 1992 in order to implement the provisions of these conventions.¹

In November 2006, the Executive Council of the CMI decided to establish an International Sub-Committee to cover the three conventions relating to limitation of liability, namely the LLMC, the CLC and the HNS Convention. The mandate of the International Sub-Committee was to prepare draft guidelines relating to procedural rules in maritime law.²

In 2008 the CMI had adopted Guidelines in respect of Procedural Rules Relating to Limitation of Liability in Maritime Law. ³

In 2012 a list of Issues following further consideration on Limitation of Liability in Maritime Law has been published⁴

An issue that remained out of the scope of work of the International Sub-Committee was the breaking the owner’s right to limit liability.

Although the breaking the owner’s right to limit liability is codified in several conventions with numerous signatories and ratifications, the issue lacks uniformity across jurisdictions. Not only there is a lack of uniformity in interpretation, but as will be seen in this article, even a lack of uniformity of terms.

In February 2020 the CMI had circulated a questionnaire addressed to the national maritime law associations (NMLA’s) of the recently formed International Working Group then called “on Unified Interpretation for Standard to Break Limitation Under IMO Conventions” as part of the task to assist IMO⁵ .

The Questionnaire⁶ related to the following conventions:

a. International Convention on Civil Liability for Oil Pollution Damage 1969 (‘CLC 1969’)

b. 1992 Protocol to the CLC 1969 (‘CLC 1992’)

c. Convention on Limitation of Liability for Maritime Claims 1976 (‘LLMC 1976’)

d. 1996 Protocol to the LLMC 1976 (‘LLMC 1996’)

e. International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea 1996 (‘HNS 1996’)

f. 2010 Protocol to the HNS 1996

g. International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (‘Bunkers Convention’)

h. Nairobi International Convention on the Removal of Wrecks 2007 (‘WRC’)

The Questionnaire had 22 questions on various issues of liability limitation but let us focus on the most compelling – conduct barring limitation, as formulated in article 4 of the LLMC.

Article 4 Conduct barring limitation

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 recklessly⁷ and with knowledge that such loss would probably result.

Статья 4 Поведение, препятствующее ограничению ответственности

Лицо, несущее ответственность, не имеет права ограничить свою ответственность, если доказано, что ущерб явился результатом его собственного действия или упущения, совершенного с намерением причинить такой ущерб или по самонадеянности и с сознанием, что такой ущерб возможно будет причинен.

In 1999, the Russian Federation acceded to the 1996 Protocol amending the 1976 Convention on Limitation of Liability for Maritime Claims. The Convention’s increased limits set by the Protocol of 19 April 2012 are currently applicable in the Russian Federation.

The text of the LLMC for the most part has been literally implemented into Chapter XXI of the Russian Merchant Shipping Code. However, as it occasionally occurs⁸ with translations of international conventions into the Russian language and their reception into the national legislation, there has been a twist in translation. Article 357 of the Russian Merchant Shipping Code implements Article 4 of the Convention, literally, almost...

Article 357 Conduct barring limitation of liability

A person liable for loss shall not be entitled to limit liability if it is proved that the loss resulted from his personal act or personal omission, committed either with intent or by gross negligence.

Статья 357 Поведение, препятствующее ограничению ответственности

Лицо, ответственное за ущерб, не имеет права на ограничение ответственности, если доказано, что ущерб явился результатом его собственного действия или собственного бездействия, совершенных умышленно или по грубой неосторожности.

It is noteworthy referring to the reputable Commentary to the Merchant Shipping Code of the Russian Federation by G.G. Ivanov. The commentary on Article 357 reads “Article 357 corresponds to Article 4 (Conduct barring limitation) of the 1976 Convention, which provides that the 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. The commentary goes on to explain the personal fault of the shipowner, including examples from foreign jurisprudence, but does not disclose neither the concepts of recklessness⁹ or gross negligence, nor is any comment is made on the difference in the texts of the Convention in the Russian language, where the term “recklessness“ ⁹ is used, and the Russian Merchant Shipping Code, where it was replaced by the term “gross negligence”.

Gross negligence and recklessness are two distinct legal concepts referring to different levels of carelessness or disregard for the safety and well-being of others. In some foreign legal systems the key difference between gross negligence and recklessness lies in the actor’s mental state. Recklessness requires a conscious awareness of the risks involved and a wilful disregard for those risks, while gross negligence involves a level of carelessness without the same degree of conscious awareness.

The test for breaking the right to limit liability was presented and adopted at the 1976 International Conference on the LLMC Convention as part of a package that was coupled with higher limits of liability (than the International Convention Relating to the Limitation of the Liability of Owners of Seagoing Ships, 1957).¹⁰

To break the shipowner’s right of limitation, a person challenging the right to limit – if unable to prove intent – would have to establish both reckless conduct and knowledge that the relevant loss would probably result... ...recklessness involves ‘an obvious risk of damage and failure to give any thought to the possibility of it or recognition of the risk and going on to take it’. However, it seems that – in implementing Article 4 of the LLMC Convention – a stricter form of recklessness would be required. It would not suffice to prove that the conduct could ‘possibly’ lead to the loss, but that it would ‘probably’ lead to it.¹¹

Notwithstanding the different approaches adopted by courts... ...the LLMC Convention calls for the application of a subjective test, i.e. proof of the actual state of mind of the person liable. Otherwise, it may be argued that the Convention would have used the well-known phrase ‘when he knew or ought to have known’ instead of ‘with knowledge’. It is also important to note that ‘recklessness’ and ‘knowledge’ are separate but cumulative requirements, i.e. both need to be proved. Thus, where the court finds that a conduct was reckless but there was no knowledge, the claim will fail.¹²

The words “recklessly and with knowledge that such loss would probably occur” come very near to the English legal term “wilful misconduct”, which normally is the degree of blame required if the insurance cover shall be forfeited (Marine Insurance Act (1906) Sect. 55 (2) a). The proposed text, therefore, implies that there will be right of limitation where the insurance cover is intact. Making the limitation unbreakable to this extent should make possible a significant raise of the limits of liability.¹³

There is no legal or statutory definition of the concept of “wilful misconduct”, but the concept is defined through court cases. As a starting point, “wilful misconduct” includes damage caused intentionally (deliberate misconduct), and also a reckless assumption of risk. In the UK system “reckless assumption of risk” is evaluated subjectively: the decisive test is whether the assured is acting “without caring whether the action was wrongful or not” or if there is a “deliberate courting of a known risk”. There is wilful misconduct at common law if a person’s conduct increases the risk of loss and that person is actually aware of this. This clearly implies a condition that the assured has to be conscious of the fact that he is wrongly increasing the risk.¹⁴

Further, the UK interpretation on this point is that it is sufficient that the assured act with indifference to what the results may be, i.e. the act may be reckless even if there is no objective probability of the loss. The decisive point is thus the subjective recklessness of the act itself, i.e. the indifference towards the results of the act. On the other hand, the concept of wilful misconduct does not include a “thoughtless act of the spur of the moment”. Neither does it include negligence or even gross negligence: wilful misconduct is something entirely different from negligence, and far beyond it, whether the negligence be culpable, or gross or howsoever denounced.¹⁵

The term “gross negligence” as used in Article 357 of the Russian Merchant Shipping Code is obviously of a very different meaning from “recklessness” in the text of the LLMC. In Russian civil law, it is also common to divide negligence into gross and simple negligence. This distinction is not fixed in Art. 401 of the Civil Code itself but follows indirectly from a number of special norms of the Civil Code, which by way of derogation from the general rule establish that the debtor is liable only for intent and gross negligence (for example, Art. 693 par. 1, Art. 697, para. 2 Art. 901 of the Civil Code, etc.). Gross negligence is usually described as disregarding elementary, obvious to all and the most minimal measures of care and diligence in the performance of an obligation.¹⁶ Whether there was gross or simple negligence depends on the circumstances of the case and can only be ascertained on the basis of a detailed examination of thereof.

In modern Russian civil law, one can hardly find a definition of “self-reliance” («самонадеянность»).

In the legislation and the theory of criminal law it is accepted to distinguish between direct and indirect intention, and also negligence in the form of carelessness and thoughtlessness (self-reliance). The direct intention is the understanding of danger of actions, anticipation and desire of approach of consequences. Indirect intention – the realisation of danger, foresight of consequences without desire of their approach, but with the assumption or indifference to them. Negligence – not foresight of consequences, though at necessary attentiveness and foresight it is possible to foresee them. Frivolity (arrogance) is the foresight of consequences, but the presumptuous expectation of their prevention without sufficient grounds. It is necessary to distinguish self-reliance from indirect intention – at self-reliance a person realises that socially dangerous result can occur, does not treat this fact indifferently, but counts on its prevention.¹⁷

From the point of view of O.S. Ioffe, unlike in criminal law, the division of types of intent into direct and indirect and types of negligence into negligence and self-reliance makes no practical sense for civil law. There is a different, three-component division of types of guilt: intent, negligence - simple and gross. ¹⁸

It is true that, as a general rule, unlike in criminal law, fault in civil law serves as a ground but not as a measure of liability for damages. However, for the institution of limitation of liability, it is of fundamental importance whether the shipowner will lose the right to limitation of liability because of his act committed not merely out of recklessness but with the knowledge that such damage is likely to occur. In other words, whether the shipowner will be liable within the limits of the limits of liability or will be liable in excess of those limits, i.e. for a greater amount.

Self-reliance is characterised by a deliberate breaking of rules, foreseeing negative consequences, but having a careless expectation of overcoming them. It is united with carelessness by its lack of attentiveness, seriousness, thoughtfulness. Hence it is believed that there is only anticipation of the possibility, the abstractness of anticipation. It is considered that what distinguishes self-reliance from indirect intention is unspecific foresight, calculation on a circumstance which allows avoiding unfavourable consequences; there is only hope on “hoping for the best” («на авось»), on “chance”, on “luck”.¹⁹

If in self-reliance there is a conscious neglect of duty, if what should have been done is not done, and this has been realised and understood, then we must speak of intent and not of carelessness.²⁰ “In bourgeois law, this kind of guilt is sometimes called recklessness, associating it with conscious neglect of something, an unjustified risk, a gross deviation from the standard of care, which is no different from intent.” ²¹

The intellectual element of guilt in the case of self-reliance is that the subject is aware of the wrongfulness of his behaviour, is aware that the harmful consequences could occur, but is also aware that they will not occur due to his chosen option of behaviour, according to his calculation, the error of which he was not aware, but could and should have been aware of.²² Self-reliance is characterised by the awareness of the wrongfulness (public danger) of the behaviour, confidence in the non-occurrence of negative consequences due to the unconscious error in the regulation of behaviour to prevent them.²³

In the above definition of presumption, one of the elements is the belief that negative consequences will not occur. However, the text of the Convention explicitly refers to recklessness and the knowledge that such loss would probably result.²⁴ As stated above it is also important to note that ‘recklessness’ and ‘knowledge’ are separate but cumulative requirements, i.e. both need to be proved for the limitation right to be disqualified.

Turning to contemporary Russian criminal law,²⁵ the combination of the two elements ‘recklessness’ and ‘knowledge’ on the one hand correspond more to indirect intent rather than negligence if there is an element of public danger (for example, sending a ship on a voyage with less crew than is allowed by a minimum crew certificate). If there is indirect intent, perhaps «recklessness» should be translated into Russian as recklessness («опрометчивость»).²⁶ On the other hand, if the vessel’s charts were not timely updated and outdated charts were used for navigation, the combination of the elements ‘recklessness’ and ‘knowledge’ correspond more to a reckless offence (crime), where a person foresaw the possibility of socially dangerous consequences of his actions (or inaction), but without sufficient reason presumptuously expected to prevent these consequences.

To resolve the issue of the interpretation of “recklessness” and its translation into Russian as “presumptuousness”, we should refer to Articles 31 to 33 of the Vienna Convention on the Law of Treaties, 1969, to which the Russian Federation is a party. Articles 31–32 provide that a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose, and that recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion.

According to the Travaux Préparatoires of the 1976 LLMC Convention, the rejection of the gross negligence concept in favour of ‘recklessness’ and ‘knowledge’ as cumulative requirements allowed for a significant raise of the limits of liability compared to the Intonational Convention Relating to the Limitation of the Liability of Owners of Seagoing Ships, 1957

According to Article 33(4) of the Vienna Convention when a comparison of the authentic texts [in different languages] discloses a difference of meaning which the application of Articles 31 and 32 does not remove, the meaning which best reconciles the texts, having regard to the object and purpose of the treaty, shall be adopted. In the translation of the term “recklessly” (recklessly and with knowledge that such loss would probably result), the terms used in the USSR/Russian Federation treaties were: “in self-reliance and with knowledge that such loss would probably result”, “through irresponsibility” and with knowledge that such loss, damage or delay would probably result, “in gross negligence” and with knowledge that such loss would probably result. Regardless of the specific term used in the translation of the IMO Liability Conventions into the Russian language, where “self-reliance” (“self-reliance”, “self-trust”) is used in place of “recklessness”, interpretation shall be made following the rules of the Vienna Convention.

A much more difficult issue is how to interpret the reception of the provisions of the IMO Liability Conventions into national legislation where “recklessness” has been widely translated as “gross negligence”. But that would be a problem for domestic liability disputes with no foreign element that would allow the application of the relevant international convention.

The CMI’s important work on the unification of maritime law, has resulted in the text of three draft resolutions on the Unified Interpretation on the test for breaking the owner’s right to limit liability under IMO conventions²⁷ approved by the IMO’s Legal Committee (LEG 108)²⁸ at the 108th session that took place on 26–30 July 2021.

The draft Resolution relating to the Convention on Limitation of Liability for Maritime Claims affirms that the test for breaking the right to limit liability as contained in article 4 of the 1976 LLMC Convention is to be interpreted: (a) as virtually unbreakable in nature i.e. (b) to mean a level of culpability analogous to wilful misconduct, namely (i) a level higher than the concept of gross negligence, since that concept was rejected by the 1976 International Conference on Limitation of Liability for Maritime Claims; (ii) a level that would deprive the shipowner of the right to be indemnified under their marine insurance policy; and (iii) a level that provides that the loss of entitlement to limit liability should begin where the level of culpability is such that insurability ends; (c) that the term “recklessly” is to be accompanied by “knowledge” that such pollution damage, damage or loss would probably result and that the two terms establish a level of culpability that must be met in their combined totality and should not be considered in isolation of each other, and that the conduct of parties other than the shipowner, for example the master, crew or servants of the shipowner, is irrelevant and should not be taken into account when seeking to establish whether the test has been met.²⁹

The draft Resolution points out that the courts in States Parties are the final arbitrators on the interpretation of the Conventions, the 1976 LLMC Convention and the 1996 LLMC Protocol, but that an affirmation of the test for breaking the right to limit liability in the form of a Unified Interpretation would assist courts, as well as governments, claimants, shipowners and insurers, in their interpretation and understanding of the test. ■