liability but rather, the compensation payable, if he is found to be liable. It is stated
by a noted author that liability is the measure of conduct that is reprehensible or
repugnant in the eyes of the law whereas compensation, otherwise known as
damages in common law jargon, is the remedy provided by the law to one who
suffers loss, damage or injury resulting from such conduct. Thus, liability is qualitative in nature whereas compensation is quantitative.
2 To put it in precise terms and
in proper context, it is submitted that the phrase should be “limitation of damages”
(or compensation) and not “limitation of liability.” Arguably, however, “liability” in
the latter expression means the compensation that the perpetrator is “liable” to pay to
the victim of his act or omission which has proximately caused his loss, damage or
injury.
This chapter addresses a specific aspect of law within the realm of limitation of
liability; that is the entitlement of limitation in respect of a liability insurer. Following this Introduction, the article refers in summary form to the fact that the law and
practice of limitation of liability in international shipping has been largely tempered
by convention law, and that in the present milieu, there are several convention
instruments some governing what is known as “global limitation” and others,
addressing specific subject matters, whereby, virtually all aspects of shipping are
covered by limitation regimes. A central purpose of the paper is to present the
Chinese law on the subject of the insurer’s right to limit liability, the state of the
law which is primarily statute-based and its underlying principle. Reference is made
to English legislation and case law which tangentially points to a comparative
appreciation of how the convention law is embraced in the two jurisdictions. In
finality, some speculative conclusions are made with respect to which modalities
pose as the best choices in which situations. Proposals are made for amending the
relevant convention instruments and corresponding domestic legislation giving
effect to these amendments.
2 Historical Evolution
It is said that the origins of limitation of liability are lost in obscurity and “was
probably not a concept derived from the general maritime law”.
3 In historical terms,
connotations and traces of it are reportedly to be found in the Mosaic law of the Old
Testament biblical era and the doctrine of noxae diditio in Roman law.
4 Latterly, the
traditional maritime custom and practice of limitation was recorded in medieval
2 Id. p. 41.
3 Meeson and Kimbell (2011), p. 283. See in particular footnote 5 at that page citing various sources
relating to the obscurity of its origins.
4 Pursuant to this doctrine, person liable to another for damage or harm could discharge his liability
by simply surrendering the offending instrument of which he was the owner. See Gauci
(1995), p. 65.
658
Y. Xia
by a noted author that liability is the measure of conduct that is reprehensible or
repugnant in the eyes of the law whereas compensation, otherwise known as
damages in common law jargon, is the remedy provided by the law to one who
suffers loss, damage or injury resulting from such conduct. Thus, liability is qualitative in nature whereas compensation is quantitative.
2 To put it in precise terms and
in proper context, it is submitted that the phrase should be “limitation of damages”
(or compensation) and not “limitation of liability.” Arguably, however, “liability” in
the latter expression means the compensation that the perpetrator is “liable” to pay to
the victim of his act or omission which has proximately caused his loss, damage or
injury.
This chapter addresses a specific aspect of law within the realm of limitation of
liability; that is the entitlement of limitation in respect of a liability insurer. Following this Introduction, the article refers in summary form to the fact that the law and
practice of limitation of liability in international shipping has been largely tempered
by convention law, and that in the present milieu, there are several convention
instruments some governing what is known as “global limitation” and others,
addressing specific subject matters, whereby, virtually all aspects of shipping are
covered by limitation regimes. A central purpose of the paper is to present the
Chinese law on the subject of the insurer’s right to limit liability, the state of the
law which is primarily statute-based and its underlying principle. Reference is made
to English legislation and case law which tangentially points to a comparative
appreciation of how the convention law is embraced in the two jurisdictions. In
finality, some speculative conclusions are made with respect to which modalities
pose as the best choices in which situations. Proposals are made for amending the
relevant convention instruments and corresponding domestic legislation giving
effect to these amendments.
2 Historical Evolution
It is said that the origins of limitation of liability are lost in obscurity and “was
probably not a concept derived from the general maritime law”.
3 In historical terms,
connotations and traces of it are reportedly to be found in the Mosaic law of the Old
Testament biblical era and the doctrine of noxae diditio in Roman law.
4 Latterly, the
traditional maritime custom and practice of limitation was recorded in medieval
2 Id. p. 41.
3 Meeson and Kimbell (2011), p. 283. See in particular footnote 5 at that page citing various sources
relating to the obscurity of its origins.
4 Pursuant to this doctrine, person liable to another for damage or harm could discharge his liability
by simply surrendering the offending instrument of which he was the owner. See Gauci
(1995), p. 65.
658
Y. Xia