thereof. The outcome is that the liability insurer does not suffer the same fate as his
assured in a situation where the assured is denied the right of limitation.
The independent mode of entitlement of the liability insurer to limit liability
under the CLC 1969 repeated identically in CLC 1992, has been adopted by several
other conventions. The relevant provisions are, inter alia, Article 12 (8) of the HNS
Convention, 1996, Article 7 (10) of the Bunkers Convention, 2001, and Article 4 bis
(10) of the Athens Convention, 2002. It is noteworthy that the right of limitation
under the Athens Convention (PAL) 2002 is mainly package limitation for passenger
claims, which is different from the typical limitation of liability under the CLC 1969
and 1992, the HNS Convention, 1996 and the Bunkers Convention, 2001.
Unlike the conventions mentioned above, the Nuclear Convention, contains no
provision relating to the insurer of liability. Pursuant to Article III of the Nuclear
Convention, the operator of a nuclear ship can limit his liability regardless of
whether the nuclear incident resulted from his actual fault or privity. Thus, his
liability is limited in virtually all cases, and this right is hardly ever lost. In the
event of any direct action brought against the liability insurer, in the absence of any
provision to the contrary, it must be surmised that he may invoke the same right of
limitation as the assured operator himself even though, as mentioned above, the
Convention does not explicitly confer any right of limitation on the liability insurer.
It should be added that although conventions on carriage of goods by sea
generally establish a regime of package limitation for cargo claims, none of them,
namely, the Hague Rules of 1924, the Hague-Visby Rules of 1968, the Hamburg
Rules of 1978 and even the recent Rotterdam Rules of 2008, confer on the liability
insurer any right of limitation.
6 Comparison of the Two Modalities
Which is the better of the two modalities attracts a subjective answer depending on
who is most likely to benefit from one or the other. From the viewpoint of the
liability insurer, clearly the independent mode is more advantageous and functional,
because it is separate from the assured’s right to limit, whereas from the claimant’s
perspective, the parasitical mode, which is dependent on or attached to the assured’s
right to limit, would seem to serve his interest better. At any rate, this is how the
matter is viewed from the vantage point of the vested commercial interests. How law
and policy makers should approach the issue to reach a fair and balanced outcome is
not an easy task, to say the least. For this reason, among others, an objective
comparative analysis is warranted which is set out below.
Liability Insurer’s Right to Limit Liability for Maritime Claims:. . .
665
assured in a situation where the assured is denied the right of limitation.
The independent mode of entitlement of the liability insurer to limit liability
under the CLC 1969 repeated identically in CLC 1992, has been adopted by several
other conventions. The relevant provisions are, inter alia, Article 12 (8) of the HNS
Convention, 1996, Article 7 (10) of the Bunkers Convention, 2001, and Article 4 bis
(10) of the Athens Convention, 2002. It is noteworthy that the right of limitation
under the Athens Convention (PAL) 2002 is mainly package limitation for passenger
claims, which is different from the typical limitation of liability under the CLC 1969
and 1992, the HNS Convention, 1996 and the Bunkers Convention, 2001.
Unlike the conventions mentioned above, the Nuclear Convention, contains no
provision relating to the insurer of liability. Pursuant to Article III of the Nuclear
Convention, the operator of a nuclear ship can limit his liability regardless of
whether the nuclear incident resulted from his actual fault or privity. Thus, his
liability is limited in virtually all cases, and this right is hardly ever lost. In the
event of any direct action brought against the liability insurer, in the absence of any
provision to the contrary, it must be surmised that he may invoke the same right of
limitation as the assured operator himself even though, as mentioned above, the
Convention does not explicitly confer any right of limitation on the liability insurer.
It should be added that although conventions on carriage of goods by sea
generally establish a regime of package limitation for cargo claims, none of them,
namely, the Hague Rules of 1924, the Hague-Visby Rules of 1968, the Hamburg
Rules of 1978 and even the recent Rotterdam Rules of 2008, confer on the liability
insurer any right of limitation.
6 Comparison of the Two Modalities
Which is the better of the two modalities attracts a subjective answer depending on
who is most likely to benefit from one or the other. From the viewpoint of the
liability insurer, clearly the independent mode is more advantageous and functional,
because it is separate from the assured’s right to limit, whereas from the claimant’s
perspective, the parasitical mode, which is dependent on or attached to the assured’s
right to limit, would seem to serve his interest better. At any rate, this is how the
matter is viewed from the vantage point of the vested commercial interests. How law
and policy makers should approach the issue to reach a fair and balanced outcome is
not an easy task, to say the least. For this reason, among others, an objective
comparative analysis is warranted which is set out below.
Liability Insurer’s Right to Limit Liability for Maritime Claims:. . .
665