Chapter 5
64 of the CMC, but to simply repeal Article 206 and add a provision in
Chapter 12
65 which would read—“An insurer of liability for claims subject to
limitation in accordance with this Code shall be entitled to the benefits of limitation
granted to the assured by this Code, irrespective of the assured himself being denied
the right to limit by this Code”.
9 Summary and Conclusion
In summary, it is stated that in the present maritime law, whether under international
conventions or domestic legislation, there are two modalities providing for entitlement to limitation for insurers of liability, namely, the parasitical mode and the
independent mode. It is submitted that the latter is fairer and more reasonable, and is
therefore the better choice for international conventions as well as domestic legislation to achieve harmonization of laws with respect to entitlement to limitation for
liability insurers.
To that end, it is submitted that although the parasitical modality is in accord with
the principle of indemnity in insurance law, it affects the liability insurer’s defences
under the insurance contract and the relevant legislation. In the case of the assured
who is entitled but fails to invoke limitation, the parasitical mode contains selfcontradiction and goes against the logic of legal interpretation. Therefore, it is
untenable to adopt that modality on the basis of the principle of indemnity. In fact,
the parasitical mode is in breach of the basic philosophy underlying the modern law
of limitation of liability, i.e., the person liable should only forfeit his right of
limitation owing to his own conduct. It also causes instability of the liability insurer’s
right to limit his liability. In contrast, the association of the independent mode with
these problems, is remote, if any at all; and is in conformity with the aim of the
current law of limitation of liability, which is principally to confer on the liability
insurer an independent and indisputable right of limitation. It is self-evident that the
independent mode of entitlement to limitation is a better choice for any domestic
legislation, the intention of which is to endow the liability insurer with the right to
limit liability.
In conclusion, it is proposed with regard to convention law that Article 1(6) of the
LLMC 1976/1996 Convention be amended to clarify the independence of the
liability insurer’s right of limitation, and in the convention on carriage of goods by
sea, a similar clause be added. In China, it would be expedient to repeal Article
206 of the CMC and simultaneously to add a provision in Chapter 12 addressing the
Contract of Marine Insurance, to uniformly confer on the liability insurer an independent right of limitation.
64 The title of Chapter 5 is “Contract of Carriage of Passengers by Sea”.
65 The title of Chapter 12 is “Contract of Marine Insurance”.
674
Y. Xia
64 of the CMC, but to simply repeal Article 206 and add a provision in
Chapter 12
65 which would read—“An insurer of liability for claims subject to
limitation in accordance with this Code shall be entitled to the benefits of limitation
granted to the assured by this Code, irrespective of the assured himself being denied
the right to limit by this Code”.
9 Summary and Conclusion
In summary, it is stated that in the present maritime law, whether under international
conventions or domestic legislation, there are two modalities providing for entitlement to limitation for insurers of liability, namely, the parasitical mode and the
independent mode. It is submitted that the latter is fairer and more reasonable, and is
therefore the better choice for international conventions as well as domestic legislation to achieve harmonization of laws with respect to entitlement to limitation for
liability insurers.
To that end, it is submitted that although the parasitical modality is in accord with
the principle of indemnity in insurance law, it affects the liability insurer’s defences
under the insurance contract and the relevant legislation. In the case of the assured
who is entitled but fails to invoke limitation, the parasitical mode contains selfcontradiction and goes against the logic of legal interpretation. Therefore, it is
untenable to adopt that modality on the basis of the principle of indemnity. In fact,
the parasitical mode is in breach of the basic philosophy underlying the modern law
of limitation of liability, i.e., the person liable should only forfeit his right of
limitation owing to his own conduct. It also causes instability of the liability insurer’s
right to limit his liability. In contrast, the association of the independent mode with
these problems, is remote, if any at all; and is in conformity with the aim of the
current law of limitation of liability, which is principally to confer on the liability
insurer an independent and indisputable right of limitation. It is self-evident that the
independent mode of entitlement to limitation is a better choice for any domestic
legislation, the intention of which is to endow the liability insurer with the right to
limit liability.
In conclusion, it is proposed with regard to convention law that Article 1(6) of the
LLMC 1976/1996 Convention be amended to clarify the independence of the
liability insurer’s right of limitation, and in the convention on carriage of goods by
sea, a similar clause be added. In China, it would be expedient to repeal Article
206 of the CMC and simultaneously to add a provision in Chapter 12 addressing the
Contract of Marine Insurance, to uniformly confer on the liability insurer an independent right of limitation.
64 The title of Chapter 5 is “Contract of Carriage of Passengers by Sea”.
65 The title of Chapter 12 is “Contract of Marine Insurance”.
674
Y. Xia