Resolutions on Unified Interpretations on the test for breaking the shipowner’s right to limit liability: finally passed

By Prof. Dr. Dieter Schwampe, Senior Insurance Partner at the law firm of Arnecke Sibeth Dabelstein, Hamburg, IUMI Professional Partner, and Member of the Legal & Liability Committee of IUMI and Vice President of the Comité Maritime Internati

In Issue 33 of IUMI Eye June 2021, Charles Fernandez, Chair of the IUMI Legal & Liability Committee, has already addressed the endeavours made to create Unified Interpretations, which clarify the requirements for breaking the shipowner’s right to limit liability. These Unified Interpretations were drafted by a Correspondence Group established by the Legal Committee of the International Maritime Organization (IMO).

During its 108th session, the Legal Committee unanimously agreed on the drafts of such Unified Interpretations, also recommending that the Unified Interpretations should be resolved by the member states to the conventions, which the Unified Interpretations address, namely the 1976 and 1996 Convention on Limitation of Liability for Maritime Claims (LLMC) and the 1992 International Convention on Civil Liability for Oil Pollution Damage (CLC). This was achieved by the respective member states, present at the 32nd session of the IMO Assembly, unanimously passing resolutions on the Unified Interpretations.

Technically, thus, the resolutions have not been passed by IMO, which as such has no powers to resolve authoritative interpretations of conventions, but by all member states to the conventions. This is important as the International Court of Justice had ruled in the Whaling in the Antarctic case that, under the Vienna Convention on the Law of Treaties, interpretations of conventions require the “support of all State parties to the Convention”. With the unanimous resolutions the LLMC and CLC conventions parties, this requirement is fulfilled.

The effect is that the interpretations are authoritative and have to be observed by courts in convention states when testing whether under the facts of a case in front of them a loss resulted from the shipowner’s personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.

What practical effect the Unified Interpretations will have depends on how courts in convention states so far have interpreted the conventions. The closer they have been to what the Unified Interpretations state, the less influence the Unified Interpretations have. Or in other words: Where courts have interpreted the conventions in the way now set down in the Unified Interpretations, they will not have to change their practice. This is different for such courts in convention states, which have adopted different tests and disregarded what the Unified Interpretations now fix. The Comité Maritime International (CMI) has called on its members, the national Maritime Law Associations of some 54 countries, to provide reports on the court practices in their jurisdictions, and CMI will publish the results in due course. Whatever these reports will show, non-observance of the Unified Interpretations from now on will be a wrong interpretation of the Conventions.

Turning to the principles the Unified Interpretations have set, first, the courts of convention member states are now bound to hold that limitation under the conventions as meant to be “virtually unbreakable in nature i.e. breakable only in very limited circumstances and based on the principle of unbreakability”. This will require that the courts consider the wider effects of their findings. Should they entail an increased breaking of limitation, the courts will have to determine whether this would still be in line with the concept of ‘virtual unbreakability’.

Second, the level of culpability required for breaking limitation shall ‘be analogous to wilful misconduct’. This may be easy to follow for courts of such states, the laws of which contain the concept of wilful misconduct but be more difficult to apply for jurisdiction to which the concept of wilful misconduct is alien. However, Unified Interpretations go beyond just referring to wilful misconduct but specify this and thereby allow also courts of such countries to adhere to the Unified Interpretations. They go back to the negotiations leading to the 1976 LLMC. The Travaux Préparatoire, published by the CMI (available at, shows the common understanding that the level of fault required is more than gross negligence. This is what the Unified Interpretations now expressly clarify. Courts, which so far have allowed unlimited liability in cases of gross negligence, will have to change their rulings.

In practice more relevant will be what the Unified Interpretations stipulate in respect of the relationship between insurance cover and limited or unlimited liability respectively. By stating that such a level of fault is required ‘that would deprive the shipowner of the right to be indemnified under their marine insurance policy and that the loss of entitlement to limit liability should begin where the level of culpability is such that insurability ends’, the Unified Interpretations link unlimited liability to loss of insurance cover. Pursuance of claims for unlimited liability will be inconsistent with attempts to enforce a judgement for unlimited liability against a liability insurer.

The Unified Interpretations go on to state 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’.

Finally, the Unified Interpretations deal with the aspect that only the conduct of the shipowners themselves shall be relevant for breaking limitation. This aims to avoid that ‘the conduct of parties other than the shipowner, for example the master, crew or servants of the shipowner,’ is taken into account.

It is hoped that the Unified Interpretations not only lead to an application of the conventions which is in line with their intentions but that Uniform Interpretations in all convention states also avoid forum shopping and make litigation much more predictable.