Visit JCPCMSC Mediterranean Shipping Company SA (Appellant) v Conti 11 Container Schiffahrts-GmbH & Co KG MS “MSC Flaminia” (Respondent)
Case summary
Case ID
UKSC/2023/0131
Parties
Appellant(s)
MSC Mediterranean Shipping Company S.A.
Respondent(s)
Conti 11. Container Schiffahrts-GmbH & Co. KG MS “MSC Flaminia”
Judgment details
Judgment date
30 July 2025
Neutral citation
[2025] UKSC 14
Hearing dates
Full hearing
Start date
5 February 2025
End date
6 February 2025
Permission hearing
Start date
25 July 2025
End date
25 July 2025
Justices
Judgment details
Hilary Term 2025
LORD HAMBLEN (with whom Lord Hodge, Lord Briggs, Lord Leggatt and Lord Burrows agree):
1. The principle of limited liability for maritime claims is an established feature of international maritime law. It entitles the shipowner and certain others involved in ship operation to limit their liability for claims arising out of a maritime casualty or incident to a particular sum. Its roots lie in a recognition of the importance of maritime trade and the need to encourage investment in it.
2. In the United Kingdom limitation is governed by the 1976 Convention on Limitation of Liability for Maritime Claims as amended by the amending Protocol of 1996 (“the 1976 Convention”), which is given the force of law by section 185 of the Merchant Shipping Act 1995. Under the 1976 Convention shipowners and salvors are entitled to limit their liability (article 1.1) and the “shipowner” means “the owner, charterer, manager and operator of a seagoing ship” (article 1.2). The right to limit is given in respect of specified types of claim (article 2) and, in particular, claims for damage to property occurring on board or in direct connexion with the operation of the ship (article 2.1(a)).
3. This appeal concerns the circumstances in which a charterer may limit its liability in respect of claims made by the shipowner. As a matter of English law it is well established (and common ground on the appeal) that there is no right to limit its liability in respect of claims by a shipowner for loss of or damage to the vessel – see CMA CGM SA v Classica Shipping Co Ltd (The CMA Djakarta) [2004] EWCA Civ 114, [2004] 1 All ER (Comm) 865, approved (obiter) by the Supreme Court in Gard Marine and Energy Ltd v China National Chartering Co Ltd (The Ocean Victory) [2017] UKSC 35, [2017] 1 WLR 1793.
4. The principal issues on this appeal are (i) whether there is a further and wider principle that there is no right for a charterer to limit its liability in respect of claims by a shipowner for losses originally suffered by it (as opposed to recourse claims) and (ii) whether the claims made by the shipowner fall within article 2.1 of the 1976 Convention and, if so, whether the fact that they result from damage to the vessel means that there is no right to limit.
Factual background
5. The appellant (“MSC”) is a container line operator, which runs liner services carrying containerised cargo around the world. The respondent (“Conti”) is the owner of a container ship, the “MSC Flaminia” (“the Vessel”).
6. The Vessel was chartered by MSC under a time charter on the New York Produce Exchange form (“the Charter”), initially made in November 2000 and extended several times.
7. On 14 July 2012, while the Vessel was in mid-Atlantic en route from Charleston, South Carolina, to Antwerp, an explosion occurred in the no 4 cargo hold which led to an extensive fire on board. The explosion was caused by auto-polymerisation of the contents of one or more of three tank containers laden with 80% divinylbenzene (“DVB”) which had been shipped at New Orleans. Three of the Vessel’s crew lost their lives, extensive damage was caused to the Vessel, and hundreds of containers were destroyed.
8. Conti engaged salvors, Smit Salvage BV (“Smit”), to bring the fire under control and to salve the Vessel and cargo. Seawater was sprayed into the Vessel which resulted in about 30,000 mt of firefighting water, contaminated with dangerous and toxic residues, remaining in the holds after the fire was brought under control. On 20 July 2012 Smit began towing the Vessel towards mainland Europe.
9. On 28 August 2012, an agreement was reached with the German authorities and the Vessel was allowed to proceed to Wilhelmshaven in Germany.
10. Significant costs and expenses were incurred by Conti in relation to the passage to Wilhelmshaven. In particular, payments were made to national authorities in Belgium, France, the UK, and Germany, most of which related to claims by the German and UK authorities under the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. These claims related to preventative and precautionary measures taken in those jurisdictions in the event that bunker oil leaked from the Vessel and causing pollution in their territorial waters.
11. The Vessel arrived at Wilhelmshaven on 9 September 2012 for the discharge of sound and damaged containers that needed to be removed before the Vessel could be moved to a repair facility. This commenced on 28 September 2012. Discharge of the sound and damaged containers was ultimately completed on 18 December 2012. The process of decontaminating cargo, releasing sound cargo, and destroying unsound and sound but unclaimed cargo continued thereafter, into 2013 and beyond.
12. During this time, Conti incurred various costs and expenses, all of which had to be incurred in order, ultimately, to repair the Vessel. These included berth dues, quayside space rental and service charges (€18.3m); cargo handling and disposal costs (€9.2m); customs agents’ fees (€210,000); disbursements and bunker supplies (€4.2m); fire experts’ fees (€880,000), and additional services and miscellaneous expenses (all figures approximate).
13. A further issue that needed to be considered by Conti at this time was the disposal of the firefighting water on board the Vessel, which had to be removed before repairs could commence. Discharge of the firefighting water was arranged and was completed on 1 March 2013 at a cost of around €7.1m.