Decision ID: 001077

In October 1999 the 1971 Fund Executive Committee and the 1992 Fund Executive Committee, in private sessions pursuant to Rule 12 of the Rules of Procedure at which only the delegations of Member States of the 1971 Fund and the 1992 Fund were present, considered whether the 1971 Fund and the 1992 Fund respectively should oppose the shipowner’s right to limit liability and take recourse action against the shipowner and the shipowner’s parent company. The two Committees noted the conclusion of the Funds’ experts and agreed that the Nakhodka was unseaworthy at the time of the incident, that the shipowner was, or at least should have been, aware of the defects that caused the vessel to be unseaworthy, that the incident was therefore caused by the fault or privity of the shipowner and that consequently, pursuant to Article V.2 of the 1969 Civil Liability Convention, the shipowner was not entitled to limit liability. The two Committees decided that if the shipowner, Prisco Traffic Ltd, initiated limitation proceedings the 1971 Fund and the 1992 Fund should both oppose the right to limit. The two Committees also decided that, since an action against that company might not result in any money being recovered, recourse actions should also be taken by both Funds against Primorsk Shipping Corporation (Primorsk) the parent company of Prisco Traffic Ltd, which appeared to exercise a considerable degree of control over the latter, which should, in the view of the Committees, include responsibility for the seaworthiness and safe operation of the fleet.

Date: 30.09.1999
Category: Financial limits, limitation proceedings and indemnification
Subject: Shipowner's right of limitation of liability