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Singapore Introduces Higher Limits of Liability for Maritime Claims

08 Jan 2020

Singapore Introduces Higher Limits of Liability for Maritime Claims

A few days ago on the 29th December 2019 Singapore acceded to the 1996 Protocol to the Convention on Limitation of Liability for Maritime Claims 1976, otherwise known as the LLMC 1976.

As readers will know, the LLMC 1976 provides shipowners  (and charterers) with a right to limit liability for, amongst other things, claims in respect of cargo loss and damage and also damage to other property (including to other ships). The level of limitation available to shipowners is based upon a sliding scale dependent upon the tonnage of the ship.

The 1996 Protocol (as amended) to the LLMC 1976 imposes much higher limits of liability upon shipowners than was hitherto the case and now brings Singapore into line with many other leading maritime nations. From cargo interests’ perspective at least this will make Singapore a more attractive jurisdiction in which to assert claims subject to vessel limitation and Singapore will no longer be a place in which shipowners can take advantage of what many considered to be outdated limits which did not reflect the current value of property.

By way of example, under the old 1976 LLMC regime, a vessel with a gross tonnage of 80,000 GT had a limit of liability of SDR10,923,500 (approximately USD15,075,000) whereas under the 1996 Protocol it is SDR 39,562,000 (approximately USD54,595,500).

These higher limits of liability will be of considerable comfort to cargo owners and their insurers when confronted with very large cargo losses subject to Singapore jurisdiction, but will also make Singapore, which in recent years has been keen to promote its shipping credentials, a more attractive place for dispute resolution.

The new limits have now come into force, but only apply to incidents which occur after the 29th December 2019. Any incidents that occurred prior to this date will still be subject to the old, lower, limits of liability.

Any queries should be addressed to Michael Hird at W.K. Webster mhird@wkwebster.com

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