Liability limits for ship passengers raised with new Athens Convention, compulsory insurance introduced
Compulsory insurance to cover passengers on ships will become international law
and limits of liability will be raised under amendments to the Athens Convention
Relating to the Carriage of Passengers and their Luggage by Sea, 1974, adopted
at a diplomatic conference held from 21 October to 1 November 2002 at IMO
Headquarters in London.
to the Convention are contained in a Protocol to the Athens Convention.
IMO Secretary General
Mr. William A. O'Neil said that the 2002 Protocol, when it comes into force,
would provide a much-needed update to the 1974 Convention and he urged Governments
to ratify the Protocol as soon as possible.
He said, "For
some time now it has been recognized that the limits of liability in the 1974
Convention are no longer adequate to meet the needs of the international community.
The 1990 Protocol, in the eyes of many States, suffered from the same defect.
Therefore it never entered into force. It goes without saying, however, that
compensation, in adequate measure, must be provided for loss of human life and
physical injury for all passengers travelling by sea."
The new instrument
will provide for adequate compensation for death and personal injury claims
and claims for loss of or damage to luggage and vehicles.
"As with all
IMO conventions, the aim of the Organization has been to create an internationally
accepted regime so that the shipping industry does not become subject to a variety
of individual national schemes. I am hopeful that with these new elements, this
Protocol will be widely accepted and quickly brought into force," Mr. O'Neil
was attended by more than 70 States, many of which held differing views on what
constitutes adequate compensation. Some delegations had proposed even higher
limits. However, the Conference was able to achieve a compromise and a consensus
on the final package of measures adopted, balancing the concerns of commercial
insurance with the need to ensure adequate protection.
The slow rate of acceptance of the 1974 Convention (it has been ratified by
28 States) has been largely attributed to the low level of the limits of liability
set in the original Convention and in its 1990 Protocol (which raised the limits
but never entered into force).
As well as raising limits of liability for passenger claims, the Protocol also
introduces other mechanisms to assist passengers in obtaining compensation,
based on well-accepted principles applied in existing liability and compensation
regimes dealing with environmental pollution. These include replacing the fault-based
liability system with a strict liability system for shipping related incidents,
backed by the requirement that the carrier take out compulsory insurance to
cover these potential claims.
The limits contained
in the Protocol set a maximum limit, empowering - but not obliging - national
courts to compensate for death, injury or damage up to these limits.
The Protocol also
includes an "opt-out" clause, enabling State Parties to retain or
introduce higher limits of liability (or unlimited liability) in the case of
carriers who are subject to the jurisdiction of their courts.
Entry into force
The 2002 Protocol will enter into force 12 months after being accepted by 10
A new Article 4bis of the Convention requires carriers to maintain insurance
or other financial security, such as the guarantee of a bank or similar financial
institution, to cover the limits for strict liability under the Convention in
respect of the death of and personal injury to passengers.
The limit of the
compulsory insurance or other financial security shall not be less than 250,000
Special Drawing Rights (SDR) (about US$325,000) per passenger on each distinct
occasion. Ships are to be issued with a certificate attesting that insurance
or other financial security is in force and a model certificate is attached
to the Protocol in an Annex.
Limits of liability
The limits of liability have been raised significantly under the Protocol, to
reflect present day conditions and the mechanism for raising limits in the future
has been made easier.
The liability of
the carrier for the death of or personal injury to a passenger is limited to
250,000 SDR (about US$325,000) per passenger on each distinct occasion.
The carrier is liable, unless the carrier proves that the incident resulted
from an act of war, hostilities, civil war, insurrection or a natural phenomenon
of an exceptional, inevitable and irresistible character; or was wholly caused
by an act or omission done with the intent to cause the incident by a third
If the loss exceeds
the limit, the carrier is further liable - up to a limit of 400,000 SDR (about
US$524,000) per passenger on each distinct occasion - unless the carrier proves
that the incident which caused the loss occurred without the fault or neglect
of the carrier.
For the loss suffered
as a result of the death of or personal injury to a passenger not caused by
a shipping incident, the carrier is liable if the incident which caused the
loss was due to the fault or neglect of the carrier. The burden of proving fault
or neglect lies with the claimant.
of the carrier only includes loss arising from incidents that occurred in the
course of the carriage. The burden of proving that the incident which caused
the loss occurred in the course of the carriage, and the extent of the loss,
lies with the claimant.
The Protocol allows a State Party to regulate by specific provisions of national
law the limit of liability for personal injury and death, provided that the
national limit of liability, if any, is not lower than that prescribed in the
Protocol. A State Party, which makes use of this option is obliged to inform
the IMO Secretary?General of the limit of liability adopted or of the fact that
there is none.
Loss of or damage
to luggage and vehicles - The liability of the carrier for the loss of or
damage to cabin luggage is limited to 2,250 SDR (about US$2,925) per passenger,
of the carrier for the loss of or damage to vehicles including all luggage
carried in or on the vehicle is limited to12,700 SDR (about US$16,250) per
vehicle, per carriage;
of the carrier for the loss of or damage to other luggage is limited to
3,375 SDR (about US$4,390) per passenger, per carriage;
carrier and the passenger may agree that the liability of the carrier shall
be subject to a deductible not exceeding 330 SDR in the case of damage to
a vehicle and not exceeding 149 (about US$220) SDR per passenger in the
case of loss of or damage to other luggage, such sum to be deducted from
the loss or damage.
The Protocol introduces a new procedure for amending the limits of liability
under the Convention, so that any future raises in limits can be achieved more
readily. Under the 1974 Convention, limits can only be raised by adopting amendments
to the Convention which require a specified number of States' acceptances to
bring the amendments into force. This has meant, for example, that the 1990
Protocol, which was intended to raise the limits, has not yet entered into force
and indeed is being superseded by the 2002 Protocol.
The 2002 Protocol
therefore introduces a tacit acceptance procedure for raising the limits of
liability. A proposal to amend the limits, as requested by at least one-half
of the Parties to the Protocol, would be circulated to all IMO Member States
and al States Parties and would then be discussed in the IMO Legal Committee.
Amendments would be adopted by a two-thirds majority of the States Parties to
the Convention as amended by the Protocol present and voting in the Legal Committee,
and amendments would enter into force 18 months after its deemed acceptance
date. The deemed acceptance date would be 18 months after adoption, unless within
that period not less than one fourth of the States that were States Parties
at the time of the adoption of the amendment have communicated to the IMO Secretary-General
that they do not accept the amendment.
For the first time in an IMO Convention, a regional economic integration organization
may sign up to the Protocol. An article in the Protocol states that a Regional
Economic Integration Organization, which is constituted by sovereign States
that have transferred competence over certain matters governed by this Protocol
to that Organization, may sign, ratify, accept, approve or accede to the Protocol.
A Regional Economic Integration Organization which is a Party to this Protocol
shall have the rights and obligations of a State Party, to the extent that the
Regional Economic Integration Organization has competence over matters governed
by this Protocol.
Title of Convention
The Protocol states that Articles 1 to 22 of the Convention, as revised by the
Protocol, together with Articles 17 to 25 of the Protocol and the Annex thereto,
shall constitute and be called the Athens Convention relating to the Carriage
of Passengers and their Luggage by Sea, 2002.
States who ratify
the 2002 Protocol are required to denounce the 1974 Convention and its 1976
and 1990 Protocols, if they are Party to the 1974 Convention and those Protocols.
The Conference adopted the following resolutions:
1 - Regional Economic Integration Organizations
The resolution notes that the 2002 Protocol to the Athens Convention allows
Regional Economic Integration Organizations and their sovereign Member States
to become parties to the Protocol and recognizes that States may, in the future,
establish or become Members to various forms of regional economic integration
organizations to which they may opt to transfer competencies or functions governed
by treaties and exercise these in a shared manner. The resolution requests IMO
to carry out a study of the issue, and, if found necessary, to develop appropriate
provisions which may be considered in new treaties it may develop, or in amendments
to existing treaties, when there will be a need for such provisions to be included
so as to enable present and future regional economic integration organizations
and their Member States to become parties to such treaties.
Conference Resolution 2 - Certificates of insurance or other financial security
and ships flying the flag of a State
under the terms of a bareboat charter registration
The resolution addresses the fact that a number of States allow ships to fly
their flag under the terms of bareboat charter, through which the bareboat charterer
assumes all the duties and responsibilities of the owner for the operation of
the ship whilst the ownership and encumbrances remain registered in another
State which suspends the right of the ship to fly its flag. The resolution requests
IMO to carry out a study of the issuing of certificates of insurance or financial
security in these cases and, if found necessary, to develop appropriate guidelines.
3 - Framework of Good Practice with respect to carriers' Liabilities
The resolution requests IMO to develop appropriate guidelines on the provision
of insurance or financial security for compensation for claims for death of
or personal injury to passengers which will establish an appropriate framework
of good practice to ensure that all carriers take steps to maintain full insurance
or financial security to meet their full level of liability provided for in
Representatives of 71 States participated in the Conference. One State attended
as an observer and one Associate Member of IMO sent observers. Three intergovernmental
and 18 non-governmental organizations attended the conference as observers.
The following were elected by the Conference:
His Excellency Dr. Ra Jong-Yil, Ambassador Extraordinary and Plenipotentiary
of the Republic of Korea
His Excellency Senhor Antonio DaCosta Fernandez, Ambassador Extraordinary and
Plenipotentiary and Permanent Representative of Angola
His Excellency Mr Basil G. O'Brien, CMG, High Commissioner and Permanent Representative
of the Bahamas
Ms Margit Markus, Head, Department of Marine Transport, Ministry of Transport,
Mr Evangelos Tsantzalos, Lieutenant Commander of the Hellenic Coastguard, Greece
His Excellency Mr J. Mortada, Ambassador Extraordinary and Plenipotentiary,
of the Whole
Mr Gaute Sivertsen, Norway
of the Committee of the Whole
Dr. Beate Czerwenka, Germany
Captain Pedro San Miguel, Venezuela
The Athens Convention of 1974 was designed to consolidate and harmonize two
earlier Brussels Conventions dealing with passengers and their luggage and adopted
in 1961 and 1967, respectively.
The Convention established a regime of liability for damage suffered by passengers
carried on a seagoing vessel. It declared a carrier liable for damage or loss
suffered by a passenger if the incident causing the damage occurred in the course
of the carriage and was due to the fault or neglect of the carrier.
However, unless the carrier acted with intent to cause such damage, or recklessly
and with knowledge that such damage would probably result, he can limit his
liability. For the death of, or personal injury to, a passenger, this limit
of liability was set at 46,666 Special Drawing Rights (SDR) (about US$61,100)
As far as loss of or damage to luggage is concerned, the carrier's limit of
liability varies, depending on whether the loss or damage occurred in respect
of cabin luggage, of a vehicle and/or luggage carried in or on it, or in respect
of other luggage.
has been in force since 1987. At present, 28 States are party to it.
Conference on the Revision of the Athens Convention relating to the Carriage
of Passengers and their Luggage by Sea, 1974) opened on Monday 21 October and
continued on Friday 25 October through to Friday 1 November, following the 85th
session of the IMO Legal Committee which met from Tuesday 22 to Thursday 24
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