In Perusahaan Perseroan (Persero) Pt Pertamina v Trevaskis Ltd and Others  HKCFA 5, the Appeal Committee of the Court of Final Appeal (“CFA”), upon hearing submissions from both parties on 16 February 2023, granted leave to Perusahaan Perseroan (Persero) Pt Pertamina (“Plaintiff”) to appeal to the full court of the CFA on the following question of great general or public importance (“GGPI”) relating to the Convention on Limitation of Liability for Maritime Claims 1976 (“LLMC”):
“Where a Contracting State has enacted LLMC Article 2(1) in full into local law but has, by a provision of local law (pursuant to Article 18), disapplied (permanently or temporarily) head (d), is a shipowner nonetheless entitled to limit its liability for a Private Recourse Claim under head (a), or does the existence and/or suspension of head (d) exclude the shipowner’s reliance upon head (a) for such claims?”
In broad and practical terms, the issue in dispute is whether the Wreck Removal Claim was subject to limitation under LLMC article 2(1)(a) (“Head (a)”) in Hong Kong notwithstanding that LLMC article 2(1)(d) (“Head (d)”) has been suspended by way of local Hong Kong legislation as permitted by the LLMC. The two heads are quoted below:-
Head (a): “claims in respect of … loss of or damage to property … occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;”
Head (d): “claims in respect of the raising, removal, … of a ship which is sunk, wrecked …;”
On 13 January 2019, “STAR CENTURION”, owned by Trevaskis Ltd (“Defendant”), sank in Indonesian waters upon collision with the Plaintiff’s vessel “ANTEA” (the “Collision”). The Defendant allegedly incurred wreck removal costs of not less than HKD 139 million pursuant to an order issued by the Indonesian authorities (“Wreck Removal Claim”).
The Plaintiff brought a limitation action in Hong Kong and constituted a limitation fund in the sum of approximately HKD 175 million (“Limitation Fund”). The Defendants then issued a summons for a declaration (“Declaration”) that the Wreck Removal Claim should not be subject to limitation under LLMC article 2 or the Limitation Fund.
The Declaration was granted at the Court of First Instance and upheld by the Court of Appeal (“CA”) on the main basis that the more general terms of Head (a) should give way to the specific terms of Head (d) under the maxim of generalia specialibus non derogant so that the Wreck Removal Claim should fall exclusively within Head (d). The CA also refused to grant leave of appeal to the CFA.
However, the Plaintiff successfully obtained leave to appeal from the CFA. In granting leave to appeal to the full court, the CFA held that the Question was clearly of GGPI. The substantive appeal is scheduled before the full court of the CFA on 20 June 2023.
The Question has significant financial, legal and practical implications on all shipowners and marine insurance contracts worldwide. It also amounts to a novel point of law in Hong Kong, with conflicting authorities in the United Kingdom, Australia, Netherlands, and Norway. This is an opportunity for the CFA to clarify the law and hand down an authority from the highest court that is directly on point.
Our Hong Kong team comprising Lianjun Li (partner), Donald Sham (partner) and Angus Yu (associate) at Reed Smith Richards Butler LLP have been working with Mr. Clifford Smith SC of Des Voeux Chambers, Mr. Christopher Hancock KC of Twenty Essex and Mr. Edward Alder of Prince’s Chambers in relation to the appeal.