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Singapore: Singapore Implements 1996 Protocol To The Convention On Limitation Of Liability For Maritime Claims

As of 29 December 2019, Singapore will be implementing the 1996 Protocol (as amended in 2012) to the Convention on Limitation of Liability for Maritime Claims of 1976 (“LLMC 1976”), pursuant to the partial commencement of the Merchant Shipping (Miscellaneous Amendments) Act 2019.

The LLMC 1976 allows shipowners and others, including insurers, to limit their liability for particular maritime claims by constituting a limitation fund. The size of the fund depends on the type of claim and the tonnage of the ship. The implementation of the 1996 Protocol does not apply in relation to any liability arising out of an occurrence which took place before 29 December 2019.

The test or the requirement for breaking limitation for the LLMC 1976 and 1996 Protocol is essentially the same. Instead, the 1996 Protocol updates the limits of liability under the LLMC 1976. A comparison of the limits under the LLMC 1976 and the 1996 Protocol (as amended in 2012) are set out below:

Claims for loss of life or personal injury

Tonnage (GT) LLMC 1976 (SDR) Tonnage (GT) 1996 Protocol (SDR)
< 500 333,000
501 – 3,000 333,000 + 500/ton over 500 <2,000 3,020,000
3,001 – 30,000 1,583,000 + 333/ton over 3,000 2,001 – 30,000 3,020,000 + 1,208/ton over 2,000
30,001 – 70,000 10,574,000 + 250/ton over 30,000 30,001 – 70,000 36,844,000 + 906/ton over 30,000
>70,000 20,574,000 + 167/ton over 70,000 >70,000 73,084,000 + 604/ton over 70,000

Other claims

Tonnage (GT) LLMC 1976 (SDR) Tonnage (GT) 1996 Protocol (SDR)
< 500 167,000 <2,000 1,510,000
501 – 30,000 167,000 + 167/ton over 500 2,001 – 30,000 1,510,000 + 604/ton over 2,000
30,001 – 70,000 5,093,500 + 125/ton over 30,000 30,001 – 70,000 18,422,000 + 453/ton over 30,000
>70,000 10,093,500 + 83/ton over 70,000 >70,000 36,542,000 + 302/ton over 70,000

The updated limits under the 1996 Protocol (as amended in 2012) ensures that Singapore’s limitation regime reflects the current value of life and property and is aligned with that of other countries that have acceded to the 1996 Protocol such as the United Kingdom, Hong Kong and Malaysia (as it applies in West Malaysia comprising the states of Peninsula Malaysia and the Federal Territory of Labuan).

In particular, with the implementation of the 1996 Protocol, Singapore is on an equal footing with traditional rival jurisdictions such as the United Kingdom and Hong Kong, when it comes to ship collision claims. This is considering that a party will usually study the relative limitation limits as well as any risk or chance of breaking limitation before deciding on a jurisdiction to set up a limitation fund which is favourable for them.

Additionally, the implementation of the 1996 Protocol is likely to promote the selection of Singapore law as the governing law of commercial shipping contracts and attract more claimants to utilise Singapore’s legal and arbitration dispute facilities and services.
Source: Clyde & Co, by Ik Wei Chong (Partner / Managing Director, Asia) and Asyraf Isnin (Associate) (https://www.clydeco.com/insight/article/singapore-implements-1996-protocol-to-the-convention-on-limitation-of-liabi)

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