BUSINESS Passenger ship liability, compensation treaty enters into force

The 2002 Athens Convention relating to the carriage of passengers and their luggage by sea, which substantially raises the limits of liability for the death of, or personal injury to, a passenger on a ship, entered into force yesterday, April 23, 2014.

According to a memo from the International Maritime Organisation (IMO), the higher limits of liability will apply to ships registered in the following states which have ratified the 2002 treaty: Albania, Belgium, Belize, Bulgaria, Croatia, Denmark, Greece, Latvia, Malta, the Netherlands, Norway, Palau, Panama, Saint Kitts and Nevis, Serbia, Syrian Arab Republic and the United Kingdom.

Additionally, the convention is mandatory for European Union Member States (including those that have not ratified the Athens Protocol regime yet as individual states) to the extent that the European Union has competence over matters governed by the Protocol, as the European Union has ratified the treaty under a novel article in the Protocol which allows for 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, to sign, ratify, accept, approve or accede to the Protocol.

The 2002 Protocol to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, (PAL), revises and updates the 1974 Convention, which established a regime of liability for damage suffered by passengers carried on a seagoing vessel. As a precondition for joining, Parties to the 2002 Protocol are required to denounce the 1974 treaty and its earlier Protocols.

The Athens Convention declares a carrier liable for damage suffered by a passenger resulting from death, personal injury or damage to luggage if the incident causing the damage occurred in the course of the carriage and was due to the fault or neglect of the carrier. Such fault or neglect is presumed, unless the contrary is proved.

The memo said carriers can limit their liability unless they acted with intent to cause such damage, or recklessly and with knowledge that such damage would probably result. For the death of, or personal injury to, a passenger, this limit of liability was set at 46,666 Special Drawing Rights (SDR) per carriage in the 1974 convention.

In case of shipping incidents, the 2002 Protocol substantially raises those limits to 250,000 SDR per passenger on each distinct occasion, 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 party.

If the loss exceeds this limit, and also in case of non-shipping incidents, the carrier is further liable - up to a combined limit of 400,000 SDR 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.

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.