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Limiting liability and 'any distinction occasion' under LLMC'76

Whether a shipowner has to establish a single limitation fund or more to meet all claims arising following an incident depends on whether the incident can be regarded as ‘one distinct occasion’ or not within the meaning of LLMC. There is limited case law on this topic. Last year a court in the Netherlands got its first such case where there were multiple allisions after a bulk carrier broke her anchor chain in a storm.

The vessel first struck a nearby ship, then a foundation of a windmill, and finally allided with a jacket of a windfarm transformer substation. The crew of the bulk carrier were evacuated by the coastguard between the second and the third incidents. Also, the vessel was initially manoeuvrable but after colliding with the first vessel, she suffered damage to her propeller and was from thereon under the mercy of the weather. Owners of the bulk carrier applied for limitation under LLMC’96 basis her tonnage which amounted to roughly €20m. The owners of the windmill and the windfarm were claiming in excess of €60m and were arguing that the breaking the anchor chain, becoming unmaneuverable, and finally being an unmanned ship were separate and distinct incidents, and hence the total limitation amount would possibly increase two fold or three fold.

It came down to the interpretation of the term ‘distinct occasion’ used in LLMC. As per the court, the answer depends on whether there was a causal connection between the incidents. In the Court’s view the anchor chain breaking, crew failing to gain control using the engines, colliding with another vessel, loosing manoeuvrability, and the next two contact incidents must be regarded as one event. All the events were interlinked with the previous occurrence(s). Hence only a single limitation fund needed to be established.


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