Persons entitled to limit liability may of course bring claims against each other. Their contractual relationship will determine the legal basis of such claims. If, for example, there is a cargo claim against the charterer, the charterer would be entitled to limit its liability against the cargo owner. However, if the charterer pays the claim in full and then tries to recover from the shipowner, the shipowner would be entitled to limit its liability against the charterer in exactly the same way as if the claim was directly from the cargo owner against the shipowner. This is consistent with the historical development of the limitation of liability as a protectionist measure for the benefit of the owner and the extension of the shipowners’ privilege to other persons. However, when the cargo claim is brought against the shipowner who pays up and then tries to recover from the charterer, in such a case is the charterer also entitled to invoke limitation of liability against the shipowner? Such a result would be a significant expansion of the scope of limitation beyond the protection of the shipowner, who may consequently face limited recovery for damages incurred in the shipping business.
Add comment