Ralph Morley appeared for slot charterers MSC Mediterranean Shipping Company S.A. in the Admiralty Court’s determination of a series of applications regarding the rights of putative charterers to limit their liability under the Limitation Convention in Sea Consortium Pte Ltd v Bengal Tiger Line Pte Ltd (The X-Press Pearl) [2024] EWHC 3174 (Admlty).

This is part of the ongoing limitation proceedings concerning the X-PRESS PEARL, a container ship that caught fire and sank off Sri Lanka in 2021. The vessel’s owners and related interests have constituted a limitation fund and obtained a general limitation decree in the Admiralty Court, limiting their liability.

As a feeder liner, the vessel was carrying containers for several shipping lines, including MSC. MSC’s containers were carried under a Connecting Carrier Agreement (“CCA”). The CCA required Sea Consortium to make available space on its vessels but did not require MSC to pay for space it did not use. This kind of agreement is increasingly common in container shipping.

Article 1(2) of the Limitation Convention defines shipowners who may limit their liability to include charterers. MSC applied to be recognised as a shipowner under the Convention and for a declaration that it was entitled to limit its liability, on the basis that the CCA was a slot charterparty (that is, a charterparty for space, or “slots”, for containers) and so MSC, as a charterer, came within Article 1(2).

The Admiralty Court (Andrew Baker J) granted that application. The judgment is the first since The MSC Napoli [2008] EWHC 3002 (Admlty) to consider the essential characteristics of a charterparty for the purpose of the Convention, and the first to consider whether payment for slots used or not used is necessary. The judge held that the critical feature is the commitment by the owner to allocate space for the charterer’s purpose, which was a feature of the CCA. It is not also a requirement that the putative charterer needs to pay for space it does not use.

Of further interest is that the judgment is the first to recognise the possibility that non-vessel operating common carriers (NVOCCs) could, depending on the terms of their agreements with shipping lines, also qualify as charterers (and therefore as shipowners) under the Convention, and so limit their liability to cargo interests.

Ralph was instructed by Guy Mills and Joshua Atkinson of Mills & Co.