Anchor

In relation to the issues arising under Article 4, a further change introduced by the 1976 Convention should be noted. This change is to who bears the ‘burden of proof’ for the entitlement of limitation benefit. Under the 1957 Convention it was clearly placed upon the party who was seeking to limit liability to show that he was entitled to limit. In other words the party seeking to limit had the burden of proof. i.e. he had to show lack of fault or privity. Under the 1976 Convention the point is left vague and has to be determined by way of construction from the wording of the Articles concerned. Article 2 (1) says quite definitely that claims shall be subject to limitation of liability and this gives the natural impression that if limitation is to be broken or denied then it is up to the party in opposition, i.e. the plaintiff, to introduce evidence sufficient to prove that the defendant is not entitled to limit liability as set out in Article 4. It would seem, therefore, safe to assume that the burden of proof has shifted to the plaintiff. In respect of the meaning ‘person liable’ under the 1976 Convention, it is necessary to consider the ‘alter ego’ of the corporate person seeking to limit, we are still looking at the ‘personal’ acts or omissions of the party liable. Personal acts of corporate persons need to be investigated to determine whether they were the very action of the company itself. As this issue appears to be the same under the 1976 Convention as the 1957 Convention, the same test of ‘alter ego’ as used under the 1957 Convention will presumably still be used under the 1976 Convention. The classic case on this issue was the Lady Gwendolen (1965) where the tests were laid down for such determination, those tests being: – Another case in point, more recently, was ‘The Marion (1984)’. This is one of the most recent cases upon this issue and certainly the most controversial and came before the House of Lords. The Master of a Liberian tanker anchored at Hartlepool to wait for a berth and when he dropped the ship’s anchor it fouled an undersea pipeline. Oil Companies who had an interest in the pipeline sued the ship’s owners, claiming US$ 25 million damages (direct and consequential losses). The owners admitted liability but sought to limit under the existing law (i.e. the 1957 Convention). They claimed that the Master had negligently used an out-of-date chart which did not have the pipeline marked on it.