LLMC — Limitation of Liability for Maritime Claims

The Convention on Limitation of Liability for Maritime Claims 1976, and its 1996 Protocol (as further amended by 2012 and 2015 IMO decisions), is the primary international framework enabling a shipowner to cap total liability arising out of a single incident. Once the shipowner constitutes a limitation fund equal to the applicable limit, all covered claims must be brought against that fund — the shipowner cannot be pursued beyond it. LLMC operates alongside the specialised regimes (CLC 1992, Bunker Convention, Athens Convention) rather than replacing them; the specialised regime applies within its scope, LLMC applies to remaining claims.

Who can limit

• Shipowner — the registered owner or the person entitled to entering the vessel on the ship registry.
• Charterer — bareboat, time, and voyage charterers can also invoke LLMC in their capacity as shipowner where they exercise sufficient control.
• Manager and operator — the ship manager who is responsible for navigation may limit.
• Salvor — salvage operator working on or in respect of the ship may limit under LLMC 1976 Article 1.
• Insurers — P&I Clubs paying claims on behalf of the shipowner have the same right to limit.

Claims subject to limitation

LLMC Article 2 lists claims subject to limitation. The list is broad and includes:

• Claims for death or personal injury of passengers, crew, or third parties (subject to separate specific limit).
• Claims for loss of or damage to property including cargo, port infrastructure, and other vessels.
• Claims for delay in carriage of cargo and passengers.
• Claims for loss resulting from infringement of rights other than contractual (e.g., wrongful arrest, wrongful search).
• Claims for costs of raising, removal, destruction, or rendering harmless of a sunken, wrecked, stranded or abandoned ship (BUT NOTE: many state parties have made the Article 18 reservation excluding wreck-removal costs, meaning wreck-removal claims proceed unlimited under the Nairobi Convention).

Claims NOT subject to limitation

• Salvage claims (governed by LOF-2020 + Salvage Convention 1989).
• General Average contributions.
• Oil-pollution claims covered by CLC 1992 (proceed under CLC limits + IOPC Fund).
• Nuclear damage claims (governed by separate nuclear-liability regime).
• Claims by servants of the shipowner whose duties are connected with the ship IF national law prohibits limitation for such claims.

The tonnage-based limits (LLMC 1996 Protocol as amended 2015)

LLMC establishes two separate limitation funds per incident: (i) a fund for claims for death and personal injury of persons other than passengers; and (ii) a fund for all other claims (property damage etc.). Both are calculated on the vessel's gross tonnage.

Worked example: for a 100,000 GT container ship, property damage fund = 1.51M + 28,000 × 604 + 40,000 × 453 + 30,000 × 302 = ~48 million SDR (~$64M). Death/injury fund = ~96 million SDR (~$128M). These are the total maximum recoveries for all covered claims from that single incident.

Passenger claims — separate limit

LLMC 1996 Article 7 provides a separate limitation for passenger claims: 175,000 SDR per passenger the vessel is authorised to carry. For a 3,000-passenger cruise ship, that's a limitation of 525 million SDR (~$700M) — but the more specialised Athens Convention 2002 supersedes LLMC for international passenger voyages.

When limitation is BROKEN

Under LLMC Article 4, a shipowner CANNOT limit if the loss resulted from the shipowner's personal act or omission committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. This is a very high bar.

• "Personal" act or omission. The fault must be that of the shipowner personally (or, for a corporate owner, the "alter ego" of the company — the directing mind). Fault of the Master or crew alone does not break limitation.
• Intent or recklessness with knowledge. Mere negligence, even gross negligence, is insufficient. The shipowner must have intended the loss or been recklessly indifferent to its high probability.

The English courts have made it clear that breaking limitation is exceptional. Recent cases where limitation has been held to survive include The Aegean Sea (1998, structural failure not owner's privity) and The Erika (French criminal proceedings did not break the international-law limitation).

Constitution of the fund + procedure

1. Shipowner (or P&I Club) applies to the court of a state party with jurisdiction over the vessel or incident.
2. Fund constituted by cash deposit, guarantee, or Club letter of undertaking equal to the applicable limit.
3. Court issues limitation decree — claimants must file all claims against the fund.
4. All separate claims consolidate against the single fund. Individual arrest actions must be released once fund is constituted.
5. Court apportions fund among claimants pro rata (typically death/injury claimants prioritised over property).

See also

• · Bunker Convention + CLC + IOPC Funds — oil-pollution-specific liability regime.
• · Athens Convention — passenger-specific liability regime superseding LLMC.
• · Salvage — LOF-2020 + Salvage Convention 1989 (salvage claims not subject to limitation).
• · General Average — GA contributions not subject to LLMC limitation.
• · Arrest of Ships — vessel arrest released upon constitution of LLMC fund.
• · P&I Clubs — provide the letter of undertaking constituting the fund.

Last verified 14 days ago