Reconciling Maritime Liens and Limitation of Liability for Maritime Claims: a Comparison of English Law and Chinese

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Reconciling Maritime Liens and Limitation of Liability for Maritime Claims: a Comparison of English Law and Chinese University of Southampton Research Repository ePrints Soton Copyright © and Moral Rights for this thesis are retained by the author and/or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder/s. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given e.g. AUTHOR (year of submission) "Full thesis title", University of Southampton, name of the University School or Department, PhD Thesis, pagination http://eprints.soton.ac.uk UNIVERSITY OF SOUTHAMPTON FACULTY OF BUSINESS AND LAW Southampton Law School Reconciling Maritime Liens and Limitation of Liability for Maritime Claims: A Comparison of English Law and Chinese Law by Dingjing Huang Thesis for the degree of Doctor of Philosophy March 2015 UNIVERSITY OF SOUTHAMPTON ABSTRACT FACULTY OF BUSINESS AND LAW Southampton Law School Doctor of Philosophy Reconciling Maritime Liens and Limitation of Liability for Maritime Claims: A Comparison of English Law and Chinese Law by Dingjing Huang In maritime law, there are two special regimes for maritime claims, namely maritime liens and limitation of liability for maritime claims. Each of the regimes provides the maritime claimant or the liable person some special rights. It appears that the legal principles underlying maritime liens and limitation of liability are not related, however, they are interconnected in that both of them seek to strike a proper balance in the encouragement of shipping on the one hand and the effective prosecution of maritime claims on the other hand. Historically speaking, maritime liens and limitation of liability are related in that both of them reflect the impact of the personification of ships. Under this doctrine, a ship is personified to be regarded as a distinct entity with a capacity to contract and to commit torts. i However, after their own development, the two regimes currently have different emphases and opposed purposes. The purpose of maritime liens is to protect the maritime claimant with regard to the fact that ships are highly mobile and can flee the jurisdiction of the court, coupled with the additional fact that their owners could continue to incur liabilities to the detriment of existing creditors. Limitation of liability for maritime claims is more shipowner friendly. Limitation of liability allows shipowners or other persons related to ship operation to limit their liability for damage, loss or injury caused through their acts. This thesis studies whether maritime liens and limitation of liability for maritime claims can be reconciled with each other under English law and Chinese law. The thesis revisits the relationship between the two regimes and analyses the problems arising from their inconsistences in both jurisdictions as well as in relevant international conventions. This thesis has raised questions that have not been considered before. These questions include: (a) What is the relationship between maritime liens and limitation of liability for maritime claims? (b) What are the conflicts between maritime liens and limitation of liability for maritime claims? (c) What is the effect of so-called ‘conflict clauses’? (d) How should maritime liens be reconciled under English law and Chinese law? The answers provided by this research to the above questions are as follows: (1) The relationship between maritime liens and limitation of liability for maritime claims lies in the personification of ship. Therefore, such a relationship is broken under the tonnage limitation system which does not rely on the personification theory. (2) Because of the opposed policy consideration and the overlap of the two regimes, the regime of limitation of liability apparently prevents maritime liens’ operation. (3) The conflict clauses have their effect of depriving the application of maritime liens in the limitation proceedings. However, none of these clauses provided an ii all-around solution to the conflicts. (4) Legislation reform is required in order to resolve conflicts between maritime liens and limitation of liability under Chinese law; whereas Reconciling maritime liens and limitation of liability for maritime claims under English law can be achieved by wider application of case law. The law is stated as of 12 March 2015. iii iv Table of Contents Chapter I Introduction ................................................................................................... 1 1.1 Research background.......................................................................................... 1 1.1.1 Limitation of liability for maritime claims ..................................................... 1 1.1.2 Maritime liens ................................................................................................. 3 1.1.3 Conflicts between maritime liens and limitation of liability for maritime claims 5 1.2 Aims, objectives and contributions .................................................................... 8 1.3 Structure ........................................................................................................... 10 1.4 Admiralty jurisdiction in China ........................................................................ 12 1.5 Methodology..................................................................................................... 13 Chapter II History and Current Law of Maritime Lien ........................................... 17 2.1 Introduction ...................................................................................................... 17 2.2 History of maritime liens .................................................................................. 18 2.2.1 Early maritime law........................................................................................ 18 2.2.2 English law ................................................................................................... 24 2.2.3 Chinese law ................................................................................................... 32 2.3 Current legislation on maritime liens ............................................................... 38 2.3.1 English law ................................................................................................... 38 2.3.2 Chinese law ................................................................................................... 42 v 2.3.3 International unification ................................................................................ 45 2.4 Enforcement of maritime liens ......................................................................... 45 2.4.1 Enforcement aspects ..................................................................................... 45 2.4.2 English law ................................................................................................... 46 2.4.3 Chinese law ................................................................................................... 47 2.5 Conclusion ........................................................................................................ 48 Chapter III History and Current Law of Limitation of Liability for Maritime Claims ............................................................................................................................. 49 3.1 Introduction ...................................................................................................... 49 3.2 History of limitation of liability ....................................................................... 50 3.2.1 Historic origin: Roman law .......................................................................... 50 3.2.2 Continental limitation systems ..................................................................... 54 3.2.3 English law development and the tonnage limitation system ....................... 58 3.2.2 History of the limitation regimes in China ................................................... 62 3.3 International unification ................................................................................... 64 3.3.1 1924 Limitation Convention ......................................................................... 65 3.3.2 1957 Limitation Convention ......................................................................... 67 3.3.3 1976 Limitation Convention ......................................................................... 69 3.3.4 The 1996 Protocol ......................................................................................... 72 3.4 Current legislations on limitation of liability ................................................... 73 3.4.1 English law ................................................................................................... 73 vi 3.4.2 Chinese law ................................................................................................... 80 3.5 Policy considerations ........................................................................................ 83 3.5.1 For the shipping industry .............................................................................. 84 3.5.2 For shipowners .............................................................................................. 86 3.6
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