Is The Concordia Incident Subject to Exonoration or Limiation of Liability?

Issues – FLAG and LIMITATION OF LIABILITY of the Costa Concordia:

Costa Concordia: (Flag:Italy IMO:9320544 MMSI:247158500 Type of Cargo:––– Gross Tonnage:114147 tons)

46 USC CHAPTER 305—EXONERATION AND LIMITATION OF LIABILITY does not apply nor is Italy a party to the LLMC Convention.

The Italian limitation system differs significantly and is adjudicated by Section 275 of the Italian Code of Navigation. As in most jurisdictions, Italian Courts apply Italian law as to issues of procedure and the substantial issues would be governed by the law of the ship’s flag. The applicable Italian code provision under the Italian Code of Navigation §275. “Debt limitation of the Shipowner” provides:

“For the obligations undertaken during and for the necessities of a voyage, and for the obligations arisen, from facts and acts accomplished during the same voyage, excepting those deriving from his personal fraud or grave fault, the Operator can limit the total debt to a sum equal to the value of the vessel and to the amount of the freight and of any other income of the voyage.” §275 Italian Code of Navigation

In an article of the Italian Maritime Association (2), the author observed that “Italian law grants the benefit of limitation only to the operator of the ship. Pursuant to art. 275 code of navigation the operator of a ship is entitled to limit his liability in respect of obligations assumed in the occasion and for the needs of a voyage and of the obligations arisen out of facts occurred or acts performed during the voyage,  provided the operator did not act with gross negligence or wilful misconduct. Italian  law further provides that in order to limit liability the operator of a ship must establish  a limitation fund by way of actual payment of a sum into Court. The amount of the  limitation fund is equal to two-fifths of the sound value of the ship together with the  ship’s earnings at the end of the voyage. If the value of the ship at the time when the limitation is applied for is lower than one-fifth of the sound value, then the limitation fund is equal to one-fifth. The sound value is, pursuant to art. 622 code of navigation,  the insured value.”
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(1) Convention on Limitation of Liability for Maritime Claims (LLMC)
Adoption: 19 November 1976; Entry into force: 1 December 1986; Protocol of 1996: Adoption: 3 May 1996; Entry into force: 13 May 2004
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(2) http://www.aidim.org/pdf/5Quest_LimResp.pdf

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(3) According to the Italian Maritime Law Association article “Italian Courts would apply the LLMC Convention if the ship flies the flag of a State party and the accident subject to limitation has occurred in the Italian jurisdiction. The Italian Courts have applied the 1976 LLMC Convention in one occasion (Tribunal of Sassari 22 April 2004, The “Panam Serena”, Diritto dei Trasporti 2006, 559) where limitation of liability was invoked by the owner of a ship flying the Bahamas flag.”

Robert L. Gardana, Esq. Maritime Law Association of the United States – Cruise Ship Committee

About Robert

As a U.S.C.G. Licensed Captain-Master and Attorney for over 30 years, member of the Maritime Law Association of the United States, Southeast Admiralty Law Institute, Robert L. Gardana, P.A., located in Miami, Florida, home to the largest passenger port in the world, is available to handle cases against cruise lines for injuries, death, missing persons, rape, assault and excursion related injuries or death.
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