This was an appeal from CSL Australia Pty Ltd v Tasmanian Ports Corp Pty Ltd (The Goliath) [2024] FCA 824 (CMI2530). Stewart J held that the wreck removal claims of the Tasmanian Ports Corp Pty Ltd (TasPorts) were subject to limitation under art 2.1.a of the LLMC 1996, and were not excluded from being subject to limitation by Australia's exercise of its right of reservation not to implement arts 2.1.d and 2.1.e of the Convention in s 6 of the Limitation of Liability for Maritime Claims Act 1989 (Cth) (the Act).

TasPorts appealed, identifying three main issues:

1. How should the LLMC be construed if TasPorts' claims can be said to fall within both arts 2.1.a and 2.1.d?
2. Is there, in fact, complete overlap between arts 2.1.a, b, c, d, and e?
3. Does 'a ship' in art 2.1.d mean a ship able to limit under art 2.1.a?

Held: The appeal is allowed.

The respondent, CSL Australia Pty Ltd (CSL), argued that art 18 of the LLMC does not confer on contracting States an option to completely remove from limitation all wreck removal claims, including claims within and limitable under arts 2.1.a-c. All art 18 does is allow a contracting State when implementing the Convention to 'not enact or implement Art 2(1)(d), and thus to not allow limitation to only those claims falling under that paragraph'.

The exercise of the reservation in respect of arts 2.1.d and e does not change the construction of art 2.1 as a whole. Australia is a contracting State which has acceded to the Convention as a whole. That includes all of art 2.1. By art 18.1 it has exercised its right to exclude the application of arts 2.1.d and e in Australian domestic law. The proper construction of art 2.1 must be the same in every contracting State, regardless of whether or not a State Party has exercised its right of reservation. This is made clear by art 21.2 of the Vienna Convention.

The distinction posited by CSL denudes the important words in the chapeau to art 2.1, 'whatever the basis of liability may be', which were deliberately added to the Convention. The meaning of those words must be given effect. Their importance is reinforced by the fact that they were apparently added to the 1976 Convention as a result of a perceived deficiency in the language of the 1957 Convention, art 1.1 of which stated that the Convention applied to 'claims arising from' a list of specified 'occurrences'.

This specific question was addressed by the Hong Kong Court of Final Appeal in The Star Centurion (CMI2253), which held that art 2.1.d was intended to encompass all wreck removal expense claims, such that, whatever the basis of the liability therefor, a reservation under art 18 would be effective to exclude such claims from limitation.

The interaction between art 2.1.d and art 18.1 has also been considered by the Supreme Court of the Netherlands (Hoge Raad) in Scheepvaartbedrijf MS Amasus BV v ELG Haniel Trading GmbH (The Wisdom) (ECLI:NL:HR:2018:140; CMI160). The Supreme Court observed that 'the subjects referred to in Article 2, Paragraph 1 of the [1976 Convention] may overlap, and a claim may therefore be subject to limitation on various grounds listed in that provision', but said that 'this concurrence does not lead to questions of interpretation because the same limits ... apply in both cases'. The Court observed, however, that the position is different when a reservation has been made, in which case art 18.1 precludes limitation under arts 2.1.d and e. This is an important decision of a superior Court, of a country with significant shipping interests and consequent shipping litigation, which has construed an international Convention, and so is one that demands close consideration.

The same conclusion was reached on the same day by the Supreme Court of the Netherlands (Hoge Raad), constituted by the same bench, albeit in a different case which gave rise to the same question of construction – Eitzen Chemical (Singapore) Pte Ltd v VOF G Idzenga Scheepvaartbedrijf (The Sichem Anne and The Margreta) (ECLI:NL:HR:2018:142; CMI157).

The Wisdom was not followed in Twitt Navigation Ltd v The State represented by the Defence Department (21-058354TVI-THOD/TBER; CMI1726), a decision of a single judge of the Hordaland District Court in Bergen, Norway. The decision in Twitt was criticised in The Star Centurion. The Court considers Twitt to be of little assistance to the resolution of the present proceedings.

CSL drew attention to an additional international decision, being that of the Supreme Court of South Korea in Partenreederei MS Alexandria v China Shipping Development Co Ltd (The Alexandria) (99Da9646, 9653, 9660, 9677; CMI242). In circumstances where it is clear that the Supreme Court of South Korea was interpreting the particular wording of its own domestic statute, which does not accord with the wording of the Convention, its decision is of no assistance in the present case.

In light of the conclusion reached on issue 1, it is unnecessary to consider the remaining issues.