SCHEDULE TO THE ORDER THE MERCHANT SHIPPING ACT 1995

PART VI PREVENTION OF POLLUTION

CHAPTER III LIABILITY FOR OIL POLLUTION

Preliminary

152 Meaning of “the Liability Convention”and related expressions.
(1) In this Chapter—
“the Liability Convention” means the International Convention on Civil Liability for Oil Pollution Damage 1992;
“Liability Convention country” means a country in respect of which the Liability Convention is in force and includes the United Kingdom and any relevant British possession to which the Liability Convention has been extended; and
“Liability Convention State” means a State which is a party to the Convention.
(2) If Her Majesty by Order in Council declares that any State specified in the Order is a party to the Liability Convention in respect of any country so specified the Order shall, while in force, be conclusive evidence that that State is a party to the Liability Convention in respect of that country.

Liability

153 Liability for oil pollution in case of tankers.
(1) Where, as a result of any occurrence, any oil is discharged or escapes from a ship to which this section applies, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable—
(a) for any damage caused outside the ship in the territory of Bermuda by contamination resulting from the discharge or escape; and
(b) for the cost of any measures reasonably taken after the discharge or escape for the purpose of preventing or minimising any damage so caused in the territory of Bermuda by contamination resulting from the discharge or escape; and
(c) for any damage caused in the territory of Bermuda by any measures so taken.
(2) Where, as a result of any occurrence, there arises a grave and imminent threat of damage being caused outside a ship to which this section applies by the contamination that might result if there were a discharge or escape of oil from the ship, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable—
(a) for the cost of any measures reasonably taken for the purpose of preventing or minimising any such damage in the territory of Bermuda, and
(b) for any damage caused outside the ship in the territory of Bermuda by any measures so taken;
and in this Chapter any such threat is referred to as a relevant threat of contamination.
(3) Subject to subsection (4) below, this section applies to any ship constructed or adapted for carrying oil in bulk as cargo.
(4) Where any ship so constructed or adapted is capable of carrying other cargoes besides oil, this section shall apply to any such ship—
(a) while it is carrying oil in bulk as cargo; and
(b) unless it is proved that no residues from the carriage of any such oil remain in the ship, while it is on any voyage following the carriage of any such oil,
but not otherwise.
(5) Where a person incurs a liability under subsection (1) or (2) above he shall also be liable for any damage or cost for which he would be liable under that subsection if the references in it to the territory of Bermuda included the territory of any other Liability Convention country.
(6) Where—
(a) as a result of any occurrence, a liability is incurred under this section by the owner of each of two or more ships, but
(b) the damage or cost for which each of the owners would be liable cannot reasonably be separated from that for which the other or others would be liable,
each of the owners shall be liable, jointly with the other or others, for the whole of the damage or cost for which the owners together would be liable under this section.
(7) For the purposes of this Chapter—
(a) references to a discharge or escape of oil from a ship are references to such a discharge or escape wherever it may occur, and whether it is of oil carried in a cargo tank or of oil carried in a bunker fuel tank;
(b) where more than one discharge or escape results from the same occurrence or from a series of occurrences having the same origin, they shall be treated as one, but any measures taken after the first of them shall be deemed to have been taken after the discharge or escape; and
(c) where a relevant threat of contamination results from a series of occurrences having the same origin, they shall be treated as a single occurrence.
(8) The Law Reform (Liability in Tort) Act 1951 shall apply in relation to any damage or cost for which a person is liable under this section, but which is not due to his fault, as if it were due to his fault.
Revised Laws of Bermuda, 1951 Title 18, Item 57.

154 Liability for oil pollution in case of other ships.
(1) Where, as a result of any occurrence, any oil is discharged or escapes from a ship other than a ship to which section 153 applies, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable—
(a) for any damage caused outside the ship in the territory of Bermuda by contamination resulting from the discharge or escape; and
(b) for the cost of any measures reasonably taken after the discharge or escape for the purpose of preventing or minimising any damage so caused in the territory of Bermuda by contamination resulting from the discharge or escape; and
(c) for any damage so caused in the territory of Bermuda by any measures so taken.
(2) Where, as a result of any occurrence, there arises a grave and imminent threat of damage being caused outside a ship other than a ship to which section 153 applies by the contamination which might result if there were a discharge or escape of oil from the ship, then (except as otherwise provided by this Chapter) the owner of the ship shall be liable—
(a) for the cost of any measures reasonably taken for the purpose of preventing or minimising any such damage in the territory of Bermuda; and
(b) for any damage caused outside the ship in the territory of Bermuda by any measures so taken;
and in the subsequent provisions of this Chapter any such threat is referred to as a relevant threat of contamination.
(3) Where—
(a) as a result of any occurrence, a liability is incurred under this section by the owner of each of two or more ships, but
(b) the damage or cost for which each of the owners would be liable cannot reasonably be separated from that for which the other or others would be liable,
each of the owners shall be liable, jointly with the other or others, for the whole of the damage or cost for which the owners together would be liable under this section.
(4) The Law Reform (Liability in Tort) Act 1951 shall apply in relation to any damage or cost for which a person is liable under this section, but which is not due to his fault, as if it were due to his fault.
(5) In this section “ship” includes a vessel which is not seagoing.

155 Exceptions from liability under sections 153 and 154.
No liability shall be incurred by the owner of a ship under section 153 or 154 by reason of any discharge or escape of oil from the ship, or by reason of any relevant threat of contamination, if he proves that the discharge or escape, or (as the case may be) the threat of contamination—
(a) resulted from an act of war, hostilities, civil war, insurrection or an exceptional, inevitable and irresistible natural phenomenon; or
(b) was due wholly to anything done or omitted to be done by another person, not being a servant or agent of the owner, with intent to do damage; or
(c) was due wholly to the negligence or wrongful act of a government or other authority in exercising its function of maintaining lights or other navigational aids for the maintenance of which it was responsible.

156 Restriction of liability for oil pollution.
(1) Where, as a result of any occurrence—
(a) any oil is discharged or escapes from a ship (whether one to which section 153 or one to which section 154 applies), or
(b) there arises a relevant threat of contamination,
then, whether or not the owner of the ship in question incurs a liability under section 153 or 154—
(i) he shall not be liable otherwise than under that section for any such damage or cost as is mentioned in it, and
(ii) no person to whom this paragraph applies shall be liable for any such damage or cost unless it resulted from anything done or omitted to be done by him either with intent to cause any such damage or cost or recklessly and in the knowledge that any such damage or cost would probably result.
(2) Subsection (1)(ii) above applies to—
(a) any servant or agent of the owner of the ship;
(b) any person not falling within paragraph (a) above but employed or engaged in any capacity on board the ship or to perform any service for the ship;
(c) any charterer of the ship (however described and including a bareboat charterer), and any manager or operator of the ship;
(d) any person performing salvage operations with the consent of the owner of the ship or on the instructions of a competent public authority;
(e) any person taking any such measures as are mentioned in subsection (1)(b) or (2)(a) of section 153 or 154;
(f) any servant or agent of a person falling within paragraph (c), (d) or (e) above.
(3) The liability of the owner of a ship under section 153 or 154 for any impairment of the environment shall be taken to be a liability only in respect of—
(a) any resulting loss of profits, and
(b) the cost of any reasonable measures of reinstatement actually taken or to be taken.

Limitation of liability

157 Limitation of liability under section 153.
(1) Where, as a result of any occurrence, the owner of a ship incurs liability under section 153 by reason of a discharge or escape or by reason of any relevant threat of contamination, then (subject to subsection (3) below)—
(a) he may limit that liability in accordance with the provisions of this Chapter, and
(b) if he does so, his liability (being the aggregate of his liabilities under section 153 resulting from the occurrence) shall not exceed the relevant amount.
(2) In subsection (1) above, “the relevant amount” means—
(a) in relation to a ship not exceeding 5,000 tons, three million special drawing rights;
(b) in relation to a ship exceeding 5,000 tons, three million special drawing rights together with an additional 420 special drawing rights for each ton of its tonnage in excess of 5,000 tons up to a maximum amount of 59.7 million special drawing rights;
but the Secretary of State may by order make such amendments of paragraphs (a) and (b) above as appear to him to be appropriate for the purpose of giving effect to the entry into force of any amendment of the limits of liability laid down in paragraph 1 of Article V of the Liability Convention.
(3) Subsection (1) above shall not apply in a case where it is proved that the discharge or escape, or (as the case may be) the relevant threat of contamination, resulted from anything done or omitted to be done by the owner either with intent to cause any such damage or cost as is mentioned in section 153 or recklessly and in the knowledge that any such damage or cost would probably result.
(4) For the purposes of this section a ship’s tonnage shall be its gross tonnage calculated in such a manner as may be prescribed by an order made by the Secretary of State.
(5) …

158 Limitation actions.
(1) Where the owner of a ship has or is alleged to have incurred a liability under section 153 he may apply to the court for the limitation of that liability to an amount determined in accordance with section 157.
(2) If on such an application the court finds that the applicant has incurred such a liability but has not found that he is not entitled to limit it, the court shall, after determining the limit which would apply to the applicant’s liability if he were entitled to limit it, and directing payment into court of the amount of that limit—
(a) determine the amounts that would, apart from the limit, be due in respect of the liability to the several persons making claims in the proceedings; and
(b) direct the distribution of the amount paid into court (or, as the case may be, so much of it as does not exceed the liability) among those persons in proportion to their claims, subject to the following provisions of this section.
(2A) Where—
(a) a distribution is made under subsection (2)(6) above without the court having found that the applicant is entitled to limit his liability, and
(b) the court subsequently finds that the applicant is not so entitled,
the making of the distribution is not to be regarded as affecting the applicant’s liability in excess of the amount distributed.
(3) A payment into court of the amount of a limit determined in pursuance of this section shall be made in dollars; and
(a) for the purpose of converting such an amount from special drawing rights into dollars one special drawing right shall be treated as equal to such a sum in dollars as the International Monetary Fund have fixed as being the equivalent of one special drawing right for—
(i) the day on which the determination is made; or
(ii) if no sum has been so fixed for that day, the last day before that day for which a sum has been so fixed;
(b) a certificate given by or on behalf of the Minister stating—
(i) that a particular sum in dollars has been so fixed for the day on which the determination was made, or
(ii) that no sum has been so fixed for that day and that a particular sum in dollars has been so fixed for a day which is the last day for which a sum has been so fixed before the day on which the determination was made,
shall be conclusive evidence of those matters for the purposes of this Chapter;
(c) a document purporting to be such a certificate shall, in any proceedings, be received in evidence and, unless the contrary is proved, be deemed to be such a certificate.
(4) No claim shall be admitted in proceedings under this section unless it is made within such time as the court may direct or such further time as the court may allow.
(5) Where any sum has been paid in or towards satisfaction of any claim in respect of the damage or cost to which the liability extends—
(a) by the owner or the persons referred to in section 165 as “the insurer”; or
(b) by a person who has or is alleged to have incurred a liability, otherwise than under section 153, for the damage or cost and who is entitled to limit his liability in connection with the ship by virtue of section 17 or 18 of the Merchant Shipping Act 1979 as extended to Bermuda;
Sections 17 and 18 of the Merchant Shipping Act 1979 were extended to Bermuda by the Merchant Shipping Act 1979 (Bermuda) Order 1980 (S.I.1980/1510).
the person who paid the sum shall, to the extent of that sum, be in the same position with respect to any distribution made in proceedings under this section as the person to whom it was paid would have been.
(6) Where the person who incurred the liability has voluntarily made any reasonable sacrifice or taken any other reasonable measures to prevent or reduce damage to which the liability extends or might have extended he shall be in the same position with respect to any distribution made in proceedings under this section as if he had a claim in respect of the liability equal to the cost of the sacrifice or other measures.
(7) The court may, if it thinks fit, postpone the distribution of such part of the amount to be distributed as it deems appropriate having regard to any claims that may later be established before a court of any country outside Bermuda.
(8) No lien or other right in respect of any ship or other property shall affect the proportions in which any amount is distributed in accordance with subsection (2)(b) above.

159 Restriction on enforcement after establishment of limitation fund.
(1) Where the court has found that a person who has incurred a liability under section 153 is entitled to limit that liability to any amount and he has paid into court a sum not less than that amount—
(a) the court shall order the release of any ship or other property arrested in connection with a claim in respect of that liability or any security given to prevent or obtain release from such an arrest; and
(b) no judgment or decree for any such claim shall be enforced, except so far as it is for costs …;
if the sum paid into court, or such part thereof as corresponds to the claim, will be actually available to the claimant or would have been available to him if the proper steps in the proceedings under section 158 had been taken.

160 Concurrent liabilities of owners and others.
(1) Where, as a result of any discharge or escape of oil from a ship or as a result of any relevant threat of contamination, the owner of the ship incurs a liability under section 153 and any other person incurs a liability, otherwise than under that section, for any such damage or cost as is mentioned in subsection (1) or (2) of that section then, if—
(a) the owner has been found, in proceedings under section 158 to be entitled to limit his liability to any amount and has paid into court a sum not less than that amount; and
(b) the other person is entitled to limit his liability in connection with the ship by virtue of section 17 or 18 of the Merchant Shipping Act 1979 as extended to Bermuda;
no proceedings shall be taken against the other person in respect of his liability, and if any such proceedings were commenced before the owner paid the sum into court, no further steps shall be taken in the proceedings except in relation to costs.

161 Establishment of limitation fund outside Bermuda.
Where the events resulting in the liability of any person under section 153 also resulted in a corresponding liability under the law of another Liability Convention country sections 159 and 160 shall apply as if the references to sections 153 and 158 included references to the corresponding provisions of that law and the references to sums paid into court included references to any sums secured under those provisions in respect of the liability.

162 Extinguishment of claims.
No action to enforce a claim in respect of a liability incurred under section 153 or 154 shall be entertained by any court in Bermuda unless the action is commenced not later than three years after the claim arose nor later than six years after the occurrence or first of the occurrences resulting in the discharge or escape, or (as the case may be) in the relevant threat of contamination, by reason of which the liability was incurred.

Compulsory insurance

163 Compulsory insurance against liability for pollution.
(1) Subject to the provisions of this Chapter relating to Government ships, subsection (2) below shall apply to any ship carrying in bulk a cargo of more than 2,000 tons of oil of a description specified in regulations made by the Minister.
(2) The ship shall not enter or leave a port in Bermuda or arrive at or leave a terminal in the territorial sea of Bermuda nor, if the ship is registered in Bermuda, a port in any other country or a terminal in the territorial sea of any other country, unless there is in force a certificate complying with the provisions of subsection (3) below and showing that there is in force in respect of the ship a contract of insurance or other security satisfying the requirements of Article VII of the Liability Convention (cover for owner’s liability).
(3) The certificate must be—
(a) if the ship is registered in Bermuda, a certificate issued by the Minister;
(b) if the ship is registered in a Liability Convention country other than Bermuda, a certificate issued by or under the authority of the government of the other Liability Convention country; and
(c) if the ship is registered in a country which is not a Liability Convention country, a certificate issued by the Minister or by or under the authority of the government of any Liability Convention country other than Bermuda.
(4) Any certificate required by this section to be in force in respect of a ship shall be carried in the ship and shall, on demand, be produced by the master to any officer of customs, the Director of Marine and Ports Services or any officer of the Department of Marine and Ports Services authorised by him.
(5) If a ship enters or leaves, or attempts to enter or leave, a port or arrives at or leaves, or attempts to arrive at or leave, a terminal in contravention of subsection (2) above, the master or owner shall be liable on conviction on indictment to a fine, or on summary conviction to a fine not exceeding $75,000.
(6) If a ship fails to carry, or the master of a ship fails to produce, a certificate as required by subsection (4) above, the master shall be liable on summary conviction to a fine not exceeding $5,000.
(7) If a ship attempts to leave a port in Bermuda in contravention of this section the ship may be detained.

164 Issue of certificate by the Minister
(1) Subject to subsection (2) below, if the Minister is satisfied, on the application for such a certificate as is mentioned in section 163 in respect of a ship registered in Bermuda or in any country which is not a Liability Convention country, that there will be in force in respect of the ship, throughout the period for which the certificate is to be issued, a contract of insurance or other security satisfying the requirements of Article VII of the Liability Convention, the Minister shall issue such a certificate to the owner.
(2) If the Minister is of opinion that there is a doubt whether the person providing the insurance or other security will be able to meet his obligations thereunder, or whether the insurance or other security will cover the owner’s liability under section 153 in all circumstances, he may refuse the certificate.
(3) The Minister may make regulations providing for the cancellation and delivery up of a certificate under this section in such circumstances as may be prescribed by the regulations.
(4) If a person required by regulations under subsection (3) above to deliver up a certificate fails to do so he shall be liable on summary conviction to a fine not exceeding $5,000.
(5) The Minister shall send a copy of any certificate issued by him under this section in respect of a ship registered in Bermuda to the Registrar of Shipping and the Registrar shall make the copy available for public inspection.

165 Rights of third parties against insurers.
(1) Where it is alleged that the owner of a ship has incurred a liability under section 153 as a result of any discharge or escape of oil occurring, or as a result of any relevant threat of contamination arising, while there was in force a contract of insurance or other security to which such a certificate as is mentioned in section 163 related, proceedings to enforce a claim in respect of the liability may be brought against the person who provided the insurance or other security (in the following provisions of this section referred to as “the insurer”).
(2) In any proceedings brought against the insurer by virtue of this section it shall be a defence (in addition to any defence affecting the owner’s liability), to prove that the discharge or escape, or (as the case may be) the threat of contamination, was due to the wilful misconduct of the owner himself.
(3) The insurer may limit his liability in respect of claims made against him by virtue of this section in like manner and to the same extent as the owner may limit his liability but the insurer may do so whether or not the discharge or escape, or (as the case may be), the threat of contamination, resulted from anything done or omitted to be done by the owner as mentioned in section 157(3).
(4) Where the owner and the insurer each apply to the court for the limitation of his liability any sum paid into court in pursuance of either application shall be treated as paid also in pursuance of the other.
(5) The Third Parties (Rights Against Insurers) Act 1963 shall not apply in relation to any contract of insurance to which such a certificate as is mentioned in section 163 relates.
Revised Laws of Bermuda (1971) Title 8, Item 69.

Supplementary

166 Jurisdiction of Bermuda courts and registration of foreign judgements.
(1) Paragraph (d) of section 1(1) of the Administration of Justice Act 1956 as applied in Bermuda by the Admiralty Jurisdiction (Bermuda) Order 1974 shall be construed as extending to any claim in respect of a liability incurred under this Chapter.
S.I.1974/2148: by virtue of section 17(2) of the Interpretation Act 1978 (1978 c. 30)S.I.1974/2148 has effect as if made under section 150(2) and (3) of the Supreme Court Act 1981 (1981 c. 54).
(2) Where—
(a) any oil is discharged or escapes from a ship but does not result in any damage caused by contamination in the territory of Bermuda and no measures are reasonably taken to prevent or minimise such damage in that territory, or
(b) any relevant threat of contamination arises but no measures are reasonably taken to prevent or minimise such damage in the territory of Bermuda,
no court in Bermuda shall entertain any action (whether in rem or in personam) to enforce a claim arising from any relevant damage or cost—
(i) against the owner of the ship, or
(ii) against any person to whom section 156(1)(ii) applies, unless any such damage or cost resulted from anything done or omitted to be done as mentioned in that provision.
(3) In subsection (2) above, “relevant damage or cost” means—
(a) in relation to any such discharge or escape as is mentioned in paragraph (a) of that subsection, any damage caused in the territory of another Liability Convention country by contamination resulting from the discharge or escape, or any cost incurred in taking measures to prevent or minimise such damage in the territory of another Liability Convention country;
(b) in relation to any such threat of contamination as is mentioned in paragraph (b) of that subsection, any cost incurred in taking measures to prevent or minimise such damage in the territory of another Liability Convention country; or
(c) any damage caused by any measures taken as mentioned in paragraph (a) or (b) above;
and section 156(2)(e) shall have effect for the purposes of subsection (2)(ii) above as if it referred to any person taking any such measures as are mentioned in paragraph (a) or (b) above.
(4) The Judgments (Reciprocal Enforcement) Act 1958 shall apply, whether or not it would so apply apart from this section, to any judgment given by a court in a Liability Convention country to enforce a claim in respect of a liability incurred under any provision corresponding to section 153; and in its application to such a judgment that Act shall have effect with the omission of subsections (2) and (3) of section 4.
Laws of Bermuda, No 103 of 1958.

167 Government ships.
(1) Nothing in the preceding provisions of this Chapter applies in relation to any warship or any ship for the time being used by the government of any State for other than commercial purposes.
(2) In relation to a ship owned by a State and for the time being used for commercial purposes it shall be a sufficient compliance with section 163(2) if there is in force a certificate issued by the government of that State and showing that the ship is owned by that State and that any liability for pollution damage as defined in Article I of the Liability Convention will be met up to the limit prescribed by Article V of the Convention.
(3) Every Liability Convention State shall, for the purposes of any proceedings brought in a court in Bermuda to enforce a claim in respect of a liability incurred under section 153, be deemed to have submitted to the jurisdiction of that court, and accordingly rules of court may provide for the manner in which such proceedings are to be commenced and carried on; but nothing in this subsection shall authorise the issue of execution against the property of any State.

168 Limitation of liability under section 154.
For the purposes of section 17 of the Merchant Shipping Act 1979 as extended to Bermuda any liability incurred under section 154 shall be deemed to be a liability to damages in respect of such damage to property as is mentioned in paragraph 1(a) of Article 2 of the Convention on Limitation of Liability for Maritime Claims 1976.

169 Saving for recourse actions.
Nothing in this Chapter shall prejudice any claim, or the enforcement of any claim, a person incurring any liability under this Chapter may have against another person in respect of that liability.

170 Interpretation.
(1) In this Chapter—
“the court” means the Supreme Court of Bermuda;
“damage” includes loss;
“dollars” means Bermuda dollars;
“the Minister” means the Minister for the time being responsible for Marine and Ports Services;
“oil” means persistent hydrocarbon mineral oil;
“owner” means the person or persons registered as the owner of the ship or, in the absence of registration, the person or persons owning the ship, except that, in relation to a ship owned by a State which is operated by a person registered as the ship’s operator, it means the person registered as its operator;
“relevant threat of contamination” shall be construed in accordance with section 153(2) or 154(2); and
“ship” (subject to section 154(5)) means any sea-going vessel or sea-borne craft of any type whatsoever.
(2) In relation to any damage or cost resulting from the discharge or escape of any oil from a ship, or from a relevant threat of contamination, references in this Chapter to the owner of the ship are references to the owner at the time of the occurrence or first of the occurrences resulting in the discharge or escape or (as the case may be) in the threat of contamination.
(3) …
(4) References in this Chapter to the territory of any country include the territorial sea of that country and—
(a) in the case of Bermuda, any area within the exclusive economic zone proclaimed on 10th June 1996; and
Government Notice No. 407 dated 21st June 1996.
(b) in the case of any other Liability Convention country, the exclusive economic zone of that country established in accordance with international law, or, if such a zone has not been established, such area adjacent to the territorial sea of that country and extending not more than 200 nautical miles from the baselines from which the breadth of that sea is measured as may have been determined by that State in question in accordance with international law.