Merchant Shipping Act 1995

Indemnification where damage is caused by ship registered in Fund Convention country

176A (1) Where a liability is incurred under section 153 in respect of a ship registered in a Fund Convention country the Fund shall indemnify the owner and his guarantor for that portion of the aggregate amount of the liability which—

(a) is in excess of an amount equivalent to 100 special drawing rights for each ton of the ship’s tonnage or of an amount of 8,333,000 special drawing rights, whichever is the less, and

(b) is not in excess of an amount equivalent to 133 special drawing rights for each ton of the said tonnage or an amount of 14 million special drawing rights, whichever is the less.

(2) Where proceedings under the Liability Convention for compensation for pollution damage have been brought in a country which is not a Fund Convention country (but is a country in respect of which the Liability Convention is in force), and either—

(a) the incident has caused pollution damage in the territory of the United Kingdom (as well as in the territory of that other country); or

(b) the headquarters of the Fund is for the time being in the United Kingdom,

subsection (1) above shall apply with the omission of the words “under section 153”.

(3) The Fund shall not incur an obligation under this section where the pollution damage resulted from the wilful misconduct of the owner.

(4) In proceedings to enforce the Fund’s obligation under this section the court may exonerate the Fund wholly or partly if it is proved that, as a result of the actual fault or privity of the owner—

(a) the ship did not comply with such requirements as the Secretary of State may by order prescribe for the purposes of this section, and

(b) the occurrence or damage was caused wholly or partly by that non-compliance.

(5) The requirements referred to in subsection (4) above are such requirements as appear to the Secretary of State appropriate to implement the provisions of—

(a) Article 5(3) of the Fund Convention (marine safety conventions), and

(b) Article 5(4) of the Fund Convention (which enables the Assembly of the Fund to substitute new conventions).

(6) An order made under subsection (4) above may contain such transitional and other supplemental provisions as appear to the Secretary of State to be expedient.

(7) Expenses reasonably incurred, and sacrifices reasonably made, by the owner voluntarily to prevent or minimise the pollution damage shall be treated as included in the owner’s liability for the purposes of this section.

(8) For the purpose of converting into sterling the amount in special drawing rights adjudged to be payable by the Fund by way of indemnity in such proceedings as are mentioned in subsection (4) above, subsections (4) to (6) of section 176 shall have effect—

(a) if the liability in question has been limited in pursuance of section 158, as if—

(i) for the reference in the said subsection (4) to the amount there mentioned there were substituted a reference to the amount adjudged as aforesaid, and

(ii) for any reference to the day on which the judgment is or was given there were substituted a reference to the day on which the determination of the limit was made in pursuance of the said section 158; and

(b) if the liability in question has not been so limited, with the modification made by paragraph (a)(i) of this subsection and as if for any reference to the day on which the judgment is or was given there were substituted a reference to the day on which the said amount was so adjudged.