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Hong Kong – Shipping & International Trade Law: Collisions.

10 February, 2015

 
 
1. Is the 1910 Collision Convention in force?
 
The 1910 Collision Convention is in force in Hong Kong, and it is enacted as domestic legislation via the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Cap. 508, the ‘CDLSO’).
 
One must be mindful of the enactment history of CDLSO, however, when applying or referring to the provisions of the 1910 Collision Convention in Hong Kong proceedings.
The Hong Kong CDLSO was enacted in June 1997, in the lead-up to the handover of sovereignty to the PRC. Before June 1997, the UK Maritime Convention Act 1911 extended to Hong Kong. The CDLSO localised the part of the UK Maritime Convention Act 1911 which gave effect to the 1910 Collision Convention.
 
The articles of the 1910 Collision Convention were not copied verbatim into the Maritime Convention Act 1911, and therefore Hong Kong’s CDLSO is not completely in line with the articles of the 1910 Collision Convention either.
 
The plaintiff in Chan Kwai Ha v Wong Chick Bun [2008] 2 HKLRD 259 commenced collision proceedings five years after her barge sank, allegedly due to the defendant’s tugging service. The plaintiff was time-barred pursuant to the two year time bar as enacted in the CDLSO. It was suggested by the plaintiff that the court should construe the CDLSO in light of the 1910 Collision Convention, in such a manner so as to allow her to overcome the time bar issue. This approach was rejected by the Court of Appeal:
 
‘The 1910 Collision Convention is only part of Hong Kong law to the extent that it is enacted by statute. Even where the court construes an ordinance in light of a convention, it must be the text of the ordinance that ultimately governs, not that of the convention. This is because the Legislature may not have enacted a convention in its entirety. A statute may modify the terms of a convention. However wide art. 10 may be, the court can only enforce that part of it which has been brought into effect by the Ordinance.’
 
2. To what extent are the Collision Regulations used to determine liability?
 
The International Regulations for Preventing Collisions at Sea 1972 as amended by Resolution A464 (XII) are enacted in Hong Kong via the Merchant Shipping (Safety) (Signals of Distress and Prevention of Collisions) Regulations (Cap. 369N).
 
The extent to which the Collision Regulations are used to determine liability in Hong Kong is neatly encapsulated in Re the Magway (Unreported, 1 August 2002, Court of First Instance, Waung J, Admiralty Action Nos. 14 & 246 of 1999, [2002] HKEC 1023, at paragraph [6]):
 
‘It is to be noted that in collision cases, what is always important is the percentage of blame and cases would often be decided where the court would hold one partyto be 60%, 70%, 80% or 90% to blame. Each percentage involves very often a great deal of money. So, the correct assessment of the various manoeuvres of the ship which results in the final percentage of blame is vitally important. That assessment of the proper manoeuvre or good seamanship involves knowledge not only of the collision regulations but very often of what could be said to be good seamanship…’.
 
3. On what grounds will jurisdiction be founded – what essentially is the geographical reach?
 
Jurisdiction of the Hong Kong courts is founded by service.
 
For in personam claims, jurisdiction is founded by personal service of the writ on the defendant. This is not likely to be problematic if the in personam defendant is based in Hong Kong. Where the claim is for damage, loss of life or personal injury arising out of a collision between ships or the carrying out of or omission to carry out a manoeuvre, or non-compliance with the collision regulations, and the in personam defendant is located overseas, leave of the Hong Kong Court to serve out is required. Furthermore, service out is only permissible in such cases if one of the following conditions applies (Order 75, rule 4 of the Rules of the High Court (‘RHC’); and sections 12C(1) – (2) of the High Court Ordinance, Cap. 4):
 
  • the defendant has his/her habitual residence or a place of business in Hong Kong;
  • the cause of action arose within the territorial waters of Hong Kong;
  • an action arising out of the same incident or series of incidents is proceedings in the Hong Kong court or has been heard and determined in the Hong Kong Court; or
  • the defendant has submitted or agreed to submit to the jurisdiction of the Hong Kong Court.
 
As for in rem claims, jurisdiction is founded by service on the ship, which is effected by affixing the warrant of arrest or a sealed writ on any mast or on the outside of any suitable part of the ship’s superstructure (Order 75, rule 11 of the RHC). In theory, the in rem jurisdiction of Hong Kong courts extends to all ships within Hong Kong’s territorial waters. In practice, though, the Bailiff of the Hong Kong High Court will only serve in rem proceedings on vessels that call into a Hong Kong port, including anchorages within port limits.
 
As a matter of procedure, time is protected by the filing of a writ at the High Court. The High Court of Hong Kong has exclusive jurisdiction for admiralty claims.
 
As between competing vessel interests involved in a collision, preliminary acts are then filed at court (Order 75, rule 18 RHC). Preliminary acts are designed to obtain statements of facts from the parties, and these statements are to be made ‘blind’ when matters are still fresh in the parties’ minds. Statements of fact in a Preliminary Act amount to formal admissions and cannot generally be departed from without special leave of the court.
The plaintiff’s preliminary act is, subject to agreement between the parties as to time extension(s), to be filed within two months of the service of the relevant Writ (Order 75, rule 18(2) of the RHC).
 
Thereafter the defendant(s) also file their preliminary act(s). Part two of each preliminary act serves as the equivalent of a formal pleading in a non-admiralty context (ie, as statement of claim, and statement of defence, respectively).
 
Preliminary acts are filed at the High Court Registry in sealed envelopes (Order 75, rule 18(5) of the RHC) and cannot be viewed by other interested parties unless the consent of the solicitor or party filing the preliminary act is given, or by special order of the court.
If liability issues as between vessels are not resolved by way of negotiation, then the respective preliminary acts would be opened and circulated to the parties (at latest) at such time as there is a contested argument before the Admiralty Judge as to liability apportionment. Such contested hearings are extremely rare in Hong Kong as inter-vessel liability apportionment is normally negotiated and agreed.
 
4. Can a party claim for pure economic loss in the event of a collision?
 
Collision claims are invariably in tort, rather than contract. Similar to the position under English law, pure economic loss can only be recovered in tort if such loss arose as a consequence of physical damage to, or interference with, the property of the claimant. Thus in Owners and/or Demise Charterers of ‘OOCL China’ v Owners and/ or Demise Charterers of ‘Darya Bhakti’ (Unreported, 14 August 2014, Court of Appeal, CACV 70/2013, [2014] HKEC 1373, at paragraph [15]), the time charterer’s claim for pure economic loss following a collision was disallowed as the time charterer did not have any proprietary interest in the vessel.
 
This material was first published by Sweet & Maxwell in 2014 in “Shipping and International Trade Law – International Comparisons” (and is reproduced here by agreement with the Publishers)

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Damien Laracy, Partner, Laracy & Co in association with Hill Dickinson Hong Kong LLP

damienlaracy@laracyco.com

 

Mike Mallin, Partner, Hill Dickinson Hong Kong LLP in association with Laracy & Co

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Michael Ng, Solicitor, Laracy & Co in association with Hill Dickinson Hong Kong LLP

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