The right to limit is virtually unbreakable, a principle reaffirmed by the Admiralty Court’s judgment of May 2026 in MS Solong Schiffahrtsgesellschaft mbH & Co KG and Another v Samskip Multimodal BV [2026] EWHC 1211 (Admlty).
Background
In March 2025, the m.v. Solong (“Solong”) collided with the m.t. Stena Immaculate (“Stena Immaculate”) which was sitting at anchor with cargo of over 220,000 barrels of jet fuel. The fireball which ensued on collision led to the loss of life of a crew member onboard the Solong, and the Master was convicted earlier this year of gross negligence manslaughter.
Following the collision, the Solong’s owners and demise charterers advanced a claim to limit their liability under the Convention on Limitation of Liability for Maritime Claims 1976 (the “LLMC 1976”). The claim to limit was disputed by the Stena Immaculate’s owners and demise charterers (the “Stena Interests”), who sought damages for the damage to their vessel (a constructive total loss) and compensation for cargo and crew claims which they had settled. The Solong’s owners brought an application to strike out the defence and this judgment is the decision on that strike-out application.
The Issues
The issues as to the ability of the Solong’s owners to limit liability turned upon Article 4 of the LLMC 1976, which provides that:
“[Owners] shall not be entitled to limit [their] liability if it is proved that the loss resulted from [their] personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.”
The three main points considered by Andrew Baker J in this case were:
- the “virtually unbreakable nature” of the right to limit;
- the interpretation of the wording “intent to cause such loss” in Article 4; and
- whether the Stena Interests had an alternative basis for defending against the Solong’s owners’ claim to limit their liability.
Nature of the right to limit
The starting point was consideration of the extent of the right to limit liability in principle. Counsel for both parties agreed that in principle the right to limit under the LLMC 1976 is “virtually unbreakable”. In analysing a range of commentary and case law, Andrew Baker J highlighted that this view is backed up by an IMO Resolution (A.1164(32)), adopted on 15 December 2021, which must be considered when interpreting Article 4. The Resolution provides:
“that the test for breaking the right to limit liability as contained in article 4 of the 1976 LLMC Convention is to be interpreted:
(a) as virtually unbreakable in nature i.e. breakable only in very limited circumstances and based on the principle of unbreakability;
(b) to mean a level of culpability analogous to wilful misconduct, namely:
(i) a level higher than the concept of gross negligence, since that concept was rejected by the 1976 International Conference on Limitation of Liability for Maritime Claims;
(ii) a level that would deprive the shipowner of the right to be indemnified under their marine insurance policy; and
(iii) a level that provides that the loss of entitlement to limit liability should begin where the level of culpability is such that insurability ends;
(c) that the term “recklessly” is to be accompanied by “knowledge” that such pollution damage, damage or loss would probably result, and that the two terms establish a level of culpability that must be met in their combined totality and should not be considered in isolation of each other; and
(d) that the conduct of parties other than the shipowner, for example the master, crew or servants of the shipowner, is irrelevant and should not be taken into account when seeking to establish whether the test has been met.”
Interpretation of “intent to cause such loss” under Article 4
“Article 4 provides that liability cannot be limited if ‘the loss resulted from [their] personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.'” How widely the wording in bold was interpreted was important for arguing whether the Solong’s owners could limit.
The position of the Solong’s owners was that “intent to cause such loss” should be applied narrowly. On their interpretation, this would mean that liability could be limited, unless the Solong’s owners knew and/or intended that their acts or omissions would result in the Solong’s collision with the Stena Immaculate specifically – as opposed to a vessel in general.
By contrast, the Stena Interests favoured a broader interpretation. This would mean that the right to limit could be denied and their defence could proceed, if the “intent to cause such loss” applied to “loss” more generally to cover loss of or damage to any vessel, rather than solely the Stena Immaculate.
When weighing up these two interpretations, Andrew Baker J closely considered the intention behind Article 4 of the LLMC 1976. He identified the purpose that Article 4 had in mind was to require a level of intent analogous to wilful misconduct, which would negate a policyholder’s ability to rely on insurance. Andrew Baker J’s view was that the narrower interpretation of “intent to cause such loss” argued by the Solong’s owners would create illogical outcomes between similar scenarios when deciding whether the right to limit applied. He decided that the Stena Interests’ wider interpretation was the correct and ordinary meaning in light of the purpose he identified.
Consequently, the Solong owners’ application to strike out the Stena Interests’ limitation defence on the ground that there was no knowledge of the Solong colliding with the Stena Immaculate failed.
The “directing minds” argument
Having decided on the point discussed above, Andrew Baker J then turned to the Stena Interests’ defence.
The Stena Interests’ pleaded defence to the Solong owners’ ability to limit liability hinged on the following points:
(a) the Solong was unseaworthy with Capt Motin in command because of his onboard practices and/or he was not a competent master;
(b) this unseaworthiness was known to a person or persons who were the directing mind of the Solong’s owners;
(c) the person or persons in question failed to ensure or take steps to ensure the Solong was seaworthy;
(d) it would have been obvious that this failure would likely result in the Solong colliding with another vessel; and therefore
(e) the controlling minds were reckless as to and/or aware of the risk of collision.
The Stena Interests sought to assert that the Solong’s Designated Person Ashore (“DPA”) was a directing mind of the Solong’s owners solely by virtue of his being the DPA. This was rejected by Andrew Baker J by reference to the ISM Code and IMO guidelines. He instead identified that the CEO and CCO of the majority shareholder of the Solong’s owners would qualify as directing minds for the owners. The Stena Interests’ defence required that the directing mind knew of the practices onboard the Solong; appreciated that a collision would be the result; and did nothing about them. Andrew Baker J found no basis for any of those elements being fulfilled. He therefore decided that the Stena Interests’ limitation defence should be struck out.
Key Takeaways
The judgment reinforces the following points:
- the right to limit liability under the LLMC 1976 is virtually unbreakable;
- when considering the “intent to cause such loss” under Article 4, this wording is to be interpreted purposively, tying intent to a level of wilful misconduct by owners which prevents reliance on insurance; and
- when establishing a defence to limitation, a defence based on the “directing mind” argument requires awareness of the acts or omissions in question and recklessness as to or awareness of the relevant risk of loss.
