Jurisdiction(s):
United Kingdom

MSC Flaminia: UK Supreme Court confirms charterers can limit liability to owners under 1976 Convention; Article 2.1 clarified—cargo costs limitable; vessel damage and certain mitigation/removal costs not

Published on: 10 April 2025

Published by a LexisNexis Commercial expert

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Article summary

MSC Mediterranean Shipping Company SA v Conti 11 Container Schiffahrts-GmbH & Co KG MS ‘MSC Flaminia’ [2025] UKSC 14

Background

The appeal arose from an explosion on the MSC Flaminia, a container vessel owned by Conti and operated by MSC under a time charter. The incident occurred in 2012 mid-Atlantic, causing fatalities, environmental contamination, and extensive damage to the ship. Conti commenced arbitration against MSC and obtained an award exceeding US$200 million. MSC subsequently sought to cap its liability under the 1976 Convention. The Supreme Court was asked to resolve two issues:

whether the 1976 Convention allows a charterer to limit liability to the owner in respect of a claim for loss originally suffered by the owner
the correct construction of Articles 2.1(a), (e) and (f) of the 1976 Convention—namely, whether Conti’s claims fell within the categories of limitable claims under those provisions

Judgment

The Supreme Court unanimously allowed the appeal on issue 1, holding that, in principle, the 1976 Convention does permit a charterer to limit its liability to an owner, even where the loss was initially sustained by the owner...

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