A SHIPOWNER’S LIABILITY
There might be no confusion regarding the distinction between ship-owners and the multiple parties involved in the international carriage of goods for those who are intimately connected with the dynamic of the transport by sea. Although day-to-day work might be of help in order to clarify the scope of the activities each one engages in, the concept and distinction each legal system gives to shipowners and charterers, specially, might not be so simple. Shipping is not a suitable business for the faint of heart.
Historically the law provides for a sometimes unusual limit for a company’s exposure in case of liability based on the scope of their activity. Ownership for example is a purely legal concept and the core of our discussion, since it distinguishes the roles in the ship’s operation.
In Brazil the owner would be the one whose name a ship is registered to before the maritime authority when legally required. The registration usually is made on the area which the owner resides or near the Port that the ship is currently operating. The carriage of goods by sea and the obligation to provide a seaworthy ship might be an endeavor the owner undertakes but it is less common then the owner signing a charter agreement, which is a legally binding and internationally recognized document.
Ownership in Brazilian Law means a more static view of the right over the ship and does not automatically include the business activity of navigation.The act of preparing the ship, by providing all the means to undertake a sea expedition, its commercial exploitation and to put it in a seaworthiness state might be the activity of another party altogether.
Well, when talking about a shipowner's right to limit their liability, the sole purpose is to reduce the shipowner’s personal exposure (The Origins and Development of Limitation of Shipowner’s Liability, JJ Donavan) and other types of carrier might also enjoy such a privilege. However, in Brazil, depending on the circumstances of the case, there might not even exist cause for liability if the shipowner did not (directly) cause the damage.
Meanwhile, a charterparty is a written charter agreement, i.e., a contract of carriage whereby a shipowner or a disponent owner of a vessel agrees to place their ship, or part of it, at the disposal of a marchant/cargo owner (or a person who acts on behalf of a merchant) known as charterer, for the carriage of goods by sea from one port to another port on being paid freight, or to let their ship for a specified period, their remuneration being known as hire.
Nevertheless, the role of the shipowner is frequently determined in a more dynamic view except when the law provides for a different perspective. In other words, there might be a clear distinction regarding the rights and obligations of the shipowner in Brazilian Law depending on what exactly was their involvement in causing the damage.
Liability in the Brazilian courts might just be one of the most important discussions we need to have. However, regardless of the cause being lack of knowledge about the dynamics of shipping or not in the Brazilian courts, it is “easier” to demonstrate to a judge that definition mentioned earlier than to break down the specifics of a charter party or what the obligations the shipowner”s activity actually entail.
On another note, the concept of limitation of liability might differ between countries, even if those regimes were based on the same convention, because of differences of interpretation or procedure. Many aspects of the Brazilian Law and the Hague-Visby Rules, for example, simply do not combine. It clearly represents a risk for those the ship comes into contact with or any other party involved in a shipping incident, with them taking on damages they would be entitled to recover if not for the jurisdictional issues involved.
