Full cost of severed cable not recoverable under Tongan law [1]
Friday, March 27, 2020 - 17:25. Updated on Friday, March 27, 2020 - 17:26.
Tonga Cable Ltd. cannot pursue its full claim of over US$1.2 million for the damage that it alleges the oil tanker Duzgit Venture caused to its two undersea communications cables in January 2019, because the piece of legislation to support its claim has never been Gazetted, or come into law in Tonga.
The point of law was clarified by Lord Chief Justice Michael Whitten QC on 24 March.
He stated that the claim of Tonga Cable Ltd. for damages is stayed until a ruling is made on the liability of the ship owner DS Venture Ltd.
Severed cables
The Chief Justice summarized that on 20 January 2019, as the Duzgit Venture, an oil and gas tanker vessel of 2,166 tons, approached the Port of Nuku'alofa, the starboard anchor and chain were prematurely released from their housing. As a result, two undersea communications cables owned by Tonga Cable Ltd. were damaged, which interrupted Tonga's Telecommunications and internet capabilities for a number of weeks.
Limited liability claim
The Supreme Court case between DS Venture Ltd. v Tonga Cable Ltd. filed on 20 December 2019, is still proceeding. The owner of the vessel is claiming that its liability for the incident, if any, is limited to s.2 of the Shipping (Limitation of Liability) Act 1980.
“If the Court grants the ship owner’s claim for a limitation of liability decree, directions will be given for advertising of notification to any other potential claimants to bring forward their claims,” the Chief Justice stated. No other claims are yet known.
“The court will then administer and distribute the limitation fund in respect of all proved claims on a rateable or pro rata basis. Until then, any claims, including that of Tonga Cable Limited, are stayed,” he concluded.
Not Gazetted
The Chief Justice explained the reason for his clarification.
During the course of the proceedings in the case of DS Venture Ltd. v Tonga Cable Ltd., an issue arose as to whether a different convention governing any limitation of liability applies.
One of the International Maritime conventions which have been approved and have the force of law in Tonga is the Convention of Limitation of Limitation of Liability for Maritime Claims 1976 and Protocol of 1996 as amended from time to time (LLMC).
The parties agreed that if the ship owner’s liability here is limited, then under the LLMC, the maximum liability for all claims will be TOP$3,348,496.
However, although the LLMC was added to the Shipping Act in 2001, it could not become law until the Minister gives notice to that effect in the Gazette.
In a ruling on 21 February 2020 the Lord Chief Justice noted that both parties to the proceeding agreed that there had been no Gazette notices which give effect to the LLMC, nor any order of Cabinet.
“As a result, if the court grants the ship owner’s claim for a decree of limitation of liability, then any maximum liability will be calculated according to the [1980] SLLA and not the LLMC,” he stated.
The Attorney General agreed.
On 19 March 2020, the Attorney General filed a memorandum in the proceeding on which she concurred with the parties to the proceeding that because there is no record since 2001 of the LLMC being Gazetted, the LLMC is not a part of Tongan law and that therefore the issue of any limitation of liability is governed by the Shipping (Limitation of Liability) Act 1980 SLLA.
Under the SLLA any limitation of liability is to be calculated pursuant to a Schedule formula based on a number of factors, including the ship’s tonnage.
“Here, if the limitation of liability applies, the parties agreed that the maximum liability would be TOP$859,403.82.
“The SLLA also provide to the effect that that sum represents the total amount payable in respect of all claims arising from the incident.”
The ship owner's insurer, The Britannia Steam Ship Insurance Association Ltd. has established a limitation fund, undertaking to pay the aggregate of all claims arising from the incident, “up to the limit of liability which will now be calculated in accordance with the SLLA,” the Chief Justice stated.