Beware Collision Time Bars: the "SB Seaguard" Case

Most maritime countries in the world apply a two year time bar to collision claims (by virtue of some form of ratification to the Brussels Collision Conventions 1910). In other words, where a vessel collides with another, and causes damage, the Claimant must issue proceedings before the local courts within two years. If they fail to do so, they lose their right of claim completely. The time limit is relatively short, compared to the six years general contract and tort time limit in place under English law, and that of many other states. A recent case has shed further light on the pitfalls for Claimants in missing the time limit.

In the English High Court case: CDE S.A. v Sure Wind Marine Limited (SB SEAGUARD c/w ODYSSÉE), 2015, handed down in April 2015, the Claimants' catamaran yacht was at berth in Ramsgate, UK, when she was struck and damaged by an offshore tug, coming into the harbour to berth. The accident appeared to be entirely the fault of the offshore vessel, whose Master had lost control of the ship on entering the harbour.

The Claimants indicated that they would make a claim of hundreds of thousands of Euros, for repairs, but failed to take action until after the two year time bar had elapsed. When they did present their claim, the defendant's P&I Club merely responded noting that their claim was now time barred under English Law. The Claimants appointed lawyers and took their claim all the way to the High Court, making an application for the course to exercise its discretion and extend the time bar. The High Court did not agree, and dismissed the application and the case.

The judgment confirms some solid principles in respect of collision time bars. Although the court has a discretion to extend the time limit, it may only do so where there is a 'good reason'. The following arguments will not be considered a good reason; carelessness, the defendant has a poor defence, negotiations are continuing, the defendant was unaware of the time limit.

Two important reminders arise from the case, in respect of collision claims.

1. Where you have a collision claim which may not be settled within the two year period you must ensure that you have either a) an express extension or waiver of the time limit, or b) a clear admission of full liability. In the latter case the court will consider that the parties had agreed to settle the claim, subject merely to a discussion on quantum. In other words, the time bar is likely to be considered to be waived.

2. If, for any reason, the time bar is mistakenly missed, once this fact is discovered, action must be taken immediately. Specifically, the claim should be filed at court, and an application for a discretionary extension of time should be made.

ARTICLE: Common Suit Time Limits ("Time Bars")

Below is a "cheat sheet" of the most common time limits to bring a claim in shipping law (based on English law). Generally it is necessary to issue legal proceedings before the relevant time limit expires (or appoint an arbitrator where that is allowed), and not doing so typically extinguishes both the cause of action and the claim itself. In other words not only can;t you bring the claim to court but you lose the right to the remedy at all so you cannot even use it as a counterclaim or set off in a claim made against you.


CARGO CLAIMS
HAGUE RULES - 1 YEAR
HAGUE VISBY RULES - 1 YEAR
HAMBURG RULES - 2 YEARS
INLAND TRANSIT RULES - 1 YEAR


COLLISION
GENERALLY - 2 YEARS


FFO 
GENERALLY - 6 YEARS (BASIC TORT / CONTRACT LIMIT)


PERSONAL INJURY
GENERALLY - 3 YEARS
OF PASSENGER CARRIED UNDER ATHENS CONVENTION - 2 YEARS


POLLUTION
GENERALLY - 3 YEARS

OTHER CONTRACT / TORT
GENERALLY - 6 YEARS

GUIDE: Collision Claims

Collision claims, also known as RDC claims*, involve incidents where two ships have made contact, or in layman's terms when two ships have hit each other. 


Liability
Where a collision occurs which is 100% the fault of one vessel, that vessel shall bear its own losses and compensate the other for its losses as a result of the collision. However, because of their very nature collisions almost always involve a degree of fault by each party involved. The general rule is therefore that the total damage is calculated and the % liability of each vessel for causing the collision is calculated and each vessel's owners pay their fair percentage of the total damage.  


Time Limit for Claims
Collision claims are, in most jurisdictions, subject to a two-year time limit, which runs from the date on which the collision occurs. This limit comes from the 1910 Collision Convention, which most countries have ratified.**


Wash Damage
At law claims for 'wash damage' (where the movement of one vessel creates waves in the water which damage other vessels) are generally considered collision claims and dealt with as such by the courts. This is the case even though there is no physical contact between the ships. It is important to note that, despite this, the wording of some P&I and Hull policies will be such that wash damage claims cannot be considered as collisions (if they cover 'contact' with a third party vessel for example).


FFO Claims
When a ship makes contact with property other than another vessel (shore cranes, bridges etc.) and causes damage to it, this is not considered a 'collision'. Technically it is an 'allision' (two moving objects collide with each other, whereas one moving object allides with a fixed object). This term is less common today and these claims are more frequently known as FFO claims, which stands for 'Fixed and Floating Object' claims. Hitting a quay would be an example of damage to a fixed object and cracking a navigational buoy would be an example of damage to a floating object).


* This is the old terms for collisions and stands for 'Running Down Collision', essentially a reference to when one ship ran down, i.e. into, another. 
** Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels (Brussels, 23 September 1910)