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12 January 2011
On January 1 2011 both the 1996 Protocol to the Convention on Limitation of Liability for Maritime Claims (LLMC 1996) and the Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (Bunkers Convention) entered into force in the Netherlands.
The protocol will have direct effect in the Netherlands and Dutch national law will be amended where necessary. However, it will apply only to those claims arising out of occurrences which take place after the protocol's entry into force (Article 9(3) of the LLMC 1996). As with the original convention (LLMC 1976), the protocol allows parties to deviate from the applicable rules on limitation in respect of vessels of less than 300 gross tonnage. In the Netherlands, the limit for these vessels for property claims will remain at 100,000 special drawing rights (SDR).
Article 6 of the LLMC 1996 allows parties to deviate, in favour of passengers, from the limits applying to claims for loss of life or personal injury. However, this deviation will not be permissible in the Netherlands.
The Bunkers Convention will be implemented in Book 8 of the Civil Code. It does not entail limitation of liability, but states that nothing in the convention shall affect the right to limitation under an applicable regime, such as the LLMC 1976 and thus, also, the 1996 protocol.
Owners must put in place security in respect of possible liability for pollution damage caused by bunker oil. The convention, as implemented in the Netherlands, therefore requires the owner of a Dutch registered vessel to acquire a certificate attesting that insurance coverage (or some other form of financial security) is in force. A certificate is also required if a non-Dutch registered vessel approaches a port located in the Netherlands or sails in Dutch internal waters. A certificate issued by another convention state will be recognised without preconditions in the Netherlands.
In the Netherlands, the certificate is issued by the minister of transport. The certificate will be issued only if it is proven that the owner of the vessel has obtained insurance or other financial security from a licensed insurer, bank or other financial institution within the meaning of the Financial Supervision Act.
Insurers that issue policies without the appropriate licence will be subject to penalties under administrative or criminal law. The insurance contract itself will, however, remain valid. If a certificate is issued by the Ministry of Transport and it transpires that no insurance cover or financial security has been obtained by the owner, the state will arguably be liable for the damage suffered by third parties, because the applicable rules serve to protect the financial interests of third parties that suffer loss.
Dutch legislation, following the amendment, allows for a direct claim against the insurer (or other person providing financial security) for the registered owner's liability in respect of claims for pollution damage. Dutch law allows foreign and national claimants to sue foreign insurers directly in the national courts. Under Dutch law, the insurer has the same defences against a direct claim as the owner has under the convention. Even if the owner is not entitled to limit its liability according to the relevant convention, the insurer may avail itself of the liability limits prescribed therein.
As of January 1 2011, limitation of liability in the Netherlands has increased considerably for shipowners, based on the LLMC 1996 protocol. The Bunkers Convention was also implemented in Dutch law with effect from January 1 2011, with shipowners required to have a certificate which proves that valid insurance coverage or other financial security has been obtained to provide compensation for pollution damage involving bunker oil.
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