Tonnage is the gross tonnage calculated in accordance with the Tonnage Measurement Convention 1969 (s. 2(4)).
Calculation Results:
Cases:
Summaries of cases. The cases are generally on CLC, Fund Convention and Supplementary Fund Protocol, decided by the UK courts, following the law, limits, the version of respective Convention, and domestic modifications to them, applicable there at that time. They are only for purposes of learning the general principles, and not to determine any specific law or limit.
Important Notes:
This calculator is based strictly on the provisions of the Merchant Shipping (Liability and Compensation for Oil and Bunker Oil Pollution) Act 1994 (Act 515).
All limits are stated in Special Drawing Rights (SDR). Use the IMF SDR Valuation tool to convert SDR to a desired currency.
Tier 1 - Shipowner's Liability (Act 515, s. 6 & First Schedule, Part I):
For a ship up to 5,000 tons, the limit is 4.51 million SDR.
For a ship over 5,000 tons, the limit is 4.51 million SDR plus 631 SDR for each additional ton, up to a maximum of 89.77 million SDR.
Tier 2 - 1992 Fund Convention (Act 515, s. 19 & First Schedule, Part II): This fund provides additional compensation. The total compensation available under both the shipowner's liability (Tier 1) and this fund is aggregated.
The standard aggregate limit is 203 million SDR.
A higher aggregate limit of 300.74 million SDR applies if three State Parties to the convention have combined contributing oil receipts of 600 million tons or more in the preceding year.
Malaysia has adopted the limits in the CLC 1992 (as amended in 2000) and the Fund Convention 1992 (as amended in 2000) - accessible here. Malaysia has NOT adopted the Supplementary Fund Protocol 2003, so there is no third tier of compensation available under Act 515.
The owner's right to limit under s. 6 is lost if the incident resulted from the owner's personal act or omission, "committed with the intent to cause such damage, or recklessly and with the knowledge that such damage would probably result", and the burden of proof is on the person opposing the limitation (s. 6(3)). Note: This is a formidably high threshold for a person opposing the limitation to meet.
The tonnage for calculation is the ship's gross tonnage under the 1969 Tonnage Measurement Convention (s. 2(4)).
CLC 1992 [as amended in 2000] (Malaysian Version) Notes:
STRICT LIABILITY
Liability of an "owner" of a "tanker" ship is "strict", subject only to s. 4 exceptions, for any pollution damage caused by the discharge or escape of persistent hydrocarbon mineral oil (s. 3).
A tanker ship is one constructed or adapted for carrying oil in bulk as cargo. If it can carry other cargoes, liability only attaches when it is carrying oil in bulk or on a voyage following such carriage, unless the owner proves she was free of oil residues (s. 2(1), definition of "ship" (a)).
The liability is for pollution damage in any area of Malaysia (s. 3(1)) and is extended to damage caused in any area of any other Liability Convention country (s. 3(2)).
Where two or more ships incur liability and the damage is not reasonably separable, they are jointly and severally liable for all such damage (s. 3(3)).
"Pollution damage" is defined to include loss or damage from contamination outside the ship, costs of preventive measures, and further loss or damage caused by such measures. Compensation for environmental impairment is limited to costs of reasonable reinstatement and resulting loss of profit (s. 2(1)).
References to the "area" of a country include its territorial sea and exclusive economic zone (EEZ) (s. 2(3)).
EXCEPTION TO LIABILITY
Liability is excepted if the owner proves the discharge resulted from (a) an act of war, hostilities, or an exceptional, inevitable and irresistible natural phenomenon; (b) wholly from a third party's act or omission done with intent to cause damage; or (c) wholly from the negligence of a government authority responsible for maintaining navigational aids (s. 4(1)).
EXCLUSIVITY OF SECTION 3 LIABILITY
An owner liable under s. 3 is not liable for such pollution damage otherwise than under that section (s. 5(1)).
No claim for such pollution damage can be made against other specified persons (servants/agents, crew, pilot, charterer, manager, operator, salvors, persons taking preventive measures) unless the damage resulted from their personal act or omission, committed with intent or recklessly with knowledge that such damage would probably result (s. 5(2)).
CONTRIBUTORY NEGLIGENCE OF CLAIMANT
The owner may be wholly or partially exonerated from liability to a person if the damage resulted from that person's act or omission done with intent to cause damage or from their negligence (s. 4(2)).
LIMITATION OF LIABILITY
The owner has a right to limit liability in accordance with Part I of the First Schedule (s. 6(2)).
The limits are: for ships up to 5,000 tons, 4.51 million SDR; for ships over 5,000 tons, 4.51 million SDR plus 631 SDR per additional ton, capped at 89.77 million SDR (First Schedule, Part I).
The owner loses the right to limit if it is proved the damage resulted from their personal act or omission, "committed with the intent to cause such damage, or recklessly and with the knowledge that such damage would probably result" (s. 6(3)).
LIMITATION DECREE, FUND ESTABLISHMENT, DISTRIBUTION
Limitation requires an application to the Court (s. 7(1)).
The Court, upon finding liability, directs deposit of security - by way of cash payment, bank guarantee or security otherwise - for the limited amount into Court for proportional distribution (s. 7(2)). Note: This is different from the position in the UK, where payment into court is required.
Once the fund is established by such deposit into the court, any arrested ship or property shall be released, and no judgments (except for costs) shall be enforced (s. 8).
If a corresponding fund is established in another Liability Convention country, the protection against enforcement in Malaysia applies (s. 9).
An owner who has voluntarily taken reasonable preventive measures is entitled to claim against the fund for those costs proportionately like other substantive claimants (s. 7(5)).
Claims must be made within the time directed by the Court or such further time allowed by the Court, provided that a minimum of six months must be allowed from the date of the pollution damage (s. 7(3)).
TIME LIMIT FOR SUBSTANTIVE CLAIMS
Actions must be commenced within three years from the date the damage occurred OR within six years from the date of the incident, whichever is earlier. Otherwise the claim is extinguished (s. 10).
COMPULSORY INSURANCE AND RIGHTS OF THIRD PARTIES
Ships carrying over 2,000 tons of oil in bulk must have a certificate of insurance to enter or leave a Malaysian port (s. 11).
Claimants may bring an action directly against the insurer (s. 13(1)). Note: There may be practical limitations to direct-claims in the context of the policy containing a "pay to be paid" clause. A direct-claimant may be bound by an arbitration clause in the policy (the "conditional benefit" principle"). See The Prestige [2024] EWCA Civ 1536 and The Fanti & The Padre Island [1990] 2 Lloyd's Rep. 191.
RECIPROCAL ENFORCEMENT
A judgment from a court in a foreign Liability Convention country under a corresponding provision to s. 3 can be enforced in Malaysia under the Reciprocal Enforcement of Judgements Act 1958 (s. 24).
State-owned ships on commercial service can carry a state certificate guaranteeing liability up to the CLC 1992 (as amended in 2000) limits instead of an insurance certificate (s. 14(2)).
Fund 1992 (Malaysian Version) Notes:
WHO CONTRIBUTES?
Contributions are payable annually to the Fund on oil received by sea at Malaysian ports or terminals if the person received more than 150,000 tons in a year (ss. 17(1) & 17(4)). Note: It is not necessary that the oil is imported/received from overseas, unlike the position in the UK.
This also applies to oil first received in Malaysia after being discharged in a non-Fund Convention country (s. 17(3)).
The amount of contribution is determined by the IOPC Fund Assembly (s. 17(5)).
LIABILITY OF THE FUND
The Fund is liable for pollution damage in any area of Malaysia if full compensation was not available under s. 3 because: (a) liability was wholly exonerated under s. 4; (b) the owner or insurer could not meet their obligations; or (c) the damage exceeded the owner's limit under s. 6 (s. 19(1)).
The owner's reasonable and voluntary preventive measure costs are treated as pollution damage claimable against the Fund (s. 19(3)).
EXCEPTION TO LIABILITY OF FUND
The Fund is not liable if the damage resulted from an act of war/hostilities or was caused by oil from a warship or state-owned ship on non-commercial service (s. 19(4)(a)).
The Fund is also not liable if the subtantive claimant cannot prove the damage resulted from an incident involving one or more identifiable ships (s. 19(4)(b)).
The Fund may be exonerated from liability to a claimant if the damage resulted, partly or wholly, from that claimant's intentional act or omission to cause damage or from their negligence - the burden of proof being on the Fund. This does not apply to claims for preventive measures (s. 19(5)).
LIMITATION OF LIABILITY OF FUND
The Fund's liability is limited to the amounts set out in Part II of the First Schedule (s. 19(6)). See the Important Notes above for the limits.
The substantive claimant (or any other party) to a claim against an owner or an insurer may give a notice of the proceedings in writing to the Fund together with copies of the Writ and any pleadings served in the claim (ROC 2012, Ord. 70 r. 2A(1)).
The Fund may apply ex parte to intervene in the action, which the Court will mandatorily grant, even if no notice of claim was served on the Fund (ROC 2012, Ord. 70 r. 2A(2)).
Upon judgment against the Fund, the Registrar will arrange to be sent a stamped copy of the judgment to the Fund (ROC 2012, Ord. 70 r. 2A(3)).
Where the Ord. 70 r. 2A(1) notice has been given to the Fund, a final and enforceable judgment in that claim will be binding on the Fund, and the Fund may not dispute it, even if it did not intervene (s. 23(3)).
Upon receipt of the judgment against the Fund, the Fund will notify the Court whether the claim amount is NOT to be reduced or to be reduced to a specified amount pursuant to the Fund Convention 1992 (as amended in 2000) limits (s. 24(2)).
A judgment may not be enforced against the Fund without leave of the Court, which will not be given until the Fund gives the aforesaid notification (s. 24(2)).
A judgment from a court in a foreign Fund Convention country can be enforced in Malaysia under the scheme of the Reciprocal Enforcement of Judgements Act 1958 (s. 24). Note: It does not matter that the foreign country is not one in respect of which ordinarily reciprocal enforcement is available in Malaysia under the 1958 Act (First Schedule).
The Fund may sue and be sued in its own name or in the name of its Director (s. 16(2)).
TIME LIMIT FOR CLAIMS AGAINST FUND
An action against the Fund must be commenced, or a third-party notice given to the Fund, within three years from the date the damage occurred, AND not later than six years from the date of the incident (s. 21).
SUBROGATION FOR AND AGAINST FUND
Where the Fund pays compensation because the owner/insurer could not pay its portion, it is subrogated to the substantive claimant's rights against the owner/insurer (s. 22(1)).
Where the Fund pays for other reasons (e.g., liability was exonerated or exceeded), it is subrogated to any rights of recourse the owner or insurer might have (s. 22(3)).
A public authority that pays compensation is subrogated to the claimant's rights against the Fund (s. 22(4)).
This calculator is for informational purposes only and does not constitute legal advice. We accept no responsibility for the calculation and the law stated here. Users must independently verify all information and consult with qualified legal professionals.