Passenger Claims and Limitation of Liability

Kenya should consider the accession of the Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea (PAL) as Amended by the Protocol of 2002. Kenya is not a party to the Convention of 1974 or any of its Protocols, including the Protocol of 2002. However, in apparent recognition of the PAL Convention, the Merchant Shipping Act, 2009 at section 360 (1) gives the Cabinet Secretary authority to make regulations regarding certain issues concerning passenger ships and proceeds to require of the said Cabinet Secretary at section 360 (2) that “in making regulations pursuant to [section 360 (1) of the Merchant Shipping Act, 2009], the [Cabinet Secretary] shall have due regard to the International Convention on the Carriage of Passengers and their luggage on Board Ships, 1974 (PAL 1974). Interestingly, though, Kenya is not a State Party to PAL 1974 or the 2002 Protocol to amend PAL, 1974 (the Athens Convention,2002)

This comes with significant challenges, because when it comes to damage to a passenger or his luggage aboard a passenger ship, only the common law would apply. In other words, there would be no strict liability of the carrier, there would be no limits of liability and there would be no compulsory insurance.

It is in this regard that Kenya should consider acceding to the Athens Convention, 2002 as it introduces compulsory insurance to cover passengers on ships and raises the limits of liability. It also introduces other mechanisms to assist passengers in obtaining compensation, based on well-accepted principles applied in existing liability and compensation regimes such as strict liability of the carrier upto a limit of 250,000 SDR.

The limits contained in the Athens Convention, 2002 set a maximum limit, empowering, but not obliging, national courts to compensate for death, injury or damage up to these limits.

The Athens Convention, 2002 also includes an "opt-out" clause, enabling State Parties to retain or introduce higher limits of liability (or unlimited liability) in the case of carriers who are subject to the jurisdiction of their courts.

However, it should be noted that article 3 of the Athens Convention, 2002, provides for strict liability of the carrier “for the loss suffered as a result of the death of or personal injury to a passenger caused by a shipping incident…in respect of that passenger on each distinct occasion” so long as such loss does not exceed 250,000 units of account. Exceptions to the carrier’s said strict liability arise when the carrier is able to prove

(a) that the incident resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character or

(b) was wholly caused by an act or omission done with the intent to cause the incident by a third party.

The wording of the exception in (b) means that the carrier’s insurance, which are usually the Protection and Indemnity Clubs (P and I Clubs), would be liable if terrorist activity was partially the cause of the incident. However, P and I Clubs do not cover terrorist acts and considering that there is aggregation of claims with regard to passengers carried on a ship, the prospect of liability for damages arising from terrorist activities was unattractive to the P and I Clubs. It was in this regard and in order to make PAL 2002 workable, that the Legal Committee of the International Maritime Organization crafted a formula, under which terrorist attacks are excluded from the Convention by a Reservation made by a State when signifying its intention to become a Party to PAL 2002. This is known as the 2006 Reservation and it is most advisable that, when Kenya ratifies PAL 2002, it should make the 2006 Reservation. The Reservation and Guidelines are available from the IMO

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