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MERCHANT SHIPPING (LIABILITY AND COMPENSATION FOR OIL POLLUTION) ORDINANCE

MERCHANT SHIPPING (LIABILITY AND COMPENSATION FOR OIL POLLUTION) ORDINANCE (CHAPTER 414) ARRANGEMENT OF SECTIONS Section PART I PRELIMINARY 1. Short title 2. Interpretation 3. Certificate as to parties to Conventions 4. Calculation of tonnage PART II LIABILITY FOR OIL POLLUTION AND COMPULSORY INSURANCE 5. Interpretation of Part II 6. Liability for oil pollution 7. Exceptions from liability under section 6 8. Restriction of liability for oil pollution 9. Limitation of liability under section 6 10. Limitation actions 11. Restriction on enforcement of claims after establishment of limitation fund 12. Concurrent liabilities of owners and others 13. Establishment of limitation fund outside Hong Kong 14. Extinguishment of claims under Part II 15. Compulsory insurance against liability for oil pollution 16. Issue of certificate by Director 17. Rights of third parties against insurers 18. Jurisdiction of Hong Kong courts and registration of foreign judgments 19. Warships, etc.

20. Liability for cost of preventive measures where section 6 does not apply 21. Saving for recourse actions PART III THE INTERNATIONAL OIL POLLUTION COMPENSATION FUND 22. Interpretation of Part III 23. Contributions to the Fund 24. Power to obtain information 25. Liability of the Fund for pollution damage 26. Indemnification of ship owner where ship registered in Fund Convention country 27. Effect of judgments 28. Extinguishment of claims under Part III 29. Subrogation and rights of recourse PART IV MISCELLANEOUS 30. Offences by bodies corporate 31. Fees 32. Amendments, Savings and Repeals Schedule 1. Overall limit on liability of Fund Schedule 2. (Omitted) An Ordinance to provide for compensation for pollution caused by the discharge or escape of oil from oil-carrying ships and for the liability of shipowners; for compulsory insurance in respect of such liability; for contributions by oil importers and others to the International Fund for Compensation for Oil Pollution Damage; for the liability of the Fund in certain circumstances for such pollution; for the indemnification of shipowners by the Fund; and for incidental or related matters.

[15 January 1991] L. N. 13 of 1991 PART I Preliminary 1. Short title This Ordinance may be cited as the Merchant Shipping (Liability and Compensation for Oil Pollution) Ordinance.

2. Interpretation (1) In this Ordinance, unless the context otherwise requires- "cost" includes expenses; "country" includes any territory; "court" means the High Court or a judge thereof; "damage" includes loss; "Director" means the Director of Marine; "Fund Convention" means the International Convention on the establishment of an International Fund for Compensation for Oil Pollution Damage opened for signature in Brussels on 18 December 1971; "Hong Kong ship" means a ship registered in Hong Kong; "Liability Convention" means the International Convention on Civil Liability for Oil Pollution Damage opened for signature in Brussels on 29 November 1969; "owner", in relation to a ship, means the person or persons registered as the owner of the ship or, in the absence of registration, the person or persons owning the ship, except that in relation to a ship owned by a State which is operated by a person registered as the ship's operator, it means the person registered as its operator; (Amended 74 of 1990 s. 104 (3)) "pollution damage" means damage caused outside a ship carrying oil by contamination resulting from the discharge or escape of oil from the ship, wherever the discharge or escape may occur, and includes the cost of preventive measures and damage caused by preventive measures; "preventive measures" means any reasonable measures taken by any person after a discharge or escape of oil from a ship to prevent or reduce pollution damage; "ship" means any sea-going vessel or seaborne craft of any type whatsoever, carrying oil in bulk as cargo; "special drawing rights" means units of account used by the International Monetary Fund and known as special drawing rights; "terminal installation" means any site for the storage of oil in bulk which is capable of receiving oil from waterborne transportation, including any facility situated offshore and linked to any such site.

(2) For the purposes of this Ordinance, where more than one discharge or escape results from the same occurrence or from a series of occurrences having the same origin, they shall be treated as one; but any measures taken after the first of them shall be deemed to have been taken after the discharge or escape.

(3) References in this Ordinance to the area of any country include the territorial sea of that country.

3. Certificate as to parties to Conventions A certificate signed by the Governor and certifying that a State specified in the certificate- (a) is a party to the Liability Convention in respect of a country specified in the certificate; or (b) is a party to the Fund Convention in respect of a country specified in the certificate, shall be conclusive evidence of the matters contained therein and shall in any legal proceedings under this Ordinance to which it relates be admissible on its production and without further proof.

4. Calculation of tonnage For the purposes of this Ordinance, the tonnage of a ship shall be ascertained as follows- (a) where the register tonnage of the ship has been or can be ascertained in accordance with the Merchant Shipping (Tonnage) Regulations (App. I, AB1), the ship's tonnage shall be the register tonnage of the ship as so ascertained but without making any deduction required by those regulations of any tonnage allowance for propelling machinery space; (b) where the ship is of a class or description with respect to which no provision is for the time being made by the Merchant Shipping (Tonnage) Regulations, the tonnage of the ship shall be taken to be 40% of the weight (expressed in tons of 2 240 lbs) of oil which the ship is capable of carrying; (c) where the tonnage of the ship can not be ascertained in accordance with either paragraph (a) or (b), the Director shall, if so directed by the court in any proceedings, certify what, on the evidence specified in the direction, would in his opinion be the tonnage of the ship as ascertained in accordance with paragraph (a) or (b), as the case may be, if the ship could be duly measured for the purpose; and the tonnage stated in his certificate shall be taken to be the tonnage of the ship.

PART II LIABILITY FOR OIL POLLUTION AND COMPULSORY INSURANCE 5. Interpretation of Part II (1) In this Part- "Liability Convention country" means a country in respect of which the Liability Convention is in force; and "Liability Convention State" means a State which is a party to the Liability Convention.

(2) In relation to any pollution damage resulting from the discharge or escape of any oil carried in a ship references in this Part to the owner of the ship are references to the owner at the time of the occurrence resulting in the discharge or escape or, if there is more than one such occurrence, at the time of the first of such occurrences.

(3) References in this Part to the Merchant Shipping Act 1979 (1979 c. 39 U. K.) are references to that Act as it applies in Hong Kong.

6. Liability for oil pollution (1) Where, as a result of any occurrence taking place while a ship is carrying a cargo of persistent oil in bulk, any persistent oil carried by the ship (whether as part of the cargo or otherwise) is discharged or escapes from the ship, the owner of the ship shall be liable, except as otherwise provided by this Ordinance, for any pollution damage caused in Hong Kong.

(2) Where- (a) a liability arises under subsection (1); and (b) the discharge or escape by reason of which the liability arose also results in pollution damage in the area of a Liability Convention country other than Hong Kong, the owner of the ship concerned shall also be liable under subsection (1) for that damage as if the damage had occurred in Hong Kong.

(3) Where persistent oil is discharged or escapes from 2 or more ships and- (a) a liability is incurred under this section by the owner of each of them; but (b) the pollution damage for which each of the owners would, apart from this subsection, be liable cannot reasonably be separated from that for which the other or others would be liable, each of the owners shall be liable, jointly with the other or others, for the whole of that damage for which the owners together would be liable under this section.

(4) Section 21 of the Law Amendment and Reform (Consolidation) Ordinance (Cap. 23) shall apply in relation to any pollution damage for which a person is liable under this section, but which is not due to his fault, as if it were due to his fault.

7. Exceptions from liability under section 6 The owner of a ship from which persistent oil has been discharged or has escaped shall not incur any liability under section 6 if he proves that the discharge or escape- (a) resulted from an act of war, hostilities, civil war, insurrection or an exceptional, inevitable and irresistible natural phenomenon; or (b) was due wholly to anything done or left undone by another person, not being a servant or agent of the owner, with intent to do damage; or (c) was due wholly to the negligence or wrongful act of a government or other authority in exercising its function of maintaining lights or other navigational aids for the maintenance of which it was responsible.

8. Restriction of liability for oil pollution Where, as a result of any occurrence taking place while a ship is carrying a cargo of persistent oil in bulk, any persistent oil carried by the ship (whether as part of the cargo or otherwise) is discharged or escapes then, whether or not the owner incurs a liability under section 6,- (a) he shall not be liable otherwise than under that section for any such pollution damage as is mentioned therein; and (b) no servant or agent of the owner and no person performing salvage operations with the agreement of the owner shall be liable for any such damage.

9. Limitation of liability under section 6 Where the owner of a ship incurs a liability under section 6 by reason of a discharge or escape which occurred without his actual fault or privity, he may limit that liability in accordance with this Ordinance, and if he does so his liability (that is to say, the aggregate of his liabilities under section 6 resulting from the discharge or escape) shall not exceed- (a) 133 special drawing rights for each ton of the ship's tonnage; or (b) 14,000,000 special drawing rights, whichever amount is the less.

10. Limitation actions (1) Where the owner of a ship has or is alleged to have incurred a liability under section 6 he may apply to the court in accordance with rules of court for the limitation of that liability to an amount determined in accordance with section 9.

(2) If on such an application the court finds that the applicant has incurred such a liability and is entitled to limit it, the court shall determine the limit of the liability and direct payment into court of the amount of that limit, and shall then (a) determine the amounts that would, apart from the limit, be due in respect of the liability to the several persons making claims in the proceedings under this section; and (b) direct the distribution of the amount paid into court (or, as the case may be, so much of it as does not exceed the liability) among those persons in proportion to their claims subject to the following provisions of this section.

(3) A payment into court of the amount of a limit determined under this section shall be made in Hong Kong dollars and- (a) for the purposes of converting such an amount from special drawing rights into Hong Kong dollars the Monetary Authority may certify, in Hong Kong dollars, the respective amounts which are to be taken as equivalent for a particular day to the sums expressed in special drawing rights in section 9; (b) a certificate signed by or on behalf of the Monetary Authority under paragraph (a) shall be conclusive evidence of the matters contained therein and shall in legal proceedings under this Ordinance to which it relates be admissible on its production and without further proof.

(Amended 82 of 1992 s. 44) (4) No claim shall be made in proceedings under this section except within such time as the court may direct or such further time as the court may allow.

(5) Where any sum has been paid in or towards satisfaction of any claim in respect of the pollution damage to which the liability referred to in subsection (1) extends- (a) by the owner or the person referred to in section 17 as "the insurer"; or (b) by a person who has or is alleged to have incurred a liability, otherwise than under section 6, for that damage and who is entitled to limit his liability in connection with the ship by virtue of the Merchant Shipping Act 1979 (1979 c. 39 U. K.), the person who paid the sum shall, to the extent of that sum, be in the same position with respect to any distribution made in proceedings under this section as the person to whom it was paid would, apart from this subsection, have been, and the distribution shall be made accordingly.

(6) Where the owner who incurred the liability referred to in subsection (1) has voluntarily made any reasonable sacrifice or taken any other reasonable measures to prevent or reduce pollution damage to which the liability extends or might have extended he shall be in the same position with respect to any distribution made in proceedings under this section as if he had established a claim in respect of the liability for an amount equal to the cost of the sacrifice or other measures, and the distribution shall be made accordingly.

(7) The court may, if it thinks fit, postpone the distribution of such part of the amount to be distributed as it deems appropriate having regard to any claims that may later be established before a court outside Hong Kong.

11. Restriction on enforcement of claims after establishment of limitation fund Where the court has found that a person who has incurred a liability under section 6 is entitled to limit that liability to any amount and he has paid into court a sum not less than that amount- (a) the court shall order the release of any ship or other property arrested in connection with a claim in respect of that liability or any security given to prevent or obtain release from such an arrest; and (b) no judgment or decree for any such claim shall be enforced, except so far as it is for costs, the sum paid into court, or such part thereof as corresponds to the claim, will be actually available to the claimant or would have been available to him if the proper steps in the proceedings under section 10 had been taken.

12. Concurrent liabilities of owners and others Where, as a result of any discharge or escape of persistent oil from a ship, he owner of the ship incurs a liability under section 6 and any other person incurs a liability, otherwise than under that section, for any such pollution damage as is mentioned in subsection (1) of that section, then, if- (a) the owner has been found, in proceedings under section 10, to be entitled to limit his liability to any amount and has paid into court a sum not less than that amount; and (b) the other person is entitled to limit his liability in connection with the ship by virtue of the Merchant Shipping Act 1979 (1979 c. 39 U. K.), no proceedings shall be taken against the other person in respect of his liability, and if any such proceedings were commenced before the owner paid the sum into court, no further steps shall be taken in the proceedings except in relation to costs.

13. Establishment of limitation fund outside Hong Kong Where the events resulting in the liability of any person under section 6 also result in a corresponding liability under the law of a Liability Convention country other than Hong Kong, sections 11 and 12 shall apply as if the references to sections 6 and 10 included references to the corresponding provisions of that law and the references to sums paid into court included references to any sums secured under those provisions in respect of the liability.

14. Extinguishment of claims under Part II No action to enforce a claim in respect of a liability incurred under section 6 shall be brought in any court in Hong Kong unless the action is commenced not later than 3 years after the claim arose and not later than 6 years after the occurrence or, if there is more than one such occurrence, the first of such occurrences resulting in the discharge or escape by reason of which the liability was incurred.

15. Compulsory insurance against liability for oil pollution (1) Subject to section 19, subsection (2) applies to any ship carrying in bulk a cargo of more than 2,000 tons of persistent oil as defined in regulations made under this section.

(2) A ship to which this subsection applies shall not enter or leave- (a) the waters of Hong Kong; or (b) if the ship is a Hong Kong ship, a port in any other country or a terminal installation in the territorial sea of any other country, unless there is in force a certificate complying with subsection (4) and certifying that there is in force in respect of the ship a contract of insurance or other security satisfying the requirements of Article VII of the Liability Convention.

(3) For the purposes of subsection (2) and section 16 (1), references in Article VII of the Liability Convention to Article V thereof shall be construed as references to Article V as amended by Article II of the Protocol dated 19 November 1976 to the Liability Convention.

(4) A certificate referred to in subsection (2) must be- (a) if the ship is a Hong Kong ship, issued by the Director under section 16; (b) if the ship is registered in a Liability Convention country other than Hong Kong, issued by or under the authority of the government of the other Liability Convention country; or (c) if the ship is registered in a country which is not a Liability Convention country, recognized for the purposes of this paragraph by regulations made under this section.

(5) The Governor in Council may by regulations- (a) define "persistent oil" for the purpose of subsection (1); (b) provide that certificates in respect of ships registered in any country which is not a Liability Convention country shall, in such circumstances as may be specified in the regulations, be recognized for the purposes of subsection (4) (c) if issued by or under the authority of the government of a designated country; and in this subsection "designated country" in relation to a certificate in respect of a ship, means- (i) the country in which the ship is registered; (ii) any country specified in the regulations for the purposes of this subsection.

(6) A certificate required by this section shall at all times be carried in the ship to which it relates and shall, on demand, be produced by the master to the Director or any officer of the Marine Department authorized by him.

(7) If a ship contravenes subsection (2), the master and the owner of the ship each commits an offence and is liable- (a) on conviction upon indictment, to a fine of $500,000; and (b) on summary conviction to a fine of $100,000.

(8) If a ship fails to carry, or the master of a ship fails to produce, a certificate as required by subsection (6) the master commits an offence and is liable to a fine of $5,000.

(9) The Director may detain any ship which attempts to leave the waters of Hong Kong in contravention of this section.

16. Issue of certificate by Director (1) Subject to subsection (2), the Director shall, if he is satisfied, on an application for a certificate referred to in section 15 in respect of a Hong Kong ship, that there will be in force in respect of the ship, throughout the period for which the certificate is to be issued, a contract of insurance or other security satisfying the requirements of Article VII of the Liability Convention, issue such a certificate to the owner.

(2) If the Director is of opinion that there is a doubt whether the person providing the insurance or other security will be able to meet his obligations thereunder, or whether the insurance or other security will cover the owner's liability under section 6 in all circumstances, he may refuse to issue the certificate.

(3) The Governor in Council may by regulations- (a) prescribe the fee to be paid on an application for a certificate under this section; and (b) provide for the cancellation and delivery up of such a certificate in such circumstances as may be prescribed by the regulations.

(4) A person required by regulations made under subsection (3) to deliver up a certificate who without reasonable excuse fails to do so commits an offence and is liable to a fine of $5,000.

(5) The Director shall retain a copy of any certificate issued by him under this section in respect of a Hong Kong ship and shall make the copy available for public inspection.

17. Rights of third parties against insurers (1) Where it is alleged that the owner of a ship has incurred a liability under section 6 as a result of any discharge or escape of oil from the ship occurring while there was in force a contract of insurance or other security to which a certificate referred to in section 15 related, legal proceedings to enforce a claim in respect of the liability may be brought against the person who provided the insurance or other security (in this section referred to as "the insurer").

(2) In any proceedings brought against the insurer by virtue of this section it shall be a defence (in addition to any defence affecting the owner's liability) to prove that the discharge or escape was due to the wilful misconduct of the owner himself.

(3) The insurer may under section 10 limit his liability in respect of claims made against him by virtue of this section in like manner and to the same extent as the owner may limit his liability but the insurer may do so whether or not the discharge or escape occurred without the owner's actual fault or privity.

(4) Where the owner and the insurer each apply to the court under section 10 for the limitation of his liability any sum paid into court in pursuance of either application shall be treated as paid also in pursuance of the other.

(5) The Third Parties (Rights against Insurers) Ordinance (Cap. 273) shall not apply in relation to any contract of insurance to which a certificate referred to in section 15 relates.

18. Jurisdiction of Hong Kong courts and registration of foreign judgments (1) Where any persistent oil is discharged or escapes from a ship but does not cause any pollution damage in Hong Kong, no action (whether in rem or in personam) shall be brought in any court in Hong Kong to enforce a claim arising from any pollution damage resulting from the discharge or escape in the area of a Liability Convention country other than Hong Kong.

(2) Sections 3 to 9 of the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) shall apply, whether or not they would so apply apart from this section, to any judgment given by a court in a Liability Convention country to enforce a claim in respect of a liability incurred under any law corresponding to section 6; and in the application of those sections of the Foreign Judgments (Reciprocal Enforcement) Ordinance to such a judgment, the sections shall have effect as if subsections (2) and (3) of section 6 of that Ordinance were omitted.

19. Warships, etc.

(1) Nothing in the preceding provisions of this Part applies in relation to any warship or any ship for the time being used by the government of any State for a purpose other than a commercial purpose.

(2) In relation to a ship owned by a State and for the time being used for a commercial purpose it shall be a sufficient compliance with section 15 (2) if there is in force a certificate issued by the government of that State and certifying that the ship is owned by that State and that any liability for pollution damage as defined in Article 1 of the Liability Convention will be met up to the limit prescribed by Article V of the Liability Convention as amended by Article II of the protocol dated 19 November 1976 to the Liability Convention.

(3) A Liability Convention State shall, for the purposes of any proceedings brought in a court in Hong Kong to enforce a claim in respect of a liability incurred under section 6, be deemed to have submitted to the jurisdiction of that court, and accordingly rules of court may provide for the manner in which such proceedings are to be commenced and carried on; but nothing in this subsection shall authorized the issue of execution against the property of any State.

20. Liability for cost of preventive measures where section 6 does not apply (1) Where- (a) after a discharge or an escape of persistent oil from a ship, reasonable measures are taken to prevent or reduce damage in Hong Kong which may be caused by contamination resulting from the discharge or escape; and (b) any person incurs, or might but for the measures have incurred, a liability, otherwise than under section 6, for any such damage, then, notwithstanding that subsection (1) (b) of that section does not apply, he shall be liable for the cost of the measures, whether or not the person taking them does so for the protection of his interests or in the performance of a duty.

(2) For the purposes of section 17 of the Merchant Shipping Act 1979 (1979c. 39 U. K.) any liability incurred under this section shall be deemed to be a liability in respect of such damage to property as is mentioned in paragraph 1 (a) of Article 2 of the Convention in Part I of Schedule 4 to that Act.

21. Saving for recourse actions Nothing in this Part shall prejudice any claim, or the enforcement of any claim, which a person incurring any liability under this Part may have against another person in respect of that liability.

PART III THE INTERNATIONAL OIL POLLUTION COMPENSATION FUND 22. Interpretation of Part III (1) In this Part- "Fund" means the International Fund established by the Fund Convention; "Fund Convention country" means a country in respect of which the Fund Convention is in force; "guarantor" means any person providing insurance or other security of the kind described in section 15 (2); "oil", except in sections 23 and 24, means persistent hydrocarbon mineral oil.

(2) In this Part a franc shall be taken to be a unit of 65 1/2 mg of gold of millesimal fineness 900.

(3) The Governor may by order specify in Hong Kong dollars the amounts which for the purposes of this Part are to be taken as equivalent to any specified number of francs.

23. Contributions to the Fund (1) Contributions shall be payable to the Fund in respect of oil carried by sea to ports or terminal installations in Hong Kong.

(2) Subsection (1) applies whether or not the oil is being imported, and applies even if contributions are payable in respect of carriage of the same oil on a previous voyage.

(3) Contributions shall also be payable to the Fund in respect of oil when first received in any terminal installation in Hong Kong after having been carried by sea and discharged in a port or terminal installation in a country which is not a Fund Convention country.

(4) The person liable to pay contributions is- (a) in the case of oil which is being imported, the importer; and (b) in any other case, the person by whom the oil is received.

(5) A person shall not be liable to make contributions in respect of the oil imported or received by him in any year if the oil so imported or received in that year does not exceed 150 000 tonnes.

(6) For the purpose of subsection (5)- (a) all the companies in a group of companies shall be treated as a single person; and (b) any 2 or more companies which have been amalgamated into a single company shall be treated as the same person as that single company.

(7) The contributions payable by a person for any year shall- (a) be of such amount as may be determined by the Assembly of the Fund under Articles 11 and 12 of the Fund Convention and notified to him by the Fund; (b) be payable in such instalments, becoming due at such times, as may be so notified to him, and if any amount due from him remains unpaid after the date on which it became due, such amount- (i) shall from that date bear interest, at a rate determined from time to time by the Assembly of the Fund, until it is paid; and (ii) shall, together with such interest, be recoverable as a civil debt due to the Fund.

(8) The Governor in Council may by regulations require persons who are may be liable to pay contributions under this section to give security for payment to the Governor or to the Fund; and such regulations may- (a) contain such supplemental or incidental provisions as appear to the Governor in Council expedient; and (b) provide that a contravention of specified provisions of the regulations shall be an offence and may provide penalties therefor not exceeding a fine of $5,000.

(9) In this section and section 24, unless the context otherwise requires-"company" means a body incorporated under the law of Hong Kong, or of any other country; "crude oil" means any liquid hydrocarbon mixture occurring naturally in the earth whether or not treated to render it suitable for transportation, and includes- (a) crude oils from which distillate fractions have been removed; and (b) crude oils to which distillate fractions have been added; "fuel oil" means heavy distillates or residues from crude oil or blends of such materials intended for use as a fuel for the production of heat or power of a quality equivalent to the American Society for Testing and Materials' Specification for Number Four Fuel Oil (Designation D 396-69), or heavier; "group of companies" has the same meaning as in section 2 (1) of the Companies Ordinance (Cap. 32), and in the case of a company incorporated outside Hong Kong, has a corresponding meaning subject to any necessary modifications; "import" means import into Hong Kong; "importer" means the person by whom or on whose behalf the oil in question is entered for customs purposes on importation; "oil" means crude oil and fuel oil.

(10) In this section "sea" does not include any waters within the boundaries of Hong Kong as defined in the Second Schedule to the Interpretation and General Clauses Ordinance (Cap. 1).

24. Power to obtain information (1) The Governor may, for the purpose of transmitting to the Fund a list of the names and addresses of the persons who, under section 23, are liable to make contributions to the Fund for any year, and the quantity of oil in respect of which they are so liable, by notice in writing require any person engaged in producing, treating, distributing or transporting oil to furnish to a person specified in the notice such information as may be specified in the notice.

(2) A notice under this section may require a company to give such information as may be required to ascertain whether its liability is affected by section 23 (6).

(3) A notice under this section may specify the manner in which, and the time within which, it is to be complied with.

(4) In legal proceedings by the Fund against any person to recover any amount due under section 23, any particulars contained in any list transmitted by the Governor to the Fund shall, in so far as those particulars are based on information obtained under this section, be admissible as evidence of any relevant fact stated in the list; and in so far as particulars which are so admissible are based on information given by the person against whom the proceedings are brought, those particulars shall be presumed to be accurate until the contrary is proved.

(5) A person who discloses any information which has been furnished to or obtained by him under this section, or in connection with the execution of this section, unless the disclosure is made- (a) with the consent of the person from whom the information was obtained; or (b) in connection with the execution of this section; or (c) for the purposes of any legal proceedings arising out of this section, or of any report of such proceedings, commits an offence and is liable to a fine of $5,000.

(6) A person who- (a) refuses or wilfully neglects to comply with a requirement of a notice under this section; or (b) in purporting to comply with a requirement of a notice under this section makes any statement which he knows to be false in a material particular, or recklessly makes any statement which is false in a material particular, commits an offence and is liable- (i) on conviction upon indictment, to imprisonment for 1 year and to a fine of $50,000; or (ii) on summary conviction, to a fine of $5,000.

25. Liability of the Fund for pollution damage (1) The Fund shall be liable for pollution damage in Hong Kong if the person suffering the damage has been unable to obtain full compensation under section 6- (a) because the discharge or escape causing the damage- (i) resulted from an exceptional, inevitable and irresistible natural phenomenon; or (ii) was due wholly to anything done or left undone by another person, not being a servant or agent of the owner, with intent to do damage; or (iii) was due wholly to the negligence or wrongful act of a government or other authority in exercising its function of maintaining lights or other navigational aids for the maintenance of which it was responsible, (and because liability is accordingly wholly displaced by section 7); or (b) because the owner or guarantor who is liable for the damage is not able to meet his obligations in full in respect of that liability; or (c) because the damage exceeds the liability under section 6 as limited by section 9.

(2) Where- (a) a discharge or escape has caused pollution damage both in Hong Kong and in the area of another Fund Convention country; and (b) proceedings under the Liability Convention for compensation for the pollution damage have been brought in a country which is not a Fund Convention country or in Hong Kong, subsection (1) shall be construed and have effect as regards that pollution damage as if for "Hong Kong" there were substituted "the area of a Fund Convention country".

(3) Where the incident has caused pollution damage both in Hong Kong and in the area of another country in respect of which the Liability Convention is in force, references in this section to any of the provisions of Part II shall include references to the corresponding provisions of the law of any country giving effect to the Liability Convention.

(4) For the purposes of this section an owner or guarantor is not able to meet his obligations if the obligations have not been met after all reasonable steps to pursue the legal remedies available have been taken.

(5) Expenses reasonably incurred, and sacrifices reasonably made, by the owner voluntarily to prevent or reduce pollution damage shall be treated as pollution damage for the purposes of this section, and accordingly he shall be in the same position with respect to claims against the Fund under this section as if he had established a claim in respect of liability under section 6.

(6) The Fund shall incur no liability under this section if- (a) it proves that the pollution damage- (i) resulted from an act of war, hostilities, civil war or insurrection; or (ii) was caused by oil which escaped or was discharged from a warship or other ship owned or operated by a State and used, at the time of the occurrence, only on government non-commercial service; or (b) a claimant cannot prove that the damage resulted from an occurrence involving a ship identified by him, or involving 2 or more ships one of which is identified by him.

(7) If the Fund proves that the pollution damage resulted wholly or partly- (a) from anything done or left undone with intent to cause damage by the person who suffered the damage; or (b) from the negligence of that person, the Fund may be exonerated wholly or partly from its liability to pay compensation to that person, but this subsection shall not apply to a claim in respect of expenses incurred or sacrifices made voluntarily to prevent or reduce pollution damage.

(8) Where the liability under section 6 is limited to any extent by subsection (4) of that section, the Fund shall be exonerated to the same extent.

(9) The Fund's liability under this section shall be subject to the limits imposed by paragraphs 4, 5 and 6 of Article 4 of the Fund Convention which impose an overall liability on the liabilities of the owner and of the Fund, and the texts of which are set out in Schedule 1.

(10) Evidence of any instrument issued by any organ of the Fund or of any document in the custody of the Fund, or any entry in or extract from such a document, may be given in any legal proceedings by production of a copy certified as a true copy by an official of the Fund; and any document purporting to be such a copy shall be received in evidence without proof of the official position or signature of the person signing the certificate.

(11) For the purpose of giving effect to paragraphs 4, 5 and 6 of Article 4 of the Fund Convention a court giving judgment against the Fund in legal proceedings under this section shall notify the Fund to that effect, and- (a) no steps shall be taken to enforce the judgment unless and until the court gives leave to enforce it; (b) that leave shall not be given unless and until the Fund notifies the court either that the amount of the claim is not to be reduced under paragraph 4 of Article 4 of the Fund Convention, or that it is to be reduced to a specified amount; and (c) in the latter case the judgment shall be enforceable only for the reduced amount.

26. Indemnification of ship owner where ship registered in Fund Convention country (1) Where a liability is incurred under section 6 in respect of a ship registered in a Fund Convention country the Fund shall indemnify the owner and his guarantor for that portion of the aggregate amount of the liability which- (a) is in excess of an amount equivalent to 1,500 francs for each ton of the ship's tonnage or of an amount of 125 million francs, whichever is the less; and (b) is not in excess of an amount equivalent to 2,000 francs for each ton of the said tonnage or an amount of 210 million francs, whichever is the less.

(2) Where proceedings under the Liability Convention for compensation for pollution damage have been brought in a country which is not a Fund Convention country (but is a country in respect of which the Liability Convention is in force), and the incident has caused pollution damage in Hong Kong (as well as in that country) subsection (1) shall apply with the omission of the words "under section 6".

(3) The Fund shall not incur an obligation under this section where the pollution damage resulted from the wilful misconduct of the owner.

(4) In legal proceedings to enforce the Fund's obligation under this section the court may exonerate the Fund wholly or partly if it is proved that, as a result of the actual fault or privity of the owner- (a) the ship did not comply with such requirements as the Governor may by order prescribe for the purposes of this section; and (b) the occurrence or damage was caused wholly or partly by that non- compliance.

(5) The requirements referred to in subsection (4) are such requirements as appear to the Governor to be appropriate to implement the provisions of- (a) Article 5 (3) of the Fund Convention (marine safety conventions); and (b) Article 5 (4) of the Fund Convention (which enables the Assembly of the Fund to substitute new conventions).

(6) An order made under subsection (4) may contain such transitional or other supplemental provisions as appear to the Governor to be expedient.

(7) Expenses reasonably incurred, and sacrifices reasonably made, by the owner voluntarily to prevent or reduce the pollution damage shall be treated as included in the owner's liability for the purposes of this section.

27. Effect of judgments (1) Where in accordance with rules of court made for the purposes of this subsection the Fund has been given notice of proceedings brought against an owner or guarantor in respect of liability under section 6, any judgment given in the proceedings shall, after it has become final and enforceable, become binding upon the Fund in the sense that the facts and evidence in the judgment may not be disputed by the Fund even if the Fund has not intervened in the proceedings.

(2) Where a person incurs a liability under the law of a Fund Convention country corresponding to the provisions of Part II for damage which is partly in Hong Kong, subsection (1) shall, for the purpose of proceedings under this Part, apply with any necessary modifications to a judgment in proceedings under that law of the country concerned.

(3) Subject to subsection (4), sections 3 to 9 of the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) shall apply, whether or not they would so apply apart from this subsection, to any judgment given by a court in a Fund Convention country to enforce a claim in respect of liability incurred under any law corresponding to section 25 or 26; and in the application of those sections of the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) to such a judgment, the sections shall have effect as if subsections (2) and (3) of section 6 of that Ordinance were omitted.

(4) No steps shall be taken to enforce judgment referred to in subsection (3) unless and until the court in which it is registered under the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) gives leave to enforce it; and- (a) that leave shall not be given unless and until the Fund notifies the court either that the amount of the claim is not to be reduced under paragraph 4 of Article 4 of the Fund Convention, or that it is to be reduced to a specified amount; and (b) in the latter case, the judgment shall be enforceable only for the reduced amount.

28. Extinguishment of claims under Part III (1) No action to enforce a claim against the Fund under this Part shall be brought in any court in Hong Kong unless- (a) the action is commenced; or (b) a third-party notice of an action to enforce a claim against the owner or his guarantor in respect of the same damage is given to the Fund, not later than 3 years after the claim against the Fund arose.

(2) In subsection (1) "third-party notice" means a notice of the kind described in section 27 (1) and (2).

(3) No action to enforce a claim against the Fund under this Part shall be brought in any court in Hong Kong unless the action is commenced not later than 6 years after the occurrence or, if there is more than one such occurrence, the first of such occurrences, resulting in the discharge or escape by reason of which the claim against the Fund arose.

(4) Notwithstanding subsections (1), (2) and (3), a person's right to bring an action under section 26 to enforce the Fund's obligation to indemnify him under that section shall not be extinguished before 6 months from the date when that person first acquired knowledge of the bringing of an action against him under the provisions of Part II (that is to say an action to enforce a liability against which he seeks indemnity), or under the corresponding provisions of the law of any country outside Hong Kong giving effect to the Liability Convention.

29. Subrogation and rights of recourse (1) In respect of any sum paid under section 25 (1) (b) the Fund shall acquire by subrogation the rights of the recipient against the owner or guarantor.

(2) The right of the Fund under subsection (1) is subject to any obligation of the Fund under section 26 to indemnify the owner or guarantor for any part of the liability on which he has defaulted.

(3) In respect of any sum paid- (a) under section 25 (1) (a) or (c); or (b) under section 26, the Fund shall acquire by subrogation any rights of recourse or subrogation which the owner or guarantor or any other person has in respect of his liability for the damage in question.

(4) In respect of any sum paid by the Government as compensation for pollution damage, the Government shall acquire by subrogation any rights which the recipient has against the Fund under this Part.

PART IV MISCELLANEOUS 30. Offences by bodies corporate Where an offence under this Ordinance, which has been committed by a body corporate is proved to have been- (a) committed with the consent or connivance of; or (b) due to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, commits that offence and shall be liable to be proceeded against and punished accordingly.

31. Fees (1) The Governor in Council may by regulations made under this section or under the Merchant Shipping Ordinance (Cap. 281) prescribe the fees payable in respect of any certificate, service or facility issued or provided under this Ordinance, not being fees prescribed under any other section of this Ordinance.

(2) Any fees prescribed under this Ordinance- (a) may be fixed at levels which provide for the recovery of expenditure incurred or likely to be incurred by the Government or other authority in relation generally to the administration, regulation and control of Hong Kong ships and of ports, ships and navigation in the waters of Hong Kong, and shall not be limited by reference to the amount of administrative or other costs incurred or likely to be incurred in the provision of any particular certificate, service, facility or matter; and (b) may, without prejudice to the generality of paragraph (a), be fixed at different amounts in relation to different sizes of ship, whether measured by tonnage, length or otherwise, or in relation to different classes, types or descriptions of certificate, service, facility or ship.

32. Amendments, Savings and Repeals (1) The Oil Pollution (Compulsory Insurance) Regulations (App. I, p. AV1) as amended in the provisions set out in column 1 of Part I of Schedule 2 to the extent and in the manner set out in column 2 of that Part- (a) shall, notwithstanding the repeals specified in subsection (3), continue in force; and (b) shall be deemed for all purposes to have been made by the Governor in Council under sections 15 and 16.

(2) - (3) (Omitted) (4) Notwithstanding the repeals effected by subsection (3), any certificate or notice- (a) issued in Hong Kong; (b) corresponding to a certificate or notice for which provision is made by section 10 (3), 16 (1) or 24 (1); and (c) in force immediately before the commencement of this Ordinance, shall continue in force and have effect as if it were a certificate or notice issued under section 10 (3), 16 (1) or 24 (1), as the case may be.

SCHEDULE 1 OVERALL LIMIT ON LIABILITY OF FUND Fund Convention, Article 4-paragraphs 4, 5 and 6 [s. 26 (9)] 4. (a) Except as otherwise provided in subparagraph (b), the aggregate amount of compensation payable by the Fund under this Article shall in respect of any one incident be limited, so that the total sum of that amount and the amount of compensation actually paid under the Liability Convention for pollution damage caused in the territory of the Contracting States, including any sums in respect of which the Fund is under an obligation to indemnify the owner pursuant to Article 5, paragraph 1, of this Convention, shall not exceed 450 million francs.

SCHEDULE 2 (omitted)


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