In accordance with the provisions of the 1976 International Convention on Limitation of Liability for Maritime Claims, where the aggregate of claims arising out of a single occurrence exceeds the limits of liability referred to in Article 106 of the code, the total amount of repairs owed by the owner under the legal limitation is made up of, by the owner or any other person acting on his behalf, into a single limitation fund. The fund thus shall be used exclusively to settle claims to which the limitation of liability applies.
After the formation of the fund, no right may be exercised, in respect of the same claims, over other assets of the owner by the creditors of the fund, provided that the limitation fund is available to the claimant.
The fact of invoking the limitation of liability or setting up the limitation fund does not mean that the owner accepts liability.
The limitation fund comprises three parts allocated respectively:
a) the settlement of claims for death or personal injury to passengers;
b) the settlement of claims for death or personal injury of persons other than passengers;
c) the settlement of other claims.
For each part of the fund, the distribution will be made among the creditors in proportion to the amount of their recognized claims.
Where the amount of claims for death of or personal injury to persons other than passengers exceeds the amount of the limitation of liability limit set for these claims in the a), the excess is in competition competing with claims other than those arising from death or personal injury b).
If, before the distribution of the fund, the owner of a ship has paid in whole or in part any of the claims referred to in Articles 103, 104 and 106 of the code, he is authorized to take part in the distribution of the fund in the place and stead of the creditor in the distribution of the fund, but only to the extent that, under the law of the country in which the fund is established, this creditor could have had his claim against the owner.
In all cases where an owner is authorized by the Code to limit his liability, he may obtain the release of his vessel or any other property belonging to him, as well as the release of bonds and guarantees given.
He must first prove that he has set up the fund or provided all the appropriate guarantees for its constitution.
In applying the provisions of the preceding paragraph, the court shall take into account the constitution of the fund or the provision of sufficient guarantees not only in the territory of the Member State but also either at the port where the event giving rise to the distrainor’s claim occurred, or at the first port of call after the event, if the event did not take place in a port, or at the port of disembarkation or unloading, in the case relating to personal injury or damage to goods.
Where the owner has provided a guarantee for a sum corresponding to the limits of his liability, this guarantee is used to pay all claims arising from the same event and for which the owner can limit his liability.