CANADA Law and Practice Contributed by: Rui Fernandes, Andrea Fernandes and Conal Calvert, Gardiner Roberts LLP
trustee in bankruptcy unless the trustee pays into court the amounts claimed in relation to the sale of the arrested vessel in the Federal Court action. 5.12 Damages in the Event of Wrongful Arrest of a Vessel The court will order that damages be paid for a wrong - ful ship arrest only if malice or gross negligence on the part of the arresting party can be proven. 6. Passenger Claims 6.1 Laws and Conventions Applicable to the Resolution of Passenger Claims Canada’s MLA sets out the laws applicable to the resolution of maritime passenger claims. The MLA incorporates both the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 as amended by the Protocol of 1990 (the “Ath - ens Convention”), and the LLMC Convention. Generally speaking, the Athens Convention applies to limit liability for injuries suffered by passengers, typically paying, aboard a vessel being operated for a commercial purpose. The LLMC Convention limits liability for all other personal injuries and deaths that occur on board a ship or arise directly from its opera - tion. Section 27 of the MLA provides that Canada is a state party to the LLMC Convention. The limits of liability are found at Articles 6 and 7 of the LLMC Convention. For ships of less than 300 GT, Sections 28 and 29 of the MLA set out the limits of liability for claims for loss of life or personal injury to passengers. Section 37 of the MLA provides that Articles 1 to 22 of the Athens Convention have force of law in Canada. The MLA expands the scope beyond purely interna - tional voyages to apply to domestic voyages as well. The limits of liability are found under Articles 7 and 8 of the Athens Convention. Where the total amount that would be payable to all claimants under the Athens Convention limitation of liability exceeds the limit of liability set out in Article 7 of the LLMC Convention, a ship-owner may limit such claims to the amount of
the LLMC Convention limit through a pro rata scaling of each claim. Under Article 16 of the Athens Convention, any action for damages arising out of the death of or personal injury to a passenger or the loss of or damage to lug - gage shall be time-barred after a period of two years. Under Section 14 of the MLA, no action may be com - menced by the dependants of the person injured or deceased later than two years after the cause of action arose. Under Section 23 (1) of the MLA, no action may be commenced later than two years after the loss or injury arose to enforce a claim or lien against a ship in collision or its owners in respect of any loss to another ship, its cargo or other property on board, or any loss of earnings of that other ship, or for damages for loss of life or personal injury suffered by any person on board that other ship, caused by the fault or neglect of the former ship, whether that ship is wholly or partly at fault or negligent. Under Section 140 of the MLA, except as otherwise provided in the MLA or any other federal statute, no proceedings under Canadian mari - time law may be commenced later than three years after the day on which the cause of action arises. Claims for indemnities for personal injury of a pas - senger are recognised as maritime claims rather than maritime liens. Maritime liens are reserved for bot - tomry and respondentia, salvage, collision, seamen’s wages, Master’s disbursements, and goods and ser - vices provided to foreign ships. 7. Enforcement of Law and Jurisdiction and Arbitration Clauses 7.1 Enforcement of Law and Jurisdiction Clauses Stated in Bills of Lading The Courts in Canada will recognise and enforce for - eign law and jurisdiction clauses stated in bills of lad - ing under certain circumstances. Section 46 of MLA allows cargo claimants the option to sue in Canada despite an exclusive foreign jurisdic - tion clause. It states the following.
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