Shipping 2026

HONG KONG SAR, CHINA Law and Practice Contributed by: Christopher Andrew Potts, Crump & Co

Differences in Enforcement Regarding the lease, the focus is on repossessing the leased asset (the ship) under lease terms, which is often faster than mortgage enforcement – and is often governed by English law and arbitration (eg, the LMAA). A mortgage involves court-ordered fore - closure and sale, which is a more complex process – especially with international jurisdictions. This is governed by the Merchant Shipping (Registration) Ordinance (Chapter 415). In essence, Hong Kong’s pro-leasing policies and global market shifts are making leasing a dominant force, challenging traditional bank lending by offering unique capital and risk management benefits, espe - cially for Chinese owners. 3. Marine Casualties and Owners’ Liability 3.1 International Conventions: Pollution and Wreck Removal The liability of owners and interested parties for marine pollution and wreck removal is governed by a combi - nation of domestic legislation, which gives local effect to several key international conventions. Several international conventions concerning marine pollution liability are implemented in Hong Kong through local ordinances. These include: • MARPOL 73/78 (enacted via the Merchant Ship - ping (Prevention and Control of Pollution) Ordi - nance (Chapter 413)); • the International Convention on Civil Liability for Oil Pollution Damage (CLC) 1992 and the Fund Convention 1992 (implemented by the Merchant Shipping (Liability and Compensation for Oil Pollu - tion) Ordinance (Chapter 414)); and • the Bunker Pollution Convention 2001 (given effect by the Bunker Oil Pollution (Liability and Compen - sation) Ordinance (Chapter 605)). Hong Kong has not adopted the Nairobi Wreck Removal Convention 2007, although its registered ships must obtain the required insurance when oper - ating in countries that are party to it. Wreck removal

liability is instead addressed by local law, with the Shipping and Port Control Ordinance (Chapter 313) allowing the Director of Marine to order wreck removal. 3.2 International Conventions: Collision and Salvage Liability for marine collisions and salvage is mainly governed by the Merchant Shipping (Collision Dam - age Liability and Salvage) Ordinance (Chapter 508), which puts international conventions into effect. The overall framework for limiting liability is set out in the Merchant Shipping (Limitation of Shipowner’s Liability) Ordinance (Chapter 434). Collision The 1910 Collision Convention (via Chapter 508) divides property damage liability based on fault. Liability for loss of life or personal injury is joint and several. The International Regulations for Preventing Collisions at Sea 1972, which help determine fault, are enforced by the Merchant Shipping (Safety) (Signals of Distress and Prevention of Collisions) Regulations (Chapter 369N). The LLMC 1976/1996 is implemented through Chap - ter 434. This allows ship-owners to limit liability for collision claims and related maritime claims based on the vessel’s tonnage, subject to statutory conditions. Salvage The 1989 Salvage Convention is implemented through Chapter 508. It governs the rights to salvage reward, criteria for determining salvage remuneration, special compensation for environmental protection and duties of salvors and owners. Contract terms can modify the convention, except for certain mandatory duties. 3.3 Convention on Limitation of Liability for Maritime Claims The 1976 Convention on Limitation of Liability for Mar - itime Claims was incorporated by the Merchant Ship - ping (Limitation of Shipowners Liability) Ordinance (Chapter 434). Amendments to this Ordinance were made to give effect to the increased limits of liability, as set out in the 1996 Protocol and the subsequent 2012 amendments, in 2015 and 2017, respectively.

243 CHAMBERS.COM