A recent report from the Permanent Norwegian Law Commission for Maritime Matters has recommended that Norway ratifies the HNS Convention 1996. The
Convention, which concerns liability for damage caused by hazardous and
noxious substances, such as LPG
and LNG gas, carried by sea, will make it
easier for injured parties to claim compensation directly from the liability
"Under Norwegian marine insurance law, third parties may, in practice, only
commence direct action against the liability insurers if the insured is
insolvent. However, under the HNS Convention the right to commence action
against liability insurers is not subject to this precondition," says Gaute
Gjelsten, newly-appointed partner at Oslo-based law firm Wikborg Rein.
The HNS Convention contains considerably higher limitation amounts than
those under the 1976 Limitation Convention as amended by the 1996 Protocol.
"As an example, under the global limitation rules a 40,000 gross ton vessel
would give a limitation fund amounting to approximately $21,700,000 for
property damage. Under the HNS Convention the same vessel would have a
limitation amount of approximately $95,700,000," explains Gjelsten.
Compensation under the HNS Convention is expected to come primarily from
shipowners and their liability insurers. A compensation fund will be
established for those instances where liability extends beyond the
limitation amounts for shipowners and their insurers. The fund will be
financed by the receivers of HNS cargo through a tax payable to the fund.