Limitation Fund

Limitation Fund in Maritime Law

Note: There is more information on maritime/admiralty law here.

The following is a definition of Limitation Fund, produced by Tetley, in the context of admiralty law: [Translation of Limitation Fund in French: “fonds de limitation”] [Translation of Limitation Fund in Spanish: “fondo de limitación”] [Translation of Limitation Fund in Italian: “fondo di limitazione”] [Translation of Limitation Fund in German:Haftungsbegrenzungsfond”] – The fund which is constituted in court by the party seeking to limit its liability under the Limitation Conventions 1957 (art. 2) or 1976 (art. 11) (see this maritime law term in this legal dictionary). Once constituted, the limitation fund is available only to pay claims subject to limitation, so that other claims must be asserted separately, and claimants against the fund are barred from proceeding against other assets of the defendant. The fund is constituted by the deposit with the court of the sum or approved security, as determined under the relevant Convention, for the benefit of all claimants. The constitution of the fund results in a stay of proceedings in any actions already begun in respect of the casualty concerned, and in the filing of all claims relating to the casualty in the limitation proceedings, in accordance with the principle of “concursus” (see this maritime law term in this legal dictionary). At the conclusion of the limitation proceedings, the fund is distributed in proportion to the “established claims”. See Tetley, Int’l. M. & A. L., 2003 at pp. 300-311.

Limitation Fund in Admiralty Law

For information on limitation fund in this context, see the entry on limitation fund in the maritime law encyclopedia.