STUDY ON THE SYSTEM OF LIMITATION OF LIABILITY OF CRUISE COMPANIES
Zhao Qiang & Chu Siyu
As a new form of tourism in China, more and more tourists choose to take a cruise as their way of leisure, entertainment and vacation. However, the cruise tourism industry started rather late in China, and the relevant laws and regulations are not perfect. When a cruise passenger suffers loss of life or personal injury or property damage, the cruise company is in an advantageous position as the relatively strong party. In addition, the legal relationship among the cruise company, the travel agency and the passenger has not been clarified, and the rights and obligations are not clear enough. As a result, the cruise company and travel agency tend to shirk liabilities to each other, and the rights and interests of the cruise passenger cannot be fully protected. Thus, this paper mainly studies the rights of limitation of liability that the cruise company enjoys in China’s cruise tourism, analyzes the characteristics of cruise tourism, sorts out the legal relationship between the cruise company, the travel agency, and the passenger in cruise tourism, and discusses the provisions of China’s laws regarding the system of the limitation of liability of cruise companies, so as to analyze its shortcomings and makes suggestions on how to improve the relevant system.I. PROVISIONS OF CHINA’S LAWS ON THE SYSTEM OF LIMITATION OF LIABILITY OF CRUISE COMPANIESThe term ‘liner’ originated from Britain in the 19th Century. At first, it was used exclusively by the post office. In addition to the function of delivering mails, cruise ships sometimes transport passengers from one port to another in order to increase additional income, thus having a passenger transport function. With the emergence of jetliners, liners no longer have advantages in speed and comfort. Airplanes have gradually become the main mode of transportation for mails and passengers. The competitiveness of liners in carrying passengers and freight is gradually reduced, and the role of its transportation is gradually weakened. However, shipping companies found that liners could provide services as amusement and sea sightseeing. Therefore, they increased their profits by attracting passengers to take liners, and a special kind of liners for carrying passengers, which can also be called ‘cruise’, arose. Cruise ships have gradually become carriers based on the transportation of passengers when they sail on the sea according to a specific voyage route and a specific sailing date. The function of cruise ships has gradually shifted from carrying letters and packages to providing amusement, becoming a ‘mobile tourist hotel’ that can provide leisure and comfort functions.In recent years, cruise tourism has developed rapidly in China. Since 2013, the passenger flow of cruise tourism in China has grown at a rate of over 30 percent for five consecutive years. In 2018, cruise tourists in China reached 4.955 million, far exceeding the growth rate of the global cruise market.With the rise of cruise tourism, the differences between cruise tourism and traditional maritime passenger transport are increasingly apparent. Cruise tourism has its unique characteristics in terms of its content, operation mode and legal status of the subject. As one of the important systems in the field of maritime affairs, the system of limitation of liability also faces new problems in the practice of cruise tourism.Based on different legal relationships, cruise companies have dual identities as a ‘carrier’ and a ‘performance supporter’, which undertake diverse types of liabilities and enjoy different rights of limitation of liability.A. The Limitation of Liability of Cruise Companies as the Carrier of Passengers by SeaIn the aspect of marine cruise tourism, the cruise company mainly undertakes the identity of the carrier of passengers by sea, and provides maritime transport services for cruise passengers. Articles 114-126 of the Maritime Law, chapter 7 of the Contract Law, the General Provisions of the Civil Law and the Tort Law all stipulate the responsibilities and obligations that the cruise company should bear during the carriage of passengers by sea, among which the Maritime Law specifies the limitation system of compensation liability enjoyed by the cruise company.1. Types of Liabilities of Cruise Companies during the Carriage of Passengers by Sea. — The possible damage from cruise companies to passengers is mainly in terms of loss of life or personal injury or property damage. In terms of the research object of this paper, there are different opinions in the theoretical and practical circles on whether the carrier should bear the liability for breach of contract or tort liability for the compensation of passengers’ loss of life or personal injury in the process of maritime transport. There are three views in general, which are the liability for breach of contract, liability for tort and liability concurrence.First, the liability for breach of contract. Based on the current package cruise tourism mode in China, cruise companies, as the carrier of passenger transportation by sea, sign package cooperation agreements with travel agencies. At the same time, in accordance with article 110 of the Maritime Law, because of the cruise tickets or boarding vouchers held between the cruise company and passengers, it can prove that the two parties have a de facto maritime passenger transportation relationship. Chapter 17 of the Contract Law contains general provisions on the contract of carriage of ordinary passengers, and Contract of Carriage of Passengers by Sea (chapter 5) in the Maritime Law has made special provisions on the contract of carriage of passengers by sea. Therefore, whether it is ordinary passenger transportation or maritime passenger transportation, it can be classified as a contract, and the carrier shall be liable for breach of contract for loss of life or personal injury of the maritime passenger.If the cruise company fails to perform its obligations in accordance with the maritime transportation contract, and the passenger’s contractual rights have not been fulfilled, then the passenger’s contractual rights may be fulfilled in accordance with the right of claim stipulated in Contract of Carriage of Passengers by Sea (chapter 5) and Limitation of Liability for Maritime Claims (chapter 11) of the Maritime Law, and Liabilities for Breach of Contracts (chapter 7) and Passenger Transport Contract (section 2 of chapter 17) of the Contract Law, which require the cruise company to bear liability for breach of contract for loss of life, personal injury, or property loss of passengers.Second, the tort liability. The Maritime Law lists the obligations that a cruise company as a carrier needs to undertake, which mainly include the obligations of ship seaworthiness, careful attention, and safety guarantee. The most important one is the safety guarantee obligation, which has an important impact on the passengers’ personal and property safety. If the cruise company fails to fulfill this obligation, such as ship’s leaks, railings, unsafe points and other dangerous places not dealt with and repaired in a timely manner, or fails to provide noticeable warning signs in dangerous areas on the ship, causing personal injury to passengers or property damage, then at this point, the cruise company constitutes an infringement on the personal or property rights of passengers, and it shall bear corresponding responsibilities in accordance with the provisions concerning tort liability in chapters 1 to 4 of the Tort Law and chapter 8 of the General Provisions of the Civil Law.In addition to the infringement damage caused to passengers by the cruise company’s own reasons, there are also cases in which the act of a third party causes infringement to passengers. If the cruise company as a carrier also has faults in this case, it shall bear joint and several liabilities together with the third party for the infringement damage. The victim has the right to claim for the tort compensation from the third party as well as directly from the carrier. For tort compensation, the cruise company has the right to claim from a third party and recover the compensation after assuming the liability.Third, the concurrence of tort liability and liability for breach of contract. At the stage of passenger transportation by sea, it is more often when a cruise company causes personal injury or loss of life or property damage to passengers, and it also meets the circumstances of breach of contract. The carrier’s liability at this time is the concurrence of tort liability and breach of contract liability. According to article 83 of the Legislation Law, when the law is applied, the principle of ‘special law is superior to general law’ shall be adhered to. As for the case of compensation for loss of life or personal injury or property damage to passengers by sea, as compared with the Contract Law, the provisions of the Maritime Law on Contract of Carriage of Passengers by Sea (chapter 5) are special provisions, thus the special provisions shall apply. However, the concept of ‘special law is superior to general law’ does not mean that the special provisions of chapter 5 of the Maritime Law can only be applied to the cases of damages where passengers’ loss of life or personal injury or property damage occur during the carriage of passengers by sea. The author believes that the premise of determining the general law and the special law is that both are provisions on the same legal relationship and legal facts. Therefore, even if the special provisions of liability for breach of contract are inconsistent with the general provisions or special provisions of tort liability, the two are not necessarily mutually exclusive in the application of law in the case of liability concurrence. Therefore, the provisions of Maritime Passenger Transport Contract (chapter 5) in the Maritime Law are not comparable to the provisions of the Tort Law on loss of life or personal injury. There is no need to distinguish special law and general law in such cases, and there is no question of which law has priority. The laws corresponding to the liability for breach of contract and the tort liability have the same effect, and shall be applied respectively within the scope of the civil legal relationship adjusted accordingly.Therefore, in the case of concurrence of tort liability and liability for breach of contract, the passenger can choose one cause of action between tort and breach of contract to file claims against the cruise company. At the same time, due to the special charter mode of China’s travel agencies, the cruise company’s breach of contract with the passenger is usually in line with the breach of the charter cooperation agreement with the travel agency, so the passenger can also file claims against the travel agency based on the cruise travel contract signed with the travel agency. After the compensation for the passenger’s losses, the travel agency may file claims against the cruise company based on the breach of contract. Thus, when investigating the liability of the cruise company, the cruise passenger can choose to ask the cruise company to bear the liability for breach of contract or tort liability.In addition, in accordance with the paragraph 3 of article 117 of the Maritime Law, the carrier and the passenger may agree in writing that the amount of liability shall be higher than that specified in paragraph 1 thereof. Therefore, if the compensation liability limit agreed by the passenger and the cruise company through a written agreement is higher than the limit specified in paragraph 1, the provisions of paragraph 1 shall no longer apply, but the maximum limit agreed by the parties in writing shall be the liability limit.2. Cruise Company’s Right to Limit Liability during Passenger Transportation by Sea. — First, the limitation of liability under the liability for breach of contract. In the event of a cruise tourism dispute, if the personal injury or property damage of a cruise passenger is caused by a maritime accident, the carrier has the right to claim limitation of liability. The limitation of liability in the Maritime Law for carriage of passengers by sea is mainly consistent with the 1976 Protocol to Amend the 1974 Athens Convention relating to the Carriage of Passengers and Their Luggage by Sea (hereinafter referred to as the 1976 Protocol of the 1974 Athens Convention), which is mainly reflected in liability limit stipulated in article 117 of the Maritime Law and the comprehensive liability limit in the provisions of articles 210 and 211.Article 117 of the Maritime Law stipulates the carrier’s liability limit as follows: the passenger’s loss of life or personal injury shall not exceed 46666 units of account per passenger. The unit of account here refers to the ‘special drawing right’ commonly used by the international community. The loss or damage of the passenger’s own luggage shall not exceed 833 units of account per passenger. The loss or damage of the passenger’s vehicle and the luggage carried therein shall not exceed 3333 units of account per vehicle, and the loss of or damage to luggage other than the two properties involved shall not exceed 1,200 units of account per passenger.Article 211 of the Maritime Law stipulates that ‘in respect of claims for loss of life or personal injury to passengers carried by sea, the liability limit of the shipowner thereof shall be an amount of 46,666 units of account multiplied by the number of passengers which the ship is authorized to carry according to the ship’s relevant certificate, but the maximum amount of compensation shall not exceed 25,000,000 units of account.’ That is to say, in a single maritime accident, the maximum amount of compensation for the total liability for loss of life or personal injury of each single passenger is 25 million units of account.If the liability limit specified in article 117 of the Maritime Law is regarded as a primary limitation, the comprehensive liability limit specified in article 211 thereof is regarded as a secondary limitation. However, article 204 thereof explicitly stipulates the applicable subject of the ‘secondary limitation’ is that the carrier must be the owner, charterer or operator of the ship at the same time. In cruise tourism, as the carrier and the owner of the ship, the cruise company is entitled to enjoy the secondary limitation right specified in article 211 thereof, that is, in the event of a serious maritime accident, the total compensation of a cruise company for loss of life or personal injury of passengers can be controlled at the liability limit multiplied by the number of passengers which the ship is authorized to carry through the secondary limitation. The sum of these amounts shall be limited within 25 million units of account.Second, the limitation of the liability under tort liability. In the Tort Law and related judicial interpretations, there is no provision for the limitation of liability under the tort liability for loss of life or personal injury of passengers by sea. There is no legal basis yet for whether the carrier can enjoy the right of the limitation of liability under tort liability, so the carrier cannot apply the system of limitation of liability and has no right to limit its liability. At this point, the carrier needs to bear the liability according to the proportion of liability for the accident.Third, the limitation of liability under the concurrence of tort liability and the liability for breach of contract. In the event of loss of life or personal injury of passengers by sea, it is controversial whether the injured passenger can avoid the limitation of liability after choosing the cause of action through liability concurrence. Some scholars believe that, based on the particularity of the Maritime Law in protecting ships and the background of legislation, this limitation has the nature of compulsory law, which must be implemented in trial practice, regardless of whether the injured passenger chooses to sue for breach of contract or tort infringement. The carrier can enjoy the right of limitation of liability, otherwise, there is a risk of wrong case measured by the current law. However, the author believes that the provisions on the limitation of liability for loss of life or personal injury in carriage of passengers by sea are all stipulated in item 1 of paragraph 1 of article 117 of the Maritime Law, in the chapter Contract of Carriage of Goods by Sea. That is to say, the above limitation of liability only applies to the maritime passenger transportation contract, that is, the situation where the carrier bears the liability for breach of contract. If the injured passenger sues and requires the carrier to bear tort liability, the Tort Law and relevant judicial interpretations shall apply, and the liability limit shall be no longer applicable.B. The Limitation of Liability of a Cruise Company as the Performance Supporter of a Travel AgencyThrough the above analysis, it is clear that the cruise company, as the carrier of passenger transportation by sea, shall bear the liability for personal injury or property damage to the passenger and enjoy the corresponding right of limitation of liability. This part mainly studies the right of limitation of liability enjoyed by the cruise company as the performance supporter of the travel agency. According to the different places where passengers receive services, the analysis can be divided into two parts: passenger on board and passenger on land.1. The Right of Limitation of Liability of Cruise Company While Passengers Being on Board. — In the current mode of exclusive sale of tickets in China, the travel agency is the party to the cruise tourism contract. Although the cruise company does not directly enter into a tourism service contract with the passengers, the service facilities and projects provided by the cruise company play an important role in assisting the travel agency in fulfilling its obligations under the contract, including the cruise itself as a tourist attraction, providing accommodation and various other entertainments and leisure for the passengers.If a passenger encounters personal injury or property damage while on board, the occurrence of such damage can be divided into an accident caused by navigational liability or an accident caused by non-navigational liability. There is no doubt that damages caused by navigational liability may be subject to limitation of liability. However, whether the cruise company is still entitled to the limitation of liability for losses caused by non-navigational liability, the Maritime Law of China does not make clear provisions on this. Academia generally believes that the original intention of the establishment of the carrier’s liability limitation system was to avoid the carrier’s excessively strict liability for compensation and protect the long-term development of the shipping industry when maritime accidents occurred during the maritime voyage due to specific marine risks. The limitation of liability system is a rule system with obvious tendency of rights and interests. Therefore, during the period of passenger’s stay on the ship, when receiving the accommodation, shopping and other services on the cruise ship, the possible personal and property risks faced by the passenger are not significantly different from the risks suffered in the ordinary tourism activities on the land, and they are not faced with special risks on the sea. In this case, if the cruise company still enjoys the same right to limit compensation liability for passenger transportation by sea, it is contrary to the original intention of this system and violates the balance of interests and fairness of civil liability. It not only goes beyond the legislative purpose of the system of limitation of liability, but also violates the goal of fairness of the law. It is more likely that the original reasonable industry support will become industry protectionism. That is to say, in terms of the limitation of liability for compensation, the cruise company does not enjoy the limitation of liability for the loss caused by non-navigation accidents such as tourist service during the period when the passenger is on the ship, and needs to bear the liability in full.2. The Right of Limitation of Liability of Cruise Company While Passengers Being on Land. — In order to study whether the cruise company can still invoke the limitation of liability in the stage of on-land tourism of passengers, it is necessary to clarify whether the responsibilities of the cruise company cover the period of land tourism. The responsibilities of the cruise company in providing entertainment services and recreational facilities shall be the same as those in providing services in the period of carriage of passengers by sea. By reviewing the relevant provisions in the Maritime Law in force concerning the period of carriage, it can be seen that the responsibility for the personal safety of the passenger in the service of carriage of passengers by sea starts from the time of boarding to the time of disembarkation. As for luggage and other property rights and interests, it can be classified into carry-on luggage and checked luggage according to the different ways of carrying. The two have different responsibilities of keeping. According to the relevant provisions of the Maritime Law, the delivery period of the carry-on luggage is the same as the period of the passenger’s personal rights; the delivery period of the checked luggage is from the time the cruise company accepts the luggage to the time when the luggage is returned to the passenger.However, due to the special nature of cruise tourism, the service of carriage of passengers by sea required by passengers is usually no longer a simple ‘shore to shore’ transport, but cruise ships stop at certain ports in the middle of the way, and after going to the land for sightseeing, passengers return to cruise ships to continue to accept the service of maritime transport. Hence, whether the period of sightseeing on land is still covered by the cruise company’s responsibilities should be judged according to the de facto agreement between the cruise company and the travel agency. If the cost of the tickets sold by the cruise company already includes the related cost of on-land tourism, the cruise company shall not only be responsible for the related service of marine cruise tourism, but also be responsible for the on-land tourism service of the passengers, and the corresponding responsibility during this period is naturally covered. It is not only limited to the sea but also extended to the land. However, in practice, there are few cases in which the cruise ticket includes the land tourism cost. In cruise tourism, the travel service on land is usually operated by the travel agency. Even if the cruise company is engaged in shore-based tourism business, it is not acting as the identity of a shipping carrier.The author believes that even if cruise companies need to provide services in the on-land tourism stage, fundamentally they are no different from other ordinary on-land tourism programs. The passengers’ on-land recreational activities are not affected by maritime factors. Personal injuries and property damage encountered while traveling on land are not related to maritime risks, and the risks and losses faced by the cruise company are not too much different from other on-land activities. In this case, the Maritime Law does not need to be applied to adjust the liability of the cruise company since there is no legal relationship with the carriage of passengers by sea. It can be adjusted only by applying the Tourism Law. In any event, regardless of whether the cruise company’s liability period includes the land travel stage, the liability limitation system for the maritime field should not be applied to passengers’ personal injuries or loss of life. The compensation that the cruise company needs to bear has no maximum limitation, and it needs to be fully compensated. As for the passenger’s property loss or damage, it is necessary to determine whether it is still within the custody of the cruise company according to the different ways of carrying, to divide the period of liability, and consider the corresponding limitation of compensation liability.
II. THE LIMITATIONS OF THE CURRENT LIABILITY LIMITATION SYSTEM OF CRUISE COMPANIES IN CHINA
Cruise tourism has a huge development prospect in China, but the current system cannot meet the requirements of the particularity of cruise, and it is difficult to solve the lag of new problems in the current practice. This chapter summarizes the limitations of the current system, so as to provide targeted suggestions on how to solve these problems in the future.A. The Current System Cannot Meet the Requirements of the Particularity of CruiseAt the beginning of the enactment of the Maritime Law, China’s cruise tourism industry was not widely developed, and the consumption demand of the cruise tourism market was relatively small. Chapter 5 of the Maritime Law mainly adjusts the general maritime passenger transport industry, which solves the legal problems in the general maritime passenger transport. With the rise of cruise tourism, the particularity of cruise tourism is increasingly apparent. The current system does not make specific provisions for cruise tourism when it was formulated, which cannot meet the special needs of cruise tourism.1. Limitation of Liability of Cruise Companies for Abuse of Format Contract Terms. — At present, most of the domestic cruise tourism industry is engaged by foreign large-scale cruise companies. Due to the strict control of national policies on the industry and other factors, cruise companies usually use the way of cooperation with China’s travel agencies to carry out for-profit business activities. Due to the diversity and complexity of the cruise tourism industry, the cooperation agreements signed by travel agencies and cruise companies are generally pre-prepared format contracts that can be used multiple times by cruise companies to save time and increase efficiency. The format contract text provided by the foreign cruise company is usually published on its official website and displayed to the public in terms of shipping terms and details. These format contract texts mainly involve the cruise company’s liability for breach of contract, contract changes, jurisdiction, and exemption clauses, etc. The cruise travel contracts provided by various cruise companies are different, especially concerning the responsibilities of cruise carriers.When formulating the terms and conditions of the cruise contract, due to the profit-seeking characteristics of commercial operations, in order to maximize profit, the cruise carrier needs to master the risks and reduce them, and it will adopt restrictions on its own operational risks and liability, for example, formulating an exemption clause, that is, by making it clear in advance in the agreement, the party concerned shall not be liable or only partially liable for an impending damage. In this pre-defined way, before risks occur, cruise companies aim to prevent the risks in the future, so as to avoid the possible burden. However, the abuse of such format clause will often lead to the situation that cruise companies evade their responsibilities, thus lacking fairness.For example, cruise companies usually formulate relevant terms in statements or contracts in advance to avoid the companies’ liability in case of illegal infringement, such as theft of property of passengers’. ‘Valuables’ in the Terms & Conditions of MSC Cruises explicitly states that ‘all cabins shall be provided with safes. When money or valuables are stored in luggage or left unattended, the company shall not be liable for any inadvertent loss or theft.’ At the same time, it is stipulated in the Company Liability that ‘if the valuables are not kept by the purser, neither the company nor the carrier shall be liable.’ It seems reasonable that passengers should take care of their valuables. However, this term obviously avoids the liability which the cruise company should bear when the passengers’ ‘non-valuables’ are stolen or lost and ‘valuables not being kept by the purser’.There is no unified standard for limitation of liability of major cruise companies. In order to protect their own interests to the greatest extent and avoid bearing more losses, the provisions of the format terms of each cruise company for the compensation limit are often different and lack of uniform management. Article E of the Carrier’s Obligations and Limitations in the Terms and Conditions of the Passage Contract of the Booking Voyage Contract provided on the official website of Star Cruises Company states that ‘in the case of death of or personal injury to a guest, the sum of USD 70,000 per guest including medical costs, disability compensation, etc. (or whatsoever); and in the case of loss of or damage to property, the sum of (a) USD 300 per guest, or (b) USD 5 per kilogram of the item lost or damaged or, (c) USD 75 per bag or piece of baggage, whichever is lowest.’ There are also loopholes for cruise companies to avoid liability by expanding the scope of the subject of limitation of liability in practice. Article 12 in the Terms and Conditions of Star Cruises Company stipulates that ‘it is hereby expressly agreed that no servant or agent of the carrier (including every independent or sub-contractor whose services are from time to time utilized by and for the purposes of the carrier) shall in any circumstances whatsoever be under any liability whatsoever to the guest for any loss, damage or delay of whatsoever kind exceeding that of carrier while acting in the course of or in connection with their employment or agency.’ The subject of right of the limitation of liability enjoyed has been extended to the carrier’s employees, agents, even independent contractors. The scope of the subject of the limitation of liability is expanded, and more subjects are given the right of limitation of liability, so that the cruise company can reduce the liability to the greatest extent.In addition, due to the dominate position of cruise companies in cruise market in China, travel agencies generally have no right to require cruise companies to modify the specific terms of their format contracts involving the limitation of liability. The format contracts provided by cruise companies are usually in English or other foreign languages. Even after they are translated into Chinese, the important clauses related to the limitation of liability will be difficult to understand due to the differences in language habits in terms of language meaning, sentences, and interpretation. Travel agencies and passengers can easily lead to deviations in understanding their own rights and interests, and ultimately lead to unsuccessful rights protection. At the same time, the protection of the rights of cruise passengers and the management of the cruise tourism market will also cause adverse effects.In conclusion, there is no unified standard for the limitation of liability of cruise companies. Cruise companies often abuse the right of limitation of liability and restrict their liability to cruise passengers’ loss of life or personal injury and property damage by formulating unfair format terms in the format contracts they provide during the process of making cooperation agreements or signing cruise contracts, such as stipulating limitation of liability by themselves and expanding the subject of limitation of liability. It is not conducive to the protection of the rights and interests of cruise passengers.2. Disputes on the Application of Limitation of Liability by Cruise Companies. — First, whether a cruise company is entitled to the limitation of liability in the case of ‘non-navigational accident’. There is no doubt that cruise companies have the right of limitation of liability for personal and property damage caused by maritime navigational accidents. However, in the case of non-navigational accidents, if cruise companies are given the same right of limitation of liability, does it completely violate the original intention of the system of limitation of liability? Is it appropriate to divide the right of limitation of liability of cruise companies into navigational accident and non-navigational accident as the boundary?Non-navigational accidents in cruise tourism are basically the same as the on-land accidents. If the cruise company is still given the right to limit the liability for compensation, there is indeed a possibility that the rights and interests between the carrier and the passenger will be unbalanced and the risk to the carrier will be excessively reduced. However, if we can see from the complex cruise tourism practice, it is often difficult to separate the special maritime risks from the non-maritime risks. Navigational accidents and non-navigational accidents are also difficult to define in the field of limitation of liability. There are loopholes in the legislation and disputes in the theoretical circle, which also constitute challenges to the traditional shipping industry brought by the development of cruise tourism.In fact, the concept of special maritime risks itself has a certain degree of abstraction and limitations of wording. In the state where the definition of navigational accidents and non-navigational accidents has not been clearly distinguished, if only based on this basis of measurement to determine whether cruise companies can evoke the limitation of liability, we cannot solve the existing problems, and which is also the challenge of modern cruise tourism on the passenger transportation field in the traditional maritime law.Second, whether a cruise company enjoys the limitation of liability during the land-based sightseeing stage. On the issue of whether the cruise companies can claim the limitation of liability for compensation during the land-based tourism in China, because the cruise tourism industry is a new developing industry, it is currently a legislative omission, and the rules in this field are still blank. In my opinion, the right of limitation of liability for compensation should not be given to cruise companies. However, in the practice of cruise tourism, in order to minimize their own liability, cruise companies also limit their liability during on-land tourism in the format terms, and only bear liability within a certain limitation for the loss of passengers. One typical example is the Royal Caribbean International Cruise Company. In the Passengers’ Contracts of Bill, it stipulates the limitation of liability for the loss or damage of property: regardless of the contrary provisions of the law, the carrier’s limitation of liability for the loss of the passengers’ on-land property is USD 300 per passenger. It can be seen from the format terms of cruise companies listed above that in cruise practice, they often try to further reduce their liability by expanding the application scope of their limitation of liability to cover the stage of on-land tourism.B. The Current System Is Lagging BehindAs a norm, the content of the law is abstract, generalized and stereotyped, and it has a certain stability after it is formulated. However, the cruise tourism issues to be dealt with in China’s current laws and regulations are constantly changing with the development of the times. Therefore, the current system inevitably has a vacuum of rules, showing certain incompatibility and lag, and the unclear laws will lead to loopholes in judicial practice. The limit of compensation liability in the Maritime Law has remained unchanged for more than two decades, and it is seriously behind the legislation. More importantly, under the current fast-developing economic conditions, the right of the cruise company to limit liability for compensation under the Maritime Law clearly cannot form a reasonable balance with the compensation for passenger losses.1. The Application of Limitation of Liability under Different Causes of Action of Tort and Breach of Contract Is Uncertain. — According to the current legal system in China, the relevant provisions of the contract of carriage of passengers by sea stipulate that the carrier is entitled to the right of limitation of liability in case of breach of contract, but it is not clear whether the carrier is entitled to the right of limitation of liability in case of tort liability.However, in the charter tourism mode in China, the status of legal subjects between cruise companies and passengers is inexplicit. On the one hand, the cruise company has not directly signed a cruise tourism contract with the passenger, and the role of boarding certificate or ticket has not been fully recognized; on the other hand, the cruise company has not signed a service contract with the passenger in terms of tourism services. The legal subject status of the cruise company is usually in the state of ‘anonymity’. As the function of the tickets is not clear enough and not fully recognized, it is difficult for the passenger to realize that the cruise company can be held liable as a carrier based on the contractual relationship of the ticket certificate. In addition, in practice, the form and message of the ticket are also inadequate, and the content of the ticket is usually not comprehensive enough to fully summarize all the terms of the contract of carriage of passengers by sea. Due to the non-professional nature and lack of legal knowledge, passengers seldom know that the ticket is a kind of legally binding documentary evidence.Due to the limitations of their own legal awareness and lack of professionalism, passengers are usually unable to realize that the tickets sold by cruise companies through travel agencies have formed de facto contract relationships of carriage of passengers by sea. After passengers’ personal and property are damaged, they often choose the tort liability of cruise companies as the cause of action, without taking into account that cruise companies can be held liable for breach of contract. Therefore, if a passenger claims compensation for the tort damages with the tort as the cause of action after suffering the infringement damage, whether the cruise company enjoys the system of limitation of liability for compensation is not clearly stipulated by law, the cruise company may not enjoy the right of limitation of liability for compensation.In addition, if the system of limitation of liability can only be applied to the claim of compensation for breach of contract, the uncertainty of the system of limitation of liability of carrier under different causes of action of tort and breach of contract is also contrary to the principle of fairness of civil liability. The current law only makes it clear that the carrier can enjoy the right of limitation of liability in case of breach of contract. However, in the case of maritime accidents, there are often cases where the concurrence of tort liability and liability for breach of contract occurs. If the passenger’s personal and property losses are not only the cruise company’s violation of the relevant obligations in the contract of carriage of passengers by sea, but also the cruise company’s infringement of the passenger’s personal and property rights and interests, the passenger can only claim compensation for one cause of action. If the passenger chooses the breach of contract as the cause of action, the cruise company can apply the limitation of liability for compensation stipulated in the Maritime Law, but if the passenger brings an action of tort, the cruise company cannot apply the limitation of liability for compensation, and can only make compensation in real amount. Only because of different causes of action, the carrier’s liability for compensation varies greatly, which obviously violates the original intention of the establishment of the limitation system of liability for compensation.2. The Current Stipulated Amount of the Limitation of Liability Is Too Low. — In the carriage of passengers by sea in current cruise tourism, the clauses concerning the limitation of maritime liability are no longer suitable for economic development in China. The provisions of the Maritime Law on contract of carriage of passengers by sea and the limitation of maritime liability give the carrier the right of limitation of liability when facing victims’ claims. The original intention of the system is to protect the carrier from risks and maintain a balance of rights and interests between the carrier and passengers. However, the Maritime Law in force has significantly lowered the amount of carrier’s liability for compensation, which is obviously lower than the level of China’s economic development, and it has clearly caused an imbalance of rights and interests, and it is difficult to effectively protect the interests of passengers.With the rapid development of China’s social economy, the current system of limitation of the carrier’s liability has obviously lagged behind. According to the query results on the official website of the National Bureau of Statistics, when the Maritime Law was adopted at the Standing Committee of the Seventh National People’s Congress in 1992, the per capita disposable income of urban residents in China was only 2026.6 yuan, and 784 yuan for rural residents. In view of the per capita disposable income of urban and rural residents at that time, when formulating the Maritime Law at that time, the provisions on the limitation of liability had greatly safeguarded the rights and interests of passengers, and achieved a balance and fairness between the rights of carriers and passengers. However, according to the latest data from the National Bureau of Statistics, in 2017, the per capita disposable income of urban residents and rural residents reached 36,396 yuan and 13,432 yuan respectively, which is several times higher than the level when the Maritime Law was enacted. Even though the purpose of the limitation of liability in the Maritime Law is to protect the interests of the carrier considering maritime risks, it is obviously out of balance according to the current situation of China’s actual economic development, and it is difficult to provide the full remedy for the injured passengers.At the same time, cruise tourism belongs to a higher level of tourism mode in China’s tourism industry. Whether it is the pricing of cruise tourism products or the expenditure of various entertainment items (catering, shopping, etc.) on cruise, the expense of passengers is generally higher than that of other general types of sea passenger transportation. When the Maritime Law was enacted, cruise tourism was still a relatively rare way of tourism. At that time, the scale of passenger ships was generally small. Even if the carrier enjoyed the secondary limitation of liability on the basis of primary limitation, due to the small passenger volume, there was no imbalance in the rights and interests of passengers. However, the scale of modern cruise tourism passengers is far larger than that of traditional maritime passenger transportation. If the carrier’s liability limitation stipulated in the current Maritime Law of China continues to be used, the total amount of compensation borne by the cruise company on the basis of primary limitation will be greatly limited by the secondary limitation, which unreasonably increases the risk of loss to cruise passengers and the risk of loss to cruise tourism, and also adversely affects the healthy development of the cruise tourism industry.III. SUGGESTIONS ON IMPROVING THE SYSTEM OF LIMITATION OF LIABILITY OF CRUISE COMPANIES IN CHINAWith the rapid development of China’s cruise market and the continuous expansion of market share, various departments of the national government attach great importance to this, followed by policy support and reasonable management and control of the development of cruise tourism industry to ensure the smooth operation of the market. The National Development and Reform Commission included the luxury cruise industry in the state’s encouraged industry catalog in 2011. In 2016, the State Council issued the 13th Five-Year Plan for Tourism Development, which has been in effect since December 7, and made plans for taking tourism as a national strategic pillar industry and developing cruise tourism development, expanding the main body of the cruise market and encouraging the diversified capital development of the cruise industry. With the rapid development of China’s cruise tourism industry, in addition to policy support, the law should also be accompanied by corresponding improvements. Whether it is to safeguard the reasonable rights and interests of passengers or to standardize the legal operation of cruise companies, it needs to be supported by perfect laws. Among them, the liability limitation system, as a key system for cruise companies to bear civil liability, also needs to clarify the solution method of the problem in light of the new challenges and problems that continue to emerge in practice, combined with the needs of the development of the times, so that there is a legal basis to promote the settlement of disputes and the healthy development of cruise tourism. Therefore, it is of great significance to promote the perfection of legislation on the system of limitation of liability.A. Clarify the Liability and Limitation of Liability of Cruise CompaniesIn order to further study whether cruise companies enjoy the right of limitation of liability, it is necessary to be explicit whether cruise companies should bear liability and what kind of liabilities should be borne in different situations. At the same time, unified provisions need to be made in terms of the right of limitation of cruise companies’ liability under the two different causes of action, tort and breach of contract.In view of the fact that China has not yet made clear provisions on the legal status of cruise companies, the future legislative improvement of China needs to take into account that the identity of cruise companies is not only the carrier of passenger transport by sea, but also the important status of the performance supporter of travel services, namely the assistant of travel agencies, when providing service facilities and entertainment programs for passengers on cruise ships. 1. Clarify the Liability during the On-Land Tourism Service. — According to the cooperation agreement between the cruise company and the travel agency, the services provided by the cruise company also include the on-land tourism service for cruise passengers. The author believes that the liability and the limitation of liability should be determined by the relevant laws concerning the general tourism activities on land, rather than the application of the Maritime Law alone. Judging from the cooperation agreement between the cruise company and the travel agency, if the cruise company does not need to provide on-land tourism services, and the passengers are no longer under the control of the cruise company nor in the closed space of cruise ship, the cruise company shall not be liable for loss of life or personal injury of cruise passengers. As for the properties other than the passengers’ carry-on luggage, such as luggage and vehicles, are still under the control of cruise companies until they are returned to the passengers, the cruise company shall still be liable for the property loss, and shall be entitled to the corresponding limitation of liability.2. The Right of Limitation of Liability of a Cruise Company in Non-Navigational Accidents Shall Not Be Completely Excluded. — Whether the cruise carrier is entitled to the limitation of liability for non-navigational accidents that happened on the cruise should be clarified by the specific practice in cruise tourism. Due to the special nature of maritime travel, even the personal injury and property damage of passengers caused by non-navigational accidents may inadvertently aggravate the damage due to various factors such as being far away from land, limited medical conditions, long rescue distance, and low comfort, which may increase the damage invisibly.Thus, the author believes that, in view of the fact that the distinction between ‘navigational accidents’ and ‘non-navigational accidents’ has not been fully clarified, in practice, the cruise company should not be completely excluded from the right of limitation of liability in non-navigational accidents. Even if the damage is caused by a non-navigational accident, it should be combined with the space factor of the cruise ship and the environmental factors at sea to the passenger’s personal injury and loss of life, the degree of maritime factor intervention, and then judge whether the cruise company has the right to limit the liability in the maritime field. For personal injury or loss of life that is not affected by the special risks at sea and does not have maritime factors, the cruise company does not have the right to enjoy the limitation of liability, and has no right to invoke the right to limit the liability for compensation either.B. Unify the Right of Limitation of Liability of Cruise Companies under Different Causes of ActionIn view of the current situation of different liabilities caused by different causes of action, the liability limits of the carrier should be consistent. If the system of limitation of liability can only be applied to the claim for breach of contract, there is uncertainty in the carrier’s liability limitation system under different lawsuits of torts and breach of contract, which does not conform to the principle of fairness of civil liability. Passengers can only choose one cause of action to claim for compensation. If the passenger chooses breach of contract as the cause of action, the nature of the case is ‘dispute over the contract of carriage of passengers by sea’, and the cruise company can apply the limitation of liability specified in the relevant provisions of the Maritime Law on the contract of carriage of passengers by sea. However, if the passenger brings an action of tort, the cause of action is ‘dispute over compensation for maritime personal injury’. The cruise company cannot apply the limitation of liability, but only compensate in full. In practice, it is often the case where the concurrence of tort liability and liability for breach of contract occurs, and it is obviously unfair if the cruise company is not given the right to limit the liability for compensation.Therefore, in order to avoid the inconsistency of the liability of the cruise company under different complaints, it may be considered to add provisions on the tort complaint that the cruise company still has the right to limit the liability for compensation under the relevant provisions of the Maritime Law. The personal and property damage suffered in passenger transportation, regardless of whether the claimant is the counterparty to the contract, and regardless of its complaint based on the contract or tort, requires the cruise company to bear compensation for its losses, which will not hinder the cruise company’s claim to invoke the carrier’s right in system of limitation of liability in the maritime field.C. Increase the Liability of Cruise CompaniesTo increase the liability of cruise companies and urge them to fulfill their duties of safety guarantee, it is necessary to raise the unit limitation of liability and comprehensive limitation of liability of cruise companies to increase the compensation, while strictly regulate the exercise of the right of limitation of liability of cruise companies, and it should be considered that simply increasing the limitation of liability is not enough to solve the fairness problem. It is also necessary to regulate the terms concerning the limitation of liability in cruise companies’ format contracts, so as to prevent cruise companies from wantonly expanding the subject of right and avoiding the liability.1. Raise the Limitation of Liability of Cruise Companies. — First,increasing the limitation of liability in light of national conditions. The provisions on limitation of liability in the Maritime Law of China originate from the relevant content in the 1976 Protocol of the Athens Convention. With the significant increase in the per capita disposable income of urban and rural residents in China, combined with China’s actual situation and the trend of continuously increasing the carrier’s liability limit outside the territory, the current liability limit has not been adapted to our national conditions and world trends.Hence, when the cruise company causes personal injuries or loss of life or property damage to passengers, the unit liability limit and comprehensive liability limit of the cruise company should be raised, so as to maintain the balance of rights and interests of both parties. Specifically, the current situation of per capita disposable income of urban and rural residents in China in recent years can be referred to, combining with the predictable economic development and income change trend, to develop a liability limit standard that not only conforms to the current economic situation but also adapts to the future development trend, and to realize the long-term development of cruise tourism and the balance of interests of both parties.Second, implementing a dual liability limitation system. Although China has not acceded to the 2002 Athens Convention, the provisions of the Convention can be referred to implement a dual liability limitation system. The current principle of the carrier’s liability for compensation in China is the strict liability principle, i.e., the principle of no-fault liability, that is, the carrier is liable for compensation regardless of whether the carrier is at fault with the passenger’s personal injury or property damage, and can all invoke the liability limitation system. There is a separate provision for the case where the carrier has serious fault, namely ‘to act or omit to act intentionally or recklessly with knowledge that damage may be caused’. At this point, the subjective condition required for the carrier is ‘intentional’, or it can be understood as ‘serious or gross negligence’, in which case the cruise company will lose the right of limitation of liability.On this basis, it can be taken into consideration that when the carrier’s fault that causes the passengers’ personal injury or property damage is not serious enough to lose the right of limitation of liability, we can raise the standard of the carrier’s liability limit in such case, and increase part of the carrier’s liability, so as to achieve the role of urging the cruise company to strengthen its security obligations to prevent the occurrence of harm, and at the same time, we can make the loss of passengers due to the non-significant fault of the cruise company be compensated to a greater extent.Third, setting the liability limit in the field of cruise tourism separately. When raising the liability limit of the cruise company, it needs to be considered that cruise tourism is a kind of high-end and luxury-oriented tourism. The price of tickets paid by passengers is relatively high, and their capacity of consumption and expenditure are also rather high. Therefore, the limitation of liability of cruise tourism should be different from that of ordinary passenger transport. Cruise companies usually have large scale and high profits. If the liability limit concerning carriage of passengers by sea in chapter 5 of the Maritime Law is raised too high, it will cause conflicts of unfairness to ordinary passengers by sea.Consequently, it may be considered to implement a dual-track system. By formulating separate regulations of the liability limit of cruise companies in cruise tourism to calculate the liability limit of cruise tourism and the liability limit of ordinary carriage of passengers by sea respectively, so as to achieve fairness in the horizontal field of the industry.2. Strictly Regulate the Terms of Limitation of Liability in the Format Contract of Cruise Companies. — The contract model text is a standard document which is developed by the national competent department on the basis of summarizing practical experience, in order to strengthen the contract management and improve the contract performance rate. It is concluded through constant adjustment and design, and issued through legal procedures, which can be used repeatedly by subjects in society and has momentous demonstration significance. The Business Standard of Shanghai Cruise Tourism (hereinafter referred to as the Business Standard) implemented on April 10, 2016, is the first governmental normative document issued nationwide to adjust the cruise tourism industry. The definition, legal relationship, legal application, dispute resolution and other issues of cruise tourism are clearly defined. The Business Standard expressly stipulates that if the cruise tickets, service descriptions and other materials provided by the cruise company adopt format clauses, it is encouraged to file with the municipal transportation administrative department; when signing the cruise tourism contract, it is encouraged to refer to and use the model text of Shanghai cruise tourism contract issued by Shanghai Administration of Industry and Commerce and Shanghai Municipal Administration of Culture and Tourism. However, The Business Standard is a local government regulation with low legal effect and only binding on cruise tourism operation in Shanghai, and the relevant contract model texts are only aimed at cruise activities in Shanghai. At present, China lacks the current effective laws, regulations and rules particularly related to cruise ships, as well as the universal specialized model texts on cruise tourism contracts.Thus, the relevant government departments can be given the right to formulate and publish the cruise contract model text through legislation. In the standard terms, the key contents that are easy to cause disputes about the cruise carrier’s liability and limitation of liability and involve the equity of the rights and interests of both parties to the contract shall be explicitly defined by the relevant departments, to prevent the cruise carrier from abusing its advantageous position, reducing its liability through the standard terms that tend to maintain its own interests, and to protect the party with weaker contracting capacity, as well as to establish a unified good order of the cruise market.In addition, the relevant departments or specialized organizations that formulate the format contract may supervise the implementation of the format contract. It is required that all cruise companies must use a uniform standard format contract, especially for the clauses in the format contract involving the limitation of cruise company’s liability, which shall not be changed without authorization. At the same time, considering the freedom of signing the contract, if there is a need to change the terms of the contract, it can be allowed to modify them within a reasonable limit, but it needs to apply to the supervision agency for filing. Cruise companies shall remind cruise passengers of the parts in the format clauses that may affect the rights and interests of cruise passengers, and clearly inform and explain the contents of the provisions, so that the passengers can accurately and correctly understand their contractual rights and obligations. If the cruise company or the travel agency fails to correctly perform this responsibility, the passengers shall be compensated.With the rapid development of cruise tourism industry in China and the continuous expansion of its market share, it is not only necessary to provide supporting cruise service facilities in terms of materials, but also necessary to improve them in terms of laws. Whether it is to safeguard the reasonable rights and interests of passengers or regulate the legal operation of cruise companies, it needs perfect laws as support. Among them, the liability limitation system, as a key system that involves liability in cruise tourism, also needs to clarify the way to solve the problem when facing new challenges that continue to emerge in practice, so as to promote the healthy development of cruise tourism. Therefore, it is of great significance to promote the improvement of the compensation liability limitation legislation. Improving the system of liability limitation of cruise companies and strengthening the supervision on cruise companies will not only help to protect the rights and interests of cruise passengers, but also ensure the healthy and sustainable development of cruise tourism industry. Hence, it is imperative to complete the improvement of relevant laws and regulations of cruise tourism as soon as possible, clarify the rights and liabilities of cruise companies, and formulate the legal system of cruise tourism with Chinese characteristics.
