Section 182
Constitution of limitation fund.
The Merchant Shipping Act, 2025
About this Act
An Act to consolidate and amend the law relating to merchant shipping to ensure compliance with India's obligation under the maritime treaties and international instruments to which India is a party and also to ensure the development of Indian shipping and efficient maintenance of Indian mercantile marine in a manner best suited to serve the national interest and for matters connected therewith or incidental thereto.
(1) Any ship owner, desiring to avail of the benefit of limitation of his liability under this Chapter, shall apply to the High Court having jurisdiction or the Central Government for constitution of a fund for the total sum representing his limits of liability, within such time and in such manner, as may be prescribed.
(2) Such fund may be constituted either by depositing the sum or by furnishing bank guarantee or such other security with the High Court or the Central Government.
(3) The insurer or any other person providing financial security to the ship owner may apply to the High Court or the Central Government for constitution of the fund under sub-section (1) and the fund so constituted shall have the same effect as if it were constituted by the ship owner.
(4) An application for constitution of the fund may be made by the insurer under this section even in cases where the ship owner is not entitled to limit his liability under sub-section (2) of section 181 and in any such event, constitution of the fund shall not prejudice the rights of any claimant against the ship owner for full compensation exceeding the amount deposited or secured in the fund.
(5) The amount in Special Drawing Rights to be deposited or secured in the fund under this section shall be converted in rupees on the basis of official value in rupees of the Special Drawing Rights as determined by the Reserve Bank of India on the date of constitution of the fund.
(6) Where a fund is established by the ship owner in relation to an incident of oil pollution before a High Court, all claims for compensation under this Chapter shall only be instituted in the High Court where the fund was constituted:
Provided that where claims arising out of the incident of oil pollution is made in High Courts other than the one where the fund was established, the ship owner may approach the Supreme Court in accordance with the Code of Civil Procedure, 1908 (5 of 1908) to transfer the claims to the High Court where such fund was established.
(2) Such fund may be constituted either by depositing the sum or by furnishing bank guarantee or such other security with the High Court or the Central Government.
(3) The insurer or any other person providing financial security to the ship owner may apply to the High Court or the Central Government for constitution of the fund under sub-section (1) and the fund so constituted shall have the same effect as if it were constituted by the ship owner.
(4) An application for constitution of the fund may be made by the insurer under this section even in cases where the ship owner is not entitled to limit his liability under sub-section (2) of section 181 and in any such event, constitution of the fund shall not prejudice the rights of any claimant against the ship owner for full compensation exceeding the amount deposited or secured in the fund.
(5) The amount in Special Drawing Rights to be deposited or secured in the fund under this section shall be converted in rupees on the basis of official value in rupees of the Special Drawing Rights as determined by the Reserve Bank of India on the date of constitution of the fund.
(6) Where a fund is established by the ship owner in relation to an incident of oil pollution before a High Court, all claims for compensation under this Chapter shall only be instituted in the High Court where the fund was constituted:
Provided that where claims arising out of the incident of oil pollution is made in High Courts other than the one where the fund was established, the ship owner may approach the Supreme Court in accordance with the Code of Civil Procedure, 1908 (5 of 1908) to transfer the claims to the High Court where such fund was established.