Supreme Court Holds Limitation Of Liability To Be Virtually Unbreakable

An important and much awaited decision with respect to limitation of liability for maritime claims and wilful misconduct under a marine insurance contract has been rendered by the Supreme Court of Canada this week. In Peracomo Inc. et al v. Telus Communications Company et al., the Supreme Court reversed the lower Courts' decisions and held that Peracomo was entitled to limit its liability for a million dollar claim to $500,000 under the 1976 Convention on Limitation of Liability for Maritime Claims. At the same time, the Supreme Court upheld the lower Courts' findings that  that although the misdeeds of Peracomo's representative were insufficient to break limitation, they still constituted wilful misconduct and that the vessel's marine insurance underwriters could deny coverage for the incident.