After almost three decades in limbo, the international maritime industry is about to get a long-missing piece of its liability architecture. The International Maritime Organization (IMO) has confirmed that the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 2010 (HNS Convention or Convention). This Convention, which governs liability and compensation for damage linked to the sea carriage of hazardous and noxious substances will finally enter into force on 29 November 2027.

For Malta, as home to one of the world's largest ship registries and a leading hub for maritime law, , this is not a distant regulatory curiosity. It is a compliance deadline with direct consequences for shipowners, P&I correspondents and registry administrators.

A convention three decades in the making

The Convention's path to entry into force has been unusually long given that it was first adopted back in 1996, modelled on the well-established civil liability conventions that have governed oil pollution liability since the 1970s. But the Convention never attracted enough ratifications as States focused on its practical problems in its reporting and contribution mechanisms, particularly around how to calculate and collect levies on liquefied natural gas cargoes.

A conference held in April 2010 adopted a protocol aimed at remedying these defects, whereby the result was the Convention as amended by the 2010 Protocol, now commonly referred to as the HNS Convention, which is finally moving towards entry into force.

Under Article 21(1) of the Protocol, entry into force required two thresholds to be met:

(i)               ratification by at least twelve Sates, of which four had to each carry a fleet of no less than two million units of gross tonnage; and

(ii)            confirmation, via reports submitted in line with Article 20, that contracting States had collectively received at least 40 million tonnes of contributing cargo in the preceding calendar year.

Both conditions were satisfied on 29 May 2026, following ratifications by Belgium, Germany, Netherlands and Sweden the previous month, which brought the total number of contracting states to twelve, which also includes Canada, Denmark, Estonia, France, Norway, Slovakia, South Africa and Turkey. The Convention now enters into force exactly eighteen months later, as dictated by the Protocol.

IMO Secretary-General Arsenio Dominguez called the milestone overdue, describing it as closing "an important gap in the international liability and compensation regime for shipping" and stressing that the regime will give victims of hazardous cargo incidents access to fair, timely compensation while giving industry and governments legal certainty.

Strict liability meets a two-tier fund

The Convention's design borrows directly from the oil pollution regime but extends it considerably further as it establishes a two-tier compensation system. The first tier rests on the shipowner, who is subject to strict liability, meaning that liability arises regardless of fault by the vessel or her crew, for damage connected to the carriage of hazardous and noxious substances by sea. To back that liability, owners must maintain compulsory, State-certified insurance or other financial security and carry an HNS certificate evidencing it.

However, liability is not unlimited as it is capped in accordance to the ship's gross tonnage, ranging broadly between 10 million and 100 million Special Drawing Rights (SDR) for bulk HNS damage, rising to a maximum of 115 million SDR where the damage involves packaged HNS or a mixture of bulk and packaged substances.

Where damage exceeds what the shipowner's tier can satisfy, a second tier activates, known as the HNS Fund. This fund is essentially an intergovernmental compensation mechanism financed not by shipowners but by the receivers of HNS cargo in contracting States. Aggregate compensation available under the two tiers combined is capped at 250 million SDR per incident (which roughly translates to USD 360 million at current exchange rates). If admissible claims fall within that cap, they are paid in full; if they exceed it, payments are pro-rated so that all claimants receive an equal proportion of their entitlement. The Fund will be administered by member States, with contributions levied only after an incident occurs and calculated against the compensation actually required, rather than collected in advance as a standing reserve.

The substantive scope of the regime is very broad, as it applies to more than 2,000 substances carried by sea - including chemicals, oils, acids, fertilisers, alcohols, LNG and LPG - and covers not only pollution damage, in the manner of the oil conventions, but also fire and explosion risk. Recoverable heads of loss extend to loss of life, personal injury, property damage, pure economic loss, clean-up costs and environmental damage, with claims for death and personal injury given priority in any payout.

This is a materially wider net than the existing regime followed by the Civil Liability Convention and the Fund Convention for oil tankers, and it is precisely because no equivalent framework has existed for non-oil hazardous cargo that the gap has been described as the missing link in the IMO's liability architecture.

What changes operationally

Once the Convention takes effect, an estimated 65,000 ships worldwide will be required to carry HNS certificates of insurance or equivalent financial security - a compliance burden falling on flag States, classification societies, P&I clubs and the owners and managers themselves. Contracting States will also assume ongoing administrative duties: each must continue submitting annual cargo-receipt reports under Article 20, both to sustain the Fund's basis and to allow regulators to identify and invoice the cargo receivers liable to contribute.

For shipowners trading in and out of contracting States, the practical effect mirrors what the industry already knows from the oil pollution conventions - insurance certification becomes a condition of port access and trading, not merely good practice.

Why this matters for Malta

Malta's relevance to this development is structural, not incidental. As one of the world's largest ship registries by gross tonnage, Malta already flags a significant share of the vessels likely to fall within the Convention's scope, including chemical tankers, gas carriers and general cargo vessels carrying packaged hazardous substances.

Once the Convention enters into force for any contracting State, Maltese-flagged vessels calling at or trading with those states will need to demonstrate compliance regardless of whether Malta itself has yet ratified, because the certification requirement attaches to port entry by contracting States, not solely to the vessel's flag State.

That creates an immediate strategic question for Malta's maritime administration: whether and when to accede to the 2010 Protocol. Malta has historically positioned itself as an early and willing adopter of IMO liability conventions, both to maintain its registry's reputational standing and to avoid Maltese-flagged tonnage facing friction at ports of contracting States.

Ratification would also bring Malta within the HNS Fund's governance structure as a member State with reporting obligations under Article 20, requiring Maltese authorities to track and report cargo receipts of contributing HNS substances through Maltese ports and terminals.

A compressed timeline

Eighteen months between the Covnention's triggering conditions and its entry into force is not a long runway for an industry of this scale. Insurers will need to build HNS cover into renewal cycles, registries will need to issue certificates at volume and contracting States will need functioning reporting systems before the Fund can operate as designed.

For Malta specifically, the period between now and November 2027 is likely to determine whether the jurisdiction enters the new regime as an early mover or finds itself reacting to a framework that other major registries have already absorbed.

Either way, the HNS Convention's arrival closes a gap that has sat conspicuously open in international maritime law since the 1990s. For a jurisdiction whose economy is as intertwined with shipping as Malta's, the legal and administrative groundwork starts from now.

Disclaimer: Ganado Advocates is responsible for contributing this law report but was not in any way involved as legal advisor for the parties in the judgment being covered in this law report.

Gabriel DeBono is an Associate at Ganado Advocates working within the firm's Shipping department.