When a ship’s engine stops: who is liable under Korean law?

When a ship’s engine fails, the shipyard is not necessarily the only party to consider. Korean law allows claims under the Product Liability Act or in tort, even without a direct contract. A tanker engine dispute illustrates how liability can turn on who held information about a defect, who controlled it, and who failed to disclose it to those concerned.

This blog post is an English translation of a Korean-language column the author contributed to the Korea Shipping Gazette on 11 May 2026. The translation is the author’s own; in the event of any discrepancy, the Korean original prevails.

An engine stops: where does responsibility lie?

Imagine that, shortly after buying a new car, its engine suddenly stops in the middle of a motorway. Who is responsible? Is it the car manufacturer that assembled the vehicle, the company that supplied the engine to that manufacturer, or another company that drew up the engine’s design?

The same question arises at sea. Where a ship’s engine stops or breaks down during navigation, and the cause is a defect in essential equipment such as the engine, the focus of the dispute shifts towards the shipyard or the companies that made the equipment concerned. Such disputes are bound to become more frequent as new types of ships are developed and autonomous ships become a reality.

Two possible grounds for a claim

A claim for damages by a shipowner or another claimant against a shipyard or equipment manufacturer may be brought under the Product Liability Act or in general tort. The requirements and burdens of proof differ between the two causes of action, so the choice between them needs to be addressed at an early stage of the case.

The Product Liability Act defines a product as “movable property that is manufactured or processed”. A ship is movable property and a large structure which a shipyard produces by combining numerous components and systems through processing and assembly. It therefore qualifies, in principle, as a product.

Individual items of equipment installed on a ship are also separate products in their own right. Accordingly, where a defect in a ship is at issue, it should be possible to pursue claims separately in respect of ‘the ship as a whole’ and ‘a particular component’. Where product liability is established, the practical advantage over a claim in general tort is by no means small: the injured party bears a considerably lighter burden of proving the defect and causation.

Can a company be liable without a direct contract?

One question I am often asked is whether damages can also be claimed from a company with no direct contractual relationship with the shipowner or operator, such as a (sub-contracted) manufacturer of an individual item of equipment. The answer is “yes”.

If the equipment manufacturer qualifies as a manufacturer under the Product Liability Act, a product liability claim may be brought directly against it; even if it does not, it may be liable in general tort if negligence in manufacture is established. This is because a tort arises where an intentional or negligent unlawful act causes loss to another, even in the absence of a direct contractual relationship, and the interests infringed in such a case include not only contractual rights but also interests worthy of legal protection when viewed from the perspective of the legal order as a whole.

An engine designer’s failure to disclose

A good example of the latter is a judgment delivered by the Seoul Central District Court on 21 September 2017. Less than five months after delivery, a tanker’s engine had repeatedly stopped, eventually forcing the vessel to suspend operations. Its bareboat charterer and insurer claimed damages against the engine manufacturer and engine designer.

The cause of the casualty lay in the engine designer’s failure to inform the operator, the shipowner or the engine manufacturer that it had concluded, after an internal review, that “the fuel injection parameters must be reset”. The court rejected the claim against the engine manufacturer, finding no negligence on its part: the proper setting and input of the engine control unit parameters fell within the engine designer’s independent sphere of work, and the manufacturer could not have known of the matter unless the designer had provided that information.

By contrast, it held the engine designer liable in damages for its omission in failing to disclose information it held to the operator or manufacturer. In other words, the court imposed liability in tort on an engine designer that had no contractual relationship whatsoever with the bareboat charterer and insurer who brought the proceedings.

Liability follows substance, not appearances

It is also interesting that the engine designer and engine manufacturer faced diametrically opposed findings on liability for the same casualty. Who held the information about the defect, and who was in a position to control that information, proved the decisive variable in determining liability.

The engine manufacturer had performed the visible work of making the engine, yet lacked the information about the parameter adjustment that caused the casualty. The engine designer, meanwhile, had that information but told no one. Ultimately, liability followed substance rather than appearances. In practice, this can be taken to mean that, when choosing the party against whom to bring a claim after a casualty, the substance as well as the outward appearances should be examined and traced.

What this means for new ship types and autonomous ships

Let us apply that lesson to the future of shipbuilding and shipping. New types of ships and autonomous ships developed in the future will contain increasingly complex systems and equipment. Their critical parameters may lie in a domain which is difficult even for the shipyard constructing the physical vessel to understand — a domain known only to the designers or suppliers of those systems or items of equipment.

Accordingly, when a casualty occurs, we should trace who held and could control the information about the cause of the defect, rather than assume at the outset that the shipyard bears primary responsibility. We are moving from an era of attributing liability on the basis of appearances to one in which liability turns on the substance of the matter: whether a party held critical information.

Conclusion

When the engine of a new car stops, our instinct is to call the car manufacturer. Yet responsibility may in fact lie with the company that made and supplied the engine, or with another company that designed it. The same applies to casualties involving ships. A casualty should not automatically direct all our attention to the shipyard, nor should all responsibility be laid at the door of a single equipment or component manufacturer.

We need to work through, calmly, who held what information and who controlled the critical information. Perhaps this is how maritime law practice can evolve alongside a rapidly changing technological environment.

K. M. Choi is a partner at Law Offices Choi & Kim, qualified in the Republic of Korea, with over ten years in shipping disputes, marine insurance and major casualties in Korean waters. He can be reached at kmchoi@choikim.com or on LinkedIn.

This article describes Korean law and practice in general terms and is not advice on the law of any other jurisdiction. The law is stated as at the date of the original Korean publication and may since have changed, and nothing here creates a lawyer–client relationship.