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The New South Wales Supreme Court has considered whether court costs should be included in the limit of liability under the 1976 London Convention on Limitation of Liability for Maritime Claims. The court adopted a literal construction of the convention, holding that the limitation applies only to "claims in respect of life" and not costs arising from the resulting dispute.

Litigation on deep vein thrombosis (DVT) is continuing following two recent cases in the Victoria and Queensland courts. The Victoria court found that an airline's failure to warn of the risks of DVT could constitute an 'accident' under Article 17 of the Warsaw Convention, while the Queensland court rejected this approach. The Victoria case has been further appealed.

Parliament recently passed the Transport Safety Investigation Act. The act consolidates the statutory basis for the investigation of air, shipping and rail accidents by the Australian Transport Safety Bureau within a single act. The act defines the investigative powers of the bureau and controls information flows resulting from investigations.

The Federal Court recently examined whether a company which held all units in a trust fund thereby owned a vessel which was property of the trust. The court considered that the company had an equitable interest in each asset in the trust, but that the terms of the trust deed precluded recognition of the company as the equitable owner of the vessel.

A ship's master and owner pleaded guilty to charges under Section 8(1) of the Marine Pollution Act after the High Court held that they could not be excused from liability on the grounds of 'damage' caused by fair wear and tear. However, the Land and Environment Court subsequently found that there were extenuating circumstances justifying an order for dismissal of the charge.

The government recently introduced the Maritime Legislation Amendment (Prevention of Pollution from Ships) Bill 2003, which will implement changes to Annex 4 of the International Convention for the Prevention of Pollution from Ships. The annex regulates the discharge of sewage from ships on international voyages and requires ports to provide adequate facilities to receive sewage.

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The Bahamas Maritime Authority has announced the eagerly awaited launch of the Yacht Registry. The expansion of the authority, and of the yacht sector itself, resulted in the need for a more focused and autonomous infrastructure dedicated to this area. The addition of the registry adds a new dynamic and quality component to an already well-rounded, well-developed and expansive ship registry system.


The Supreme Court has rendered its second decision in the long-running road haulage dispute known as the 'sugar case'. The Supreme Court considered the scope of application of the Convention on the Contract for the International Carriage of Goods by Road (CMR), and whether all damages resulting from a loss that arises from a CMR contract can be recovered from the road carrier.

Over the past few years, the Antwerp Commercial Court has considered on multiple occasions the question of whether a carrier's terms and conditions published on its website can be validly incorporated into an agreement. Although the court has provided insightful guidance on the matter, further questions remain unanswered.

A new law has been passed that establishes measures to combat maritime piracy. Under certain conditions, a Belgian-flagged ship will now be allowed to rely on maritime security companies to protect the vessel against piracy. This new legislation is a step in the right direction, but there is still work to be done.

In cases where extensive mandatory implementation of an EU directive in one EU member state conflicts with the (lesser) implementation in another member state, does the Rome Treaty prevail over the law chosen by the parties? This was the question posed to the European Court of Justice in an ongoing case relating to an arbitration clause in a ship agency contract.

A new law has been passed that establishes an investigative body for maritime casualties. The legislation includes certain obligations and criminal penalties for those involved in maritime incidents. Ships flying the Belgian flag and all ships calling at Belgian ports will finance the new institution, which was introduced to implement EU measures on reducing the number of maritime casualties.

All too often, carriers consider agreements as to steaming time to be no more than non-binding information. A recent decision is a stark reminder that even when steaming time is without guarantee, a vessel is at risk of being arrested for costs and damages suffered if it does not proceed with reasonable dispatch.

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The National Agency for Waterway Transportation recently published a new resolution that sets forth provisions for the inspection of port services and details administrative infractions. The resolution applies to the administration of organised ports, leaseholders of port areas and facilities, port operators and holders of port facility authorisations. It also sets forth the obligations with which such parties must comply.

The National Agency for Waterway Transportation (ANTAQ) recently published a new resolution that sets forth the authorisation procedures for the construction, development and expansion of private use terminals, cargo transshipment stations, small public port facilities and tourist port facilities. Before authorisation to develop such types of facilities can be obtained, an application must first be filed with ANTAQ.

The National Committee for Pilotage Matters recently published a public consultation document that deals with the maximum price schedule per manoeuvre for pilotage services in ports in the states of Sao Paulo, Espirito Santo and Bahia. However, pilots and service providers have raised concerns that the maximum prices set by the consultation do not offer fair remuneration for the services provided.

The National Agency for Waterway Transportation recently published a resolution that sets out procedures for the elaboration of lease projects and defines the methodology for the reinstatement of an economic equilibrium for lease contracts for port areas and facilities at organised ports. According to the rule, the leasing of port areas and facilities must always be preceded by a study of technical, economic and environmental feasibility.

The introduction of the new Ports Law heralded the second phase of the National Programme for Port and Waterway Dredging. The programme will be implemented by the Presidency's Division of Ports and by the Ministry of Transportation. In view of this task, the Special Secretariat of Ports recently conducted a public consultation on the terms of reference for maintaining the depth of the fairway and berths in the port of Santos.

The Committee for Pilotage Matters recently conducted a public consultation on the preliminary maximum price schedules for services rendered in pilotage zones at ports and terminals located in the states of Bahia, Espirito Santo and Sao Paulo. The schedules set out the maximum prices, which vary in accordance with ships' gross tonnage and according to sub-regions inside each pilotage zone.

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British Virgin Islands

As a jurisdiction for ship registration and offshore financial products and services, the British Virgin Islands continues to weather the storm of the economic downturn. Cases in point are the achievement of Organization for Economic Cooperation and Development White List status and the BVI Ship Registry's showing at the annual Monaco Yacht Show in September 2009.

The Maritime and Coastguard Agency has recently issued a news release confirming the announcement that the UK secretary of state for transport has agreed to upgrade the Virgin Islands Shipping Register to Category 1 vessel registration status.

The British Virgin Islands (BVI) government has taken a significant step towards achieving Category 1 vessel registration status. A change in registration status to Category 1 will lift the current tonnage restrictions on vessels that may be registered under the BVI flag, and will open the territory to new possibilities in the merchant shipping arena.

The British Virgin Islands (BVI) has taken another step towards realizing its aim of achieving category 1 vessel registration status with the coming into force of the Merchant Shipping (Adoption of UK Enactments) Order 2005. The effect of this new statutory instrument is to adopt British legislation in the context of merchant shipping, subject to relevant modifications.


Regulations brought into effect in November 2010 satisfy Canada's obligation as a contracting state to the International Convention for the Safety of Life at Sea to require that certain of its passenger vessels and cargo vessels transmit long-range identification and tracking information to other participating states. The regulations are intended to increase marine safety and enhance the security of Canada's marine environment.

Fourth Officer Karl Lilgert pleaded not guilty to charges of criminal negligence causing death in connection with the 2006 sinking of the passenger ferry the Queen of the North. The criminal justice branch of the British Columbia Ministry of the Attorney General appears to have concluded that the available evidence does not support the charging of any officer or crew member other than Lilgert with respect to the sinking.

The new Maritime Occupational Health and Safety Regulations under the Canada Labour Code are now in force. Part of a govemment effort to ensure that "employees working on board vessels enjoy the same level of health and safety protection as off‑board employees", the new regulations apply to employees employed on vessels registered in Canada or uncommissioned vessels of the Canadian government, among others.

In British Columbia, tort feasors liable for personal injuries suffered in a marine context are now also subject to claims by the provincial government for the recovery of healthcare costs expended (past and future) by the Ministry of Health relating to the injury pursuant to the Health Care Costs Recovery Act. The British Columbia Supreme Court recently determined an important point on when the act applies retrospectively.

In a recent case the Supreme Court of Canada considered the matter of payments in lieu of property taxes made by federal corporations (including major Canadian ports) to municipalities in which these corporations are located. This is an important issue for Canadian ports, as making payments in lieu of taxes can affect their economic viability.

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Cayman Islands

The Cayman Islands Shipping Registry is constantly improving the service it offers, such as by providing representative offices in key shipping hubs around the world. As evidence of its commitment to the efficiency of the registration process in the Cayman Islands, the Maritime Authority of the Cayman Islands is now introducing an improved website with several new services which were previously unavailable online.


Article 1203 of the Commerce Code establishes that maritime disputes must be resolved through arbitral proceedings. However, some parties seek to override this mandatory provision. The Valparaiso Court of Appeal recently confirmed that shipping disputes must go through arbitration and held that an ordinary court had no competence to hear a shipping dispute.

The Tribunal for the Defence of Free Competition has recently ruled on a request that the Merchant Navy Law be modified to annul a competition exemption enjoyed by shipping conferences, pool agreements and consortiums. The tribunal ruled that the requested abrogation of the law is unnecessary, provided that antitrust authorities can still investigate and punish conduct that may attempt to impede free competition.

A new law was recently enacted to replace the provisions on general and non-marine insurance contained in the Code of Commerce, so that Chilean insurance law could be updated in line with current trends and market practice. The law contains a number of amendments to the existing marine insurance provisions, all of which have been in force since 1988.

The Tribunal for the Defence of Free Competition is in the process of reviewing a request from the National Economic Office of the Public Prosecutor that the Merchant Navy Law be modified, annulling a competition exemption enjoyed by shipping conferences, pool agreements and consortiums. The proposed amendment aims to harmonise the industry's regulations with the principles of free competition.

Mooring facilities in the Valparaiso region are subject to a number of rules and restrictions in order to ensure that free competition is maintained. A recent decision of the Court for the Defence of Free Competition has detailed the conditions that should apply in relation to the tender for Terminal 2 at Valparaiso port, in order to make the process more flexible and successful.

Article 1203 of the Commercial Code establishes the general principle that the resolution of any maritime dispute, including those relating to marine insurance, is subject to arbitration. However, in certain cases the ordinary civil courts may hear maritime disputes. The Supreme Court of Justice has recently confirmed the correct interpretation criteria and held that mandatory arbitration applies for shipping disputes.

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Recent developments in the shipping and transport sector include the issuance of administrative measures governing the supervision of road transport vehicles through satellite positioning devices, the publication of draft guidance on the transformation and upgrade of ports and the Ministry of Transport's announcement that it has cancelled or delegated certain items previously requiring its approval.

A recent case has highlighted the extent of a freight forwarder's liability for expenses incurred at the discharging port. The defendant entrusted the plaintiff to handle the freight forwarding for two shipments, which safely arrived at the discharging port. However, the defendant did not pay the freight forwarding fees or the terminal charge paid by the plaintiff on behalf of the defendant.

A Beijing company engaged a Maltese carrier to import 10,000 tons of bulk sulphur. When offloading the goods, it was found that part of the shipment had been seriously contaminated. The Beijing company applied to the Tianjin Maritime Court for preservation of maritime claims. The subsequent case considered several contentious issues, including whether the Beijing company's insurer was entitled to the right of subrogation.

A recent Shanghai Marine Court case regarding damage to a shipment of paper rolls and adhesives while in transit illustrates the limits of carrier liability where the shipper has not packed its goods appropriately. The carrier pointed to International Maritime Organisation guidelines to prove that the packing of the goods was completely unsuitable for sea transport.

A recent case before the Shanghai Maritime Court highlights the importance of pinpointing exactly where cargo damage occurs when determining the responsible party in container damage claims. The case also shows that a consignee's failure to make a full inspection of the goods upon receipt and within the statutory period could bring about the unravelling of its claim.

A recent case before the Guangzhou Maritime Court highlights the extent of relief from carriers' liability for damaged cargo under the Maritime Law. Although the dispute was ultimately settled out of court, provisions of the law allowed the defendant to pay a much lower settlement amount than the plaintiff's original claims.

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Costa Rica

The customs legislation was recently amended, and this update explores the most important aspects of the new law.


The Marine Accidents Investigation Committee (MAIC) was recently established under the Marine Casualties and Incidents Investigation Law (2012) which implemented EU Directive 2009/18/EC. The MAIC is an independent committee responsible for investigating all types of marine accident (casualties and incidents) and is supported by the Marine Accidents and Incidents Investigation Service.

The new agreement on merchant shipping between Cyprus and Georgia recently entered into force. Its main provisions tackle issues of equivalent treatment, parallel registration, crew facilities, shipwrecks and accidents and remittance of income.

With the summer tourist season beginning, the Cyprus Department of Merchant Shipping has issued a circular reminding operators of coastal passenger vessels of their obligation to submit a proper passenger manifest under the Ferry and Coastal Passenger Vessel Regulations of 2012 and to comply with the procedures set out in the regulations.

The Cyprus Department of Merchant Shipping has announced that where a seafarer on board a Cyprus-flagged ship has not received a security awareness certifications or training on designated security duties, the department will accept compliance with Section 13 of the International Ship and Port Facility Security Code. This is a temporary concession that will expire on January 1 2015.

The Supreme Court in its admiralty jurisdiction recently considered an application under Section 30 of the Merchant Shipping (Registration, Sales and Mortgages of Ships) Law for an order prohibiting the respondents from dealing with the two vessels registered in their name and ownership. Section 30 empowers the court to make an order prohibiting any dealing with a ship or any share in a ship.

The Department of Merchant Shipping recently issued an updated list of countries whose certificates of competency are recognised by Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers. The principal change from the previous list, issued by the department in September 2011, is the addition of Georgia, Malaysia and Uruguay.

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Including: Damaged Cargo; Merchant Shipping Act; Choice of Law and Paramount Clauses; Freight Forwarders; Transport Conventions

The Maritime and Commercial Court has clarified that a road carrier may be liable for damage that occurs after termination of the transport undertaken by the road carrier and regardless of the fact that the goods are no longer in its custody. Such liability, under Danish law, follows from general legal principles and is not based on the Convention on the Contract for the International Carriage of Goods by Road.

The Maritime and Commercial Court recently found that a carrier's liability should be decided on the basis of the NSAB 2000, including the network clause. The decision is a clear example of the application of a network liability principle under Danish law. The application of the Hague-Visby Rules means that these rules have mandatory application in case of damage to carriage of goods by sea and in ports.

A recent Maritime and Commercial Court decision held that a sender of cargo is liable without fault in relation to the carrier for losses arising from inaccurate information about the cargo. Thus, a sender cannot avoid liability even if it was unaware that a third party had included undeclared goods within the consignment.

The Maritime and Commercial Court recently ruled that a bunker trader was liable for losses resulting from the refusal to accept a vessel holding bunkers. When a vessel nominated in a bunker contract has been accepted subject to a specific condition being fulfilled, any such condition may be invoked only if it relates to circumstances on which information was not already provided when the condition was made.

In a decision in line with existing Danish court practice, the Maritime and Commercial Court recently ruled that armed robbery cannot exclude a carrier from liability under the Convention on the Contract for the International Carriage of Goods by Road if the robbery occurs while the carrier is staying at an unsafe parking facility in an area where robbery of trucks and cargoes occurs frequently.

The Maritime and Commercial Court recently considered whether the basis for selling a consignment at a reduced price to a secondary market can be based on a concern not to risk damage to goodwill or whether it can be based on a depreciation in the product's market value despite no reduction in its quality. The case concerned a consignment of organic beef that had been contaminated with low levels of limonen during transit.

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European Union

The new EU Liner Consortia Block Exemption Regulation recently came into force. This regulation applies to consortia only in respect of international liner shipping services to or from one or more EU ports. Provided that no hardcore restrictions exist, and that the conditions stipulated are satisfied, the regulation provides certain exemptions.

The European Parliament has voted in favour of a new regulation covering the rights of passengers travelling by sea and inland waterways in Europe. Once the new regulation enters into force, it could have a significant impact on the liability of waterborne passenger service operators, since passengers will enjoy similar compensation rights to those travelling by other modes of transport.

The European Commission has published a draft of its long-awaited Guidelines on the Application of Article 81 of the EC Treaty to Maritime Transport Services. The guidelines are intended to assist ship owners and operators to understand the manner in which Article 81 of the EC Treaty will be applied in the maritime sector.

From today, the exemption from the enforcement of EU competition law in respect of shipping which has existed since 1986 has been abolished. The enforcement rules apply immediately to tramp operators and owners involved in cabotage. Liner operators have been given a two-year transitional period in which to adjust to the new regime.

The European arrest warrant has significant implications for senior individuals who may be involved in serious international transport accidents. Those most exposed to cross-border prosecution will be in senior positions of responsibility. In the marine and aviation world, this will include heads of risk and safety, marine and air pilots, and air traffic control chiefs.


Pursuant to the Maritime Code, maritime safety authorities can request a master on a foreign flagged vessel to give a maritime declaration, but the effect of this request can be challenged. It is unclear if the criminalisation stipulation in case of failure concerns a master on a foreign flagged vessel and if the authorities have the right to detain the vessel in order to encourage the master to give the maritime declaration.

The Helsinki Appeal Court recently overruled a judgment regarding an oil pollution payment. A vessel was suspected of leaking oil and the Border Guard had imposed an oil discharge fee on the vessel owner. The owner appealed on the grounds that the fee had been imposed on the wrong party, since the vessel had been operated by the operator at the time. The court accepted the appeal and annulled the discharge fee.

The Finnish Competition and Consumer Authority recently investigated suspected abuse of the dominant market position of major harbour towage service operators. Based on a competitor's complaint the authority investigated the suspected abuse in harbour towage services in the port of HaminaKotka and other parts of the Finnish coast. The authority found no form of abuse of dominant position in the operators' activities.

The Turku Appeal Court recently confirmed a Turku Maritime Court decision regarding the question of title to wreck and the right of salvage. The decision illustrates the criteria that must be fulfilled for the removal of a wreck to be regarded as salvage and will hopefully serve as a guideline to salvors in the future.

Amendments to the Municipal Act and other reforms are set to change the ownership structures of ports, with the aim of enhancing competition within and between ports. Under the new regime, a municipality must establish a corporation for all of its activities when it acts in competitive markets. Meanwhile, the much-debated fairway dues are also subject to possible revision.

A mail courier company distributed printed advertisements for a retailer based on an assessment of the number of households in different post codes. The retailer claimed that this assessment was incorrect, leading to a shortfall in some areas and a surplus in others. The Helsinki Appeal Court held that the advertisements constituted goods and their delivery constituted transport; the advertisements could not be regarded as mail.

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The Federal Court of Justice has clarified that the legal nature of a claim against the first carrier in a recent case had no influence on the time bar of the recourse claim of the first carrier against the sub-carrier, according to the Commercial Code. The court held that it made no difference whether the claim against the first carrier was governed by transportation or shipping law.

If a forwarder is unable to pay the freight to the carrier, the carrier may decide to invoke a right of retention regarding the goods in its custody based on a contractual or statutory lien. If the carrier has no lien, there is a high risk that it will be held liable for the cargo value and financial losses. The carrier should seek legal advice before exercising a lien.

The Federal Court of Justice recently ruled whether a freight forwarder was liable for loss of goods without limitation due to qualified fault. The court held that the freight forwarder did not necessarily act with qualified fault by leaving a vehicle in an unguarded industrial estate. Unlimited liability is justified only if circumstances conclude that the risk of loss is obvious and the freight forwarder ignores this risk.

In the course of the reform on the law on seafarers, Germany also enacted the Offshore Working Time Regulation. The regulation applies to both German-flagged and foreign-flagged offshore vessels. Although it is too early to predict how strictly the authorities will enforce the new legislation, shipowners and charterers of offshore vessels should not risk breaching contracts with their customers.

The Act on the Reform of Maritime Trade Law has recently entered into force. Among other things, the requirements for ship arrests have been amended. In particular, the requirement of special urgency has been dropped for the arrest of vessels, undoubtedly facilitating ship arrests in Germany. However, it remains unclear whether the reform has also abolished the obstacle of counter-security.

The Federal Court of Justice recently ruled on the requirements for obligatory investigation and documentation measures applicable to the forfeiting of a freight forwarder's right to limit its liability in case of loss of goods during transportation. The court pointed out that a forwarder must investigate and document the relevant facts immediately after the loss of goods in order to have sufficient proof in any legal dispute.

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Hong Kong

Obtaining witness evidence may require the use not only of long-established procedures, commonly used in many maritime nations, but also of specific admiralty orders and certain innovations introduced by the civil justice reform. Video conferencing may prove to be a key factor where crew members or technical experts are based abroad.

The High Court has struck out a shipping company's attempt to instigate proceedings in Hong Kong as a collateral attack on the outcome of a London arbitration that involved the same opponent or transparently related parties. The Court of Appeal has since endorsed the first instance court's view. The case has attracted considerable attention, not least for the sum at stake.

The key to Hong Kong's future as a chosen jurisdiction for resolving shipping disputes is its proximity and links to China. Hong Kong benefits as a jurisdiction because it is respected by both Chinese and foreign parties for its mature administration and trusted legal system. However, a recent admiralty case involving issues of crown immunity raise serious concerns.

Hong Kong is a chosen jurisdiction for shipping disputes. Vessels are brought there, usually at the behest of mortgagee banks, because the Admiralty Court has a reputation for grasping intricate legal concepts and finding expeditious solutions. However, making the most of these advantages means understanding maritime liens and statutory claims, ship arrest procedure and the arrest of sister vessels.

The criminal law is increasingly invoked when serious shipping casualties occur. However, criminalizing seafarers - rather than pursuing shipowners and managers for poor management or lax safety procedures - arguably has as much to do with deterrence and retribution as with compensating those who have suffered loss. A recent collision case illustrates many of the contentious and problematic issues for the industry.

Arresting a ship in Hong Kong is generally an easy process, particularly for those familiar with English law. This update outlines the arrest procedure and considers related issues, such as types of admissible claim and the appraisal and sale of a vessel pending litigation.

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This update details the conditions under which a vessel may be arrested in Iceland and the procedures that these aressts must follow.

A new act on international trading companies (ITCs) allows Icelandic-registered aircraft to operate globally while enjoying benefits such as an income tax rate as low as 5%, and an exemptin from property taxes.


The Bombay High Court recently delivered a conclusive decision on the issue of beneficial ownership and damages that can be claimed in cases of wrongful arrest of a vessel. The crux of the issue was the owner's right to claim compensation for losses, damages and prejudice suffered in the event of a wrongful arrest.

In a recent case concerning the arrest of a vessel, the Bombay High Court directed that the security amount furnished by the owners of the vessel should be refunded with interest, arguing that the order of arrest or retention of the security of the vessel could not be sustained. The court held that there is nothing wrong with a person owning different ships in the names of different companies, unless it is a sham.

The Bombay High Court recently considered a notice of motion to dismiss a shipping suit. The judgment focused on whether the court would cease to have jurisdiction once an order of arrest had been vacated and return of the security furnished ordered, and whether a suit could proceed against the parties against which averments had been made in the plaint without placing on record sufficient material in support of the claims.

The Bombay High Court recently considered whether a bareboat charterer can be considered the de facto owner of a vessel that is arrested, but against which the plaintiff has no maritime claim under the 1999 Arrest Convention. The plaintiff made a maritime claim for arrest of the defendant's vessel following a charterparty dispute for unpaid charter hire concerning a separate vessel of which the defendant was a time charterer.

The Bombay High Court has again considered the issue of beneficial ownership, as covered by the International Convention on the Arrest of Ships. The court held that for the corporate veil to be lifted to ascertain the real owner, fraud must be alleged - simply alleging beneficial ownership through common address, common signatures and common directors without supporting evidence is not enough.

A recent Bombay High Court ruling decided significant issues under Indian law regarding the right to arrest bunkers onboard a vessel where the vessel is unconnected to the dispute and the right to arrest cargo freight under similar circumstances. Under Indian law, an order arresting freight in relation to the cargo on board a vessel is unsustainable without privity or an entitlement to make a claim against the vessel itself.

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Over 100,000 merchant vessels carry 90% of the world's trade, yet the shipping sector rarely gets good press. In fact, it rarely gets any press, unless something goes terribly wrong. If shipping companies want to change the way they are perceived by the public, their peers and the media, they need to treat their brands as assets.

A bank financing the purchase of a vessel will normally obtain security for the loan by way of a mortgage. However, the bank's interests are exposed to a variety of risks that must be addressed by obtaining adequate insurance cover. The bank has several options to ensure that its interests are protected, depending on whether the owner's insurances are placed on English or Nordic conditions and the acceptable degree of risk.

Sellers and buyers of secondhand vessels are sometimes faced with the question of which standard contract to use. The Norwegian Saleform 2012 is the most commonly used contract in the market, with the Japanese Nipponsale 1999 coming in second. However, if one party is based in the east and the other in the west, negotiations sometimes begin with a battle of forms

Quality is always a concern when it comes to new builds. The orders for some of the new builds now coming up for delivery were placed at a time when prices were significantly higher than in today's market. With such an inversion of delivered price to mar­ket price, it remains more important than ever to ensure that the build quality is acceptable and in accordance with the building contract.

The Windtime - a new standard form charter party for personnel transfer and support vessels servicing offshore wind farms - is expected to be released soon by the Baltic and International Maritime Council in response to industry requests for standardisation. It will be interesting to see to what extent the industry embraces this first step towards standardisation of contracts, and what further efforts may be made in the future.

Shipowners often face a decision as to which flag they should fly on their vessel. Shipowners have considerable freedom when choosing where to register their vessels. The main consideration is usually to minimise costs and maximise revenue. There are certain factors that a shipowner should take into account when making a decision on registering a vessel in order to have an outcome that best meets its requirements.

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The European Court of Justice recently issued an interesting decision regarding marine fuel emissions in response to a preliminary question submitted by the Court of Genoa. The case involved a vessel found to have been burning marine fuel with a sulphur content exceeding that permissible under the Environmental Code while in the port of Genoa.

The Messina Court of Appeal recently issued an interesting judgment in which it addressed the qualification of a vessel's sale and purchase as a 'transfer of business assets'. The decision was issued in regards to a claim by the Italian social security agency against the purchaser of a vessel for the payment of crew members' social contributions, which the former shipowner had failed to pay.

In a recent decision of the Tribunal of Genoa, the court applied established principles on the liability of sub-carriers towards cargo claimants in circumstances where a freight forwarder is charged with the transport of goods and thereafter instructs the sub-carrier. In particular, the court addressed potential direct liabilities towards the cargo interests of the sub-carriers involved.

An Italian court was recently asked to decide on an interesting issue relating to cross-border insolvency and ship arrests. Although few authorities are available in Italy in this respect, the question as to which effects of insolvency proceedings are recognised across jurisdictions has generated increasing interest in light of the financial distress that many shipowners face in the present economic climate.

The Cagliari Court of Appeal recently issued a judgment in which it addressed and clarified the nature of the two-year time limit for claims stipulated in Article 23 of the Salvage Convention 1989. The court confirmed the two-year limit in this case, holding that in circumstances where salvage operations have been carried out, numerous interests are often involved and the need for certainty is crucial.

The recent decision in Chuang's China Treasury Ltd v Euronavi srl addressed the application of the 1952 Arrest Convention to circumstances where the credit for which security is sought is that of a subcontractor towards a shipyard for works performed when building a vessel. The judgment is of practical application and is relevant to most cases of shipyard insolvency.

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On March 1 2014 the Convention on the Limitation of Liability For Maritime Claims 1976, as amended by the 1996 Protocol to Amend the Convention on Limitation of Liability for Maritime Claims 1976, came into force in Malaysia. Prior to this, the 1957 International Convention on the Limitation of the Liability of Owners of Seagoing Ships was in force.

The High Court recently considered a loan granted to one party to part-finance the purchase of two vessels owned by a second party. As security for the loan, the two vessels were to be mortgaged by way of a third-party mortgage charged to the plaintiff. Some time later, the first party defaulted on its payment and the plaintiff initiated foreclosure proceedings. However, the plaintiff had failed to register the mortgage.

A fire and subsequent explosion during the loading of a cargo of dangerous goods at Port Klang resulted in the loss of both the vessel and its other cargo. In a recent court judgment, the shipper was found liable in negligence to the carrier. The court argued that the shipper owed a reasonable duty of care to the carrier to prevent the dangerous goods from causing or doing injury to the vessel.

The Malaysian courts recently considered the applicability of a plea of limitation under the Hague Rules, as incorporated into national law. The case arose following alleged damage to cargo as a result of faulty refrigeration. The court held that as the plaintiff's claim was brought after the expiry of the one-year limitation period under the rules, it was time barred and the plea of limitation was therefore a valid defence.

A Malaysian court recently examined liability for loss caused by the discharge or delivery of cargo without the production of original bills of lading. The court held that the act of discharging cargo belonging to the plaintiff into the hands of a third party at a different destination from that contracted for under the bill of lading was the cause of the loss. The defendant was found to have failed in carrying out its duties as bailee.

It is not uncommon for a bill of lading to have a pre-agreed stipulation that any dispute or claim arising out of the bill is to be brought before and determined by a foreign tribunal or court, known as a forum selection clause. Malaysian courts of first instance seized with jurisdiction over disputes between a shipper and a carrier have considered the application of such a pre-agreed forum selection clause.

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With its centuries-old maritime tradition and as an EU member state, Malta has become the largest European maritime flag and also the seventh largest flag worldwide. Thanks to the unstinting efforts of the government and the maritime industry, Malta has developed into a reputable flag of choice and quality, which offers a wide array of international maritime services and fiscal incentives.

Following similar announcements recently made by France and Italy, the Maltese authorities published the Guidelines for the Value Added Tax Treatment of Short-Term Yacht Chartering. The guidelines address situations in which a short-term charter of a yacht with a crew (or on a bareboat charter basis) is entered into between the owner or operator and the charterer for a consideration.

Following an incident at sea, the master of a ship can make a so-called 'sea protest' in which he or she can declare the facts of the incident as known to him or her. Under Maltese law, a sea protest tends to hold significant probative weight in subsequent settlement negotiations or litigation, since it is often taken as being a correct statement of facts. However, failure to submit a sea protest properly can prove detrimental.

Following the recent increase in attacks on vessels travelling in the vicinity of Somalia, demand has grown for private maritime security companies that can provide professional armed guards on board a vessel to assist in anti-piracy measures. Malta has therefore recently taken steps to regulate the licensing of such companies to ensure that they meet appropriate standards and employ quality personnel of high integrity.

In a recent judgment the Maltese courts rejected a foreign liquidator's application to have a precautionary warrant of arrest lifted on the basis of the EU Insolvency Regulation. This judgment is to date the only judgment delivered by the Maltese courts in which the effects of the regulation on legal proceedings instituted in Malta to secure maritime claims in rem have been discussed.

A Maltese civil court recently further confirmed the rights of mortgagees granted by the law. Despite leaving a number of questions unanswered, this ruling should reassure international financiers of vessels registered under the Malta flag. Provided that the contracts into which they enter are in line with the provisions of the Merchant Shipping Act, financiers can rest assured that their rights will be fully upheld and safeguarded.

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The Court of Appeal of The Hague has recently held that that the International Convention Relating to the Arrest of Seagoing Ships 1952 applies to all vessels, irrespective of flag and owner. The decision substantially extended the jurisdiction of the Dutch courts following the attachment of a vessel.

The Dutch Supreme Court has handed down an important judgment which confirms that in disputes pending before the Dutch courts involving the carriage of goods under the Convention on Contracts for the International Carriage of Goods by Road, a time bar cannot be interrupted following a previous suspension, even if the suspension has already been lifted due to a rejection of liability.

In a recent landmark decision the European Court of Justice in Luxembourg definitively put its weight behind forum shopping as a means of limiting liability under the Convention on the Contract for the International Carriage of Goods by Road in carrier-friendly countries. This is a boon to the Dutch jurisdiction and specifically comes at the expense of the courts in Germany.

The Arrest Convention allows a pre-judgment arrest of a vessel flying the flag of a convention state to obtain security only for 'maritime claims'. However, a recent ruling has confirmed that in the Dutch courts protective measures against a vessel can be taken for non-maritime claims immediately after a foreign judgment has been declared enforceable in the Netherlands pursuant to the Brussels I Regulation.

Moves are under way to introduce a bill to accelerate ratification by the Netherlands of the Rotterdam Rules, after seven major industry organisations successfully applied pressure to revive the process. Universal application of the rules could facilitate international trade by making its underlying contracts and documentation more efficient and transparent. The Netherlands is attempting to act as a catalyst in this respect.

Ships which deviate from the mandatory shipping lane above the Dutch Wadden Sea Islands will be subject to higher penalties, after the Cabinet recently voted to increase the maximum fine for such offences from €7,600 to €78,000. The increased fines are intended to take effect from January 1 2014. The proposed legislation amendments will be published on introduction of the bill in the House of Representatives.

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Netherlands Antilles

Shipping companies may use the Netherlands Antilles tonnage tax by registering the vessel with the Netherlands Antilles tax authorities, even though the ship is registered in another flag state. The ship tonnage reserve, to which capital gains, the repayment of investment deductions and reinvestment reserves can be added, offers advantageous tax planning opportunities.

New Zealand

For the first time, the New Zealand courts have directly considered the interrelationship between cross-border insolvency and admiralty claims. The case arose from a foreign administration order that was recognised by the New Zealand High Court as a qualifying foreign proceeding and therefore operated as an automatic stay of proceedings in New Zealand. However, the court allowed the claimants to continue their admiralty claims.

The last participant in an international freight forwarders' price-fixing cartel has finally been dealt with by the High Court in a case that confirms New Zealand's approach towards negotiated settlements and agreed penalties in these quasi-criminal prosecutions brought by a regulator. New Zealand courts remain quite content to endorse this type of 'plea bargaining' approach, despite recent Australian trends questioning it.

Following the High Court judgment establishing a limitation fund for claims arising from the grounding of the MV Rena, the court has issued further directions to claimants that have filed claims against the fund. The earlier order allowed the owners of the Rena to limit their liability to NZ$11,030,110 for any claims for loss or damage arising from the grounding. All claims came within the limitation cap, but not all had been fully quantified.

The High Court recently considered its ability to annul or modify charterparties that are entered into under duress, within its admiralty jurisdiction where the terms of the charterparty are inequitable and construed under the International Convention on Salvage 1989. The dispute underlying the decision arose from the October 2011 grounding of the MV Rena off the New Zealand coast.

Initial ship arrest in New Zealand can be fast and relatively inexpensive. The time and cost involved in maintaining the arrest and claim against the ship, and possibly obtaining judicial sale, will depend on a range of factors. Provided that all of the necessary information is available, the proceeding can be prepared and the application for arrest made within a short time of the instruction being received.

The High Court recently examined whether a boat builder's right to bring an in rem claim in the admiralty jurisdiction and to arrest a vessel was extinguished by a subsequent payment arrangement with the vessel owner. The builder's claim was brought on the basis that it was a claim in respect of the construction, repair or equipment of a ship under the Admiralty Act.

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Nigeria's ratification of the Maritime Labour Convention is a welcome development for the country's maritime industry. However, implementation may present some legal and constitutional hurdles, as the convention has not been enacted into domestic law by the National Assembly, which the Constitution requires for any treaty or convention signed by the government to have force of law.

The Federal High Court recently ordered the sale of a vessel under arrest for the purpose of preserving pre-judgment security. The court held that the application of the Admiralty Jurisdiction Procedure Rules does not depend on the filing of a statement of defence, but is rather to preserve the vessel from destruction. The court ordered that the vessel be sold and the proceeds kept in a profit-yielding account pending the case outcome.

Piracy and armed robbery at sea have become a major threat to maritime activities in Nigerian waters. In order to tackle this issue, a two-pronged approach is needed: the creation of national enabling legislation, incorporating provisions from international conventions, and the establishment of regional agreements with some or all of the states in the Gulf of Guinea region.

The Maritime Administration and Safety Agency has released 12 new marine environmental management regulations. Among the new regulations is the Sea Protection Levy Regulation 2012, which is to be paid by foreign ships calling at Nigerian ports and ships registered in Nigeria. This levy is part of the agency's endeavour to bring Nigeria's maritime law in line with international best practice.

Due to the volatile and cost-intensive nature of the shipping industry, shipowners are given the right to limit the extent of their liability. A well-defined regime for calculation and procedure is governed by the Merchant Shipping Act 2007. However, changes to the limits of liability for maritime claims are on the horizon.

The judicial sale of a ship in Nigeria is carried out by the admiralty marshal at the Federal High Court. A court can order a ship under arrest to be valued and sold on application by an interested party before or after final judgment. The application may be based on the owner's failure to pay its mortgage, creditors, cargo carriage, crew wages or other debts, or could result from the ship's deterioration in value while in the court's custody.

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A non-resident company that participates in business being carried out in, or managed from, Norway will be liable to pay tax. However, an exemption to this rule exists. The exemption results in non-Norwegian shipowners not being liable to tax in Norway on shipping income – even if the shipping business is managed from Norway – provided that certain conditions are met.

A financing bank will usually secure a loan by obtaining a mortgage for a vessel and seek to protect its interests in the mortgaged vessel by way of insurance. The bank has several options to ensure that its interests are protected by insurance, depending on the conditions under which the owner's insurances are placed, the degree of risk that is acceptable and the costs of taking out various insurance covers.

A recent study of case law confirms that courts will place significant weight on evidence arising from or collected in the immediate aftermath of an incident. Parties facing a potential dispute should take care to collect all relevant documentary evidence and be cautious when issuing preliminary reports or other documents until all relevant facts are identified.

Norway has now implemented EU Directive 2009/20/EC, which obliges shipowners to take out liability insurance for all claims covered by the Convention on Limitation of Liability for Maritime Claims 1996. Vessels are required to carry onboard a certificate as proof of insurance. The directive has been implemented in the Norwegian Maritime Code 1994.

In Norway, as in most other jurisdictions, there are separate rules governing the time bar of maritime claims. It is crucial not only to be aware of these rules and the claims to which they apply, but also to keep in mind that the general time-bar rules may supplement the special maritime rules.

The Borgarting Court of Appeal recently considered the applicable time bar for claims for damages caused by delay of goods carried by sea. The court held that claims for delay are subject to the same limitation period as claims for damage to or loss of the goods, and consequently are time barred one year after the cargo has been or should have been delivered.

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The enrolment of vessels in Panama involves several government authorities. Applicable legal provisions are contained in various laws, cabinet and executive decrees and resolutions, and the commercial, labour and fiscal codes.

The arrest or attachment of vessels offers creditors an effective way of collecting their claims. Domestic legislation provides for petitions of arrest, general procedures, suspension and waiver of arrest, and the relevance of arrest orders decreed by foreign courts.

The International Safety Management Code covers all aspects of safety at sea and efforts are being made to ensure that all ship-owners implement its measures and standards. The Panamanian Ship Registry welcomes strict enforcement of the code and 75% of Panamanian vessels already comply with its requirements.


A seafarer was admitted to hospital two days after repatriation and died six months later. The seafarer's heirs filed a claim for death benefits. The labour arbiter dismissed the claim as the death occurred outside the employment term and there was no evidence that working conditions had brought about the illness. The Supreme Court held that for death benefits to be compensable, death must occur during the employment term.

The Supreme Court recently ruled that a seafarer was not entitled to disability benefits after the seafarer had wilfully concealed pre-existing illnesses. The court held that the failure of the pre-employment medical examination to reveal the seafarer's undisclosed hypertension could not shield him from the consequences of wilful concealment of this information.

The Supreme Court has denied a seafarer's claim for disability benefits as the seafarer failed to submit himself to a post-employment medical examination within three working days of his arrival in the Philippines. The seafarer admitted that he had had his medical examination more than a month after his arrival and failed to prove that he had suffered any illness during the term of his employment.

The Supreme Court recently denied a seafarer's claim for disability benefits. The court ruled that it was undisputed that the seafarer was repatriated due to his contract ending and not for medical reasons. The court emphasised that the seafarer's repatriation for completion of his contract belied his submission that his claimed heart disease had been aggravated by his work onboard the vessel.

Following the abrupt termination of a number of seafarers due to the cessation of the employer's operations, it was agreed that the seafarers would receive 100% of their salaries, but the next day it was agreed that they would receive only 50%. The seafarers executed quitclaims. The Supreme Court considered the quitclaims valid, noting that all the seafarers executed them with a full understanding of their consequences.

A seafarer filed a complaint for payment of permanent total disability benefits. The Supreme Court noted that the seafarer had pre-empted the mandated procedure by filing a complaint based on his chosen physicians' opinions without referring the conflicting opinion to a third doctor for final determination, as was his duty. The Supreme Court dismissed the seafarer's complaint.

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Portugal has no statutory regime dealing with piracy, either under civil or criminal law. This could cause practical difficulties for a court where, for example, it is required to deal with the consequences of a Somali pirate attack off the Somali coast which is thwarted by a Portuguese warship. In such cases a Portuguese judge's scope of action would presumably be severely limited.

The Lisbon Court of Appeal has confirmed a first instance ruling that an agreement between a shipowner and a ship agent - and any disputes arising from termination of the agreement - are matters of maritime commercial law. The dispute in question fell to be resolved exclusively by the maritime court.

A recent order of the Lisbon Admiralty Court may have paved the way for the arrest of associated ships and piercing the corporate veil in arrest cases. The judge allowed the arrest of associated ships, owned by a company within a group, in connection with a claim relating exclusively to other group companies and to ships that the latter companies owned (or would have owned under the contract in dispute).

A recent report on maritime economic activity has given rise to several proposals to support sea carriage and shipbuilding. In addition, a change to the ranking of priorities for claims in favour of mortgagees will help to improve the competitive position of the Portuguese fleet, while a draft navigation law is likely to facilitate ship arrest in Portugal.

Many owners and insurers of vessels operating in the Portuguese jurisdiction, calling at Portuguese ports or sailing in Portugal's coastal waters are unaware of the importance of presenting a sea report following an incident at sea if damages or compensation may be sought in proceedings in Portugal. Potential claimants and defendants are well advised to follow and intervene in the inquest to confirm such a report.

New legislation has changed the ranking of priorities over Portuguese-flagged ships in favour of mortgagees. Most newbuilds and purchases of ships in service are financed by banks or leasing companies that require owners to flag their vessels in mortgagee-friendly jurisdictions; the recent change aims to halt a 20-year decline in the numbers of Portuguese ships and shipowners.

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The government recently issued an order to establish the Administration of the Northern Sea Route. The creation of this state institution was one of the measures indicated in the recent Federal Law 132-FZ, which provides the foundation for the new regulation of issues relating to the Northern Sea Route. The new rules will facilitate better access to the route for the international shipping community.

Parallel registration of ships under the Russian flag was first made possible in 1999, when the current Merchant Shipping Code replaced the Soviet Merchant Shipping Code. The new code made it possible for ships that are permanently registered under flags of other countries to be temporarily transferred to the Russian flag with the permission of the central authority responsible for merchant shipping.

At the start of the 1990s the Soviet Union boasted one of the largest fleets in the world, but over the past 20 years Russia has lost a significant share of the market. A new law will encourage the registration of ships under the Russian flag and support the country's shipyards. It also signals significant opportunities for international shipping businesses and financial institutions.

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A recent decision of the Singapore High Court gives valuable insight into the court's approach to applications for the private direct sale of arrested vessels in Singapore. However, much will depend on the specific circumstances of the case, and the Singapore courts are exercising more caution when dealing with applications for judicial approval of private direct sales in order to safeguard the interests of all interested parties.

The High Court recently ruled on an appeal against a decision of the assistant registrar to refuse to stay an admiralty action between foreign parties arising from a collision between foreign vessels of different nationalities. The decision shows a willingness to apply the doctrine of international comity and dismisses the argument that being subject to a lower limitation fund constitutes a juridical or personal disadvantage.

The High Court has clarified the degree of disclosure required on an application for a warrant of arrest. An arresting party is not required to show that it is likely to win the case on the merits before invoking the Singapore court's admiralty jurisdiction. The duty to make full and frank disclosure is strictly meant to ensure that the Singapore court's power of arrest is not being abused or misused by the arresting party.

The Court of Appeal's recent decision in The Asia Star is significant to the shipping industry, as the courts have now made clear that it is important for a charterer to consult a defaulting owner on the measures that the former intends to take in order to mitigate the damage caused by the latter's contractual breach.

Singapore has been known as a leading centre of arbitration in Asia for many years. The development of the Singapore Chamber of Maritime Arbitration, in keeping with the less formal arbitration models often used in maritime disputes, and amendments to the International Arbitration Act exemplify Singapore's ability to keep pace with changes in international business needs.

In The Vasiliy Golovnin the Court of Appeal set aside the arrest of a vessel because the arresting party did not have a good arguable case and failed to make full and frank disclosure in the arrest application. The decision clarifies the standard for claimants in making a case for arrest and the duty of disclosure in an application. The court also considered when a defendant can claim damages for wrongful arrest.

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In April 2004 the Airport Companies Law took effect. The law provides the legal basis for six airports to operate as independent joint stock companies with the state as their sole founder. The relevant administrative body is authorized to determine the individual companies. The airports will then operate accordingly.

South Africa

A common feature of shipbuilding agreements is the requirement that parties provide guarantees from third-party institutions as security for the performance of their respective obligations. The legal nature and practical effect of this type of security are routinely a source of dispute and litigation internationally, often as a result of the uncertainty introduced by the way in which contracting parties choose to name the instrument.

Given the ease with which ships can be arrested in South Africa as security for legal proceedings, commenced either locally or in foreign forums, the question frequently arises as to whether it is possible to issue arrest proceedings in South Africa as a protective step to guard against a change of ownership or a possible time bar of the claim.

It has long been an open question as to whether a claimant can arrest a bareboat (or demise) charterer's rights in a bareboat charterparty as security for court or arbitration proceedings. There have been arrests in South Africa from time to time of the demise charterer's so-called 'right, title and interest' in and to the ship, but it was not until the recent case of mt Rio Caroni that the point was successfully challenged.

A recent flurry of major international shipping companies initiating proceedings for protection from creditors has highlighted the rights of creditors to arrest maritime property in South Africa as a mechanism to sidestep these proceedings. South Africa is well known for having a liberal arrest regime, and the insolvency provisions are no exception.

In the recent case of Lorcom Thirteen (Pty) Ltd v Zurich Insurance Company South Africa an interesting factual scenario gave the Western Cape High Court an opportunity to assess the correct approach to the question of insurable interest under South African law. The case concerned the MFV Buccaneer, a fishing vessel lost at sea in 2008.

South Africa continues to be a popular jurisdiction for maritime creditors to obtain security for claims. While the outstanding feature of the country's admiralty procedure remains the well-known 'associated ship' arrest, a number of other aspects also contribute to its potency. The South African arrest regime has a liberal nature and offers possibilities to creditors in the current distressed market.

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South Korea

The Supreme Court has ruled on the interpretation of Article 60(2)(ii) of the British Marine Insurance Act 1906. The 'cost of repairing the damage' refers to costs incurred in restoring a damaged vessel to its original condition, including the cost of towing the stranded vessel to the repair port and the stamp fee for issuance of the towage certificate, among other things.

Recent Supreme Court decisions have clarified issues such as the relevance of the Hague-Visby Rules in domestic law, the naming of cargo owners as consignors in bills of lading and the circumstances in which the courts will apply the Civil Code to uphold a contributory negligence setoff where concurrent causes exist.

A recent Supreme Court judgment considers the issue of contributory negligence in determining the scope of liability for damage resulting from a breach of a carriage contract.


In a recent ruling on both-to-blame collisions, the Supreme Court clarified that for the purposes of collision liability, the concept of a ship comprises not only craft with an ability to navigate, but also floating devices capable of being moved. It further confirmed that the concept of collision extends to cases where there has been no direct physical contact between the ships.

The Law on Contracts for the Land Transport of Goods is designed to modernize the legal framework governing contracts for land transport by road and rail. It will also apply to river transport and, subsidiarily, transport by post. The new law also introduces carriers' liability. The liability framework is based on the presumption of carrier's liability where an event giving rise to liability occurs.

The Supreme Court has clarified the law on the supplementary application of general insurance default interests to marine insurance contracts. Should parties fail to provide for a regulation on the interests applicable to indemnity in case of late payment by the insurer and unless the parties have expressly excluded the application of the Law on Insurance Contracts, the loophole will be filled by Article 20 of the law.

This update looks at the power granted to insolvency judges regarding the termination of a shipbuilding contract when, at the time the insolvency proceedings are initiated, obligations of both parties are still pending (ie, the shipyard for construction of the vessel and the shipowner for the payment of instalments).

The provisions of the 1952 Brussels Convention on the Arrest of Seagoing Ships were ratified by Spain in 1953. They apply to vessels flying any flag pursuant to Articles 1, 2 and 3 of the Law on the Precautionary Arrest of Foreign Seagoing Vessels. The Spanish rules regarding interim and precautionary measures such as arrest are governed by Articles 721 to 747 of the Civil Procedure Act.

The Supreme Court has recently considered the requirement for timely notice to the carrier of loss or damage to cargo carried between two non-international ports, confirming the informal interpretation of the carrier pursuant to the second paragraph of Section 952(2) of the Commercial Code.

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The Supreme Court recently confirmed that boat owners' responsibility for collision damage is subject to a two-year limitation period. Arguably, any party claiming compensation for damages from a tortfeasor which is thereafter contacted by an insurer of the tortfeasor should not blindly trust that the insurer is authorised to act on behalf of the tortfeasor.

A consumer arranged to have a car shipped from Miami to Gothenburg. The car was delivered to the carrier, but problems arose and the shipment did not take place. The consumer was later advised that the car had been sold to cover storage costs, so the consumer claimed compensation. The Gothenburg City Court ruled that because carriage never took place, the time bar period had not commenced.

Following years of pressure, the government has finally initiated an action plan in order to strengthen the Swedish shipping community's ability to compete in an international market. The government has decided to initiate an investigation to analyse the possibility of introducing a tonnage tax system in Sweden with the clear purpose of increasing the number of Swedish vessels flying the Swedish flag.

The Maritime Labour Convention recently entered into force. The convention aims to secure the right of all seafarers to decent employment. The provisions are implemented through amendments in the Vessel Safety Act. Vessels which do not comply with the provisions may be prohibited from proceeding to sea.

The government has recently enacted a law setting out new provisions on the employment of onboard armed security personnel, which is set to take effect in July 2013. An unofficial English translation of the act will be published later this year by the Maritime Law Institute.

The increased use of armed guards and the expanding market in the number of firms offering armed maritime security services impelled the International Maritime Organisation to issue guidance on the use of privately contracted armed security personnel onboard ships. Sweden has not yet adopted regulations on the employment of security guards; however, Parliament is expected to enact a new law in the near future.

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A recent Supreme Court decision has opened the door for subrogated underwriters to take recourse action in international transport relationships. The decision is significant since it limits the longstanding practice established in the Gini/Durlemann Case in cases where the transport is governed by the Convention on the Contract for the International Carriage of Goods by Road.

In a recent case a pleasure yacht transported to Gabon by sea suffered major damage during unloading in the port. As the damaged yacht was transported on deck, the Supreme Court held that an exclusion of liability was in line with the Federal Act on Carriage by Sea.


The Council of Ministers is reviewing the new draft Commercial Code which proposes major changes to maritime trade. The changes respond to the need to implement international conventions and reflect experience gained over the last 50 years from the application of the current Commercial Code.

The maximum fines for various shipping infractions were amended on June 1 2005 under the new Criminal Code. The new single multiplier implemented by the code has resulted in drastic changes to the fines, with the new fines being much lower than they used to be.

Carrier responsibility in case of loss of or damage to goods carried by sea is an important issue. If a dispute occurs, the judge must first decide whether there is a 'foreign element' involved in the matter. If the carriage took place from one Turkish port to another Turkish port on a Turkish vessel, then there is no foreign element.

In an effort to attract foreign investment, Article 823 of the Turkish Trade Law has been amended to allow shipping companies with Turkish-flagged vessels to be traded on the stock exchange, provided that the majority of shares are held by Turkish citizens. Other changes encourage foreign investment by relaxing and simplifying mortgage and foreclosure processes.

The Turkish Parliament has promulgated a new Road Transport Act. The act is more regulatory than substantive in nature, and governs commercial operators of road transport vehicles that carry passengers and goods. A strict liability regime has been introduced in connection with the carriage of passengers.


Ukrainian customs and maritime authorities are taking steps to establish control over the offshore ship-to-ship transshipment areas in the Kerch Strait, through which more than 15 million tons of cargo pass every year. However, in view of international law and the bilateral treaties between Ukraine and Russia, the validity of these measures may be dubious.

Severe weather conditions last winter had serious negative consequences for shipping businesses in Ukrainian ports. Long-term weather forecasts for Winter 2013/2014 are also not optimistic, so the best course of action is to take preventive measures. In particular, ice and/or force majeure clauses, should be incorporated into the standard forms of charterparties and other contracts.

The Ministry of Infrastructure recently adopted a new version of the Regulation on Procedures for Registration of International Shipping Lines operating in Ukrainian ports. The amended regulation should adapt the shipping line registration process to the modern shipping market, and should also simplify and speed up the procedure for international line operators and local maritime agents.

The Ukrainian government is set to abolish segregated ballast water controls, which have been the subject of widespread discussion in the shipping community and the cause of numerous challenges for shipowners. Although the relevant act to abolish these controls has not yet been promulgated, there are no doubts that the new regulations will reduce the number of disputes and prevent breaches of law.

The right of a shipowner to declare a lien on cargo is inherent to sea carriage contracts. However, when exercising this right in Ukraine, shipowners should be aware of several nuances related to the peculiarities of Ukrainian jurisdiction. Before declaring a lien on cargo, all possible risks for the shipowner must be duly estimated and competent advice on the ambiguities of the law should be obtained.

Priority of berthing and loading or discharging of a vessel is a significant issue, as it directly concerns matters of laytime and demurrage. The first come, first served principle is commonly known in shipping and port practice when it comes to berthing and loading or discharging of vessels. However, sometimes even an agreed berthing line-up cannot guarantee timely berthing.

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United Arab Emirates

When a non-delivery of cargo claim arises, insurers must be quick to trace the cargo and obtain evidence admissible in the UAE courts. Two recent judgments provide an interesting insight into marine insurance litigation in the United Arab Emirates.

Proposed measures to prevent further oil spills in the United Arab Emirate's territorial waters include a total ban on ships that fly the flags of certain countries.

A ministerial decision passed in June modifies the UAE licensing conditions for foreign vessels. This update details the amendment.

United Kingdom

The Commercial Court has handed down its judgment in Ocean Victory. The case concerned a safe port warranty and total loss, but it also addressed whether the insurer – as the assignee of the co-assured demise charterer – was entitled to claim indemnity from time charterers for the demise charterer's liability towards the co-assured head owners in respect of their breach of the safe port warranty.

Life as a shipowner is seldom easy. In addition to the commercial challenges that owners face on a daily basis, time must be given to reading law reports to ensure that benefits are gained and warnings heeded from the misfortunes of those who find themselves embroiled in the legal system - particularly when economic conditions demand strict enforcement of legal rights. Three recent decisions may be of particular interest.

Whether the 1993 Norwegian sale form excludes terms as to satisfactory quality and fitness for purpose, which are implied in contracts of sale by the Sale of Goods Act, has always been the subject of speculation. A recent decision has put this debate to rest, holding that such terms are to be implied unless expressly excluded. This ruling has implications for the terms agreed for the sale and purchase of second-hand vessels.

When a party commits a breach of contract entitling the other party to terminate, the innocent party should not delay in exercising its rights. To do so may raise difficult questions as to whether the right has been waived and whether the late exercise of a right to terminate itself amounts to a repudiatory breach. A recent decision in a case involving a shipbuilding contract highlights that time may be an important consideration before the right to terminate arises.

The English courts have delivered a decision on guarantees and the all-important distinction under English law between guarantees and indemnities or on-demand bonds. The courts have repeatedly attempted to explain the distinction between these two forms of security. In a recent decision the Court of Appeal attempted a more simple solution by seeking to cut – or perhaps unravel – this Gordian knot.

A guarantee designed to provide security for the performance of the obligations of a debtor sometimes turns out to be far from secure. Where the nature and extent of a guarantee is ambiguous, courts are often called on to determine the scope and validity of the security. What seems simple and straightforward when these guarantees are negotiated can become less so when it comes to enforcement against a resistant guarantor.

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In Offshore of the Palm Beaches, Inc, DBA Freedom Boat Club v Lynch the Eleventh Circuit reviewed the district court's decision to lift the stay imposed in a limitation proceeding where there was only a single claimant, but the vessel had filed a limitation complaint before the claimant filed her state court claim.

The US Second Circuit Court of Appeals recently addressed the issue of whether US federal courts can exercise their exclusive admiralty jurisdiction to enforce a foreign judgment rendered by a non-admiralty court if the underlying claim is considered maritime under US legal standards. The Second Circuit's ruling may have a significant impact on the enforcement of foreign judgments in the United States.

The US District Court for the Eastern District of Louisiana has found in favour of Smith Marine Towing in a suit brought against it by Cashman Equipment Corporation. Both companies owed each other money for chartered vessels. Calculation of the final damages award came down to timing: once interest was taken into consideration, Smith owed Cashman only about $8,000, rather than the $2.5 million that Cashman had initially claimed.

The Oregon rule states that when a moving vessel allides with a stationary object in the water, the moving vessel is presumed at fault and must prove otherwise. A recent district court opinion provides useful guidance on navigating the troubled waters created by the presumptions in maritime law.

The US Fifth Circuit Court of Appeals recently explored Inland Navigational Rule 9 – the rule for navigating in a narrow channel – and its relationship to The Pennsylvania rule in connection with an allision that occurred on the Intracoastal Waterway in Louisiana. The Pennsylvania rule is a burden-shifting presumption for causation when, at the time of collision, a vessel is in actual violation of a statutory rule intended to prevent collisions.

The US Court of Appeals for the Fifth Circuit recently affirmed a decision rendered by the US District Court for the Eastern District of Louisiana enforcing a liquidated damages provision in a vessel sales agreement under maritime law. The court analysed the facts and enforced the provision in breach of a non-compete clause that prohibited the buyer from chartering out two tugboats purchased from the seller under the agreement.

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Many owners of ships that use the port of Aden have faced exaggerated cargo claims by Yemeni receivers, particularly in respect of steel, timber and chemical cargoes. A reform programme has reduced the number of exaggerated claims and partly curbed the indiscriminate arrest of vessels, but shipowners should consider the pitfalls revealed by recent cases.