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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.
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.
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.
In a case involving damage to goods during sea carriage, the Antwerp Court of Appeal recently rendered a significant decision which sets out the principles relating to Belgian freight forwarding and considers the commission contract as a sui generis contract, specific to the commercial trade.
Belgium adopted two anti-piracy laws in December 2009. A recent first prosecution demonstrates that they are a step in the right direction. However, some experts have questioned whether they provide sufficient protection for Belgian-flagged ships and their crews, and a number of Belgian shipowners recently called for the right to hire private security forces for their vessels.
The notary public and the court official of the Maritime Contracts Registry Office recently filed suit against the federal government requesting acknowledgement of the fact that the Admiralty Court does not have the jurisdiction to register maritime contracts. In turn, the court alleged that the port authority had been failing to fulfil its role as notary with regards registration of vessels.
In 2009 the National Federation of Port Workers filed a notice with the Federal Accounting Court alleging irregularities in the activities of private terminals located in organised port areas. According to the federation, by handling a small proportion of their own cargo in comparison with third-party cargo, some terminals were acting more as public terminals. The court's technical unit recently issued its opinion on the matter.
Following concerns over the visual impact of the view of docked ships from the southern part of the city, the Rio de Janeiro City Attorney's Office recently requested that the port captaincy provide alternative anchoring locations for ships at the port. The changes aim to reduce the large number of ships at anchorage by increasing access to the port at night and during bad weather, among other things.
Congress is in the process of analysing a provisional presidential decree that has created a new regulatory framework for the Brazilian port system, setting forth provisions on the direct and indirect exploitation by the government of ports and ports facilities and revoking the Ports Law. The commission has scheduled public hearings so that representations from those that operate or make use of the port system can be heard.
The National Agency for Water Transportation recently issued a statement announcing that the new economic and financial qualification requirements for granting authorisation for a company to operate as a Brazilian shipping company recently entered into force. Under the rule, applicants must submit independently audited balance sheets. However, those deemed micro-companies or small businesses are exempt.
The National Commission on Pilotage Matters was recently established by the federal government. The commission is expected to rule on the methodology for pilotage service price control and the maximum price for pilotage services in each pilotage zone, as well as measures for improving the control of services in each zone and the boundaries of each zone.
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.
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.
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.
In 2011 the government promoted a draft amendment of the regulation that applies to casinos based on cruise vessels, in order to increase economic competitiveness in this market and to bring Chile into line with other significant economic activities. However, the enacted Casino Law, in all matters regarding cruise vessels, kept only partially to the draft amendment.
The Chamber of Deputies of the Chilean National Congress has recently approved a bill to replace the provisions on general and non-marine insurance. Under the bill, in addition to relating directly to ships, marine insurance will now apply to facilities and machinery used for loading, unloading and stevedoring operations, and will cover other goods or assets that the parties consider to be exposed to marine risks.
The number of cruise vessels calling at Chilean ports has decreased dramatically since 2008, a trend partly caused by the current prohibition on the functioning of game casinos in territorial waters. However, under a proposed draft amendment to the Casinos Law, the excessively onerous requirements currently in force for the exploitation of casino games in cruising vessels will be at least partially eliminated.
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.
In a case concerning compensation liability for the release of goods without a bill of lading, the defendant was a qualified non-vessel operating common carrier, but also had a certificate for handling international forwarding. The plaintiff failed to distinguish between the freight forwarder and non-vessel operating common carrier and thus did not make its action against the right defendant, causing the court to rule against it.
Two ships, the M/V SF and the M/V CS, collided in the port of Tianjin, causing much damage to the CS. The CS's owner filed an action for damages against the owner of the SF and its protection and indemnity club insurer. The club argued, among other things, that it was merely a trade brand jointly used by 12 insurers and thus not a legal entity that could be sued. The court ruled in favour of the club, dismissing the claim.
An item of machinery that was to be shipped from Brazil to China was damaged when it struck lifting equipment in the port area. Among other things, the court had to decide whether the defendant was entitled to enjoy the unit limitation of liability that applies when cargo damage occurs during sea transportation, with the plaintiff arguing that the cargo damage had occurred some distance from the ship's rail.
A dispute between a clothing company in China, a logistics company and a shipping company raises significant questions about the scope of liability where goods are released at their destination without an original bill of lading, particularly where the carrier is required to deliver the goods to Customs and the port authority.
The customs legislation was recently amended, and this update explores the most important aspects of the new law.
The Department of Merchant Shipping recently announced that it has amended the form for declaration by a legal representative or auditor of a company adopting the tonnage tax system that the company concerned was tax resident in Cyprus for the relevant year. The declaration also sets out the tonnage of qualifying and non-qualifying ships and confirms that any non-qualifying income must be appropriately accounted for.
The Department of Merchant Shipping recently announced that with effect from the 2012 tax year, all owners of foreign ships, charterers and ship managers participating in the tonnage tax system must submit a declaration in the prescribed form, together with their tonnage tax declaration. In addition, following the recent disruption to the banking sector, the department has extended certain payment deadlines.
A recent decision of the Supreme Court in its first instance admiralty jurisdiction gives valuable insight into the court's approach to applications for the arrest of vessels and for security to be lodged with the court for the release of the vessel. The case centred on damage caused to a number of fish cages by a ship on approach to the port of Vasiliko, resulting in the loss of the fish that had been kept in the cages.
A recent judgment arising from one of a series of claims being dealt with by the Cyprus courts against a ship gives an insight into the principles that the courts will apply when considering applications for security for costs in admiralty cases. The applicable law will depend on whether the party against which such an order is sought can be considered an 'adverse party' under Rule 185 of the Admiralty Jurisdiction Order.
The Department of Merchant Shipping recently announced how the EU Passenger Liability Regulation will be applied within Cyprus and to Cyprus-flagged ships. The regulation establishes a regime relating to liability and insurance for the carriage of passengers by sea, under which ships must be issued with a state certificate from their flag state confirming that insurance or other financial security is in force.
In a recent decision the Supreme Court dealt with an application by summons to amend the statement of claim filed by the plaintiff in an action in rem. The key consideration that the courts will apply in assessing such an application is the effect of the proposed amendment on the interests of the respondent. If the effect on the respondent is disproportionate, the court will dismiss the application.
A recent ruling highlights the fact that carriers must be informed when goods are of particular value and special security measures must be taken. The Supreme Court held that the theft of designer goods from an area that was checked by security guards only three times a night was not attributable to the carriers' gross negligence.
The Maritime and Commercial Court has ruled in favour of railway carriers in a delivery dispute, notwithstanding a leakage of wine from a tank container in transit.
The Western Division of the Danish High Court found in favour of plaintiffs who had experienced airline delays. The court was not satisfied that the airline had taken all necessary measures to avoid the loss incurred by the travellers due to the delay.
Following damage to meat products in transit, the goods' insurers paid compensation and instituted legal proceedings claiming indemnification against the transportation firm for the full amount. The Maritime and Commercial Court ordered the transportation firm to pay.
The Maritime and Commercial Court has ruled on the issue of whether a ship broker and shipping firm were liable for costs incurred in connection with the retention of goods in Pakistan.
A recent case before the Maritime and Commercial Court concerned a carriage of insulin which was exposed to frost. The importer claimed full damages against the carrier on the grounds of its carrier liability insurance (open policy).
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.
The government's initiative to tackle the grey economy has focused on the transport sector – especially on the transportation of goods by road. Several amendments to the Act on Commercial Transport of Goods by Road recently came into force, one of which increases the onus on a procurer of haulage services to ensure that the transportation contract is not concluded before it has made certain checks.
The Finnish Port Operators Association has repeatedly turned down the Transport Workers Federation's (AKT) demand that the lashing and unlashing of containers - traditionally undertaken by the vessel's own crew - be carried out by stevedores. In a recent decision the Labour Court found the AKT's threat that stevedores would take over the lashing work from February 4 2013 to be an illegal industrial action. Negotiations to settle the dispute are ongoing.
A Finnish appeal court recently dismissed criminal charges against the master and first mate of a vessel who had been fined for failing to ensure that their ship was seaworthy prior to a voyage from Germany. While the vessel's cargo of explosives had not been transported in accordance with the applicable regulations, the appeal court found that this had caused no risk to life and thus did not constitute a criminal offence.
In 2011 Finland and Sweden entered into a bilateral convention to strengthen the organisation of winter navigation services. The arrangement has enabled icebreakers to operate effectively and economically, to the benefit of both parties. The success of this cooperation hinges on careful planning by the authorities.
The Finnish Seaman's Union (FSU) has long subjected foreign flagged vessels to harassment. If a foreign vessel that applies a collective bargaining agreement which the FSU dislikes calls at a Finnish port, the FSU tends to claim the right to negotiate a new collective bargaining agreement for the vessel. The FSU has almost never sought a mandate from the crew, but claims that it has a right to negotiate.
Despite efforts to encourage competition, Finland has remained one of the few EU countries where the goods transport network was operated by a single railway company. However, the first safety certificates were issued to private companies in 2011 and the Ministry of Transport and Communications recently issued a licence to Ratarahti, making it the first new official operator since the sector was opened to competition.
German maritime trade law has been reformed in order to satisfy the needs of the 21st century shipping industry. The new legislation entered into force on April 25.
Germany is in the final stages of significantly reforming its maritime trade law. The reform bill has been approved and is set to enter into force in due course. The reform is a considerable step towards improving the standards of the German shipping industry, providing a modern legal framework without losing sight of practical needs. However, it will be essential to revise standard terms and conditions to meet the new standards.
The Federal Court of Justice recently clarified the rules pertaining to the freight forwarder's burden of proof and the scope of compensation in the case of partial loss of goods of exceptionally high value. The court confirmed that the burden of proof rests with the claimant, but under certain circumstances the claimant may invoke a derivative burden of proof for the defendant.
The German Parliament recently approved new rules on the use of private maritime security companies onboard German flagged vessels to fight piracy. Private maritime security companies must now be licensed under the new scheme, which is far more demanding than its predecessor. The new rules provide a clear legal framework for the licensing process and ensure that the quality of services is safeguarded.
The Hamburg Higher Regional Court recently held invalid a clause which exempts and limits the liability of the carrier for damages caused by delay, independent of the degree of default. The court found that a limitation of liability could not be justified, even in the event that use of the clause would be customary in international maritime business.
The Dusseldorf Court of Appeal recently clarified a carrier's obligation to provide information in case of damage to goods. The carrier must provide detailed facts concerning the damage only if the claimant has provided evidence of the likelihood of a qualified fault. In this case, the claimant failed to provide such evidence.
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.
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.
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.
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.
The shipbuilding market has experienced both peaks and troughs during the past few years. The global financial crisis has affected market conditions, which in turn have impacted on shipbuilding contracts. Owners considering placing new orders may be able to negotiate terms that were unachievable in the pre-crisis era. Given existing market conditions, buyers lose nothing by requesting a particular term or provision.
It is often impossible for shipowners to control the varied interests which may have a claim against their ship in the event of a major maritime incident, and they are often left with little option but to wait to see where creditors take action. However, there is another option – the 'Australian exit', whereby owners can take control and change the traditional forum shopping procedure.
The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea still has not entered into force some 16 years since it was adopted. Eight countries have now signed the 2010 protocol, which was designed to overcome the practical problems that have prevented the convention from entering into force.
In May 2007 the International Maritime Organisation adopted the Nairobi International Convention on the Removal of Wrecks. The convention fills a gap in the existing international legal framework by providing the first set of uniform international rules aimed at ensuring the prompt and effective removal of wrecked ships. It is expected that sufficient states will ratify the convention for it to enter into force during the next two years.
The Lloyd's Salvage Arbitration Branch, the body responsible for administering the Lloyd's Open Form of Salvage Agreement (LOF), recently issued a new version of the form – LOF 2011. The two most significant changes introduced by LOF 2011 relate to the publication of awards and the procedures to be followed in respect of salvage services provided to container vessels.
The Court of Genoa has issued a decision regarding interpretation of both contracts for the supply of food to ship crew members and of the applicable rules in the related collective bargaining agreement. It is the first time that an Italian court has taken a view on the construction of such a contract. The decision shows that food quantity and quality provisions should be taken as general guidance, not as strict parameters.
The Genoa Court of Appeal recently issued an interesting decision on the scope of application of the Hague-Visby rules. In particular, the court was asked to decide on the application of the limit of liability set down by the rules in circumstances where the cargo to be carried suffered damages during loading operations and before the relevant bill of lading was issued.
A Tribunal of Genoa decision has affirmed that damage claims against carriers for full liability must prove not only that the carrier's behaviour had been grossly negligent, but also that the carrier or its agents acted recklessly and foresaw that damage would result from their act or omission.
A judgment issued by the Court of Ravenna poses complex legal questions about the application of the concept of 'undue hardship' to charterparties and the obligation to renegotiate. It also raises significant problems about the relationship between English and Italian jurisdiction.
A recent Supreme Court decision has refocused attention on the issue of incorporating arbitration clauses by reference to common charterparty forms contained within fixture recaps. This has been a point of contention for many years within the shipping industry, giving rise to numerous disputes and great uncertainty in the interpretation of charterparties and fixture recaps.
The interpretation of Article 3(4) of the Brussels Convention 1952 has given rise to much debate in the convention's contracting states. In Italy, a number of arrests have been granted in respect of claims against a demise charterer or a time charterer, even where the maritime claim is not secured by a maritime lien on the vessel. A decision of the Court of Genoa on this issue seems certain to provoke further debate.
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.
The Court of Appeal recently ruled that an appeal by an owner in a collision action was allowed in part. The court overturned an earlier High Court decision that had held that the owner was not entitled to limit its liability for damage under Section 360 of the Merchant Shipping Ordinance. The appellate court held that the owner was liable in negligence but was granted limitation pursuant to the ordinance.
The Admiralty Court recently issued Practice Direction 1/2012 in relation to admiralty and maritime claims, which is to be followed in relation to admiralty and maritime matters at the high courts. The Kuala Lumpur Admiralty Court and the other high courts are to hear all matters pertaining to 'maritime claims', which are defined in detail in the practice direction.
There are two key items of Malaysian legislation that address marine pollution from ships - the Merchant Shipping (Oil Pollution) Act 1994 and the Merchant Shipping Ordinance 1952. Both were recently amended in order to bring domestic legislation into line with international conventions on the prevention of oil pollution.
The Arbitration (Amendment) Act 2011 was recently passed. This bill amends the Arbitration Act 2005 and empowers a Malaysian court that exercises admiralty jurisdiction to order the retention of vessels or the provision of security, pending the determination of arbitration proceedings related to admiralty disputes. The bill brings into force the amendments to Sections 10 and 11 of the 2005 act.
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.
Legal history was made recently when a Maltese civil court granted an application requesting approval of a private sale. Court-approved private sales are intended to address the respective disadvantages of private sales and judicial sales by auction. Notwithstanding that this remedy has been on the statute book since 2006, this case represented its first test.
Following the violence in Libya over the past weeks, numerous shipping companies have been operating round trip charter evacuations between Libya and Malta, mainly on the request of governments in Europe, Latin America and the Far East. While tragic in its humanitarian implications, such a crisis presents those with the requisite resources and expertise with a commercial reality that warrants attention.
In 2010 the Maltese courts issued their highest-ever damages award in a case involving a failure to transfer shares in a company that was the owner of a new Aframax tanker. An Italian company filed an action against a Monegasque company for breach of a promise to sell shares in a Maltese registered company which had been formed for the purposes of entering into a shipbuilding contract.
In the bunker industry, it is common practice to issue invoices to the "master and/or owners and/or operators and/or managers and/or charterers c/o" (or similar wording), followed by the name of the person or company actually ordering the bunkers. So does this mean that, if unpaid, a claim for the bunkers can be made against the master, the owners or the vessel?
The Netherlands Appeal Court has overturned a Rotterdam Court ruling in a dispute involving entitlement to limit liability under the Strasbourg Convention on the Limitation of Liability in Inland Navigation. The dispute arose during the transportation of containers on board a push barge, which was being pushed by another vessel. Under Dutch law, a push barge and a pushed barge are considered to be two separate vessels.
The issue of what constitutes delivery under the terms of the Convention on the Contract for the International Carriage of Goods by Road, and establishing when the period of the carrier's liability ends, continues to occupy the time of the Dutch courts. The Middleburg District Court recently ruled on this issue in a dispute involving a shipment of mussels.
If a seller cannot prove that goods were delivered to its foreign buyer, it will have to pay the value added tax on the goods. For this reason, many sellers include a clause in Convention on the Contract for the International Carriage of Goods by Road (CMR) contracts stating that the carrier must present a proof of delivery. A recent Supreme Court decision illustrates how a CMR consignment note can provide proof of delivery of cargo.
The government has agreed to amend national law to facilitate the implementation of international and European legislation governing the carriage of passengers by sea. The amendments will see the Athens Convention and its protocol and EU Regulation 392/2009 enter into force - although in relation to the protocol, a reservation has been made in respect of carriers' liability.
The Supreme Court has ruled that claimants could not rely on the Convention on the Contract for the International Carriage of Goods by Road (CMR) to prove gross negligence on the part of the defendants in a dispute involving theft of a high-value cargo from a parked trailer. The judgment reinforces the belief that it is virtually impossible in the Dutch courts to break the CMR limitation on the basis of gross negligence.
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.
The High Court recently clarified the extent of New Zealand's jurisdiction over New Zealand ships on the high seas. The case involved a skipper charged with committing an offence under the Maritime Transport Act by operating his ship in a manner that caused unnecessary risk. The court had to consider whether the act applies extraterritorially, either through its express wording or by implication.
A recent High Court decision has held that the court has jurisdiction to authorise the establishment of a limitation fund as security for a shipowner's liability for damage caused by a ship. This decision is contrary to earlier authority on the point. The case stems from the grounding of the MV Rena off the coast of Tauranga on New Zealand's North Island.
A recent ministerial inquiry into the use and operation of foreign-chartered vessels in New Zealand concluded that the way in which some such vessels operate has the potential to damage the country's international standing. In response, a new bill has been put before Parliament that is designed to improve vessel safety management, employment and fisheries management on foreign-chartered vessels.
In 2011 the MV Rena struck the Astrolabe Reef off New Zealand's North Island. The owner of the Rena was recently fined NZ$300,000 for environmental offences arising from the disaster - the largest fine ever imposed for this offence. However, it is worth considering why the fine was not closer to the maximum available and no reparation or enforcement orders were made.
International freight forwarding service providers have been prosecuted in several jurisdictions for agreements to fix the prices and surcharges applied to consignments. The New Zealand Court of Appeal has rejected a claim from one such provider that it is a "mere holding company" in Switzerland, inactive operationally, and so cannot be caught by the agency/principal or extra-territoriality provisions of the Commerce Act.
In October 2011 the MV Rena struck the Astrolabe Reef, resulting in over 1,000 tonnes of waste collecting on the coastline of New Zealand's North Island. The master and second officer have been sentenced to seven months' imprisonment; the shipowner, if convicted, faces a fine of up to NZ$600,000 for discharging harmful substances into water from a ship, plus up to NZ$10,000 for every day that the offence continues.
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.
In 2003 the Coastal and Inland Shipping (Cabotage) Act was passed in an effort to improve indigenous participation in maritime and coastal trade within the country's waters. However, since its inception, the act has not fulfilled its mandate to empower indigenous shipping. Foreign companies should try to support the act's objectives and can work with their indigenous counterparts in an effort to comply with the act.
Every year, billions of dollars are lost by shippers carrying goods to and from Nigeria. The cause of such loss is attributed to loss or damage by the carrier, the use of independent contractors, a breach of international contracts of sale and, in recent years, hijacking by pirates off the Nigerian coast. However, there are various ways in which shippers can mitigate their losses and claim compensation.
The Nordic Marine Insurance Plan 2013 recently entered into force. While the plan is largely based on its predecessor, some important changes have been introduced. These amendments will better facilitate use of the plan in other Nordic countries, as well as in the international market. The plan will no doubt provide greater certainty to both insurers and assureds as to the extent of insurance cover.
In 2012 Norway and Poland ratified an amendment protocol to the Polish-Norwegian Tax Treaty 2010, which aimed to restore former tax exemptions for Polish workers on Norwegian ships. The Norwegian shipping market has shown little enthusiasm for the change, as there appears to have been limited take-up of the restored tax exemptions. As the amended protocol will not become effective until 2014, its impact remains to be seen.
In a recent case a Singaporean shipbroker commenced proceedings in Norway against a Norwegian shipowner. Singapore is not a party to the Lugano Convention, which regulates questions of jurisdiction and enforcement in international disputes. The Supreme Court had to decide whether the convention applies where the claimant is domiciled in a non-member state. The outcome is surprising and warrants attention.
In Norway, a pilot is considered the servant of a shipowner, and the shipowner is held responsible for any loss or damage arising as a result of the pilot's negligence. Notwithstanding this general principle, some grey areas exist where the rationale for holding the shipowner responsible can be called into question. A recent court decision concerning state liability for pilotage failed to provide certainty in this area.
In Norsk Tillitsmann ASA v Silvercoin Industries AS the Supreme Court dealt with the distinction between an ordinary guarantee triggered by the principal debtor's default and an on-demand guarantee. The Supreme Court confirmed the long-held view that the guarantor's liability is triggered by the principal debtor's default, unless there is a reasonably clear basis for a different interpretation.
Ensuring that adequate insurance is in place is essential for a vessel under construction as the losses can be substantial if a peril strikes. Shipbuilding contracts will invariably address which of the parties is required to take out insurance cover, and will often specify the standard insurance terms to be used.
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 who fractured his arm while working filed a claim for disability benefits. The labour arbiter awarded full disability benefits on the basis that the company-designated doctor failed to make any pronouncement on the seafarer's fitness to resume service within the 120 days required by law. The Supreme Court reiterated that the temporary total disability period may be extended up to a maximum of 240 days.
Following an illness a seafarer was certified fit to work by the company-designated doctor. The seafarer subsequently filed a complaint for the recovery of disability benefits and his private physician concluded that he was unfit to work. The Supreme Court stated that the company-designated physician clearly had greater knowledge of the seafarer's medical condition than the private physician and held that the seafarer was not entitled to disability benefits.
A seafarer initiated grievance proceedings before his union after a dispute ensued over his entitlement to disability benefits. A settlement was not reached and the seafarer filed a complaint before the National Labour Relations Commission. The Supreme Court held that the dispute should have been referred to the voluntary arbitration mechanism as found in the collective bargaining agreement.
The Supreme Court recently held, in the absence of contrary evidence, that a seaman's illness was work related, considering that a Grade 1 disability was issued by the company-designated doctor and that sick pay was paid. It is important that vessel interests present proof that illness or injury is not work related to ensure that it is considered unrelated and is thus not compensable.
The Supreme Court recently considered whether a seafarer was entitled to disability benefits considering that he had not been declared fit to work by the company physician and had not been given a disability grading within the period allowed by law. The court ruled that the seafarer was not entitled to full disability benefits, but remanded the case to the labour arbiter for the proper determination of disability benefits.
The Supreme Court has granted full disability benefits to a seaman who was unable to work for 249 days after being diagnosed with kidney stones. The court clarified that the temporary total disability period may be extended up to a maximum of 240 days. This decision highlights the importance of the 240-day rule.
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.
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.
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.
In a recent case the High Court allowed the claimant to arrest a ship in Singapore in order to obtain security for a judgment in a foreign jurisdiction. The decision is unusual, given that the court had previously held that its jurisdiction to arrest a ship in an action in rem should not generally be exercised in order to provide security for an award or judgment in another jurisdiction.
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 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.
The MV Alina II suffered serious hull damage in 2009. The vessel's charterer brought an application to set aside an arrest of bunkers aboard the vessel in South Africa as security for contemplated London arbitration proceedings. This case is noteworthy in that the initial hearing on the papers led to a referral of the matter to oral evidence. Referrals to oral evidence are a rarity in South African arrest applications.
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.
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.
Several amendments to the Swedish maritime legislation recently entered into force. The amendments concern the Maritime Code, the Vessel Safety Act and the Vessels Safety Ordinance. The provisions state, among other things, that ship owners and operators of Swedish ships with a gross tonnage of at least 300 are liable to maintain insurance or other financial security for the carrier's performance of obligations.
In a recent judgment the Svea Court of Appeal reaffirmed the exclusivity of the Uniform Rules Concerning the Contract of International Carriage of Goods by Rail. While the decision may be legally sound, it is perhaps more questionable from an environmental perspective. The judgment has been appealed to the Supreme Court. However, it is doubtful whether the appeal will succeed.
The Court of Appeal has recently considered whether a time limitation included in the General Conditions of the Nordic Association of Freight Forwarders should be considered a rule corresponding to the limitation of liability. The court upheld the previously expressed view that it should not be possible to rely on a limitation clause in a contract if damage is caused through gross negligence or wilful misconduct.
In Sweden, freight forwarders are subject to no special mandatory regulations and, in principle, the parties involved are free to agree whatever terms they wish, provided that they do not contravene the law. Despite this, few freight forwarding agreements are made between parties; rather, the General Conditions of the Nordic Association of Freight Forwarders are widely used within the Nordic countries. This update considers the impact of the ongoing review of these conditions.
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.
Almost one year has passed since the International Convention for the Unification of Certain Rules relating to the Arrest of Seagoing Ships 1952 entered into force in Ukraine. However, local procedural inconsistencies still prevent the shipping industry from benefiting fully from the opportunities afforded by the convention.
A new regulation has amended the procedure for the granting of temporary one-time permission to enter the river ports of Ukraine for merchant vessels flying the flags of states that are not parties to bilateral treaties on the navigation of inland waterways. Exceptions are now explicitly made for passenger vessels, pleasure boats, sailing ships and yachts, which will not require such permission to enter river ports.
The long-awaited Law on Sea Ports has largely satisfied the expectations of industry players. The law renovates port management mechanisms, facilitates partnership between the public and private sectors, establishes the instruments of concession and encourages investment in port infrastructure while protecting the interests of investors.
As Ukraine is not a contracting state to the Brussels Convention, shipments from Ukrainian ports are not subject to Hague-Visby Rules by default. Nevertheless, several significant concepts in the Hague-Visby Rules are reflected in the Merchant Shipping Code of Ukraine. It is crucial to be aware of these similarities, as well as the differences, when determining carrier liability.
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.
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.
The Supreme Court recently ruled in favour of the buyers of six Korean newbuildings, Rainy Sky SA and five other entities, reversing the Court of Appeal's decision which rejected their claim under refund guarantees. The decision represents a victory for commercial common sense over the strict legal interpretation of the language used in guarantees.
The procedure for enforcement of a ship mortgage under English law is based on a contractual right. Thus, the rights of a mortgagee are derived from specific terms agreed with the mortgagor. Typically, the loan documentation will identify those events of default by the mortgagor which give rise to the right on the part of the mortgagee to take enforcement action.
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.
The US Fifth Circuit Court of Appeals recently clarified the meaning of the phrase "acting in the course of employment" when considering whether an employer is liable for the negligent acts or omissions of its employee that causes injury to a co-employee in tort cases filed under the Jones Act, which extends the protections of the Federal Employers Liability Act to seamen.
To prevent vessels from operating with inadequate crews, the Coast Guard provides detailed requirements to which all operators of uninspected towing vessels must adhere when manning their vessels. As the costs of non-compliance can be severe, it is important to spend time analysing the make-up of crews to ensure that they comply with the applicable rules and regulations.
As one of the oldest forms of insurance, marine insurance has taken on many shapes and forms. Even under the simplest circumstances, selecting proper insurance can be difficult. In order to make informed decisions when procuring insurance, it is important to understand the basics of what types of insurance are available and what each type of policy covers.
A recent Fifth Circuit Court of Appeals ruling provides a clear example of the factors under consideration when determining whether a structure used in offshore oil and gas exploration can be classified as a vessel in navigation. It also provides an example of the 'sensible' rule, whereby a ship or similar structure should not be considered a vessel in navigation merely because it may sail at some point in future.
The US Court of Appeals for the Fifth Circuit recently examined whether in rem claims asserted under admiralty jurisdiction in the same complaint as in personam claims asserted under diversity jurisdiction must be tried together before a jury when the plaintiff has clearly expressed that the in personam claims are premised on diversity rather than in admiralty.
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.