Dardani Studio Legale
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Shipping & Transport
In the context of lease financing transactions, it is not uncommon for the financier (registered owner) to refinance part of the transaction by recourse to third-party lenders, concluding a loan agreement which is typically secured by a mortgage over the vessel. Under Italian law, a charterer's right to enjoyment of a vessel receives a certain level of protection even if nothing is specifically agreed by the parties and no letter of quiet enjoyment is issued.
The concept of limitation of a shipowner's liability is well known in maritime law and is generally the same across many maritime jurisdictions. However, the government's failure to ratify the Convention on Limitation of Liability for Maritime Claims 1976 and its Protocol of 1996, coupled with an unclear amendment to the regime set out by the Code of Navigation, suggests that Italy may have forgotten the importance of the limitation regime.
The Civitavecchia Tribunal recently considered a vessel owner's application to exercise a maritime lien on a quantity of coal carried on board the vessel to secure its freight balance, demurrages and expenses towards the charterer after the charterer applied to open insolvency proceedings. The decision was based on two precedents of the Genoa Court and reinforces the principles that under Italian law, a lien on cargo can be placed under the authority of only the local courts.
The Supreme Court recently ruled in a case concerning the defence of lack of jurisdiction due to state immunity claimed by Rina SpA in the matter concerning the sinking of the Al-Salam Boccaccio 98. The decision contains precise guidance as to immunity from jurisdiction with regard to the classification and certification of ships, thereby making it improbable that any such defence will be successfully pleaded in the future by a classification society before an Italian court.
The Supreme Court recently issued a significant decision on the apportionment of a salvage reward among a shipowner and cargo interests. The decision has confirmed the principle already expressed in previous Supreme Court judgments that the shipowner is liable towards the salvor for an entire salvage reward, subject to recourse action by said shipowner against the cargo interests. However, the Supreme Court's conclusions are debatable, as is its interpretation of Article 497 of the Code of Navigation.
The Court of Genoa recently referred a jurisdictional immunity claim to the European Court of Justice for a preliminary ruling on whether it should decline to hear the case on the basis of said immunity exception or whether it must apply the EU Brussels Regulation. The case concerned a compensation claim by survivors and relatives of the deceased of a ferry accident.
Italian law includes no specific rules concerning the sale of ships. As such, the general rules on the sale of movable assets apply. However, should the purchase of a ship qualify as an acquisition of business assets, certain mandatory rules of law apply. In two recent judgments, the Rome Court of Appeal held that the mandatory rules regarding the transfer of business assets do not apply to sale and purchase agreements concerning a single ship.
The Supreme Court recently upheld the decision of the Agrigento Criminal Court in the Sea-Watch 3 case. The appeal decision has given a clear and straightforward interpretation of the concept of 'place of safety' in search and rescue operations: the rescuing vessel cannot be deemed a place of safety.
Can a coastal state prevent a ship from exercising the right of innocent passage into its territorial waters to access one of its ports in a maritime distress scenario deriving from rescuing migrants at sea? This question has been the focus of attention due to legislation that the government passed in 2019 in order to restrict such rights and the case of Sea Watch 3, which entered the Italian port of Lampedusa despite a government veto.
A significant recent judgment by the Genoa Court of Appeal examined the extent and nature of the informative duties imposed on shipbrokers under Italian law. The decision applies to shipbrokers the principles outlined by the Italian courts for general brokerage activities (in particular, real estate brokerage for which the case law is richer and more consistent). Consequently, a general and uniform legal framework has been extended to shipbrokers.
Tribunal of Genoa examines jurisdiction issue in pre-trial proceedings regarding court surveyor's appointmentItaly | 11 September 2019
A recent Tribunal of Genoa case concerning a yacht lost during carriage examined whether the Italian courts have jurisdiction to appoint court surveyors and order survey operations to take place in Italy where the merits of a dispute are not subject to Italian jurisdiction. According to the tribunal, the fact that the merits of the dispute in question were to be decided in London did not deprive the Italian courts' jurisdiction to order inspection and survey operations on goods located in Italy.
The Tribunal of Milan recently published a judgment analysing a common occurrence in shipping matters where a contract of charter is not incorporated into an agreement duly executed by both parties, but is instead contained in a recap fixture exchanged via email. The decision is noteworthy as it reaches conclusions (significantly different from prevailing Italian case law) which deserve to be carefully considered when concluding charter parties.
Genoa Court of Appeal confirms decision on limitation of carrier's liability under Hague-Visby RulesItaly | 20 February 2019
A recent Genoa Court of Appeal decision interpreted the principle of the limitation of a carrier's liability under the Hague-Visby Rules. The decision affirms that receivers must give actual evidence of a carrier's knowledge that damage would probably have resulted as a consequence of its reckless conduct in order to claim the exclusion of the carrier's limitation of liability, with no recourse to factual presumptions.
The Supreme Court recently issued a significant decision regarding the joint liability of a carrier, shipper and owner of goods following the carrier's violation of road safety rules under Italian law. The decision is notable, as it gives a clear interpretation of Legislative Decree 286/2005's rules that the fault is the subjective element required to establish the liability of a party in the transport chain where there is a violation of the road safety rules.
The Supreme Court recently issued a decision regarding the sale and purchase of a second-hand vessel – in particular, the construction of the words 'as she lies'. While Italian jurisprudence has historically considered the words a mere standard clause with no legal effects, Italian maritime scholars have confirmed the validity of the clause aimed at contracting out the sellers' guarantee to remedy any hidden defects in the goods being sold.
A recent decision of the Genoa Court of Appeal dealt with two interesting issues arising under the London International Convention on Salvage 1989: whether, for the purposes of fixing a salvage reward, the judge should consider not only the value of the salved vessel, but also that of the cargo on board; and the apportionment of a salvage reward between co-salvors where only one salvor brought proceedings for its remuneration.
One of the final pieces of legislation that the government enacted before the March 2018 general election was the eagerly awaited reform of the so-called 'Nautical Code'. The changes include a new definition of 'superyachts', the introduction of an electronic registration system for yachts and superyachts, a streamlined cancellation procedure for the Italian yacht registry and restrictions to the occasional chartering regime.
The most recent edition of the Nautica e Fisco booklet issued by the Nautical Association Industry and the Revenue Agency covers legal and fiscal developments in the nautical industry, including issues from registration to customs and fiscal matters. In particular, the booklet provides guidelines on exporting a yacht from Italy, value added tax exemptions for the use of yachts in the high seas and the temporary importation regime and refitting services.
The Italian International Registry provides a number of substantial fiscal advantages to shipowners. However, the European Commission recently established an EU pilot procedure against Italy to enquire into the nature of the advantages that Italy has made available to ships registered in the registry. The European Commission's message was taken on board and measures are now being discussed to amend national legislation so that it conforms to EU principles.
The Milan Court of Appeal recently addressed a demurrage claim under a voyage charterparty. The decision dealt with the issue of contract formation and focused on the choice of law provision contained in the charterparty. This case has confirmed that, when so called, the Italian courts are keen and ready to pronounce judgments in line with commercial shipping practice.
In an important decision, the Supreme Court recently established the validity of a forum selection clause contained in a multimodal bill of lading. The judgment is notable as it overturns the main trend in Italian case law on this subject. Before the issuance of the Supreme Court judgment, many lower courts had denied the validity of jurisdiction clauses contained in multimodal bills of lading.
As of January 1 2017, the EU Passenger Liability Regulation applies to Class A ships sailing Italian domestic voyages, as defined under the EU Directive on Safety Rules and Standards for Passenger Ships. Accordingly, such ships can limit their liability, pursuant to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974, and must fulfil the relevant compulsory insurance duties.
With Parliament's recent passage of Act 230, the long-awaited reform of the Italian legal regime regulating maritime pilots' liability has now come to fruition. The amendments introduced to the Code of Navigation establish a system based on limitation of liability and compulsory insurance. Pilots' representatives have welcomed the reform.
The Tribunal of Genoa recently issued two decisions dealing with the legal nature of sea waybills. In both decisions the tribunal considered the extent to which the content of a sea waybill is relevant when identifying the parties to the contract of carriage and, consequently, when deciding on the defence of title to be sued.
A recent Supreme Court judgment addressed the issue of maritime liens and the remuneration of shipping companies' court-appointed managers by adopting a strict interpretation of the maritime liens rules. The judgment provides an idea of which credits are assisted by liens and highlights the difference between the rules of law regarding liens and those regarding managers' duties and rights.
Bareboat-in registration in the Italian International Ship Registry has recently been made available to ships from EU registries and ships owned by EU persons or entities, to which access was previously denied. After almost two decades of silence regarding this crucial matter regulating ship registration, the government and legislature are again concentrating their efforts on a strategically important area.
The Tribunal of Genoa recently issued a judgment regarding the corporate structure of a group of shipping companies. In particular, the court considered the liability of a local shipping agent where it was established as a subsidiary of the line carrier and alternatively where it was merely a branch office of the line carrier.
The Supreme Court recently issued a decision concerning the interpretation of Article 3.2 of the Brussels Convention and a free in liner out clause contained in a bill of lading. The case concerned compensation for the loss of and damage to cargo and focused on whether a terminal operator had acted as a servant of the carrier or the shipper and, as a consequence, on the limitation period applicable to the action brought against the terminal operator.
The OW Bunker group collapse continues to affect the wider shipowning community, with a number of physical bunker suppliers not receiving payment. A recent Tribunal of Venice decision addressed whether a physical bunker supplier was entitled to arrest the vessel to which it supplied fuel where it had received no payment from the insolvent contractual bunker supplier.
The Tribunal of Genoa recently issued an interesting judgment addressing the applicability of fair competition principles to certain contractual provisions generally used by most major line carriers. The dispute regarded a claim filed by a group of freight forwarders which held that certain surcharges – particularly the 'LO-LO' charge – should be declared null and void.
The Genoa Court of Appeal recently issued its decision in Redwood, which concerned the liability of classification societies. The appeal court quashed the first-instance decision, which had found Lloyd's Register liable for damages suffered by the time charterers of the vessel Redwood. The decision will undoubtedly attract the attention of maritime lawyers around the world.
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.
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.
Two decisions represent the Italian courts' only interpretations of the wording of the Institute Classification Clause. The notion that the cargo classification clause requires full classification of a vessel without recommendations is controversial - it takes no account of the evolution of the clause or the differences between its literal formulation and that of the corresponding classification clause for hull and machinery insurance cover.
The Court of Genoa has considered the problematic issue of the liability of classification societies, holding Lloyd's Register liable for damages caused to time charterers as a result of the detention of their vessel. This is the first time that an Italian court has specifically addressed the issue.
The Rome Court of Appeal recently set an important precedent on the distinction between a charterparty contract and a contract of carriage of goods by sea. The case involved an Italian tank vessel which sank. After rejecting the allegation that the owner had been negligent, the court examined the terms of the time charterparty to decide whether it amounted to a contract of carriage of goods by sea.