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21 December 2016
The Nairobi International Convention on the Removal of Wrecks entered into force on April 14 2015. One of the main reasons for its establishment was the lack of authority of the coastal states within the exclusive economic zone (EEZ). This regulatory gap has now been filled, but the consequence, particularly for Germany, is an intricate situation due to the different legal frameworks between the regulations of the convention applicable in the EEZ and the national regulations applicable in the territorial sea of Germany.
Within the German EEZ, the convention applies directly and has precedence over national law. German legislation established the necessary measures to comply with the convention, with German regulations entering into force at the same time as the convention.
Article 9(2) of the convention defines the obligation for a registered owner of a wrecked vessel to remove the wreck that constitutes a hazard. According to Article 10(1) of the convention, the registered owner must bear the costs for this operation. As an affected state, Germany may also intervene on its own at the expense of the shipowner, provided that the owner takes no action and there is imminent danger. If that is the case, Germany may obtain compensation from the registered owner on the basis of civil law (based on negotiorum gestio or management of business). A reimbursement based on administrative law is, on the contrary, not allowed.
Under German law (Clauses 10(2) and 12(1) of the convention), both shipowner and insurer are allowed to limit their liability in respect to wreck removal.
To ensure the enforceability of the claim, and for practical reasons, Article 12 of the convention requires the registered owner of any seagoing vessel of 300 gross tonnage (gt) and over to maintain insurance or other financial securities to cover the costs of wreck removal. This compulsory insurance corresponds with a direct claim of the state against the insurer, following the example of the International Convention on Civil Liability for Oil Pollution Damage 1969.
Any seagoing vessel of 300gt and over is required to carry a certificate issued by a state party to the convention attesting that the necessary insurance is in place. This certificate is issued in Germany by the Federal Maritime and Hydrographic Agency and also constitutes a port entry requirement.
A charterer is obliged neither to remove a wreck within the EEZ nor to take out insurance. The master and operator of the vessel (bareboat charterer) flying the German flag must report to the German authorities without delay whenever the vessel has been involved in a maritime casualty resulting in a wreck.
Since its territorial sea is part of Germany's federal waterways, and Germany decided not to make use of the provision in Article 3(2) of the convention to extend the scope of the convention to its territorial sea, the removal of wrecks in Germany's territorial sea is mainly regulated by the German public law on the use of federal waterways.
Under German law, the German authorities are authorised to remove obstacles within these waters. Alternatively, they may formally issue an order for their removal. Wreck removal includes the removal of cargo. The addressee of the order is the person or entity responsible for the incident. In contrast to the convention, the law therefore assigns the personal liability not only of the owner, but also of the charterer or operator of the vessel.
In correspondence with the convention, the authorities may decide to act on their own, provided that there is a disruption of the 'easy flow' and safety of traffic. Expenses can be reimbursed both by principles of civil law (based on negotiorum gestio) or administrative legal means. If there is more than one responsible person or entity for the incident, they are all jointly liable. German law permits a limitation of liability
Due to these detailed national regulations and the liability principle of responsibility, there is no legal obligation, neither for the shipowner nor for the charterer, to take out insurance regarding wreck removal. Additionally, Germany has no direct claim against the insurer.
Whereas the convention provides a strict liability, compensation and compulsory insurance regime within the EEZ at the expense of the registered owner, the legal framework on wreck removal in the territorial sea and other federal waterways is based on the principle of responsibility and does not require insurance.
In Germany, it is advisable for the registered owner to obtain insurance for wreck removal, as this is required by the authorities when the vessel operates in the German EEZ and, even though not required within the German territorial sea, in order to minimise cost risks. Also, the charterer is advised to take out sufficient insurance, not only whenever the vessel sails within the German territorial sea and the charterer might be held responsible for any casualty of the vessel, but also when the vessel sails in the EEZ, as it depends on chance whether an accident takes place within the EEZ or territorial waters. In addition, the charterer may be obliged to pay compensation under the charterparty. With respect to the cost of wreck removal, it is highly advisable to insure the risk.
For further information on this topic please contact Lars Kortländer or Marco G Remiorz at Dabelstein & Passehl by telephone (+49 40 31 779 70) or email (firstname.lastname@example.org or email@example.com). The Dabelstein & Passehl website can be accessed at www.da-pa.com.
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