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11 December 2013
In Norway, as in most other jurisdictions, there are separate rules governing the time bar of maritime claims. It is crucial not only to be aware of these rules and the claims to which they apply, but also to keep in mind that the general time-bar rules may supplement the special maritime rules.
The general Norwegian rules on time bar are found in the Time-Bar Act 1979, according to which a claim (whether in tort or contract) generally becomes time barred after three years. However, for certain maritime claims, the Maritime Code 1994 establishes special rules that prevail over the Time-Bar Act.
The Maritime Code rules are partly based on international conventions, such as the Hague-Visby Rules. Similar time-bar rules may thus be found in the maritime codes of many other jurisdictions throughout the world, including in the other Nordic countries.
The limitation periods for maritime claims and other claims arising out of transportation of goods are significantly shorter than the general limitation period. The rationale behind having a shorter limitation period is that when it comes to transporting goods, there is a greater need to obtain evidence swiftly and decide whether claims will be pursued, especially for the insurers involved.
The time-bar rules that apply to maritime claims are found in Sections 55, 64 and 501 to 504 of the Maritime Code. Different claims have different limitation periods.
For claims regarding salvage remuneration, collision claims and claims arising under passenger contracts, the limitation period is two years. For claims regarding a share of a salvage award, general average claims and cargo claims (including claims based on an incorrect description of the goods in the bill of lading and wrongful delivery of cargo), the limitation period is only one year.
The Maritime Code also provides specific time-bar rules for pollution claims (Section 503) and maritime liens (Sections 55 and 64). Claims for pollution damage against the shipowner (or the International Oil Pollution Compensation Funds) become time barred unless suit is brought within three years of when the damage, loss or expense occurred, provided that claims cannot be brought when more than six years have passed from the event giving rise to the claim. A maritime lien against a ship or a cargo will become time barred one year after the day on which the claim arose, unless the ship has been arrested in the meantime and the arrest has led to a compulsory sale of the ship.
The date on which the limitation period commences will also depend on the type of claim. For example, the limitation period for personal injury claims from passengers commences on the day on which the passenger disembarked or should have disembarked, and the limitation period for cargo claims commences on the day when the goods were delivered or should have been delivered. As such, it is important to apply the correct rules to the correct claim.
Based on Article 3(6)bis of the Hague-Visby Rules, the Maritime Code also establishes separate time-bar rules for recourse claims arising out of collisions and cargo claims. Such recourse claims become time barred one year after either the original claim was paid or when legal proceedings were commenced in respect of the original claim (Section 501(2)).
When it comes to recourse claims, there is an important difference between the time-bar rules of the Maritime Code and the general time-bar rules of the Time-Bar Act. Under the Time-Bar Act , an insurer with a claim subrogated to it by the assured is generally considered to be a recourse creditor having a recourse claim, and is given an additional time period of one year to pursue its subrogated claim against the tortfeasor or responsible party. However, legal scholars suggest that the Maritime Code's definition of 'recourse claims' does not include claims subrogated to insurers. Consequently, a cargo insurer's claim against the shipowner (after settling the claim for cargo damage with the cargo owner) will most likely become time barred at the same time as the cargo owner's original claim against the shipowner.
Although the time-bar rules in the Maritime Code are special and prevail over those of the Time-Bar Act, the Time-Bar Act may still be relevant for maritime claims in several respects.
First, the general rules of the Time-Bar Act apply to all claims that are not governed by the time-bar rules in the Maritime Code. Therefore, freight and demurrage claims will be subject to a limitation period of three years.
Second, even if a claim is governed by the rules of the Maritime Code, the general provisions of the Time-Bar Act supplement the Maritime Code, as the Maritime Code is not exhaustive and does not regulate all aspects of time bar. The Time-Bar Act will thus supplement the Maritime Code with regard to how time bar is interrupted (eg, by commencing legal proceedings or enforcement), the effects of interruption of time bar and the legal effects that time bar has (on the right to claim payment or make counterclaims). Of particular importance are the Time-Bar Act's rules regarding time extension (Section 28) and notice of recourse claims (Section 8).
A mistaken reliance on the general time-bar rules in circumstances where the Maritime Code applies may cause a creditor to lose its claim before it has even had time to consider the issue of time bar. Similarly, although many of the time-bar rules that apply to maritime claims are the same in many maritime jurisdictions around the world, different jurisdictions may have different, general time-bar rules that supplement and affect the maritime time-bar rules.
For further information on this topic please contact Ena Barder, Ingrid Bjørke Larsen or Trond Eilertsen at Wikborg Rein by telephone (+47 22 82 75 00), fax (+47 22 82 75 01) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Wikborg Rein website can be accessed at www.wr.no.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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