The. Shipping Law Review

Transcription

1 The The Shipping Law Review Shipping Law Review Editors James Gosling and Rebecca Warder Law Business Research

2 The Shipping Law Review The Shipping Law Review Reproduced with permission from Law Business Research Ltd. This article was first published in The Shipping Law Review - Edition 1 (published in July 2014 editors James Gosling and Rebecca Warder). For further information please [email protected]

3 The Shipping Law Review Editors James Gosling and Rebecca Warder Law Business Research Ltd

4 THE LAW REVIEWS THE MERGERS AND ACQUISITIONS REVIEW THE RESTRUCTURING REVIEW THE PRIVATE COMPETITION ENFORCEMENT REVIEW THE DISPUTE RESOLUTION REVIEW THE EMPLOYMENT LAW REVIEW THE PUBLIC COMPETITION ENFORCEMENT REVIEW THE BANKING REGULATION REVIEW THE INTERNATIONAL ARBITRATION REVIEW THE MERGER CONTROL REVIEW THE TECHNOLOGY, MEDIA AND TELECOMMUNICATIONS REVIEW THE INWARD INVESTMENT AND INTERNATIONAL TAXATION REVIEW THE CORPORATE GOVERNANCE REVIEW THE CORPORATE IMMIGRATION REVIEW THE INTERNATIONAL INVESTIGATIONS REVIEW THE PROJECTS AND CONSTRUCTION REVIEW THE INTERNATIONAL CAPITAL MARKETS REVIEW THE REAL ESTATE LAW REVIEW THE PRIVATE EQUITY REVIEW THE ENERGY REGULATION AND MARKETS REVIEW THE INTELLECTUAL PROPERTY REVIEW

5 THE ASSET MANAGEMENT REVIEW THE PRIVATE WEALTH AND PRIVATE CLIENT REVIEW THE MINING LAW REVIEW THE EXECUTIVE REMUNERATION REVIEW THE ANTI-BRIBERY AND ANTI-CORRUPTION REVIEW THE CARTELS AND LENIENCY REVIEW THE TAX DISPUTES AND LITIGATION REVIEW THE LIFE SCIENCES LAW REVIEW THE INSURANCE AND REINSURANCE LAW REVIEW THE GOVERNMENT PROCUREMENT REVIEW THE DOMINANCE AND MONOPOLIES REVIEW THE AVIATION LAW REVIEW THE FOREIGN INVESTMENT REGULATION REVIEW THE ASSET TRACING AND RECOVERY REVIEW THE INTERNATIONAL INSOLVENCY REVIEW THE OIL AND GAS LAW REVIEW THE FRANCHISE LAW REVIEW THE PRODUCT REGULATION AND LIABILITY REVIEW THE SHIPPING LAW REVIEW

6 PUBLISHER Gideon Roberton BUSINESS DEVELOPMENT MANAGERS Adam Sargent, Nick Barette SENIOR ACCOUNT MANAGERS Katherine Jablonowska, Thomas Lee, James Spearing ACCOUNT MANAGER Felicity Bown PUBLISHING COORDINATOR Lucy Brewer MARKETING ASSISTANT Chloe Mclauchlan EDITORIAL ASSISTANT Shani Bans HEAD OF PRODUCTION Adam Myers PRODUCTION EDITOR Jo Morley SUBEDITOR Timothy Beaver MANAGING DIRECTOR Richard Davey Published in the United Kingdom by Law Business Research Ltd, London 87 Lancaster Road, London, W11 1QQ, UK 2014 Law Business Research Ltd No photocopying: copyright licences do not apply. The information provided in this publication is general and may not apply in a specific situation, nor does it necessarily represent the views of authors firms or their clients. The publishers accept no responsibility for any acts or omissions contained herein. All chapters were submitted, reviewed and approved by the authors between March and July 2014; however, shipping law is a fast-changing practice area, and experienced local legal advice should always be sought. Enquiries concerning reproduction should be sent to Law Business Research, at the address above. Enquiries concerning editorial content should be directed to the Publisher [email protected] ISBN Printed in Great Britain by Encompass Print Solutions, Derbyshire Tel:

7 ACKNOWLEDGEMENTS The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book: ABOU ALI LAW FIRM & P&I CORRESPONDENTS ADVOKATFIRMAET THOMMESSEN AS AKD NV ALI BUDIARDJO, NUGROHO, REKSODIPUTRO BOSE & MITRA & CO BOWMAN GILFILLAN BURKE & PARSONS CHAPMAN TRIPP DABELSTEIN & PASSEHL ERSOY BILGEHAN LAWYERS & CONSULTANTS FENECH & FENECH ADVOCATES FORMOSA TRANSNATIONAL, ATTORNEYS AT LAW FOUNDATION CHAMBERS GORRISSEN FEDERSPIEL HAVIARAS & PHILIPPOU LLC HOLMAN FENWICK WILLAN LLP IN LAW OFFICE JORQUIERA & ROZAS ABOGADOS i

8 Acknowledgements JOSEPH & PARTNERS KINCAID MENDES VIANNA ADVOGADOS ASSOCIADOS LAW OFFICES CHOI & KIM LEXCELLENCE LAW FIRM MORAIS LEITÃO, GALVÃO TELES, SOARES DA SILVA & ASSOCIADOS, RL MORGAN & MORGAN PALACIOS, PRONO & TALAVERA PRAMUANCHAI LAW OFFICE CO, LTD RAJAH & TANN LLP RUGGIERO & FERNANDEZ LLORENTE S FRIEDMAN & CO SABATINO PIZZOLANTE ABOGADOS MARÍTIMOS & COMERCIALES SAN SIMÓN & DUCH SEWARD & KISSEL LLP STUDIO LEGALE MORDIGLIA VERALAW (DEL ROSARIO RABOCA GONZALES GRASPARIL) VGENOPOULOS & PARTNERS LAW FIRM YOSHIDA & PARTNERS ii

9 CONTENTS Editors Preface...vii James Gosling and Rebecca Warder Chapter 1 COMPETITION AND REGULATORY LAW...1 Anthony Woolich and Daniel Martin Chapter 2 MARINE INSURANCE...9 Jonathan Bruce and Alex Kemp Chapter 3 OCEAN LOGISTICS...18 Catherine Emsellem-Rope Chapter 4 PIRACY...25 Michael Ritter and William MacLachlan Chapter 5 SHIPBUILDING...32 Simon Blows and Vanessa Tattersall Chapter 6 ARGENTINA...39 Gustavo Ruggiero and Alejandro Fernández Llorente Chapter 7 AUSTRALIA...52 Gavin Vallely, Simon Shaddick, Francis Burgess and Reid Bettridge Chapter 8 BRAZIL...71 Camila Mendes Vianna Cardoso, Godofredo Mendes Vianna and Lucas Leite Marques Chapter 9 CHILE...82 Ricardo Rozas Chapter 10 CHINA...96 Nicholas Poynder, Laura Wright and Jean Cao Chapter 11 CYPRUS Andreas Haviaras iii

10 Contents Chapter 12 DENMARK Jens V Mathiasen and Christian Benedictsen-Nislev Chapter 13 EGYPT Gamal A Abou Ali and Tarek Abou Ali Chapter 14 ENGLAND & WALES James Gosling, Rebecca Warder, Max Thompson and Tessa Huzarski Chapter 15 FRANCE Mona Dejean Chapter 16 GERMANY Olaf Hartenstein, Marco Remiorz and Marcus Webersberger Chapter 17 GREECE Paris Karamitsios, Richard Johnson-Brown and Dimitri Vassos Chapter 18 HONG KONG Caroline Thomas, Thomas Morgan, Kim Macnamara and Gabriella Martin Chapter 19 INDIA Amitava Majumdar Chapter 20 INDONESIA Sahat Siahaan, Desi Rutvikasari, Muhammad Muslim and Dwi Meitiara Pratiwi Bakrie Chapter 21 ISRAEL Amir Cohen-Dor and Michael Safran Chapter 22 ITALY Pietro Palandri and Marco Lopez de Gonzalo Chapter 23 JAPAN Tetsuro Nakamura, Tomoi Sawaki and Minako Ikeda Chapter 24 KOREA JH Choi and SW Park iv

11 Contents Chapter 25 MALAYSIA Jeremy M Joseph Chapter 26 MALTA Ann Fenech Chapter 27 MARSHALL ISLANDS Lawrence Rutkowski Chapter 28 NETHERLANDS Ellen Saman-Kole and Haco van der Houven van Oordt Chapter 29 NEW ZEALAND John Knight and Armando Neris Chapter 30 NIGERIA L Chidi Ilogu and Adedoyin Adeloye Chapter 31 NORWAY Stephen Knudtzon, Andreas Meidell and Marie Falchenberg Chapter 32 PANAMA Juan David Morgan Jr Chapter 33 PARAGUAY Juan Pablo Palacios Velazquez Chapter 34 PHILIPPINES Valeriano Del Rosario, Maria Theresa Gonzales, Daphne Ruby B Grasparil and Jennifer E Cerrada Chapter 35 PORTUGAL Cátia Henriques Fernandes Chapter 36 RUSSIA Igor Nikolaev Chapter 37 SINGAPORE Dominic Johnson, Michael Buisset, Anders Wiklund, Kendall Tan and See Bin Koh v

12 Contents Chapter 38 SOUTH AFRICA Jeremy Prain Chapter 39 SPAIN Luis de San Simón Chapter 40 SWITZERLAND William Hold Chapter 41 TAIWAN Delphine TL Chen Chapter 42 THAILAND Pramual Chancheewa, Sken Kongkaew and Thanakrit Srirasa Chapter 43 TURKEY Zihni Bilgehan, Semih Sander and Emre Ersoy Chapter 44 UKRAINE Vagif Mallayev, Victoria Konograi and Inga Drobinova Chapter 45 UNITED STATES Raymond J Burke Jr, Stephen P Kyne, Christopher H Dillon, William F Dougherty, Keith W Heard and Michael J Walsh Chapter 46 VENEZUELA José Alfredo Sabatino Pizzolante Appendix 1 ABOUT THE AUTHORS Appendix 2 CONTRIBUTING LAW FIRMS CONTACT DETAILS Appendix 3 GLOSSARY OF TERMS vi

13 EDITORS PREFACE This book aims to provide those involved in handling wet and dry shipping disputes in multiple jurisdictions with an overview of the key issues relevant to each jurisdiction. We have sought contributions on the law of leading maritime nations, including both major flag states and the countries in which most shipping companies are located. We also include chapters on the law of the major shipbuilding centres and a range of other jurisdictions. We begin with cross-jurisdictional chapters looking at the latest developments in important areas for the shipping industry internationally: piracy, marine insurance, shipbuilding, logistics, and competition and regulatory law. Each jurisdictional chapter then gives an overview of the procedures for handling shipping disputes in each country, including arbitration, court litigation and any alternative dispute resolution mechanisms. Jurisdiction, enforcement and limitation periods are all covered. Contributors have summarised the key provisions of local law in relation to shipbuilding contracts, contracts of carriage and cargo claims. We have also asked each author to address limitation of liability, including which parties can limit, which claims are subject to limitation and the circumstances in which the limits can be broken. Ship arrest procedure, which ships may be arrested, any security or counter-security requirements and the potential for wrongful arrest claims are also included. The authors review the vessel safety regime in force in each country, along with port state control and the operation of both registration and classification locally. The applicable environmental legislation in each jurisdiction is explained, along with the local rules in respect of collisions, wreck removal, salvage and recycling. Passenger and seafarer rights have both recently been enhanced with the entry into force in 2014 of the 2002 Protocol to the 1974 Athens Convention and the Maritime Labour Convention in 2013, and contributors set out the current position in each jurisdiction. The authors have then looked forward and have commented on what they believe are likely to be the most important forthcoming developments in their jurisdictions. vii

14 Editors Preface The shipping industry continues to be one of the most significant sectors worldwide, with the United Nations estimating that commercial shipping represents around US$380 billion in terms of global freight rates, amounting to around 5 per cent of global trade overall. More than 90 per cent of the world s freight is transported by sea. The law of shipping remains as interesting as the sector itself and the contributions to this book reflect that. This past year has, of course, been a challenging one for the international shipping industry, as it continues to feel the effects of the global financial recession. At the same time, the shipping industry has witnessed increased regulation and environmental scrutiny. There has been a recent plethora of increasingly stringent emissions regulation measures focused on sulphur oxides and nitrogen oxides emissions. Within emissions control areas, the current limit is 1.0 per cent sulphur content, falling to a tougher 0.1 per cent from 1 January 2015 (although California has accelerated its sulphur emissions limits to the new standard already). Tier II limits on nitrogen oxides emissions have been in place globally since Tier III, which represents a significantly more stringent regime than Tier II limits, will be implemented in emissions control areas from Furthermore, also from 2016, the United States Clean Air Act will introduce a target of an 80 per cent reduction in nitrogen oxides emissions from vessels by The International Maritime Organisation (IMO) has so far not introduced similar limits on the emission of greenhouse gases, such as carbon dioxide, although it is generally perceived that the IMO is in the future likely to further regulate global carbon dioxide emissions from vessels. Outside of the IMO, the EU and individual countries are focusing on greenhouse gas reduction policies. In particular, the European Commission s current proposal is that, from 2018, vessels calling at ports in the EU should be expected to monitor, report and verify carbon dioxide emissions. The strategy is intended to evolve into carbon dioxide reduction targets and marketbased measures in the longer term, in line with the EU s approach to land-based greenhouse gas emissions. Steps have already been taken in this regard in France where, since October 2013, vessels calling at French ports have been required to record and report their carbon dioxide emissions. Any EU market-based measures are expected to include tradeable emissions permits for the shipping industry. Another challenge facing the shipping industry relates to the handling of everlarger casualties. The most recent high-profile container ship casualties, such as the MSC Napoli or the Rena, involved relatively small vessels with a maximum capacity of up to 4,688 containers; however, the latest mega-containerships can carry up to 15,000 containers. It is likely that at some stage there will be a casualty involving one of these new larger vessels and this may prove a major test for the industry. It has been suggested that the current salvage industry may find it difficult to deal with the scale of any wreckage. The regulatory environment is becoming increasingly stringent, with far stricter controls on both clean-up and wreck removal, which will also make handling any mega-container ship casualty more challenging. The London underwriting community has responded to concerns about the general average implications by evolving a new insurance product, which, it is suggested, could replace the traditional approach to general average for large container ships. It remains to be seen whether this will be accepted by the market. viii

15 Editors Preface Piracy remains a considerable issue for the shipping industry worldwide. There has been a decline in the number of incidents off Somalia since the peak in 2010/11, but an increase in West Africa and (to an extent) elsewhere. Although the use of armed guards and increased naval policing in recent years have undoubtedly contributed to the decline, challenges remain and the shipping industry must continue to be alive to the threat. We would like to thank all the contributors for their assistance with producing this inaugural edition of The Shipping Law Review. We hope that this volume will provide a useful source of information for those in the industry handling crossjurisdictional shipping disputes. Finally, we would like to thank our colleague, Tessa Huzarski, for all her hard work in compiling this book. James Gosling and Rebecca Warder Holman Fenwick Willan LLP London July 2014 ix

16 Chapter 31 NORWAY Stephen Knudtzon, Andreas Meidell and Marie Falchenberg 1 I COMMERCIAL OVERVIEW OF THE SHIPPING INDUSTRY Norway has been a major player in shipping for more than 150 years. The fleet is one of the most modern in the world. Norwegian shipping companies are engaged in all shipping segments, and have a particularly strong position in specialised shipping such as transport of petroleum products, chemicals, gas, paper, vehicles and Ro-Ro and offshore shipping. The Norwegian merchant fleet has remained much the same in size and scope in recent years: Per cent change NOR Norwegian Ordinary Ship Register Vessels Tonnage, measured (GT) 2,037, NIS - Norwegian International Ship Register Vessels Tonnage, measured (GT) 13,958, All Vessels 1, Tonnage, measured (GT) 15,996, Stephen Knudtzon and Andreas Meidell are partners and Marie Falchenberg is an associate at Advokatfirmaet Thommessen AS. 2 published 31 March

17 Norway II GENERAL OVERVIEW OF THE LEGISLATIVE FRAMEWORK The most important legal source within the maritime field is the Maritime Code of 24 June 1994 (MC). This statute incorporates several international conventions and contains rules relevant to, inter alia, ships and ship management, contracts of carriage, questions of liability and marine accidents. Other important statutes include the Act relating to the Norwegian International Ship Register of 12 June 1987, the Ship Safety and Regulation Act of 16 February 2007 and the Ship Labour Act of 21 June Several statutes of a more general nature are also relevant to shipping, such as the Dispute Act of 17 June 2005 (DA), the Arbitration Act of 14 May 2004 (AA), the Act relating to the Limitation Period for Claims of 18 May 1979 (ALP) and the Enforcement of Claims Act of 26 June 1992 (ECA). III FORUM AND JURISDICTION i Courts Jurisdiction There are no specialised maritime courts in Norway. Shipping disputes will be litigated in the ordinary national courts in the absence of a valid arbitration clause. The main rule in the Norwegian civil legislation is that a civil claim must be heard by a conciliation board consisting of three laypersons before it can be brought before a district court, pursuant to DA Section 4-1(1) and Section 6-2(2). There are, however, several exceptions to this rule. A suit may, for instance, be initiated directly before a district court if the claim exceeds 125,000 kroner and both parties have been assisted by a lawyer (DA Section 6-2(2)(a)). The general rules on the allocation of jurisdiction between the Norwegian courts are found in DA Chapter 4 and the Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters of 2007 (the Lugano Convention), which is incorporated into Norwegian law by DA Section 4-8. The court of the ordinary location of the defendant is competent unless otherwise agreed or an exclusionary provision applies (subsections 1 3 of DA Section 4-4 and Section 4-6). This court s jurisdiction is, however, often non-exclusive. First and foremost, DA Section 4-5 provides a list of alternative venues that may be chosen by the claimant. Actions arising out of maritime relations may, for instance, be brought in the judicial district where the vessel s port is situated (Section 4-5(5)). It follows from this that an action relating to the claim for the payment of money secured by the arrest of a vessel may be brought at the place where such arrest took place. It is further stated that certain actions directed at the shipmaster or crew may be brought in the judicial district in which the vessel is docked at the time of service of the writ of summons. In addition, the MC includes rules on alternative legal venues, particularly in Section 310(1), which gives the claimant extensive freedom of choice in respect of disputes relating to the carriage 402

18 Norway of general cargo. Unlike the list in DA Section 4-5, the options in the MC cannot be contracted out of before the dispute has arisen. 3 Norwegian procedural law also includes express provisions on the competence of Norwegian courts in international matters. The basic principle is that disputes in international matters cannot be brought before Norwegian courts unless the facts of the case have a sufficiently strong connection to Norway (DA Section 4-3). Whether the dispute is sufficiently connected to Norway will depend on an overall assessment of both the legal and the factual aspects of the case. 4 The requirement for sufficiently strong connection in Section 4-3 does not apply if the Norwegian courts are competent pursuant to the Lugano Convention. 5 The Lugano Convention is concluded between EU countries and the EEA countries other than Liechtenstein, and regulates which of the signatories courts have jurisdiction in private law cross-border disputes. Its effects are materially the same as the Brussels I Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. It should also be noted that Norwegian law includes several other more specific rules on jurisdiction. The competence of Norwegian courts in disputes concerning oil pollution liability, for instance, is governed by MC Section 203. Limitation periods Unless otherwise prescribed by statute, the claim will be subject to a general limitation period of three years from the date on which the creditor first had the right to demand performance (ALP Section 3 No. 1 and MC Section 502). In shipping matters there are, however, a multitude of time-bar periods applicable to various types of claims that differ from the general principle. The most important of these are listed in MC Sections 54, 64, 501 and 503. Time-bar periods may also be specifically agreed in a contract. It follows from MC Section 54 and Section 64 that maritime liens are subject to a one-year limitation period from the day when the claim in question arose. MC Section 501 provides, inter alia, that claims for damages arising from collision will be timebarred unless the limitation period is interrupted within two years after the day on which the damage was done. MC Section 503 deals with claims for damages for pollution damages, as mentioned in MC Sections 183, 191, 207 or 208, or for compensation from the International Oil Pollution Compensation Fund. Such claims will be lifted unless proceedings have been initiated within three years from the date on which the damage, loss or expense arose. ii Arbitration and ADR Most shipping-related disputes can be referred to arbitration either pursuant to an earlier agreement between the parties or on the basis of an agreement entered into after the dispute has arisen (AA Section 9). As for disputes arising out of contracts of carriage, arbitration may be agreed provided that the cargo owner is given equivalent freedom of 3 See DA Section 4-6 and MC Section 310 (1). 4 See, inter alia, the Supreme Court judgment published in Rt. 2010, p See Rt p. 57, paragraph 18 and Ot.prp.nr 89 ( ), p

19 Norway choice as set out in MC Section 310 (see MC Section 311 and the comments on MC Section 310 in Section III.i, supra). If the dispute is subject to arbitration, the applicable time bar will be interrupted when the creditor takes legal steps against the debtor to obtain an arbitration award (ALP Section 15). The parties may also agree to mediation, expert determination or other methods of ADR. It is, however, important to note that decisions resulting from methods of ADR other than arbitration will generally not be enforceable under Norwegian law (ECA Section 4-1). The relevant clause will therefore usually be worded as an obligation to go through with the preferred ADR before the dispute can be brought before the courts or arbitral tribunal. Clause 5-5 of the Nordic Marine Insurance Plan is illustrative in this regard. According to this clause, either party may, in the event of a dispute concerning the adjustment of a claim, demand that the calculation is submitted to a Nordic average adjuster for his or her opinion before the matter is brought before the courts. iii Enforcement of foreign judgments and arbitral awards Foreign judgments and arbitral awards are legally enforceable in Norway to the extent provided by statute or agreement with the foreign state (DA Section 19-16(1)). It follows from the second sub-paragraph of the same Section that a judgment rendered by a foreign court that has jurisdiction on the basis of the parties agreement, is enforceable in Norway if it is final and enforceable pursuant to the laws in the country of its origin. Foreign judgments may also be directly enforceable under Norwegian law pursuant to the Lugano Convention. The recognition and enforcement of arbitral awards is governed by AA Sections 45 and 46, which incorporate the principles of the New York Convention (NYC). AA Section 45 provides that arbitral awards will, subject to certain formal requirements, be recognised and enforced regardless of the award s country of origin. There are several exceptions to this rule in AA Section 46, which essentially correspond with the exceptions set forth in NYC Article V. Unless otherwise prescribed by statute, a new limitation period of 10 years will run from the date of the judgment or arbitral award, or from the date when the creditor may first demand fulfilment of the award (ALP Section 21(2)). The limited period can be interrupted by, inter alia, a demand for enforcement (distraint or full coverage) of the judgment or award (ALP Section 17(1)). IV SHIPPING CONTRACTS i Shipbuilding Shipbuilding is an important branch of maritime activity in Norway. A shipbuilding contract is in principle a contract of sale with the effect that the Norwegian Sale of Goods Act of 13 May 1988 (SA) applies to the contractual relationship between the shipyard as seller and the customer as buyer. It seems nevertheless to be the consensus that some of the statutory provisions do not apply to shipbuilding contracts. The provisions that do apply can in any event be contracted out of pursuant to SA Section 3. Most shipbuilding contracts are indeed entered into on the basis of standard forms with detailed regulations of the parties rights and obligations. 404

20 Norway The most important standard form from a Norwegian perspective is the Norwegian Standard Form Shipbuilding Contract 2000 (the Contract). The Contract is widely used both inside and outside Norway, and is an agreed document based on negotiations between the Norwegian Shipowners Association and Norwegian Shipbuilders Association. According to Article VIII, 4 of the Contract, the title and risk pass to the buyer upon the delivery and acceptance of the vessel. Delayed delivery will, pursuant to Article IV, 1(a) of the Contract, entitle the buyer to a daily reduction in price by way of liquidated damages. The maximum reduction under this provision is liquidated damages for 180 days of delay. As a general rule, the buyer will not be entitled to cancel the contract unless the delay continues for a period in excess of 180 days after delivery date or if the sum of non-permissible delay and of force majeure delay (excluding other permissible delay) amounts to more than 270 days (Article IV, 1(b) and (c)). The buyer may, however, cancel the contract forthwith if it can be established beyond any reasonable doubt that the vessel will be delayed beyond the said periods (Article IV, 1(d)). The right to cancel for anticipatory breach of contract is in accordance with the general principles of Norwegian contract law. The burden of proof of anticipatory breach is, however, heavier in the Contract than what follows from the equivalent principle codified in SA Section 62. ii Contracts of carriage Part IV of MC deals with contracts of affreightment. This label is used in the MC to describe general carriage of cargo (pursuant to bills of lading or waybills), charters, quantity contracts and contracts for the carriage of passengers and luggage. Carriage of general cargo is regulated by MC Chapter 13, which incorporates the Hague-Visby Rules of 1968 into Norwegian law. The provisions are to a large extent mandatory. Although Norway has not ratified the Hamburg Rules, the provisions are aligned with the latter regime to the extent possible without breaching Norway s obligations under the Hague-Visby Convention. At the time of writing, Norway has neither ratified nor adapted its legal framework to the Rotterdam Rules. The Hague-Visby Rules only apply to international carriage, and carriage by sea in domestic trade is made subject to several provisions that deviate from the Convention, (see MC Section 276 sub-paragraph 3). Perhaps most importantly, the weight limitation is increased to 17 SDRs per kilo in respect of domestic carriage and the exception for navigational errors does not apply (MC Section 280 sub-paragraph 2). 6 Norway has not ratified any conventions on multimodal transports, and the rules applicable to different modes of transport have not in any other way been harmonised. The Hague-Visby Rules only apply to bills of lading in so far as such document relates to the carriage of goods by sea (Article 1(b)). Likewise, only the transit by sea under a multimodal bill of lading is assumed to fall within the scope of MC Chapter As for 6 Ibid. 7 See MC Section

21 Norway the combination of sea and road carriage, however, it should be noted that the CMR Convention may apply to the whole carriage. 8 iii Cargo claims MC Sections 275 and 276 constitute the main rules on liability for cargo damage. According to the former, the carrier is liable for losses occurred while the goods were in his or her custody unless it can be proved that the loss was not due to his or her personal fault or neglect, or that of anyone for whom he or she is responsible. The Hague Visby Rules error in navigation and fire exceptions are set forth in MC Section 276. The Section also states that the carrier, in any event, will be responsible for damages caused by unseaworthiness of the vessel, unless the carrier proves that due diligence was taken to make the vessel seaworthy at the commencement of the voyage. MC Section 280 includes the limits of liability; the carrier s liability shall not exceed 667 SDRs per package or 2 SDRs per kilo, whichever is higher. As indicated in subsection ii, supra, special rules apply to domestic transport in this respect. Charterparty terms are often incorporated into a bill of lading by reference. In the hands of the charterer, such a bill of lading is only a receipt for the delivered cargo. In the hands of the endorsee, however, the document determines the rights and obligations of the bill of lading holder in relation to the carrier (see MC Section 292, sub-paragraph 3) and MC Chapter 13 thus becomes applicable. To what extent the holder of the bill of lading is bound by the charterparty terms and conditions will in principle depend on an interpretation of the relevant incorporation clause. As a guideline for the interpretation, the cargo owner should be protected from unexpected surprises. If the bill of lading contains a provision concerning the settlement of disputes by legal proceedings or arbitration, but the bill does not expressly state that the provision is binding on the holder, then the carrier cannot invoke the provision against a holder of the bill of lading who has acquired it in good faith (see MC Section 310 sub-paragraph 3). The carrier is defined in MC Section 251 as the person who enters into a contract with a sender for the carriage of general cargo by sea, and the main rule in MC Section 285 is that the contracting carrier s liability does not cease when a subcarrier gets possession of the cargo. Identity-of-carrier clauses raise several issues of interpretation, and may in any event be voided under Norwegian law to the extent that they do not fulfil the requirements for exemption of the contractual carrier s liability in MC Section 285, sub-paragraphs 2 and 3. According to this provision, modifications of the liability of the contractual carrier presuppose an express agreement providing that a particular segment of the carriage shall be performed by a named subcarrier, and the cargo owner is able to bring an action against the subcarrier in accordance with MC Sections 286 and 310. iv Limitation of liability MC Chapter 9 includes the main provisions on the right of owners, charterers and managers etc. to limit their liability in shipping disputes (see MC Section 171). 9 8 See CMR Convention Article 2/CGR Section 4. 9 See MC Section 185 sub-paragraph

22 Norway MC Section 172 regulates limitation of liability for claims related to personal damages, property damages and delays resulting from the operation of the ship, pursuant to the rules of the LLMC Convention 1976 as amended by the 1996 Protocol. The respective limits of liability are set forth in Section 175 and are based on fixed sums, with an increase based on a ship s gross tonnage and number of passengers. The right to limit liability for claims in connection with clean-up efforts relating to, inter alia, maritime accidents is set out in MC Section 173. Pursuant to MC Section 1752, the limits of liability for these claims are set at 2 million SDRs, with a certain increase based on a ship s gross tonnage. MC Section 173 includes a list of types of claims where the general rights to limitation do not apply, such as claims for salvage rewards, interest and legal costs. Special rules in MC Chapter 10 apply to limitation of Convention-based liability for oil pollution damage from tankers. Pursuant to MC Section 194, the owner may limit its liability to 4.51 million SDRs for ships with a tonnage not exceeding 5,000 tonnes. For ships with tonnage exceeding this limit, the maximum liability increases by 651 SDRs per tonne exceeding 5,000 tonnes. The liability will, however, in no event exceed million SDRs. V REMEDIES i Ship arrests Ship arrests are common in Norway in order to secure and enforce maritime claims. Norway is a party to the Brussels Convention of 1952 on the arrest of ships, and the rules are partly found in MC Chapter 4, as well as in DA Chapters 32 and 33 and ECA Chapter 11. A claim for the arrest of a ship needs to be served with the local court in the jurisdiction where the arrest is to take place, which will be the legal venue for any maritime claims that are secured by the arrest (DA Section 4 5). In general, only maritime claims may be secured by the arrest of a vessel, as these claims are identified in MC Section 92. All claims that are secured by a maritime lien according to the MC Section 51 will also qualify as a maritime claim under MC Section 92. However, pursuant to MC Section 92, certain other claims may also be secured by arrest, such as claims based on goods or materials being delivered to the ship for use in its operation and maintenance, the building or fitting out of the ship; costs and fees payable for docking; and a master s disbursements, including disbursements by shippers, charterers or agents on behalf of the ship or its owner. Sister ship arrests are also allowed under MC Section 93, but only when the shipowner is personally liable for the claim, or if someone other than the owner of the ship to which the maritime claim relates, is personally liable for the claim, in which case other ships owned by that person may be subject to arrests. Ship arrests can generally be avoided by providing security for the claim, see DA Sections 33 5 and Such security would normally be required in a form of a bank guarantee being unconditional and for an indefinite period of time. Norwegian banks and other banks from within the EEA area will be accepted. In cases of wrongful arrest, DA Section imposes a strict liability on the petitioner of the arrest to compensate 407

23 Norway any loss that the defendant has sustained in the event that the petitioner s claim did not exist when the arrest was made and the security ordered. Further to regular ship arrests, in accordance with the DA Chapters 32 and 33, arrest may also be made of other moveable goods, such as cargo and bunkers. ii Court orders for sale of a vessel A creditor demanding a court order for the sale of a vessel must apply to the courts in accordance with the rules in ECA Part 2. Such an application must document that the creditor has a legal ground for enforcement, and these are laid out in ECA Chapter 4, such as ordinary court judgments and arbitration awards, and registered mortgages and enforcement liens. With regard to enforcement of claims by a sale of a vessel, the rules are found in ECA Chapter 11. A due claim must be presented to the debtor (the defendant) in accordance with ECA Section After the defendant has submitted its defence, the court will make a decision as to whether grant the applications, ECA Section If the request for a court order for a sale has been granted, then the court will have to decide between an auction and an assisted sale. The latter will generally be a sale conducted with assistance from a professional ship broker. The detailed procedures on such a sale are described in the ECA Chapter 11(2), while the rules on a forced auction are dealt with in Chapter 11(3). It is at the court s discretion to decide whether to use an assistant or go through with a forced auction; however, pursuant to ECA Section 11 12, the court s decisions must be based on consideration of what method would give the highest sale proceeds. VI REGULATION i Safety The Norwegian safety regime for ships is mainly found in the Ship Safety and Security Act of 2007 with its Supplementary Regulations. The Act implements both international (UN) legislation as well as EU legislation. Inter alia, SOLAS, the ISM Code, MARPOL, and the Colregs are implemented through the Ship Safety and Security Act and Regulations. The Act and the Regulations contain rules about the shipowner s duties in respect of safety management as well as specific provisions on the technical and operational safety of a ship and the personal safety of crew members and passengers. Furthermore, the Act deals with environmental safety and protective security measures; establishes a supervision scheme; and details certain sanctions applicable to anyone who is in breach of the Act. Matters such as safe navigation and protection of the environment are not only protected by the Ship Safety and Security Act, but also by the Maritime Code and the Pollution Act of ii Port state control Port state control in Norway is exercised by the Norwegian Maritime Directorate. In conducting the control, the Directorate employs the reporting system Safe Sea Net, and this reporting system is administered by the Norwegian Coastal Administration. 408

24 Norway According to the Ship Safety and Security Act, Section 44, non-norwegian ships may also be subject to supervision. Coercive measures, as well as stoppage or boarding, may be exercised within the limits imposed by international law. Norway is further a signatory to the Paris MoU, implying a duty for Norway as a coastal state to also conduct checks on foreign ships. In 2012 the total number of inspections in Norway was 572, and deficiencies were found in 182 inspections, but the number of detentions was only iii Registration and classification Norway has two ships registers: the Norwegian Ordinary Ship Register (NOR) and the Norwegian International Ship Register (NIS). Both are nationwide in scope and based in Bergen. They are independent of the courts, and operate under the authority of the Ministry of Trade and Industry. These two registers are also separate from each other, NOR with its basis in the Maritime Code and NIS in the NIS Act. The tonnage registered in NIS is greater than in NOR, but the number of vessels in NOR is much higher. The registration of rights in NIS and NOR can take place to the same extent as for the recording of rights in real property under Norwegian law. This means that deeds, options, purchase contracts, mortgages and negative pledge agreements can be registered in the ship registers. Charterparties cannot be registered as such. Applications for registration can only be made by the person listed as the ship s owner and who has the registered title to the vessel (see MC Section 21). The procedural rules for registrations may be found in MC Section 14 et seq., but these are also supplemented by the NIS and NOR Regulations. The procedure is highly documentational, and is conducted by a registrar who enters the documents into the registry s files. If the registrar refuses to register the documents, or should there be an allegation that a document that has previously been registered is incorrect, there is a procedure whereby complaints may be submitted to the Ministry of Trade and Industry. The legal effect of registration is set out in MC Section 23, whereby registered rights have priority over unregistered rights, and determination of priority between registered rights is made on the basis of the date and time of entry in the journal documents. The classification societies that operate in Norway are the American Bureau of Shipping, Bureau Veritas, DNV-GL, Lloyd s Register of Shipping, Rina SpA and Nippon Kaiji Kyokai. Under Norwegian law, a classification society may in principle be held liable, and the efforts made by the classification societies to limit their liability by inserting contractual provisions to this effect are approached with some scepticism in Norwegian courts. 11 iv Environmental regulation Pollution from ships is in general regulated by the Norwegian Pollution Act of 1981 with its secondary regulations. This Act regulates both the liability of polluters, as well as 10 See the Paris MoU Annual Report for 2012; 11 See, for example, the court awards published in Nordiske Domme i Sjøfartsanliggende 1993, p. 243, and 1997, p

25 Norway rules on preventive measures. Preventive measures are also further elaborated by the Ship Safety and Security Act of 2007, which contains a general prohibition against pollution in its Chapter 5 Section 31. Further to this, the convention-based liabilities for oil pollution have been transposed into MC Chapter 10. Part 1 of this chapter incorporates the Bunker Convention 2001, while Part 2 incorporates the CLC Convention, as well as the Oil Pollution Fund Convention 1992 and the Supplementary Fund Protocol All of the aforementioned acts impose strict liability on the polluter, and this regime is thoroughly enforced by the Norwegian authorities. Usually, polluters will be ordered to pay fines as well as to compensate the authorities for any preventive measures or clean-up costs relating to a vessel that either has polluted, or could potentially pollute, the marine environment. v Collisions, salvage and wrecks Rules on ship collisions are found in MC Chapter 8, and this is based on the Collision Convention. The basis for liability is negligence, as there will be no strict liability (see MC Section 162. In both-to-blame collisions, the losses will be allocated in proportion to the amount of blame accorded to each of the vessels as further elaborated in the MC Section 161. The Norwegian rules on salvage are found in MC Chapter 16 and these are based on the Salvage Convention A requirement for a salvage award is that the ship or other object to which assistance is rendered, must have been in danger, as this requirement has been further elaborated by Norwegian courts. The ship receiving assistance must objectively be in danger, and when assessing whether or not such danger is present, the competence and skills of the crew and their evaluation of the situation will be important evidence. This must of course be based on careful evaluation of the facts on a case-by-case basis. Furthermore, a salvage award can only be claimed when the salvage operation has been successful (see MC Section 445). However, special compensation may be claimed according to MC Section 449 and this applies in particular in regard to environmental damage. Such special compensation shall correspond to the expenses incurred by the salvor in a salvage operation, and may only be claimed insofar as it exceeds the amount of the salvage award fixed according to Section 446, which lists the circumstances to which importance shall be attached in the apportionment of a salvage award, all in line with the similar provisions of the 1989 Salvage Convention. Wreck removals and recycling are dealt with by the Harbour Act 2009 and the Pollution Act According to the Harbour Act Section 35, the authorities can order the party responsible for a vessel to conduct the wreck removal within a specified time frame, but only insofar as consideration of safety and navigation, or other use of the waters requires it. If the order is not complied with, the responsible party may be ordered to cover reasonable expenses someone else has taken in order to do the wreck removal. Ship recycling is addressed by the Ship Safety and Security Act Section 36 stating that vessels that definitely are taken out of service shall be taken care of in a proper manner, so that no danger to life, health or environment may arise. In this respect Norwegian law also applies the EU Waste Regulation No. 1013/2006 and the Basle 410

26 Norway Convention as well as the IMO Guidelines on Ship Recycling of 2003, and Norway has ratified the Hong Kong Convention. vi Passengers rights MC Chapter 15 deals with the carriage of passengers and accompanied luggage. An Amendment Act dated 7 June 2013 to, inter alia, MC Chapter 15 incorporated Regulation (EC) No. 392/2009 on the Liability of Carriers of Passengers by Sea in the Event of Accidents and the Athens Convention into Norwegian law. The provisions of the Regulation regarding carrier s liability may thus be invoked under Norwegian law. vii Seafarers rights The new Ship Labour Act of 21 June 2013 repealed the former Seamen s Act of 30 May 1975 and came into force on 20 August The Act, together with certain provisions in the Ship Safety and Regulation Act of 16 February 2007, incorporate the Maritime Labour Convention 2006 into Norwegian law. VII OUTLOOK The Norwegian shipping industry is expected to be profitable and to grow in years to come, notably in respect of specialised high-value vessels. Many shipowners believe in the arctic boom leading to northern sea routes and exploration of natural resources in the arctic, implying the use of specialised vessels capable of operating in an extreme environment. With regard to legal developments, Norway will continue to take an active part in the international maritime law community. An example of this is the Nordic Marine Insurance Plan of 2013, which is based on the former Norwegian marine insurance plan, and is now increasingly adopted by non-nordic insurers and insureds. 411

27 Appendix 1 ABOUT THE AUTHORS STEPHEN KNUDTZON Advokatfirmaet Thommessen AS Stephen Knudtzon heads Thommessen s shipping and offshore department. His practice includes legal advice with an emphasis on maritime and oil service-related matters, including contractual law, insurance law, negotiations and litigation. He also acts as an arbitrator and mediator in disputes resolution. He is a member of the legal committee of the Norwegian Shipowners Association and is also chairman of Buksér & Berging AS and the chairman of the Supervisory Committee of Gard and SG Finans AS. He is the chairman of the board of the Arbitration and Dispute Resolution Institute of the Oslo Chamber of Commerce. Mr Knudtzon was the president of the Norwegian Maritime Law Association from ANDREAS MEIDELL Advokatfirmaet Thommessen AS Andreas Meidell holds a doctoral degree in law from the University of Bergen. He is the partner responsible for Thommessen s insurance and reinsurance practice and is part of the firm s shipping department. His practice concentrates mainly on shipping matters, as well as commercial insurance claims and coverage issues, such as marine and energy insurance (hull, P&I, LoH and war), property and liability insurance (including product liability covers), cargo insurance, as well as reinsurance. Andreas Meidell assists a wide range of insurance clients, both Norwegian and international. He is also a frequent litigator and appointed arbitrator in Norwegian and international arbitrations. Mr Meidell gives university lectures on maritime law and marine insurance, and has published legal essays on these subjects. He is also a member of the board of directors of Thommessen law firm, and of the Norwegian Maritime Law Association. 597

28 About the Authors MARIE FALCHENBERG Advokatfirmaet Thommessen AS Marie Falchenberg joined Thommessen s shipping department in Her main areas of expertise are maritime, petroleum and insurance law. She has worked as a research assistant at the Scandinavian Institute of Maritime Law. She also holds an LLM in maritime law from the University of Southampton. ADVOKATFIRMAET THOMMESSEN AS Haakon VIIs gate 10 PO Box 1484 Vika 0116 Oslo Norway Tel: Fax: