The. Shipping Law Review

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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

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 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

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