Scandinavian Maritime Law

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1 Thor Falkanger - Hans Jacob Bull Lasse Brautaset Scandinavian Maritime Law The Norwegian Perspective Universitetsforlaget

2 Contents 1 INTRODUCTION What is maritime law? The unique characteristics of maritime law The topics to be examined Sources of law The Maritime Code and other legislation Interpretation of Statutes Contracts and their interpretation Case law, including arbitration awards Legal literature Conventions Jurisdiction and choice of law Court jurisdiction and rules dealing with forum Jurisdiction agreements Choice of law Arbitration Satisfaction of judgments and arbitration awards - enforcement Arrest of ships and cargo 40 2 SHIPS, NATIONALITY AND REGISTRATION Ships - definition Characteristic features When does a construction become a ship and when does this Status cease? Appurtenances of a ship Identification of ships Nationality and registration The significance of nationality When is a ship considered Norwegian? The rules under international law The Norwegian International Register (NIS) The two purposes of registration 55

3 10 CONTENTS 2.25 Conditions for registration in the ordinary Norwegian ships' register (NOR) Conditions for registration in the NIS Particular implications of registration in the NIS Structure of the registers, registration procedures and legal protection associated with registration Registration of ships under construction 69 SHIP CONTROL AND CLASSIFICATION The Seaworthiness Act of 9 June The Seaworthiness Act and its scope of application The purpose of the Act Requirements in respect of individual ships The exercise of public control International co-operation Classification 79 SHIPBUILDING AND REPAIR CONTRACTS Shipbuilding - legal background The Shipbuilding Contract Negotiations and contracting Description of the ship (art. II) Change orders The building phase: Approval of plans; supervision and tests; risk allocation Tests and trials Delivery date and delivery Price and payment terms Builder's default Additional comments regarding registration, financing and insurance Repair of ships - generally The main features of the repair contract of 1985, revised The scope and quality of work Delivery time Price and manner of payment Sanctions available for breach of contract Other damages 105

4 CONTENT PURCHASE AND SÄLE OF SHIPS Introduction The basic problem: What is purchased? Description and inspection The buyer's need to inspect the ship The three-stage alternative "Outright sale" Description of the ship What is included in the sale Time of delivery Price and method of payment Disputes - choice of law and forum Sale of ships for demolition MORTGAGES, ENFORCEMENT LIENS, MARITIME LIENS AND RIGHTS OF RETENTION Introduction: The vessel as security for Claims Maritime liens - general description and historical background What Claims are secured by a maritime lien and what are the priorities? Claims secured Priority of maritime liens Foreign maritime lien Claims Maintenance of maritime liens. Limitation period Ship mortgages The mortgagee's position - particular risks The scope of mortgage rights The mortgagee's legal protection as against third parties Mortgaging a vessel share Additional comments on mortgages of ships under construction Enforcement liens Foreclosure Introduction Grounds for enforcement Default Forced sale 133

5 12 CONTENTS 6.75 Forced use Enforcement on the basis of foreign rights. Auction abroad The right of retention (possessory lien) WAYS OF STRUCTURING SHIPOWNING ENTTTIES "Shipowner" and "shipowning Company" - definition A preliminary note on Norwegian terminology Everyday usage The legal significance of the terms Summary Forms of Organisation employed in ship ownership and Operation Registration of companies Sole proprietorships Part-owners/partnerships/joint ownership Limited partnerships Limited liability companies or corporations The forms of Organisation in practice Transfer of the shipowner's functions The international perspective Pool agreements and Joint ventures Management agreements Other intermediaries and assistants Agents Stevedores Pilots and tugboats Suppliers Shipyards and travelling squads Brokers Freight forwarders and liner agents LIABILITY Types of damage and causation Ordinary principles of liability The tortfeasor's liability for negligence The shipowner's vicarious liability Strict liability Claims for personal injury Liability arising out of contract Limitation of liability. Indexing 168

6 CONTENT The scope of the shipowner's vicarious liability Introduction The legal relationship between shipowner and assistant The nature of the Service provided Categories of assistants Scope of the shipowner's contractual liability Limitation of actions - an overview LIMITATION OF SHIPOWNERS' LIABILITY Background When do the rules in MC Chapter 9 apply? Who can invoke the rules? What counts as a ship in this context? The scope of limitation In general The individual Claims "Privity" The principle of Single liability How liability is limited in practice The principles Limitation funds - guidelines The limitation fund - Special rules One or more incidents? An example Claims by the owner against the limitation fund Procedural rules. Effect of the establishment of a fund Limitation without establishment of a fund Establishment of a limitation fund Other limitation rules Contracts of Affreightment Oil pollution OlL POLLUTION AND ENVIRONMENTAL LIABILITY Introduction The international rules on liability for oil pollution, background and development Overview of the Norwegian rules on liability for oil pollution Convention-based liability under MC Chapter

7 14 CONTENTS Scope of application Strict liability Channelling of liability Limitation of liability Compulsory insurance The international compensation fund Limitation of actions Non-convention-based liability for oil pollution Liability for oil pollution damage subject to global limitation Liability for oil pollution pursuant to the Petroleum Act Other environmental liability LIABILITY FOR COLLISIONS Introduction The central rules on liability When only one ship is at fault When both are to blame Accidental collisions Collisions between three or more ships Liability for actions based on necessity Cross or single liability? Liability for cargo claims The Maritime Code American law Liability for personal injury The evaluation of fault Introduction The Rules of the Road The measure of damages Prescription, maritime liens and insurance cover Collisions with other structures THE LEGAL POSITION OF THE CREW Introduction The employment contract Duration of the contract 230

8 CONTENT Rights and obligations Circumstances which may change the date of termination or give the seaman a right to take leave The master Particular provisions applicable to NIS-registered ships CONTRACTS OF AFFREIGHTMENT - AN OVERVIEW Ways of employing a ship in trade The two extremes The liner trade Chartering A wide-ranging transfer of functions: Leasing Options to purchase Contracts of Affreightment The term Bills of lading and sea waybills Voyage Charters Time Charter party Bareboat Charter party Tramp bills of lading The parties to a contract of affreightment The use of the forms of contract in practice Sources of law BILLS OF LADING AND WAYBILLS: LIABILITY FOR DAMAGE, LOSS AND DELAY; INCORRECT DESCRIPTION OF GOODS Introduction The liability of the carrier The underlying sale and the bill of lading Procedure for delivery of the goods to the carrier A summary of the functions of the bill of lading Alternatives to bills of lading The liability of the carrier: background and content Historical development The main rules relating to carrier liability for damage and delay The scope of liability A note on bürden of proof, notice and time bars Liability for delay 292

9 16 CONTENTS Deviation Risk allocation and insurance Can the rules on liability in MC 274 (13:24) et seq. be avoided by contract or otherwise? The scope of application for MC Chapter 13 pursuant to 252 (13:2) To what extent are the Norwegian rules mandatory? Description of the goods in the bill of lading. Consequences of mis-description The problem The information to be included in the bill of lading Carrier's duty to check that the information in the bill of lading is correct - duty to investigate and make reservations pursuant to 298 (13:48) Carrier's liability for information in the bill of lading Shipper's liability to carrier Shipper's need for a "clean" bill of lading - "back letters" Are the rules on the content of bills of lading and liability for incorrect description mandatory? Liability for wrongful delivery Sea waybills Introduction What is a waybill? What are the consequences of issuing a sea waybill? When are sea waybills issued and whom are they issued to? If the requirements for a sea waybill are not satisfied So-called "document-free carriage" Waybills used in coastal carriage Questions relating to freight and expenses Liability for cargo damage against persons other than the contracting carrier, including vessel personnel An overview Cargo Claims against crew, stevedores etc Contractual and actual carrier - use of third party tonnage. Combined carriage Introduction Entitlement to use a sub-carrier Consequences of authorised use of a sub-carrier - subject to mandatory rules? 335

10 CONTENT Obligations of the contractual carrier when a sub-carrier is used The obligations and liability of the actual carrier (sub-carrier) Joint and several liability of the contractual carrier and sub-carrier (13:37) Several carriers - an example Combined or multimodal transports - The Geneva Convention of VOYAGE CHARTERING Introduction Definition and legal sources Standard contracts and fixture procedure The ship Named or unnamed ship clause The ship's cargo capacity Loading/discharging equipment etc Seaworthiness Time allowed for Performance of the voyage. Performance of the voyage. Deviation The time factor When should loading commence? Performance of the voyage. Deviation Ports of loading/discharging and places of loading/discharging Distinction between port of loading and place of loading Safe port/berth. Damage to the ship "Near" clauses and some related Charter clauses The cargo The loading and discharging process The loading process and associated expenses Loading time: laytime, demurrage Freight and allocation of expenses Calculation of freight Freight risk and liability for cargo damage Who is the freight debtor? Security for the freight claim Voyage expenses Issues relating to cargo damage The rules of the Maritime Code 383

11 18 CONTENTS Is the Maritime Code mandatory? Freedom of contract Bills of lading issued under voyage Charters. Indemnity Claims Issuance of bills of lading and consequences thereof Incorporation of Charter party terms into the bill of lading Indemnity actions brought by the owner against the charterer TIME CHARTERING Introduction The ship and its description Cargo capacity and loading/discharging equipment Speed and consumption Seaworthiness Duration "Delivery" and "redelivery" procedures "Redelivery" "Overlap" and "underlap" Charterer's options Trading area, cargo options and individual voyages Trading area Permitted cargo Performance of the individual voyages Allocation of operational responsibilities and costs Charter hire - amount, payment and risk Calculation of hire Method and place of payment Default in payment of hire Security for hire payments - the "lien" clauses Rules concerning off hire Off-hire clauses in selected Charter parties Settlement of off hire Liability for damage to cargo Introduction Cargo damage Claims brought by the time charterer Liability under bills of lading Recourse against the time charterer 425

12 CONTENT OTHER CONTRACTS OF AFFREIGHTMENT Charter party for consecutive voyages Quantity contracts Bareboat Charter CARRIAGE OF PASSENGERS AND LUGGAGE Contract and statutory rules The carrier's obligations The passenger's obligations The owner's right to compensation Liability for personal injury and delay Standing to sue Basis of liability and bürden of proof Right of limitation Tort claims. The contracting carrier and performing carrier Compulsory insurance Luggage What is luggage? The right to bring luggage The carrier's obligations The carrier's liability for lost, damaged or delayed luggage Limitation of actions SALVAGE Introduction Conditions for obtaining a salvage award What property or interests can be subject to salvage? The salved property must be "wrecked" or "in danger" The principle of "no eure no pay" Salvage agreements The right to salve Assessment of the salvage award Special compensation Actions by the salvor which may result in loss or reduetion of the salvage award or Special compensation 459

13 20 CONTENTS 19.7 Apportionment of the salvage award Liability for salvage awards and Special compensation. Security, maritime liens and insurance cover. Limitation of actions GENERAL AVERAGE Introduction What is a general average act The principle of coramon safety The principle of common benefit If the danger is caused by one of the participants What is compensated in general average Determining the value of the contributing interests General average contributions; liability for general average contributions; and insurance cover MARINE INSURANCE - OVERVIEW AND GENERAL QUESTIONS Introduction The sources of law The insurance contract The parties to an insurance contract Concluding the insurance contract Jurisdiction and choice of law Insurance period Insurable interest, insurable value and sum insured The interest insured Insurable value and sum insured Scope of cover: Perils insured against, causation and losses covered Scope of cover Perils insured against Causation The duties of disclosure and due care Overview The duty of disclosure Alteration of the risk Casualties caused by the assured Unseaworthiness Safety regulations 495

14 CONTENT Duty to notify and duty to avert or minimise the loss Identification Costs of measures to avert or minimise the loss Introduction Insurance cover of general average contributions Particular measures taken to avert or minimise loss The relationship between maritime law and marine insurance law: An example THE INDIVIDUAL TYPES OF INSURANCE Introduction Hüll insurance What objects are covered by hüll insurance? Scope of cover: an overview Total loss Damage Liability of the assured arising from collision and striking Total loss insurances Introduction Main features of the cover Restrictions on the right to effect separate total loss insurances War insurance Introduction Scope and termination Total loss Damage Loss of time Owner's liability Occupational injury insurance Loss of hire insurance Introduction Main rules regarding the insurer's liability Calculation of the loss The insurance settlement P&I Insurance Introduction The general rules concerning the scope of cover Liability for claims related to persons Liability connected to cargo 535

15 22 CONTENTS Liability for collision and striking Pollution liability Other liability The position of the injured party: Direct action Cargo insurance Introduction Who is the beneficiary of the insurance? Total loss Shortage Damage Insurance settlement Subrogation claims against third parties MARITIME INQUIRIES Introduction Mandatory maritime inquiries Criteria for the holding of a maritime inquiry Exceptions to the duty to hold a maritime inquiry Maritime inquiries held upon request Maritime inquiries for foreign ships Procedural rules Generally Collisions Commissions of inquiry 550 Abbreviations 552 Table of cases 556 Table of Statutes 569 Index 598

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