THE LEGAL ASPECTS OF WRECK REMOVAL

Transcription

1 THE LEGAL ASPECTS OF WRECK REMOVAL ISU ASSOCIATE MEMBERS' DAY 20 TH MARCH 2013 Toby Stephens, Partner, Holman Fenwick Willan LLP T: +44 (0)

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4 Outline Forms in use Points to consider when negotiating a contract for wreck removal Points to consider in the future

5 Forms in use BIMCO standard forms WRECKFIXED 2010 WRECKHIRE 2010 WRECKSTAGE 2010 Forms amended in November 2010 to be up to date with current industry practice 99 forms withdrawn

6 Forms in use Differences between the updated forms Remuneration: WRECKHIRE 2010 WRECKSTAGE 2010 WRECKFIXED 2010 Services paid for on a daily hire basis possible reductions of hire in the event of delay Incentive scheme for early completion : 100% bonus if wreck removed by a specified date or event : if wreck removed before a second specified date : bonus reduced pro-rata Services paid for in a lump sum in stage payments possibility of additional payments in the event of delay No incentive scheme Services paid for in a lump sum on a nocure-no-pay basis no additional payments in the event of delay No incentive scheme

7 Points to consider when negotiating a contract

8 Points to consider when negotiating contract Who is to be responsible for any extra costs? Port expenses Assisting tugs Agency fees, visas, guarantees Taxes and duties in relation to contract Fines and penalties "all charges, costs or other expenses whatsoever and howsoever arising" TIPS: Exercise due-diligence Consider costs when negotiating with sub-contractors

9 Points to consider when negotiating a contract Delay Provisions What is the default position of the wreck removal form? What rate has been agreed? What length of time will trigger the delay provisions? Will the provisions extend to the delay of part of the services? Does the provision cover delay as a result of the default of a party? Weather delays Definition Agreed system of monitoring

10 Points to consider when negotiating a contract Is the completion of services dependent upon gaining specific certification? Check to see whether local authorities' authorisation is required Check whether local authorities are likely to be compliant Check what timescales are in place to obtain authorisation Who's obligation to obtain? Who will bear the risk? TIP: Engage with local authorities

11 Points to consider when negotiating a contract Do provisions provide for any risks arising during the operation? eg. Third party claims MV RENA

12 Points to consider when negotiating a contract Limitation of liability for wreck removal Limitation of Liability for Maritime Claims 1976 Article 2 Where is the wreck located Is that jurisdiction a signatory to the Convention? Has wreck removal been carved out?

13 Points to consider when negotiating a contract Do provisions provide for any risks arising during the operation? eg. Issues surrounding the disposal of a wreck MSC CHITRA

14 Dumping at sea UNCLOS Article 210 London Dumping Convention 1976 and Protocol The Protocol is much more restrictive Any application to dump must show full consideration given to re-use, offsite recycling, destruction of hazardous constituents OSPAR General prohibition 2 exceptions: Safety of human life or of a vessel In an emergency

15 Summary Better to have the correct contractual provisions at the outset to avoid headaches down the line TIPS: Take the time to negotiate the contract thoroughly Know what you are signing

16 Points to consider in the future Salvors should be aware of future updates in wreck removal forms Evolving liabilities Nairobi International Convention on the Removal of Wrecks 2007 Not yet in force Implementing legislation of other jurisdictions may impact on the obligations and liabilities of salvors

17 Final thought Ships are becoming ever larger and untested Eg: Triple E Maersk Class - LOA : 400m - Total containers : 18,000 Are we one large wreck away from a change in liability regimes?

18 Lawyers for international commerce hfw.com