Another year full of experiences.
Together we have faced and overcome every challenge.
You know that taking care of you is what gets us going every day.
The trust you place in us continues to thrill us.
Without it we could not have shared this path.
In these times when we are with our people.
We wish you a safe return home.
Aiyon
taking care of what is important
Merry Christmas and Happy New Year
In its Special issue on the XII Annual Congress of FETEIA-OLTRA (Spanish Federation of Freight Forwarders and Organisation for Logistics, Transport and Customs Representation), which will be held again between 29 September and 2 October in Algeciras, the “Canal Marítimo y Logístico” publishes an article by AIYON Abogados on INCOTERMS 2020 and Insurance, with particular attention to Incoterms CIP and CIF.
The INCOTERMS®, a term that refers to the acronym for “International Commercial Terms”, are a set of international rules, governed by the International Chamber of Commerce (ICC) since 1936, issued for the interpretation of the most used terms in international trade, and are widely used in international business throughout the world. They are neither a supranational legal norm nor a mandatory law; the ICC created them based on and with the objective of reflecting the uses and customs related to the international sale and purchase of goods at the time.
The INCOTERMS® regulate very important aspects of a transport operation such as the conditions of delivery of the goods, the distribution of risks and costs between the seller and the buyer, the contracting and payment of insurance for the goods, the passing of risk, customs formalities and the cost of transport. It is easy to see that they do not regulate aspects relating to jurisdiction and applicable law, the method of payment or the transfer of ownership.
Regarding the CIP and CIF terms, the main characteristic of these two INCOTERMS® in their 2020 version is related to insurance, insofar as they add to the seller the obligation to take out transport insurance for the goods during the international transport phase in favour of or on behalf of the buyer. The term CIF (Cost, Insurance and Freight) imposes on the seller the obligation to take out, in favour of a third party, the buyer, transport insurance with the minimum cover of the Institute Cargo Clauses, i.e., ICC (C), while the term CIP (Cost and Insurance Paid to), obliges the seller to take out, in favour of the buyer, transport insurance, in this case with maximum cover, ICC (A).
In those operations in which the INCOTERMS® CIF or CIP have been agreed, the cost and risk of the main phase of the transport is divided, with the obligation to contract the transport remaining with the seller, while the risk and, therefore, the insurable interest of the goods during the main phase of the transport falls on the buyer. In other words, the seller will have the insurable interest in the goods until they are loaded on board the ship at the port of origin (CIF) or until the goods are delivered to the first carrier or at the agreed place (CIP), while the buyer will acquire the insurable interest in the goods from that moment, i.e., from the beginning of the main transport phase.
Read the full article HERE
El Diario de Cádiz has recently published an article highlighting the work carried out by Aiyon from its offices in Algeciras and Cádiz, its solid presence in the south and its active participation in the sector, not only as expert lawyers in Maritime Law, International Trade, Insurance or Transport Law, but also as teachers and trainers of the new generations being part of the teaching staff of the “Master in Legal Consultancy of Companies” taught at the University of Cadiz.
From its headquarters in Algeciras, José Domínguez Castro, partner and head of the firm, who in addition to being a lawyer has a degree in Nautical and Maritime Transport, a Diploma in Civil Navy and a Merchant Navy Pilot with accredited experience in passenger ships and ro-ro cargo, confirmed to the Journal that the local client is fully aware of the need of specialised lawyers to provide legal advice in the different areas of our speciality. We refer to all matters relating to trade, transport and insurance, and all that this entails in terms of the lawyer’s knowledge of the world of logistics, port handling, storage and warehousing, shipbuilding and ship repair, ship supplies and services, land transport, sanctioning procedures, insurance claims, etc. Legal advice is provided from a purely contentious point of view when the dispute has already arisen and in order to try to reach a negotiated resolution, or judicial if unavoidable, as well as from a previous moment in order to obtain preventive advice and avoid possible future risk situations.
Together with Enrique Ortiz, partner in charge of Aiyon’s office in Cadiz and expert lawyer, our colleagues have actively participated as speakers and trainers in Universities and companies. An example of this are the recent lectures on transport and insurance in the international sale and purchase given int June in the “Master’s Degree in Business Legal Consultancy” at the University of Cadiz. With regard to his teaching work, we would like to echo José’s words: “We have really enjoyed giving these conferences and we are grateful to the University of Cadiz for having counted on us for this Master’s Degree. With the regulatory selection we made and the case study method, taking advantage of our real experience, we think that the students have been able to acquire a global vision of real and common risks that arise in this complicated sector and how to advise their companies or clients so that they can prepare themselves in the best possible way and protect their interests when facing operations of this type”.
Although air cargo transport may seem to cover only movement of special or very specific cargo, the truth is that it includes all types of goods and materials, including perishable goods or live animals.
Transport may require a single journey from origin to destination or involve several flights or transfers at different airports and countries. All of this in relatively short and, in principle, very competitive, but usually costly, timescales.
It is easy for a seller/shipper or a buyer/consignee of air cargo to fall into a subjective interpretation of the conditions governing it. In particular, and in relation to the security of this sector, in view of the stringent security measures to which citizens and their luggage are subjected on air journeys both in airport facilities and on aircrafts, it is natural to infer that this means of transport is extremely safe in order to move our goods from one country to another.
In this context, it is reasonable to think that cargo insurance is not perceived as necessary or relevant as it would be in other types of transport, such as maritime transport, with longer crossings and cargoes being subject to different manipulations by operators of all kinds, or in land transport, where shipments are exposed to damage due to breakdowns, delays, or theft. However, this is a line of reasoning that must be contested mainly because of two important issues:
(i) air cargo is subject to damage, delay and loss, even if the airports of origin, transshipment and destination are located in countries with high security measures and fully standardized protocols;
(ii) the international regulation affecting the carriage of air cargo protects the figure of the carrier by establishing limitations of liability that are applicable to them, in many cases even when the figures of fraud or gross negligence of the carrier may occur.
Specifically, if we look at the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal, 1999) and its subsequent amendments, it states that even when there may be intent or gross negligence on the part of the carrier in failing to comply with all types of security or safekeeping measures with respect to the goods or the ULD, the carrier always has the right to limit his liability to 22/SDR/kilo based on the weight of the damaged/missing cargo (updated in Spanish Official Gazette of 16/07/20). Therefore, if the limitation of the carrier’s liability is applied, the sums to be recovered by the affected shippers based on the wight limitation are usually low when, on the contrary, in most cases the value of the transported goods is high.
Although the Warsaw Convention is still in force in certain countries and at national level, we have the obsolete Air Navigation Act of 1960 regulating air cargo, and both regulations admit in certain cases the breaking of the carrier’s limitation of liability, we cannot forget that the Montreal Convention is of massive application, and specifically to all air transport between member states of the European Union. Moreover, as Spain is a party to the MC, if the non-EU country of origin or destination of the affected cargo has also ratified it, the transport will always be subject to it.
Therefore, in the absence of a prior express declaration of value with payment of a supplement to cover us to a greater extent in the event of damage/missing cargo, in our experience at AIYON, we consider it highly advisable to insure air cargo, which is not risk-free even at the most secure airports and at the hands of the most prestigious airlines.
We would like to thank the University of Cadiz for their warm welcome to our partners of Aiyon Cadiz and Aiyon Algeciras, who had the honour of being part of the teaching staff of the “Master in Legal Business Consultancy (MAJE)” organized by the Faculty of Law of the University of Cadiz and the University Business Foundation of the province of Cadiz (FUECA).
A Master’s Degree that offers its students the opportunity to broaden and deepen their legal and accounting knowledge in the business world, from a comprehensive, up-to-date and practical perspective, so that they can plan their professional career in the specific field of legal-business advice, and which is taught by renowned professionals with extensive experience in legal-business advice, both from the University itself and from the private sector.
In their classes, our colleagues, Enrique Ortiz and José Antonio Domínguez, have worked with the students on two subjects of great relevance in the field of international trade, such as the international transport contract and insurance in the international market. All this within the rest of the subjects that made up the module entitled “International Dimension of the Company” of which they have been part.
Likewise, Enrique and José have shared with the attendees their long and extensive professional experience, acquired during the many years they have been active in managing matters for all types of clients related to the transport, insurance, and international trade sector, commenting on practical cases and common situations in their day-to-day work in AIYON Abogados.
We are sure that these new generations of professionals will be very well received, and we wish good luck to all of them!
On 17 March 2022, the Official Spanish Gazette (BOE) published the order TMA/201/2022, of 14 March, which regulates the procedure for alternative dispute resolution for air transport users on the rights recognised in the European Union in terms of compensation and assistance in the event of denied boarding, cancellation, or long delay, as well as in relation to the rights of persons with disabilities or reduced mobility, approved by the Ministry of Transport, Mobility and Urban Agenda.
The entry into force took place the day after its publication, affecting those incidents occurring after the first day of the month following the publication of the resolution of the competent authority in the Official Spanish Gazette, accrediting the State Aviation Safety Agency (hereinafter also the Agency) as an alternative dispute resolution entity in the field of air transport user protection.
The Order shall apply to the procedure which the Agency provides for air transport users (whether they are consumers or not) to resolve disputes over the application of the following regulations:
– Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91; and
– Regulation (EC) No 1107/2006 of the European Parliament and of the Council of 5 July 2006 concerning the rights of disabled persons and persons with reduced mobility when travelling by air.
This rule in no way precludes the exercise of the passenger’s right to resort to any out-of-court dispute resolution system accepted by the airline or airport operator.
The procedure shall be free of charge, without prejudice to the assumption of the costs of the tests by the party proposing them. For passengers, voluntary acceptance and non-binding outcome; for airlines, mandatory acceptance and binding outcome; for pre-acceding airport operators, mandatory acceptance and non-binding outcome; and for all other operators, voluntary acceptance and non-binding outcome.
Finally, it should be noted that the Agency’s decision, which will always be reasoned, as mentioned above, will be binding on the airline but not on the passenger, who may bring any civil action he or she may have against the airline.
Our partners Verónica Meana, Mikel Garteiz-goxeaskoa, Jose Domínguez and Enrique Ortiz have collaborated, once again, in the section dedicated to Spanish Law of the Shipping 2022 Global Practice Guide published by Chambers. This publication focusses on practical legal issues affecting shipping in 26 key jurisdictions.
The guide provides information on marine casualties, Owners’ liability, cargo claims, maritime liens, ship arrests, Shipowners’ income tax relief, choice of Jurisdiction and Law agreements, Port State Control matters and in particular the implementation of IMO 2020 on sulphur content of fuel oil, and the implications of Covid-19, among other issues.
Read the AIYON Abogados contribution by clicking on the following link.
We have had the pleasure of receiving “Estrategia Empresarial” in our Bilbao office, a prestigious publication that has been interested in getting to know in depth our activity, our team and our long professional trajectory as legal professionals. They were also interested in interviewing our partner, Zuberoa Elorriaga, in view of her recent qualification as a specialist in Aviation and Space Law, after completing the postgraduate course given by Icade University in collaboration with the Spanish Association of Aeronautics and Space Law (Aedae).
As our partner in Bilbao has rightly stated, at AIYON “we represent and protect the interests of individuals and companies immersed in a particularly complex, dynamic and multidisciplinary framework, which presents all kinds of issues affecting companies, operators, entities or individuals from all perspectives, bearing in mind that the ultimate goal is to comfort our clients by providing the most appropriate response to their query or the most beneficial solution to their problem”.
We would like to thank “The Law Reviews” for allowing us to contribute to the 2021 edition of “The Insurance Disputes Law Review”, a work that we have carried out in collaboration with other prestigious international firms.
This cooperation is being carried out for the second consecutive year and has allowed our partners Verónica Meana and Mikel Garteiz-goxeaskoa to provide a broad and very complete overview of Spanish insurance regulation.
In addition to reviewing the general aspects of insurance and the legal framework, the study has also focused on studying the types of litigation that have increased in Spain in recent months in areas such as: limitation and delimitation clauses of insurance; compensation for loss of profit due to business interruptions due to Covid-19; malice and gross negligence; insurance contracts for large risks and possible negligence in the health sector, among others.
Read the AIYON Abogados chapter by clicking on the following link.
Back in 2019, in our article “Judgement of the Spanish Supreme Court in the Spanair crash case”, we pointed out that the Civil Chamber of the Supreme Court in its judgment of 17 May 2019 no. 1513/2019 settled the question of the evaluation of personal injuries suffered in an air accident, by confirming the criteria of the Provincial Court of Barcelona, judgment no. 165/2016, of 12 July, and determining that, in the absence of regulation for the evaluation of personal injuries caused in aviation accidents, it was more appropriate to provide compensation based on the existing legal scale for personal injuries caused in motor vehicle accidents (RDL no 8/2004, of 29 October, approving the revised text of Civil Liability and Insurance Act in the Circulation of Motor Vehicles).
However, the judgement pointed out that the indicative use of the scale does not prevent the application of corrective criteria according to the circumstances of the sector of activity to which it refers. In the case of an air accident, due to its catastrophic nature and the other circumstances surrounding it, it is reasonable that the compensation resulting from the application of the scale be increased by an additional percentage, which in this case was set at 50 %.
Now, after years of litigation arising from the very serious plane crash suffered by the now defunct airline Spanair in 2008, resulting in the death of one hundred and fifty four people and eighteen injured, the recent Judgment of the Supreme Court no. 901/2021 of 21 December 2021 dismisses the extraordinary appeal for procedural infringement and the cassation appeals against judgment no 5/2018, of 8 January, of the Provincial Court of Madrid, filed by Mapfre Global Risks Compañía Internacional de Seguros y Reaseguros S.A., among others, to confirm that, without prejudice to other possible causes, the accident occurred as a result of an inadequate configuration of the aircraft to perform this maneouver, attributable to the pilot an co-pilot of the aircraft. Likewise, the court establishes hat Mapfre is civilly liable for the damages caused by the accident, as it was the insurer of the company Spanair at the time of the accident.
Furthermore, in line with the above, Judgment no 901/2021 in its Sixth Legal Basis states that, by using as a criterion for compensation the indicative application of the scale in the annex to Legislative Royal Decree no 8/2004, of 29 October, the Provincial Court did not violate the principle of indemnity in the compensation of damages or apply limitations to compensation for death or bodily injury, incompatible with the framework of the Montreal Convention and Regulation (EC) no. 2027/1997, as amended by Regulation (EC) no. 882/2002, of 13 May 2002.
Consequently, the insurer is ordered to pay compensation, the amount of which now exceeds four million Euro.