AIYON collaborates with the ‘Diario del Puerto’ in its report ‘Legal Allies’

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The special report entitled ‘Legal Allies’, recently published by the specialised newspaper of the logistics and transport sector, ‘Diario del Puerto’, has counted on the collaboration of our colleagues Verónica Meana and Zuberoa Elorriaga, among other professionals of the sector.

After analysing the various questions posed to us, which covered different aspects of our work and included our vision for the future in the face of new challenges, we discussed aspects such as the value of advice and prevention in conflict areas, the most common deficiencies and lack of knowledge in the sector, the role we play as lawyers and its importance in the transport sector, as well as the future challenges facing the world of transport, our lawyers provided their perspective, based on their broad and varied experience.

For her part, Zuberoa Elorriaga commented that the lack of the proper coordination and joint vision that should exist between the purchase and sale operation and the subsequent transport operation can give rise to claims and disputes, which could be avoided with good prior advice. We are talking about both the logistics operation and the insurance that accompanies it.

It considers that the transport phase must be highlighted as an essential complement that complements and perfects the sale and purchase from which it derives. Therefore, correct management of routes and delivery times to avoid delays or damage to the goods is essential, a task that always involves a cost if we want to guarantee a correct service at the hands of professionals.

Verónica Meana, in turn, explained that the EU’s growing demands to reduce emissions are forcing the transport sector to look for alternatives, such as the use of electric vehicles or cleaner fuels. All of this is causing concern among operators about the high costs of adapting their fleets, whether by sea, air or land, which will be required by the new regulation.

In addition, she points out that the delay in adopting digital solutions for optimising operations or complying with environmental regulations, and the lack of robustly implemented protocols among employees of transport companies to make them less susceptible to cyber-attacks, are factors that can be improved with good research and planning.

Access to the publication…

WISTA International Holds Successful Assembly in Limasol

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The WISTA International Annual Assembly was held in Limassol (Cyprus) from 9 to 11 October, accompanied by a day of conferences and a day of workshops.

This important international event, which brings together women from all over the world, all of them professionals in different areas of international trade and the world of maritime transport, was attended by the firm’s lawyers, Verónica Meana and Zuberoa Elorriaga.

Our two members, together with the rest of the Wista Spain delegation, enjoyed a sunny few days in the beautiful maritime city of Limassol, during which they were able to share knowledge and experiences with international experts in all kinds of areas. In its 50 years of existence, Wista International has proved to be the perfect platform for promoting contact between professionals worldwide, while at the same time reinforcing the role of women in the maritime and transport world, a role that is continually growing.

We would like to thank Wista International and Wista Cyprus for their incredible welcome, which has made Veronica and Zuberoa feel all the WISTA energy.

Next year it’s Wista Spain’s turn, so we hope to see you all in Barcelona!

AIYON Abogados, a Decade at the Service of Maritime and Transport Law

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‘El Canal Marítimo y Logístico’ took advantage of the celebration of the annual meeting of AIYON Abogados S.L.P. to meet in Bilbao with the five partners of the firm. Close to celebrating 10 years in the market, each of them pointed out the strengths of their multidisciplinary team of lawyers, as well as the different challenges they face on a daily basis from their offices located in Madrid, Cadiz, Bilbao and Algeciras.

We invite you to rea the article in its entirety from the link at the end of this article, highlighting below some of the statements made by the partners.

As expert lawyers in chartering and leasing of vessels, both for general cargo and project cargo, AIYON has also been specializing in off.shore construction projects. In this regard, AIYON’s partner in Bilbao, Mikel Garteiz-goxeaskoa, states, ‘This experience has given us the opportunity to assist from our Bilbao office local companies such as SAITEC Offshore Technologies, S.L., in projects as innovative as the launching and installation of its DemoSATH floating offshore wind platform in the BIMEP test area (Armintza), in the open sea two miles off the coast, and in waters 90 meters deep, as AIYON aspires to be a benchmark for companies operating in this sector due to its in-depth knowledge of Maritime Law in all its areas’.

With regard to the specific offshore wind sector, Mikel Garteiz-goxeaskoa highlights the firm’s strengths: ‘In addition to our knowledge and experience, we also have a large international network of collaborating lawyers, also specialized in these matters, mainly from the United Kingdom and Northern Europe. This allows us to rely at all times on up-to-date professionals in their respective jurisdictions to resolve any issued that may arise in the negotiation of the contracts concerned.’

When asked about their latest performances in Madrid, the firm’s partner, Verónica Meana, points our that: ‘We have recently seen in the office a notable increase in the number of cases that are resolved in institutional arbitration in these matters, either under CIAM or ICC rules, compared to the percentage of cases that go to court, which is still higher. This increase, although independent, runs parallel to the firm’s involvement in the Maritime Law working group within the Spanish Maritime Law Association in collaborating with CIAM, in an effort to promote maritime arbitration in Spain as an efficient and quality alternative means of dispute resolution.’

AIYON’s involvement in the teaching and preparation of the new generations is part of its hallmark, a fact that Verónica wants to highlight: ‘On the other hand, form Madrid, as from the rest of our offices, we continue to contribute to the teaching of maritime law. In my case, participating as a lecturer in the Master’s degree of both the IME (Spanish Maritime Institute) and the ISDE (Higher Institute of Law and Economics) in the subjects of maritime law and land transport.’

‘In Aiyon we know what it means to be at the side of both maritime and land carriers on a daily basis’, says Enrique Ortiz, partner of the Cadiz office. ‘And we know what it is like to be there for them both in normal circumstances and in urgent situations that require quick action (such as refusals of delivery by receivers, accidents, blocking of the means of transport by the authorities, etc.). What’s more, in exceptional circumstances, such as during the Covid confinement period or during the road transport stoppages and strikes that took place throughout the country between March and April 2022, our customers have always been able to counts on us.’

In fact, the situation in times of strikes and stoppages in the transport sector was not easy for the companies dedicated to land transport, and many of them, due to the convulsions of the time, even suffered damage to their vehicles caused by a group of people who, in favour of the strike during those dates, ‘took it’, in an absolutely vehement manner, against the vehicles in question. In relation to these events, which occurred to a significant number of road haulage companies and vehicles, Enrique can confirm that AIYON has recently managed to obtain, for one of its clients, a favourable ruling in the first instance, subject to appeal, against the Insurance Compensation Consortium, ensuring that concepts such as ‘riot’ and ‘extraordinary risk’ are not emptied of content, thereby rendering ineffective the coverage of claims that correspond to the Insurance Compensation Consortium. Let us not forget that the Consortium collects part of the premiums that insured hauliers pay to their insurance companies.

Asked about the great activity of the Port of Algeciras, our partner in the location, José Domínguez, tells us: ‘The port of Algeciras occupies a pre-eminent position within the Spanish port system. From our office in Algeciras, we provide ‘dockside’ assistance to shipping companies that provide passenger and goods transport services, both containers and roll-on/roll-off cargo in the Strait of Gibraltar, constantly advising not only in the day-to-day handling of all types of cargo and passengers claims, but also in the planning and management phases of the shipping companies to face challenges such as those of the so-called Operation Crossing the Strait (OPE). To this end, we regularly advise on charterparties, slot charters, shipbuilding and ship repair contracts, ancillary contracts and agreements such as stevedoring, confinement, etc. This is a part of the business that I particularly enjoy, as my background as a merchant seafarer is of great help to our clients, as I speak the same language as they do.’

Another of the most important traffics of Algeciras is the supply of fuel to ships, the so-called bunkering. Domínguez indicates in this respect that: ‘Algeciras is one of the most important bunkering ports in the Mediterranean. The maritime traffic through the Strait of Gibraltar, together with the magnificent anchorage of the port, make our port especially attractive for this type of operations. The figures that are handled are very relevant, close to 350,000 tons of oil products to ships, at a rate of approximately 200 ships supplied per month by a fleet of more than 15 barges of different sizes.’

For her part, Zuberoa Elorriaga, AIYON partner in Bilbao, points out that, in their almost 10 years as active partners, the common effort and trajectory has brought them together, allowing them to learn from each other: ‘Together with the rest of the firm’s staff, we form a close-knit team that encourages cooperation between offices and lawyers. It is not an easy sector as we face different challenges every day, with often complex cases and different actors involved, so the best way to work is to support each other and share experiences, which will always result in a better service for our clients.’

Finally, Zuberoa makes special mention of the continuous learning that the firm’s team is committed to pursuing, proof of which is the Postgraduate Course in Aeronautics and Space Law at the Faculty of Law (ICADE) of the Universidad Pontificia de Comillas, which she completed in 2021, opening up new areas of activity for the firm.

Listening to its partners, it is clear that in Aiyon Abogados they face this first decade of work and common effort as the beginning of a long and productive professional career looking to the future with optimism.

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Irantzu Sedano represents the Bar Association of Bizkaia in the 5th International Human Rights Public Speaking Competition for Young Lawyers, organised by the FBE in Gdansk (Poland)

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From 5 to 7 September 2024, our colleague Irantzu Sedano participated in the ‘5th International Human Rights Public Speaking Competition for Young Lawyers’, organised by the European Federation of Bar Associations in Gdansk, Poland.

Showing its commitment not only to the legal field but also to the defence of fundamental values at the international level, the FBE brought together young lawyers from all over the world to discuss human rights and their relevance and impact at the international level.

In her speech, Irantzu highlighted the impact of maritime transport on climate change and its direct relationship with fundamental rights. She emphasised how global warming, exacerbated by emissions from freight transport, affects, in many cases disproportionately, the most vulnerable communities, thereby compromising essential rights such as access to life, health and housing, and then she linked this issue to new European environmental legislation, in particular the ‘EU Emission Trading System’ and the ‘Fit for 55’ legislative package. Legislation that seeks a phased decarbonisation of the maritime sector, and which is being criticised and praised in equal measure.

Irantzu underlined that these regulations, although ambitious and necessary, also face important challenges in their implementation, especially in terms of port infrastructure and competitiveness of European companies.

This is not the first event of international scope in which Irantzu has made her mark. In 2023 she also had the opportunity to participate in the ‘Contracts Competition’, a leading meeting for young lawyers specialising in commercial law and contracts, held in Lisbon, which demonstrates our strong commitment to the The Bar Association of Bizkaia, where part of our team, including Irantzu Sedano, actively participates in the ‘Maritime Law Commission’ and the ‘International Relations Commission’.

Without a doubt, participating in these events allows us not only to exchange knowledge with other professionals from around the world, but also to gain new perspectives on the global challenges facing the legal sector, thus enriching our professional vision and experience in different global discussion forums.

All of which is a reflection of the firm commitment of Aiyon Abogados with the continuous training of its lawyers and the expansion of its international relations, both essential pillars for the good development of our work, especially in a sector that is so globalized and in constant change as the logistics and transport sector.

AIYON present at SMM HAMBURG 2024

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Our colleagues in charge of the Algeciras and Cadiz offices, José Dominguez and Enrique Ortiz, represent AIYON at the ‘SMM Hamburg 2024’ fair, which is held in the Hamburg Messe congress hall in Hamburg (Germany).

The ‘SMM Hamburg’ is considered the largest trade fair for the maritime industry, specialising in shipbuilding, machinery and marine technology. This biennial fair has a great international impact, bringing together a wide and varied public (shipowners such as shipping companies, shipyards, auxiliary industry and also the offshore wind sector, etc.), which has been growing in recent years, bringing together this year in the city of Hamburg 40,000 participants from more than 120 countries.

From 3 to 6 September, more than 2,000 companies will be presenting state-of-the-art technologies and services, with workshops, symposia and conferences covering all types of topics related to the maritime industry.

We look forward to seeing you in Hamburg!

AIYON participates in Piraeus (Greece) in the symposium on “Geopolitics, Climate Change and Regulations: The importance of Shipping Straits in the Global Maritime Activities and Markets”

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On their recent trip to Piraeus (Greece), our colleagues from the Algeciras and Cadiz offices had the pleasure of taking part in the symposium entitled “Geopolitics, Climate Change and Regulations: The importance of Shipping Straits in the Global Maritime Activities and Markets”, organised by the companies DINO THEO ATLANTIS M.C., SL and MARGI MARINE.

At the event, José Antonio Domínguez and Enrique Ortiz not only had the opportunity to share experiences and knowledge with the many attendees and speakers, all of them operators in the maritime sector in Piraeus, including shipowners and P&I clubs, but also, on behalf of our firm, José Antonio Domínguez had the honour of participating in the event as a speaker.

Together with Ms. Marilena Orfanides, founding partner of Coventinay and responsible for analysing the main consequences of the geopolitical events, Mr. John Ghio, CEO and Captain at Gibraltar Port Authority, and the directors of the organising companies, Mr. Dino Dritsakis CEO of Dino Theo Atlantis, and Mr. Evangelos Georgoulis, Managing Director of Margi Marine, our colleague José took part in the presentations, explaining to the large audience the Spanish perspective in relation to the Paris MoU, as well as the ship inspections or “Port State Control” carried out in Spain. We are well acquainted with the scope of this matter due to the many matters we handle in the firm related to ship inspections carried out by the Spanish maritime authorities, as well as for handling the varied and always complex administrative sanctioning proceedings that are brought against ships and their owners.

The panel in which we were honoured to take part, coordinated by Ms. Anastasia Vamvaka of Forbes magazine, was part of the “Posidonia International Shipping Exhibition 2024”, and featured a special performance by the renowned Greek singer Peggy Zina (https://event.dtatlantis.com/).

AIYON would like to thank the organisers and the attendees for the warm welcome our colleagues received at this interesting and relevant event, which has helped us to strengthen our ties with the Greek maritime community, as well as to meet new operators in the sector.

Mechanisms to Protect Against the Risk of Non-Payment by Shipyards and Shiprepairers

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I. Introduction

In any commercial or industrial activity involving the exchange of goods or services, there is a risk for the supplier that he will not be paid for his goods or services. To avoid these risks, market operators can take appropriate contractual measures or assert the rights that the legal system, the law, grants them.

The risks of non-payment are not particularly higher in the shipbuilding or ship repair sector than in any other sector under consideration. However, due to the type of asset on which the entire maritime shipbuilding or ship repair business is based, the ship, sometimes under foreign flag and ownership, protection against such risks of non-payment deserves special attention.

Many shipowners are organised under single-ship corporate structures, which means that with the vessel gone, the shipping company is undercapitalised and collection of claims against it becomes impossible.  The mobility of ships, which can easily change jurisdiction, can also add complexity to the recovery of claims in cases where there are no other known assets of the shipping company in the jurisdiction where the shipbuilder or ship repairer operates.

In order to protect their interests, both shipbuilders and ship repairers can implement contractual mechanisms that best protect their claims. There are also legal mechanisms that the legislation provides to these operators with the same protective purpose. In this article we will try to explain some of these mechanisms.

II. Contractual Mechanisms:

When we talk about contractual mechanisms, we refer to preventive measures that can be agreed in shipbuilding or ship repair contracts. There is no legal limitation to adopt this type of contractual covenants, so the will of the parties and the creativity of their legal advisors are the limit. The most common mechanisms that shipbuilders or ship repairers usually adopt are:

(a) Advance payments:

The provision of funds by the shipowner prior to the execution of the work is a common preventive solution to ensure that the shipbuilder or repairer has the necessary resources during the shipbuilding or repair process.

Most commonly, milestone payments are agreed. Through this mechanism, the shipowner makes advance payments based on the achievement of milestones during the construction or repair process, ensuring that the operator receives funds as the work progresses.

This system usually involves the issuing of refund guarantees by the builder/repairer in favour of the shipowner in case the work for which the latter has made the advance payment is not executed as agreed.  The mechanism therefore has a banking/financial cost for the shipbuilder/repairer.

(b) Requiring Sureties or Enforceable Guarantees:

Payment guarantees are another effective form of protection for shipbuilders and ship repairers.  Through this mechanism, the shipowner provides the shipbuilder/repairer with a separate payment guarantee, so that in the event of non-payment by the shipowner, the guarantor, under the guarantee contract, is obliged to make payment on first demand. The most common guarantees are:

  • Bank Guarantee: In this case the guarantor is a bank that will issue a guarantee on first demand in the event of non-payment and up to the agreed monetary limit.

If certain requirements are met, this type of bank document is directly enforceable before the Spanish courts.  The cost of this banking instrument is generally borne by the shipowner.

  • Personal Executive Payment Guarantee: With due formalities, this instrument functions in a similar way to a bank guarantee. In this case the guarantor is a natural or legal person whose solvency is known to the constructor/repairer. By means of this guarantee this person guarantees with his present and future assets the non-fulfilment of the payment obligation by the shipowner.

(c) Retention of Ownership of the Ship.

Finally, we would like to comment on this mechanism of retention of ownership of the ship until the shipowner pays the price. Due to its nature and operation, this contractual solution is reserved for shipbuilders, as it will be difficult or impossible for ship repairers to implement.

It involves retaining ownership of the vessel built until full payment by the shipowner. So that in the event of non-payment the shipbuilder can sell the ship to the highest bidder in order to collect the amount owed. If the market value of the ship is less than the price owed by the shipowner, the contractual arrangement should provide that the shipbuilder will continue to have a claim against the shipowner for the remainder.

In order to guarantee its effectiveness and proper operation, it is advisable to register the construction project in the name of the builder. In this way, if the shipowner’s non-payments are widespread, the registration of the ownership of the project in favour of the builder will prevent third party creditors of the shipowner from enforcing their claims against the vessel.

III. Legal Measures.

Spanish legislation provides shipbuilders and ship repairers with additional mechanisms that they can articulate without having to expressly agree on them. These mechanisms are mainly the following:

(a) Retention of possession of the vessel.

Article 7 of the International Convention on Ship Mortgages and Privileged Maritime Claims 1993 together with section 139 of the Shipping Act 2014 enables the builder and repairer of a ship to retain possession of the ship until they are paid what is due to them in respect of its construction or repair.

Certain requirements must be met:

  • In order to be retained, the ship must be in the possession of the shipbuilder or repairer. That is, the detention must operate prior to delivery and as long as the ship is on the premises or in the possessory custody of the shipbuilder’s or repairer’s personnel.
  • Retention is to be exercised for claims arising from the shipbuilding or ship repair contract, not for other claims.
  • The vessel that has generated these unpaid claims should be retained, not against another vessel.

It is important that all these requirements are scrupulously respected, otherwise there is a risk of improperly exercising the retention, which could lead to civil and even criminal liability.

Certain rules of the Civil Code apply to this lien which result in a lien on the ship. Some authors therefore argue that the shipbuilder or repairer of the ship can ask for the ship to be sold at public auction once the shipowner’s obligation to pay has expired. Thus the measure is sufficiently effective to persuade a shipowner to pay.

The Maritime Navigation Act 2014 only states that, if the compulsory sale occurs while the ship is retained by the shipbuilder or repairer, ‘the latter shall deliver possession of the ship to the buyer, but may obtain payment of his claim with the proceeds of the sale after satisfying those of the holders of maritime privileges… and before mortgage claims and other registered or noted encumbrances’. Thus, the shipbuilder or ship repairer will have preference of collection over ship mortgages and ordinary creditors, but not over privileged maritime claims (accruals in favour of the crew, compensation for death or personal injury caused by the ship, prizes for maritime salvage, port and pilotage fees and material damage caused by the ship due to non-contractual fault).

Since possession of the ship is a prerequisite for the lien, once the ship is delivered the lien and its collection preferences are extinguished.

(b) The Preventive Vessel Attachment:

The freezing of ships is a legal tool that enables the shipbuilder or repairer to secure the immobilisation of a ship wherever it is located in order to guarantee the collection of his claim.

This precautionary, preventive and urgent judicial measure can also be qualified as a burdensome measure due to the economic damage it can cause to the operator of the vessel, such as delays in its navigation, unforeseen costs due to its stay in a port, etc. It can also be a costly measure for the person requesting the seizure if it is wrongly or improperly proposed.

This measure is regulated by the International Convention on Arrest of Ships (Geneva 1999), the LNM and the Spanish Civil Procedure Act.

The immobilisation of the ship may be replaced by the provision of security by the shipowner/shipowner to the seizing court, since the ultimate objective of the attachment is to ensure the effectiveness of a subsequent judgment on the merits of the claim (‘maritime claim’) and thus to guarantee the creditor/shipper the possibility of enforcement.

In the event that the lien is unjustifiably or improperly applied for, the shipowner/shipowner of the vessel is entitled to claim any damages resulting from the lien.

The requirements are as follows:

  • Allegation of a ‘maritime claim’: The list of so-called ‘maritime claims’ is contained in Article 1(1) of the 1999 Geneva Convention, which includes, in paragraph (m), shipbuilders‘ or ship repairers’ claims;
  • attachment of the ‘offending ship’: attachment of the ship causing the claim is permitted provided that the person who was the owner/bareboat lessor of the ship at the time when the claim arose is still the owner/bareboat lessor at the time the attachment is requested. Under certain conditions it also provides for the possibility to seize other vessels owned by the person liable to pay (‘sister ships’).
  • the obligation for the attaching creditor to deposit a security: its purpose is to guarantee that in the event that the attachment is improperly requested, the damage caused to the shipowner/shipowner can be economically alleviated. At present, the minimum amount for this security is 15% of the alleged claim.
  • Where the application for attachment is made as an interim measure prior to the filing of the claim on the merits, it will lapse if the builder/repairer fails to commence proceedings on the merits before the competent court within the time limit set by the attaching court.

In short, this is a very effective precautionary measure that allows the builder or repairer to obtain sufficient security for his claims.

IV. Conclusions

It is a fact that shipbuilders and ship repairers face risks of non-payment by shipowners in their day-to-day business.

To protect against this risk there are a variety of solutions, both contractual and legal, which it is always and in any case advisable to bear in mind in order to minimise the risks to which builders and repairers are subject, all the more so when we are talking about foreign vessels and shipowners without a presence in our territory with complex corporate structures.

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Damages in Maritime Project Contracts: The “Knock for Knock” RULE; when negligence does not matter

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In both project cargo shipping and offshore installation projects (offshore wind, oil & gas) it is crucial to understand the rules governing liability in the event of damage, the fundamental principle being the “Knock for Knock” (“KFK”) rule.

While in some contracts (HEAVYLIFT) the negligent party is liable for damages, in other contracts – HEAVYCON, PROJECTCON, SUPPLYTIME – the rule is that each party to the contract is liable for its own damage to its property and/or its personnel, even if caused by the negligence of the other party. Negligence does not matter; this is what the KFK rule summarises.

Example: Under HEAVYCON, the project cargo suffers serious damage due to the negligence of the shipowner, and an operator of the charterer is injured. Under the KFK rule, the charterer cannot claim damages from the shipowner. Moreover, if the charterer’s operator sues the shipowner, the charterer must indemnify him, even if the shipowner was negligent. This rule is reciprocal, if the damage was to the ship due to the charterer’s negligence, the shipowner should bear the cost of the damage.

The “KFK” rule was developed in London during World War II when, in response to the threat of German U-boats, British ships sailing in the dark with all lights off increased the incidence of collisions between ships. To avoid costly and protracted litigation for damages, operators accepted the KFK principle. This rule has been taken up by the offshore and project cargo shipping industry.

To cover these damages, each party must take out own damage and/or liability insurance. High excesses expose the operator to a high risk, therefore we recommend negotiating to exclude the KFK rule for the first tranche of damages, the equivalent of the excess.

In conclusion, operators in the maritime project sector should be aware of this KFK rule by taking advice to cover their risks.

The LEGAL 500″ and “CHAMBERS & PARTNERS” guides endorse AIYON Abogados’ good work

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Once again, Aiyon Abogados has been highlighted as one of the best maritime law firms in the Spanish market by both Chambers and Partners  and The Legal 500 in their respective 2024 Guides. Our clients have recognised the adaptability and efficiency of the team and its extensive experience in dispute resolution, contract drafting, maritime accidents, pollution, shipbuilding, maritime claims, etc.

During direct client surveys, our clients have highlighted that Aiyon’s lawyers “are client-oriented with a service that goes beyond the legal advice” offering “quick responses and analytical advice and guidance”. “The broad knowledge and set of different personalities at the law firm maintain a solid basis for sharp and tailor-made legal advice“.

On an individual level, Verónica Meana and Mikel Garteiz-goxeaskoa have also been included, once again, in the rankings of the 2024 Guide of both publications as outstanding professionals for their recognised experience and prestige, in which they have been appearing for years, highlighting that Verónica “is very reactive, available and efficient” and Mikel “is a great professional with deep knowledge of the subject matter“.

We would like to thank all our customers for their comments and trust. It is our customers who make us want to improve every day.

The Abandonment of Containers in Maritime Traffic

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A recurring problem in maritime transport is the abandonment of containers loaded with goods.

When the consignee of the goods does not come to collect them after having been requested to do so as the authorised party, shipping companies are faced with a series of costs such as delays due to the occupation of the container with other people’s goods, the storage of the container or the internal transport costs of the container.

In this situation, there are two possible solutions: to initiate a procedure for abandonment and auction of the cargo by the competent customs office, or to initiate a notarial procedure for the deposit and sale of the goods.

Abandonment proceedings initiated by the Customs Department

In order to initiate this procedure, a declaration of abandonment must first be issued by the competent customs administrator and the following rules must be complied with.

As soon as the goods are in a situation of abandonment, in accordance with the provisions of Article 316 of the Decree of 17 October 1947 approving the revised and amended text of the General Customs Regulations, a file is opened, headed by the written declaration of the interested party or by a statement of the facts justifying the abandonment. Within a maximum of 5 days from the opening of the file, the goods shall be examined and, after hearing the second head of customs, the administrator shall decide whether or not the abandonment is admissible.

This decision shall be notified to the person concerned with the goods, if known, and he shall be given a period of 5 days in which to accept or contest it.

If the person concerned is not known, the decision is published in the BOP and on the notice board of the customs office, and a further period of 5 days is granted for the submission of any objections. At the end of this period, the file is sent to the General Directorate of Customs for a decision.

If abandonment is finally declared, the administrator seizes the goods on behalf of the Treasury, which sells them by public auction.

From the proceeds of the sale, customs duties, fines, storage and warehousing costs and any other costs relating to the goods shall be deducted in order. Freight and the costs of loading and unloading the goods may then be deducted and, after the above deductions have been made, the balance, if any, shall be paid tothe Public Treasury as abandoned goods.

Notarial Deposit and Sale of Goods Procedure, regulated in Law 14/2014 on Maritime Navigation (Article 513 ff.)

This procedure for the deposit and sale of goods, regulated in Law 14/2014 on Maritime Navigation (articles 513 et seq.), may be initiated when the law applicable to the charter party of the vessel authorises the carrier to request the deposit and sale of the goods in cases where the consignee does not pay the freight or does not appear to collect the goods transported (containers and their contents).

In order to initiate the procedure, the interested party must indicate the transport in question and provide a copy of the Bill of Lading (B/L); it is also necessary to identify the consignee, the freight or expenses claimed, the type and quantity of goods and an approximate value of the same.

Once the application has been accepted, the Notary will request payment from the addressee, unless the title is not nominative, in which case payment will only be requested if the applicant so wishes and designates a person to do so.

If the addressee is not found within 48 hours, or if the addressee does not pay, the notary will order the goods to be deposited.

Once the goods have been deposited and the depositee has been appointed,

the notary shall authorise their valuation and sale by a specialised person or body or by public auction; the amount obtained from the sale shall be used first to pay the deposit and the costs of the auction, and the remainder shall be delivered to the applicant to pay the freight, or expenses claimed, and only up to that limit.

However, if the holder of the goods objects to payment at the time of the summons or within 48 hours thereafter, the remainder of the sale proceeds shall be deposited pending the outcome of the case. In this case, the holder must initiate legal or arbitration proceedings before the competent court. If the action is not brought within the time limit set, the Notary will return the balance to the claimant in payment of the freight or expenses claimed and up to that limit.

Finally, if the deposit has been avoided or cancelled by the provision of sufficient security by the addressee, the latter must file an action within the time limit. If he fails to do so, the notary will order payment of the claim from the security provided.

Since the notarial procedure involves costs (notary, expert opinions, etc.), it is not advisable for goods of low value, in which case it is preferable to use the customs abandonment procedure.

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