AIYON Abogados participates in the Special Supplement on Transport and Logistics of El Correo

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On the occasion of the celebration of the “Empack and Logistics & Automotion” trade fair, which will take place at the Bilbao Exhibition Centre (BEC) in Bilbao on 1 and 2 March 2023, the newspaper El Correo has prepared a special on Transport and Logistics with the collaboration of our firm.

AIYON has prepared the article “Why is adequate legal advice necessary for transport companies“, which aims to explain the need for the legal advisor to take an active part not only in the dispute resolution phases or claims that clients may require, but also in the previous phases of consultation, advice or processing. In any case, accompanying the operators in the logistics chain in an active and participative manner, trying to avoid possible setbacks in the development of their work, or to tackle problems, optimising their work as much as possible.

This collaboration is also accompanied by the participation as moderator of our partner from Bilbao, Zuberoa Elorriaga in the round table organised by the Basque Institute of Logistics and Sustainable Mobility (IVL/LEE) for the 2nd of March under the title “Present and Future of Land Freight Transport in the Basque Country”, in which Zuberoa will share space with professionals such as Sonia García – President of ASETRABI, Almudena Palomera – Manager Director at TUBACEX, Iñaki Cepeda – Manager of the GUITRANS Foundation, Inmaculada Ugarteche – Director of UNIPORT and Antonio Jaraices – Director of Organisation, Communication and Corporate Strategy at EUSKOTREN.

The Insurance Compensation Consortium and its Policyholders, with a Special Focus on Inland Road Freight Transport

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In this article we will analyse how the Insurance Compensation Consortium (hereinafter “CCS”) is legally configured, as well as some of the most common cases in which the CCS is related to land transport of goods, delving into the characteristics of the relationship established between the CCS and its insured parties.

The CCS was created in 1954, and is currently defined as a public business entity, framed in articles 103 and following of Law 40/2015, of 1 October, on the Legal Regime of the Public Sector (LRJSP).

Public business entities are public law entities with separate legal personality, their own assets and autonomy in their management. As far as their financing is concerned, article 103 of the LRJSP states that “they are financed with market revenues, and that together with the exercise of administrative powers, they carry out service activities, management of services or production of goods of public interest, which are susceptible to payment”.

In addition, and as a peculiarity, it should be stressed that, although we are talking about public law entities, they are governed by private law. This is stated in Article 104 of the LRJSP, which specifies that “public business entities are governed by private law” and, specifically, it is also regulated in the CCS’s own regulations, in particular in Article 2 of Royal Legislative Decree 7/2004, of 29 October, which approves the revised text of the Legal Statute of the Insurance Compensation Consortium (hereinafter, “Legal Statute of the CCS”). Article 2 which, regarding the legal status of the entity, states: 1. The Consortium shall be governed by the provisions contained in these legal statutes (…). 2. It shall be subject, in the exercise of its insurance activity and, in the absence of special rules contained in these legal statutes, to the provisions of the revised text of the Law on the Regulation and Supervision of Private Insurance, approved by Royal Legislative Decree 6/2004, of 29 October, and in Law 50/1980, of 8 October, on Insurance Contracts. 3. The contracting of the Consortium is governed by private law, (…)”.

If we go to the Legal Statute of the CCS, we find the functions attributed to this public business entity in Chapter III, which is divided into a First Section covering its private functions in the insurance field, and a Second Section containing its public functions. Specifically, it is in the section relating to private functions where we find the different cases in which the CCS can be related to land transport of goods, which are as follows:

  • Compensate damage caused by extraordinary risks, understood as natural phenomena, or derived from events of political or social incidence, on the obvious condition of having subscribed an insurance policy for the persons or goods affected.
    This category would include, for example, all the damage suffered by the different tractor units and semi-trailers of hauliers as a result of the altercations and pickets during the strikes and stoppages of activity in the transport sector in March 2021, and which were about to be repeated in November 2022. These strikes or stoppages would fall under one of the extraordinary risks by being classified as “popular unrest”[1].
  • Assume the compulsory coverage of vehicles not accepted by insurance companies (e.g., those with foreign registration plates), as well as that of public bodies that request it. Also, compensate for damage caused by unknown, uninsured, or stolen vehicles. Think, for example, when there is a non-payment of premiums and the policy ceases to have effect after the legally established period of time[2], whether it is a private vehicle, a semi-trailer, a tractor unit or any other vehicle that causes damage.

Having analysed these two most common cases in which the CCS is related to land transport of goods, we consider it interesting to determine the characteristics of the relationship that the CCS establishes with its policyholders.

In this sense, our highest Court has been concluding since the 1990s that the relationship that exists between the insured and the CCS is contractual, provided that the insured has taken out an insurance policy with a Spanish insurance company under which the insured pays a surcharge on the premium in favour of the CCS. In such cases, the insured will be deemed to have two insurance contracts, one with the Spanish private insurer with which they took out the policy and the other with the CCS. However, both are instrumented in a single contract or policy, which is the one they sign with the Spanish private insurer.

The Supreme Court has also pointed out on several occasions that each of these two contracts has its own content and, as such, is subject to different legal regimes. Even so, the rules of the Insurance Contract Law will always be applicable to contracts entered into with the Insurance Compensation Consortium insofar as they are not provided for in its specific regulation, among others, the insured objects and their situation; the insured sum or the scope of the coverage; the amount of the premium, the surcharges and taxes; or the duration of the contract with expression of the day and time in which its effects begin and end.

Ultimately, a compulsory supplementary insurance contract is established between the insured and the CCS when the various surcharges on the premiums paid for the insurance are credited. That is why, in most cases, the liability of the CCS will be contractual. In the case of road hauliers, when policies are taken out for each insured tractor unit and/or semi-trailer.

In view of the above, we believe that it is absolutely essential for professionals in the transport sector to be aware of the characteristics of insurance policies, taken out directly or via their insurance brokers, and to review them periodically. This is because they contain intrinsic contractual rights and duties, of vital importance, which directly affect them as insured parties.

All of which is recommended in order to ensure better protection of the risks inherent in its activity and of the services provided to third parties in the event that they are affected by claims or incidents.

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[1] Defined by art. 2.1 k). of Royal Decree 300/2004, of 20 February, approving the Regulation on extraordinary risk insurance.

[2] Art. 15 of Law 50/1980 of 8 October 1980 on Insurance Contracts.

Aiyon, taking care of what is important

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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

Irantzu Sedano Speaker at the National Maritime Law Congress

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Once again, this year on 17 and 18 November 2022, the National Maritime Law Congress organised by the Spanish Maritime Law Association was held in Madrid.

AIYON Abogados, in addition to sponsoring the event, has collaborated closely in it, as our colleague Irantzu Sedano had the opportunity to be a speaker at the event with her presentation on the guarantees to be provided in requests for places of refuge for ships that are carried out in Spain.

Irantzu and her other three fellow speakers, Neus León, Carmen Zulueta and María Fernández Llamazares, all members of the Young Lawyers Group of the Spanish Maritime Law Association, through their interesting presentations on the personal guarantees to be provided in maritime navigation, provided us with practical and useful information, and helped us to broaden our knowledge on the subject.

In particular, our colleague’s presentation highlighted the analysis of the real and practical application of the provisions of the regulations applicable in Spain, through the case study of the ship “Modern Express” managed in conjunction with the port of Bilbao.

If you want more information on the guarantees to be provided in refugee applications made in Spain, we recommend that you read our article “On Ports of Refuge”.

On Ports of Refuge

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Vessels in an emergency or dangerous situation while underway, whether due to fire, capsize, explosion, collision, etc., require urgent assistance. This assistance may come from vessels close to the incident, as well as from the rescue teams and coastal state authorities in charge of the area of responsibility for maritime search and rescue (SAR area) in which the vessel is located.

However, once human lives have been saved (always in compliance with SOLAS convention) and the damage and risks have been assessed, the affected vessel will most likely initiate the appropriate procedure to request the ship’s refuge in an appropriate place.

Although historically it has been understood that a place of refuge should correspond to a port, the International Maritime Organisation (IMO) changed this interpretation and broadened the term place of refuge to cover all places where ships in need of assistance can take the necessary measures to stabilise their condition or situation, be they berths, anchorages, ports or any other place.

The procedure for requesting refuge in Spain is relatively simple, and special attention should be paid to the provisions of Royal Decree 210/2004 of 6 February, which establishes a system of monitoring and information on maritime traffic.

The Master of the ship, or alternatively, a representative of the operator or shipping company concerned must submit a request for refuge to the competent authority of the country, in our case the Director General of the Merchant Navy, explaining the reasons why the ship requires refuge.

Once the Directorate General of the Merchant Navy has received the request for refuge, it will convene a technical committee comprising at least of the Maritime Master, the Head of the maritime district, the maritime inspection and safety coordinators and any other persons whose opinion may be relevant to the case; an example would be the local Port Authority in the event that the assessed place of refuge is a Port.

This committee will deliberate and carry out all the investigative acts it deems appropriate and may even go as far as to physically inspect the ship. It should not be overlooked that, in the first instance, the provision of a place of refuge may pose a serious danger, either by causing pollution, port congestion, etc., so all requests for a place of refuge must be carefully considered. On the other hand, it is true that failure to provide the necessary refuge in a timely manner could also lead to the ship’s situation worsening to such an extent that the damage that could have been contained, or at least minimised by the assistance required, would be multiplied. This was the reality in the case of the Prestige in 2002.

The decision authorising access or refusal of refuge may be taken orally without undue formality; however, it must always be communicated to the persons concerned in writing and duly reasoned within a period of less than 96 hours.

Furthermore, practice has shown that authorisation to give refuge to a ship in need of assistance is to a greater or lesser extent subject to the provision of a guarantee. The characteristics of this guarantee are mainly set out in the aforementioned Royal Decree 210/2004 and in the revised text of the Law on State Ports and the Merchant Navy, and as a summary we can highlight the following peculiarities:

  1. When the guarantee is required: The Second Transitional Provision of Royal Decree 210/2004 establishes that the provision of the financial guarantee will be an essential element to be taken into account when authorising the refuge. Furthermore, practice shows that the guarantee is always requested before the ship has been admitted.
  2. Perceptiveness of the guarantee: In this aspect, we can affirm that the provisions of the regulations and the practical reality of refugee applications are contradictory. Although article 22 of RD 210/2004 and article 299 of the revised text of the Law on State Ports and the Merchant Navy suggest that the provision of the guarantee does not seem to be mandatory, the reality is different, as practice shows that refuges are not authorised without the provision of the necessary guarantee.
  3. Purpose of the guarantee: The purpose of the guarantee is clear; it is required to cover possible damage which may be caused to persons, public entities or property of any nature by the ship, its fuel or cargo, as well as to cover expenses incurred in the application of preventive measures.
    The guarantee shall cover all damage caused during the ship’s voyage to or from the place of refuge, as well as during its stay in the place of refuge.
  1. Maximum amount of the guarantee: This limitation cannot be confused with the limits of liability, which will have to be determined in accordance with the regulations applicable to each case.
    Depending on the goods transported, the limits will be one or the other:
    • Goods with the characteristics outlined in Regulation EC/1726/2003 of the European Parliament and of the Council of 22 July 2003. 7,000,000.00 euros for vessels not exceeding 2,000 GT and 10,000.00 euros for each tonnage unit exceeding 2,000 GT.
    • The rest of the goods. 2,5000,000.00 euros up to 2,000 GT and 600.00 euros for each tonnage unit exceeding 2,000 GT.
    Given the urgency of these processes, establishing the amount of the guarantee is very complicated; therefore, the maritime authority concerned usually seeks to be on the safe side by establishing the maximum permitted limit.
    In the event that no damage or costs are incurred in the course of the ship’s refuge, as was the case, for example, of “Modern Express” in the port of Bilbao, the guarantee will not be invoked.
  1. Types of guarantees allowed: Article 22 of RD 210/2004 establishes that a financial guarantee must be provided in favour of the Directorate General of the Merchant Navy at a bank domiciled in Spain, i.e. the General Deposit Fund.

In addition to this, in certain cases, there is a possibility of providing other types of guarantees, such as Letter of Undertaking (LOU) from Protection and Indemnity Clubs (P&I Clubs). Generally, in order to be accepted, the Letter of Undertaking is required to be provided by a P&I Club with an “A” rating, i.e. the highest credit rating.

The acceptance or rejection of this guarantee shall be taken on a case-by-case basis by the relevant authority.

Despite the fact that requests for places of refuge are not very common in the course of maritime navigation or in the day-to-day life of the sector, given their importance and the extremely serious and urgent situations that arise at such times, it is important that maritime lawyers and other experts involved in these operations are properly prepared to deal with this type of procedure. This is in order to guarantee an adequate resolution of these incidents, as well as to provide the best protection to the parties that may be affected.

AIYON Abogados Collaborates with ISEC

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In collaboration with the ISEC (Institute for Cargo Security), our partner in Bilbao, Zuberoa Elorriaga, took part in the III National Congress on Land Transport which took place on the 20th of October at the Centre for Traffic Management and Emergency Coordination of the Basque Country in Bilbao.

The Congress was opened by Ms. Sonia Díaz de Corcuera, Director of Traffic of the Basque Government and was aimed at members of the Local Police, Autonomous Police, Civil Guard and transport inspection technicians from the different Autonomous Communities, in order to provide them with continuous training and learning in the area of land transport, adapting to new regulations.

Together with the great professionals of the sector such as Andoni Gortazar, Francisco Fernández Sasiain and Juan Cantón Revuelto, Zuberoa took part in the presentation on Lashing Techniques, which covered a wide range of content on regulation, methodology, equipment, obligations and responsibilities, providing her vision on the role of the parties to the transport contract, and the best way for the inspection authorities to deal with the imputation of responsibilities or penalties to those involved in the stowage and lashing of cargoes.

AIYON Abogados would like to thank ISEC for giving us this opportunity, as well as for the excellent welcome received at the Traffic Management and Emergency Coordination Centre. We hope this is the first of many collaborations.

On the Collision of the “OS35” and “ADAM LNG” in the Waters of the Strait of Gibraltar

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On the night of Monday 29 August 2022, the vessels “OS 35” and “ADAM LNG” collided during the manoeuvre out of the Bay of the Port of Gibraltar.

What happened was a textbook collision, as there was physical contact between the two ships and certain damage was caused after the collision: ‘Collision is defined as a collision involving ships, vessels or naval craft, resulting in damage to any of them, persons or things’.

In this regard, the Brussels International Convention of 23 September 1910, for the Unification of Certain Rules Relating to Collision, states that its consequence extends: “to compensation for damage which, either by execution or omission of a manoeuvre, or by non-observance of the regulations, a vessel causes to another vessel or to persons or things on board the latter, even if there has not been collision”, demanding as an indispensable requirement to determine that a accident between two vessels is collision, that damage is caused. For its part, the Spanish Maritime Navigation Act of 2014 complements this legal concept, extending its regime to damages produced in navigation accidents in which there has been physical contact or not, such as those that may be suffered in the event of omission or execution of a manoeuvre.

Fortunately, and despite the seriousness of the events, it should be noted that there were no fatalities. The ship that suffered the most damage, the bulkcarrier “OS 35”, ran aground near the port in shallow waters, precisely to avoid putting the safety of its crew at risk, to avoid polluting spills, and to affect the situation of the cargo as little as possible.

Nevertheless, from an environmental point of view, significant risks were caused because, contrary to the initial information given by the “OS 35”, the vessel was indeed suffering from small fuel oil leaks. These leaks, after intense work by experts, were identified and sealed after several days. This situation has undoubtedly also had an impact in Spain, and in particular in the Campo de Gibraltar area.

Although a priori, by analysing the trajectory of the ships involved, it might seem easy to identify who is responsible, it is not always easy to delimit. In those cases, in which the fault is shared by both ships, both the 1910 Convention and the Spanish Maritime Navigation Act provide for a system of graduation of liability; that is to say, a system of graduation in proportion to the degree of fault actually produced by each ship, the only exception being the case in which it is impossible to determine the degree of fault of each party. Only in that case would the presumption of liability of the shipowners in equal shares come into play.

Leaving aside the responsibilities yet to be delimited and possible administrative sanctions that the vessels or their owners may receive, more than a month after the accident we can affirm that one of the most controversial aspects of this incident has been precisely the determination of sovereignty over the waters in which it occurred, which is not clearly defined.

This collision has particularly affected the United Kingdom (Gibraltar) and the Kingdom of Spain, both signatories to the Treaty of Utrecht. The acceptance of this Treaty by both states determines the mutual acceptance that Gibraltar, together with its port (castle, city, inland waters and harbour), are under the sovereignty of the United Kingdom. However, what it does not determine, and what Spain therefore objects to, is that Gibraltar can generate maritime spaces outside its jurisdiction.

But we should not forget that, regardless of which state ultimately determines sovereignty over the waters in which the incident occurred, international law imposes an obligation on both states to cooperate, inter alia to protect and preserve the marine environment (United Nations Convention on the Law of the Sea).

The gas tanker “ADAM LNG” is currently sailing normally after having entrusted its emergency repairs to a Spanish shipyard. However, the vessel “OS 35”, which undoubtedly bore the brunt of the collision, and which has been the subject of full public attention due to its spectacular situation, is still being managed by the Gibraltarian authorities after being sunk and stabilised in a controlled manner so that it cannot move and turn with the waves, the tide and/or the wind. As of today, it remains in position after having discharged all its fuel, as well as the polluting substances it had on board, but there is still much to be done and decided on this collision.

This, however, has reminded us of the relevance and magnitude of merchant ships and their mission, carrying out complex and risky work daily as they sail the world’s waters.

CIP and CIF – INCOTERMS® 2020 and Insurance

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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

Changes in Land Transport Regulations

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On 14 September 2022, the “Organic Law 11/2022, of 13 September, amending the Criminal Code on reckless driving of motor vehicles or mopeds” was published in the Official State Gazette and “Royal Decree 750/2022 of 13 September, amending Article 3 and Annex I of Royal Decree 920/2017 of 23 October, regulating the technical inspection of vehicles“, with entry into force on 15 and 27 September 2022, respectively.

On the one hand, with regard to the amendments to Organic Law 11/2022 amending the Criminal Code in the area of imprudence in the driving of motor vehicles or mopeds, in general terms, it could be said that three new amendments have been introduced with the aim of reinforcing the spirit of the previous reform, that introduced by Organic Law 2/2019, of 1 March, amending Organic Law 10/1995, of 23 November, of the Criminal Code, on the subject of reckless driving of motor vehicles or mopeds and the penalty for leaving the scene of an accident, which provided the criminal justice system with greater legal certainty.

The first modification consisted in the reduction of the fine in the case of causing injuries through less serious negligence, which objectively require medical or surgical treatment of one or two months for their cure.

For its part, the second of the modifications has eliminated the requirement of a complaint by the injured party or their legal representative whenever death is caused by less serious negligence using a motor vehicle or moped, thus converting the offence typified in Article 142.2 of the Penal Code into a public offence.

And, thirdly, it has eliminated the possibility of imposing the sanction of deprivation of the right to drive motor vehicles and mopeds in offences of less serious negligence, stipulating that the imposition of this sanction is mandatory.

On the other hand, in relation to Royal Decree 750/2022 amending Article 3 and Annex I of Royal Decree 920/2017, of 23 October, which regulates the technical inspection of vehicles, two changes are introduced.

The first of these is the transposition into our legal system of the “Commission Delegated Directive (EU) 2021/1717 of 9 July 2021 amending Directive 2014/45/EU of the European Parliament and of the Council of 3 April 2014”, as regards the updating of the designation of certain categories of vehicles and the inclusion of eCall, an in-vehicle emergency system that automatically makes a free emergency call to 112 when a serious road accident occurs.

Finally, Royal Decree 750/2022, in its Single Additional Provision, increases, exceptionally and for a single time only, the period of validity of the next inspection date for vehicles affected by Order SND/413/2020, of 15 May, establishing special measures for the technical inspection of vehicles as a result of the situation caused by Rulings 1237/2021, of 18 October 2021, 1243/2021, 1244/2021 and 1246/2021, of 19 October 2021, of the Third Chamber of the Supreme Court.

AIYON Algeciras Strengthens its Team

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We would like to announce the incorporation of our colleague and lawyer Rocío López  to the AIYON Algeciras team, who will be in charge of the local AIYON office together with the head of the office, José Antonio Domínguez. After spending more than a year collaborating with our entire team from our offices in Cádiz and Algeciras and gaining extensive experience, Rocío has joined our team of lawyers in AIYON Algeciras on a permanent basis.

Algeciras is of great importance as it has the largest Spanish port with a large volume of passenger traffic, as well as all types of goods in bulk and containers, in addition to road traffic. Whether acting as a port of destination or origin, or as a strategic transhipment port, the port is an essential area for the passage of cargo and passengers to and from the mainland and the islands, as well as from all types of locations worldwide.

Therefore, in order to provide the most complete service and confirm its essential position, Algeciras has a large port community of which AIYON Abogados has been a part for years, with a very active presence in associations such as Cádiz-Port or Comport- Algeciras Port Community.

Our new colleague, Rocío López, holds a Degree in Labour Relations and Human Resources from the University of Seville (2016) and a Degree in Law from the University of Cádiz (2020). She also holds a Master’s Degree in Maritime-Port Company Management and Maritime Law from the University of Deusto (2020) and a Master’s Degree in Access to the Legal Profession from the UNIR (2022). Her training includes previous work coordinating services and quality in a company in the maritime-port sector in Algeciras, as well as a subsequent internship in a maritime law firm in Bilbao.

We also take this opportunity to announce the departure of AIYON Cadiz lawyer Encarnación Quevedo who has embarked on a new adventure in the world of administrative law with great enthusiasm, and always with all our support and good wishes. Good luck in this new stage, Encarni!