AIYON visits the Port of Baiona and meets with the French association of transporters O.T.R.E.

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We would like to thank the Chamber of Commerce of Baiona for the excellent welcome we received during our visit to their port facilities on Wednesday 15th, a port that is currently undergoing a process of intense growth following the approval of important investments, which will greatly improve the area and will undoubtedly attract more traffic.

Zuberoa Elorriaga, from AIYON Bilbao, together with Sonia García acting as President of the Transport Business Association of Bizkaia (ASETRABI), met yesterday, Wednesday, with the commercial manager of the port of Baiona, Mr. Joxan Madinabeitia, who, as representative of the Chamber of Commerce and Industry of Baiona – Basque Country (CCI Bayonne Pays Basque), is working to establish a better understanding in cross-border logistics and wants to promote the possibilities of collaboration between companies and associations on both sides of the Basque-French border.

After visiting the port and getting to know the local traffic, the three of them had the opportunity to enjoy an interesting lunch with Mrs. Caroline Auge, head of the French hauliers’ association O.T.R.E. for the 64th (Pyrénées-Atlantiques area) and 40th (Landes area) departments. O.T.R.E. is the French representative organisation for small and medium-sized transport companies in France, grouping together more than 3,000 companies and 75,000 employees, and since 2021 it has been a member of the European Road Hauliers Association (UETR).

This lunch allowed them to share and discuss the realities experienced in each country in relation to road transport, as well as the new regulations being promoted by the European Union. Both associations considered this visit a good opportunity to establish the basis for future collaboration, with AIYON’s support and legal assistance when required by the heads of the associations or their members.

It should be recalled that AIYON is the firm of reference for ASETRABI and its associates in the areas related to land transport, insurance and other matters involved in its activity.

Royal Decree-Law 14/2022 of 1 August and its Most Significant Developments in the Field of Land Freight Transport

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As reflected in the Preamble of Royal Decree-Law 14/2022, of 1 August, on economic sustainability measures in the field of transport, in terms of grants and study aids, as well as measures for energy saving, efficiency and reduction of energy dependence on natural gas (hereinafter RDL 14/2022), the land freight transport sector in Spain is made up of small companies (53% of companies with heavy goods vehicles have only one vehicle), which exacerbates the difficulties that small road transport operators may have in adapting to scenarios in which sharp increases in transport costs occur unexpectedly and unpredictably (such as fuel, due to inflation and the war in Ukraine, or tyres and spare parts in general). This calls for greater intervention by the public authorities to guarantee the proper functioning of an activity that represents around 2% of Spanish GDP.

It is for this reason that on 2 August 2022, RDL 14/2022 came into force, which came to modify precepts of the national land transport of goods regulations such as Law 15/2009, of 11 November, on the Contract of Land Transport of Goods and Law 16/1987, of 30 July, on the Organisation of Land Transport.

Title I of RDL 14/2022 refers to land transport measures, and with the legislator’s objective in mind of guaranteeing that the price of transport be higher than the actual individual costs and expenses borne by the carrier, it has been considered necessary to require written documentation of transport contracts for a single consignment made with the actual carrier, provided that these exceed 150.00 euros, as well as of those contracts for continuous transport.

Similarly, it is now required that the transport price with reference to the related costs be expressly stated in the transport document, requiring that the transport price be equal to or higher than the actual individual costs incurred by the carrier (art. 1 RDL 14/2022 amending art. 10 bis Law on the Contract of Land Transport of Goods referring to the transport document in contracts concluded with the actual carrier).

This reformed article 10 bis of the Law on the Contract of Land Transport of Goods states that, in order to determine the actual cost of transport, it is possible to “take the time reference that best suits the carrier’s forecasts and business strategy”; in other words, a fairly flexible criterion has been chosen that allows the carrier to vary and adapt the cost of transport to the circumstances of the moment, or if desired, to the prices of the moment, and thus reflect it in the consignment note.

To translate the above into the daily practice of hauliers, and to know which costs can and cannot be included in the transport documents, we must refer to the new ninth additional provision of the Law on the Contract of Land Transport of Goods introduced by RDL 14/2022. This states that, in order to determine the actual individual cost of transport provided by the actual carrier, the cost item structure of the observatory of road freight transport costs drawn up by the Ministry of Transport, Mobility and the Urban Agenda will be valid. This cost item includes:

  • Depreciation costs of the different elements (tractor units, trailers, semi-trailers and auxiliary equipment);
  • Annual financing costs of the different elements purchased;
  • Costs of driving personnel;
  • Vehicle insurance costs;
  • Tax costs;
  • Fuel costs;
  • Urea dilution costs;
  • Tyre, maintenance and repair costs;
  • Driver’s per diem costs;
  • Toll costs;
  • Indirect costs that can be passed on to each vehicle (such as fleet management software).

Consequently, we would recommend that all land transport operators have these costs perfectly identified in a general way for their entire fleet (pro rata for each vehicle) and that, subsequently and for each specific transport, they take “the time reference that best fits the carrier’s business strategy and forecasts” and adapt these costs, as if they were a tailor-made suit, in order to reflect them in the consignment note and ensure that the price they will finally charge for the transport is higher than the costs and expenses of the transport.

Finally, it should be noted that, if these costs are not reflected in the consignment note, in accordance with Article 13 of the Law on the Contract of Land Transport of Goods, this absence or irregularity in the consignment note provided for in Article 10 bis does not render the contract non-existent or null and void, and that the omission of any mention of Articles 10.1 and 10 bis.1 does not render the consignment note ineffective.

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.

How Does Illegal Drug Trafficking Affect Transport?

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The most common way to bring illegal drugs in a country is by using the most common means of transport, such as airplanes used for air traffic, trucks used for land transportation, and ships used for maritime traffic.

When we think about how the entry of these illegal drugs can be developed in such a way that they cannot be detected in the transport from one country to another, in some cases it requires the active participation of the passengers and their luggage as essential elements that help the traffic, but in other cases the illegal cargo is hidden in containers or trailers, together with other regular cargo, in order to facilitate its transit. But there is an increasingly common phenomenon that we have been able to deal with at AIYON, which consists of the introduction of drugs hidden in the means of transport itself.

In their case, road haulage companies, especially those operating routs from Africa to Spain via the Strait of Gibraltar, face the increasingly common risk of having drug bales hidden on the outside of their trucks, specifically in the underbody, without the haulage companies or drivers being aware of it.

This operation seems to be carried out relatively easily and quickly, as the ways of placing the drugs range from fastening them to the axles of the truck with clips to placing them with magnets attached to the chassis, so that the illegal packages can be placed during any stop or rest of the driver’s journey. Although the truth is that sometimes it is not even necessary for the driver to be absent from the truck, as even when he is in the cabin, he may even not notice that there is someone under the truck (a phenomenon that also occurs when stowaways are transported).

It would be logical to think that, since it is the outside of the truck, a place in the vehicle to which anyone has access, the driver should not be held responsible until it is proven that he was the one who placed the drugs there or knew about their placement when transporting them, but the reality in the courts is quite different.  In fact, there are quite a few proceedings for crimes against the public health against truck drivers in which, after a routine inspection at border control, bundles of drugs are found and the drivers are finally convicted, even if it is not proven that they were the ones who placed the drugs there.

With regard to ships, the same problem can be detected when bales of up to 600 kilos are placed on the outside of a ship, attached to the hull below the waterline. Bales that require a complex operation, as it is divers who, at the port of origin, introduce the package into certain cavities of the ship so that they can face a sea crossing of several days and be picked up at the port of destination by other divers, without the shipowners or the crew having to be aware of it. It is a reality that there are certain ports around the world that require ships docking in them to carry out anti-drug inspection before putting to sea.

Once the problem has been detected by the police, the regular procedure carried out in the case of land transporters (whose involvement in the criminal act is often questioned more than in the case of shipowners) is to arrest the transporters allegedly involved and bring them before the police, and to proceed to the provisional weighing of the drugs by the police.

If after the provisional weighing, the quantity of drugs seized is considered notorious, the prosecutor will assess whether there is a risk of flight, the possibility of destruction of evidence and/or re-offending; having assessed this, he will draw up a report in which he will propose the measures he considers appropriate, including provisional imprisonment if necessary.

After an appearance in court on the tenth day and based on the weighing of the drugs, either Urgent Proceedings are initiated, i.e. without an investigation phase and with the possibility of an agreement with the prosecutor to pass sentence in the Examining Court, or Preliminary Proceedings in the event that they are requested by the prosecutor, issuing an Order for Abbreviated Proceedings in which a time limit is given for the written pleadings and defence. Finally, the Criminal Court, by means of an order, will admit or reject the evidence and set the date for the trial, with a subsequent sentence.

In view of this, surely the best advice we can give to carriers is to exercise extreme caution and, in the event that they are affected, to seek immediate advice from professional lawyers to best defend their interests.  

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 ISDE

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The ISDE Law Business School has been collaborating this year with AIYON Abogados in teaching the classes on Land Transport and Maritime Transport included in its postgraduate course offered under the title “Master in Business Law, Arbitration and ADR”.

Our partner in Madrid, Verónica Meana, was in charge of the asynchronous classes on Land and Maritime Transport and will soon be giving the in-person class on Maritime Transport, while our partners Enrique Ortiz (Cadiz) and José Domínguez (Algeciras) gave a lesson on Land Transport and Payment Methods, respectively.

This collaboration has given AIYON a new opportunity to take part in the learning process of new generations of professionals who will surely enrich the sector.

We would like to thank ISDE for this opportunity, which we hope will be the first of many.

The “Prestige” case twenty years on

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On 13 November 2002, it was twenty years since the Prestige sent out its first distress call while sailing off the Galician coast, loaded with approximately 77,000 tonnes of crude oil on board. This first call led, six days later, to the ecological disaster that resulted in the sinking of the Prestige and the consequent spillage of part of its cargo into the sea (63,200 tonnes). 

The IOPC Fund (International Oil Pollution Compensation Fund), an intergovernmental body set up under the auspices of the International Maritime Organisation (IMO) to promote adequate compensation for those affected by oil spills and the economic damage they cause, takes part in these situations. Spain is a State Party and a member of the IOPC Fund.

Specifically, in the “PRESTIGE” case, the IOPC Fund had 147.9 million euros at its disposal to deal with the incident.

Since its inception, the team of lawyers of AIYON ABOGADOS S.L.P. has advised the IOPC Fund in the “PRESTIGE” case which was prosecuted in Spain, and our partners Mikel Garteiz-goxeaskoa and Verónica Meana are currently in charge of this advice.

Among other national and international publications, the national newspaper “La Razón” has echoed this news by publishing on 13 November a comprehensive article entitled “Prestige: caso abierto 20 años después” (Prestige: open case 20 years later). 

Read more…