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). 

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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.

Saitec Entrusts Aiyon Abogados with the Expert Advice on its Offshore Wind Project DemoSATH

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The Basque company Saitec Offshore Engineering has developed a novel technology for floating wind turbines called SATH.

This system will be tested in the DemoSATH project in open waters, specifically in Biscayan waters, in the BIMEP test area, off the coast of Armintza, to test its operation in real sea conditions, and it will also be connected to the electricity grid. In this way, all the necessary parameters will be tested before its mass commercial launch.

For the construction of the first prototype, Saitec has contacted local suppliers in every possible way. Thus, the company points out that around 75% of the construction contracts have been made with suppliers in the immediate vicinity.

Among these necessary suppliers is Aiyon Abogados, a law firm specialising in maritime law, which has collaborated in the DemoSATH project together with Saitec. Its work has focused on legal advice on the special contracts for the marine operations necessary for the launching of the floating offshore wind turbine, the installation of its anchoring system in BIMEP, as well as for its transfer to this test area and its subsequent connection to the submarine cable.

The collaboration has been very fluid, with constant communication and a very satisfactory result, as it has offered the necessary solutions to the challenges posed by the project. “They have shown total interest in collaborating beyond the scope originally proposed and are very resolute and will undoubtedly be one of our fundamental supports in the future, both in the legal and insurance areas”, says Esteban Núñez, from Saitec, during the guided visit he made to Mikel Garteiz-goxeaskoa, Zuberoa Elorriaga and Irantzu Sedano at the Port of Bilbao.

The technology of the prototype was developed entirely by Saitec Offshore Technologies, a spin-off of Saitec engineering, based in Leioa (Bizkaia), which dates back to 1989. As a differentiating element, the platform on which the tower and the wind turbine stand was built with concrete as the raw material. This first unit will be connected to the electricity grid, providing energy equivalent to the consumption of around 2,000 homes. The prototype will be installed two nautical miles off the coast and will be anchored to the seabed, in an area 85 metres deep.

The complex loading operation of the DemoSATH floating concrete wind turbine will be carried out by SPMTs, a system of trolleys that will bring the unit from the construction position to the edge of the quay where a self-submersible pontoon will be waiting for it. The 140m long barge “Boa Barge 33” will be submerged to float the assembly with the wind turbine installed at a height of more than 90m.

This operation will mark another milestone in the programming of critical events of the project, already developed or yet to come, in which nothing can go wrong and in which expert advice, such as that provided by Aiyon Abogados in its field, becomes indispensable.

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El Diario de Cádiz Highlights the Work of Aiyon Lawyers in Algeciras and Cádiz

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El Diario de Cádiz has recently published an article highlighting the work carried out by Aiyon from its offices in Algeciras and Cádiz, its solid presence in the south and its active participation in the sector, not only as expert lawyers in Maritime Law, International Trade, Insurance or Transport Law, but also as teachers and trainers of the new generations being part of the teaching staff of the “Master in Legal Consultancy of Companies” taught at the University of Cadiz.

From its headquarters in Algeciras, José Domínguez Castro, partner and head of the firm, who in addition to being a lawyer has a degree in Nautical and Maritime Transport, a Diploma in Civil Navy and a Merchant Navy Pilot with accredited experience in passenger ships and ro-ro cargo, confirmed to the Journal that the local client is fully aware of the need of specialised lawyers to provide legal advice in the different areas of our speciality. We refer to all matters relating to trade, transport and insurance, and all that this entails in terms of the lawyer’s knowledge of the world of logistics, port handling, storage and warehousing, shipbuilding and ship repair, ship supplies and services, land transport, sanctioning procedures, insurance claims, etc. Legal advice is provided from a purely contentious point of view when the dispute has already arisen and in order to try to reach a negotiated resolution, or judicial if unavoidable, as well as from a previous moment in order to obtain preventive advice and avoid possible future risk situations.

Together with Enrique Ortiz, partner in charge of Aiyon’s office in Cadiz and expert lawyer, our colleagues have actively participated as speakers and trainers in Universities and companies. An example of this are the recent lectures on transport and insurance in the international sale and purchase given int June in the “Master’s Degree in Business Legal Consultancy” at the University of Cadiz. With regard to his teaching work, we would like to echo José’s words: “We have really enjoyed giving these conferences and we are grateful to the University of Cadiz for having counted on us for this Master’s Degree. With the regulatory selection we made and the case study method, taking advantage of our real experience, we think that the students have been able to acquire a global vision of real and common risks that arise in this complicated sector and how to advise their companies or clients so that they can prepare themselves in the best possible way and protect their interests when facing operations of this type”.

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The Importance of Insurance in Air Cargo Transport

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Although air cargo transport may seem to cover only movement of special or very specific cargo, the truth is that it includes all types of goods and materials, including perishable goods or live animals.

Transport may require a single journey from origin to destination or involve several flights or transfers at different airports and countries. All of this in relatively short and, in principle, very competitive, but usually costly, timescales.

It is easy for a seller/shipper or a buyer/consignee of air cargo to fall into a subjective interpretation of the conditions governing it. In particular, and in relation to the security of this sector, in view of the stringent security measures to which citizens and their luggage are subjected on air journeys both in airport facilities and on aircrafts, it is natural to infer that this means of transport is extremely safe in order to move our goods from one country to another.

In this context, it is reasonable to think that cargo insurance is not perceived as necessary or relevant as it would be in other types of transport, such as maritime transport, with longer crossings and cargoes being subject to different manipulations by operators of all kinds, or in land transport, where shipments are exposed to damage due to breakdowns, delays, or theft. However, this is a line of reasoning that must be contested mainly because of two important issues:

(i) air cargo is subject to damage, delay and loss, even if the airports of origin, transshipment and destination are located in countries with high security measures and fully standardized protocols;

(ii) the international regulation affecting the carriage of air cargo protects the figure of the carrier by establishing limitations of liability that are applicable to them, in many cases even when the figures of fraud or gross negligence of the carrier may occur.

Specifically, if we look at the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal, 1999) and its subsequent amendments, it states that even when there may be intent or gross negligence on the part of the carrier in failing to comply with all types of security or safekeeping measures with respect to the goods or the ULD, the carrier always has the right to limit his liability to 22/SDR/kilo based on the weight of the damaged/missing cargo (updated in Spanish Official Gazette of 16/07/20). Therefore, if the limitation of the carrier’s liability is applied, the sums to be recovered by the affected shippers based on the wight limitation are usually low when, on the contrary, in most cases the value of the transported goods is high.

Although the Warsaw Convention is still in force in certain countries and at national level, we have the obsolete Air Navigation Act of 1960 regulating air cargo, and both regulations admit in certain cases the breaking of the carrier’s limitation of liability, we cannot forget that the Montreal Convention is of massive application, and specifically to all air transport between member states of the European Union. Moreover, as Spain is a party to the MC, if the non-EU country of origin or destination of the affected cargo has also ratified it, the transport will always be subject to it.

Therefore, in the absence of a prior express declaration of value with payment of a supplement to cover us to a greater extent in the event of damage/missing cargo, in our experience at AIYON, we consider it highly advisable to insure air cargo, which is not risk-free even at the most secure airports and at the hands of the most prestigious airlines.

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