New website of AIYON Abogados on Ship Arrest

AIYON Abogados has launched a new website devoted to the management of the ship arrest, both to request its lifting as well as to proceed with its execution. Thus, those interested in learning about and, when needed, in using this efficient legal tool that guarantees the recovery of a debt (International Convention on Arrest of Ships, 1999) may obtain all relevant information on www.shiparrestrelease.com

The concept of arrest of ships entails the detention of any kind of vessel by judicial authorities in cooperation with maritime authorities of the place where the vessel is located. Given the usual brevity of the vessel’s port call and the internationality of the maritime sector as well as of its operators, the possibility to take an anticipatory and urgent legal action, such as arrest of ships, allows for an easy recovery of a debt from shipowners and shippers. The same urgency involves the reverse procedure when the action is taken from the position of shipowners and shippers. 

Our multidisciplinary team of lawyers, comprising of professionals of renowned prestige and with a large trajectory as experts in Maritime Law is here at your entire disposal to assist any query or initiate any action related to ship arrest or to arrange the lifting of the measure on a vessel.    

Royal Decree 339/2021, of May 18, regulating the safety and pollution prevention equipment on recreational craft

From the relentless technological evolution of the equipment to be installed on recreational craft along with the latest update coming from Europe on recreational craft and marine equipment, derives the new Royal Decree 339/2021 of May 18, regulating the safety equipment and pollution prevention of recreational craft  published today May 19, 2021, and whose entry into force is set for next July 1, 2021.

For the purposes of this RD, recreational craft will be considered all types of vessels which, regardless of their means of propulsion, have a length between 2.5 and 24 meters, have been designed and intended for recreational and sporting purposes, and which do not carry more than 12 passengers.

The main objectives include, on the one hand, the determination of the equipment for the prevention of pollution of the marine environment and the safety equipment for navigation, rescue and fire protection, as well as the distinction of the requirements for such equipment. And, on the other hand, the establishment, in a clear and precise way, of the obligations of the shipowners in relation to them.

Regarding the novelties included in this Royal Decree, developed in six chapters and several final provisions, the extension of its scope of application stands out (art. 2), which will be extended: (i) to recreational vessels that are registered or pre-registered in Spain; (ii) to those that carry out an activity for commercial or lucrative purposes in maritime waters in which Spain exercises sovereignty, sovereign rights or jurisdiction, regardless of their flag State; (iii) and that navigate in Spanish internal maritime waters or the Spanish territorial sea, regardless of their flag State, and that are owned or have their use and enjoyment, natural or legal persons with residence or registered office in Spain.

Therefore, it will apply even to those vessels that, flying a foreign flag, sail through Spanish waters and the owner or the person who is actually using the vessel has a connection with Spain. As can be deduced, the aim is to avoid the escape of recreational vessels to foreign flags with more lax requirements in terms of safety and pollution prevention.

It also highlights the reference to the responsibility of owners and skippers in relation to the maintenance of the boat and safety and prevention equipment, in terms established in this Royal Decree, ensuring in any case that the boat is always in a position, to go to sea without danger to the maximum people authorized on board.

In addition to developing the sections of Rescue Equipment, Navigation Equipment, Fire Safety Equipment and means of rescue and Pollution Prevention, the regulation includes the determination of the penalty system applicable in case of infringement. To this end, it specifies and graduates the infringements already established in the Consolidated Text of the Law of State Ports and Merchant Marine, approved by the Royal Legislative Decree 2/2011, of September 5, which facilitates the determination of the corresponding penalties to be imposed, which will range from 100 € to 3,000 €.

“MV EVER GIVEN”: Insurances and General Average

On 23 March 2021, the vessel “MV EVER GIVEN”, one of the largest container ships in the world with a capacity of 20,000 TEUs, was grounded in the Suez Canal (Egypt). From then on and for the following six days, until the ship could finally be towed, an immense traffic jam was generated in the area, blocking the passage of thousands of goods transported daily by this waterway.

To date, there have been countless delays, because, in addition to those suffered by the cargo carried by the “MV EVER GIVEN”, there have also been delays suffered by all the ships and their cargoes that were trapped on one side of the canal or the other during this time. This has affected a significant number of shipowners and shippers worldwide.

Over time, all the details of this event will become clearer, and responsibilities will be clarified, but what can be said is that the insurance coverages of the affected operators and agents will have to be activated in order to be able to face the many costly claims that will be filed.

In this case, the directly affected insurance policies would be:

– Hull & Machinery Insurance, for damage to the proper vessel and    salvage costs.

– Protection and Indemnity Insurance (P&I), for shipowners and charterers, with civil liability cover.

– Cargo insurance for shippers, for possible damage to cargo.

The “MV EVER GIVEN” has been arrested since 13 April, at the request of the Suez Canal Authority (hereinafter SCA). SCA originally claimed $916 million for the non-payment of the ship’s refloating and maintenance costs but decided to reduce the claim by almost a third part, filing a final claim for $600 million in order to find a quick solution for the matter.

In view of this situation, several relevant questions arise.

 

  • Do shippers have the right to claim against the carrier for the delay?

Spanish law provides some protection in this respect, obliging the shipper to prove that the delay suffered was not “reasonable”. However, after analysing the standard contracts of carriage generally used by maritime carriers, it is very unlikely that the applicable law be Spanish law, as English law usually dominates these agreements.

At the same time, it is important to bear in mind that losses arising from delay are usually excluded from cargo insurance policies for maritime transport, as is the case in the most common clauses, the English clauses (ICCA).

 

  • Why does the ship’s operator, Taiwan’s Evergreen Marine CORP (EMC), not transfer the cargo to other vessels so that it can reach its destination?

The answer to this question is not simple.

Although the operator’s legal representatives are struggling to obtain the necessary permits and transhipments, at present the vessel and the cargo transported are understood to be a single entity and indivisible unit affecting the expenses claimed by SCA. This means that as long as the vessel is detained in Egypt, so are its goods.

Furthermore, to be able to carry out the transhipment, the vessel “MV EVER GIVEN” would have to move from the lake where it is berthed and detained (Great Bitter Lake) to the nearest port.

Finally, it cannot be overlooked that the shipowner has declared the figure of “general average”, so that the cargo transported is affected by the costs of the general average.

 

  • What is “General Average”?

It is understood as any expense or sacrifice reasonably and intentionally incurred by the shipowner, the purpose of which is to preserve the maritime adventure, the voyage and the goods involved in a maritime expedition, avoiding greater damage.

Once the general average is declared, all the interests involved (the ship, the cargo, the freight, etc.) have the legal obligation to contribute proportionally to the payment of those damages or expenses generated to save the voyage and the rest of the cargo. Therefore, this is a figure that is usually present in the ICC coverage agreed by shippers.

Shippers who do not have the goods insured under these clauses will have to provide personally the guarantees required by the shipowner to ensure their subsequent contribution to the general average. As long as such guarantees are not provided, the goods will continue retained by the shipowner.

In summary, in view of the fact that the vessel continues detained while waiting for the evaluation of the possible transhipment of the cargo to other vessels, we recommend that those affected receive specialised and appropriate legal advice to deal with the damages that they may have suffered due to this situation with all the guarantees.

“The Legal 500” joins the list of international distinctions of AIYON Abogados

AIYON Abogados SLP has received a special recognition for its areas of Maritima and Land Transport Law by “The Legal 500”, a prestigious international guide that investigates the activity of more than 2,700 law firms in 80 countries. This evaluation is added to the gradually extending relation of distinctions granted to the firm: “The International Comparative Legal Guides (ICGL)”, “The Insurance Disputes Law Review” and “Chambers”, among others.   

In its 2021 edition for Europe, “The Legal 500” places AIYON Abogados in leading positions in Maritime and Land Transport Law and recommends its services for being considered, according to collected testimonies, “a top-rate boutique law firm with a team available 24 hours every day of the year and comprising of professionals with an ample formation in law and in-depth knowledge of recent Spanish jurisdiction. The guide also underscores the “fairness and the easy communication of its lawyers”, “who have been involved in the majority of the main maritime, trade, insurance and transport cases in Spain with excellent results”. 

Maritime Law

With regard to the performance in maritime transport, the references consulted by “The Legal 500” stresses that it is “a solid firm that, from its offices in Bilbao, Madrid, Cádiz and Algeciras, offers an on-site service throughout the whole country”. “The extensive legal and technical training of its lawyers in maritime transport – the guide adds – provides them with deep knowledge of the business, the operations and its physical execution”. In the same way, “the proximity and the permanent communication with the clients (shipowners / charterers, masters, crew members, ship agents, insurance companies, etc.) and their successful and renowned trajectory in advising on sea pollution, collisions, salvage, wrecking, insurance, stowaways, ship arrests, piracy, ship repair and construction contracts are positively pondered.

Land and Air Transport 

The firm also receives excellent references for its “experience in any kind of issues arising in the sector of land transport”. Particular consideration shall be given to their efforts in national and international transport (cargo claims and theft, contracts of guarantee, contracts of logistics and multimodal transport, sanctioning proceedings, etc.) The expert capability and practice in air transport is also being addressed (insurance contracts and air traffic accidents, as well as purchase, leasing and financing of aircrafts, etc.) 

In both sections, the guide evaluates the added value of AIYON Abogados that, according to the references obtained by “The Legal 500” rests upon the ample experience of every member of the team (on average 17 years) and a large teamwork culture, since all the partners have been working together for most of the time of their careers. This allows the firm to choose the best team for every case and client in particular with the aim to protect and promote the business of their clients. 

“The Legal 500” 

The ´purpose of “The Legal 500” is to help lawyers and operators find the most suitable advisors by means their classification, based on the opinion of 300,000 respondents that are processed and evaluated by independent researchers. Merit is the only criterion applied for including law firms into the classification, which is thoroughly reviewed every year. 

M/V “Ever Given”: Do you have any cargo on board? How to protect your interests

On 23 March 2021, one of the largest containerships in the world grounded in the Suez Canal. The vessel was touching the banks on both sides effectively blocking the channel for six days. This caused the stoppage of the “EVER GIVEN” voyage and the delay of about four hundred vessels that were queuing to cross the channel. As a result of this situation, the delivery of the cargoes on board “EVER GIVEN” and the other blocked vessels has been also delayed.

The 2018 container vessel was bound to the Port of Rotterdam from where its cargo was to be distributed to its destination, many of them to Spain.

Although some of the details of the casualty and the causes are still unknown, cargo owners are worried about what will happen to their cargoes now.

Presently, the M/V “EVER GIVEN” has re-floated and is being towed to a place of refuge where to she will be inspected for damage assessment. This could take days, if not weeks. In fact, if the vessel does not pass the inspection, the vessel operator, EVERGREEN, will probably be compelled to tranship the cargo onto one or more alternative ships to conclude the voyage. This will increase the delay on delivery and the costs.

As a summary, therefore, and regardless of how the events will develop, the cargoes on board the “EVER GIVEN” and/or the approximately four hundred blocked vessels will arrive to their destination with important delays and significant costs. The situation with the blockage will take time to be resolved and that it will also cause bottlenecks on the global logistic chain.

Would cargo owners be entitled to claim damages for delayed delivery against the carrier?

Spanish law does give some protection on that respect. To claim damages for delay, cargo interests will need to provide evidence that the delay was unreasonable under the circumstances. Would Spanish Law be sufficient protection? Would Spanish law be applicable to the contract of carriage? After having studied the contracts of carriage generally used by sea carriers, we may conclude that Spanish law will not be applicable as the conditions of these contracts usually remit to English law.

Will the insurance grant cover for delay?

Most marine cargo insurance policies do not cover losses due to delays. This is the case, for example, of “all risks” ICC A clauses in which delay is expressly excluded. Therefore, unless there is an express agreement to remove such exclusion, cargo insurance will not cover the losses for delay.

Lastly, cargo owners might end paying a large part of the invoice for the salvage operation through General Average.

Cargo interests should also bear in mind that salvors that are intervening to rescue the vessel and her cargo have the right to lien the vessel, the cargo, her freight, and bunkers as a guarantee for the payment of their salvage reward. Presumably, a salvage contract (LOF) has been entered into by Owners and Salvors through which the salvage costs and reward will be paid by Owners and the Salvors will not claim against cargo interests directly.

However, it is possible that the shipowner decides to declare General Average. This is a specialty of maritime law based on equity and an interesting option to the shipowner since it requires that interested parties in the marine adventure (vessel, cargo, freight) contribute in proportion to their interests to the payment of the salvage costs.

Cargo interests insured under any of the ICC policies will be covered and their insurer will take care of the General Average contribution. But uninsured cargo interests will need to handle the claim and procure average guarantees/security by themselves before they obtain delivery of the cargo. If guarantee/security for the General Average contribution is not placed, the carrier will be entitled to exercise a lien on the cargo.

Consequently, cargo interests are encouraged to contact their legal advisors to take adequate steps for the handling on this incident.

BREXIT: The New European Scenario

The European Union ended the year 2020 with breaking news. It was the agreement reached “in extremis” with the United Kingdom on the management of trade relations after 1st January 2021; the date on which, after approximately 4 years of extensions and postponements, BREXIT would finally enter into force.  

After arduous negotiations, on 24th December, Ursula Von der Leyen (President of the European Commission) and Boris Johnson (Prime Minister of the United Kingdom) announced that an agreement had been reached, avoiding so the much feared “Hard Brexit” or “extreme Brexit”, whereby the United Kingdom would leave the European Union without a previous agreement.

There is no doubt that the close trade relations that exist between the two territories have produced significant pressure which has led to this final agreement. In any case, whether by means of a global agreement or by means of sectoral agreements, trade relations with the United Kingdom would ultimately be signed since UK is a vital trading partner for the European Union. In fact, for Spain, the United Kingdom is the fifth in the scale of its trading partners, moving (between imports and exports) over 32 billion Euros during 2019. 

The importance of this agreement arises, to a certain extent, from the fact that thanks to it, bilateral trade relations can be maintained without customs duties or quotas, an aspect that is of particular interest to exporters and importers, but which in general affects the whole society, since the costs to be assumed in import operations, as well as in export operations, will always have an impact on the final cost and customer. However, this agreement does not prevent bureaucratic, administrative, and fiscal procedures from being multiplied due to this departure. Examples of it are customs declarations, sanitary and phytosanitary controls, and the payment of VAT on the declared value of the goods at the time of import.

In other words, since 1st January 2021 the United Kingdom is a third country for the European Union, and as it happens with goods entering and leaving third countries outside the EU, the Spanish Customs Authorities will have to ensure that they are informed on and have control of the goods that are to be introduced into their territory and, consequently, into the European Union. 

This information about entries and exits will generally be provided by the company carrying out the transport of the goods (shipping companies, airlines, or land carriers) and must coincide with the presented customs declarations. In fact, efficiency and speed in the transmission of this information will be key to facilitating border formalities and thus avoiding discontinuities and delays, which for now are unavoidable. Companies that usually trade with importers or exporters from third countries outside the Union are already aware of the formalities required for these operations.

 

TRADE AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN UNION AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, ON THE ONE HAND, AND THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, ON THE OTHER HAND

With respect to the Agreement reached, we would like to highlight its second part, which includes aspects related to trade, transport, fishing and other provisions that are of interest to our sector with the aim of facilitating trade of goods between the parties and maintaining liberalized trade to the extent agreed in the Agreement. 

To this end, different aspects are addressed, such as:

  1. The recognition of the freedom of transit through their territories to persons with nationality of either Party. 
  2. The prohibition of customs duties, that is, a Party may not adopt or maintain any duties, taxes and other charges imposed on the exportation of a good to the other Party or in connection with such exportation, or any tax that is higher than the tax or charge that would be imposed on similar goods but destined for domestic consumption. 
  3. With respect to taxes and charges, the Parties may not assess these amounts ad valorem, but may simply charge such taxes and charges limited in amount to the cost of the services rendered and shall not constitute indirect protection of domestic products. There are exceptions for some specific services.
  4. Agree that the Parties may not impose restrictions, prohibitions or monopolies on imports or exports of goods destined for the territory of the other Party (except Article 11 of the GATT 1994). 
  5. That each Party shall determine in its territory the customs value of the goods of the other Party. 
  6. To create rules for determining the origin of goods for the purposes of applying preferential tariff treatment and to establish origin procedures. 
  7. Agree on the sanitary and phytosanitary measures to be applied on goods imported into the Parties to this Agreement. 
  8. Ensure customs cooperation for trade simplification. To this end, measures such as the rapid release of goods, the presentation and advance electronic processing of documentation, the promotion of the association of authorized economic operators, the establishment of the single window, the facilitation of roll-on-roll-off traffic, etc., are taken. 

Although this agreement regulates many aspects of interest for the sector, there are other things that it does not resolve and that are fundamental for the correct development of commercial relations. In particular, we would like to make special mention of the exequatur or recognition of foreign judgments, as well as the jurisdiction applicable in the resolution of disputes between the Parties. 

Given the transcendence that an incorrect choice of the applicable jurisdiction may imply for the subjects involved in international trade operations, from AIYON Abogados we would like to recommend all agents involved in trade with the United Kingdom, before starting a new commercial relationship, to make express agreements where the jurisdiction to which they will submit their disputes is agreed. In case of pre-existing commercial relations, we recommend analysing whether the jurisdiction agreed upon at the time is still the best for the defence of their present and future commercial interests.

Royal Decree 927/2020, of 27 October, which extends the scope of the action of Ship Inspection and Survey Organizations, and modifies Royal Decree 877/2011, of 24 June, and Royal Decree 357/2015, of 8 May

States are responsible for ensuring that ships under their flag are designed, constructed and maintained in compliance with the safety requirements established in the conventions and instruments approved within the IMO. To carry out these tasks, they are supported by the classification societies.

The regulation of classification societies in Spain is contained in articles 97 and 107 of Law 14/2014, of 24 July, known as the Spanish Shipping Act. It is algo applicable the Royal Decree 877/2011, issued following European Directive 2009/15/CE, of 23 April 2009, that establishes unified rules and regulations for organizations in charge of inspection and recognition of vessels, and various European Regulations, such as Regulations (EC) 336/2006, of 15 February 2006, y (EU) 1257/2013 of 20 November 2013.

The main purpose of Royal Decree 927/2020 is to establish in which cases a recognized organization can act in the name of the Spanish Maritime Administration The aim is to reduce waiting times for obtaining the obligatory certificates and to improve the competitiveness of ships flying the Spanish flag as these cannot see their activity affected by delays in carrying out necessary inspections. The new international Conventions and EU Regulations affecting maritime safety and prevention of contamination of the marine environment require more flexibility and delegating on these organizations.

The cases in which recognized organizations may be authorized to carry out ship surveys on behalf of the Spanish General Directorate of the Merchant Navy (GDMN) are as follows:

a) When a Spanish ship is in a foreign port and needs to extend the term of validity of any mandatory certificate as the expiration date approaches.

b) When a Spanish ship is dedicated to making trips between foreign ports and its transfer to a national port is detrimental to its commercial exploitation, to carry out any of the mandatory surveys.

c) When a Spanish ship, due to breakdowns or other causes of accident, must be recognized abroad.

d) When a Spanish ship is built or carries out transformation, reform or major repair works abroad.

e) When a Spanish ship calls in a Spanish port on non-working days or outside working hours, or for any other reason, the surveys cannot be provided by the inspection services of the Harbour Master Office.

f) When, in light of logistical conditions, to adapt to its procedures or the need for agility in the operation, the company so decides.

g) When a ship is abroad and requests to be flagged in Spain.

h) When a company has its head office abroad.

In addition to the above, authorized organizations will be able to control that the rules for the management of the operational safety of a vessel are followed and will be able issue and renew the maritime labour certificate and the declaration of maritime labour compliance Part I, referred to in the Maritime Labour Convention (MLC).

AIYON Abogados collaborates with the “ICLG Shipping Laws and Regulations, 2020”

Our partners of Madrid and Bilbao offices, Veronica Meana and Mikel Garteiz-goxeaskoa, have participated in the chapter dedicated to Spanish Law of the ICLG Shipping Laws and Regulations: 2020,publication which covers common issues in the area of Shipping law in forty jurisdictions.

Among these common issues are: the regulation of maritime casualties, cargo claims and passenger claims, the regulation of ship arrest and procedural issues such as the collection of evidence, judicial and other dispute resolutions methods applicable to maritime claims and the enforcement of court judgments and arbitration awards.

Please click here to have access to the publication:

 

Royal Decree-Law 26/2020, of 7 July, on economic recovery measures to deal with the impact of COVID-19 in the areas of transport and housing

On Wednesday 8 July 2020, Royal Decree Law 26/2020, was published in the Official State Bulletin, with the aim of approving a set of measures required for the purposes of economic recovery in the transport sector and in the field of housing, protecting the health of workers and travellers, guaranteeing the availability of essential goods and services, providing liquidity to companies and reducing administrative burdens.

In this article, we will analyse this regulatory text, focusing on the specific measures arising for the transport service. 

1. AIR TRANSPORT

Articles 2 to 7 include the management measures adopted for air transport. General prevention measures against COVID-19 that companies in the sector must guarantee compliance with, as well as all those that the Autonomous Communities have adopted. 

Operational guidelines have been established from Europe, which are applicable to the entire Spanish territory. The EASA/ECDC Guidelines will be compulsory not only for airport managers but also for companies that carry out their work as auxiliaries at airports: 

– Inform users on the preventive measures and health reasons why they should refrain from accessing the airport, as well as the consequences of detecting a person suspected of having COVID-19 during health checks. 

For its part, the Transport Facilitation Committee will be responsible for coordinating and supervising all the actors who have a role in the application or definition of these measures.

 

2. MARITIME TRANSPORT

Articles 8 to 14 set out the measures taken to revitalise the maritime sector. Firstly, the reasoned reduction of maritime traffic requirements for 2020 at the request of the concessionaire will be permitted, due to the impossibility of compliance (deriving from COVID-19). 

Likewise, the liquid quota of the occupation rate accrued during the financial year 2020 may be reduced, being determined this reduction depending on the decrease in maritime traffic or, failing this, on incomes attributable to the activity, the different types and also depending on the economic and financial situation of the Port Authority. 

With regard to the activity tax, the Port Authorities may (upon request of the taxpayer) leave the lower limit of the annual activity tax quota without effect for the year 2020. In turn, the enforceability of the activity fee established in the authorisation may also be modified. 

As we have already commented in other publications, this Royal Decree confirms that the fees for vessels (between 1 March 2020 and 31 October 2020) may be modified, depending on the reason for the stay in port waters. Likewise, the Port Authorities may grant deferrals of tax debts accrued (between 1 March and 31 October 2020) and not paid.

As a final comment, it should be noted that the provision of human resources at the passenger terminals serving the regular maritime services during the state of alarm, are considered as emergency services for all purposes.

 

3. RAIL TRANSPORT

With regard to Railway Transport, it should be mentioned that RENFE is authorised to arrange credit operations during the 2020 financial year, for the amount of 1 billion euros. 

It is also planned to authorise extraordinary credits to be financed with Public Debt.

 

4. ROAD TRANSPORT

Articles 18 to 30 contain the provisions relating to road transport. Firstly, moratoriums will be granted for the public goods and occasional passenger transported by bus. 

Among other measures, deferrals of payments of instalments on loan, leasing and renting contracts used by self-employed persons and public undertakings for the purchase of buses and public transport vehicles of more than 3.5 tonnes, maximum authorised mass, are accepted. 

With regard to the approval of road transport authorisations, this will be extended, establishing 2021 as an open deadline for approval of transport authorisations that should be endorsed in 2020 and have not been yet. Also, for those authorizations that should be endorsed in 2020 and have done so, the deadline for their next endorsement is extended until 2023. In addition, the opportunity to apply for extraordinary rehabilitation for public transport authorisations invalidated during 2020 is provided due to the inability to certify the requirements for their endorsement. 

Finally, an extension of 3 months is established for those technical inspection certificates of vehicles that expire between 21 June and 31 August.