Air and Sea Workers, and the Reduction Coefficients

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Workers in the transport sector generally endure difficult working conditions due to the long periods of work they must perform away from their homes, the distance from their families, the arduous schedules and, on occasions, the dangerous and unhealthy nature of their work; in short, the working conditions of all these workers could be defined as, at least, complicated.

In view of this reality, different Social Security systems in various countries have provided early retirement procedures for those workers who, foreseeably, suffer a deterioration in their health and put their physical or psychological integrity at risk in the performance of their professional duties. Good examples of this are workers of maritime and air transport sector, who we will focus on in this article.

In accordance with the above, different international regulations establish regimes for taking early retirement, i.e., they apply what in Spain are called “reduction coefficients” (COE).

These “reduction coefficients” of retirement pensions are coefficients that are applied to determine the amount of the pension when there has been an early retirement allowed by the Special Regime for Sea Workers (RD 1311/2007 of October 5) for example, or the Special Regime for Flight Personnel or Aerial Work (RD 1559/1986, of June 18). But when and how should these reduction coefficients be applied?

They will be applied exclusively when the worker has considered it necessary to lower his retirement age. The period of time during which the worker’s retirement age is lowered will be counted as having contributed for the sole purpose of determining the percentage applicable to calculate the amount of the retirement pension. In other words, the objective of the COE is none other than to compensate for the effects that retirement at an earlier age has on the amount of the retirement pension.

That is to say, if the worker has not considered it necessary to lower the retirement age, it will not be possible to apply the reduction coefficients to increase the amount of the pension to be received by the worker.

This explanation is supported by Supreme Court Ruling 807/2021, of July 20, 2021, which concludes that the reduction coefficients cannot be computed when the worker is 65 years old, since, in that case, he would be receiving a higher pension than the one he would have obtained if he had retired at 65 years of age. Since he/she is not entitled to the application of the reduction coefficient for being over 65 years of age, the reduction coefficient will not be recognized for the calculation of the pro-rata contribution percentage.

For this reason, we recommend that all workers who may be affected by the early retirement age and, therefore, by the application of the reduction coefficients be appropriately informed and advised by professionals on the optimum age at which to retire and the resulting contribution percentage at the time of retirement.

Informative Talk on Maritime Law for Ship Repair Companies of Tenerife

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Last May, in cooperation with our law firm, the Provincial Association of Auxiliary Companies of Ship Repair and Shipbuilding, (ATIREN-CONNAVALTE), member of FEMETE (Provincial Federation of Metal Companies and New Technologies of Santa Cruz de Tenerife and Training within Metal Sector of Tenerife), offered to its members the first formative seminar on Maritime Law, expecting it to be the first one from many others that will follow it.

During the presentation, the speakers addressed the concept of ship repair contract, its diverse models and overall requirements. They also discussed arrest of ships and the right of retention as a legal guarantee for recovery of maritime liens, that companies devoted to works or supply of parts /raw material on different vessels which they work for might have.

Our partners of AIYON Abogados located in the offices of Bilbao and Algeciras, Zuberoa Elorriaga, José Antonio Domínguez and Mikel Garteiz-goxeaskoa, actively participated in this informative talk, remaining at the disposal of the companies of the association, or third entities, for resolving any question or inquiry.

From AIYON Abogados we would like to thank to ATIREN-CONNAVALTE for the opportunity we were given, hoping that this cooperation will continue in the future.

 

New website of AIYON Abogados on Ship Arrest

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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

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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

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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.

Read the article published…

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

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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. 

Read the article published…

Aiyon Abogados, a “boutique law firm” of experts in Maritime, Transport, International Trade and Insurance Law

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As the newspaper EL Correo Español – El Pueblo Vasco reports in one of its article published in March, the professionals who make up AIYON Abogados, S.L.P. like to consider themselves members of a ’boutique law firm’ that has earned the trust of its clients and the recognition of its sector.

The AIYON Abogados team is distributed in four locations: Bilbao, Madrid, Cadiz and Algeciras, and all of them form a team of experts in Maritime, Transport, International Trade and Insurance Law that is proud to be able to handle national and international cases of great importance while defending the interests of clients with a very diverse profile. In all cases and circumstances, the secret of success lies in a principle that has been maintained to the letter since the team started working together: direct and personalised attention for a comprehensive legal service provided twenty-four hours a day, every day of the year.

Furthermore, one of AIYON Abogados’ strengths is its international projection. Major world references such as ‘The International Comparative Legal Guides (ICLG)’, ‘The Insurance Disputes Law Review’ and ‘The Chambers ‘Shipping 2021′ Global Practice Guide’ have entrusted the firm with their chapters on Spanish law in both maritime and insurance law.

All of this, without forgetting that the greatest guarantee of its success is the accumulated experience of more than twenty years in handling countless cases in their areas of expertise, some of them as well known as the sinking and pollution of ‘Prestige’, the sinking of ‘Costa Concordia’, the hijacking of the fishing boat ‘Alakrana’, the capsizing of the ship ‘Denev’, etc.

Read article published HERE

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

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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.

Challenges for Maritime Law

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“Puertos y más”, a magazine specialised in transport and logistics, publishes today an article on the challenges the maritime sector is facing in these difficult times by our colleagues Verónica Meana and Irantzu Sedano.

The year 2020 and its special circumstances had a profound impact on the maritime sector. The covid pandemic has altered the way we operate, hindering the supply of goods and limiting the mobility of people. This has led to the maritime transport of goods being declared an essential activity in Spain. Moreover, the year ended with the culmination of Brexit, which meant no less than additional challenges.

Maritime law is obliged to adjust to the new times and the circumstances arising from this new reality, which is why, in 2021, there are many challenges that the sector in Spain is facing. These include, for example, the development of intermodality, guaranteeing thus connectivity with air and land means of transport, and above all, the rail transport.

Thanks to these connections, delivery times will be speeded up, which will ensure the supply of essential goods. Improving work safety is another challenge to be met that will require bettering the employment situation of seafarers, which has been seriously jeopardised by the pandemic, including labour conflicts due to excessive embarkation periods; fatigue syndromes; uncertainty about their embarkation or disembarkation dates and reliefs; and the need to ensure the repatriation of workers.

We cannot also forget the need to guarantee environmental sustainability of maritime services. Maritime transport is still considered a highly polluting mode of transport (due to the high volume of goods transported by sea and the consequent abundance of maritime traffic). A major effort has already been made to enforce the use of low sulphur fuels, but the maritime industry wants to and must continue to evolve. Some of the challenges that arise in this respect are: researching maritime propulsion systems powered by renewable energies; developing the shipping industry to make new constructions less polluting; and adapting existing ships to new, more environmentally friendly fuels.

Finally, it is necessary to continue to make progress in the digitalisation of administrative and bureaucratic processes, as well as in the automation of port-logistic operations and to adapt legislation to the autonomous vessels that are already a reality. After the complex 2020, this year will bring changes to some of the regulations that affect the sector, such as the State Ports and Merchant Marine Act and the Maritime Navigation Act, as part of the constant adaptation and modernisation required by the maritime world at international, European and national level, as well as by the agents that form part of it, as is the case of our firm, to meet the future challenges the sector is facing.

Read article published HERE