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The Importance of Insurance in Air Cargo Transport

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.

Read article…

Abandonment of Recreational Craft

The abandonment of recreational boats is a real and tangible phenomenon that occurs more frequently than one might think, with very negative and, generally, costly consequences.

What is more, the marina concessionary company with which the mooring is contracted, or the dry marina, are generally the parties that suffer the most, as they act as the depository of the boats. The consequences of this problem are accentuated when the shipowners are not citizens of the country where their boats are berthed.

There are currently hundreds of abandoned boats in different marinas in the country, a problem that increases significantly when the economy is truncated by periodic crises. And this is because, beyond the fact that the personal economic situation of a shipowner can be affected at any given time, sometimes even drastically, we must add other ancillary issues to this, such as the relentless increase in the price of fuel, the cost of revisions and inspections, the increase in the regulatory requirements on navigation elements, the periodic increase in the price of maritime taxes, etc. All of which makes it impossible for many yacht owners to take care of their boats, and they are forced to abandon them without even the slightest explanation.

Despite the above, there is hardly any specific legal regulation of this phenomenon, although it is expected that this situation will change soon.

Article 302 of Royal Legislative Decree 2/2011, of 5 September, which approves the Revised Text of the Law on State Ports and the Merchant Navy, states that when we talk about abandoned ships, we are referring to vessels that have remained for more than three months moored, anchored, or even on land, in the same place within the same port, and without having any type of externally appreciable activity on board. Abandoned ships which, in order to be catalogued and declared as such by the competent Port Authority, must also have failed to pay their corresponding fees and tariffs for at least three months.

After processing the corresponding procedure, and once the ship has been declared abandoned by the Port Authority, the latter will proceed: (i) either to its sale at public auction, paying the proceeds of the sale after subtracting the credits accrued in its favour for port taxes/fees and the costs of the procedure; (ii) or, to the sinking of the ship when, due to its condition, maritime safety reasons make it advisable to do so.

However, in this article we are referring to vessels abandoned in a port that is not a port of general interest, with indirect management by the administration as these are ports under concession. Consequently, the port authorities of the main port to which the concessioned port is attached are often opposed to initiating the administrative procedures for abandonment of vessels under Article 302 on the grounds, among others, that the procedure for abandonment of vessels is only applicable to vessels which are moored or anchored in a port under the direct management of the authority; that they cannot rule on the abandonment of a vessel when there is a contractual relationship between the concession holder and the owner of the vessel; or that the administrative procedure for the abandonment of vessels is only applicable to recover debts owed by the vessel to the port authorities (fees, tariffs, etc.) and not those owed to the concession holder in the context of a private contract.

In view of this, in the absence of a specific regulation in this respect to date, in the face of the “disappearance” of the yacht owner and the consequent non-payment of the services he has contracted, the current option available to marinas or suppliers to deal with these incidents is to initiate legal proceedings for breach of contract and claim for payment against the person who contracted the unpaid services (art.1124 of the Civil Code). This would be done either with the intervention of the shipowner in the process or in default, in case the shipowner does not comply with the injunction.

If the shipowner does not meet his obligations voluntarily once the marina/concessionary company obtains a favourable court ruling, the latter will have to initiate a second legal process to request the forced execution of the sentence in which it would have the option of seizing the vessel in order to promote its subsequent auction and public sale. With the sum obtained from this sale, and after payment of the debts incurred in the management of the auction, the rest of the debts existing up to that moment, including that of the port, would be settled. Another option could be for the concessionary company itself to be awarded the vessel, being able to dispose of it as it sees fit.

As instrumental measures to such a declaratory process, there would be two other legal options to be studied in each case:

  • Exercise the right of retention of the vessel in the hands of the concessionaire by instituting a declaratory judgment (art. 1780 of the Civil Code).
  • On the basis that the service contracting party is the registered owner of the vessel, proceed to the preventive seizure of the vessel by filing the measure before the competent court (art. 470 of the Maritime Navigation Act).

For the time being, this lack of regulation by state regulations has led some of the most affected autonomous communities, such as Valencia and the Balearic Islands, to publish their own specific regulations with the aim of speeding up and avoiding the serious problems of indebtedness and deterioration that vessels immobilised in port present, with the danger of pollution or that of navigation itself due to not being properly guarded or maintained.

This situation will hopefully change soon since, as announced on 1 March 2022, the amendment of the revised text of the Law on State Ports and the Merchant Navy and the Law on Maritime Navigation has been approved to bring it into line with current European regulations and, among other points, recreational boating activity will be dealt with and regulated in more detail. In fact, it is expected that the Maritime Navigation Law will add a new Chapter VII to the current Title X that specifically regulates the abandonment of recreational craft.

We can conclude, therefore, that currently the ways of managing abandonment situations are limited and costly, or are only regulated locally, so that in any case we advise seeking prior legal advice from a law firm specialised in the matter so that they can duly assist the affected parties.

Read article published here.

Enrique Ortiz and José Antonio Domínguez participate in the “Master in Business Legal Consultancy” of the University of Cadiz

We would like to thank the University of Cadiz for their warm welcome to our partners of Aiyon Cadiz and Aiyon Algeciras, who had the honour of being part of the teaching staff of the “Master in Legal Business Consultancy (MAJE)” organized by the Faculty of Law of the University of Cadiz and the University Business Foundation of the province of Cadiz (FUECA).

A Master’s Degree that offers its students the opportunity to broaden and deepen their legal and accounting knowledge in the business world, from a comprehensive, up-to-date and practical perspective, so that they can plan their professional career in the specific field of legal-business advice, and which is taught by renowned professionals with extensive experience in legal-business advice, both from the University itself and from the private sector.

In their classes, our colleagues, Enrique Ortiz and José Antonio Domínguez, have worked with the students on two subjects of great relevance in the field of international trade, such as the international transport contract and insurance in the international market. All this within the rest of the subjects that made up the module entitled “International Dimension of the Company” of which they have been part.

Likewise, Enrique and José have shared with the attendees their long and extensive professional experience, acquired during the many years they have been active in managing matters for all types of clients related to the transport, insurance, and international trade sector, commenting on practical cases and common situations in their day-to-day work in AIYON Abogados.

We are sure that these new generations of professionals will be very well received, and we wish good luck to all of them!

V State Sectoral Agreement on Stevedoring

On Friday 8 May 2022, the V State Sectoral Agreement on Stevedoring was signed, which came into force in May 2022 following its publication on May 18 in the Official State Gazette, under the title: “Resolution of 4 May 2022, of the Directorate General of Labour, by which the V Agreement for the regulation of labour relations in the port stevedoring sector is registered and published”.

There were five signatories to this long-awaited and important agreement at local and state level:

  1. The National Association of Stevedoring Companies.
  2. Port Employment Centres.
  3. The State Coordinator of Seafarers
  4. The State Federation of Services, Mobility and Consumption of the General Union of Workers.
  5. The Federation of Citizen Services of Trade Union Commissions.

In addition to the signature of these five corporations, this Agreement has the approval of the National Commission for Markets and Competition, as well as that of the Ministries of Transport, Mobility and Urban Agenda and the Ministries of Labour and Social Economy.

The main objective of this Agreement is to provide legal certainty to the economic activity of stevedoring, and to this end, it had to adopt the legal provisions of both the state framework, as well as those applicable in the EU. In other words, this Agreement had to adapt to and respect the new legal framework of the stevedoring sector, as well as the rulings of the Court of Justice of the European Union in its judgements of 11 December 2014 and 13 July 2017.

With regard to the technical characteristics of this Agreement, it should be noted that this Agreement will be applied in the Spanish territory, without exclusions, and in particular it will apply to companies holding a licence for port services for the handling of goods and to Port Employment Centres.

It is scheduled to run until 31 December 2025 and may be extended.

Regarding the most noteworthy content of this 5th State Sectoral Agreement on Stevedoring, we highlight the following aspects:

  1. The organisation and direction of work shall be the sole responsibility of the management of stevedoring companies.
  2. The stevedoring companies shall employ the personnel affected by this Agreement in the activities of the functional scope taking into account the legally required qualifications and the selection procedure and professional framework agreed in the agreement.
  3. The work will be distributed daily by rotating the available staff by professional groups.
    Likewise, the Port Employment Centres will be able to make personnel available to stevedoring companies through a rotation system by professional groups and specialities.
  4. The workers covered by this Agreement are classified into 4 groups according to their specialization:
    a. Specialist.
    b. Handling Officer.
    c. Commodity Controller.
    d. Foreman.
  5. The selection and recruitment of personnel for the provision of port handling or cargo handling services shall be free.
  6. Regarding the regularisation of labour relations:
    a. A maximum working time of 1,826 hours per year is established.
    b. It is established that excess working time is to be counted as overtime.
    c. The minimum annual leave shall be 30 calendar days.
    d. It is stipulated that minimum vocational training must be ensured.
    e. Finally, with regard to the minimum remuneration to be received, it is established that a guaranteed salary of thirty shifts per month must be provided for full-time permanent staff, adapting the same to other types of working hours.

This guarantee replaces the so-called inactivity wage and does not apply to those Port Employment Centres and stevedoring companies that have fixed monthly time unit wage or a guaranteed minimum monthly wage.

This guarantee replaces the so-called inactivity wage and does not apply to those Port Employment Centres and stevedoring companies that have fixed monthly time unit wage or a guaranteed minimum monthly wage.

As can be seen, this 5th State Sectoral Agreement on Stevedoring does not leave indifferent any agent or worker linked to the sector, who will have to adapt to what has been agreed.

Aiyon Collaborates Again with the Spanish Maritime Institute and the Universidad Pontificia de Comillas in the Master’s Degree in Maritime Business and Law

On 26 May 2022, our partners Verónica Meana and Mikel Garteiz-Goxeaskoa have taught one more year the class on “Removal of wreck and Nairobi Convention 2007” and “HNS Convention 2010”.

This is the fifth consecutive year that our colleagues are part of the faculty of the Master’s Degree in Business and Maritime Law of the Spanish Maritime Institute in collaboration with the Universidad Pontificia de Comillas, sharing their theoretical and practical knowledge on matters affecting the maritime transport sector.

In this case, the subject dealt with was “Liability and compensation for damage caused by harmful and potentially hazardous substances during maritime transport”, which affects both operators in the sector and public administrations, both nationally and internationally.

As always, we enjoyed giving the class and hope that the students found it useful and interesting.

Is the Detention of Russian Mega Yachts Legal?

On 24 February 2022, Russia begins its invasion of Ukraine, provoking an immediate reaction from the European Union and the United States, condemning the action and announcing sanctions. Among the sanctions adopted by the EU is the freezing of assets belonging to Russian oligarchs who participate or have participated in the war against Ukraine. European countries immediately began to immobilise assets located in their territories.

In the case of Spain, the arrests of several mega yachts of more than 24 metres in length, such as the “Valerie”, located in Barcelona, and the “Lady Anastasia”, docked in Palma de Mallorca, have been striking. The question is, on what instrument is Spain basing these detentions?

AIYON analysed the situation in an article that was published by the newspapers ABC Sevilla and ABC Madrid last April, which we recommend reading.

Read article published here.

Order TMA/201/2022 of 14 March: New Procedure for the Settlement of Disputes in Favour of Air Transport Users

On 17 March 2022, the Official Spanish Gazette (BOE) published the order TMA/201/2022, of 14 March, which regulates the procedure for alternative dispute resolution for air transport users on the rights recognised in the European Union in terms of compensation and assistance in the event of denied boarding, cancellation, or long delay, as well as in relation to the rights of persons with disabilities or reduced mobility, approved by the Ministry of Transport, Mobility and Urban Agenda.

The entry into force took place the day after its publication, affecting those incidents occurring after the first day of the month following the publication of the resolution of the competent authority in the Official Spanish Gazette, accrediting the State Aviation Safety Agency (hereinafter also the Agency) as an alternative dispute resolution entity in the field of air transport user protection.

The Order shall apply to the procedure which the Agency provides for air transport users (whether they are consumers or not) to resolve disputes over the application of the following regulations:

– Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91; and

– Regulation (EC) No 1107/2006 of the European Parliament and of the Council of 5 July 2006 concerning the rights of disabled persons and persons with reduced mobility when travelling by air.

This rule in no way precludes the exercise of the passenger’s right to resort to any out-of-court dispute resolution system accepted by the airline or airport operator.

The procedure shall be free of charge, without prejudice to the assumption of the costs of the tests by the party proposing them. For passengers, voluntary acceptance and non-binding outcome; for airlines, mandatory acceptance and binding outcome; for pre-acceding airport operators, mandatory acceptance and non-binding outcome; and for all other operators, voluntary acceptance and non-binding outcome.

Finally, it should be noted that the Agency’s decision, which will always be reasoned, as mentioned above, will be binding on the airline but not on the passenger, who may bring any civil action he or she may have against the airline.

Aiyon Abogados collaborates with Chambers in the shipping law 2022 Global Practice Guide

Our partners Verónica Meana, Mikel Garteiz-goxeaskoa, Jose Domínguez and Enrique Ortiz  have collaborated, once again, in the section dedicated to Spanish Law of the Shipping 2022 Global Practice Guide published by Chambers. This publication focusses on practical legal issues affecting shipping in 26 key jurisdictions.

The guide provides information on marine casualties, Owners’ liability, cargo claims, maritime liens, ship arrests, Shipowners’ income tax relief, choice of Jurisdiction and Law agreements, Port State Control matters and in particular the implementation of IMO 2020 on sulphur content of fuel oil, and the implications of Covid-19, among other issues.

Read the AIYON Abogados contribution by clicking on the following link.

“Estrategia Empresarial” Stresse out our Consolidation in the Field of Aviation and Space Law

We have had the pleasure of receiving “Estrategia Empresarial” in our Bilbao office, a prestigious publication that has been interested in getting to know in depth our activity, our team and our long professional trajectory as legal professionals. They were also interested in interviewing our partner, Zuberoa Elorriaga, in view of her recent qualification as a specialist in Aviation and Space Law, after completing the postgraduate course given by Icade University in collaboration with the Spanish Association of Aeronautics and Space Law (Aedae).

As our partner in Bilbao has rightly stated, at AIYON “we represent and protect the interests of individuals and companies immersed in a particularly complex, dynamic and multidisciplinary framework, which presents all kinds of issues affecting companies, operators, entities or individuals from all perspectives, bearing in mind that the ultimate goal is to comfort our clients by providing the most appropriate response to their query or the most beneficial solution to their problem”.

Read the full article

Royal Decree 128/2022 of 15 February on Port Reception Facilities for Ship Waste

As a consequence of the transposition of Directive (EU) 2019/883 of the European Parliament and of the Council of 17 April 2019 on port reception facilities for ship waste discharge, amending Directive 2010/65/EU and repealing Directive 2000/59/EC, Royal Decree 128/2022 of 15 February 2022 on Port Reception Facilities for Ship Waste was published on 16 February 2022.

The purpose of the aforementioned legal text is none other than to guarantee the protection of the marine environment from all those negative effects that might be caused by waste generated by ships and cargo residues from ships using Spanish ports. It also aims to ensure the proper functioning of maritime traffic, improving the availability and use of adequate port reception facilities, as well as the delivery of waste to these facilities.

The extension of the scope of application of this Royal Decree is one of the main innovations that it brings with it, as it now includes fishing vessels and sport or recreational vessels. Thus, this regulation will be applicable to all vessels, regardless of their flag, which call at or operate in Spanish ports, except those which are used to provide port services and State vessels. Likewise, in order to avoid unnecessary delays, in anchorages where the vessel does not carry out commercial operations of embarking and disembarking passengers or loading and unloading goods, provided that the call at anchorage is less than seven days, the obligation to discharge ship waste and pay the indirect tariff is exempted.

Another of the main updates is the application of this RD to waste caught unintentionally by fishing vessels, other unintentional catches, facilitating their collection at port waste-reception facilities free of charge; and the regulation of electronic communications through the SafeseaNetsystem, as established in Royal Decree 210/2004, of 6 February, which establishes a system for monitoring and reporting maritime traffic.

Finally, a cost recovery system is foreseen so that the costs of the ship waste reception service, excluding cargo residues, are borne by the ships themselves calling at or operating in Spanish ports through the payment of a fee, irrespective of whether they deliver the waste to a port reception facility or not. Thus, it seems that the government’s intention is that the fees should not discourage the delivery of waste.

The Royal Decree entered into force on 17 February 2022.