Maritime Legal Aspects
Put into professional practice
Admiralty law and General maritime law
✓ What is Admiralty law (and what is not)
✓ History of Admiralty law
✓ General Average, definition and example
✓ York-Antwerp Rules (YAR)
✓ People claims overall
✓ The Maritime Labour Convention (MLC)
✓ Maritime Liens
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Admiralty law and General maritime law
SHIPPING LAW
Wet Dry
• Salvage • Charterparties
• Collision • Bills of Lading
• Maritime liens • LOIs
• Etc. • Etc.
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Admiralty law and General maritime law
Evolution of Shipping law
✓ Code of Hammurabi, 1,800 BC
✓ The Rhodian Law, 8th century
✓ The laws of Oleron, 12th century
Basic principles survive still today!
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Admiralty law and General maritime law
General Average
Rule A.1 of the YAR: “There is a general average act when, and only when, any
extraordinary sacrifice or expenditure is intentionally and reasonably made or
incurred for the common safety for the purpose of preserving from peril the
property involved in the common maritime adventure”
Contributing values
• The ship
• The cargo on board
• The bunkers on board
• The freight to be earned
• The containers (if applicable)
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Admiralty law and General maritime law
General Average
Losses
Value of cargo overboard: US$ 130,000
Freight lost due to cargo not delivered: US$ 20,000
Repairs for the prosecution of the voyage: US$ 10,000
Total values lost: US$ 160,000
Contributing values
Vessel’s value: US$ 1,800,000
Cargo’s value: US$ 1,200,000
Freight: US$ 200,000
Total values contributing: US$ 3,200,000
Contribution ratio: 160,000/3,200,000 equals 5%, therefore:
GA contribution by the values involved:
Vessel to pay: US$ 1,800,000 * 5% = US$ 90,000
Cargo to pay: US$ 1,200,000 * 5% = US$ 60,000
Freight to pay: US$ 200,000 * 5% = US$ 10,000
Total contribution: US$ 160,000 6
Admiralty law and General maritime law
General Average
Who does the adjustment: Usually they are members of the Association of
Average Adjusters. Skilled and certified professionals who apply the Rules of
Practice of the Association at the place the adjustment is prepared, e.g. London,
New York, Singapore etc.
Beware!
• The sacrifice or expenditure must be extraordinary
• The peril saved from must be grave and imminent
• The sacrifice or expenditure must be intentional
• The sacrifice or expenditure must be reasonable, and
• The operation must be successful
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Admiralty law and General maritime law
General Average
The adjustment is based on a no-fault presumption and is not binding: This
means that it is open to the parties to challenge their adjusted contributions on
grounds of any party’s fault (usually unseaworthiness of the vessel).
The dispute can then be resolved through a settlement or full proceedings.
Obtaining security, an early stage must-do, arranged by the adjuster.
GA Absorption clauses, function and amounts.
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Admiralty law and General maritime law
General Average
YAR, 19th century to now 7-lettered rules
Definition of GA and general principles
• YAR 1860-1890
• YAR 1950
• YAR 1974 23-numbered rules
What loss or expense can qualify as GA
• YAR 1994
• YAR 2004
• YAR 2016
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Admiralty law and General maritime law
General Average
Handling of a GA situation
• Preparation before any such incident occurs: suitable general average clauses in the
contracts of carriage and rules to incorporate.
• Review of likely losses - compare with any GA absorption clause
• GA declaration and appointment of a competent and qualified adjuster
• Proper security arrangement
• Review of costs involved with the adjuster and preparation of the general average
adjustment
• Circulate the adjustment to the involved parties, collection of contributions
• In case of dispute, to review arguments and decide whether to fight further or seek
compromise
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Admiralty law and General maritime law
People Claims
✓ Crew member
✓ Passenger
✓ Outside associate (superintendent, pilot, technician etc.)
✓ Visitor (stevedores, port officials, agents etc.)
✓ Other (stowaways, deserters etc.)
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Admiralty law and General maritime law
People Claims
Employment contracts: period, voyage or else. Directly between the crew and the
owner or manning agent.
CBA: Owners’ association and Seafarers’ Union (ITF or affiliate), “floor” requirements.
Example: Standard Employment Contract of the Philippine Overseas Employment
Administration (POEA) cannot be amended to reduced rights and benefits.
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Admiralty law and General maritime law
People Claims
Flag state and/or national regulations to govern safety standards, living standards, work
hours, compensation etc. In case of an event, controversy exists as to what is the proper
jurisdiction between the various nationalities involved.
Situation in the USA:
Event involving seaman and within USA jurisdiction gives rise to “Maintenance and
cure” rights. Crew nationality, lack of negligence etc. do not affect this.
In case of negligence/unseaworthiness, right to claim damages on top of maintenance
and cure, The Jones Act 1920
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Admiralty law and General maritime law
People Claims
MLC 2006 aims to introduce uniformity and minimum standards for:
• Employment terms agreed
• Health condition, training and qualifications
• Accommodation conditions, food quality, recreational facilities
• Health/medical care, follow up until recovery, compensation.
MLC Certificates on board as proof of compliance
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Admiralty law and General maritime law
People Claims
Liability towards other than crew members
Owner’s duty of care as a matter of:
a. Contract
Though it makes things simpler, there can be cases where it is by-passed, hence the
knock-for-knock clauses
b. Statute
Local regulations can impose additional obligations and, if not complied with, can face
civil as well as criminal liability
c. Common law
Local Courts worldwide are very likely to find in favour of the injured person on the
basis of Owners’ implied duty of care.
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Admiralty law and General maritime law
Maritime Lien
Definition: the right to bring in rem proceedings against property (vessel, cargo, bunkers
etc.)
Main feature: it sticks with the property, so even an innocent buyer will be held liable
for a pre-existing maritime lien
Getting rid of it: only through settlement of the claim, judicial sale of the property or
time-bar
Sale of the property will not extinguish the Maritime lien
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Admiralty law and General maritime law
Maritime Lien
Three conventions govern the situation with maritime liens:
• The International Convention for the Unification of Certain Rules of Law Relating to
Maritime Liens and Mortgages 1926 (“the 1926 Convention”);
• The International Convention for the Unification of Certain Rules relating to Maritime
Liens and Mortgages 1967 (“the 1967 Convention”); and
• The International Convention on Maritime Liens and Mortgages 1993 (“the 1993
Convention”).
However, uniformity worldwide is yet to be achieved
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Admiralty law and General maritime law
Maritime Lien
What qualifies as suitable to generate a maritime lien:
• Crew wages
• Collision
• Salvage
• Towage
• Pilotage
Less likely, depending on local regulations:
• Goods supplied (e.g. bunkers, provisions, repairs etc.)
• Port dues
• Cargo damage
• General average
• Wreck removal expenses
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