Contributed By Hill Dickinson
Not applicable to our jurisdiction. However, it is undeniable that Greece is widely renowned as one of the world’s leading maritime nations, with a rich shipping heritage dating back to antiquity. The maritime industry in Greece remains one of the main pillars of the economy and, when combined with related and complementary sectors, it contributes close to 10% of the national GDP.
Despite the economic crisis over the last decade, shipping companies owned and/or managed by Greek interests continue to top the ranks of the oceangoing sector, carrying approximately 20% of global seaborne trade.
According to figures published by IHS Markit (and referenced by the Union of Greek Shipowners), as of January 2018 the Greek fleet comprised 4,746 vessels with a total deadweight tonnage (DWT) of 365.45 million, representing 19.89% of total world DWT and 49.15% of the total EU fleet.
Greek shipowners control 29.19% of the world crude oil tanker fleet, 22.03% of the world dry bulk carrier fleet and 15.45% of the world chemical and product tanker fleet. More than 750 vessels are registered with the Greek shipping register, with the Greek-flagged fleet ranking seventh internationally and second in the EU in terms of DWT.
Regardless of shipping cycles, the Greek shipping market remains active and continues to grow, with Greek shipowners regularly ranking as the most active buyers and sellers of newbuilding and second-hand ocean-going vessels.
Not applicable to our jurisdiction. However, in Greece the common corporate structure for shipping operations consists of special-purpose vehicles (SPVs) owning a single vessel. Those SPVs are often incorporated in recognised offshore or shipping jurisdictions and would include entities incorporated in the Marshall Islands, Liberia, Panama, Cyprus and Malta (as well as many others). Commonly, the relevant SPV (and ultimately the relevant vessel) is managed by another offshore ship management company with a branch office established in Greece, pursuant to the provisions of Article No 25 of Law 27/1975 (as amended).
While a wide variety of corporate structures are available and implemented in Greece (for Greece-based operations) the above example is considered a tried and tested structure, used by many Greek shipowners, large and small. Such structures offer favourable legal and fiscal advantages with tax incentives, legal certainty and limited liability (in most cases).
Those primary benefits are combined with centuries of maritime experience, a wealth of commercial knowledge, the availability of hardworking operations/technical personnel (with seafaring experience) and leading professional service providers specifically focused on the shipping business in Greece. The combined force of these attributes has made Greece a very attractive destination for both Greek and international ship-owning operations.
Not applicable to our jurisdiction. However, in order to attract international/foreign investment and enable those international shipping companies to establish operations in Greece and take advantage of a favourable and legitimate tax regime the regime of Law 89/1967 was established in relation to management companies in Greece. Despite Law 27/1975 amending Law 89/1967, ship management companies well established in Greece are still commonly referred to as Law 89 management companies.
In accordance with Article No 25 of Law 27/1975, foreign (non-Greek) shipping companies may establish a branch office in Greece for activities related exclusively to:
Upon completion of an application (together with all requested documentation) filed with the Ministry of Shipping and Insular Policy, a Law 89 management company can obtain a special licence for its establishment in Greece. The licences are granted by ministerial decision and published in the Government Gazette.
Within two months of publication of the ministerial decision and establishment of the Law 89 management company in Greece, the relevant entity is required to provide a bank guarantee (in the amount of USD10,000) in favour of the Greek Ministry of Economy, Development and Tourism.
The licence for a Law 89 management company remains valid for five years unless it is revoked. In order to maintain the benefits and exemptions provided by Law 27/1975, the management company is obliged to import foreign currency into Greece in such amount that will cover:
The shipping industry is by its nature a high-risk, capital-intensive industry. There are vast capital resources tied to ships and their operation, all of which are placed at risk by the perils of the sea, wars, piracy, congestion and the volatility and cyclical nature of the industry itself.
Traditionally, ships have been financed through banks and financial institutions using conventional debt finance. Greece is no exception and the dominant form of ship finance remains a term loan facility secured by a registered ship mortgage. Due to the international nature of shipping business, the majority of loan facilities and security documents offered to the Greek market are governed by English law and subject to the jurisdiction of English courts, even in cases where finance is provided by Greek banks and/or financial institutions.
Usual and customary security documents for ship finance transactions often include:
As a great number of banks (Greek and international) have come under increasing regulation and pressure to improve their capital adequacy ratios, many have sought to reduce their exposure to the shipping industry. Gradually, other forms of finance have started to fill the severe funding gap created by this withdrawal over the last few years.
Alternatives to traditional ship finance in Greece now include sale and leaseback structures (both from Western and Far Eastern leasing companies and financial institutions), export credit financing and builder credit or hire purchase arrangements. In particular, international private equity funds have shown a significant interest in providing direct credit and ‘traditional’ debt finance to shipowners in Greece, albeit at higher interest rates and shorter loan terms (at least when compared with banks or institutional lenders).
Not applicable to our jurisdiction. However, under Greek Law, the Greek flag offers many incentives to shipping entities. Under the Greek Civil Code of Public Maritime Law (Legislative Decree 187/1973), in order to qualify for registration with the Greek shipping register a ship must be “not less than ten net registered tons (NRT), intended to navigate at sea by its own means of propulsion.” Ships can be registered with the Greek shipping register under two different classes:
Under Greek law there are two possible methods of registering a ship with a Greek flag:
Not applicable to our jurisdiction. However, under Greek Law, the Greek flag offers many incentives to shipping entities: see 1.5 Maritime Projects' Eligibility for Incentives, above.
Not applicable to our jurisdiction.
Not applicable to our jurisdiction.
Not applicable to our jurisdiction. However, the most important security taken by a lender in a ship finance transaction remains the ship mortgage registered over a ship in favour of a lender. Greek law provides for three different types of ship mortgages:
Not applicable to our jurisdiction.
Not applicable to our jurisdiction.
Greece is a party to both LLMC 76 and its 1996 Protocol, which have been implemented at a national level through the enactment of Laws 1923/1991 and 3743/2009, respectively. Law 1923/1991 gives the force of national law to the provisions of LLMC 76, while Law 3743/2009 gives effect to the amendments introduced by the 1996 Protocol.
See 1.1 LLMC 76, above.
Greece is a party to both LLMC 76 and its 1996 Protocol (please see 1.1 LLMC 76,above). Importantly, Greece has not exercised the right afforded by Article No 10 paragraph 1 of LLMC 76, therefore limitation of liability may be invoked irrespective of whether a limitation fund has been constituted.
Neither Law 1923/1991 (as amended) nor the Code of Private Maritime Law prescribe a limitation period within which action should be taken to limit liability. In fact, it has been held that no such time bar exists (Patra Court of Appeal, decision No 661/2005, cited with approval by the Piraeus Court of Appeal in a recent decision, No 228/2016). Nevertheless, the better view remains that steps to establish the limitation fund should be taken as quickly as possible.
In line with Article No 2 of LLMC 76, Law 1923/1991 (as amended) provides that the following types of claim can be subject to limitation of liability:
It must be noted that Article No 2 sub-paragraphs 1 (a) and (c) of Law 1923/1991 refer to “the exploitation of the ship,” differing from the corresponding sub-paragraphs of LLMC 76, which use the phrase “the operation of the ship”.
It has been decided by high authority (Piraeus Court of Appeal, decision No 228/2016, with recent Supreme Court approval, decision number 1470/2017) that the term ‘exploitation’ adopted by the draftsmen of Law 1923/1991, does not do justice to the original text of LLMC 76. Accordingly, the phrase “exploitation of the ship” in Article No 2 of Law 1923/1991 should be read in line with the English text of LLMC 76 (ie, “operation of the ship”) so as to include technical aspects and not only the commercial operation/exploitation of the ship.
In line with Article No 3 of LLMC 76, Law 1923/1991 (as amended) provides that the following types of claims cannot be subject to limitation of liability:
Article No 4 of Law 1923/1991 mirrors the equivalent provision of LLMC 76 in that a person shall not be entitled to limit his or her liability if it is proved that the loss resulted from his or her personal act or omission, committed with intent to cause such loss, or recklessly and with knowledge that such loss would probably result. Case law demonstrates that it is very difficult to break limitation. The concept of ‘recklessness’ is interpreted as ‘gross negligence’ under Greek law. Furthermore, for legal persons seeking limitation of liability, the acts or omissions barring limitation must be attributable to their representatives (see Supreme Court decision No 1470/2017). The burden of proof for establishing such conduct lies with the party seeking to rely on Article No 4 to break limitation.
The Amendments to the 1996 Protocol to LLMC 76 (adopted on 19 April 2012 and entering into force on 8 June 2015) have been implemented in Greece by Article No 16 paragraph 1 of Law 4504/2017. Therefore, liability may be limited as follows:
It must be noted that Greece is a member of the International Monetary Fund (IMF) and therefore the resulting SDR is given its euro value (prevailing on the establishment date of the limitation fund), by using the method of valuation applied by the IMF for its operations and transactions.
Please see 1.7 Conduct Barring Right to Limitation of Liability, above.
A party seeking to set up a limitation fund will need to post a Greek bank guarantee of a form and wording acceptable to the court.
Please see 1.10 Acceptable Guarantees, above.
The constitution of the limitation fund has important implications on any pre-existing claims and arrests. More specifically:
In Greece, ships are sold (in the context of enforcement) by way of public auction. The concept of judicial sale does not exist under Greek law. The main source regulating public auction proceedings of ships is the Greek Code of Civil Procedure.
Under Greek civil procedural law, auction proceedings in Greece generally take place without the involvement of a court. The main authorities involved in auction proceedings are a court bailiff and a notary public duly accredited by the Ministry of Justice to conduct electronic public auctions.
The law has recently changed and since 21 February 2018 all public auctions are conducted exclusively through electronic (online) procedures (e-auctions) under the supervision of an appointed accredited notary public. The online platform for e-auctions is: http://www.eauction.gr. The purpose of this amendment is to expedite and maximise the efficiency of the enforcement proceedings.
The public auction proceedings are initiated by any creditor who has (what is called under Greek law) an enforceable title. The relevant provisions of the Greek Code of Civil Procedure identify the following enforceable titles:
In an enforcement procedure, a copy of the enforceable title with an attached exequatur (ie, an official order addressed to all competent court enforcement officers to execute the deed of enforcement) and a demand for payment are served to the debtor within a term of three business days by a court bailiff under instruction from a creditor.
If the debtor fails to pay within three business days, the creditor may begin the main phase of the enforcement proceedings by officially instructing a court bailiff to proceed with the enforcement and arrest of the ship. The court bailiff is instructed by the creditor to draft and issue a deed of arrest of the ship, including:
The public auction of the ship is scheduled on the first Wednesday (which must be a business day) 40 days following the arrest of the ship.
The electronic public auction proceedings are conducted by a notary public (registered with the Notary Public Association) and practising in the region where the ship is moored.
The public auction proceedings are completed with the transfer of the vessel’s ownership to the highest bidder.
Within three days of the date of the arrest of the ship, a copy of the deed of arrest with all the details of the public auction must be served to:
The court bailiff must file a copy of the deed of the arrest of the ship, along with the enforceable title and evidence it has been properly served, with the employee of the public auction proceedings within ten days of the ship’s arrest.
An extract of the deed of the arrest is issued by the court bailiff and is published on the Public Auctions website within 15 days of the ship’s arrest. A copy of this extract is subsequently served to the Port Authorities (OLP), various funds and the mortgagee.
The reserve price for the starting/first bid is specified by the court bailiff in the deed of arrest. The first bid is set at two thirds of the commercial value of the ship, which is determined by the court bailiff on the basis of expert valuations.
The public auction of the ship is conducted by openly tendering online offers. As a result, there is only one round, during which all prospective bidders submit their offers, each higher than the previous, until the vessel is awarded to whoever has submitted the highest bid by the closing time of the auction.
As already discussed (please see 2.4 Judicial Sale Proceedings, above), there is only one round of bids in the public auction, with no requirement for a specific number of bids.
If no offers are tendered during the public auction, the creditor who initiated the enforcement proceedings can request the ship to be awarded to him or her at the reserve price. If no such request is filed, a new auction date is set.
The auction of the ship is conducted on a real-time basis with successive online bids to the notary public via the specialised electronic bidding platform. More specifically, all prospective bidders submit their offers, each one higher than the previous, until the close of the auction. All bidders are automatically notified of each new higher offer.
The electronic public auction is carried out from 10:00 to 14:00 or from 14:00 to 18:00. At the end of the auction, all participants are directly notified of the winning bid via the electronic platform. The ship is sold to the bidder with the highest offer.
Public auctions are conducted exclusively through online procedures and so participants/prospective bidders are not required to attend in person.
To take part in the auction, prospective bidders must:
The public auction employee considers the documents submitted by the prospective bidders, ensures adherence to the requirements for participation and uploads a list of the bidders eligible to participate in the proceedings to the electronic platform.
The successful bidder must pay the sale price into a special bank account of the employee of the public auction within ten business days of completion of the public auction.
A party that has a judicially recognised credit against the ship is not precluded from placing a bid during the e-auction proceedings.
The only parties that cannot place a bid according to the provisions of Greek Code of Civil Procedure are the debtor, the accredited notary public and any employees involved in the public auction proceedings.
Under Greek law a maritime judge cannot approve the sale to the successful bidder if the winning bid does not cover the arrest expenses incurred within the claim that gave rise to the judicial sale proceedings.
According to the Greek Code of Civil Procedure, the costs and expenses of the enforcement (including arrest expenses) must be borne by the debtor and are paid in advance by the creditor, initiating the enforcement proceedings.
According to Article No 975 of the Greek Code of Civil Procedure, the costs and expenses of the enforcement are deducted from the auction proceeds prior to its distribution to the ranking creditors. The costs and expenses incurred by the creditor commencing the enforcement proceeding are in the general interest of all the creditors, provided they are necessary for the enforcement procedure and include all costs incurred during the pre-auction phase, the arrest, the maintenance of the arrested ship, the auction procedure and the ranking of the creditors.
Greece has ratified the Hague-Visby Rules, which have been given the force of national law through the enactment of Law 2107/1992, but not the Hague, Rotterdam or Hamburg Rules.
Please see 3.1 Carriage of Goods, above.
The Hague-Visby Rules are compulsorily applicable to:
Under Greek law, a bill of lading constitutes prima facie evidence of the terms of the contract of carriage in the hands of a charterer, while it constitutes conclusive evidence of the terms of the contract of carriage in the hands of a bona fide endorsee.
Generally, the contracting parties in a carriage of goods by sea contract are the carrier and the shipper. The carrier can be the shipowner or any other person who, although not the owner, has the commercial exploitation and operation of a ship. The identity of the carrier is, in some cases, a complex question of fact (please see 3.8 Carrier, below). The shipper is the person who delivers the goods to the carrier for carriage and is primarily liable for payment of freight. The shipper can be the owner of the goods, or it can simply be delivering goods belonging to another for carriage. Finally, a consignee is also usually involved in a carriage of goods by sea contract. The consignee (either the shipper or a third party) is the receiver of the goods and has the right to claim delivery of the goods.
In principle, when cargo is lost or damaged in the course of carriage, the party generally entitled to claim in its own name is the shipper that entered into the contract with the carrier. However, there are exceptions to this general rule, including:
Such cargo claims can be brought against the carrier, which may or may not be the shipowner (please see 3.8 Carrier below).
Please see 3.6 Cargo Claims, above.
The party that has agreed to carry the goods is deemed to be the carrier. If the contract of carriage has not been made with the shipowner, but between the shipper and the charterer, the charterer (not the shipowner) is deemed to be the carrier.
Also, where the master signs a bill of lading as the carrier’s agent, the shipowner will be identified as the carrier, unless it can be shown that the master acted for the charterer and the party suing under the bill of lading had knowledge of this.
As already mentioned, the identity of the carrier is a question of fact. Nevertheless, the following principles can be distilled from case law:
Please see 3.10 Right in Rem or Maritime Lien, below.
Under Greek law, claims cannot attach to the ship in the same way as maritime liens in other jurisdictions (most notably England and Wales). Consequently, the ship cannot be sued in rem. The issue of maritime liens is governed by Article No 205 of the Greek Code of Private Maritime Law, under which cargo claims do not give rise to a maritime lien under Greek law unless they are the result of a collision.
Under Greek law the carrier can be sued in both contract and tort. Furthermore, in line with Article No 4 bis of the Hague-Visby Rules, the defences and limits of liability of the rules apply in an action against the carrier, irrespective of whether the action is founded in contract or tort.
As a general rule, Greek courts do recognise the effectiveness of Himalaya clauses in bills of lading. The rationale behind this approach is to prevent cargo owners from evading the effect of contractual defences available to the carrier by suing the tortfeasor (not in sufficiently close relationship with the carrier to qualify for the protection afforded by Article No 4 bis of the Hague-Visby Rules) in negligence. Therefore, Himalaya clauses can be used to extend the protection afforded by the contract of carriage to persons engaged by the contractual carrier and can extend to cargo forwarders.
In line with Article No 4 rule 2 of the Hague-Visby Rules, the following exclusions of liability are available to the carrier:
It is worth noting that the carrier cannot rely on one of the immunities set out in Article No 4 rule 2 above if it failed, before and at the beginning of the voyage, to exercise due diligence to render the ship seaworthy.
In accordance with the Hague-Visby Rules, unless the nature and value of the goods have been declared by the shipper before shipment and inserted in the bill of lading, the carrier is entitled to limit its liability either by unit (SDR666.67 per unit) or by weight (SDR2 per kg), whichever is higher.
Generally, Greek law places the burden of proof upon the party that substantially asserts the truth of a particular fact (Article No 338, Greek Code of Civil Procedure). Nevertheless, where a cargo claimant shows a prima facie case of breach of the contract of carriage under the final item listed in Article No 4 rule 2 of the Hague-Visby Rules (please see question 13 above) or otherwise (by establishing that the goods were loaded in good condition and discharged at a shortage or in a damaged condition), the burden shifts to the carrier to prove that the loss and/or damage is attributable to a cause for which it is not responsible (see also question 16 below). In all other cases falling under the preceding items of Article No 4 rule 2 listed above, it is presumed that the carrier is not liable for such loss or damage and the burden of proof falls upon the cargo owner to establish that the loss or damage resulted from the fault or neglect of the carrier.
As per the provisions of Article No 3 rule 6 of the Hague-Visby Rules, upon delivery of the goods by the carrier to their destination, the cargo owner has to inspect them. If their condition does not accord with that described on the face of the bill of lading, the cargo owner must, before or at the time of their actual delivery, notify the carrier or his or her agent, in writing, about the loss or damage, as well as its nature. In the case of non-apparent damage or loss, notice must be given within three days of actual delivery of the goods. Finally, written notice is not required when the goods have, at the time of their actual delivery, been the subject of joint inspection.
The obligation (or perhaps more accurately, the burden) on the cargo owner to provide written notification can result in two presumptions:
Nevertheless, the presumption arising under both situations is rebuttable, at least when sufficient evidence can be cited by the party against which it operates.
In line with the Hague-Visby Rules, the carrier is discharged from all liability in respect of the goods, unless suit is brought within one year of their delivery or the date they should have been delivered. Contrary to the express provisions of Article No 275 of the Greek Civil Code, however, this one-year period may be extended if the parties so agree.
Please see 3.16 Time Bar in Cargo Claims, above.
It seems to be settled law that a jurisdiction and/or choice of law clause contained in a bill of lading bind the holder if both the holder and the carrier have signed the bill or if there is a previous course of dealings as a result of which the holder of the bill is aware of the carrier’s standard conditions of carriage contained in the bill of lading.
Furthermore, Regulation (EU) 1215/2012 applies in Greece.
Article No 25 of the Regulation grants exclusive jurisdiction to the courts of any member state (so long as the parties are in agreement and regardless of where they are domiciled) “to settle any disputes which have arisen or which may arise in connection with the particular legal relationship”. Article No 25 further provides that such an agreement conferring jurisdiction must be:
Although there are numerous options available to a party seeking to challenge the validity of a jurisdiction and/or choice of law clause, Greek courts are usually slow in finding in favour of the invalidity of a jurisdiction and/or choice of law clause, provided that it can be shown that the relevant clause has been incorporated into the contract of carriage in accordance with standard shipping practice.
The following provisions govern marine accidents in waterways in Greece:
According to the provisions of Article No 8 of UNCLOS (UN Convention on Law of the Sea), which Greece has incorporated with Law 179/1998, waters on the landward side of the baseline of the territorial sea, including bays, ports and estuaries of rivers, form part of the internal waters/waterways of the state.
The hiring of a pilot is compulsory in certain cases. When a ship sails in certain dangerous areas, pilotage is compulsory for maritime safety reasons.
In addition, according to the Greek Code of Public Maritime Law, pilotage is compulsory:
According to Article No 187 of the Greek Code of Public Maritime Law, the following ships are exempt from compulsory pilotage:
There is no single reply to this question and different provisions should be considered depending on the damages to be recovered and the authority against which a shipowner wishes to recover damages.
The role of the Inspectors is to be a responsible, impartial and permanent investigative body. They should be endowed with the necessary powers and, through suitably qualified investigators, sufficiently competent in matters relating to marine casualties and incidents to conduct safety investigations in an unbiased manner and issue reports.
According to Article No 5 paragraph 1 of Law 4033/2011, the Hellenic Bureau for Marine Casualties Investigation (HBMCI) must conduct a safety investigation after very serious marine casualties:
According to Article No 5 paragraph 1 of Law 4033/2011, HBMCI shall decide whether or not a safety investigation is to be undertaken in regard to any other marine casualty or incident.
The HBMCI shall ensure that its investigators (or any other investigative body to which it has delegated the task of safety investigation), in collaboration with the authorities responsible for the judicial inquiry where appropriate, are provided with any information pertinent to conduct the safety investigation and therefore are authorised to:
There is no single answer to the question of how a shipowner initiates a claim to recover damages, and different provisions should be considered depending on the claim to be initiated and the authority against which a shipowner wishes to recover damages.
Different time bars apply, depending on the administrative claim to be filed and the authority against which the claim is filed.
Different provisions should be considered depending on the authority against which a shipowner wishes to recover damages.
As above, different provisions should be considered depending on the authority against which a shipowner wishes to recover damages.
As above, different provisions should be considered depending on the authority against which a shipowner wishes to recover damages.
Different provisions should be considered depending on the claim to be filed and the authority against which a shipowner wishes to file such claim.
Different time bars apply depending on the claim to be filed and the authority against which the claim is filed.
Different provisions should be considered depending on the claim to be filed and the authority against which a shipowner wishes to file the claim.