Shipping 2019 Comparisons

Last Updated March 19, 2019

Contributed By Hill Dickinson

Law and Practice

Authors



Hill Dickinson established its Piraeus office in 1994 to support the firm's long-standing relationships with Greek shipowners, insurers and charterers operating in the Greek market. In 2019 the office celebrates its 25th anniversary and now provides a full spectrum of English law legal services to marine and energy sectors, advising on all forms of shipping litigation and dispute resolution, ship finance and corporate transactional matters. The 27-strong team services clients including shipowners, operators and charterers, maritime insurers, underwriters, P&I clubs, banks, private equity firms and other financial institutions, brokers, commodities traders, port operators and major oil companies. The Piraeus team complements the firm’s wider marine practice – made up of 180 specialists operating across the UK, Monaco, Hong Kong and Singapore – and has grown considerably in the last year. In 2018 it announced the further expansion of its market-leading shipping disputes team, the acquisition of a finance and corporate team and the addition of a master mariner.

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:

  • managing, operating or brokering (including sale and purchase, shipbuilding, chartering and insurance) ships; and
  • representing shipowning companies or other entities of similar purpose in Greece. For the purposes of a Law 89 management company, a qualifying ship is required to have a capacity in excess of 500 tons, with a Greek or any other international flag, engaged in international shipping activities, albeit with the specific exclusion of passenger and/or commercial ships performing domestic voyages and trading within Greek territorial waters.

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:

  • its annual operating expenses (being an amount not less than USD50,000); and
  • all the payments to be made by the management company in Greece.

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:

  • first priority or preferred ship mortgage (depending on the flag state);
  • earnings and insurances assignments;
  • bank account pledges;
  • share pledges or charges over the ship-owning SPV;
  • corporate guarantees granted by a holding or management company; and
  • in some cases, personal guarantees granted by the ultimate beneficial owner.

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:

  • Class A ships, which have a capacity of between 10 and 59.99 NRT; and
  • Class B ships, which have a capacity of more than 60 NRT.

Under Greek law there are two possible methods of registering a ship with a Greek flag:

  • a ship can be registered with the Greek shipping register in accordance with the provisions of the Greek Civil Code of Public Maritime Law (Legislative Decree 187/1973). There are numerous requirements in order to register a ship with the Greek flag, including a condition that more than 50% of the ship is beneficially owned by Greek interests (either directly by Greek citizens or by Greek companies); or
  • a ship owned by a foreign shipping company may also be registered in Greece pursuant to Legislative Decree 2687/1953. This provides that ships with a capacity of more than 1,500 gross registered tons, which are beneficially owned by Greek interests (being more than 50%), may be registered with the Greek shipping register (as a foreign investment) following the issuance of a ministerial decision setting out any conditions for the registration of the relevant ship. 

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:

  • A ship mortgage in the form of a notarial deed registered with the ship register pursuant to Articles No 195-204 of the Greek Code of Private Maritime Law (GCPML). This type of mortgage entitles the mortgagee to initiate public auction proceedings in accordance with the Greek Civil Procedure Code. However, unlike the first preferred mortgage (see below), the mortgagee cannot take possession of the ship and cannot proceed with private sale of the ship. For that reason, this form of ship mortgage is less common in practice and in contrast to the first preferred mortgage described below. The mortgagee’s claim ranks in priority over any unsecured claims, subject however, to any maritime liens as defined in Article No 205 of the GCPML. ¬According to Article No 205, the following claims constitute maritime liens:
    1. legal costs incurred for the common benefit of the creditors, dues and charges incurred by the ship, taxes relating to navigation, dues payable to the Seamen’s Pension Fund, and fines imposed or to be imposed by the Bureau for the Provision of Marine Employment in favour of the Seamen’s Fund for Sick and Unemployed Seamen;
    2. claims by the master and crew arising from their employment contracts and the costs of guarding and maintaining the ship, from arrival at the port where the auction takes place up to the auction;
    3. costs and expenses payable in respect of marine salvage and the removal of wrecks; and
    4. damages due to ships, passengers and cargoes as a result of collision.
  • A preferred ship mortgage in the form of notarial deed registered with the Greek shipping register pursuant to the provisions of Legislative Decree 3899/1958. A preferred ship mortgage must be concluded by contract between the mortgagee and the mortgagor and can only be granted on ships with a capacity of over 500 tons. A preferred mortgage affords the mortgagee the right to take possession of the ship, receive the earnings and sell the ship by private sale.
  • A preferred ship mortgage on a vessel registered with Greek flag as a foreign investment in the form of notarial deed registered with the Greek shipping register pursuant to the provisions of Legislative Decree 2687/1953. According to Article No 16 of Legislative Decree 2687/1953, the mortgagee in this type of preferred mortgage is provided with enhanced rights and the right to take possession and management of the ship, and sell the ship through private sale. A first preferred mortgage registered under this law ranks in priority over all maritime liens of Article No 205 of GCPML, save for the ones which are also recognised as liens in Article No 2 of the Brussels Convention in relation to liens and mortgages of 1926.

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:

  • claims in respect of loss of life or personal injury, or loss of or damage to property (including damage to harbour works, basins and waterways, and aids to navigation), occurring on board or directly connected with the exploitation of the ship or with salvage operations, and consequential loss resulting therefrom;
  • claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;
  • claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the exploitation of the ship or salvage operations;
  • claims in respect of the raising, removal, destruction or the rendering harmless of a ship which has sunk, wrecked, stranded or abandoned, including anything that is or was on board the ship;
  • claims in respect of the removal, destruction or rendering harmless of the ship’s cargo; and
  • claims of a person, other than the person liable, in respect of measures taken in order to avert or minimise loss (the person liable may limit his liability in accordance with this Convention and further loss caused by such measures).

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:

  • claims for salvage, including, if applicable, any claim for special compensation under Article No 14 of the International Convention on Salvage 1989 (as amended), or contribution in general average;
  • claims for oil pollution damage within the meaning of the International Convention on Civil Liability for Oil Pollution Damage, dated 29 November 1969, or of any amendment or protocol thereto that is in force;
  • claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage;
  • claims against the owner of a nuclear ship for nuclear damage; and
  • claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations. These include claims by their heirs, dependants or other persons entitled to make such claims if, under the law governing the contract of service between the shipowner or salvor and such servants, the shipowner or salvor is not entitled to limit his or her liability in respect of such claims, or if they are by such law only permitted to limit their liability to an amount greater than that provided for in Article No 6.

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:

  • For claims for loss of life or personal injury on:
    1. ships not exceeding 2,000 gross tonnage, the limit is 3.02 million Special Drawing Rights (SDR);
    2. larger ships, the following additional amounts are used in calculating the limitation amount:
      1. for each tonne from 2,001 to 30,000 tonnes, SDR1,208;
      2. for each tonne from 30,001 to 70,000 tonnes, SDR906; and
      3. for each tonne in excess of 70,000 tonnes, SDR604.
  • For any other claims on:
    1. ships not exceeding 2,000 gross tonnage, the limit is SDR1.51 million;
    2. larger ships, the following additional amounts are used in calculating the limitation amount:
      1. for each tonne from 2,001 to 30,000 tonnes, SDR604;
      2. for each tonne from 30,001 to 70,000 tonnes, SDR453; and
      3. for each tonne in excess of 70,000 tonnes, SDR302.

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:

  • All proceedings commenced against the defendant are terminated given that by virtue of Article No 13 paragraph 1 of Law 1923/1991, any person having made a claim against the fund shall be barred from exercising any right in respect of the claim against any other assets of a person by or on behalf of whom the fund has been constituted.
  • By virtue of Article No 13 paragraph 2 of Law 1923/1991, the ship or any other property belonging to the defendant, on behalf of whom the fund has been constituted, which has been arrested or attached may be released by order of the court (a discretionary power invariably exercised).

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:

  • final Greek court judgments;
  • foreign court judgments and arbitral awards declared enforceable in Greece; and
  • notarial deeds (including ship mortgages) or foreign ship mortgages to the extent that these have been declared enforceable by a Greek court decision, etc.

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 ship’s precise description;
  • the ship’s reserve price of first bid, which cannot be lower than two thirds of the commercial value of the ship;
  • a description of the enforceable title, which is the basis of enforcement; and
  • details of the auction date, location and the notary public conducting it.

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 debtor;
  • the ship register and the district court judge of the region where the ship is moored; and
  • the harbour master, the master of the ship and the Greek Seamen’s Pension Fund (NAT).

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:

  • register with the electronic platform two days prior to the date of the public auction;
  • declare their intention to participate in a specific public auction proceeding;
  • provide a guarantee deposit in the amount of 30% of the starting/first bid; and
  • electronically file a power of attorney.

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:

  • international carriage under a bill of lading or other document of title (therefore not a seaway bill, or other transport receipts), where the ports of loading and discharge are located in different countries; and
  • local carriage by sea between Greek ports irrespective of whether the carriage is under a bill of lading. However, it is unclear whether the Hague-Visby Rules or the Greek Code of Private Maritime Law (which is heavily based on the Hague Rules) apply to carriages between Greek ports under non-negotiable bills of lading.

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:

  • If the original bill of lading has been issued to the order of the consignee (or has been endorsed by the shipper to the consignee) and the consignee is the holder of the original bill of lading, the consignee can claim in its own name.
  • The same applies to other legal holders of the bill of lading (eg other parties that purchased the goods from the consignee), provided they can establish their rights as legal holders of the bill of lading with an unbroken chain of endorsements.
  • If the insurer of a cargo indemnifies the legal holder of the bill of lading for its loss, the insurer becomes subrogated to the rights of the assured/holder of the bill of lading and is entitled to file a claim in its own name against the carrier.
  • A cargo pledgee and/or assignee of the consignee’s rights has title to sue the carrier, provided it is the legal holder of the bill of lading.
  • A shipper/charterer can sue the carrier if:
    1. it is the legal holder of the bill of lading; or
    2. it has endorsed the bill of lading to the consignee or a third party but retained risk to the goods (eg a CIF [Cost, Insurance and Freight] sale). In these circumstances, the shipper/charterer who has compensated the consignee/third party for its loss and has become subrogated to the rights of the legal holder of the bill of lading has title to sue the carrier.

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:

  • a bill of lading issued on a shipping company’s letterhead creates a rebuttable presumption that the shipping company agreed to act as carrier;
  • a bill of lading issued on a shipping company’s letterhead and signed by the ship’s agent “for the master – as agent only” creates a rebuttable presumption that the shipowner (not the shipping company) is the carrier;
  • a bill of lading issued on a shipping company’s letterhead to which freight has been paid is evidence that the shipping company acted as the carrier; and
  • demise/identity of the carrier clauses are invalid to the extent they contradict statements on the face of the bill of lading relating to the identity of the carrier.

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:

  • act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship;
  • fire, unless caused by the actual fault or privity of the carrier;
  • perils, dangers and accidents of the sea or other navigable waters;
  • act of God;
  • act of war;
  • act of public enemies;
  • arrest or restraint of princes, rulers or people, or seizure under legal process;
  • quarantine restrictions;
  • act or omission of the shipper or owner of the goods, his agent or representative;
  • strikes, lockouts, stoppage or restraint of labour from whatever cause, whether partial or general;
  • riots and civil commotions;
  • saving or attempting to save life or property at sea;
  • wastage in bulk of weight or any other loss or damage arising from inherent defect, quality or vice of the goods;
  • insufficiency of packing;
  • insufficiency or inadequacy of marks;
  • latent defects not discoverable by due diligence; and
  • any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.

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:

  • if notice for loss or damage is not given within the prescribed time, the cargo owner is deemed to have taken delivery of the goods in the condition/quantity shown on the face of the bill of lading. Of course, this gives rise to a presumption in favour of the carrier and against the cargo owner; or
  • conversely, if notice is given in accordance with Article No 3 rule 6, the cargo owner is deemed to have taken delivery of the goods in the condition/quantity shown in the notice. Of course, in this case the presumption is in favour of the cargo owner and against the carrier.

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:

  • in writing or evidenced in writing;
  • in a form that accords with the practices the parties have established between themselves; or
  • in the case of international trade or commerce, in a form that accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

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:

  • SOLAS 1974, Chapter I, Regulation 21 – Casualties;
  • each administration undertakes to conduct an investigation into any casualty occurring to any of its ships subject to the provisions of the present convention when it judges that such an investigation may assist in determining what changes in the present regulations might be desirable;
  • each contracting government undertakes to supply the organisation with pertinent information concerning the findings of investigations. No reports or recommendations of the organisation based upon such information shall disclose the identity or nationality of the ships concerned or in any manner fix or imply responsibility upon any ship or person;
  • SOLAS 74, Chapter XI-1, Regulation 6, The Code for the Implementation of Mandatory IMO Instruments annexed to Resolution A.996 (25) of the IMO Assembly of 29 November 2007;
  • the Code for the Investigation of Marine Casualties and Incidents annexed to Resolution A.849 (20) of the IMO Assembly of 27 November 1997 (the IMO Code for the Investigation of Marine Casualties and Incidents);
  • Directive 2009/18/EC of the European Parliament and of the Council of 23 April 2009, establishing the fundamental principles governing the investigation of accidents in the maritime transport sector, which has been implemented in Greece with the provisions of Law 4033/2011;
  • Commission Regulation (EU) No 1286/2011 of 9 December 2011, adopting a common methodology for investigating marine casualties and incidents developed pursuant to Article No 5(4) of Directive 2009/18/EC of the European Parliament and of the Council; and
  • Legislative Decree 712/1970, governing administrative investigations of marine casualties.

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:

  • where a pilot station exists and pilotage is compulsory for all ships entering into, disembarking or sailing away from the station area; and
  • in certain exceptional cases, even if there is no pilot station, when the chief of the relevant port authority deems pilotage by a person designated by him appropriate.

According to Article No 187 of the Greek Code of Public Maritime Law, the following ships are exempt from compulsory pilotage:

  • passenger ships, either under the Greek flag or under a flag of another member state of the European Union or the European Economic Area, conducting coastal transportations;
  • cargo ships with less than 1,000 gross tonnage under the Greek flag; and
  • the domestic and foreign (on the condition of reciprocity) ships of the navy. 

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:

  • involving a ship under Greek flag irrespective of the location of the casualty;
  • occurring within Greek territorial or internal waters, as defined by UNCLOS, irrespective of the flag of the ship or ships involved in the casualty; and
  • involving substantial interests of Greece, irrespective of the location of the casualty and the flag of the ship or ships involved.

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:

  • have unrestricted access to any relevant area or casualty site as well as to any ship, wreck or structure including cargo, equipment or debris;
  • ensure immediate listing of evidence and controlled search for and removal of wreckage, debris or other components or substances for examination or analysis;
  • require examination or analysis of the items referred to in the previous point and have unrestricted access to the results of such examinations or analyses;
  • have unrestricted access to observe and copy any relevant information and recorded data, including VDR data, pertaining to a ship, voyage, cargo, crew or any other person, object, condition or circumstance;
  • have unrestricted access to the results of examinations of the bodies of victims and of tests conducted on samples taken from those bodies;
  • require and have unrestricted access to the results of examinations of, or tests conducted on samples taken from, people involved in the operation of a ship or any other relevant person;
  • interview witnesses in the absence of any person whose interests could be considered as hampering the safety investigation;
  • obtain survey records and relevant information held by the flag state, the owners, classification societies or any other relevant party, whenever those parties or their representatives are established in the member state; and
  • call for the assistance of the relevant authorities in the respective states, including flag-state and port-state surveyors, coastguard officers, ship traffic service operators, search and rescue teams, pilots and other port or maritime personnel.

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.

Hill Dickinson

2 Defteras Merarchias St
Piraeus 185, 35
Greece

+30 210 428 4770

+30 210 428 4777

enquirygr@hilldickinson.com www.hilldickinson.com
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Hill Dickinson established its Piraeus office in 1994 to support the firm's long-standing relationships with Greek shipowners, insurers and charterers operating in the Greek market. In 2019 the office celebrates its 25th anniversary and now provides a full spectrum of English law legal services to marine and energy sectors, advising on all forms of shipping litigation and dispute resolution, ship finance and corporate transactional matters. The 27-strong team services clients including shipowners, operators and charterers, maritime insurers, underwriters, P&I clubs, banks, private equity firms and other financial institutions, brokers, commodities traders, port operators and major oil companies. The Piraeus team complements the firm’s wider marine practice – made up of 180 specialists operating across the UK, Monaco, Hong Kong and Singapore – and has grown considerably in the last year. In 2018 it announced the further expansion of its market-leading shipping disputes team, the acquisition of a finance and corporate team and the addition of a master mariner.

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