Shipping 2019 Comparisons

Last Updated April 03, 2019

Law and Practice

Authors



Dardani Studio Legale is an international law firm based in Genoa and Milan, with a team of advocates specialised in maritime and international trade law, but who also deal with a broad range of commercial, corporate, financing, transport, yachting and international contracts matters. The firm has five partners, led by Maurizio Dardani as the founding and managing partner of the firm. He began his career in 1975 and is considered one of the top experts in the field. The other partners are Brian Dardani, Lawrence Dardani, Luca Di Marco and Marco Manzone. The firm handles issues related to charter parties, bills of lading and international trade, casualty, admiralty and maritime insurance, shipbuilding, sale and purchase, and ship finance, litigation and arbitration, commercial law, corporate law and financing, international contracts, logistic, land and multimodal transport, and yachting.

The Italian legal system does not contain any act of law specifically devoted to regulating maritime finance.

However, owners of vessels flying the Italian flag have received special fiscal benefits from Italian legislators, at least since the Italian International Ship Registry was instituted by Act No 30 dated 27 February 1998.

A favourable fiscal regime has also been accorded to the constitution of ship mortgages as security for ship financing. To this purpose, Article No 30 of the Italian Tax Registration Act No 234/1989 provides that any deed for the constitution or cancellation of a ship mortgage (securing the owner’s obligation of repayment under a ship loan) is subject to a fixed EUR200 registration tax, rather than a sum calculated in proportion to the value of the security.

Under Italian law, only banks and ‘financial intermediaries’ are authorised to carry out financial business.

According to the consolidated Banking Act No 385 1 September 1993 and subsequent modifications (Testo Unico Bancario – TUB), financial intermediaries are authorised to carry out financial activities without limitation to any specific area of business.

Therefore, maritime finance business may be carried out only by banks and financial intermediaries.

As in all areas of business, maritime finance entities require specific expertise and so need internal teams of specialised managers/employees. The assistance of specialised lawyers and notaries public with expertise in the execution and registration of ship mortgages and other securities is of paramount importance.

In the past, some Italian banks were renowned for their ability to project marine finance and to grant finance to ship-owners by setting up the most proper and adequate security packages. Unfortunately, the 2008 financial crisis has shifted banks’ focus away from maritime finance, with new teams dedicated to insolvency matters and managing non-performing loans through debt-restructuring agreements or insolvency procedures.

Traditional maritime finance projects in Italy are still based on the granting of loans coupled with specific security packages. These include the mortgage on the ship in respect of which the loan has been granted (and potentially also on other ships of the same fleet); the pledge on the shares and the bank account; and the assignment of the earnings and insurance policies.

In recent years, maritime leasing has been extremely popular in Italy, especially in respect of leisure vessels. It has, however, been hit hard by the crisis, which has caused hundreds of yachts to be abandoned or redelivered by insolvent lessees.

Nowadays, other forms of marine investment present new and more promising prospects, such as the sale and leaseback of Italian vessels to a non-Italian special purpose vehicle, under the control of financial institutions. This involves the registration of the financial bareboat in the Italian International Ship Registry and often the simultaneous conclusion of a charterer’s credit agreement. In such case, special attention must be paid to the bilateral OECD conventions and to the compulsory application of withholding tax on the payment of bareboat charter hires.

Finally, more complex and, as yet, still rather undefined projects for marine financing may stem from the participation of hedge funds in the acquisition of non-performing loans from Italian banks as a result of recent European Central Bank guidelines.

A maritime project in Italy will receive indirect fiscal and labour incentives only to the extent that the nationality of the financed vessel remains under Italian flag by way of registration of the vessel in the Italian International Ship Registry, which was created by Act No 457 30 December 1997.

The registry consists of three separate sections dedicated to the registration of the following:

  • vessels owned by Italian or EU citizens/companies;
  • vessels owned by non-EU citizens/companies that have a permanent establishment in Italy; and
  • vessels owned by non-EU/EU citizens/companies that are bareboat chartered to EU citizens/companies under the regime of dual registration and temporary suspension from the non-EU/EU Registry.

There are two incentivised fiscal regimes available to the owners of ships registered in the Italian International Ship Registry, namely the tonnage tax regime and the ordinary tax regime.

Under the tonnage tax regime, the taxable income for each vessel is set out as a flat daily income, determined in accordance with four thresholds, depending on the tonnage of the vessel. Days when vessels are not in service as a result of repairs, maintenance, refitting or temporary lay-up are excluded from the calculation of the taxable income.

The choice for the tonnage tax regime is irrevocable and lasts for ten years.

If an Italian ship-owning company does not opt for the tonnage tax regime, the ordinary corporate tax regime will apply, but with the following fiscal benefit: the taxable income of the company will be reduced by 80%. Therefore, only the remaining 20% of income will be subject to the usual 27.5% tax, thereby making an overall income tax rate of just 5.5%.

The tonnage tax option and the other fiscal incentives were previously confined to vessels registered in the Italian International Ship Registry. Recently, however, Italy has extended the flag-link rule to ships registered in other EU/EEA countries.

This reform was a reaction to the European Commission setting up an EU pilot procedure to look into the nature of the advantages available to Italian-registered ships. However, the reform was made subject to the Ministry of Transport’s issuance of a decree to adopt the technical measures to instate such reform. This decree is yet to be issued.

Another indirect incentive to develop a maritime finance project in Italy is that owners of vessels in the Italian International Ship Registry are exempt from paying social contributions and social assistance for seafarers embarked on board vessels in the registry.

For ro-ro and ro-ro pax ferries in Italian cabotage, these incentives are applicable only to vessels staffed by Italian seafarers or seafarers from a country of the EU.

There are no specific immigration incentives.

As mentioned in 1.6 Fiscal Incentives above, benefits are presently available only to maritime projects concerning vessels registered in the Italian International Ship Registry. Therefore, the documents required are those necessary to register a vessel therein.

There is no specific maritime finance authority in Italy.

The Italian tonnage tax scheme was introduced in 2003 by the Italian Government and has European Commission approval until 31 December 2023. Labour incentives and other fiscal incentives are not subject to expiry.

Italy is not a party to LLMC 76. In 2009, the Italian Parliament authorised the government to implement the convention, but the period of validity of the authorisation expired without the government finalising the implementation procedure.

Neither LLMC 76 nor the 1996 protocol have been ratified by Italy.

Until 2012, the Italian Code of Navigation contained a provision under Article No 275, according to which the limitation of the ship-owner’s liability was to be calculated in a sum proportional to the insured value of the vessel (between 40% and 60%).

The pre-existing limitation regime was amended by Act No 111 28 June 2012, but the application of the new legislation raises a number of issues.

Article No 275 was effectively abrogated (its application having been limited to vessels of gross tonnage (gt) below 300) and substituted by a mechanism of limitation that is not, however, expressly applicable to the responsibility of ship-owners, but rather is introduced as a prerequisite of compulsory insurance of maritime claims.

According to this recent piece of legislation, which is causing great uncertainty in Italy and has given rise to conflicting interpretations among authors, it is argued that LLMC 76 liability limits may have been introduced into Italian law so as to allow liability insurance to become compulsory for ship-owners.

It is also notable that, according to the domestic substantive discipline, the limitation of liability can be relied upon only by vessels’ owners, but not by the charterers, operators or managers, who, to the contrary, are expressly entitled to benefit from the limit under the LLMC 76 convention.

Finally, it is worth mentioning that, according to Article No 7 of the preliminary rules of the Italian Code of Navigation, the matter of ship-owners’ limitation of liability is governed by the law of the vessel’s nationality. Consequently, the conflicting discipline (or, rather, lack of discipline) described above seems applicable only to vessels flying the Italian flag, although the LLMC 76 convention and subsequent addenda might be applied by Italian courts (in spite of their lack of implementation in Italy) in cases where the convention is implemented in the country whose flag the vessel flies.

As was clarified by an Italian court judgment some years ago, such indirect incorporation of LLMC 76 (through reference to the law of the flag of a country that has ratified the convention) is available only to the owner of a vessel and not to the charterer, operator or manager.

According to authors and court precedents issued under the previous regime (ie before Article No 275 of the Italian Code of Navigation was partially abrogated), the ship-owner is entitled to file a limitation of liability action without being subject to a time-bar.

According to former Article No 275 of the Italian Code of Navigation, all kinds of claims used to be subject to limitation, provided that such claims derived from the necessities of the voyage or from facts or acts occurred during the voyage, excluding obligations arising from willful misconduct or gross fault.

As a result of the changes introduced in the Italian legislation by Act No 111/2012, and assuming that such new law can be interpreted so as to set a regime of limitation of liability, the following claims would be excluded from limitation:

  • salvage claims;
  • claims for oil pollution covered by the CLC Convention [International Convention on Civil Liability for Oil Pollution Damage];
  • claims for nuclear damages;
  • claims against the owner of a nuclear vessel for nuclear damages; and
  • claims of servants of owners or salvors in connection with salvage operations.

The present lack of harmony between domestic and international regulation makes it difficult to identify what conduct may bar the owners of a vessel from invoking limitation. According to a more conservative approach, one could argue that the traditional rule (as previously contained in the partially abrogated Article No 275 of the Italian Code of Navigation) should be applied, according to which willful misconduct or gross negligence should bar the right to limit liability.

If, however, LLMC 1976 was considered applicable by way of introduction through the rules expressed under Act No 111/2012 (and in spite of the fact that such convention has not yet been ratified by Italy), then one might conclude that owners, charterers, managers or operators are not entitled to limit their liability if the loss resulted from their personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.

In the present scenario, it is impossible to predict which position will be taken by Italian courts in deciding whether or not a right to limit liability exists, and, in the affirmative, what are the actual limits of the ship-owner’s liability.

A radical approach would be to affirm that since Article No 275 of the Italian Code of Navigation is no longer applicable to vessels exceeding 300 gt and while Italy has not yet ratified LLMC 1976, owners, charterers, managers and operators of vessels under the Italian flag do not have any right to limit their liability.

A more progressive and creative approach would be to maintain that Act No 111/2012, although addressing the matter of compulsory insurers for maritime claims rather than limitation of liability, may still be considered to have introduced into the system a right of ship-owners to limit liability analogous to that contained under LLMC 76.

Were an Italian court to uphold such a view, the limitation would set at the limits foreseen by LLMC 76 and not at those deriving from the 1996 addendum or any subsequent modification of the convention.

In either case, it is quite apparent that the legal system on limitation in Italy as presently framed is particularly unsatisfactory and a potential cause of litigation.

The ship-owner’s right to limit liability can be broken by any interested party (typically creditors of the ship-owner whose rights are affected by the limitation procedure). This can be achieved by filing an opposition against the limitation and arguing that the loss is the result of the shipowner’s personal act or omission, committed with the intent to cause the loss, or recklessly and with knowledge that such loss would probably result.

Such strategy would be available to creditors only to the extent that the competent court is persuaded that LLMC 76 is applicable in Italy by reference to it contained under Act No 111/2012.

Specific wrongful behaviours of the ship-owner are also taken into consideration by Italian domestic law to deprive the ship-owner of the right to limit liability. Such behaviours might be the failure to make a correct representation of the earnings of the voyage to the court, failure to submit a declaration of value of the ship, failure to deposit the limitation sum in time, or even hiding the vessel and hindering the survey ordered by the court for the assessment of its value.

According to the rules of procedure of the Italian Code of Navigation – which are presumably still applicable notwithstanding the partial abrogation of Article No 275 – the limitation fund must be created by depositing in court a sum of money (typically a passbook) equal to the limitation amount plus interest and procedure expenses. This must be done within the deadline and in accordance with the guidelines ordered by the competent court upon receipt of the shipowner’s application for limitation.

P&I Clubs’ LOUs are normally considered an insufficient guarantee by Italian courts if a debtor is required to provide security (typically regarding the arrest of a vessel). Therefore such LOUs are likely to be considered unacceptable to constitute a limitation fund.

According to procedural provisions of the Italian Code of Navigation, from the moment a limitation procedure is declared open by the competent court, claims must be filed with supporting documentation to the judge in charge and within the deadline scheduled by the judge. Said judge shall have exclusive jurisdiction in deciding the merits of such claims.

Arrest orders granted in respect of the vessel before the opening of the limitation procedure are suspended and replaced by the security afforded to claimants by the limitation sum. No other arrests of the vessel can be issued in Italy once the limitation procedure is declared open and until completion of the procedure (ie when the apportionment of the limitation sum among creditors takes place).

It is worth noting that the limitation procedure is not affected by the declaration of bankruptcy of the shipowner, which may occur after the right of limitation has been affirmed by way of final judgment (and the creditors’ oppositions, if any, are rejected).

The judicial sale of a vessel may be ordered by any Italian court when the vessel has been appraised and put under attachment by a public bailiff.

The attachment is the first step of the enforcement procedure and amounts to a deed that is officially served on the master and the ship-owner. This ensures the vessel cannot sail and the shipowner is prevented from disposing of it and/or its carats.

The attachment of the vessel can take place only once the creditor has presented an enforceable title against the ship-owner. Under Italian law, enforceable titles comprise:

  • the enforceable judgments and awards issued by either an Italian or foreign court/arbitration tribunal (but in case of judgments or award issued abroad, they must be recognised in Italy);
  • the overdue promissory notes, the deeds executed before a notary public, providing that they contain the recognition of the debt by the ship-owner and the promise to pay and
  • the mortgage on the vessel once the ship-owner is in default.

Once a judicial sale has been ordered by the competent Court and the official value of the vessel has been assessed by a court-appointed surveyor, the court will appoint a judge to handle and monitor the enforced sale procedure and a hearing for the sale by auction will be scheduled.

Upon the judge’s direction, the chancery of the court will communicate the order of sale by auction to the creditor who has applied for the enforced sale, to the mortgagees and to the other creditors joining the procedure.

The actual appraisal of the vessel for judicial sale takes place by way of service of a deed of appraisal on the master through a public bailiff, a copy of which is also served on the local harbour master. From that moment, the vessel is not allowed to sail, but must remain in the port until the sale by auction is completed.

The vessel’s deed of appraisal becomes a registered encumbrance, upon initiative of the creditors, by way of registration of the appraisal in the ship registry, so that third parties are informed that a procedure of enforced sale is taking place and the ship-owner is prevented from selling the vessel to third parties.

The judge in charge of the procedure will determine the number of rounds by reducing the floor price, if not achieved, by 20% at each round. If sale by auction is not possible, the judge may authorise the sale to take place by private negotiation.

The minimum bids required are determined by the judge and not by the law. The law requires only that a person, in order to be authorised to participate to a public auction and to make offers, must deposit a bank guarantee beforehand with the court, of an amount decided by the judge.

According to the standard procedure, the persons authorised to participate in the auction will meet at a place indicated by the judge, normally in court. In the presence of the judge and clerk, each party will be entitled to bid. Each bid will remain valid for a period of three minutes until it is superseded by another one.

The alternative procedure, frequently authorised by Italian courts, is based on the presentation of written offers contained within sealed envelopes, followed by a standard sale by auction if there are several competing offers exceeding the floor price.

According to both the standard procedure of sale by auction and the alternative procedure based on the presentation of sealed envelopes, the presence of an attorney for the prospective bidder is required. They must present to the judge a properly drafted, executed, notarised and apostilled power of attorney.

In order to participate in a judicial sale of a vessel, the prospective bidder must make accurate preparation of the documentation required, in compliance with the guidelines contained in the order of sale issued by the court.

In particular, documents showing shareholders’ approval to bid up to a certain amount and power of attorney in favour of the attorney attending the enforced sale must be executed and presented to the court, duly translated into Italian with the sworn translation, notarised and apostilled.

As mentioned before, a bank guarantee must be deposited in court by any bidder prior to the auction, for the amount set by the judge’s order of sale.

The balance of the sale price (net of the guarantee previously deposited) must be posted in court by the successful bidder within a deadline determined by the judge in charge of the sale.  If the successful bidder fails to do so, the court will forfeit the guarantee and a new auction will be ordered.

The party with a judicially recognised credit is allowed not only to place a bid but also to demand that the property of the auctioned vessel is transferred to it, provided that there are no other bids from third parties.

The judge has ample discretion to determine the minimum sale price, therefore the sale (by auction or by private negotiation) can even be authorised for a price lower than the actual arrest/appraisal expenses.

Italy has ratified the Hague-Visby rules, which entered into force on 22 November 1985, by substituting the Hague Rules, previously in force.

Italy is not a contracting party to the Hamburg Rules nor to the Rotterdam Rules.

The Italian legal system is based on the so called double track regime. In fact, the Italian Code of Navigation, enacted in 1942, is still in force, notwithstanding the subsequent ratification of the Hague-Visby Rules.

The Italian Code of Navigation is inspired by the Hague Rules and contains a number of provisions dealing with the carrier’s liability for damages to cargo (Articles No 421-424) which do not differ substantially from the provisions of Articles No IV, V and VI of the Hague Rules.

Since the Hague-Visby Rules are lex specialis, their application prevails on the application of the Code of Navigation, which is consequently applicable only to cases that do not fall within the ambit of application of the Hague-Visby Rules.

As a result, the provisions of the Italian Code of Navigation are mainly applicable to carriages by sea of Italian vessels between Italian ports (Italian cabotage).

In the Italian legal system, the bill of lading is considered evidence of the terms and conditions of the contract of carriage between shipper and carrier.

The contracting parties in a carriage of goods by sea contract are the carrier and the shipper.

In the Italian legal system, when the shipper is not the receiver of the goods, the contract of carriage is qualified as a contract in favour of a third party. In such a case the contract is considered to be concluded between the shipper and the carrier in favour of the receiver as third party to the stipulation.

If the receiver obtains or requests the release of the goods at their destination by presenting the duly endorsed bill of lading to the carrier in the port of discharge, then the receiver becomes a party to the contract of carriage in lieu of the shipper.

The legitimate holder of the bill of lading has title to claim against the carrier for loss of or damage to the cargo.

The shipper may be entitled to claim against the carrier if the receiver has not demanded delivery of the cargo at the destination or has assigned its rights deriving from the contract of carriage to the shipper.

The insurers of the goods are entitled to bring a claim in their own name against the carrier if they are properly subrogated into the rights of their assured, provided of course that the assured was the subject entitled to claim.

In case of loss of or damage to carried goods, claims should be brought against the carrier, ie the subject who undertook to perform the transportation of cargo at destination.

According to the indications of the bill of lading, this subject can be the registered owner of the vessel, the bareboat-charterer, the time-charterer or even the voyage-charterer.

However, when the freight forwarder appointed by the shipper undertakes full or partial performance of the carriage, said forwarder shall assume the carrier’s obligations and rights, thereby becoming liable vis-à-vis the cargo interest for the loss of or damage to the cargo.

The liability of the terminal operator at the place of discharge can also be considered by the claimant if evidence is available to demonstrate that the cargo was free of damage upon discharge and delivery to the terminal operator.

The identity of the carrier mainly depends on the literal interpretation of the statements contained on both the front and the reverse of the bill of lading.

The following guidelines of interpretation have been set up by Italian jurisprudence:

  • when the heading of the bill of lading matches with the signature of the document, the carrier is the one whose name appears on the document; and
  • when the bill of lading is signed by the Master or by the agent, the following situations may arise:
    1. if the bill of lading validly incorporates a charter party, the identity of the carrier should be determined in accordance with the charter party;
    2. if the bill of lading does not incorporate any charter party and it does not contain any name or logo, the carrier is identified as the ship-owner; and
    3. if the bill of lading is signed by the ship’s agent at the loading port, it contains a name or a logo different from that of the ship-owner, and it does not incorporate a charter party, the carrier must be identified according to the bill of lading heading, unless there is evidence that the agent was appointed by the ship-owner.

Under Italian law, the action in rem does not exist and so it is not possible to bring a suit against a ship, as defendant, by an action in rem.

Cargo claims give raise to maritime liens for both the application of the provisions of the 1926 Brussels Convention for the unification of certain rules relating to maritime liens and mortgages, ratified by Italy in 1949, and for the application of domestic law.

In fact, Article No 552 of the Italian Code of Navigation contains a list of maritime liens substantially corresponding to those indicated in the 1926 Convention, including indemnities for loss of or damage to cargo and baggage.

Whenever a claim gives rise to a maritime lien, the claimant may arrest a vessel (in respect of which the claim arose), even if the vessel is owned by a third party that has no personal responsibility for the claim.

Normally, and according to a well-established case law, a claimant can sue only in contract, by addressing his or her legal action against the contractual carrier.

Only in exceptional circumstances can a claimant sue the ship-owner in tort, by providing evidence that the ship-owner committed negligent or deliberate acts or omissions outside of the obligation properly and carefully to load, handle and care for the goods carried under the contract of carriage.

The prevailing Italian jurisprudence and authors recognise the validity and effectiveness of Himalaya clauses contained in bills of lading. These are considered to fall within the scheme of the contract in favour of a third party provided for under Article No 1411 of the Italian Civil Code, according to which a stipulation in favour of a third person is valid when the stipulator has an interest therein.

In this respect, Italian jurisprudence has affirmed that the interest of the carrier to extend to its agents and independent contractors the defences available to the carrier under the contract of carriage has an economic and commercial nature, since such extension would improve the carrier’s position when negotiating the contracts with his servants or independent contractors.

The full regime of excepted perils is applicable in Italy not only when the Hague-Visby Rules apply, but also in the limited circumstances when the provisions of the Italian Code of Navigation are applicable.

In both cases, the carrier can escape liability by providing evidence that damage to or loss of cargo has been caused by one of the excepted perils foreseen by Article No IV para. 2 of the Hague-Visby Rules (or, alternatively, by Article No 422 of the Italian Code of Navigation).

Whenever the carrier succeeds in discharging the burden of proof and thus provides evidence of the occurrence of an excepted peril and of the casual relationship between it and the loss of or damage to cargo, the claimant may yet overcome the presumption of innocence of the carrier deriving therefrom. That can be achieved by proving that, notwithstanding the occurrence of the excepted peril, the loss or damage was in fact caused or contributed to by the personal fault of the carrier or the fault of its servants/agents.

The carrier has the right to limit its liability in accordance with the provision of Article No IV para. 5 of the Hague-Visby Rules. A recent decision by the Court of Appeal of Genoa granted the defence of limitation of liability raised by a carrier, notwithstanding the proof provided by the claimant that the carrier had been negligent, by recalling the principle that the carrier is deprived of the right to invoke limitation only if there is evidence of their recklessness or willful misconduct.

Where domestic law applies, the limitation liability regime is ruled by Article No 423 of the Italian Code of Navigation. The first paragraph provides that the compensation due by the carrier cannot exceed EUR103.29 per unit of cargo, or any higher amount corresponding to the value declared by the shipper before loading.

Considering that the limitation provided by the Italian Code of Navigation is particularly low, the matter has been brought to the attention of the Constitutional Court, which, by decision No 199/2005, upheld the validity of the limit, but clarified that the same was not applicable in the case of wilful misconduct or gross negligence of the carrier.

The liability regime of the carrier is based on the so-called fault-based liability system.

The cargo interest has the burden of proving that the loss of or damage to the cargo occurred when the same was in the custody of the carrier, who, in turn, in order to be exonerated from liability, has the burden of proving that the loss or damage was caused by one of the excepted perils provided in Article No 4 para 2 of the Hague-Visby Rules.

Under Italian domestic law, the burden of proof is ruled by Article No 422 of the Italian Code of Navigation, as reported in 4.13 Immunities, above.

Both in case of application of Article No III para 6 of the Hague-Visby Rules and of Article No 435 of the Italian Code of Navigation, written notice for the loss of or damage to goods must be given to the carrier or his agent at the port of discharge before or at the time of the removal of the goods or, if the loss or damage is not apparent, within three days of its discovery.

The consignee’s failure to give notice as indicated above, effects prima facie evidence that the goods were delivered in sound condition as described in the bill of lading. In order to pursue a claim in this case, the consignee will have the burden of proving that the goods suffered loss or damage while they were in the custody of the carrier.

Any cargo claim against the carrier pursuant to contracts of carriage subject to the Hague-Visby Rules must be made within one year, either of the actual delivery date or the due delivery date.

If, on the contrary, the domestic law applies, a special provision of the Italian Code of Navigation (Article No 438) limits the time bar to just six months, which is applicable if the port of loading or the port of discharge is located within Europe or in a Mediterranean country.

The one-year time-limit provided by the Hague-Visby Rules can be extended by the parties’ agreement.

The limitation period provided by the Italian Code of Navigation, however, cannot be extended or shortened by agreement, but it may be interrupted by the claimant if they serve a written letter to the carrier containing a request of payment or they serve the writ of summons.

Previously, jurisdiction clauses contained on the reverse of a bill of lading were typically considered null and void, unless the front of the bill of lading was signed by the shipper.

Since 2005, however, the Italian Supreme Court has recognised the validity of jurisdiction clauses in bills of lading, signed on the reverse of the bill by the shipper and then endorsed in favour of the receiver.

Following the above precedent it is now well established that jurisdiction clauses incorporated in the bill of lading are valid under Article No 17(C) of the Brussels Convention 1968 and Article No 23 of the EU Brussels I Regulation (44/2001), now Article No 25 of EU Brussels I bis Regulation (1215/2012).

In this respect, the courts have explained that it is normal practice in the international transport business that bills of lading are signed only by the carrier. Such practice is regarded as commercial usage, of which international trade operators are supposed to be aware.

Furthermore, the principle of the validity of jurisdiction clauses in the bill of lading has been strengthened by other Italian court decisions. According to these, the claimants, when disclosing in court the bill of lading without reservations or objections, become bound by the jurisdiction clause, since such a disclosure constitutes evidence that the claimants are relying on the terms and conditions of the bill of lading, including the jurisdiction or arbitration clause contained therein.

Marine Accidents in waterways, such as ports, territorial seas and straits, are regulated by the Italian Code of Navigation and by applicable international conventions ratified by the Italian government.

Where there is a collision between two vessels, the Brussels Convention 23 September 1910 regulates issues of damage compensation in which both vessels fly the flags of contracting states.

The 1989 London Salvage Convention has been ratified by Italy and its application covers salvage operations within internal waters, as Italy did not make any reservation in this respect, as per Article No 30 of the convention.

COLREGS [the International Regulations for Preventing Collisions at Sea 1972] have been ratified by Italy and are therefore applicable in Italian territorial waters, ports and straits, being waters connected with the high seas navigable by sea-going vessels.

It is worth noting that special rules as to the navigation in straits apply in Italy. This is the case, for instance, in the Strait of Messina and the Bonifacio Strait (between Sardinia and Corsica).

Under Italian law there is no definition of waterways.

The Italian Code of Navigation sets a distinction between maritime navigation and internal navigation. Internal navigation concerns only navigation in canals, rivers and lakes – in other words, navigation in any type of water other than maritime waters. Ports, territorial seas and straits are therefore not included within the definition of internal navigation and are considered part of maritime navigation.

Generally speaking, pilotage is not compulsory in waterways. According to Article No 87 of the Italian Code of Navigation, maritime pilotage can be made compulsory in areas where its need is recognised. Within internal waters, according to Article No 98 of the Italian Code of Navigation, pilotage may be made compulsory only in specific designated areas that so require it and only for a limited period of time.

Following the collision between Greek tanker Patmos and Spanish tanker Castillo de Monte Aragon in March 1985, pilotage in the Strait of Messina is now compulsory for:

  • vessels of more than 15,000 gt; and
  • vessels of more than 6,000 gt, carrying petroleum products or other products potentially harmful to the environment.

In the Strait of Bonifacio, which as a result of the IMO resolution MEPC.204 (62) was designated a particularly sensitive sea area, pilotage is merely recommended for vessels passing through the strait.

Generally speaking, a ship-owner is not prevented from claiming damages against a maritime authority. The grounds for recovering damages will depend on whether the ship-owner is capable of establishing the authority’s liability. 

Under Italian law, the maritime authority is the Italian Coast Guard. The main navigational functions of the Italian Coast Guard are search and rescue operations, protection of marine safety, preservation of the marine environment and a maritime police service. This includes regulating navigation and carrying out investigations in relation to marine casualties.

The Italian Code of Navigation, under Articles No 578-584, foresees two different kinds of investigations involving marine casualties, which are carried out by the local harbour-master.

For any marine accident there is a compulsory ‘summary investigation’ (inchiesta sommaria), which aims to investigate the causes and the circumstances thereof. The other type of investigation is the ‘formal investigation’ (inchiesta formale), described under question 5.7 Types of Marine Accident below.

The formal investigation is more thorough and detailed, aimed at establishing not only the causes of the accident, but also liabilities. This investigation can be applied for by the parties involved in an accident and will be carried out ex officio if from the findings of the summary investigation it can be inferred that the accident was the consequence of a negligent or deliberate act.

By implementing EC Directive 1999/35/EC of 29 April 1999, the Italian government has made the formal investigation compulsory to ascertain the causes and circumstances of marine casualties involving Italian or EU passenger or merchant ships within Italian waters. To this end, the Central Commission of Investigation on Marine Casualties was created within the Italian Ministry of Transport.

During the summary investigation, the competent harbour-master will require the Master of the vessel involved to draft a written report and may then require the Master and other implicated crew to be questioned. Lawyers may not assist during the summary investigation.

During the formal investigation, however, all involved parties (ie owners, insurers, crew-members and anyone else bearing an interest) can be accompanied and represented by a lawyer during hearings held by the marine authority’s investigation commission.

A ship-owner may bring judicial proceedings against a maritime authority to recover damages. An administrative judicial claim is available to challenge a specific administrative act issued by an Italian maritime authority and recover relevant damages. Judicial civil proceedings are also available to recover damages as a result of a negligent or deliberate act or omission by the maritime authority.

There are no specific administrative claim proceedings under Italian law to recover damages from a maritime authority. A purely administrative procedure may be triggered against the maritime authority only in opposition to sanctions and fines.

Damages arising from specific administrative decisions/acts or deriving from a negligent or deliberated act or omission by the maritime authority can be claimed.

Any damages are recoverable from the maritime authority without distinction.

This is judged on a case-by-case basis.

If proceedings are brought before the administrative court, claims must be submitted in court. When case proceedings are brought before the civil courts, a writ of summons containing the claim submission must be served upon the authority and then filed in court.

An administrative judicial claim aimed at challenging a specific administrative act issued by an Italian maritime authority is subject to 90-day time bar, while action to recover relevant damages arising therein is subject to a time bar of 120 days.

For judicial civil proceedings aimed at recovering damages as a result of a negligent or deliberated act or omission by the maritime authority, the claim will be subject to a five-year time-bar.

An action aimed at challenging a specific administrative act issued by an Italian maritime authority is subject to the exclusive jurisdiction of the local administrative court (tribunale amministrativo regionale), while actions aimed at recovering damages as a result of a negligent or deliberated act or omission of the maritime authority are subject to the jurisdiction of civil courts.

Dardani Studio Legale

Salita di Santa Caterina, 10/8 A
16123 GENOA - ITALY

+39 010 576 18 16

+39 010 595 77 05

info@dardani.it www.dardani.it/en/
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Law and Practice

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Dardani Studio Legale is an international law firm based in Genoa and Milan, with a team of advocates specialised in maritime and international trade law, but who also deal with a broad range of commercial, corporate, financing, transport, yachting and international contracts matters. The firm has five partners, led by Maurizio Dardani as the founding and managing partner of the firm. He began his career in 1975 and is considered one of the top experts in the field. The other partners are Brian Dardani, Lawrence Dardani, Luca Di Marco and Marco Manzone. The firm handles issues related to charter parties, bills of lading and international trade, casualty, admiralty and maritime insurance, shipbuilding, sale and purchase, and ship finance, litigation and arbitration, commercial law, corporate law and financing, international contracts, logistic, land and multimodal transport, and yachting.

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