Shipping 2019 Comparisons

Last Updated March 19, 2019

Law and Practice

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Albors Galiano & Portales is a leading firm in the Spanish shipping, transportation, insurance and reinsurance, and yachting practice areas that was established in Madrid in the 1990s and has achieved recognition in niche practice areas traditionally dominated by foreign law firms. It has offices in Madrid, Barcelona, Bilbao and Palma de Mallorca, and correspondents in the main capitals. The firm’s professional practice involves maritime law, road and air transport law, insurance and reinsurance law, yachting, and litigation and arbitration. Its specialised lawyers provide advice and intervene in all types of proceedings, and in all jurisdictions and courts of justice in Spain. The firm’s lawyers regularly lecture on various Master’s programmes in maritime law and work closely with universities that offer courses in this area, such as the Spanish Maritime Institute, the Valenciaport Foundation and the Nautical Faculty of Barcelona.

Spain does not have a specific maritime finance law. It has certain specific fiscal incentives that help the financing of vessels and some fiscal benefits for shipping companies, but these are not codified in specific maritime finance legislation.

The financing of maritime assets in Spain is fundamentally driven by ship-building. Spain is a leading country in the market of specialist new-builds, such as offshore supply vessels, specialist towage vessels and oceanographic research vessels. Further, Spain has a state-owned shipyard (Navantia), which specialises in military vessels.

The financing of these assets is supported by a tax lease framework that permits an accelerated tax depreciation of leased assets. This ultimately has a beneficial impact on the vessel’s price and hence the competitiveness of Spanish shipyards worldwide. The Spanish tax lease is a complex regime by which shipyards are in a position to attract investment using so-called Economic Interest Groups, which benefit from certain fiscal advantages. Purchasers can enjoy an effective rebate in the price of the vessel by buying indirectly from the shipyard through such a group.

The Spanish tax lease regime sparked much controversy, including a challenge by another EU member state, and was the subject of a negative European Commission decision in December 2015, which held that the regime constituted illegal state aid.

Although the decision was subsequently reversed by the General Court, the ship-building industry suffered badly between 2012 and 2015. In addition, by the time the General Court reversed the decision, Spain had already put in place a new tax lease regime approved by the Commission. Since the approval of the new tax lease system and Spain’s recovery from the financial crisis, ship-building in Spain has peaked and shows good signs of recovery.

Further, the Spanish Corporate Tax Act (27/2014 of November 27) provides for a special fiscal benefit for ship-owners that allows them to pay taxes at a fixed daily rate proportional to the capacity of ships employed, thus reducing their tax burden.

This fiscal benefit is intended to reverse Spain’s decline in the shipping sector, and to safeguard employment and know-how in the industry.

There are no specific maritime finance entities in Spain. Project finance, including asset finance of vessels, is performed by general financial institutions.

There are no specific requirements that make an entity subject to maritime finance.

Spanish law has no specific definition of a maritime finance project. To the extent that an asset subject to a financial scheme relates to the maritime industry, it can be considered a maritime finance project.

There are no specific requirements that make a maritime project eligible to receive benefits. If a shipyard and a ship-owner want to benefit from the tax lease structure, they will need to comply with the requirements of the Spanish Corporate Tax Act (27/2014 of November 27).

As explained briefly above, ship-owners can benefit from a tonnage tax system. This system provides for an alternative method for calculating the taxable benefit through a predictable calculation based on the tonnage of the vessel. Tax is paid at a fixed amount each day per 100 tons of the vessel. As a result, gains and losses are disregarded for taxable purposes, thus creating a very beneficial tax environment for ship-owners.

To be eligible for this special regime, the beneficiary must be a company engaged in operating owned or chartered vessels, as well as entities that are fully engaged in providing operational services for the vessels (managers of vessels).

Additionally, the vessels must be strategically and commercially managed from Spain or any other EU State. By strategical and commercial management, the Act refers to having the “control and risk of the maritime adventure and employment at sea”.

There are no specific labour incentives for maritime finance entities and projects.

There are no specific immigration incentives for maritime finance entities and projects.

Since there are no specific rules regarding maritime finance entities, the financial institutions that regularly finance new-builds through the tax lease structure need to comply with the ordinary requirements for European financial institutions (ie Basel III and other EU requirements regarding measurement and management of risks, liquidity and leverage).

There is no specific maritime finance entity. The supervisory role for all financial institutions (including those that finance maritime projects) is shared between the European Central Bank and the Bank of Spain.

Article No 7 of the Law of Autonomy of the Bank of Spain provides that the institution is responsible for promoting the smooth function and stability of the financial system in accordance with the prevailing provisions, solvency, conduct and compliance of the specific regulations of credit institutions.

Following the entry into force of the Single Supervisory Mechanism on 4 November 2014, credit institutions from Spain, together with other EU countries, are supervised within the framework of the mechanism, with the participation of the Bank of Spain and the European Central Bank.

In principle, there are no incentives subject to expiry.

Under Spanish law, the legal framework to calculate an owner’s right to limit liability is based on the Spanish Shipping Act 14/2014 (SSA), which in turn incorporates the relevant international conventions and European regulations. Spain is a party to LLMC 76 as amended by the 1996 protocol. Spain denounced LLMC 76 on 25 January 2007, having ratified the 1996 protocol.

Spain is a party to the 1996 protocol only.

Under the SSA, the time-bar is two years from the date that the first judicial claim subject to limitation is filed with the courts.

The claims subject to limitation are those set out in Article No 2 of LLMC 76. These are:

  • 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 in direct connection with the operation 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 operation of the ship or salvage operations;
  • claims in respect of the raising, removal, destruction or rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship;
  • claims in respect of the removal, destruction or rendering harmless of the cargo of the ship;
  • claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss, for which the person liable may limit his or her liability in accordance with this convention, and further loss caused by such measures.

The claims excluded from limitation are those set out in Article No 3 of LLMC 76, namely:

  • claims for salvage 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 which is in force;
  • claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage;
  • claims against the ship-owner of a nuclear ship for nuclear damage;
  • claims by servants of the ship-owner or salvor whose duties are connected with the ship or salvage operations, including claims of their heirs, dependants or other persons entitled to make such claims, if, under the law governing the contract of service between the ship-owner or salvor and such servants, the ship-owner or salvor are not entitled to limit their liability in respect of such claims, or if they are by such law permitted only to limit their liability to an amount greater than that provided for in Article No 6.

Additionally, Article No 397.2 of the SSA provides that claims by the authorities in connection with wreck-removal will not be subject to limitation.

The conduct barring limitation is set out in Article No 4 of LLMC 76. A person liable shall not be entitled to limit their liability if it is proved that 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.

The limits under LLMC 76 were increased in 2012 through the tacit amendment procedure set out in Article No 8. These increased limits entered into force in 2015. The LLMC provides that, in order to calculate the limit, one needs to look at the gross tonnage (gt) figures of the 1969 Tonnage Certificate:

  • liability for property claims for vessels:

(a)       up to 2,000 gt – 1.51 million Special Drawing Rights (SDR);       

(b)       up to 30,000 gt – SDR1.51 million plus SDR604 for each ton over 2,000 gt, to a maximum SDR18.422 million;

(c)       up to 70,000 gt – SDR18.422 million plus SDR453 for each ton over 30,000 gt, to a maximum SDR36.542 million; and

(d)       over 70,000 gt – SDR36.542 million plus SDR302 for each ton over 70,000 gt, with no maximum;

  • liability for loss of life or personal injury claims for vessels:

(a)       up to 2,000 gt – SDR3.020 million;

(b)       up to 30,000 gt – SDR3.020 million plus SDR1,208 for each ton over 2,000 gt, to a maximum SDR36,844,000;

(c)       up to 70,000 gt – SDR36.844 million plus SDR906 for each ton over 30,000 gt, to a maximum SDR73,084,000; and

(d)       over 70,000 gt – SDR73.084 million plus SDR604 for each ton over 70,000 gt, with no maximum

In addition, by means of a reserve to LLMC 76, Spain included a special limit for vessels under 300 gt, which was later introduced in Article No 399.2 of the SAA, of SDR1 million for life or personal injury claims and SDR500,000 for other claims.

In order to break the limit, the claimant must show that the loss arose from the liable person’s personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. The burden of proof is very strict under Spanish law.

Article No 403.2 of the SSA provides that in order to constitute the fund, the claimant will either have to transfer the monies into court or offer a guarantee that is sufficient in the eyes of the court. Spanish courts will usually consider a bank guarantee by a first-class bank domiciled in Spain a sufficient guarantee.

See 2.9 Acceptable Guarantees.

With regard to prior arrests, Article No 404 of the SSA provides that the courts in charge of the constitution of the fund will release the vessel(s), or other property belonging to the person entitled to limit liability, arrested for a claim that could have been brought against the fund.

In terms of claims, once the fund is constituted, anyone with claims subject to limitations is prevented from seeking security from the debtor’s assets.

For other claims, the SSA provides that the order constituting the fund will be notified to the claimants and published in the Spanish Official Gazette (Boletin Official del Estado). The publication of the order will notify other potential claimants of the constitution of the fund.

The provisions relating to the judicial sale of vessels are found in:

  • Articles No 480-485 of the SSA;
  • the provisions of Spanish civil procedure rules regarding forced sale of goods subject to public registration (Articles No 681 et seq); and
  • the International Convention on Maritime Liens and Mortgages of 1993.

Judicial sales of ships usually occur in the context of enforcement of ship mortgages or other maritime liens. In principle, however, an ordinary debtor could also seek the judicial sale of a vessel. Here we will focus on the judicial sale of a vessel by the enforcement of a ship mortgage.

For a ship mortgage to be considered a right in rem and follow the vessel irrespective of ownership, the SSA provides that it must be documented in writing through a private or (preferably) public document, and be registered in the Registry of Chattels (Registro de Bienes Muebles).

The ship mortgage creditor may exercise its right against the encumbered ship(s) to its satisfaction in the following cases:

(a)       on expiry of the term to return the capital or pay interest, in the manner that may have been agreed;

(b)       if the debtor is declared bankrupt;

(c)       if the vessel suffers deterioration that renders it definitively unseaworthy;

(d)       when there are two or more vessels assigned to fulfil the same obligation, and loss or deterioration arises that makes either of them definitively unseaworthy, unless otherwise agreed; or

(e)       on fulfilment of the conditions agreed to terminate the guaranteed obligation, and all those that have the effect of making the capital or interest enforceable.

For the cases mentioned in (c) and (d) above, the enforcement may be exercised only when the true condition of the vessel is verified though the competent authority. In the case of (b), a declaration of bankruptcy by the competent court is required.

In terms of enforcement of claims that do not carry any priority or are not directly enforceable against the vessel, the creditor requires an enforceable title (ie a final and enforceable judgment against the debtor). Further, the vessel will be subject to enforcement only if it belongs to the debtor.

The judicial auction is notified directly to:

  • the incumbent registrar at the Registry of Chattels, as well as to the competent authority in charge of inscription of the ship in the state whose flag it has been temporarily authorised to fly, if appropriate;
  • the person registered as the owner of the ship;
  • the holders of registered mortgages or encumbrances that have not been constituted to the bearer; and
  • all the holders of registered mortgages or encumbrances to the bearer and maritime liens listed pursuant to Article No 4 of the International Convention on Maritime Liens and Mortgages, as long as the competent court or administrative body has received notification of the respective claims.

Further, the auction will be published in the official gazette of the state and, if considered convenient by the judicial authorities, in newspapers of national distribution.

According to Article No 132 of the SSA, the mortgage agreement should include the value of the vessel for the purposes of the auction. If the value is not agreed, Spanish civil procedure rules provide for a valuation to be performed through a judicially appointed expert.

See answer to 3.6 Judicial Sale Auction Date.

See 3.6 Judicial Sale Auction Date.

According to our Civil Procedure Rules, if the highest bid is equal to or higher than 70% of the value at which it was auctioned, the court will approve the highest bid once the 70% threshold is met.

If the highest bid placed at the auction is lower than 70% of the value, then:

(a)       the mortgagor may, within ten days, present a third party to improve the bid by offering an amount in excess of 70% of the appraisal value, or lower if the amount is sufficient to satisfy the debt; or

(b)       if the mortgagor has failed to present a third party, the mortgagee may, within the next five days, seek to be awarded the vessel at 70% of the value or for the amount owed to the mortgagee, provided that such amount exceeds both 60% of the value and the highest bid.

If the mortgagee does not make use of its right as per (b) above, the auction will be approved in favour of the highest bidder, provided that the amount offered is higher than 50% of the appraisal value or, if lower, covers at least the amount of the total debt (plus interest and costs).

If the highest bid fails to meet these requirements, the court clerk, after hearing the parties, shall resolve the matter in view of the circumstances of the case, with particular regard to:

  • the behaviour of the mortgagor;
  • the possibility of achieving the satisfaction of the mortgagee through the sale of other assets;
  • the patrimonial implications for the mortgagor; and
  • the benefit of the same for the mortgagee.

Prospective bidders are not required to appear in the auction with a lawyer. It is advisable to have the assistance of a lawyer, however, to deal with all the relevant legal and procedural steps and to advise on the potential risks to the bidder if awarded the vessel.

Bidders are required to place with the court a security deposit equivalent to 5% of the value of the vessel for the purposes of the auction.

There is no specific deadline for posting the sale price. Once the bid has been completed, the court will request that the successful bidder posts the difference between the security amount and the amount of the bid. The timeframe will depend on the court making the request. If the bidder fails to post the difference it will lose the 5% deposit.

There is no such restriction on bidding.

As mentioned previously, if the highest bid fails to meet the 50% threshold or the total amount of the debt (including interests and costs), the court clerk, after hearing the parties, shall resolve the matter in view of the circumstances of the case, with particular regard to:

  • the behaviour of the mortgagor;
  • the possibility of achieving the satisfaction of the mortgagee through the sale of other assets;
  • the patrimonial implications for the mortgagor; and
  • the benefit of the same for the mortgagee.

If the court clerk decides to reject the offer, a creditor may seek to have the vessel awarded for 50% of the value.

Spain is party to the Hague-Visby Rules [The Hague Rules as amended by the Brussels Protocol of 1968 and 1979].

It is worth noting that Spain is also a signatory country of and has ratified the Rotterdam Rules [the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2008]. However, for the Rotterdam Rules to come into force, the ratification of at least 20 countries is required. To date, only four of the signatory countries, including Spain, have ratified the convention.

The possibility of the Rotterdam Rules entering into force and becoming binding in Spain is fairly remote, considering the time elapsed and the limited weight in the shipping industry of the countries that have so far ratified them.

The SSA does, however, envisage the possibility of the Rotterdam Rules coming into force, in which case the necessary amendments to the SSA will be made.

Lastly, it is also noteworthy that the initial draft bill of the SSA incorporated the Hamburg Rules instead of the Hague-Visby Rules. Although Parliament thereafter rectified and incorporated the Hague-Visby Rules, some provisions of the Hamburg Rules remain. These relate to liability for delay and the joint and several liability of the actual and contractual carrier.

Spain is party to the Hague-Visby Rules, which apply to all cargo claims. However, the SSA has, under advisement, included some special features from the Hamburg Rules, such as the joint and several liability of the contractual carrier and actual carrier, and liability for delay.

According to Article No 277.2, the Hague-Visby Rules will be applicable to any domestic or international carriage of goods by sea under a bill of lading. Further, the Hague-Visby Rules and the SSA apply, in principle, port-to-port, unless otherwise agreed by the parties.

The SSA provides for a unified concept of contracts of carriage of goods, which includes time charterparties, voyage charterparties and contracts of carriage evidenced by a bill of lading.

The bill of lading serves the three traditional functions:

  • it is evidence of the contract of carriage in accordance with Article No 205 of the SSA, which provides: “A charterparty may… refer to carriage of goods determined by their weight, size or class. In that case, the conditions of the contract may be recorded in the bill of lading or other similar document”;
  • it is a receipt of the goods loaded on board the vessel; and
  • it serves as a document of title.

The original parties to the bill of lading contract are the shipper and the carrier. By virtue of the bill of lading being transferred to the named receiver or subsequent endorsee, that receiver or endorsee will, in accordance with Article No 251 of the SSA, have vested on and transferred to them all the rights and actions of the original party to the bill of lading, with the exception of law and jurisdiction clauses, as explained more fully below.

Article No 251 provides: “The transfer of the bill of lading shall take the same effects as delivery of the goods represented, without prejudice to the relevant criminal and civil actions to which the party illegitimately dispossessed of such may be entitled. The acquirer of the bill of lading shall acquire all the rights and actions of the transferor, with the exception of agreements regarding jurisdiction and arbitration, which shall require the consent of the acquirer pursuant to the terms stated in Chapter I of Title IX.”

In order for a party to make a claim for loss and or damage to the cargo, or late delivery, that party is required to evidence that it had, at the time when the loss of or damage, or late delivery occurred, interest in the cargo lost and/or damaged. That party is normally the receiver or subsequent endorsee of the bill of lading. However, the underlying INCOTERM of the sales contract can also have an influence on which party actually suffered the loss.

See 4.8 Carrier.

According to Article No 278 of the SSA, both the actual and contractual carriers are joint and severally liable for loss of or damage to the cargo, or late delivery thereof, without prejudice to the recourse action as between the contractual carrier and the actual carrier. This article defines ‘contractual carrier’ as the person contractually responsible for the carriage and ‘actual carrier’ as the person who performs the carriage by their own means. Freight-forwarders fall within the definition of contractual carrier.

Spanish law does not recognise claims in rem as such. Claims are always in personam. An owner of a vessel subject to a maritime lien or mortgage can, however, be made liable in personam for a claim against the third-party former owner of the vessel.

Cargo claims are not maritime liens in Spain by virtue of not being considered as such by the International Convention on Maritime Liens and Mortgages of 1993, to which Spain is a contracting party.

Claims in tort are subject to the same liability regime as claims in contract, in accordance with Articles No 282 and 283 of the SSA. A claim by the cargo-owner against the actual carrier will be in tort under Spanish law, given that there is no contractual relationship between the cargo owner and the actual carrier.

Article No 282.2 provides: “The liability regime of the carrier and its limitation shall be applicable to all actions aimed at compensating damage and losses borne, independent of the procedure in which the action is exercised, as well as its grounds, whether contractual or tortious, and both if filed against the carrier as well as against the assistants it may employ to provide the service.”

Article No IV bis of the Hague-Visby Rules provides: “If such an action is brought against a servant or agent of the carrier (such servant or agent not being an independent contractor), such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke under these Rules.” Developing further from this, Spain has reinforced the effectiveness of Himalaya clauses by virtue of Articles No 282 and 283 of the SSA, which extend their application to independent contractors.

Article No 277 of the SSA provides that the Hague-Visby Rules apply to both domestic and international sea carriage of goods under a bill of lading, and the liability regime and defences are not an exemption. Therefore, the 17 defences of Article No IV of the Hague-Visby Rules will be mandatorily applicable. These are:

  • 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 or her agent or representative;
  • strikes, lock-outs, 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;
  • 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.

With regard to limitation of liability for loss or damage to cargo, Article No 282 of the SSA provides that, unless the real value of the cargo has been declared in the bill of lading, the limits of the Hague-Visby Rules will be applicable, ie “neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding 666.67 SDR [Special Drawing Rights] per package or unit or 2 SDR per kg of gross weight of the goods lost or damaged, whichever is the higher”.

Further, the SSA clarifies that if the carriage has been performed in a container or similar, every package or unit expressly listed in the bill of lading as included within the container will be considered as a package or unit for limitation purposes.

The applicable limit for late delivery of the cargo (Article No 283) is two and a half times the freight paid on delivery for the cargo specifically delayed, provided it does not exceed the total freight that should be paid under the charter-party, in which case the limit will be the total freight for the charter-party.

If the cargo is lost and/or damaged as well as delayed, then the limits of the Hague-Visby Rules apply.

Regarding the notice of loss or damage, Article No 285 of the SSA provides that if the cargo is lost or damaged the receiver shall give notice to the carrier or its agents:

  • no later than the following working day after delivery if the damages are apparent; or
  • within the following three working days if damages are not apparent. It is important to point out that if notice is not given within this period, then there is a presumption that the goods have been delivered in good order and condition. Such a presumption can be challenged by submitting the appropriate evidence. However, notice will not be necessary in order to claim if a joint inspection of the cargo has been carried out.

Regarding the burden of proof, the claimant has the burden of proof to show that the goods were lost and/or damaged during voyage. If the claimant can establish this, then it is for the carrier to show that it exercised due diligence in making the ship seaworthy and that it took due care of the cargo. Further, it is also for the carrier to prove the exceptions of liability of the Hague-Visby Rules upon which it relies.

The applicable time bar for cargo claim (loss, damage or delay), according to Article No 286, is of one year from the date that the cargo was delivered or should have been delivered.

Under Spanish law there are two types of time-bars. The first, ‘caducidad’, is the equivalent to the English time-bar, ie it can be protected only by commencing legal proceedings or (potentially) by agreement. The second, ‘prescripción’, can be protected by purporting to exercise the right vested on that party. In practice, sending a formal letter of claim is sufficient to protect the time-bar.

Before the enactment of the SSA, it was certain that under the Hague-Visby Rules, the time-bar was of the caducidad and not prescripción type. The SSA has made this issue unclear, however, as it specifically refers to ‘prescripción’ in Article No 286. The issue remains unresolved and has not yet reached the higher courts, although we are of the view that the time-bar is now likely to be understood as prescripción and not caducidad.

This is a rather complex issue. In summary, the position is as follows: Article No 468 of the SSA provides that foreign jurisdiction or arbitration clauses in contracts for the use of a ship (such as bills of lading contracts) are considered null and void if they have not been negotiated individually and separately. However, this is without prejudice to the provisions of international conventions currently in force in Spain.

Further, Article No 251 of the SSA provides that “the acquirer of the bill of lading shall acquire all the rights and actions of the conveyor to the goods, with the exception of agreements regarding jurisdiction and arbitration, which shall require the consent of the acquirer pursuant to the terms stated in Chapter I of Title IX”.

In principle, this means that the question of the validity of jurisdiction clauses will depend on:

  • whether there is an international convention in place that deals with jurisdiction, such as Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, or the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958; and
  • whether the party making the claim is an original party to the bill of lading contract or a third-party endorsee of the bill of lading.

As a general rule, jurisdictional clauses to which the Brussels I bis Regulation applies are enforced by the Spanish courts, although judgment should be made on a case-by-case basis. When the clauses refer to courts outside the EU, the validity test would be if the clause were negotiated separately and individually.

The main pieces of Spanish statutory legislation applicable to this area of law are the SSA and the Law on State Ports and Merchant Marine (TRLPEMM), together with several specific regulations, such as the Pilotage Regulation.

Spain has very limited navigable inland waterways. The only commercial port within inland waterways is that of Seville.

Spanish law assumes the definitions made by UNCLOS [UN Convention on Law of the Sea]. Furthermore, Article No 1.2 of the SSA states: “Maritime navigation is also considered to be that which is carried out through the waters of rivers, canals, lakes, or natural or artificial reservoirs when they are accessible to ships from the sea, but only to the extent that the effect of the tides is felt, as well as in the navigable sections of rivers where there are ports of general interest.”

According to Article No 126 TRPLEMM and Article No 8 RD 393/1996, Regulation on Pilotage, pilotage is compulsory for all vessels with a gross tonnage in excess of 500 gt entering all Spanish ports, whether at sea or on inland rivers. The Spanish authorities can, however, grant exceptions to compulsory pilotage on a case-by-case basis.

If there is any accident involving public property, the ship-owner can recover damages against a given authority according to Laws 39/2015 and 40/2015, which state the administrative procedure. When claiming against the public administration (whether it is regional or national), recourse to judiciary proceedings is always subsequent to a prior administrative claim. If there is no prior administrative claim, a judiciary claim cannot be pursued.

Maritime incidents in Spain are investigated by CIAIM [Comisión permanente de investigación de accidents e incidents marítimos (Permanent Commission on Investigations of Marine Accidents and Incidents)]. Its role is to:

  • carry out investigations and technical reports of every maritime accident classified as ‘very serious’, to identify the technical causes which caused them and to make recommendations with a view to taking the necessary measures to prevent them in the future; and
  • conduct technical investigations of ‘serious’ accidents and maritime incidents where lessons can be learned for maritime safety and the prevention of marine pollution from ships, and to prepare technical reports and recommendations thereon.

Further, in Spain the relevant harbour-master acts as the PSC [port state control] inspector and has jurisdiction to retain vessels and impose fines for breach of regulations.

Spain is a party to the Paris Memorandum, which entered into force on 1 July 1982 with the intention of co-ordinating the efforts of European States in order to eliminate substandard vessels, adopting common control procedures and acting under the provisions of international conventions.

Spain carries out inspections in accordance with European law, applying Royal Decree 1737/2010, of 23 January. This regulation establishes the regime for the inspection of foreign vessels by the Spanish authorities. Harbour-master authorities may inspect not only vessels moored in port, but also those anchored in waters under the jurisdiction of the port.

Risk profiles are drawn up for each vessel, consisting of generic and historical factors, including the history of the owners or operators of the vessel. The risk profile of each vessel dictates the length of time between inspections.

If a vessel is clearly substandard, the authorities may, in exceptional circumstances, arrest the vessel or deny access to the port. In such a case, the authorities shall immediately notify in writing the administration of the flag state, as well as the recognised organisation that issued the statutory certificates. Notice of the lifting of the detention shall be given in the same manner.

The inspector shall provide the Master of the vessel with a copy of the inspection report. Where the inspection confirms or reveals deficiencies resulting in the detention of the vessel, the payment of all inspection costs shall be imposed as an ancillary sanction to the fine. The detention shall not be lifted until the costs have been paid in full or sufficient security in cash has been provided. All costs arising from inspections leading to a vessel being refused access to a port or to the detention of a vessel in port shall be borne by the owner or operator of the vessel.

If the authorities find that the vessel has committed a breach of the applicable regulations, it will impose a fine to the owners, which can range from a few thousand euros up to around EUR3 million. The fine can be appealed to the ordinary courts, in which case the administrative courts will have exclusive jurisdiction.

CIAIM shall conduct a maritime safety investigation of very serious maritime accidents that:

  • affect ships flying the Spanish flag, irrespective of the location of the accident;
  • take place in the Spanish territorial sea or internal waters, as defined by UNCLOS, irrespective of the flag of the ships involved in the accident; or
  • affect substantial interests of Spain, irrespective of the location of the accident and the flag of the ships involved.

A very serious accident refers to a maritime accident involving the total loss of a ship, loss of human life or serious damage to the environment.

The Commission of Investigators may investigate any other maritime accidents and incidents that:

  • affect civil vessels flying the Spanish flag;
  • affect foreign civil vessels and occur in the territorial sea or internal waters of Spain, as defined by the UNCLOS; or
  • occur outside the Spanish territorial sea but affect substantial interests of Spain.

The ship-owner or Master must inform SASEMAR [Sociedad de Salvamento y Seguridad Marítima (Maritime Safety and Rescue Society)] about the incident or accident that took place within 24 hours.

Upon being made aware of an incident, the secretary of the Commission of Investigators will proceed to make an initial classification thereof. If the incident is classified as very serious, an investigator-in-charge and other field investigators will be appointed, who will form the investigation team, and the commencement of the technical investigation will be ordered.

If it is classified as a serious accident or maritime incident, the secretary may decide to initiate an investigation, proceeding as in the previous case, if it is deemed that conclusions can be drawn regarding maritime safety or the prevention of marine pollution from ships.

During an investigation, the field investigators may:

  • take statements from the Master, crew and witnesses in the absence of any person whose interests may, in the opinion of the investigators, compromise the investigation. Notwithstanding, the taking of evidence from seafarers shall be in accordance with the provisions of Chapter 12, Part II of the IMO Code for the Investigation of Marine Casualties and Incidents;
  • have free access to documentation in the possession of the administration that relates or may relate to the investigation;
  • have free access to any part of the ship or its wreckage, including cargo, equipment or drifting objects, as well as to its plans, certificates and any documentation relating to the composition, training and certification of crews, and weather and sea conditions, among other things;
  • have access to the voyage data-recorder (VDR) system installed on the ship, where such an item exists and can be retrieved; and
  • collect and make copies of documentation and data contained in VDR systems held by the flag state authority of the ship, the ship-owner, the ship-builder, the shipyard or the classification society necessary to determine the causes.

A shipowner must follow the procedure set out in Articles No 66 and 67 of Law 39/2015 (Administrative Procedure) by presenting a claim in written form, with proper identification of the claimant and all the relevant facts relating to the claim, especially:

  • the loss and/or damage sustained;
  • the alleged causal relationship between these and the operation of the public service;
  • the economic assessment of the liability (if possible); and
  • the time at which the injury actually occurred.

The claim shall be accompanied by such allegations, documents and information as may be deemed appropriate and the proposal of evidence, specifying the means by which the claimant intends to avail himself or herself.

One year, which can be interrupted by sending the appropriate letter of claim to the administration.

Any damages that arise from the accident can be claimed, subject to the limits set out below. These include material damages as well as consequential losses. There must, however, be a direct link between the damages claimed and the accident. Spanish courts are strict when it comes to assessing the quantum of damages.

Damages that are not a direct consequence of the accident cannot be recovered, eg eventual damages derived from a breach of contract.

Damages caused by force majeure or fortuitous act (fuerza mayor, caso fortuito) are not recoverable under Spanish law. The Spanish concept of force majeure differs from the common law doctrine of frustrations and is far more extensive.

Further, if there is fault of the victim, then there can be no recovery against the administration. Also, those damages that could not have been reasonably avoided, bearing in mind state-of-the-art or available techniques at the time the damage occurred, cannot give rise to a claim against the authorities

Filing a prior administrative claim is a condition sine qua non in order to file a judicial claim. When the claim is rejected by or there is no answer from the administration, the ship-owner may have recourse to judiciary proceedings. The proceedings are regulated by Law 29/1998, and the judicial claim (recurso contencioso-administrativo), as per Article No 45, must be made quoting the disputed administrative decision and the facts and grounds on which the claimant disputes it.

The time-bar is two months from the formal notification of the administrative authority’s decision or, in the absence of such notification (administrative silence), at any point in time after the date when the authorities had to decide the administrative claim.

Administrative courts have exclusive jurisdiction to hear any claim involving public authorities. The jurisdiction of the specific administrative court to be seized of the case depends on several factors, such as the place where the damage occurred, the type of public administration involved and the quantum of the claim. These must be analysed on a case-by-case basis.

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Albors Galiano & Portales

Jaime Albors
ALBORS GALIANO PORTALES
Calle Velázquez, 53
28001 Madrid

+34 91 435 6617

+34 91 576 7423

jalbors@alborsgaliano.com www.alborsgaliano.com
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Albors Galiano & Portales is a leading firm in the Spanish shipping, transportation, insurance and reinsurance, and yachting practice areas that was established in Madrid in the 1990s and has achieved recognition in niche practice areas traditionally dominated by foreign law firms. It has offices in Madrid, Barcelona, Bilbao and Palma de Mallorca, and correspondents in the main capitals. The firm’s professional practice involves maritime law, road and air transport law, insurance and reinsurance law, yachting, and litigation and arbitration. Its specialised lawyers provide advice and intervene in all types of proceedings, and in all jurisdictions and courts of justice in Spain. The firm’s lawyers regularly lecture on various Master’s programmes in maritime law and work closely with universities that offer courses in this area, such as the Spanish Maritime Institute, the Valenciaport Foundation and the Nautical Faculty of Barcelona.

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