Shipping 2021 Comparisons

Last Updated February 24, 2021

Law and Practice

Authors



Hill Dickinson International established its operations in the Piraeus office in 1994 to support the firm's long-standing relationships with Greek ship-owners, insurers and charterers operating in the Greek market. Today, the office 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 23-strong team provides services to clients, including ship-owners, operators and charterers, maritime insurers, underwriters and 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.

The Greek Code of Private Maritime Law is the main domestic law applied by the Greek shipping and maritime courts in marine disputes governed by Greek law. The most common maritime claims filed with the relevant Greek competent courts are claims for unpaid crew wages or repair/service costs, personal injury claims, marine insurance claims and maritime accidents. Mortgagee banks also use the Greek courts to enforce their rights under Greek or foreign mortgages. The aforementioned claims are usually secured through ship’s arrest and applications for interim injunctions.

Article 51 of Law 2172/1993 provides for the establishment and operation of a special maritime division within the Court of First Instance of Piraeus and the Court of Appeal of Piraeus. The maritime division of the Court of Piraeus has exclusive jurisdiction in the Attica region and concurrent jurisdiction all over Greece.

The Directive 2009/16/EC of the European Parliament and of the Council applies in Greece in relation to the establishment of a harmonised inspection system for vessels entering Greek territory. 

Greece is also a party to the Paris Memorandum of Understanding (MOU), pursuant to which the prime responsibility for compliance with the requirements laid down in the international maritime conventions lies with the ship-owner, while responsibility for ensuring that compliance remains with the Flag State.

In this regard, Port State Control in Greece is conducted by the competent department of the Hellenic Coastguard, which follows the rules and procedures established by the above Directive. The Port State Control authority must decide which ships are due to undergo mandatory inspection or are eligible for inspection (Article 12 of the Directive), the type of such inspection, ie, expanded or initial/more detailed (Articles 13 and 14 of the Directive) taking into consideration various parameters, which include the following:

  • generic parameters: type and age of ship, Flag State performance, company performance;
  • the ship’s risk profile;
  • overriding factors: ships suspended or withdrawn from class, subject to report or notification from another Member State, sailing in an unsafe manner, etc.

The Port State Control authority has been granted extended powers in relation to ships which have been involved in grounding or collision incidents (Clause II,2A, Annex A of the Directive). Although there are now specific provisions in relation to wreck removal, the enhanced authorities of the Port State Control will have an overriding effect in blocking cases.

Under Greek law, there are two available methods of registering a ship under the Greek flag:

  • a ship can be registered under the Greek shipping register in accordance with the provisions of the Greek Civil Code of Public Maritime Law (Legislative Decree 187/1973). The legislation provides for numerous requirements in order to register a ship with the Greek flag; 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 (GRT), which are beneficially owned by Greek interests (which are more than 50%), may be registered with the Greek shipping register (as a foreign investment) following the issuance of a ministerial decision setting out the conditions applicable for the registration of the relevant ship. 

In order to register a vessel under the Greek flag, more than 50% of the shares in the vessel must be ultimately beneficially owned by either:

  • Greek interests (being either Greek persons/legal entities or by foreign legal companies, provided that more than 50% of the shares in those non-Greek companies are owned by Greek persons or companies); or
  • EU citizens/legal entities.

Pursuant to Article 9 of the Greek Code of Public Maritime Law (GCPML), Greek Port or Consular authorities abroad have been granted the power to issue temporary trading certificates for vessels applying for registration under the Greek flag, with validity that cannot exceed six months. Immediately after the issuance of the temporary trading certificates, the Greek Ministry of Shipping and Insular Policy will take over the registration file, in order to proceed with the permanent registration of the subject vessel in accordance with the applicable legislative provisions.

There is no provision under the existing Greek legislation that provides for the dual or bareboat registration of vessels flying the Greek flag and therefore, as the law currently stands, these forms of registration are not permitted.

In order for a Greek mortgage to be effective and enforceable against third parties, it should be registered with the competent Ship’s Registry of the vessel’s port of registration and become publicly recorded. A maritime mortgage under Greek law may be either simple or preferred. A simple mortgage is granted by a unilateral statement of the mortgagor, while a preferred mortgage may only be granted by deed. In that case, the mortgage must be in the form of a notarial deed and in the Greek language. If a mortgage is executed abroad, a certified Greek translation of the mortgage must be submitted together with the original document.

Each port of the vessel’s registration maintains two main registers in hard-copy (book) form:

  • an ownership register (evidencing title of the vessel, details of the purchase deed, the vessel’s particulars and encumbrances registered over the vessel); and
  • a mortgage register (containing all the mortgage entries and the relevant information in relation to the registered mortgages, such as the details of the mortgagor, the notarial deed, the secured debt and the registration of any other encumbrances on the vessel, eg, arrest/prohibitory sailing order). 

The Greek Ship Registry does not yet have a full online platform. However, documentation for the registration of a vessel under the Greek flag can be submitted electronically.

These two registers are available to the public through research and review of the relevant book registers by a lawyer or a notary public. However, in order for a third party to review any ancillary documentation (eg, the mortgage deeds, documents of title, etc), permission must be first granted in writing by a competent public authority, following proof of the existence of legal interest. 

The Greek state has ratified the following international conventions, which are in force as amended and applicable to owners and third parties in the event of a maritime pollution incident:

  • the 1969 Convention of Civil Liability for Oil Pollution Damage (CLC), and the later 1992 CLCL;
  • the 1992 Fund Convention;
  • the 2003 Supplementary Fund Protocol;
  • the International Convention on Civil Liability for Bunker Oil Pollution Damage;
  • the 1976 Barcelona Convention for the Protection of the Marine Environment and Coastal Region of the Mediterranean;
  • the MARPOL 73/78 Convention; and
  • the 1972 London Dumping Convention.

The Presidential Decree 55/1998 (as amended) in relation to the protection of the Marine Environment, as well as Article 914 of the Greek Civil Code regarding liability in tort, also applies.

Pursuant to Law No 2881/2001, wreck removal is the responsibility of the vessel’s owner and therefore insurance against wreck removal is mandatory. The Greek state has also the authority to proceed with the removal of a wreck directly and subsequently to claim directly against the respective insurer, in the event that the ship-owner is unable to cover the cost. Despite the national regulation applicable for wreck removals, Greece has not yet ratified the Nairobi International Convention on the Removal of Wrecks.

The Greek state has ratified the following international legislation, which is in force as amended and applicable in the case of a maritime collision incident:

  • the International Regulations for Preventing Collisions at Sea 1972 (COLREGS);
  • the 1910 Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels.

These international regulations provide a framework for determination of the liability of the parties to a collision incident.

In circumstances where the international regulations do not apply, the provisions of Articles 235 to 245 of the Code of Private Maritime law and Article 914 of the Civil Code shall apply.

Greece is a party to both Convention for Limitation of Liability on Maritime Claims 1976 (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.

In relation to the types of claim that may be subject to limitation of liability, Law 1923/1991 (as amended) is in line with Article No 2 of the LLMC, as to the following types:

  • 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, or been 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 their liability in accordance with this Convention and further loss caused by such measures).

However, 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 number 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 relation to the types of claim that may be excluded from liability, Law 1923/1991 (as amended) is in line with Article No 3 of the LLMC 76, as to the following types:

  • 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 ship-owner 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 ship-owner or salvor and such servants, the ship-owner or salvor is not entitled to limit his or her liability in respect of such claims, or if they are by that law only permitted to limit their liability to an amount greater than that provided for in Article No 6.

In relation to the applicable limits, Article 16 of Law 4504/2017 ratified the increase of the LLMC limits according to the IMO “tacit amendment procedure”. Therefore, liability may be limited as follows.

  • For claims for loss of life or personal injury on: 
    1. ships not exceeding 2,000 GRT, the limit is 3.02 million Special Drawing Rights (SDR); and
    2. larger ships, the following additional amounts are used in calculating the limitation amount:
      1. for each ton from 2,001 to 30,000 tonnes, SDR 1,208;
      2. for each ton from 30,001 to 70,000 tonnes, SDR 906; and
      3. for each ton in excess of 70,000 tonnes, SDR 604.
  • For any other claims on: 
    1. ships not exceeding 2,000 GRT, the limit is SDR 1.51 million; and 
    2. larger ships, the following additional amounts are used in calculating the limitation amount:
      1. for each ton from 2,001 to 30,000 tonnes, SDR 604;
      2. for each ton from 30,001 to 70,000 tonnes, SDR 453; and 
      3. for each ton in excess of 70,000 tonnes, SDR 302.

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 (depending on the establishment date of the limitation fund) by using the method of valuation applied by the IMF for its operations and transactions. The SDR value is determined daily, based on the spot exchange rates observed around noon London time, and posted on the IMF website.

The particulars for the establishment and operation of a Limitation Fund under LLMC 76 are set out at Law No 1923/1991, pursuant to which the LLMC 76 has been ratified and enacted to the Greek legislation.

Under Article 11 of Law No 1923/1991, a limited liability fund may be set by any person that could be considered liable under a maritime claim. The limitation fund is set by application of the relevant person at court or other competent authority. 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.

It is a requirement for the establishment of the fund that the bank guarantee must be able to cover the totality of the amounts claimed in relation to the incident giving rise to the fund, together with relevant interest applicable from the date of the event. Calculations are made taking into account the “unit of account” referred to in Articles 6 and 7, which is the Special Drawing Right as defined by the International Monetary Fund. The amounts mentioned in Articles 6 and 7 shall be converted into the national currency of Greece, according to the value of the currency at the date the limitation fund shall have been constituted, payment is made, or the guarantee is issued.

Greece has ratified the 1924 Hague Convention and the 1986 Visby Protocol, making the Hague-Visby Rules applicable to cargo claims subject to Greek jurisdiction, which have been given the force of national law through the enactment of Law 2107/1992. Greece has not ratified the UN Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules) or the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2009 (the Rotterdam Rules).

In relation to domestic legislation, when the Hague-Visby Rules do not apply, Articles 107 to 148 of the Code of Private Maritime Law provide a regime similar to the Rules.

As a matter of principle under Greek law, 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 the following.

  • If the original bill of lading was 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.
  • If 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.
  • If 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); or
    3. it has compensated the consignee/third party or legal holder of the bill of lading for its loss and has subrogated to the rights of the legal holder of the bill of lading.

In accordance with the Hague-Visby Rules, the ship-owner/carrier is entitled to limit its liability either by unit (666.67 special drawing rights (SDRs) per unit) or by weight (2 SDRs per kilogram), whichever is higher. The limitation limits set out by the LLMC Protocol 1996 following the LLMC 76 and the International Convention on Oil Pollution Preparedness, Response and Co-operation 1990 (the OPRC Convention) also apply.

However, the approach is different if the ship-owner is the actual carrier only and not the contractual carrier, having assumed the responsibility to carry the cargo and deliver it at the port of discharge. In this case, the Hague-Visby Rules are not interested in the actual carrier, for whose actions and omissions it is the contractual carrier who remains responsible. The contractual carrier has then a right of claim for damages in tort pursuant to Article 914 of the Civil Code and Article 106§2 of the Code of Private Maritime Law.

Pursuant to Article III Rule 5 of the Hague-Visby Rules, the shipper guarantees the accuracy of the statement as to weight and quantity of the cargo, as well as the marks and number. In this regard, the carrier has the right to claim in damages against the shipper based on contract or tort for any liabilities due to claims of other cargo interests or due to damage caused to the vessel, if they were caused due to misdeclaration of any of the aforementioned cargo particulars by the shipper.

In the specific case of loading dangerous cargo (inflammable, explosive or other dangerous goods) without the knowledge of the Master of the vessel, any such cargo may be discharged, rendered harmless or destroyed at the shipper’s expense.

The national provision of Article 137 of the Code of Private Maritime Law follows the same approach, whereby the carrier will not be liable in the event of misdeclaration of the type, weight or value of the cargo. This approach has also been followed by the Greek courts, which recognise (inter alia) that a carrier will be discharged from liability to deliver a cargo in accordance with the respective bill of lading, if the shipper has made a false statement in that bill of lading (Decision No 438/1995 of the Piraeus Court of Appeal).

The time bar for filing a claim for damaged or lost cargo in Greece is one year, with the time to be counted from the date of actual delivery or the date on which delivery should have taken place. These limits remain the same irrespective of whether the provisions of the Hague-Visby Rules (Article III Rule 5) or the Code of Private Maritime Law apply (Article 148). This one-year period may, however, be extended by agreement of the parties after the cause of action has arisen.

Greece is a party to the International Convention for the Unification of Certain Rules relating to Arrest of Sea-going Ships of 10th May 1952 (the 1952 Arrest Convention), which has been ratified and implemented in Greece by the Legislative Decree 4570/1966.

The 1952 Arrest Convention (together with the provisions of Articles 682, etc, and Articles 707, etc, of the Greek Code of Civil Procedure (the GCCP), which supplement the 1952 Arrest Convention) applies in cases where a vessel flies the flag of a signatory Member State and she is arrested in the jurisdiction of a signatory Member State, while the provisions of the GCCP are applicable to all other cases for the arrest of vessels in Greece.

Under Greek law, claims deriving from or relating to services provided on board the vessel and claims deriving from damages cause by a vessel are recognised as maritime liens.

More specifically, Article 205 of the Greek Code of Private Maritime Law (the GCPML) recognises the following claims as maritime liens:

  • 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;
  • claims of 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 is to take place up to the auction;
  • costs and expenses payable in respect of marine salvage and the removal of wrecks; and
  • damages due to ships, passengers and cargoes as a result of collision.

A claim in relation to a foreign-flagged vessel is considered to be a maritime lien if both the law of the flag and Greek law recognise that claim as a maritime lien.

In cases where the 1952 Arrest Convention is applicable (ie, where a vessel flying the flag of another signatory Member State calls at a Greek port), that vessel may only be arrested for one of the following maritime claims, as defined in Article 1 of the 1952 Arrest Convention:

  • damage caused by any ship either in collision or otherwise;
  • loss of life or personal injury caused by any ship or occurring in connection with the operation of any ship;
  • salvage;
  • agreement relating to the use or hire of any ship, whether by charterparty or otherwise;
  • agreement relating to the carriage of goods in any ship, whether by charterparty or otherwise;
  • loss of or damage to goods, including baggage carried in any ship;
  • general average;
  • bottomry;
  • towage;
  • pilotage; 
  • goods or materials wherever supplied to a ship for her operation or maintenance;
  • construction, repair or equipment of any ship or dock charges and dues;
  • wages of Masters, officers, or crew;
  • Master’s disbursements, including disbursements made by shippers, charterers or agents on behalf of a ship or her owner;
  • disputes as to the title to or ownership of any ship;
  • disputes between co-owners of any ship as to the ownership, possession, employment or earnings of that ship; and
  • the mortgage or hypothecation of any ship.

If the claim is not one of a maritime nature, the creditor cannot arrest the vessel which relates to that claim.

For all the other cases where the 1952 Arrest Convention does not apply, the general provisions of Greek law apply. Under Greek law, a vessel may be arrested for any type of claim against the owner of the vessel.

Under Greek law, maritime claims are in personam claims. In contrast to other jurisdictions, Greek law does not provide for claims in rem against a vessel.

Any application for the arrest of a vessel must be filed against her registered owner – this applies even in cases of claims against third parties (ie, a demise charterer, vessel’s operator or other party controlling the vessel).

Similarly, in cases of transfer of ownership of a vessel, arrest of that vessel may be effected against the new owner of the vessel for a debt of the previous ship-owner (even if that debt does not constitute a maritime lien as per Article 205 of the GCPML).

Under Greek law, a bunker supplier can arrest a vessel in connection to unpaid bunkers supplied to a vessel, provided the owner of the vessel has undertaken a contractual obligation towards the bunker supplier. However, if the bunkers were ordered by the charterer for the supply of a chartered vessel, only the charterer, as the party that purchased the bunkers, would be held liable for the unpaid bunkers and the vessel would not be able to be arrested for debts of the charterer.

The second question relates to the most recent well-known OW Bunker cases brought before various courts around the world, including the Greek courts. The Greek courts have issued conflicting decisions on the liability of the owner to pay the physical supplier in relation to unpaid bunkers (in some cases, the owner has been held liable to pay the physical supplier while in other instances that liability has been dismissed).

In order to arrest a vessel, an application shall be filed by the creditor with the First Instance Court of the place where the vessel is moored, describing (and subsequently proving on a prima facie basis):

  • a valid claim; and
  • a risk that unless security (arrest) is granted, there is a likelihood that the creditor may not be able to enforce its right (ie, collect its claim).

Upon filing of the application, a hearing of the application is fixed within the next ten to 15 days.

Upon filing of the application, it is common practice for the creditors to apply for an ex parte provisional order with a view to prohibiting the vessel from sailing away and/or to effect any changes on her legal status (transfer of ownership, registration of mortgage, etc).

In relation to the application of arrest of a vessel, a proper hearing is held before the Court of the First Instance, witnesses are cross-examined on the merits of the case and upon completion of the hearing the judge determines a time-frame of two to three days, within which the parties have to file their written submissions and their supporting documentation.

Parties are not required to file original documents and therefore, usually, the parties file copies of the documents duly certified by a lawyer as true copies of the originals (together with official translations of those documents into the Greek language, if relevant).

Although the court has the discretion to order a security deposit on behalf of the arresting party, such a measure is quite rare in Greece. 

Bunkers on board the vessel can be arrested in Greece, provided the arresting party has a valid claim; however, due to the difficulties encountered, the arrest of bunkers is not a common practice.

Under Greek law, an attachment can be exercised over freight owed to the charterer. However, a creditor exercising such an attachment has no right to collect the freight, but rather has a right to apply for the attachment of freight, even if that freight is held by a third party (arrest in the hands of a third party).

Under Greek law, the arrest of a sister ship may only be effected in limited circumstances and in practice this is rather unusual.

Provided Greek courts have jurisdiction to hear applications for security measures in accordance with the provisions of the GCCP (ie, the defendant has its residence in Greece or the defendant has property in Greece, etc), a debtor can inter alia apply for the attachment of bank accounts of the defendant and the registration of mortgage pre-notation over a property.

Under Greek law and following the application of any interested party, the court must amend the decision ordering the arrest of a vessel (and lift the arrest) and replace the security measure of the arrest with a security up to the amount of arrest ordered by the court.

The most common types of security permitted by Greek law are the following:

  • payment of money with the Consignment Deposits and Loans Fund; 
  • a bank guarantee issued by a reputable/solvent bank and deposited with the court; and
  • a letter of undertaking of a P&I Club (provided that such security is agreed by both parties).

It should be noted that a decision ordering the arrest of a vessel is not subject to any form of appeal. However, the Greek Code of Civil Procedure permits the revocation (or amendment) of such a decision under specific circumstances.

Procedure for Judicial Sale

Under Greek civil procedural law, auction proceedings in Greece generally take place without the involvement of a court. All public auctions are conducted exclusively through electronic (online) procedures (e-auctions) under the supervision of an appointed, accredited notary public (http://www.eauction.gr).

The public auction proceedings are initiated by any creditor who has an enforceable title (ie, a final and unappealable Greek court judgment or a foreign court judgment/arbitral award declared enforceable in Greece or a notarial deed (including a ship mortgage)/foreign ship mortgages to the extent that these have been declared enforceable by a Greek court decision, etc).

A copy of the enforceable title together with an exequatur (an official order addressed to all competent enforcement officers to execute the enforcement deed) attached thereto and a demand for payment are served on the debtor within a term of three business days by a court bailiff upon a creditor’s instruction.

If the debtor fails to pay within three business days, the creditor may begin the main enforcement proceedings by officially instructing a court bailiff to proceed with the enforcement and arrest of the vessel. The court bailiff is instructed by the creditor to draft and issue a deed of arrest of the vessel, including:

  • the vessel’s precise description;
  • the vessel’s reserve price of first bid, which cannot be lower than two thirds of the commercial value of the vessel (which is determined on the basis of expert valuations);
  • a description of the enforceable title (the basis of enforcement); and
  • details of the auction date, location and the notary public conducting the auction proceedings (the notary public to be registered with the Notary Public Association and to be practising in the region where the vessel is moored).

The public auction of the vessel is scheduled on the first Wednesday (a business day) 40 days following her arrest.

The public auction is conducted by openly tendering online offers and is conducted on a real-time basis with successive online bids to the notary public via the specialised electronic bidding platform.

To take part in the auction procedure, prospective bidders must:

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

Liability for Maintaining the Vessel

The liability for maintaining the vessel from its arrest and until it is sold lies with the arresting party who is also obliged to place guards on board the vessel.

Under Greek law (Article No 975 of the Greek Code of Civil Procedure), the costs and expenses of the enforcement (including all costs incurred during the pre-auction phase, the arrest, the maintenance of the arrested vessel, etc) are deducted from the auction proceeds prior to its distribution to the ranking creditors.

Priority of Maritime Liens/Mortgages

The maritime liens of Article 205 of the GCPML take priority over a mortgage, except for a preferred ship mortgage on a Greek-flagged vessel registered as a foreign investment in the form of a notarial deed duly registered in the mortgage register in accordance with the provisions of LD 2687/1953, which ranks in priority over all maritime liens of Article 205 of the GCPML (except for those which are also recognised as liens in Article 2 of the Brussels Convention of 1926 in relation to liens and mortgages).

In the event of the auction of the vessel, the announced creditors with a claim protected by a maritime lien will be ranked in priority over the mortgagee creditors.

Article 205 of the GCPML provides for four classes of maritime liens and the claims of the first class are ranked in priority over the claims of the second class, etc. However, claims of the same class are ranked pari passu.

On 26 October 2020 a new integrated Insolvency Code (Law 4738/2020 on Debt Settlement and Second Chance Providence) was introduced and came into effect from 1 January 2021.

The new law has implemented in Greece the EU Directive 2019/1023 on preventive restructuring frameworks and second chance, and provides for preventive mechanisms, in and out-of-court restructuring procedures and updated liquidation proceedings.

One of the newly introduced mechanisms is the out-of-court settlement procedure which, inter alia, permits to debtors (both legal and natural persons) to make a request (on a confidential basis) for a settlement proposal of any debts by financial institutions and the Greek State.

Article 703 of the GCCP provides that the arresting party shall pay damages in the event of wrongful arrest of a vessel if the following two conditions are met:

  • the court has dismissed on the merits the main writ of action/claim in relation to which the security measure of the arrest of the vessel has been ordered; and
  • the arresting party knew or did not know due to gross negligence that it did not have a valid claim.

The award of damages due to wrongful arrest is quite difficult and rare, except for cases where the arrest of the vessel was ordered on the basis of false or fraudulent evidence.

Applicable International Conventions/Law

Greece has ratified both the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea of 13 December 1974 (the PAL) (Law 1922/1991) and its 2002 Protocol (Law 4195/2013). The PAL and the 2002 Protocol establish a framework under which passengers may claim compensation in the event of death/bodily injury/loss or damage of property.

On 23 April 2009, the Regulation (EC) No 392/2009 of the European Parliament and of the Council on the liability of carriers of passengers by sea in the event of accidents (the PLR) was adopted, implementing both the PAL and the 2002 Protocol in all the EU Member States with a view to creating a harmonised legal framework across the EU Member States in relation to the liability of carriers to passengers.

The PLR is applicable to all international voyages on passenger vessels where the vessel flies an EU Member State flag, the contract of carriage was concluded in an EU Member State or the place of departure/destination is an EU Member State.

The PLR also applies to domestic voyages carried out by Class A vessels since 31 December 2016, while since 31 December 2018 the PLR has also applied to domestic voyages carried out by Class B vessels.

Time Limit

Any claim for damages arising out of death/personal injury/loss or damage of luggage shall be time-barred after a period of two years.

The limitation period shall be calculated as follows:

  • in the case of personal injury, from the date of disembarkation of the passenger;
  • in the case of death occurring during carriage, from the date when the passenger should have disembarked, and in the case of personal injury occurring during carriage and resulting in the death of the passenger after disembarkation, from the date of death (provided that this period does not exceed three years from the date of disembarkation); and
  • in the case of loss of/damage to luggage, from the date of disembarkation or from the date when disembarkation should have taken place, whichever is later.

Due to grounds for suspension/interruption, the limitation period can be extended up to:

  • five years from the date of disembarkation of the passenger/date when the disembarkation should have taken place (whichever is the latter); or
  • three years from the date when the claimant knew/ought reasonably to have known of the injury/loss/damage caused by the incident.

The period of limitation may also be extended, either by a written declaration of the carrier or by a written agreement of the parties, following the occurrence of the incident.

Limitation on Liability

Under the PLR, carriers are subject to a two-tier liability system for passenger claims involving personal injury and death arising out of a “shipping incident” (Annex I of PLR), while for all other cases which do not arise out of a “shipping incident” (as defined in the PLR), the liability of the carrier must be established.

Carriers are also liable for the loss of/damage to the luggage and vehicle of a passenger up to specific limits as they are defined in the PLR.

The carrier shall not be entitled to the benefit of the limits of liability prescribed in Articles 7 and 8 and Article 10(1) of the PLR, if it is proved that the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with the knowledge that such damage would probably result.

Under Greek law, jurisdiction clauses incorporated in charterparties reflect the written agreement of the parties and as a result such clauses are mainly considered valid.

However, the same does not apply to jurisdiction clauses incorporated in bills of lading, especially due to the fact that a bill of lading is directly issued by the carrier. As a result, different approaches on the validity and the binding nature of such jurisdiction clauses have been followed by the Greek courts, depending on whether such clauses refer to courts inside or outside of the European Union.

Following the decision 883/1994 of the Supreme Court, jurisdiction clauses referring to courts outside of the European Union are valid and bind the holder if such a clause has been confirmed in writing and both the carrier and the holder have signed the bill of lading.

However, Article 25 of the Regulation (EU) 1215/2012 applies to jurisdiction clauses relating to courts of another EU Member State.

Article No 25 of the Regulation grants exclusive jurisdiction to the courts of any Member State (as 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.

In contrast to jurisdiction clauses, parties can choose the applicable law governing their contract and that choice can be made expressly, orally or clearly demonstrated by the terms of the contract or the circumstances of the case (Regulation 593/2008 – Rome I).

The application of a choice of law may be refused only if such application is manifestly incompatible with the public policy (ordre public) of the forum.

Under Greek law, the incorporation of an arbitration clause of a charterparty into the relevant bill of lading shall bind only bind the receiver/holder if this is appropriate to the relations of the carrier and the receiver/holder and if that clause has been incorporated into the bill of lading by an express and clear reference to the relevant arbitration clause of the charterparty.

A more lenient approach has been followed in relation to specific types of charterparty bills of lading, ie, CONGENBILL, where it is expressly stated these bills of lading are “to be used with charterparties”. In such cases, the incorporation of the arbitration clause of the charterparty into the bill of lading has been accepted as valid and binding and there is a rebuttable presumption that the receiver can access the charterparty and has knowledge of or can review the content of that clause.

Greece is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention), which has been implemented in Greece by Legislative Decree 4220/1961.

The New York Convention is applicable provided (i) the dispute is one of a commercial nature and (ii) the arbitral award has been issued in another member state of the New York Convention.

However, if the arbitral award does not fall within the scope of application of the New York Convention, Articles 906, etc, of the Greek Code of Civil Procedure apply, which provide the requirements and the procedure following which a foreign arbitral award may be recognised as enforceable in Greece.

The presence of a vessel within the Greek territorial waters and the subsequent call of that vessel at a Greek port would establish jurisdiction of the relevant Greek courts for purposes of arrest of that vessel (and this jurisdiction would continue to apply as long as the vessel remained berthed at a Greek port).

However, if the Greek courts do not have jurisdiction to decide on the merits of claim (due to a specific jurisdiction clause/arbitration agreement), the jurisdiction created by the presence of the vessel within the Greek territorial waters may be challenged.

If the 1952 Arrest Convention applies, the court in the jurisdiction of which the arrest has been effected (although that court does not have jurisdiction on the merits of the case), that court shall determine a timeframe within which the creditor must file a claim with the court which has jurisdiction.

If the parties have agreed to submit the dispute to the jurisdiction of a particular court other than that within the jurisdiction of which the arrest was made or to arbitration, the court or other appropriate judicial authority within the jurisdiction of which the arrest was made may fix the time within which the creditor shall commence main proceedings.

In Greece, there are two main arbitration bodies for maritime claims.

  • The Hellenic Chamber of Shipping (the NEE). The NEE is a legal entity incorporated under Greek public law in 1936 and based in Piraeus. The arbitrators are appointed from a list of arbitrators of the NEE (consisting of lawyers, ship-owners, charterers, etc).
  • The Piraeus Association for Maritime Arbitration (the PAMA). The PAMA is a private non-profit association founded in 2005. Arbitrations are conducted in accordance with Law 2735/1999 adopting UNCITRAL’s Model Law for International Commercial Arbitration and in accordance with the Rules for Maritime Arbitration adopted by the PAMA. An award issued by the PAMA is a final, binding and enforceable award pursuant to the provisions of the Greek Code of Civil Procedure (Articles 904, etc); however, this award is unappealable.   

A claim for damages could be brought before Greek courts in the event of initiating proceedings in breach of a foreign jurisdiction or arbitration clause; however, this is quite uncommon in Greece.

Tonnage tax in Greece is generally governed by Law 4110/2013, passed on 11 January 2013, imposing tonnage tax on foreign-flagged vessels.

Specifically, the following companies are subject to this tax system:

  • ship-owning companies of non-Greek flagged vessels that are being managed by companies which have established an office in Greece under Article 25 of Law No 27/1975;
  • the ship-managing companies are liable, together with the owning companies, for the payment of the tonnage tax;
  • in the case of joint ship-management, all ship-management companies are jointly liable;
  • if the management is changed within a fiscal year, each ship-managing company is liable for the period within which the ship remained under its management;
  • in the case of transfer of ownership of a vessel subject to tonnage tax as per the points above, the buyer is liable, together with the seller, for any tonnage tax payable until the date of transfer, assuming the ship’s management remains with a company which has established an office in Greece under Article 25 of Law No 27/75.

The tonnage tax is calculated as per the formula applying to vessels registered under the Greek flag pursuant to Article 13 of LD 2687/1953. The relevant formula in each circumstance will be the one in force during the year preceding the tax becoming payable. Any equivalent taxes or dues paid to the flag state are set off against the Greek tonnage tax.

Law 4110/2013 not only imposed tonnage tax on foreign-flagged vessels, it also clarified certain tax exemptions regarding the distribution of dividends and the transfer of ownership of shares.

  • The distribution of dividend of foreign ship-owning companies, which are subject to tonnage tax as above, is exempted from any taxes. This exemption applies also if the dividend distribution is effected through holding companies, irrespective of the number of companies intervening between the ship-owning entity and the beneficial shareholder.
  • The transfer of ownership (sale or donation) of shares of Greek or foreign companies owning ships under a Greek or foreign flag is exempted from transfer tax.
  • The inheritance of ships over 1.500 GRT under a Greek or foreign flag, or of shares of Greek or foreign companies owning such ships, is exempted from inheritance tax.

However, in 2019, the Greek government enacted the new Law 4670/2019, introducing a series of important amendments in the aforementioned taxation scheme, which can be summarised as follows: 

  • 10% tax is imposed on Greek tax residents on dividends distributed by Greek non-management shipping companies of Article 25 L 27/1975; 
  • a 10% tax (with further exhaustion from any other tax liability) is imposed on special payments and bonuses paid by Greek shipping companies of Article 25 L 27/1975 to members of their board of directors (BoD), managers, executives and employees on top of their regular salary;
  • the special contribution of Article 43 Law No 4111/2013 that provided for the voluntary contributions of shipping companies for the period 2014–2017 has been extended for an indefinite period and is also imposed on the Greek non-management shipping companies of Article 25 Law No 27/1975;
  • changes in the taxation of Category B vessels; and 
  • a tax duty on all Greek-flag fishing vessels and tugboats was imposed as of 1 January 2020.

During the outbreak of COVID-19, the Hellenic Maritime Administration sought to maintain the smooth operation of the international maritime transport whilst securing high standards for the protection of public health. Domestically, the key objective has been to maintain essential maritime cabotage services to the Greek islands, which is largely restored, with the necessary adjustments to secure public health. 

In this regard, various measures have been adopted throughout the last ten months, and are being re-considered regularly, depending on the changing circumstances of the pandemic, including the following:

  • prior to the arrival in a Greek port, ship Masters must submit through the National Maritime Single Window (NMSW) the documents noted in the Convention on Facilitation of International Maritime Traffic (FAL) and Directive 2010/65/EU;
  • crew members with symptoms or who suspect they are infected must follow regular quarantine or isolation routines established by the international and national Public Health Authorities;
  • Port State Control inspections are carried out based on whether the conduct of the inspection would create a risk to the safety of the inspectors, the ship, its crew or the port and taking into consideration the relevant instructions from the Health Authorities.

Although there have been no further specific measures or restrictions, the Hellenic Coastguard is considering the COVID-19 pandemic on a case-by-case basis, depending on factors that include entering ships' last port of call, possible COVID-19 cases and the declarations made by the ship’s Master before entering Greek ports.

The Greek courts have not yet decided on the issue of the recognition of the coronavirus pandemic as force majeure and/or frustration. Even in the few cases that COVID-19 has been claimed as a reason for non-payment under contracts relating to shipping services, the Greek courts have not yet considered the application of frustration or force majeure as a defence (Decision No 3012 of the Piraeus First Instance Court). It is likely that such cases will be considered in the future, with the high volume of cases brought before the Greek courts usually delaying hearing for nine to 12 months after the respective application has been filed.

However, the majority of shipping contracts remain subject to English law and arbitration. In this regard, when considering such shipping cases brought before them, Greek courts will need to consider the applicable law and the interpretation given under that law to the coronavirus pandemic within the concept of force majeure and frustration.

Law 4646/2019 came into force on 12 December 2019, bringing a historical change to the ship registration procedures in Greece. Pursuant to paragraph 3 of Article 61, the key provisions of Article 1, Law 791/1978 have been amended to provide that any foreign company with an establishment and office in Greece acting as (inter alia) a bareboat charterer or ship lessee of vessels registered under the Greek flag will have its constitution and legal capacity governed by the governing laws of the country of its incorporation – irrespective of the place of actual management and operation.

The extension of the application of the original provisions of Law 791/1978 to bareboat charterers and ship lessees operates as indirect recognition of the concept of bareboat chartering and sale and leaseback structures as part of Greek legislation. Although this addition is a relatively minor amendment to the original legislation, it allows the Greek flag further scope with the introduction of these two internationally recognised schemes.

Hill Dickinson International

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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Law and Practice in Greece

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Hill Dickinson International established its operations in the Piraeus office in 1994 to support the firm's long-standing relationships with Greek ship-owners, insurers and charterers operating in the Greek market. Today, the office 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 23-strong team provides services to clients, including ship-owners, operators and charterers, maritime insurers, underwriters and 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.