Thursday, 23 October 2014

New Shipping Law Act in Spain

October 23, 2014.

New Spanish Shipping Act

The Spanish Parliament has recently approved a new Shipping Act –Ley 14/2014, de 24 de Julio, de Navegación Marítima–, which will enter into force on the 25th of September 2014. Its 524 sections, divided into 10 titles, cover nearly all aspects of shipping law, either private or public.

So far, Spanish maritime law was mainly contained in a Commercial Code that dates back from 1885, whose provisions reflected a model of maritime trade and transport that is no longer valid. It is truth that Spanish shipping law has evolved through the incorporation of international conventions; however some of them were in contradiction with domestic law. The result? A shipping legislation outdated, incoherent and dispersed in many different texts.

This long-awaited Act tries to put those problems to and end. As the same Act expresses, “it is a renovation that not only involves a mere updating and codification, but it also meets the need of coordination with the international maritime law and the adaption to current shipping practice”.

The legislative technique used has been the referral to the international conventions in force on the different fields, whose provisions are complemented by the Act on the issues that concern national law. That is the case of ship arrests, salvage, ship mortgages and maritime liens, or general average. In those fields, the law remains practically unchanged, with some aspects that are further defined and nuanced. For example, the countersecurity for ship arrests is now fixed at a minimum of 15% of the maritime claim.

Some areas have however experienced major changes. We will examine here below some of the changes that have been introduced.


The new Act regulates separately the demise charterparty and the contracts for the carriage of goods by sea, which include time and voyage charterparties and bills of lading.

Among the shipowner’s obligations we must highlight that of seaworthiness, since reasonable care must be applied not only at the beginning but also during the voyage.

Another innovation concerns the recognition of a lien on the goods in favour of the carrier. So far, a Court order was needed in order to place a lien upon the cargo, which made the process long and expensive. The new Act allows the carrier to hold the goods until freight is paid, but only against the charterer, unless the bill of lading states that freight is payable at the port of discharge.

Carriers’ liability

The carrier’s liability regime follows that contained in the Hague-Visby Rules that are currently in force under Spanish law. However, we must remind that Spain has signed the UN Convention on the International Carriage of Goods Wholly or Partly by Sea (the “Rotterdam Rules”) and, although they are not in force yet, they have put its stamp on this text. Effectively, a significant novelty is that the carrier is not only liable for losses and damages to the goods, but also for delays in delivering.

Ship agents’ liability

The new Act finally overcomes the great controversy originated by our Supreme Court’s decision to hold the ship agent liable for the loss and damage suffered by the goods during its transport. That decision was based on a very confusing provision of the 1885 Spanish Commercial Code that has been derogated. Instead, the Shipping Act clearly states that ship agents will not be liable against receivers for those losses or damages, which is much more adequate to the role that they currently play in the carriage of goods.

Marine insurance

The regulation of marine insurance is primarily based on the conditions of coverage drafted by the Institute of London Underwriters (ILU), which are broadly applicable in the insurance market. The Act also expressly states the subsidiary application of the provisions of the Insurance Contract Act.

Jurisdiction/Arbitration clauses

The Act provides for the nullity of foreign jurisdiction and arbitration clauses contained in the contracts of carriage or other the contracts ancillary to the navigation (ship agency, ship management, pilotage and port handling contracts) as long as those clauses has not been negotiated individually and separately. It further establishes that insertion of such clauses within print forms of any of those contracts will not constitute sufficient evidence, on its own, of the parties’ choice.

Pollution civil liability insurance

Section 389 (2) of the Act establishes that claimants will have now a direct action against the liability insurers up to the agreed insurance cover, or up to the applicable limits of liability, as the case might be.

Arrest of ships

The arrest of ships remains regulated by the 1999 Convention on the Arrest of Ships, although the Shipping Act has introduced some nuances and specifications touching on the procedural aspects of the current regulation. The Act basically writes down the procedure that is followed in practice. However it is convenient to highlight that:

The countersecurity that judges usually request to the claimant is now fixed at a minimum of 15% of amount of the maritime claim.
Arrests requested by a Spanish creditor over a Spanish ship can be based on any type of claims, not only of maritime nature. This is also applicable to vessels with flag of a country that is not party to the 1999 Convention on the Arrest of Ships.
Where the Spanish Court that has ordered the arrest has no jurisdiction over the merits of the claim, the Court will determine a period of between 30 and 90 days within which the claimant must file the claim before the appropriate Tribunal.




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