Felipe Arizon, Spain felipearizon@arizon.es

The new Spanish Shipping Act has brought to the Spanish jurisdiction a modern code that has finally corrected inexplicable bad approaches like the former absurd liability regime applicable to the ship agents under the Commercial Code; it has also expressly regulated some shipping contracts like the sale & purchase of ships or ship building that were never codified under Spanish law. For the latter contract the time bar has been reduced in order to accommodate with the reality of the shipping business.

One of the benefits of the new Act has been to bring a higher degree of uniformity between domestic law and the most common International Conventions, yet some interesting differences remain in place.

Among other things the new Act has brought the following changes into play:

  • The concept of ships has now been divided into three categories; vessels, boats and naval artefacts, all of which are now vehicles of navigation. Then another category has been added, that is fixed platforms.
  • Clarification has been brought to the different parties making use of the ship. Thus the code now defines the ship owner, the “armateur” and the “naviere”. Ship agents are no longer assimilated to ship owners and will not be regarded as such in respect to their liability.
  • One of the new introductions of the Act is the regulation of the so-called auxiliary contracts of navigation; ship Management; pilotage; and port operations. In addition the Act deals with collision, salvage and general average while it codifies contamination and the regime applicable to wrecks, sunk vessels, and the limitation of liability under Spanish law.
  • Marine insurance is also dealt with under the Act in a much modern and broader way, reducing the time bars applicable to marine insurance claims from three to two years, assimilated now to non marine insurance claims. The Act has included the direct action against the P&I Clubs.
  • Public Notaries have been given important functions in respect of non judicial proceedings involving; sea protests; sale of cargoes; liens; general average; liquidation, sale, subtraction or destruction of bills of ladings.

Finally, a much better approach to ship arrest practice has been introduced, including:

(i) The competent Commercial Courts for the arrest will be the Court where the claim on the merits is to be pursued, or the competent port Court where the ship is to arrive, at the choice of the claimants. If the ship does not arrive to the port, the port Court will lose its competence for the arrest of the ship. This, sensu contrario, should mean that such port Court should be able to deal with an arrest application before the ship arrives to the port. This is something that in the past posed sometimes reactions by Commercial Courts that refused to grant an arrest order before the ship had arrived to the port.

(ii) The time limit to request the arrest of a ship will be the date where a judgment or an arbitration award is issued or obtained. From this moment the claimants must arrest the ship via an enforcement application. In the past some Courts refused to arrest ships, for instance, after arbitration had been commenced. This new clear time limit should prevent such narrow interpretation of the law.

(iii) The security to be put by the claimants will need to be of a minimum of 15% of the claimed amount. This amount of security can be revised ex officio, or ex application, to take into consideration the circumstances of the case. The form of the security can be any permitted in law, including a bank guarantee. P&I Clubs LOU might now have more chances of being accepted by the Court.

(iv) Ships flying the Spanish flag can be arrested for any other claim in addition to those set out within Art. 1 of the 1999 Arrest Convention provided the creditor has its usual residence in Spain, its principal place of business in Spain, or has obtained the credit via subrogation, or assignment. Ships not flying a flag of a 1999 Convention signatory State, the great majority, can be arrested in Spain for maritime claims as well as for any other claims.

(v) The Maritime Authorities can withdraw the ship’s documents to ensure compliance with the arrest order. This will be in addition to the usual detention measures. A copy of the arrest order and of the arrest application is to be served either to the ship agent or to the Master of the ship. The action on the merits must be lodged within the period of time fixed by the Court, that will range from a minimum of 30 days to a maximum of 90 days.

We now have specialised Courts and an updated regime for maritime law, we shall see the result of this in the coming years. For now the feed back obtained in respect of ship arrest practices is good; certainty has been gained.

Felipe Arizon