United Kingdom: Shipping

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This country-specific Q&A provides an overview of the legal framework and key issues surrounding Shipping in the United Kingdom.

This Q&A is part of the global guide to Shipping.

For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/shipping

  1. What system of port state control applies in your jurisdiction? What are their powers?

    The UK has voluntarily committed to the 1982 Paris Memorandum of Understanding. At the moment, this is in force by means of EU Council Directive 95/21/EC. The relevant agency in the UK is the Maritime and Coastguard Agency (MCA), which has said that it does not expect the PSC regime to change, despite Brexit.

    The MCA may inspect vessels without warning. If it finds deficiencies it may issue a prohibition notice (prohibiting certain activities), or a detention notice (preventing the vessel from leaving until the deficiency is corrected). The MCA also has the power to issue access refusal notices, preventing a vessel from entering the jurisdiction.

  2. Are there any applicable international conventions covering wreck removal or pollution? If not what laws apply?

    The Nairobi Convention on the Removal of Wrecks 2007 was implemented by the Wreck Removal Convention Act 2011, which came into force on 14 April 2015.

    The International Convention for the Prevention of Pollution from Ships 1973, as amended by the 1978 and 1997 Protocols, is in force. As also are the International Convention on Civil Liability for Oil Pollution Damage 1992, the Fund Convention 1992 and the Supplementary Fund Protocol 2003.

    The International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 is also in force.

  3. Are there any applicable international conventions covering collision and salvage? If not what laws apply?

    The Collision Convention 1910 and the Convention on the International Regulations for Preventing Collisions at Sea 1972 are in force by virtue of the Merchant Shipping Act 1995.

    The International Convention on Salvage 1989 applies, as incorporated by the Merchant Shipping (Salvage and Pollution) Act 1994.

  4. Is your country party to the 1976 Convention on Limitation of Liability for Maritime Claims? If not, is there equivalent domestic legislation that applies? Who can rely on such limitation of liability provisions?

    The UK is party to the Convention on Limitation of Liability for Maritime Claims 1976, as amended by the 1996 Protocol.

  5. If cargo arrives delayed, lost or damaged, what can the receiver do to secure their claim? Is your country party to the 1952 Arrest Convention? If your country has ratified the 1999 Convention, will that be applied, or does that depend upon the 1999 Convention coming into force? If your country does not apply any Convention, (and/or if your country allows ships to be detained other than by formal arrest) what rules apply to permit the detention of a ship, and what limits are there on the right to arrest or detain (for example, must there be a “maritime claim”, and, if so, how is that defined)? Is it possible to arrest in order to obtain security for a claim to be pursued in another jurisdiction or in arbitration?

    The UK is party to the Convention Relating to the Arrest of Seagoing Ships 1952, as most recently enacted by the Senior Courts Act 1981 (SCA), sections 20 and following.

    It is possible to arrest a ship to obtain security for a claim that will be determined in arbitration or in another jurisdiction.

    The right of arrest is limited to the maritime claims defined in the SCA.

    It is possible to detain a vessel to obtain security for other types of claim by means of a freezing injunction, but this is a much more complicated process.

  6. For an arrest, are there any special or notable procedural requirements, such as the provision of a PDF or original power of attorney to authorise you to act?

    There are no special formalities apart from the application to the court, and a lawyer does not need a power of attorney in order to represent his client.

  7. What maritime liens are recognised?

    Damage done by a ship; salvage; crew’s wages; master’s wages and disbursements; bottomry or respondentia (obsolete methods of raising money against the security of a ship or her cargo).

  8. Is it a requirement that the owner or demise charterer of the vessel be liable in personam? Or can a vessel be arrested in respect of debts incurred by, say, a charterer who has bought but not paid for bunkers or other necessaries?

    Yes. A ship may only be arrested if the person liable in personam is either her owner or demise charterer.

    In English law, the supply of bunkers or other necessaries does not give rise to a maritime lien, and thus claims against a time charterer who contracted for the bunkers or other necessaries do not give a right to arrest the ship.

  9. Are sister ship or associated ship arrests possible?

    A sister ship arrest is possible where the ship to be arrested is owned by the person who is liable in personam as the owner or charterer of the ship in connection with which the claim arose.

    Associated ship arrests are not possible.

  10. Does the arresting party need to put up counter-security as the price of an arrest? In what circumstances will the arrestor be liable for damages if the arrest is set aside?

    An arresting party is not required to post counter-security (although he will have to undertake to pay the Admiralty Marshal’s costs of arresting and maintaining the arrest).

    An owner is not entitled to compensation for the detention of his ship simply because the arrest is subsequently set aside. In order to claim damages, he must show that the arrest was applied for in bad faith or maliciously.

  11. How can an owner secure the release of the vessel? For example, is a Club LOU acceptable security for the claim?

    Historically, an arresting party could insist either on payment of cash into court, or by the provision of a bail bond.

    Nowadays, a ship will normally be released against a letter of undertaking issued by a P&I Club or other acceptable financial institution.

    While these are usually matters of negotiation between the parties, there are recent indications that a party may not be permitted unreasonably to refuse security the court considers is satisfactory.

  12. Describe the procedure for the judicial sale of arrested ships. What is the priority ranking of claims?

    An order for sale can be made upon application at any time after an arrest, and will usually be granted once it is reasonably clear that security will not be voluntarily posted. This apples before and after judgment on the merits. (A sale prior to judgment is described as “pendente lite”).

    The Admiralty Marshal will obtain valuations, and will then offer the ship for sale by way of sealed tender. (Other options are possible, but this is the normal route).

    The order of priority is:

    • Costs of the arrest and the sale
    • Claims that attract maritime liens
    • Mortgages and similarly secured claims
    • All other claims
  13. Who is liable under a bill of lading? How is “the carrier” identified? Or is that not a relevant question?

    The contractual carrier is liable under a bill of lading. This will usually be the owner (or bareboat charterer) of the vessel, unless there a clear statement that someone else is the carrier (which may well be so, for example, in container liner services).

    Identity of carrier or “demise” clauses will usually be given effect.

  14. Is the proper law of the bill of lading relevant? If so, how is it determined?

    The proper law of a bill of lading is always relevant, but unless evidence is brought as to what that proper law provides, then the court will assume it is the same as English law.

    English law will normally recognise and apply choice of law provisions in a contract.

    If there is no choice of law expressly stated, then – in the past – the governing law would be determined by applying the principles in the Rome I Regulation (EC/593/2008). Whether this will continue to be the case after Brexit is unclear. UK legislation might continue to apply Rome I, but maybe not. In which case it is likely the UK will revert to determining the system of law with which the transaction has its closest connection.

  15. Are jurisdiction clauses recognised and enforced?

    Yes. See above.

  16. What is the attitude of your courts to the incorporation of a charterparty, specifically: is an arbitration clause in the charter given effect in the bill of lading context?

    If a charter is identified specifically in the bill of lading then its terms will be incorporated into the bill.

    If there is a blank or unspecific reference to a charter being incorporated, then it will usually be taken to mean the voyage charter at the bottom of the chain, which will usually be more appropriate to a bill of lading contract than a time charter.

    It is not necessarily the case, however, that all terms of the charter will be incorporated. Usually it is only those that are appropriate to the carriage and delivery of the goods.

    In particular, and arbitration clause in a charter will not be taken to apply to the bill of lading contract unless it is expressly incorporated (as it is in, for example, in most recent Congenbill forms).

  17. Is your country party to any of the international conventions concerning bills of lading (the Hague Rules, Hamburg Rules etc)? If so, which one, and how has it been adopted – by ratification, accession, or in some other manner? If not, how are such issues covered in your legal system?

    The UK enacted the Hague Visby Rules (HVR) by means of the Carriage of Goods by Sea Act 1971, which gave HVR the force of law.

  18. Is your country party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards? If not, what rules apply? What are the available grounds to resist enforcement?

    The UK is party to the Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958. See section 66 and Part III of the Arbitration Act 1996.

    Section 103 of the Arbitration Act confirms that recognition and enforcement will only be refused in limited circumstances: that a party was under an incapacity; that the arbitration agreement was invalid; no proper notice was given; the award covers matters falling outside the scope of the arbitration agreement; the composition of the tribunal was improper; the award is not yet binding.

  19. Please summarise the relevant time limits for commencing suit in your jurisdiction (e.g. claims in contract or in tort, personal injury and other passenger claims, cargo claims, salvage and collision claims, product liability claims).

    The Limitation Act 1980 provides for the time limits that apply in most cases:

    • Simple contract - 6 years from the time the cause of action arose
    • Claims under deeds (or other “specialties”) – 12 years from the time the cause of action arose
    • Death and personal injury torts – 3 years from the time the cause of action arose
    • Other torts/delicts - 6 years from the time the cause of action arose

    But other time limits apply in other cases and disapply the Limitation Act provisions:

    • Cargo claims governed by the Hague Rules or the HVR – one year from the time the goods were or should have delivered
    • Collision claims under the MSA 1995 – two years from the date the loss or damage was caused
    • Personal Injury claims under the Athens Convention – two years
    • Salvage claims under the Salvage Convention – two years from the date the services terminate.

    A contract may contain other time limits. Short time limits will often be seen in bunker supply contracts, and in tanker charters in respect of demurrage claims. Such time limits will usually be respected by the court.

    Parties may agree to extend time limits, and such agreements will also be respected.