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Cyprus Shipping Law

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Cyprus chapter in ICLG Shipping Law 2015. Authored by leading Cyprus maritime lawyers, covering Marine Casualty, Cargo Claims, Evidence and Procedure, Foreign Judgments and Awards and Arrest and Security. The attached chapter appeared in the 2015 edition of The International Comparative Legal Guide to: Shipping Law; published by Global Legal Group Ltd, London.

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Cyprus Shipping Law

  1. 1. Published by Global Legal Group, with contributions from: Achour Law Firm Advokatfirma Ræder DA Ali Budiardjo, Nugroho, Reksodiputro Anastasios Antoniou LLC Araya & Compañía Abogados Armando Henriques, Ana Cristina Pimentel & Associados, Sociedade de Advogados, RL Bech-Bruun Bland & Partners P.L.L.C. Bloomfield Advocates & Solicitors Borenius Attorneys Ltd Bull, Housser & Tupper LLP Clyde & Co LLP Clyde & Co US LLP Dingli & Dingli Estudio Arca & Paoli Abogados S.A.C. Fleet Hamburg LLP FRANCO & ABOGADOS ASOCIADOS GENI & KEBE GUR LAW FIRM Holman Fenwick Willan The International Comparative Legal Guide to: A practical cross-border insight into shipping law 3rd Edition Shipping Law 2015 ICLG Izard Weston Kegels & Co Kincaid | Mendes Vianna Advogados L&J LAW OFFICE, LPC Lee and Li, Attorneys-at-Law LEWIS & CO AARPI LEX NAVICUS CONCORDIA MALSCO LAW OFFICE Marine Legal Adviser Co MAQS Advokatbyrå Murillo, Maldonado, Arredondo y Asociados, S.C. Patton, Moreno & Asvat Q.E.D INTERLEX CONSULTING SRL Rajah & Tann Singapore LLP Rosicki, Grudzinski & Co. Sabatino Pizzolante Abogados Marítimos & Comerciales SAN SIMÓN & DUCH Shepstone & Wylie Attorneys Tonucci & Partners Van Steenderen Mainport Lawyers VUKIĆ & PARTNERS Wintell & Co
  2. 2. WWW.ICLG.CO.UK Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720 Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. General Chapters: The International Comparative Legal Guide to: Shipping Law 2015 Contributing Editor Ed Mills-Webb, Clyde & Co LLP Head of Business Development Dror Levy Sales Director Florjan Osmani Commercial Director Antony Dine Account Directors Oliver Smith, Rory Smith Senior Account Manager Maria Lopez Sales Support Manager Toni Hayward Senior Editor Suzie Levy Sub Editor Amy Hirst Group Consulting Editor Alan Falach Group Publisher Richard Firth Published by Global Legal Group Ltd. 59 Tanner Street London SE1 3PL, UK Tel: +44 20 7367 0720 Fax: +44 20 7407 5255 Email: info@glgroup.co.uk URL: www.glgroup.co.uk GLG Cover Design F&F Studio Design GLG Cover Image Source iStockphoto Printed by Ashford Colour Press Ltd. July 2015 Copyright © 2015 Global Legal Group Ltd. All rights reserved No photocopying ISBN 978-1-910083-55-0 ISSN 2052-5419 Strategic Partners Country Question and Answer Chapters: 3 Albania Tonucci & Partners: Endrit Shashaj 10 4 Australia Holman Fenwick Willan: Hazel Brewer & Nic van der Reyden 15 5 Belgium Kegels & Co: Andre Kegels 22 6 Brazil Kincaid | Mendes Vianna Advogados: Godofredo Mendes Vianna & Camila Mendes Vianna Cardoso 29 7 Canada Bull, Housser & Tupper LLP: John W. Bromley 35 8 Chile Araya & Compañía Abogados: Rafael Durán & Fernando Arancibia 40 9 China Wintell & Co: James Hu & Mervyn Chen 46 10 Colombia FRANCO & ABOGADOS ASOCIADOS: Javier Franco-Zárate 52 11 Croatia VUKIĆ & PARTNERS: Prof.dr.sc. Gordan Stanković 56 12 Cyprus Anastasios Antoniou LLC: Anastasios A. Antoniou & Aquilina Demetriadi 61 13 Denmark Bech-Bruun: Johannes Grove Nielsen & Camilla Søgaard Madsen 68 14 Dominican Republic Q.E.D INTERLEX CONSULTING SRL: Luis Lucas Rodríguez 74 15 England Clyde & Co LLP: Ed Mills-Webb 79 16 Estonia MALSCO LAW OFFICE: Indrek Nuut 84 17 Finland Borenius Attorneys Ltd: Ulla von Weissenberg 88 18 France LEWIS & CO AARPI: Leila Esnard & Guillaume de Bascher 93 19 Georgia Marine Legal Adviser Co.: Valerian Imnaishvili & Paata Kopaleishvili 99 20 Germany Fleet Hamburg LLP: Dr. Christoph Hasche & Ingo Jacobs 105 21 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Sahat A.M. Siahaan & Muhammad Muslim 111 22 Japan L&J LAW OFFICE, LPC: Hirokazu Abe & Hajime Sasaki 116 23 Malta Dingli & Dingli: Dr. Tonio Grech & Dr. Fleur Delia 123 24 Mexico Murillo, Maldonado, Arredondo y Asociados, S.C.: Rafael Murillo 127 25 Netherlands Van Steenderen Mainport Lawyers: Arnold J van Steenderen & Charlotte J van Steenderen 131 26 New Zealand Izard Weston: John Burton & Robert Cahn 137 27 Nigeria Bloomfield Advocates & Solicitors: Olabode Adegoke 142 28 Norway Advokatfirma Ræder DA: Jon Andersen & Mona Lynne Eitzen 146 29 Panama Patton, Moreno & Asvat: Khatiya Asvat Patel & Nadya K. Price S. 151 30 Peru Estudio Arca & Paoli Abogados S.A.C.: Francisco Arca Patiño & Carla Paoli Consigliere 158 31 Poland Rosicki, Grudzinski & Co.: Maciej Grudziński & Piotr Rosicki 163 32 Portugal Armando Henriques, Ana Cristina Pimentel & Associados, Sociedade de Advogados, RL: Ana Cristina Pimentel 169 33 Russia LEX NAVICUS CONCORDIA: Konstantin Krasnokutskiy 174 34 Senegal GENI & KEBE: Codou Sow-Seck & Dr. Aboubacar Fall 179 35 Singapore Rajah & Tann Singapore LLP: Kendall Tan & Koh See Bin 183 1 Unsafe Ports and the ‘Ocean Victory’; What is an ‘Abnormal Occurrence’? – Ed Mills-Webb & Mark Tilley, Clyde & Co LLP 1 2 Maritime Liens: Recent Developments in U.S. Law Following the Collapse of OW Bunker – John R. Keough & George G. Cornell, Clyde & Co US LLP 5 Continued Overleaf
  3. 3. EDITORIAL Welcome to the third edition of The International Comparative Legal Guide to: Shipping Law. This guide provides the international practitioner and in-house counsel with a comprehensive worldwide legal analysis of shipping laws and regulations. It is divided into two main sections: Two general chapters. These are designed to provide readers with a comprehensive overview of key issues affecting shipping law, particularly from the perspective of a multi-jurisdictional transaction. Country question and answer chapters. These provide a broad overview of common issues in shipping laws and regulations in 41 jurisdictions. All chapters are written by leading shipping lawyers and industry specialists and we are extremely grateful for their excellent contributions. Special thanks are reserved for the contributing editor Ed Mills-Webb of Clyde & Co LLP for his invaluable assistance. Global Legal Group hopes that you find this guide practical and interesting. The International Comparative Legal Guide series is also available online at www.iclg.co.uk. Alan Falach LL.M. Group Consulting Editor Global Legal Group Alan.Falach@glgroup.co.uk 36 South Africa Shepstone & Wylie Attorneys: Shane Michael Steven Dwyer & Vanil Stephen Bagwandeen 189 37 Spain SAN SIMÓN & DUCH: Mercedes Duch & Luis De San Simón 196 38 Sweden MAQS Advokatbyrå: Kawin Mårtensson & Annica Börjesson 202 39 Taiwan Lee and Li, Attorneys-at-Law: Daniel T.H. Tsai & James Chang 207 40 Tunisia Achour Law Firm: Abdelmonem Achour 212 41 Turkey GUR LAW FIRM: Tevfik Gür & Serkan Yildirim 218 42 USA Bland & Partners P.L.L.C.: Matthew C. Guy & David S. Bland 223 43 Venezuela Sabatino Pizzolante Abogados Marítimos & Comerciales: José Alfredo Sabatino Pizzolante & Iván Darío Sabatino Pizzolante 230 Country Question and Answer Chapters: The International Comparative Legal Guide to: Shipping Law 2015
  4. 4. ICLG TO: SHIPPING LAW 2015 61WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London 1 Marine Casualty 1.1 In the event of a collision, grounding or other major casualty, what are the key provisions that will impact upon the liability and response of interested parties? In particular, the relevant law / conventions in force in relation to: (i) Collision The International Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels and Protocol of Signature, Brussels 23 September 1910, is fully applicable in Cyprus by virtue of Article 188 of the Constitution, as per the judgment of the Supreme Court of Cyprus in Danish Danish Kingdom v Mystic Isle Navigation Company Ltd (1990) 1 CLR 850. The International Regulations for Preventing Collisions at Sea of 1972 apply in Cyprus by virtue of the relevant statute (Law 18/1980) ratifying the relevant Convention of 1972. They apply to all Cyprus registered ships and to all other ships within the territorial waters of Cyprus. Their application is illustrated in The Ship NAWAL v The Ship BAYONNE (1994) 1 CLR 54 and Constantinos Sklavos v the Ship NATALEMAR (1999) 1B CLR 1079. Cyprus courts have jurisdiction to hear any claim for damage done to a ship in rem, provided that physical presence of the res within the territory of Cyprus is established, towards enabling service of the writ of summons (service out of jurisdiction is not available for in rem proceedings). Alternatively,proceedingsmaybefiledagainsttheshipowners of the vessel having their residence or place of business in Cyprus. Where the shipowners do not reside in Cyprus, in personam proceedings are subject to the procedural and substantial rules regulating service out of the jurisdiction. (ii) Pollution Cyprus is State party to the major international instruments relating to the prevention and management of pollution. Specifically, it is a party to and has ratified the International Convention on Civil Liability for Oil Pollution Damage of 1969 (“CLC”) and the 1992 Protocol amending same (ratification Laws 1989 to 2005) as well as the International Convention for the Establishment of an International Fund for Compensation for Oil Pollution Damage of 1971 and subsequent amendments (ratification laws 1989 to 1997). The liability regime under the said instruments has been extended to cover the exclusive economic zones (“EEZ”) of state parties. Under the CLC liability regime, strict liability applies for shipowners. The right of the owner to limit liability can be removed by virtue of acts or omissions of the owner itself, with the burden of proving the shipowner’s conduct being on the claimant. Cyprus is also party to the International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of 1978 (“MARPOL 73/78”) and its amendments, which has been ratified by virtue of the relevant Laws 1989 to 2005. As regards the Mediterranean, Cyprus is a party to Convention for the Protection of the Mediterranean Sea Against Pollution and Connected Protocols and has ratified the same by virtue of Law of 1979 (Law 51/79) and amendments thereto by virtue of subsequent legislation (Laws 20(III)/2001 and Law 35(III)/2007 respectively). Cyprus is also a party to the Trilateral Agreement between Cyprus, Israel and Egypt for Cooperation in Combating Major Marine Pollution Incidents in the Mediterranean. (iii) Salvage / general average Cyprus is not a state party to the 1989 International Convention on Salvage. The Wrecks Law, Cap. 298 (“Cap. 298”) regulates salvage and wreck removal. Cap. 298 vests the Council of Ministers of the Republic with the power to appoint a Receiver of Wrecks (“Receiver”) in each of the Republic’s Districts. Pursuant to the provisions of s. 24 of Cap. 298 where: (a) any ship or boat is stranded or is otherwise in distress on the shore of any sea or tidal water situated within the limits of Cyprus, and services are rendered by any person in: (i) assisting her; (ii) saving the lives of the persons belonging to her; or (iii) saving her cargo or apparel, or any portion thereof; and (b) whenever any wreck is saved by any person other than a Receiver within Cyprus, the owners of the ship or boat, cargo, apparel or wreck, as the case may be, shall be under an obligation to pay any such person a reasonable amount together with all expenses properly incurred in the course of providing the said services. The Receiver may appoint a valuer to establish the reasonable amount of salvage due, while he also has the right to sell the salvaged ship, her apparel or cargo where salvage payment has not taken place within 30 days as of the day it became due. As per the Supreme Court in Kaddoura Abdul Rahman Mohamed and Another v The Ship Sea Horse and Another (1988) 1 CLR 713, for an operation to be one of “salvage services” the following elements must exist: Anastasios Antoniou LLC Anastasios A. Antoniou Aquilina Demetriadi Cyprus Chapter 12
  5. 5. WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London 62 ICLG TO: SHIPPING LAW 2015 Cyprus foreign flagged ships in the territorial waters of Cyprus vests with the Marine Accident Investigation Committee (“MAIC”), established under the Investigation of Marine Casualties and Incidents Law of 2012, Law 94(I)/2012 (transposing Directive 2009/18/EC) of the European Parliament and the Council establishing the fundamental principles governing the investigation of accidents in the maritime transport sector. 2 Cargo Claims 2.1 What are the international conventions and national laws relevant to marine cargo claims? Cyprus has ratified the Hague Rules by the Carriage of Goods by Sea Law, Cap 263 (“Cap. 263”) and has adopted – by succession – the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading and Protocol of Signature, Brussels 25 August 1924 (extended to Cyprus on 2 June 1931). Cyprus has ratified neither the Hamburg Rules nor the Rotterdam Rules. The Hague Rules are applicable to charterparties only if they are expressly incorporated in the bill of lading, which must also include an express statement to that effect (s. 4 of the Carriage of Goods by Sea Law, Cap 263). There is substantial case law of the Supreme Court of Cyprus on this issue, such as The Ship Dama v TH. D. Georghiades SA (1980) 1 CLR 386; Kounnas and Sons Ltd v Zim (1966) 1 CLR 181; Said Hamade v Anthimos Demetriou Ltd (1994) 1 CLR 443. Moreover, subject to the above qualification, the Hague Rules would only apply for shipments from a port of Cyprus pursuant to s. 2 of Cap 263. However, if a general paramount clause were incorporated in the bill of lading, the Hague Rules would apply notwithstanding s. 2 of Cap 263 (e.g., inter alia, Loizos Louca & Sons Ltd v The Company Batsi Shipping Ltd (1992) 1B CLR 979). 2.2 What are the key principles applicable to cargo claims brought against the carrier? England’s Bills of Lading Act 1855 applies in Cyprus by virtue of sections 19 and 29 of the Courts of Justice Law of 1960, Law 14/1960, as amended, as per the Supreme Court of Cyprus in Stavros Georgiou & Son (Scrap Metals) Ltd v The Ship LIPA (2001) 1B CLR 1220. The 1855 Act regulates the transfer of rights under a contract of carriage. Any party to a contract of carriage can sue for damages against the carrier, as well as consignees of goods named in a bill of lading and endorsees of a bill of lading, having acquired full proprietary rights upon or by reason of such consignment or endorsement. The court will consider all the facts and where appropriate in the circumstances will treat a person as being a carrier even where the carriage was not performed by such party (Andreas Orthodoxou Ltd v Dimitriou Tilliri Ltd (2007) 1B CLR 1247). A demise clause or identity of carrier clause is likely to be recognised as binding and, in view of the decision of the House of Lords in The Starsin [2003] 1 Lloyd’s Rep. 571, the objective approach in the construction of a bill of lading is likely to be followed. Ownership of the cargo will also depend on the way the parties deal with each other, and such dealings may or may not include the transfer of the bill of lading (Andreas Orthodoxou Ltd v Dimitriou Tilliri Ltd (2007) 1B CLR 1247; Standard Fruit Company (Bermuda) Ltd v Gold Seal Shipping Company Ltd (1997) 1 CLR 464). Such transfer extinguishes the rights of the original shipper or any intermediary, but in respect of matters for which the shipper still (a) the services provided must either save or contribute to the ultimate safety of: (i) a ship, her apparel and cargo; or (ii) of the lives of persons belonging to a ship when in danger; and (b) the danger to the ship, her cargo or life must be real and appreciable. (iv) Wreck removal Cap. 298 regulates the removal of wrecks. Responsibility for the removal of wrecks in the territory of Cyprus lies with the Receiver, unless the shipowner is present, in which case the Receiver cannot be involved. However, the shipowner concerned must immediately notify the competent Receiver of the existence of a wreck in Cyprus, while all third parties are bound to also notify, or, where they come in possession of a wreck, surrender the same to the Receiver. Subject to the payment of the expenses, fees, and salvage as aforesaid, the owner of any wreck that establishes its claim over the wreck to the satisfaction of the Receiver within one year from the date at which the wreck has come into the possession of the Receiver, shall be entitled to possess the wreck or the money arising from a sale of part or all of the wreck. In the event that no owner establishes a claim to any wreck before the expiration of the said one year period from the date at which it has come into the possession of the Receiver, the Receiver shall forthwith sell the wreck, and, following deduction of all fees and expenses (if any) due to and incurred by him and paying the salvors such amount of salvage as may be agreed upon, any outstanding proceeds shall be attributed to the State. (v) Limitation of liability There are currently three systems of limitation regimes globally, alongside national limitation regimes. The dominant system is the one established under the Convention on Limitation of Liability for Maritime Claims of 1976 and of its amending Protocol of 1996 (“LLMC”), which has been ratified in Cyprus by virtue of Law 20(III)/2005. The Merchant Shipping (Shipowners Insurance for Maritime Claims) Law of 2012 (Law 14(I)/2012) transposed Directive 2009/20/EC of the European Parliament and of the Council of 23 April 2009 on the insurance of shipowners for maritime claims. Under the said legislative framework, compulsory insurance requirements are set for vessels with a gross tonnage of over 300. The required insurance concerns maritime claims subject to the limitations of the LLMC. Maritime claims subject to limitations of liability are listed in Article 2 of the LLMC, whether these claims arise in contract, tort or by statute (cf. The Breydon Merchant [1992] 1 Lloyd’s Rep 373). Claims excluded from limitation are listed under Article 3 of the LLMC. Pursuant to the provisions of Article 1, as this has been interpreted by English judgments – which have persuasive authority in Cyprus – the persons who may limit liability are shipowners, such term includes charterers, managers, operators and salvors. Insurers are also afforded the right to limit liability to the same extent as the insured party. Articles 7 and 8 of the 2002 Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea (Athens Convention) set out the relevant limits of liability for death or personal injury or for loss or damage to luggage and vehicles. 1.2 What are the authorities’ powers of investigation / casualty response in the event of a collision, grounding or other major casualty? The duty to investigate marine accidents and incidents of Cyprus flagged ships all over the world and accidents and incidents of CyprusAnastasios Antoniou LLC
  6. 6. ICLG TO: SHIPPING LAW 2015 63WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London Cyprus 4 Arrest and Security 4.1 What are the options available to a party seeking to obtain security for a maritime claim against a vessel owner and the applicable procedure? The Supreme Court has first instance and appellate jurisdiction in admiralty cases (“the Admiralty Court”). The Admiralty Court is competent to be seized in the following types of claims: (a) claim to possession or ownership of a vessel or to ownership of any share therein; (b) question arising between the co-owners of a vessel as to possession, employment, or earnings of that vessel; (c) claim in respect of a mortgage of or charge on a vessel or any share thereof; (d) claim for damage done by a vessel; (e) claim for damage received by a vessel; (f) claim for loss of life or personal injury sustained in consequence of defect in a vessel or in her apparel/equipment, or of a wrongful act, neglect, or default of owners, charterers, or persons in possession or control of a vessel or of master or crew thereof or of any other person for whose wrongful acts, neglects, or defaults owners, charterers, or persons in possession or control of a vessel are responsible, being an act, neglect or default in navigation or management of the vessel, in loading, carriage, or discharge of goods or in embarkation, carriage, or disembarkation of person; (g) claim for loss or damage to goods carried in a vessel; (h) claim arising out of any agreement relating to carriage of goods in a vessel or to use/charter; (i) claim in nature of salvage; (j) claim in nature of towage in respect of a vessel; (k) claim in nature of pilotage in respect of a vessel; (l) claim in respect of goods or materials supplied to a vessel for her operation or maintenance; (m) claim in respect of construction, repair, equipment of a vessel, dock charges/dues; (n) claim by a master or crew for wages and claim by or in respect of a master or crew for any money or property which, under any provisions of the Merchant Shipping Acts 1894- 1954, is recoverable as wages at Court or in the manner in which wages may be recovered; (o) claim by a master, shipper, charterer, or agent in respect of disbursements made a vessel’s account; (p) claim arising out of a general average act; (q) claim arising out of bottomry; and (r) claim for the forfeiture or condemnation of a vessel or of goods. Bareboat Owners and Time Charterers are viewed as ‘disponent owners’ of vessels. In the case of the claims mentioned in (d) to (r) above, where a person who would be liable on claim in an action in personam had been, at the time when the cause of action arose, the owner or charterer of, in possession or in control of, the vessel, the Admiralty Court’s jurisdiction may be invoked by an action in rem against: (i) the vessel, if at the time when the action is brought, she is beneficially owned in respect of all the shares therein by that person; or remained at risk, it may entitle him to sue. The courts have not yet been called upon to consider whether the original shipper remains liable once title has passed. 2.3 In what circumstances may the carrier establish claims against the shipper relating to misdeclaration of cargo? Pursuant to the provisions of s. 4 of Cap 263 the Hague Rules are applicable where they are expressly incorporated in the Bill of Lading, or another document of title. Where the Hague Rules do apply, the shipper is under a duty to properly declare cargo and failure to do so would result in the shipper being liable to the carrier for damage to the ship, under strict liability. The shipper may also be liable for damage to other cargo where hazardous cargo has not been declared or has been misdeclared. 3 Passenger Claims 3.1 What are the key provisions applicable to the resolution of maritime passenger claims? Regulation (EC) No. 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents (“the Regulation”) is fully applicable in Cyprus as an EU Member State. The Regulation lays down a harmonised regime of liability and insurance for the carriage of passengers by sea, based on: ■ theAthens Convention to the Carriage of Passengers and their Luggage by Sea 1974, as amended by the Protocol of 2002 on the carriage of passengers (“the Athens Convention”); and ■ the International Maritime Organisation (“IMO”) guidelines for implementation of the Athens Convention, adopted in 2006. ‘International carriage’ is defined under the Regulation as any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State. This Regulation applies to all international carriage and carriage by sea within a single Member State on board ships of Classes A and B (under Directive 98/18/EC) when: ■ the ship is flying the flag of or is registered in a Member State; ■ the contract of carriage has been signed in a Member State; or ■ the place of departure or of a destination as laid down in the contract of carriage is situated within a Member State. According to the liability regime established by the Regulation and drawn from the Athens Convention, for damages related to navigation accidents victims shall be covered by an ipso jure liability regime but must prove a fault on the part of the carrier in order to be compensated for damages falling under the category of “innkeeper” liability. The limitations of liability to which carriers are entitled under the Athens Convention are also included and the overall limitations of liability established in application of the LLMC, are not affected. Carriers must all maintain insurance and victims shall be entitled to make claims directly against the insurer. CyprusAnastasios Antoniou LLC
  7. 7. WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London 64 ICLG TO: SHIPPING LAW 2015 Cyprus Anastasios Antoniou LLC Cyprus (ii) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid. Under the English Administration of Justice Act 1956, which is applicable in Cyprus, the following maritime liens are recognised: a) Bottomry. b) Salvage. c) Wages. d) Master’s Wages. e) Disbursements and liabilities. f) Damage done by a ship. Aright of arrest of a vessel arises by virtue of rule 50 of theAdmiralty Jurisdiction Order 1893 applicable in Cyprus. As regards issuing an order of arrest, it is necessary for the Admiralty Court to be satisfied that there is a serious matter at trial and that on the facts before it there is a probability that the claimant is entitled to relief. In the event that the application for the arrest of a vessel is successful, the Admiralty Court will require the following from the claimant, in the absence of which the vessel will be released: (a) payment of a deposit towards expenses which may be incurred by the Admiralty Marshal in connection with the custody and supervision of the vessel whilst under arrest; (b) payment of any other amounts required by the Registrar for the expenses of the arrest; and (c) posting of a security bond by way of bank guarantee. Where arrest is not possible, a litigant can apply for a freezing order, in Cyprus or abroad, pursuant to the provisions of s. 32 of Law 14/1960 and the principles relating to Mareva Injunctions. The Cypriot legal order has incorporated the power of the courts to issue freezing orders to protect assets at risk of alienation, or to preserve a particular status quo pending the final and conclusive determination of the relevant proceedings. The Supreme Court emphatically confirmed in 2007 that the courts of Cyprus can issue freezing orders with worldwide effect (Seamark Consultancy Services Limited v Joseph P Lasala et al. (2007) 1 ΑΑΔ 162). 4.2 Where security is sought from a party other than the vessel owner (or demise charterer) for a maritime claim, including exercise of liens over cargo, what options are available? A contractual lien can be exercised against cargo, sub-freight or sub-charter hire where a lien clause is expressly included in a charterparty. Common law may also confer a lien against goods for freight due, general average contributions and/or expenses incurred by the owner for the purposes of preserving the goods. A shipowner’s right to exercise a lien on cargo at common law is available only: (a) for the recovery of a general average contribution due from the cargo; (b) for expenses incurred by the shipowner in protecting the cargo; and (c) to recover freight due on delivery of the cargo under the bill of lading or the charter. No common law lien arises for deadfreight, demurrages or shipper’s liabilities in respect of the cargo. Where a contractual lien on sub-freights is given to the owners by a charterer incorporated in Cyprus, owners must register the lien as a charge against the charterer. Failure to do so will result in such charge being void against the liquidator and any creditor of the company. Where the time-charterer is the cargo owner, the owner has the right to lien the cargo, if the charterparty provides for this. However, such lien cannot be extended against third parties, holders of the bill of lading, unless expressly provided in the bill of lading. A bill of lading stamped ‘freight prepaid’ will defeat any owner’s lien on the cargo, either at common law or ex contractu (Grade One Shipping Ltd, Owners of the Cyprus Ship ‘CRIOS II’ v The Cargo on Board the Ship ‘CRIOS II’(No. 2) (1979) 1 CLR 350). 4.3 In relation to maritime claims, what form of security is acceptable; for example, bank guarantee, P&I letter of undertaking. Bank guarantees is the only form of security the Admiralty Court will accept. Determining the amount of such guarantee rests with the Court, which takes into account the facts of the case before it and particularly the purchase value of the vessel (Judgment of 18 January 2013 in Admiralty Action No. 26/2012, TELIA VASILIKO LIMITED v the Ship “Friendship”, not yet reported). 5 Evidence 5.1 What steps can be taken (and when) to preserve or obtain access to evidence in relation to maritime claims including any available procedures for the preservation of physical evidence, examination of witnesses or pre-action disclosure? Preservation of evidence orders (known as ‘Anton Piller’ orders drawing from the landmark English judgment Anton Piller KG v Manufacturing Processes Limited [1976] 1 All ER 779 establishing the same) can be issued by Cyprus courts. Such an order would preserve evidence or property which is or may become the subject matter of the main proceedings. Anton Piller orders can be pursued by a party to: ■ Allow this party to discover and preserve evidence against the defendant, which is in the possession of the defendant and is likely to be concealed or destroyed by the defendant. ■ Identify and obtain evidence against others who have been involved with the principal tortfeasor in the tortious activities. ■ Prevent the defendant from warning others to destroy or conceal evidence. ■ Reveal further harm and damage to the applicant. Moreover, Cyprus courts have jurisdiction to issue discovery orders under both: ■ Section 32 of the Courts of Justice Law 14/1960. This empowers a court to grant an injunction in all cases where it appears to the court to be just and convenient to do so. ■ Section 29(1)(c) of the Courts of Justice Law, which requires courts to apply the principles of equity. In the context of applications for discovery or tracing of assets, Cyprus courts can issue orders towards: ■ Disclosure on oath by a respondent of the location and value of specified assets. ■ Tracing purposes, namely leading to the disclosure of information and documents regarding assets deprived or stolen from the applicant, to enable the person having suffered harm to identify and pursue proceedings against the real person committing the tort (tortfeasor). 5.2 What are the general disclosure obligations in court proceedings? Under the Civil Procedure Rules a party to litigious proceedings may apply to the Court for an order requiring the other party, within a period of time from that date, to make discovery on oath of the documents which are or have been in their possession or power, relating to the matters in question in the action, and to inspect the
  8. 8. ICLG TO: SHIPPING LAW 2015 65WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London Cyprus Anastasios Antoniou LLC Cyprus documents set out in the affidavit for discovery. This procedure is called ‘Discovery and Inspection’ and is subject to claims for privilege and admissibility. Each party may use these documents to support his case. If a party ordered to disclose documents fails to do so, he cannot use any document he failed to disclose, or allow it to be inspected as evidence on his behalf in the action, unless the court is satisfied that he had sufficient excuse for failing to do so. A claim for privilege may be raised in relation to the following documents and/or information: documents that are confidential information between lawyer and client for purposes of the litigation (litigation privilege); confidential information between lawyer and client (legal professional privilege); documents that tend to self- incriminate or subject someone to a penalty; any “without prejudice” communications either orally or in writing. These documents are privileged from inspection. Under the Civil Procedure Rules, a third party may be summoned to produce a document without being summoned to give evidence. The third party summoned to produce such a document shall be deemed to have complied with the summons if he causes the document to be produced, instead of attending personally to produce it. In the context of interim proceedings, such as arrest order applications or freezing order applications, there is an obligation for full disclosure on behalf of the applicant. An application of this nature is considered to be one of uberrima fides and an omission of disclosing material facts to the Court would inevitably lead to a collapse of any order issued under such application on an ex parte basis (see, inter alia, Τimberland Co. v Evans & Sons Ltd κ.ά. (1998) 1 CLR 1179 and Demstar Limited v Zim Israel Navigation Co Limited κ.ά. (1996) 1 (Α) CLR). 6 Procedure 6.1 Describe the typical procedure and time-scale applicable to maritime claims conducted through: i) national courts (including any specialised maritime or commercial courts); ii) arbitration (including specialist arbitral bodies); and iii) mediation / alternative dispute resolution. All admiralty actions whether in rem or in personam are instituted with the issue of a writ of summons, which must identify all parties to the intended proceedings and the claim sought. The issue of the writ gives the claimant a right against the vessel, which originates from the cause of action in rem and crystallizes upon the arrest of the vessel. In an action in rem, the writ of summons must be served at least 21 days before the date named in the writ of summons for the appearance of the parties before the Admiralty Court, while the same period in an action in personam is at least 10 days. Arbitration for maritime claims is not widely used in Cyprus. However, the Cypriot legal order provides for an international arbitration framework that is in full alignment with international best practices and standards. Pursuant to s. 7 of the International CommercialArbitration Law of 1987 (Law 101 of 1987), recognises an arbitration clause in a contract or in the form of a separate agreement, including an exchange of correspondence (including telecommunications), or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract. These provisions mirror Article 7 of the UNCITRAL Model Law on International Commercial Arbitration. However, general words in a bill of lading incorporating all the terms and conditions of another document, such as a charterparty, are not sufficient to properly give effect to an arbitration clause contained in that document into the bill of lading with a view to making such other document’s provisions applicable to disputes arising under the bill of lading (Elie Sadek v Efpalinos Shipping Company Ltd (1983) 1 CLR 696). 6.2 Highlight any notable pros and cons related to Cyprus that any potential party should bear in mind? There are a number of elements to be considered prior to pursuing proceedings before Cyprus courts. Over the past decades, Cyprus has solidified its place on the global dispute resolution map as a jurisdiction affording integrity, efficiency and reliability. Cyprus has served as a forum for the resolution of a plethora of high-profile commercial, investment and corporate disputes, while the last few years in particular have seen a constructive approach by Cypriot courts in relation to the protection of assets and interests located across the world. With respect to maritime claims in particular, in Cyprus there is no difference in the procedure between a maritime lien and a maritime claim. However it should be noted that under Cyprus law maritime liens enjoy certain advantages over all other permitted actions in rem. As regards ship arrests, the Admiralty Court can issue an arrest order against a ship in Cyprus irrespective of her flag. Moreover, a ship can be arrested in Cyprus irrespective of the debtor (unless sovereign immunity rules are applicable). What could be seen as a disadvantage of the ship arrest procedure in Cyprus would be that the Admiralty Court only accepts bank guarantees as security towards issuing an arrest order. The integrity and independence of the Cypriot judicial system ensures the impartial, unbiased, transparent and just adjudication of disputes of the highest complexity and scale. Despite the impeccable track record of Cypriot courts, local and international arbitration is also on the rise, benefiting from a fully functional and accommodating legal framework. Cypriot courts have in fact encouraged arbitration on numerous occasions, particularly in cases concerning highly technical issues and Cyprus is increasingly becoming a suitable international arbitration forum. 7 Foreign Judgments and Awards 7.1 Summarise the key provisions and applicable procedures affecting the recognition and enforcement of foreign judgments. Judgments from EU Member States’ Courts can be registered and enforced in Cyprus under the provisions of Regulation (EU) 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 (recast). In enforcing a foreign judgment, Cyprus courts cannot review it as to its substance and therefore the courts will either accept or refuse the judgment’s recognition and enforcement, without interfering with the substance of the judgment. Courts may refuse the judgment’s recognition and enforcement where:
  9. 9. WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London 66 ICLG TO: SHIPPING LAW 2015 Cyprus Anastasios Antoniou LLC Cyprus 8 Updates and Developments 8.1 Describe any other issues not considered above that may be worthy of note, together with any current trends or likely future developments that may be of interest. It was recently held by the Admiralty Court in Nationwide Shipping Inc ν. The Ship Athena (formerly Amaze) (2012) 1 CLR 2343 that the same lacked jurisdiction to arrest a ship berthed in a Cyprus port, for the purpose of aiding foreign arbitration proceedings. According to the judgment, the Court’s jurisdiction to arrest a ship in an action in rem should not be exercised for the purpose of providing security for an award that may be made in arbitration proceedings. Under the current legislative framework in Cyprus, the Admiralty Court may entertain provisional measures that seek to provide security in respect of the action in rem, however this is not the case when the interim relief is sought in order to provide security in some other proceedings, e.g. arbitration proceedings. In reaching this result, the Supreme Court applied the English ruling in The Vasso (formerly Andria) (1984) Lloyd’s Reports 235, which was decided prior to the English Civil Jurisdiction and Judgments Act 1982. It follows that if a claimant invokes the jurisdiction of the Supreme Court (acting as Admiralty Court) to obtain the arrest of a ship as security for an award in arbitration proceedings, the Court may not issue a warrant of arrest. A possible alternative for protection of a potential Claimant would be to invoke the provisions of section 9 of the International Commercial Arbitration Law 1987 (Law 101/87) which confers jurisdiction, on the application of one of the parties, for provisional measures at any time before commencement or in the course of arbitration proceedings. Nevertheless, any such application can only be commenced before a District Court. Overall, we can safely say that Cyprus is a genuine maritime nation, being a major ship-management centre worldwide with more than 60 ship-management companies operating on the island. Several of these companies rank among the largest of their kind in the world. Cyprus is among the top five countries and territories in the world with the largest number of third party ship-management companies on its territory. The Cyprus registry today, ranking 10th among international fleets – with ocean going vessels of a gross tonnage exceeding 21 million – is continuously upgrading its services in order to offer a high standard of support to international shipping and a reputation of a “Flag of Progress”. Cyprus also features an EU-approved tonnage tax system. The European Commission approved the Cypriot tonnage tax scheme as compatible with the requirements of the EU guidelines on State Aid to Maritime Transport, the first occasion on which an EU Member State with an open registry received such approval. The tonnage tax system confers tax exemptions in favour of the payment of tonnage tax only, which is calculated on the basis of the net tonnage of the ships owned, chartered or managed. ■ the judgment is contrary to the public policy of Cyprus; ■ where the judgment was given in default of appearance, the defendant had not been not served with the proceedings in good time or in a manner so as to enable him to prepare his defence himself; ■ where the judgment is inconsistent with an earlier judgment of the Cypriot Courts between the same parties; or ■ if recognition is inconsistent with an earlier judgment given in another Member State or in a third State between the same parties regarding the same cause of action. As far as non-EU judgments are concerned, Cyprus is party to a number of multilateral and bilateral treaties in relation to the recognition and enforcement of foreign judgments. In order to simplify procedures for enforcement and execution of foreign judgments in Cyprus, Law No. 121(1)/2000 was introduced in relation to the Recognition, Enforcement and Execution of Foreign Judgments which applies to all cases in which recognition, registration and enforcement of decisions of foreign courts is requested. A judgment creditor can also pursue enforcement of a foreign judgment in Cyprus at Common Law, bringing an action on the foreign judgment. If the foreign judgment is capable of registration under statute, it cannot be enforced by a Common Law action on the judgment. In the context of proceedings for recognition, registration and enforcement of foreign judgments either under statute, or at Common Law, the judgment creditor may apply for interim relief. 7.2 Summarise the key provisions and applicable procedures affecting the recognition and enforcement of arbitration awards. Foreign arbitral awards can be enforced in Cyprus by virtue of the provisions stated in the Cyprus International Commercial Arbitration Law No.101/1987 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, which Cyprus has ratified by Law No. 84/1979. Cyprus is thus obliged to enforce awards made in foreign states that are signatories to the Convention. There are particular grounds on which a Cyprus court may refuse to register or enforce a foreign arbitral award.
  10. 10. ICLG TO: SHIPPING LAW 2015 67WWW.ICLG.CO.UK © Published and reproduced with kind permission by Global Legal Group Ltd, London Cyprus Anastasios Antoniou LLC Cyprus Anastasios Antoniou LLC, ranked as a top-tier Cyprus law firm by The Legal 500, recommended and acclaimed by Best Lawyers International, IFLR1000 and the Client Choice Awards, is a boutique law practice specialising in maritime and shipping law, including admiralty litigation. Our lawyers provide expert legal services to ship owners, ship managers, carriers, maritime security companies, freight forwarders, underwriters and cargo claimants with respect to: ■■ Ship registrations. ■■ Tonnage Tax. ■■ Time, voyage and bareboat charters. ■■ Purchases of new build vessels both at the pre-delivery and post-delivery stage. ■■ Affreightment. ■■ Cooling and capacity sharing arrangements. ■■ Financing, operation and ownership of vessels. ■■ Cargo losses. ■■ Collusion. ■■ Pollution. ■■ Towage and salvage claims. ■■ Drafting and advising on ship building and ship repair contracts. ■■ Law of the Sea and Public International Law issues. ■■ Ship arrests. ■■ Maritime security. Anastasios A. Antoniou Anastasios Antoniou LLC Grigori Afxentiou 3 Office 102, 4003 Limassol Cyprus Tel: +357 25 105 038 Fax: +357 25 104 574 Email: anastasios@antoniou.com.cy URL: www.antoniou.com.cy Anastasios A. Antoniou is an Advocate of the Supreme Court of Cyprus and is ranked as a leading lawyer in competition law, shipping law, EU and international law by eminent ranking houses, including The Legal 500, Who’s Who Legal, IFLR1000 and Best Lawyers. In recommending Anastasios as “very knowledgeable” and a leading lawyer, The Legal 500 have highlighted his “eye for detail” and “expertise” as being the reason behind Anastasios Antoniou LLC’s “solid reputation”, while he has been included in the best competition lawyers globally by Who’s Who Legal and was chosen by his peers for inclusion in Best Lawyers International. As counsel he appears before national and international courts and arbitration tribunals in high-profile maritime, energy, competition and international law disputes. He is a member of the European Competition Lawyers Forum, the Chartered Institute of Arbitrators, the Association of International Petroleum Negotiators (AIPN), the British Institute of Comparative and International Law and the European Society of International Law. An Advocate of the Supreme Court of Cyprus, Aquilina Demetriadi is a member of the Cyprus Bar Association, the Nicosia Bar Association and the International Trademark Association. Prior to being called to the Bar, Aquilina read law in the United Kingdom (LL.B. (Hons) from the University of Manchester) and was subsequently awarded with an LL.M. in International Business, Corporate and Maritime Law from the Erasmus University of Rotterdam, in the Netherlands. She also holds a Postgraduate Diploma in International Arbitration from the Queen Mary University of London. Aquilina is fluent in English, German, French and Greek. Aquilina Demetriadi Anastasios Antoniou LLC Grigori Afxentiou 3 Office 102, 4003 Limassol Cyprus Tel: +357 25 105 038 Fax: +357 25 104 574 Email: a.demetriadi@antoniou.com.cy URL: www.antoniou.com.cy
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