Newsletter
MARITIME LAW SUBSTANTIALLY AMENDED
The amendment to Maritime Law took effect on 16 July 1999. Key points of the amendment are as follows:
Prohibition And Exceptions of Provisional Attachment of Vessels
Provisional attachment should not be imposed on a vessel from the time when she has completed preparations for the commencement of her voyage until the time when she arrives at the next port of call. However, if the obligation secured by provisional attachment is an obligation incurred for the purpose of making the voyage possible or is a damages obligation caused by a collision of the vessel, provisional attachment may still be imposed after the vessel has completed preparations for the commencement of her voyage.
Limitation of Liabilities
Limitation of liability may not be lower than the following standards:
Property claims: gross registered tonnage, SDRs54 per ton.
Personal claims: gross registered tonnage, SDRs162 per ton.
Property and personal claims: gross registered tonnage, SDRs162 per ton, provided that personal claims have a priority up to SDRs108 per ton.
Gross registered tonnage of vessels of less than 300 tons should be calculated at 300 tons.
Types of cases subject to limitation of liability were reduced from nine to four, while the causes of non application of the limitation were increased from three to six.
The limitation can be claimed by vessel owners, charterers, mangers, and operators.
Maritime Lien
Costs of litigation, expenses incurred to preserve the vessel or to procure its sale by tendering procedures, and compensation for damages caused to consignors were deleted as claims secured by maritime lien. Claims secured by maritime line have precedence over the right of mortgage over a vessel. The order of lien was revised with the following changes.
As for claims arising from the construction or repairs of a vessel, the creditor's right of detention on a vessel were placed after maritime lien and prior to the right of mortgage over the vessel. The income from an auction of a detained vessel should first be used to pay off obligations secured by maritime lien, then to pay off the rights of the party holding the detention, and finally to settle obligations secured by mortgage.
The time limit of one year to bring suit for maritime lien arising out of employment contracts should start from the day employment ends and not from the date when the obligation arises.
Carriage of Goods
Dispute Resolution
Disputes arising from a bill of lading which specifies that the port of loading or port of discharging is an ROC port, should be subject to the jurisdiction of the ROC courts at the port of loading or port of discharging, and any other ROC courts which have jurisdiction according to law.
For such bill of lading, if the parties have agreed on arbitration, a dispute may be arbitrated in the ROC despite any contrary provisions regarding the place and the applicable rules of arbitration provided in the bill of lading. However, if the parties enter into a separate written agreement after the dispute arises, the separate agreement should govern.
Furthermore, for such bill of lading, a dispute should be governed by the law as determined by the ROC conflict of laws rules. In principle, the parties may agree to a governing law. When there is no agreement, the governing law should be the law of the country of domicile (lex domicilli) or the law where the carriage agreement was entered into (lex loci). However, if the Maritime Law provides better protection for the ROC consignees or consignors, the Maritime Law should prevail.
Disposal of Cargo Which Can Not Be Delivered
A party may apply for an auction under one of the following conditions, and deposit the surplus proceeds after deducting freights and other related necessary expenses.
1.Goods that cannot be kept in a warehouse;
2.Goods that may deteriorate; and
3.Goods the value of which is obviously insufficient to pay off freights and related necessary expenses.
Notice of Damage/Statute of Limitations
The carrier and the vessel owner are relieved of their liability for the total or partial damage or loss of the goods if a suit has not been filed within one year from the date of taking delivery of the goods or from the date on which goods should have been taken. This provision of the amendment overlooked the possibility that the parties may have contractually agreed to arbitrate disputes, and, therefore, how it will be applied and interpreted remains to be seen. For example, it is unclear whether a carrier would be relieved of liability if a claim for arbitration was filed within one year but a lawsuit was not.
Effect of Liability Release
Any arrangement reducing or relieving carriers or vessel owners from liability for damage, loss, or delay of goods resulting from fault or non-fulfillment of their legal obligations are of no effect and not enforceable.
Unit Limitation
The unit limitation was revised from NT$9,000 per package to SDRs666.67 per package or SDRs2 per kilogram, whichever is the higher.
The "number of unit" means the packing units of the consigned goods. The number of pieces should be the packing units specified in the bill of lading in case of containers, pallets, or similar article of transport used to consolidate goods. If the bill of lading unclear, however, the packing units should be the number of packages. If the consignor provides the container to be used, each container should be counted as one package.
The unit limitation should apply unless the nature and value of cargo have been declared by the shipper prior to loading, and stated in the bill of lading. However, the unit limitation may not be cited if damage or loss arises from the willfulness or gross negligence of the carrier or vessel owner.
Defenses of Carriers, Their Agents And Employees
Agents and employees of carriers may assert the defenses and limitations of liability provided to carriers under the Maritime Law for the loss, damage or delay of goods to consignors and third parties; provided, however, that the defenses and limitations of liability should not be available if it can be proved that the loss, damage or delay of goods was a result of willfulness or gross negligence of the agents or employees.
The foregoing also applies to businesses in the commercial harbor area engaged in loading, discharging, carriage, custody, guarding, stowage, tally, security and pallet storage.
Salvage
Salvors who are effective in preserving the ocean environment may demand from the vessel owner the expenses actually incurred in undertaking the salvage or remuneration not exceeding two times the amount of the expenses.
The right of a salvor to claim for remuneration for salvage is extinguished if not exercised within two years of the completion of the salvage.
General Average
Previously, general average must be acts of the shipmaster. The amendment provides that during the voyage of the vessel, the direct consequential sacrifice and expenditures arising from intentional and reasonable measures taken for the safety of the entire property in common danger, should be considered general average.
The amendment also, by reference to international practice, revised provisions regarding other methods of calculating compensation amounts for general average sacrifice, general average expenditures, and how to determine general average.
Marine Insurance
Any property exposed to perils possibly arising in relation to navigation may be made the subject matter of marine insurance. This scope of coverage differs from the prior rule which stated that perils must arise "during navigation." Therefore, the amendment extends the coverage of marine insurance to cover perils on land, inland rivers, lakes and inland waterways.
The insured has a duty to prevent or mitigate losses when an insured risk occurs. Otherwise, the insurer is not liable for the increased losses which result. The insurer has the responsibility to repay the insured for expenses incurred arising from the performance of the duty to prevent or mitigate losses; provided, however, that the amount is limited to the insured amount. The previous provision which allowed the insurers to contractually minimize their responsibility to provide such compensation was deleted.
If the vessel on which the goods are to be loaded and carried is not yet decided, the insured upon knowing that the goods have been loaded on board a vessel must immediately notify the insurer of the vessel's name, date of loading, the goods loaded and their value. In case such notice is not served, the insurer is not liable for losses arising from the lack of notification. (Previously if the notice was not served the contract of insurance was invalid.)
A definition of abandonment under maritime insurance was added providing that when a cause of abandonment arises, the insured may claim the full insured amount of the subject matter insured after the insured transfers all the rights of the subject matter insured to the insurer. In addition, the statute of limitation was reduced from four months to two months.