On Friday July 25, 2014 the text of the new Law of Maritime Navigation, number 14/2014 of 24 July, was published in the Spanish Gazette. 524 articles that bring a legal revolution of those that happen in any country every hundred years.
The law covers all aspects related legal contracts and situations that arise in shipping. It covers all business related to the sea and to maritime navigation. It applies to all Spanish ships, and also to those not flying the Spanish flag but calling Spanish ports. It also applies to rivers and bays where these are accessible from the sea.
Although many aspects are therefore covered by this new piece of legislation, we will focus on the most relevant ones in terms of transport of goods by sea. We will do this on a short explanatory basis.
The Act regulates the shipbuilding contract in a very direct and pragmatic way, solving among other important issues that related to the possible discrepancies that may arise between the different documents available to the shipyard when building the ship, setting the prevalence in this order: first, the construction contract; second, technical specifications; and third, the blueprints.
It also establishes a system of indemnities for delays beyond 30 days, and a right to terminate the contract if the delay goes beyond 180 days, with a limitation period of 3 years from delivery to sue under a shipbuilding contract.
This new law, somehow surprisingly, tells us that this is “the” contract of carriage of goods, as if there was no other way to arrange for a contract for the transport of goods by sea. It also recognizes both voyage and time charters expressly, and implicitly also recognising the COA.
The owner is obliged to make available the nominated vessel, or any other similar characteristics and apply reasonable care for the vessel seaworthiness not only at the beginning of the voyage but throughout the voyage. The Owner also has a duty to follow the agreed route, or alternatively the most convenient one.
The charterer must pay the freight as agreed in the contract, allowing the possibility of the parties agreeing that the freight must be paid in any event, even when the ship or the cargo are lost.
In Spain up until now it was not possible exercise a lien on the goods. Companies were obliged to go at Court, with the consequential losses of time and expense for the parties. The new law finally gives us a lien as properly understood under English law: if the freight is not paid, the carrier may retain the goods without any formality; if the port terminal expenses are not paid, the terminal can alsto retain the goods until the debt is paid off.
But beware, the lien is allowed on the goods, not on the bill of lading, which must necessarily be delivered to the shipper once the goods are stowed on board the ship.
This new law finally equals a maritime carrier, with the road, air and rail carrier, and in the sense that is held responsible not only for losses and damages suffered by the goods, but also by delay in delivering at destination. the limitation period here will be of one year from delivery.
Ship Agent’s Responsibility
The new law finally brings to an end the unfortunate and obsolete wording of the Spanish Commercial Code (which will be superseded), which allowed the Supreme Court to hold the Ship Agent responsible for all losses and damages suffered by the goods.
Ship Agents can now rest assured that they will no longer be sued for this reason.
One grand advantage of the new law is the setting up of series of disputes that must be resolved by Notaries and not by Judges. A Notary now can solve getting delivery of the goods in case of theft or loss of the bill of lading; the Notary can receive a sea protest; the Notary can sell cargo not collected on arrival and also abandoned luggage; and rule on settlement figures of a general average.
This new law is taking Spanish maritime law from the nineteenth century to the twenty first century. It will be in force from 25 September 2014.
Abogado and English Qualified Lawyer
Blas de Lezo