Danish reform

Danish reform

A NEW Danish Arbitration Act came into force on 1 July, 2005. The Act is expected to undergo considerable amendment in the near future, which it is hoped will increase Denmark’s attractiveness as a forum for international arbitrations. “The new Act meets a long sought need to get the foundation of Danish arbitration proceedings up to current standards abroad,” says Peter Ringsted of Focus Advokater.

The process began in 2003 when the Danish Bar and Law Society drafted a proposal to modernise the Act, putting case law into statutory form and making the Act a more effective tool for Danish arbitrators and foreign contracting parties considering Danish arbitration. The proposal, which contains 47 sections, is based on the 1985 United Nations Commission on International Trade Model Law.

“The Act should provide for more international arbitrations in shipping as well as in other fields. Having said that, the general hesitation by parties to having awards , even on less contentious disputes, publicised and thereby contributing to the body of law will remain unaffected by the new legislation and will be a bar to a boost in the number of maritime arbitrations,” adds Ringsted.

Agents warned of EU protection failings

LONDON law firm Lawrence Graham says ship agents need to be aware that EU legislation intended to protect agents where their principal sacks them and sets up his own office on the back of business generated by the agent will not find protection under English law.

“Unfortunately, agents will always be operating in an unbalanced market, with the major liner companies having the power to impose onerous trading terms on the independent agents. They can insist on a short termination notice period and a “no compensation” clause on termination, so that when the business is flourishing due to the agent’s efforts, the line can simply step in with its own office and the agent gets nothing,” warns Imogen Rumbold, partner at Lawrence Graham.

Rumbold explains, “In 1993 the UK implemented the Commercial Agents (Council Directive) Regulations 1993, to give effect to EU Council Directive 86/653. The purpose of the directive was to ensure that agents who had built up business for a principal could be compensated for the effort and good will that had been put into the principal’s business notwithstanding any clause in the contract which excluded the right to claim compensation.”

“However, the wording of the directive, and the regulations, defines an agent as someone who is… “a self-employed intermediary who has continuing authority to negotiate the sale of or the purchase of goods. Liner agents book freight on behalf of a liner company, and freight is regarded under EU law as providing a service, rather than the sale or purchase of goods. As EU law specifically distinguishes between services and goods, the weight of decisions under English law has been to disappoint agents who have sought compensation under the terms of this regulation when dumped by a growing liner operator.”

New Turkish law on pollution

NEW legislation to help reduce the risk of pollution in Turkey’s territorial waters could have a significant impact on the volume of maritime traffic through the Turkish straits, according to Seyma Inal of Istanbul-based Inal Law Office.

The Law in Relation to Intervention in Cases of Emergency in the Pollution of the Sea by Oil and other Harmful Materials and the Principles in Relation to the Compensation of Damages (Law No 5312) came into force in June this year. It applies mainly to owners and operators of vessels over 500gt carrying oil or harmful materials and operating in, or intending to enter, Turkey’s territorial waters, internal waterways and straits.

The new law requires all parties responsible for such vessels to not only prevent incidents but ensure that when an incident does occur that they take all the necessary measures as set out in international law to reduce, eliminate or limit the extent of damage and pollution. Vessels that fail to meet the relevant standards for navigation, life, goods and environmental safety as set out in the international conventions that Turkey is a party to, will not be permitted to enter Turkey’s territorial waters, internal waterways and straits. Non-compliant vessels that do enter will be removed immediately or given a maximum of 30 days to comply with the standards.

Spain catches up

SPAIN is finally taking steps to reform its outdated shipping legislation, reports Carlos Perez , partner at DLA Piper Rudnick Gray Cary Spain. Spanish shipping law has remained unchanged since 1885 when the current Code of Commerce was approved (apart from some international conventions ratified by Spain and a few domestic laws passed by parliament).

With a view to updating this old legislation, the Spanish Minister of Justice recently presented a proposed pre-draft of a new shipping Act introducing new rules on matters such as oil pollution, as a result of the Prestige disaster. The pre-draft intends to include a complete regulatory framework of Spanish maritime law from collisions, groundings and salvage to limitation of liability and marine insurance.

Even before the new Act is expected to be passed, there are legal practitioners who are criticizing it. In their opinion, the new Act is not needed as the reform of Spanish maritime law can continue to be made through the ratification of international conventions and the promulgation of special domestic maws.

Despite the criticism, the proposed pre-draft is a good starting point for a new era in Spanish maritime law, says Perez. “Spain definitely requires a new legal framework adapted to the needs of the shipping sector in the 21st century. Hopefully, such a framework will be provided by the new Act,” he adds.

The Minister aims to have the pre-draft completed within this legislature. Time will tell whether this long-awaited Act will come into force as quickly as needed.