Out with the old

FOLLOWING the adoption of its new Maritime Code, which came into force in August this year, Latvia’s legal regulation of maritime matters has undergone significant change. The need for a new code was based on the obsolescence of the previous code’s regulations as well as its ambiguous legal nature. Having been adopted in the form of governmental regulations, it was also unclear as to whether the former code could be applied if in contradiction of other legal provisions. It could, therefore, be argued that the old maritime code was actually void.

The new maritime code represents a compilation of the most recent maritime legislation both nationally and internationally. The legal act upon which the code has been largely based is the Norwegian Maritime Code. It has then been supplemented by the most recent international conventions and protocols regulating maritime matters as well as the relevant European Union documents regarding, for instance, the organisation of seafarers’ working time. By adopting the Norwegian Maritime Code as the legal basis for its maritime legislation, Latvia has become a legally integral part of the Nordic countries in the maritime law sector.

The code has abandoned certain issues that were subject to regulation under the previous maritime code. Firstly, it no longer regulates technical issues. Secondly, the competence and procedural aspects of the work of the public institutions and authorities engaged in maritime matters are now regulated by a specific law. Previously, these - together with maritime issues - were subject to the regulations in the maritime code. Finally, the previous maritime code was partly based on the English law concepts of maritime law, and certain peculiarities having no link to the contemporary situation in Latvia have also been abandoned e.g., restrictions whereby a ship cannot be owned by more than 64 separate interests.

Following the principles of the Norwegian Maritime Code, Latvia’s code contains regulation on the liability limitation fund. Although the previous code also stipulated liability limitation provisions, the concept of the limitation fund is new to the Latvian maritime law. Several recent international conventions have also been implemented into the code, such as the 1992 Protocol amending the International Convention on Civil Liability for Oil Pollution Damage 1969 and the International Convention on the Arrest of Ships 1999.

Although generally following the regulations of the Norwegian Maritime Code, the drafters of the Latvian code have occasionally chosen a different approach. For example, the Norwegian Maritime Code provides for both the international and national registration of ships, while Latvia’s code provides only for a national register in a relatively restrictive manner. For example, under the previous legislation the approach was extremely liberal, and a ship could fly a Latvian flag if it was owned by a permanent resident of Latvia (without any requirements in respect of the nationality), a legal entity duly registered in Latvia or a foreign private person or legal entity having an agent in Latvia (in principle, by anybody). The new code adopts a much more restrictive approach as the owner must be either a citizen of Latvia (or a non-citizen subject to a special legal regime for former Soviet citizens in Latvia) or a legal body duly incorporated in Latvia. Therefore, if a foreign legal entity wishes to register a ship with the Latvian register, contrary to the previous situation, it is now insufficient to appoint a person as an agent in Latvia. The entity must now consider opening at least a branch office under Latvian law.

And that’s not all. Implementation of the International Convention on the Arrest of Ships presents a few practical problems. The chapter of the code on the arrest of ships follows the approach of the 1999 convention, while other laws regulating the practical application of the arrest of ships have not been subject to corresponding amendments and are still based on the previous international documents. Hopefully this and other legal inconsistencies will be smoothed over by court practice during the years to come.

Adoption of the code in accordance with national and international developments by itself is a positive trend. However, the practical application of its provisions may bring about certain problematic issues for the practitioners of maritime law, including the courts.