Financial Security in Cases of Abandonment: A Four-Month Limit for Unpaid Seafarers’ Wages?

Introduction

The International Labour Conference (ILC) at its 103rd session approved the first group of amendments to the Maritime Labour Convention (MLC), 2006. The amendments were agreed by the Special Tripartite Committee at its first meeting at the International Labour Organisation (ILO) in Geneva in April 2014 and entered into force in January 2017. The amendments concerned Regulations 2.5 and 4.2 which deal with the right to repatriation and the shipowners’ liability for sickness, injury or death of seafarers occurring in connection with their employment. In brief, the amendments inter alia set out requirements for shipowners to provide financial security to provide support for abandoned seafarers and to assure compensation in the event of death or long-term disability of seafarers due to occupational injury, illness or hazard. While an exhaustive overview of such amendments is beyond the scope of this blogpost, this blogpost aims to shed light into the operation of Standard A 2.5.2. of the MLC, 2006, as amended, paragraph 9 of which stipulates that the coverage provided by the financial security system when seafarers are abandoned by shipowners shall be limited to four months outstanding wages and four months of outstanding entitlements.

Issues

Let’s take a hypothetical case of seafarers being abandoned for 10 months. Seafarers contact the P&I Club for assistance, providing all the necessary documentation to substantiate their claim. The P&I Club’s claims handlers acknowledge receipt of the claim, check the validity of the financial security system, and investigate whether the shipowners have in fact failed to pay wages to seafarers. If the P&I is satisfied that the financial security system is valid and that the seafarers’ wages are outstanding, the P&I Club will pay four months of outstanding wages and take immediate action to repatriate the affected seafarers. Now, assuming that all the outstanding wages are of the same rate, no further questions arise. But what if the outstanding wages are not all of the same rate? If, for example, after the first four months, there has been a pay rise under the seafarers’ employment agreement.

In such cases, a further question can potentially arise as to how the limit of four months outstanding wages will be calculated. Should it be calculated based on the first four outstanding wages? Or is there a right to pick and choose which of such outstanding wages to form the basis for the calculation of such limit? If the latter is true, seafarers will be keen on calculating such limit based on the higher rate of such outstanding wages. On the other hand, the P&I Club will attempt to calculate such limit based on the lower rate of such outstanding wages. In the next section, this blogpost will explain what the relevant provisions of the MLC, 2006, as amended, provide.

The law

The relevant provision is Standard A 2.5.2 of the MLC, 2006, as amended. Paragraph 9 of this Standard states that:

‘Having regard to Regulations 2.2 and 2.5, assistance provided by the financial security system shall be sufficient to cover the following: (a) outstanding wages and other entitlements due from the shipowner to the seafarer under their employment agreement, the relevant collective bargaining agreement or the national law of the flag State, limited to four months of any such outstanding wages and four months of any such outstanding entitlements; […].’

If one looks at the wording of this provision, it can easily be ascertained that the actual text of the Convention does not give an answer to this question. Certainly, the use of the words ‘limited to four months of any such outstanding wages and four months of any such outstanding entitlements’ gives ample of space for arguments suggesting that the four months limit can be calculated by reference to any such outstanding wages, and not necessarily the first four outstanding wages.

However, it is not clear whether the specific wording was used with such flexibility in mind. The draft text of the amendments of Standard A 2.5.2. of the MLC, 2006, was based on the principles agreed at the Ninth Session (2-6 May 2009) of the Joint IMO/ILO Working Group on Liability and Compensation regarding Claims for Death, Personal Injury and Abandonment of Seafarers. During the negotiations, it was considered whether links should be drawn between paragraphs 2 and 9 of this Standard. Although this discussion took place in respect of the duration of the limitation period (it may be worth noting here that, initially, a limit of three months wages was suggested), it can still be instructive. In this respect, it was explained that the purpose of paragraph 2 is to identify when abandonment takes place, whereas paragraph 9 defines the scope of financial security to be provided in case of abandonment. Thus, it was concluded, it is necessary to allow for a time lapse between the recognition of the abandonment situation and the limitation of financial security.

Against this backdrop, it can be argued that the purpose of the said limit is to ensure that seafarers’ wages are fully paid up for the first four months since their abandonment. Bearing in mind that it is the seafarers who have to initiate the process with the P&I Clubs, it may also be worth noting here that such interpretation can assist with avoiding cases, although rare, where seafarers intentionally allow wages to continue to accrue.

Conclusion

In practice, it is highly unlikely that seafarers are owed only four months’ wages when they are abandoned by their shipowners. Thus, the possibility of different rates for wages or other entitlements cannot be precluded. Given the uncertainty of the wording of Standard A 2.5.2. paragraph 9 (a) of the MLC, 2006, amended, any conflicting arguments can easily be avoided if the purpose of this provision is clarified in future amendments.

Are there further risks for seafarers on the back of the amendments proposed by the UK government to the new Nationality and Borders Bill?

It is argued that, despite the recent amendments, the new Nationality and Borders Bill still raises concerns for seafarers who comply with their legal duty to save life at sea.

Introduction

Since its introduction to the House of Commons on 6 July 2021, the new Nationality and Borders Bill has attracted a lot of attention and has received fierce criticism for the changes it brings to the UK’s immigration and asylum system. What has not been widely known, however, is that the new bill will also change the provisions of the Immigration Act 1971 in relation to people smuggling offences in a way that can potentially criminalise seafarers who save the life of someone in distress at sea. With an amendment which aims to protect seafarers from any unfair prosecution being tabled by the UK government, not least thanks to the efforts of, and lobbying from, industry stakeholders, this blogpost attempts to explain why the new Nationality and Borders Bill matters for seafarers, what changes are proposed to the existing legislation, and what risks remain for seafarers.

Why does the new Nationality & Borders Bill matter for seafarers?

In the past few years, the world has witnessed an unprecedented humanitarian crisis. Millions of people are forced to leave their home countries in order to escape war, famine and poverty and many of them have no other option but to risk their lives, and cross some of the world’s busiest shipping lanes in small dinghies in their search for safety. It is within this context that, on various occasions, seafarers had to assist with rescues at sea. What is important to note, however, is that seafarers do not conduct these rescue operations only out of a moral obligation. There is a legal obligation to do so. Under Article 98 of the United Nations Convention of the Law of the Sea, 1982, the master and crew of a commercial ship have a duty to rescue people in distress at sea, and to bring them in a place of safety. Similar provisions are found in Chapter V of the International Convention for the Safety of Life at Sea, 1974, as well as in the International Convention for Salvage, 1989, Article 10 of which provides that ‘every master is bound, so far as he can do so without serious danger to his vessel and persons thereon, to render assistance to any person in danger of being lost at sea’ and that ‘State parties shall adopt the measures to enforce the duty set out in paragraph 1’. In fact, the UK has adopted relevant provisions, establishing that a master shall be liable of a criminal offence if he/she fails to comply with his/her duty to render assistance to persons in danger at sea and that the maximum available sentence would be two-year imprisonment or a fine, or both.[1] In effect, this means that any new provision that could make seafarers criminally liable for saving people in danger at sea would criminalise seafarers for doing what they are required to do by law!

Given that the English Channel is tuning into a popular crossing point for those who search for a better future,[2] and since its inherent dangers, the issues raised by the upcoming changes of the current legislation are not just of theoretical interest.

What did the Immigration Act 1971 provide?

Section 25A, paragraph 1 of the Immigration Act 1971, which represents the current law, provides that a person, who knowingly and for gain facilitates the arrival or attempted arrival in, or the entry or attempted entry into, the UK of an individual, and he/she knows or has reasonable cause to believe that the individual is an asylum-seeker,[3] commits a criminal offence. This could lead to a maximum sentence of 14-year imprisonment, to a fine or to both.[4] However, with the greater focus on the requirement for gain, seafarers assisting with rescues at sea according to their international maritime law obligations are well protected from the risk of being unfairly prosecuted. Unfortunately, it is argued, the latter will not be guaranteed if/when the proposed Bill is passed.

What is the Nationality & Borders Bill’s new provision for the offence of assisting asylum-seekers to enter the UK?

The Nationality & Borders Bill,[5] as introduced on 6 July 2021, proposed, pursuant to clause 38, two significant amendments in relation to the offence of facilitating the arrival in, or entry into, the UK of asylum-seekers under section 25A of the Immigration Act 1971. The first relates to the maximum potential sentence, an increase of which has been proposed from a 14-year prison sentence to life imprisonment. The second, and arguably the most important one, relates to the removal of the current requirement ‘for gain’ in order to commit such offence. This implied that a blanket criminal offence would be created, with no defences available, which could expose those seafarers who comply with their international maritime law obligation to save life at sea into criminal liability.

As a result, it was not surprising that the proposed amendments were not received well by social partners and organisations representing seafarers and the shipping industry, in general. In fact, Nautilus International and the UK Chamber of Shipping issued a joint letter to the UK government over the new Nationality and Borders Bill, in which they raised their concerns about the potential implications of the proposed bill in the long lasting problem of criminalisation of seafarers and requested the maritime minister and the shadow secretaries of transport and maritime to raise those concerns with the Home Secretary to ensure that sufficient assurances will be given that seafarers would not be liable for prosecution for complying with international maritime law.[6] In response to this letter, the Home Office Minister at the time Chris Phillip clarified that the new Nationality and Borders Bill would not target seafarers.[7] Although this response was reassuring, it was not found to be satisfactory, as it left the matter to be dealt with through policy guidance.[8] Thus, Nautilus International and the UK Chamber of Shipping issued a second letter, urging for those reassurances, namely that seafarers of commercial ships would not be  criminalised for rescuing distressed persons at sea and bringing them ashore in the United Kingdom, to be codified in legislation.[9]

After strong lobbying from Nautilus International and the UK Chamber of Shipping, in January 2022, the UK government finally confirmed that it has tabled an amendment to the new Nationality and Borders Bill which ensures that seafarers who are required by law to rescue people at sea will be adequately protected from criminal prosecution.[10] Indeed, the latest reprint of the new bill,[11] in clause 40, paragraph 4, introduces a defence for the offence of assisting asylum seekers to arrive in, or to enter into, the UK under section 25A of the Immigration Act 1971 that could be used by seafarers in those circumstances.[12] This defence is to be included as section 25BA in the Immigration Act 1971. Briefly, it provides that a person charged with this offence would not be liable if it is established that:

‘(a) the assisted individual had been in danger or distress at sea, and

 (b) the act of facilitation was an act of providing assistance to the individual at any time between –

  • the time when the assisted individual was first in danger or distress at sea, and
  • the time when the assisted individual was delivered to a place of safety on land.’[13]

From an evidentiary perspective, the defence will succeed, if the person charged with the offence adduces sufficient evidence of the relevant facts, and the contrary is not proved beyond reasonable doubt.[14] Finally, it should be mentioned that the defence will not be available in two circumstances, where the UK was not the nearest place of safety on land, and there was no good reason to deliver the assisted individual in the UK instead of to a nearer place of safety on land, and where the person charged with the offence was on the same ship as the assisted individual at the time when the individual was first in danger or distress at sea.[15] Thus, against this backdrop, a question remains as to whether the amendments proposed to the new Nationality and Borders Bill by the UK government award seafarers who rescue those in distress at sea with adequate protection.

What is the risk for seafarers?

Most certainly, the fact that the new Nationality and Borders Bill has been amended to include a defence for the offence of facilitating the arrival in, or entry into, the UK of asylum-seekers is a big success for seafarers and the shipping industry. However, some risks remain. For example, there is a question as to what would be considered as ‘sufficient’ evidence for the purposes of this defence. Furthermore, one should not overlook or underestimate the difficulties faced by seafarers when they are required to provide evidence in the context of criminal investigations in a foreign port.[16] Finally, it is unclear what the position of those seafarers involved in criminal investigations for rescuing people at sea would be. [17]

Under the shadow of these risks, seafarers may still find themselves in front of a dilemma as to whether to rescue those who are in danger at sea, and risk finding themselves caught in the middle of a criminal investigation process, or whether to disregard their responsibilities under international maritime law to save life at sea, with whatever repercussions this might have in the existing humanitarian crisis, and ‘save’ themselves from the risk of being unfairly treated. In order to avoid this, it is argued, further clarity and certainty is required. This can be achieved through policy guidance. Alternatively, the possibility of developing a code of practice to be followed by seafarers when attempting rescues at sea can be considered.

What happens next?

Having been passed by MPs in the House of Commons in December, the Bill is now being debated by the House of Lords and is due to go to committee stage on 27 January 2022, where a detailed line by line examination of the separate parts of the Bill will take place. During the committee stage, all suggested amendments will also have to be considered and votes on any amendments can take place before every clause of the Bill will be agreed to. At the end of the committee stage, the Bill will be reprinted with all the agreed amendments, and it will then move to report stage for further scrutiny.

Concluding remarks

It is beyond doubt that what Nautilus International and the UK Chamber of Shipping achieved was a big win for seafarers which highlighted how important is the role of industry stakeholders in forming public policy. However, there are still things that can be done to ensure that the ‘faith’ of seafarers, who comply with their legal obligations and save people at sea, will be more predictable if/when the new Nationality and Borders Bill is passed.


[1] Section 3, Part II, Schedule 11 of the Merchant Shipping Act 1995.

[2] It is estimated that, in 2021, more than 21,000 people crossed the English Channel, while the number of people crossing in 2020 was more than 40,000.

[3] Section 25A, paragraph 2 of the Immigration Act 1971 explains that, for the purposes of this section, ‘“asylum-seeker” means a person who intends to claim that to remove him from or require him to leave the United Kingdom would be contrary to the United Kingdom’s obligations under (a) the Refugee Convention (within the meaning given by section 167(1) of the Immigration and Asylum Act 1999 (c 33) (interpretation)), or (b) the Human Rights Convention (within the meaning given by that section).

[4] Section 25A, paragraph 4, read in conjunction with Section 25, paragraph 5 of the Immigration Act 1971.

[5] Bill 141 2021-22.

[6] ‘Nautilus and UKCS question migrant Bill that could criminalise seafarers’ (20 July 2021) available at < https://www.nautilusint.org/en/news-insight/news/nautilus-and-ukcs-question-migrant-bill-that-could-criminalise-seafarers2/> accessed 12 January 2022.

[7] ‘Union urges Nationality and Borders Bill legislative clarity’ (12 August 2021) available at <https://www.nautilusint.org/en/news-insight/news/nationality-and-borders-bill-clarity/ > accessed 12 January 2022.

[8] ibid.

[9] ibid.

[10] ‘UK Chamber of Shipping and Nautilus welcome government amendment on Nationality and Borders Bill’ (6 January 2022) available at < https://ukchamberofshipping.com/latest/uk-chamber-shipping-and-nautilus-welcome-government-amendment-nationality-borders-bill/ > accessed 12 January 2022.

[11] HL Bill 82.

[12] It may be worth noting that this defence will also be available for the offence of assisting unlawful immigration under section 25 of the Immigration Act 1971. 

[13] Clause 40, paragraph 4 of the Nationality and Borders Bill (HL Bill 82).

[14] ibid.

[15] ibid.

[16] Research has shown that the fear of criminalisation is one of the most important factors that drives seafarers away from working at sea. See, for example, Report for discussion at the Sectoral Meeting on the Recruitment and Retention of Seafarers and the Promotion of Opportunities for Women Seafarers (Geneva, 25 February–1 March 2019), International Labour Office, Sectoral Policies Department, Geneva, ILO, 2019.

[17] There is also a question as to what the position of the ship would be for as long as the investigations last.

Maritime Labour Convention and Electronic Certificates: The Way Forward?

It is often said that a period of crisis brings in the light opportunities for development, and this cannot be less true of the COVID-19 pandemic. Indeed, this on-going pandemic, together with the control measures adopted by many countries, are highlighting the need for a shift towards digitalisation. In the context of the Maritime Labour Convention (MLC), 2006, in particular, the crisis created by the COVID-19 pandemic not only interrupted, in some instances, for a significant period of time, the conduct of inspections required in accordance with Title 5 of the Convention, but also challenged the traditional ways of carrying out such inspections. It came, thus, as no surprise that a number of countries, influenced by the benefits and the practicality of having on board electronic certificates, specifically authorised their use during this pandemic to facilitate port State control inspections, with a view to ensuring that safety standards and decent working and living conditions on board ships are maintained.[1] But, how ready was the regulatory framework for such a change?

At an international level, discussion of issues relating to electronic certificates in the context of the MLC, 2006, had started at the third meeting of the Special Tripartite Committee in April 2018, only two years before the beginning of this pandemic, without taking any decisions on this matter. During this meeting, the Vice-Chairperson of the Shipowner group, the Vice–Chairperson of the Seafarer group and the Chairperson of the Government group recognised the benefits of the use of electronic documents in relation to the Maritime Labour Certificate or the Declaration of Maritime Labour Compliance, which could facilitate the maintenance and withdrawal of documents and expedite inspections by port State control officers.[2] However, one issue was whether the text of the MLC, 2006, would permit the use of such electronic certificates.[3] Furthermore, concerns were raised as to whether the various port State control authorities would accept those electronic certificates.[4] Finally, there was uncertainty as to how such electronic documents could be displayed on board ships to conform with the requirements of the Convention.[5] The possibility of using electronic certificates in relation to other documents, such as crew lists, seafarers’ employment agreements or information on crew members had also been addressed. In this respect, both the Vice-Chairperson of the Shipowner group and the Vice–Chairperson of the Seafarer group highlighted the difficulties surrounding the protection of the personal data of seafarers and noted the need to ensure compliance with the EU General Data Protection Regulation.[6]

The Special Tripartite Committee returned to some of those issues during the first part of its fourth meeting in April 2021 where it was explained that the provisions of the MLC, 2006, as currently drafted, would not prevent national administrations from authorising the creation and storage of seafarers’ employment agreements in electronic format, the maintenance of electronic records on board ships and the use of such records for inspection purposes as well as the issuance of electronic Maritime Labour Certificates and Declarations of Maritime Labour Compliance.[7] However, print outs of such electronic documents should be carried on board ships and should remain available to seafarers in accordance with Standard A5.1.3 of the MLC, 2006, paragraph 12 of which explicitly states that ‘a current valid maritime labour certificate and declaration of maritime labour compliance, accompanied by an English-language translation where it is not in English, shall be carried on the ship and a copy shall be posted in a conspicuous place on board where it is available to the seafarers’.[8] It was further stressed that the use of electronic seafarers’ employment agreements should not affect the obligations under Standard A2.1 of the MLC, 2006.[9] Amongst other things, those obligations provide that seafarers working on board ships shall have a seafarers’ employment agreement signed by both the seafarer and the shipowner or a representative of the shipowner, that seafarers shall be given an opportunity to examine and seek advice on the agreement before signing, that the shipowner and the seafarer shall each have a signed original of the seafarers’ employment agreement, and that clear information as to the conditions of employment shall be easily obtained on board by seafarers and shall also be accessible for review by inspectors. The question of whether electronic signatures should be acceptable in the context of the seafarers’ employment agreement is a matter of general contract law that is left by the Convention to be determined by the national law of the flag State or any other law applicable to the seafarers’ employment agreement.[10] Finally, it was observed that the use of electronic certificates should not undermine the obligations of State parties to the MLC, 2006, or shipowners with regards to ship certification and should not make more difficult the process of issuing, accessing or using ship certificates by the individuals concerned.[11]

At a national level, Denmark was the first country to use electronic certificates for seafarers. Its pilot project of digital certificates for seafarers started in June 2016. The aim of this project was to show how digital certificates could operate on board ships, for companies and authorities.[12] The project was based on three pillars. First, seafarers would use a mobile application to sign-on, enabling data sharing; then the master would access the digital certificates of the crew, which would facilitate the management of the crew, the automatic validation of compliance with minimum safe manning requirements, and the transfer of the details to authorities prior to arriving in the next port; and, finally, port authorities would access the digital certificates of the crew, in order to verify compliance with minimum safe manning requirements.[13] Before the launch of this project, the Danish Maritime Authority sent information to the IMO explaining that the certificates would be in compliance with international conventions and instruments, including the Convention on Facilitation of International Maritime Traffic (FAL Convention) and the IMO Facilitation Committee (FAL) Guidelines for the use of electronic certificates (FAL.5/Circ.39/Rev.2 and Corr. 1), as they would carry an electronic coat of arms, the stamp of the Danish Maritime Authority, a signature of an authorised inspector as well as a unique tracking identification number.[14] The certificates would also be protected from alteration or tampering through encryption and use of a digital signature.[15]

Since 2016, other flag States have also started to adopt regulations in relation to the use of electronic certificates, in compliance with the IMO Guidelines for the use of electronic certificates (FAL.5/Circ.39/Rev.2). Such countries include Antigua and Barbuda,[16] Bahamas,[17] Belgium,[18] Cyprus,[19] India,[20] Kiribati,[21] Liberia,[22] Malta,[23] Marshall Islands,[24] Myanmar,[25] Norway,[26] Singapore,[27] Palau,[28] Panama,[29] Sri Lanka,[30] and the UK.[31] However, it may be worth mentioning that only very few countries have made explicit provisions for the issuance of MLC, 2006, documents in electronic format. For example, the Marshall Islands provided that, as from February 2020, the Maritime Administrator would issue the Declaration of Maritime Labour Compliance Part I in electronic format only.[32]

This hesitation on the part of flag States must be associated with the fear of port State control authorities denying the validity of electronic certificates and the possibility of port State authorities unduly detaining or delaying vessels carrying such certificates. Clearly, the latter can be particularly onerous for seafarers, shipowners and other stakeholders. In this respect, the guidelines for port State control officers carrying out inspections under the MLC, 2006, which were published by the ILO in 2008, does not provide any guidance.[33] In fact, those guidelines provide that port State control inspectors should use their professional judgment in carrying out all duties.[34] Furthermore, the guidelines prescribe that the Maritime Labour Certificates and Declaration of Maritime Labour Compliance should be the starting point in the inspection process as they constitute prima facie evidence that the ship is in compliance with the requirements of the MLC, 2006,[35] and that an inspection may end after a satisfactory document review.[36] Noting the importance of the Maritime Labour Certificates and Declaration of Maritime Labour Compliance in the process of port State control inspections under the MLC, 2006, it can, thus, be argued that an update of this guidance is necessary to set out some uniform standards for the issue, acceptance, and use of such certificates.

Beyond the MLC, 2006, context, in June 2017, the Paris MoU issued a set of guidelines for the use of electronic certificates.[37] In particular, section 3, read in conjunction with section 2.2, explain that port State control inspectors should accept electronic certificates provided that: they are consistent with the format and content required by the relevant international convention or instrument, as applicable; they are protected from edits, modifications or revisions other than those authorised by the issuer or the administration; they contain a unique tracking number used for verification; and they contain a printable and visible symbol that confirms the source of issuance. However, those guidelines were only drafted for the purpose of providing guidance to port State control inspectors in performing a port State control inspection, and third parties could not claim any rights on that basis.[38]

More recently, the IMO adopted the procedures for port State control, 2019. What is particularly interesting, though, it is that section 1.2.3 provides that if a port State exercises control based on the MLC, 2006, guidance on the conduct of such inspections is given in the ILO publication “Guidelines for port State control officers carrying out inspections under the MLC, 2206”. It is, thus, unclear whether these procedures should apply to such port State control inspections or not. In that respect, it is submitted that a combined reading should be preferred. In any case, this guidance adopts a positive approach towards the use of electronic certificates that aims to afford consistency in the conduct of port State control inspections. More specifically, section 2.2.3 of the IMO procedures for port State control, 2019, explains that certificates may be in hard copy or electronic format.[39] Where the ship relies upon electronic certificates, the certificates and website used to access them should conform with the IMO Facilitation Committee (FAL) Guidelines for the use of electronic certificates (FAL.5/Circ.39/Rev.2 and Corr. 1), specific verification instructions should be available on the ship, and viewing such certificates on a computer should be considered as meeting the requirement of carrying certificates on board.[40] Of course, this guidance is only recommendatory in nature. Governments are only encouraged to implement these procedures when exercising port State control. This implies that port States can still adopt different requirements in relation to the validity of electronic certificates. In practice, this could mean that a ship calling at various ports in the course of a single voyage would have to carry both a hard copy and an electronic version of a certificate to comply with the requirements of different port States. There is no doubt that this could disincentivise flag States and companies from investing on acquiring the necessary knowledge and technology for issuing, accessing or using electronic certificates. On a final note, it should not be overlooked that this lack of uniform standards at the international level could lead to the emergence of more ports of convenience.

As we move forward and out of this pandemic, the use of electronic certificates in the context of the MLC, 2006, is likely to be expanded or even generalised. However, for that to be a viable possibility for the future, international cooperation is necessary for the creation of uniform standards for the issuance, acceptance and use of such certificates.


[1] For example, Belgium (Circular 2020/002).

[2] Final report: Third meeting of the Special Tripartite Committee of the Maritime Labour Convention, 2006, as amended (MLC, 2006) (Geneva, 23-27 April 2018), International Labour Office, International Labour Standards Department, Geneva, ILO, 2018, at page 15.

[3] ibid.

[4] ibid.

[5] ibid.

[6] ibid.

[7] Background paper for discussion, Fourth meeting of the Special Tripartite Committee established under Article XII of the Maritime Labour Convention, 2006, as amended – Part I (Geneva, 19-23 April 2021), International Labour Office, International Labour Standards Department, Sectoral Policies Department, Geneva, ILO, 2021, at page 24.

[8] ibid at page 25.

[9] ibid.

[10] ibid.

[11] ibid.

[12] Danish Maritime Authority, “Digital Certificates for Seafarers” available at < https://www.dma.dk/SoefarendeBemanding/SoefartsbogBeviser/DigitaleBeviser/Sider/default.aspx> accessed 28 May 2021.

[13] ibid.

[14] IMO Circular letter No 3646.

[15] ibid.

[16] Circulars 2018-003 and 2018-004.

[17] Marine Notice 53 of 4 January 2021.

[18] Circular 2019/0001.

[19] Circular No 14/2018.

[20] Engineering Circular No 07 of 2017.

[21] Marine Circular 37/2017.

[22] Information on Certificates and Documents issued by the Republic of Liberia of 14 September 2017.

[23] Merchant Shipping Notice No 139.

[24] Marine Notice MN-1-109-1 rev Nov/2020.

[25] Marine Guidance 1/2018.

[26] Norwegian Maritime Authority, “Electronic Certificates for Vessels” available at < https://www.sdir.no/en/shipping/vessels/certificates-and-documents-for-vessels/electronic-certificates-for-vessels/> accessed 28 May 2021.

[27] Shipping Circular No 26 of 2017.

[28] Marine Circular No 17-045 and Marine Notice 108.1.

[29] Merchant Marine Circular MMC-355.

[30] Merchant Shipping Notice (MSN) 01/2018 of 12 September 2018.

[31] Marine Information Note (MIN) 609 (M+F).

[32] Marine Safety Advisory No 07-20.

[33] ILO, Guidelines for port State control officers carrying out inspections under the Maritime Labour Convention, 2006. Geneva, International Labour Office, 2009.

[34] ibid, at paragraph 39.

[35] ibid, at paragraph 42.

[36] ibid, at paragraph 45.

[37] Paris MoU, “Guidelines for the use of electronic certificates” available at < https://www.parismou.org/guidelines-use-electronic-certificates> accessed 28 May 2021.

[38] ibid.

[39] IMO Resolution A. 1138(31).

[40] IMO Resolution A. 1138(31), Annex at Section 2.2.3.

In Rem Action- Demise Charterer or Not?

‘Statutory liens’ or ‘statutory rights in rem’ come into existence on commencement of in rem proceedings (The Monica S [1967] 2 Lloyd’s Rep 113). In practice, this means that, if a ship is sold to a third party before the jurisdiction has been invoked or if a charter by demise is terminated before such time, then the potential claimant may be unable to benefit from the in rem proceedings and the accompanying right of ship arrest. The most recent judgment of the Admiralty Court in Aspida Travel v The Owners and/or Demise Charterers of the Vessel ‘Columbus’ and The Owners and/or Demise Charterers of the Vessel ‘Vasco Da Gama’ [2021] EWHC 310 (Admlty) highlights that.

In this case, Aspida Travel claimed against the proceeds of sale of the vessels ‘Vasco De Gama’ and ‘Columbus’ in respect of travel agency services for the transport of crew to and from the vessels which took place between 1 January 2020 to 31 July 2020 when the vessels went to lay-up due to the pandemic. At that time the vessels ‘Vasco De Gama’ and ‘Columbus’ were demise chartered to Lyric Cruise Ltd and Mythic Cruise Ltd respectively to whom Aspida provided the relevant services and rendered the resulting invoices. The claim forms were issued on 13 November and 20 November 2020. The basis of the claims was Section 21 of the Senior Courts Act 1981, paragraph 4 of which provides that:

‘In the case of any such claim as is mentioned in section 20 (2) (e) to (r), where –

  • the claim arises in connection with a ship; and
  • the person who would be liable on the claim in an action in personam (‘the relevant person’) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against –
    • that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
    • any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.’

The main objection to the claims was that they do not meet the requirements of Section 21 (4) of the Senior Courts Act 1981, in that Lyric Cruise Ltd and Mythic Cruise Ltd as the ‘relevant persons’ (i.e. the persons who would be liable in personam on the claims) were the charterers at the time when the cause of action arose, but not the demise charterers at the time when the action was brought. In fact, Mythic Cruise Ltd and Lyric Cruise Ltd terminated their charters on 7 October 2020 and 9 October 2020. As the claims were brought more than a month later, it was held that the third require of the Section 21 (4) of the Senior Courts Act 1981 was not fulfilled. By the time the claims were issued, Mythic Cruise Ltd and Lyric Cruise Ltd were no longer the demise charterers.

The Third Group of Amendments to the Maritime Labour Convention 2006 Enters into force Later this Month

Later this month, the third group of amendments to the Maritime Labour Convention 2006 will be entering into force (26 December 2020). While these amendments have been discussed in a previous post on this blog https://iistl.blog/2020/06/10/singapore-passes-legislation-to-give-effect-to-the-third-group-of-amendments-to-the-maritime-labour-convention-2006/ , it may be worth reminding that they relate to Standard A 2.1, Standard A 2.2 and Regulation 2.5 of the Convention. The amendments ensure that a seafarer’s employment agreement (SEA) shall continue to have effect, wages and other contractual benefits under the SEA, relevant collective bargaining agreements or applicable national laws shall continue to be paid and the seafarers’ right to be repatriated shall not lapse for as long as a seafarer is held hostage on board a ship or ashore by pirates and armed robbers.

BIMCO COVID-19 Crew Change Clause – An Attempt to Facilitate Crew Changes

On 25 June, BIMCO announced the publication of their novel COVID-19 Crew Change Clause for Time Charter Parties. The clause provides shipowners with the right to deviate for crew changes ‘if COVID-19 related restrictions prevent crew changes from being conducted at the ports or places to which the vessel has been ordered or within the scheduled period of call’. Shipowners can exercise their right to deviate by giving charterers a written notice as soon as reasonably possible. The crew change costs will rest on shipowners, unless shipowners and charterers agree that the vessel will remain on hire during the deviation period, but at a reduced rate. In such case, the cost of bunkers consumed will be shared equally between shipowners and charterers.

With more than 200,000 seafarers currently working on board after the expiry of their contracts of employment, the COVID-19 Crew Change Clause at least ensures that shipowners can sail to those few ports were crew changes are possible, without facing the risk of breaching their contractual obligations under time charters. It should be noted, however, that this is not a panacea to the issue of crew changes. Recognising seafarers as ‘keyworkers’ and designating ports where crew changes can take place safely following the Protocols designed by the IMO (Circular Letter No 4204/Add 14 (5 May 2020) should remain a priority. 

Singapore Passes Legislation to Give Effect to the Third Group of Amendments to the Maritime Labour Convention 2006

On 5 June 2018, the International Labour Conference (ILC) at its 107th Session approved the third group of amendments to the Maritime Labour Convention 2006. The amendments were agreed by the Special Tripartite Committee on 27 April 2018 at its third meeting at the International Labour Organisation (ILO) headquarters in Geneva. The agreed amendments were the result of the work undertaken by the ILO, in view of the Resolution adopted by the ILC at its 94th (Maritime ) Session concerning the effects of maritime piracy on the shipping industry, and concern Regulations 2.1, 2.2, and 2.5 of the Convention which deal with the seafarers’ employment agreement (SEA), the seafarers’ right to be paid wages, and the seafarers’ right to be repatriated, respectively.

In particular, the amendments stipulate that a new paragraph will be inserted to Standard A 2.1. ensuring that a SEA shall continue to have effect while a seafarer is held hostage on board a ship or ashore by pirates or armed robbers. The term ‘piracy’ is given the same meaning as in the United Nations Convention on the Law of the Sea 1982 (UNCLOS). Armed robbery against ships is defined as ‘any illegal act of violence or detention or any act of depredation, or threat thereof, other than an act of piracy, committed for private ends and directed against a ship or against persons or property on board such a ship, within a State’s internal waters, archipelagic waters and territorial sea, or any act of inciting or of intentionally facilitating an act described above’.

Furthermore, a new paragraph will be inserted to Standard A 2.2. stating that, where a seafarer is held hostage on board a ship or ashore by pirates or armed robbers, wages and other contractual benefits under the SEA, relevant collective bargaining agreements or applicable national laws, shall continue to be paid during the whole period of captivity and until the seafarer is released and duly repatriated or, where the seafarer dies while in captivity until the date of death as determined in accordance with national laws or regulations.

Finally, in Regulation 2.5, paragraph 8 will be replaced to ensure that the seafarers’ right to be repatriated shall not lapse where a seafarer is held hostage on board a ship or ashore by pirates and armed robbers. The terms piracy and armed robbery against ships shall have the same meaning as in Standard A2.1.

According to the process to be followed for the amendment of the Maritime Labour Convention 2006 under Article XIV of the Convention, the agreed amendments have now been notified to all Member States whose ratification of the Convention was registered before the date of the 107th Session of the ILC. The Member States will have two years from that notification to express a formal disagreement to the agreed amendments. Unless more than 40 per cent of ratifying Member States, representing not less than 40 per cent of the world gross tonnage, have formally expressed their disagreement with the amendments, they will enter into force six months after the end of the two years. Since no formal disagreements have been expressed, the expected date for entry into force is 26 December 2020.

Singapore is one of the very first States to pass legislation to enable domestic law to give effect to the third group of amendments to the Maritime Labour Convention 2006. On 25 March 2020, the Singapore Parliament passed a Bill to amend the Merchant Shipping (Maritime Labour Convention) Act 2014, which will take the force of law later this year. The Bill focuses on two points. First, it makes any necessary amendments to Singapore law to enhance the employment protection for captive seafarers. Secondly, it provides insurers with a statutory right to become subrogated to seafarers’ rights where, under a contract of insurance or other financial security, an insurer has paid for liabilities arising from a shipowner’s obligation to repatriate a seafarer.

The Existence of a Possessory Lien in respect of a Claim would Affect the Priority to be Given to the Costs Incurred in Enforcing that Claim in an Admiralty Action in Rem

It is well settled that in actions against the proceeds of sale of property arrested in rem, costs have the same priority as the claim in respect of which they have been incurred. However, it remains uncertain whether the proper application of this rule should result in costs being accorded the same priority as a possessory lien or a statutory lien where a claimant has a possessory lien over an arrested ship in respect of a claim which, but for the possessory lien, would have priority only as a statutory lien in admiralty. In the recent case of Keppel FELS Ltd v Owner of the vessel “SONGA VENUS” and Songa Offshore SE (The Songa Venus) [2020] SGHC 74, the Singapore High Court addressed this issue.

The claimants, Keppel FELS Ltd, provided various services to the vessel Songa Venus, including repairs, modifications, supply of materials, equipment and berthing. The owners of the vessel failed to pay for the said services, and so Keppel FELS Ltd commenced these proceedings, arrested the vessel, and obtained an order for the vessel to be appraised and sold without prejudice to their possessory lien over the vessel, if any. After the vessel was sold for US$3,749,463.14, Keppel FELS Ltd obtained final judgment for the sum of US$1,169,370 with interest. The court also held that Keppel FELS Ltd had a possessory lien over the vessel in respect of the portion of its claim relating to repairs, modifications, supply of various materials, equipment and services. The sums amounted to US$328,723 plus costs. The intervener, Songa Offshore SE, commenced a separate in rem action against the vessel for sums outstanding under a seller’s credit agreement which was secure by a second preferred mortgage over the vessel. Songa Offshore SE obtained a final judgment for the sum of US$34,200,000.

Against this backdrop, Keppel FELS Ltd filed an application to determine the priority of the relevant claims and payment out of the proceeds of sale. The parties were not in dispute as to the priority of the substantive claims. The dispute revolved around the costs of the claims. Keppel FELS Ltd argued that costs attributable to the portion of their claim for which they had a possessory lien should be accorded the same priority, ranking before the mortgage. However, Songa Offshore SE contended that all costs of Keppel FELS Ltd’s claim should be granted the priority of a statutory lien and rank below the mortgage.

The court found in favour of Keppel FELS. It explained that ‘considerations of justice and equity required the court to accord the disputed costs the same priority as the portion of Keppel FELS’ claim for which it had a possessory lien’. Particular emphasis was placed on the fact that, for the possessory lien holder to surrender the ship to the admiralty court, the admiralty court has to give an undertaking to put the possessory lien holder ‘exactly in the same position as if he/she had not surrendered the ship’. In principle, a possessory lien holder retains possession of the res until he/she has been paid in full, in return for its release. He/she does not have to initiate any legal proceedings to enforce the possessory lien and, thus, does not incur any legal costs. However, whenever the possessory lien holder has to surrender the ship to the admiralty court, he/she would have to initiate in rem proceedings to satisfy his/her claim through the judicial sale of the vessel. This implies that, for the admiralty court to fulfil its undertaking to put the possessory lien holder ‘exactly in the same position as if he/she had not surrendered the ship’, the admiralty court should protect the costs incurred by the possessory lien holder when bringing a claim in rem to the same extent as the possessory lien itself.

COVID-19: An Occupational Disease?

On April 28, 2020, the global trade union movement urged governments and occupational health and safety bodies around the world to recognise SARS-CoV-2 as an occupational hazard, and COVID-19 as an occupational disease.

In practice, this means that the employer’s duty to take reasonable measures to protect the health and safety of their employees will cover COVID-19 related risks. Furthermore, it means that employees will be able to benefit from compensation schemes provided for those injured, or the dependants of the deceased, whenever there has been injury or death due to work-related accidents or occupational diseases.

Recognising COVID-19 as an occupational disease will be crucial to ‘key workers’, such as seafarers. For that it will ensure that adequate preventive measures are adopted and, if they contract COVID-19 at work, that existing compensation and liability regimes remain applicable.

PASSENGERS SUE CRUISE LINES FOR NEGLIGENCE OVER COVID-19 OUTBREAK

Ever since January 2020, it became evident that COVID-19 will place significant hurdles on cruise ship operators. The quarantine of approximately 2,500 passengers on board Diamond Princess off the coast of Japan that led to 700 confirmed cases of coronavirus was the first hard knock on the cruise industry. However, this was not enough to urge cruise ship operators to temporarily suspend their activities to minimise new transmissions on cruise vessels, or at the very least, to implement policies to prevent similar outbreaks.

Cruise ship operators continued their business as usual for more than a month. It was only mid-March, when some of the major cruise ship operators announced the voluntary suspension of scheduled cruises amid the severity of the public health crisis. Arguably, this delayed response on the part of cruise ship operators led to more passengers being exposed to COVID-19 with several passengers testing positive on cruise vessels around the world.

It now comes as no surprise that several claims have been brought against cruise ship operators over their response to COVID-19 outbreak. In early April, former passengers of the cruise ship Grand Princess filed lawsuits against the ship’s operators in federal courts of the US, claiming negligence on the part of the company in failing to ensure the health and safety of its passengers. The claims ask for compensatory and punitive damages for lost earnings, medical expenses and mental distress.

The Grand Princess departed on February 21 for a cruise from San Francisco to Hawaii. Before sailing to Hawaii, the ship made a 10-day round-trip to Mexico, and 62 passengers and more than 1,000 crewmembers continued on the voyage to Hawaii. On February 25, a man, who had been on the Mexico trip, died of the coronavirus. At this point, some members of the ship’s crew had already shown COVID-19 related symptoms. The Grand Princess turned back to the US mainland and skipped a planned stop in Mexico. On 5 March, passengers were quarantined in their cabins. However, COVID-19 had already been spreading on the ship, and 103 would ultimately test positive, with two passengers and one crew member now dead. On 9 March, passengers were moved into quarantine ashore.

The claims allege that the cruise ship operators were negligent in failing to inform Hawaii passengers that several passengers on the Mexico trip had shown COVID-19 related symptoms, failing to disinfect the ship thoroughly after the Mexico trip, and failing to screen passengers and crew before departing for Hawaii. In this respect, the claims mention that on the Grand Princess, the ship’s crew only asked passengers boarding the ship to ‘fill out a piece of paper confirming they were not sick’. The claims further allege that the cruise ship operators were negligent during the cruise in failing to inform passengers about the former passenger’s death and failing to quarantine passengers in their cabins on February 25.

Like in all personal injury claims, the liability of cruise ship operators for a passenger’s illness, injury or death will turn upon two legal questions. The first is whether the company was in any way negligent. In this respect, the claimants will have to prove that the ship operators did not exercise reasonable skill and care to ensure the health and safety of their passengers. On the facts, this may be possible, especially if it is proven that the company knew that several passengers on the Mexico trip had contracted COVID-19 and failed to disinfect the ship or at least to warn passengers boarding the ship in San Francisco.

The second is whether the company’s negligence caused the passenger’s illness. That is more problematic because it is hard to trace the exact moment when a person is infected with COVID-19. According to the official guidance of the WHO, the incubation period of COVID-19 (i.e. the time between catching the virus and beginning to have symptoms of the disease) ranges from 1 to 14 days, most commonly around 5 days. It is, thus, possible that some passengers had already been infected with COVID-19 when boarding the Grand Princess on February 21. Nevertheless, an argument may revolve around the fact that the company allowed 1,000 potentially infected people to share confined space with approximately 2,000 potentially uninfected passengers.

Assuming that both these questions will be answered in favour of the claimants, then a further question will arise as to whether the passengers of Grand Princess were in any way negligent in contracting COVID-19. If so, the company will be able to benefit from the defence of contributory negligence.

It is, thus, interesting now to see whether these claims will actually reach the courts or whether they will be settled in private.