As a result of the vote to leave the EU, the UK will cease to be a member of the EU probably around November 2018 after the new prime minister has invoked article 50 and Parliament has repealed the European Communities Act 1972. How will this affect shipping law?
Substantively, not a great deal. English dry shipping is based on common law, and a few key statutes, such as COGSA 1992, and the implementation of international carriage conventions through domestic legislation – such as COGSA 1971 with the Hague-Visby Rules. Nothing European here, so no change.
With wet shipping, the CLC and the Fund are part of our national law through domestic law implementing international conventions. Similarly, the Wreck Removal Convention, the Salvage Convention, and the 1976 Limitation Convention. Again, nothing European here, so plus ca change.
However, procedurally, we are very much affected by European legislation – and this is something we shall return to in a later post. As a starting point, bear in mind the two sources of EU legislation.
- Directives which are implemented by and Act of Parliament. On our leaving the EU it will be up to Parliament to decide whether to repeal or amend the implementing legislation.
- Directives which are implemented as statutory instruments pursuant to s.2 of the European Communities Act 1972. These will cease to be a part of national law once the European Communities Act 1972 has been repealed. If we want to keep them we need to enact them as part of our domestic law.
- Regulations which have direct effect. These will cease to be a part of national law once the European Communities Act 1972 has been repealed. If we want to keep Regulations we need to enact them as part of our domestic law.
Two recent decisions of foreign courts as to the effect of the 1976 LLMC. The first is the decision of the Danish Maritime and Commercial Court in the MOL Comfort that the constitution of a limitation fund in Japan, another state party to the 1976 LLMC, does not bar proceedings before it in relation to the loss resulting in the constitution of the fund. The legal effect of the constitution of the fund in Japan would not come into force until enforcement of the judgment is sought. In the UK Schedule 7, paragraph 8(3) of the Merchant Shipping Act 1995 gives the court power to “stay any proceedings relating to any claim arising out of that occurrence which are pending against the person by whom the fund has been constituted.”
The second is the decision in The Yuriy Arshenevskiy of the Indian High Court (LMLN 946 – 04 March 2016) that it was not a pre-condition for maintainability of a suit for constitution of a limitation fund that there should have been a prior proceeding in the Indian court against the vessel or her owner. This is the position previously reached in the English Court of Appeal in The Western Regent  2 Lloyd’s Rep 359. The court also decided that: section 352 of the Merchant Shipping Act 1958 as amended by the Amendment Act 63 of 2002 meant that the shipowner had an absolute right to limit, and; the expression “as amended from time to time” used in the definition of the “Convention” in section 352B of the Merchant Shipping Act 1958 captured all future amendments to the 1976 Convention, and accordingly the 1996 Protocols applied, although they came into effect after the 2002 Act came into force. The court also held that the shipowners were not estopped from establishing a limitation fund because they had made an earlier application to establish a fund in China which had been withdrawn.