Source: https://iclg.com/practice-areas/shipping-laws-and-regulations/germany
Timestamp: 2019-04-21 12:45:32+00:00

Document:
Germany is a party to the Collision Convention 1910 (Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels of 23 September 1910) and partly incorporated its provisions in sec. 570 to 573 of the German Commercial Code (Handelsgesetzbuch – HGB). German courts will apply German law if (i) the collision took place in German territorial waters or (ii) the Parties made a choice of law after the collision (art. 40 of the Introductory Act of the German Civil Code (EGBGB)), or (iii) will apply the Collision Convention directly if all ships involved fly flags of contracting states (art. 12 of the Collision Convention).
Sec. 570 to 573 HGB are based on the Collision Convention 1910, however, Germany did not incorporate the convention into the HGB. German courts tend to apply a prima facie evidence or rules of experience (for instance, if an anchored vessel breaks loose, there is prima facie evidence that it was insufficiently secured) that comes close to a presumption of fault which should be excluded by art. 6 para 2 of the Collision Convention 1910.
Germany is a party to the relevant international conventions such as MARPOL, the Bunker Oil Convention (International Convention on Civil Liability for Bunker Oil Pollution Damage), the CLC (Convention on Civil Liability for Oil Pollution Damage) and the Ballast Water Convention (International Convention for the Control and Management of Ship’s Ballast Water and Sediments) and the relevant provisions of MARPOL. Under the Bunker Oil Convention, it is obligatory to have the Blue Card on board.
Violation of environmental provisions may result in civil, criminal and administrative liability. Criminal liability is regulated by sec. 324 Criminal Code and imposes up to five years’ imprisonment for intentional pollution and up to three years for negligent pollution of water. Under civil and administrative law, the clean-up costs can be claimed from the shipowner and/or master.
For claims under the Bunker Oil Convention, sec. 611 HGB clarifies that limitation of liability under the Limitation Convention (see below) applies.
Germany incorporated the Salvage Convention (International Convention on Salvage, 1989) into sec. 574 et seq. HGB. These provisions are of dispositive nature and only apply when no agreement is in place. Given that salvage is usually agreed on the basis of Lloyds Open Form, which provides for arbitration in London, there are but very few older court decisions on salvage in Germany. A dispute about salvage will usually concern the remuneration. German law incorporated the criteria of art. 13 Salvage Convention into sec. 577 HGB, so a German court seized with such a dispute will consider criteria such as the salved value of the vessel and other property, skill and effort of the salvors, measure of success obtained by the salvor, etc. as laid down in art. 13 Salvage Convention. The Special Compensation for preventing environmental damage, as provided for in art. 14 Salvage Convention, has been incorporated into sec. 578 HGB, so a salvor that prevents environmental damage is entitled to compensation even if the salvage fails.
In sec. 588 et seq. HGB, German law contains basic rules regarding General Average (GA) which would apply if the York-Antwerp Rules (YAR) are not agreed upon. GA adjustment is done by specially appointed average adjusters. The GA statement can be confirmed by the local court at the place the GA statement was drawn and – with the confirmation of the court – becomes an enforceable title against all participants of the GA proceedings. Participants to the GA who do not agree with the GA statement may file an objection, which is then decided by the competent court at the place the GA statement was made. Once all objections are decided by the court, the GA statement is confirmed and may be enforced against all participants to the GA.
Germany is a party to the Nairobi Convention (Nairobi International Convention on the Removal of Wrecks), but did not opt for the choice offered by art. 3 para 2 to extend the application of the Nairobi Convention to territorial waters. So German courts will apply the Nairobi Convention to wrecks in the exclusive economic zone, and national German law to wrecks within territorial waters.
In both cases, the authorities have the right to order the removal of the wreck if it poses a danger to shipping or the environment. Authorities have the right to demand removal of the wreck or to effect the removal themselves. If the authorities choose to organise the removal, they may do so by instructing private salvage firms and they may demand a security for the expected costs from the owner.
Liability for wreck removal may be limited according to sec. 612 HGB by establishing a separate limitation fund.
Germany is a party to the 1996 Protocol of the Limitation Convention (Convention on Limitation of Liability for Maritime Claims 1976), so the tacit amendment from 2012 came into effect in Germany on 8 June 2015, i.e. the limitation amounts have been increased to a minimum of 1.51/3.02 million SDR. The Limitation Convention has been incorporated into sec. 611 et seq. HGB by reference, that is, all amendments to the 1996 protocol come into effect without any transition necessary. As stated above, claims under the Bunker Convention are subject to the limitation fund created under art. 6 of the Limitation Convention, whereas claims for wreck removal are subject to a separate limitation fund.
The limitation fund can be established by way of cash deposit, bank guarantee or guarantee by a recognised insurer. A letter of undertaking from a major P&I club is usually acceptable.
Limitation may also be invoked as a defence in court proceedings without establishing a limitation fund (cf. art. 10 of the Limitation Convention). If limitation is invoked as a defence, the claimant who has a claim exceeding the limitation amount may only obtain a judgment not exceeding that amount. If the defendant can prove other claims, the judgment will be limited to a quota of the limitation amount. If the defendant is unable to prove other claims, he may apply for a judgment which may only be enforced against the limitation fund, in which case the defendant will have to establish the fund.
There are two different aspects that need to be distinguished: (i) the prevention of further damage: In this respect (especially if it comes to pollution/environmental protection), the authorities have vast powers of ordering certain (even very costly) measures to prevent further damage to the environment; and (ii) investigations: There are numerous authorities who investigate casualties; in the first place, the Federal Bureau of Maritime Casualty Investigation (Bundesstelle für Seeunfalluntersuchungen) which investigates casualties with the aim to prevent similar losses in the future. In most major casualties, there is at least the possibility of criminal or administrative offences (such as pollution, damage to property, endangering navigation, etc.), so the authorities can use the powers of the criminal investigation bodies, which allows them to interrogate all witnesses and seize all required documents. That way, the file of the public prosecutor can become a very valuable tool in the hands of opponents in civil proceedings. Therefore, it is advisable to check carefully which authority, and under which set of rules, seizes certain documents and – if possible – to file a complaint against that and/or at least require that opposing parties (such as the other party to a collision) are refused access to the file.
Germany has the rather peculiar situation that it only ratified the Hague Rules and not the Hague-Visby Rules, however, the commercial code implemented the Hague-Visby Rules with certain amendments (for instance, neither error in navigation, nor fire on board is a defence against carrier’s liability, unless agreed upon in the contract of carriage). In consequence, in most cases the Hague-Visby Rules will apply, unless the B/L was issued in a country that is only a contracting state of the Hague Rules, in which case, the Hague Rules will apply. Germany has not ratified the Rotterdam Rules and has so far no intention to ratify them.
Germany follows the generally accepted principles of the Hague-Visby Rules, that is, the carrier is liable for losses that occur between loading and unloading of the cargo. The carrier is not liable if the loss is attributable to errors of the shipper (such as packaging or misdeclaration). Since the latest reform of maritime law in 2013, errors in navigation and fire on board are no longer defences of the carrier, unless they are explicitly agreed upon in the contract of carriage or the B/L.
Another particularity of German law is the liability of the actual carrier (sec. 509 HGB): If the contract was subcontracted (which is always the case if the B/L was issued by a NVOCC), under German law there is a direct claim against the actual carrier. There is still a lot of dispute about the question of whether this provision applies in case the actual carrier is not a German entity. It is argued that this provision applies for all contracts where the place of delivery is in Germany, as this is the place where the damage occurs. In that case, the consignee could claim directly against the actual carrier, although he has no contractual relation with that party.
Limitation of the carrier is always limited to 2 SDR/KG or 666.67 SDR per unit. There are a few decisions in which German courts allowed for a breach of this limitation in cases of gross negligence. The particularity here is that according to art. IV 5 (e) of the Hague-Visby Rules, only intent or recklessness of the carrier (and not of his employees) will deprive the carrier of the possibility to limit liability. Under German law, there is a concept of organisational errors, which allows certain errors to be attributed to the top management of the carrier and thus provides for means to brake the limitation of the Hague-Visby Rules.
The shipper is liable towards the carrier for damages resulting from misdeclaration of cargo, especially with regard to weight and hazardous materials. In addition, the shipper is liable for providing necessary documentation for customs clearing. If the shipper fails to give correct information, he is liable for damages.
Germany is a party to the Athens Convention (Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 as amended by the Protocol of 2002), and EU Regulation 392/2009 (Athens Regulation) also applies. Under the Athens Convention, there is strict liability (with a limited number of exonerations) for shipping incidents for losses caused by personal injury or loss of life up to 250,000 SDR, and unlimited liability for losses resulting from personal injury, loss of life or loss of cabin luggage with a presumption of fault on the carrier. A shipping incident is defined by the convention as “shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship”. The carrier is also liable for damages resulting from death or personal injury not caused by a shipping incident if the passenger proves fault of the carrier.
The typical measure to obtain security for a maritime claim against a shipowner would be the arrest of the vessel. In 2013, Germany amended the rules for ship arrest in order to render them more “arrest-friendly”. Thus, sec. 917 of the civil procedure code (ZPO) provides that an arrest in a sea-going vessel is always possible if the claimant can establish a claim against the owner, there is no need to prove urgency or the risk that the claim would otherwise be endangered.
If the arrest application is prepared carefully, the court should grant it within a few hours. There is usually no requirement to pose security before the arrest is granted; however, it is at the discretion of the court to order the provision of security. The arrest order is usually rendered without an oral hearing and without informing the owner of the vessel. The arrest is executed by the bailiff who takes over possession of the vessel. The bailiff will demand an advance of the costs incurred by this. If the arrested ship has cargo on board, the bailiff may arrange for the discharge.
It should be noted that under German law, the arresting creditor is liable for all costs incurred during the arrest (berthing, insurance, minimum crew) and the bailiff, who will have to arrange for it, will demand regular advances for these costs. The owner can file an appeal against the arrest order and if he is successful and the arrest is lifted, the arresting creditor is liable for damages, regardless of fault (sec. 945 ZPO).
In general yes, however, it would be necessary to establish a claim against the owner of the vessel. Since bunker is usually ordered by the time-charterer, this requirement is only fulfilled if the bunker was ordered by the owner. Bunker supplies do not create a maritime lien under German law. It is, however, possible to arrest the bunker itself if there is a retention of title.
The carrier has a lien over cargo belonging to the shipper or a third party that agreed with the transport of the goods (sec. 495 HGB) for all claims resulting from the contract of carriage. For goods belonging to the shipper, the lien extends to claims resulting from other contracts as well. The lien may be exercised until 10 days after delivery, if the goods are still in the possession of the consignee.
For a limited number of claims secured by maritime liens (such as crew claims for payment, claims resulting from collisions, port dues, etc.) a creditor may arrest the vessel regardless of the question whether or not the owner is the debtor of the claim.
The first choice of German law in terms of security is a cash deposit with the court or the guarantee of a bank registered in the EU. However, the court has discretion to allow other forms of security, so a club letter of undertaking may be acceptable (and is widely accepted). In any case, the parties are free to agree on the form of security, so if both parties agree, a P&I letter of undertaking has to be accepted by the court.
It is advisable to take statements from master, crew and everybody else who was involved and is accessible right after any major incident. Although witness statements are not admissible as evidence by themselves under German law, any witness summoned by the court may rely on written documents, so statements taken properly, at a time close to the incident, can be very valuable at a later stage. In addition, party-appointed experts who prepare expert reports and secure evidence can be a very valuable source of evidence in later proceedings. These experts can be heard as witnesses and, given their expertise in the field and the fact that they usually take pictures and copies of documents at the time of the incidents, are a very valuable source of information for the court. Party-appointed experts will not substitute an expert appointed by the court, but considering that court proceedings are usually started a long time after the incident, any court-appointed expert will have to rely on the facts established by the party-appointed experts.
Apart from these – voluntary – measures, German law has neither pre-trial discovery nor disclosure proceedings as may be known from Anglo-Saxon legal systems. The only measure that comes close to pre-trial investigation is a procedure known as independent taking of evidence (selbständiges Beweisverfahren). It is possible to ask the court to appoint an independent expert to preserve evidence that otherwise might be lost. In these proceedings, it is possible to appoint an independent expert even prior to starting legal proceedings. Both parties to the (later) dispute are allowed to participate in the taking of evidence and therefore the findings of the independent, court-appointed expert may be used in later proceedings.
There are no general disclosure obligations in court proceedings. Each party has to present the evidence it intends to rely on. In limited cases, for instance if a party refers to a certain document, or if a document has been prepared in the joint interest of both parties, the court may order a party to present certain documents. When it comes to taking factual evidence, a party may be ordered to grant access to premises or a vessel to allow a court-appointed expert or the court itself to get its own impression of the circumstances.
(i) A claim in the national courts will usually start at the District Court (Landgericht). There are specialised commercial chambers (Kammern für Handelssachen), which only deal with commercial disputes, but there is no specialised body for maritime or admiralty law. The commercial chambers are composed of one professional judge and two laymen who must have a background as director (or senior manager) of a commercial firm.
The proceedings are started with the filing of the statement of claim which must be accompanied (or followed suite) by the payment of an advance of the court fees. Court fees are calculated according to a statutory scale in (decreasing) relation to the amount in dispute. For example, a claim of EUR 100,000 will require an advance payment of EUR 3,000 and a claim of EUR 1,000,000 will require an advance payment of EUR 16,008, so there is no percentage of the claim but a decreasing scale.
Upon payment of the advance of court fees, the court (and not the claimant) will serve the statement of claim on the defendant. At the same time, the court will usually impose a delay to file a reply to the claim; the delay (which may be extended) will usually be between two and six weeks. As a matter of principle, each party has to prove the facts it relies on, and has to offer evidence for these facts. However, if factual circumstances remain undisputed by the other party (or if the court deems that they are not substantially disputed), the court will abstain from taking of evidence. German judges usually take a pro-active stand towards the proceedings and will use the first hearing to give preliminary views of the case and direct the parties with regard to the facts that will require the taking of evidence. In addition, German judges are called upon to initiate and propose settlement in all stages of the proceedings, so it is not uncommon that a judge will even propose a settlement, if the parties declare that they are generally open to such a proposal. If the parties cannot agree on that proposal, the judge will not be considered as biased.
The duration of court proceedings differs considerably. A simple matter (which is rare in shipping) may take around six months from the filing of the claim until the judgment. A more complicated matter, which requires expert evidence and the hearing of witnesses, may take up to two or three years in the first instance.
After the first instance, there is always the right to appeal to the Court of Appeal. In the appeal instance, the facts established by the first instance remain unchanged, unless the Court of Appeal considers that the District Court overlooked relevant facts or failed to take evidence on relevant issues. In that case, even the Court of Appeal can take evidence. The duration of appellate proceedings depends very much on the circumstances and would usually vary from six months if the matter is simple and no new evidence is taken, to one or two (in rare cases, more) years if the Court of Appeal has to hear witnesses or appoint experts.
If the matter is of principal relevance, the Court of Appeal may grant leave to file a cassation appeal to the German Supreme Court (Bundesgerichtshof – BGH), or, if the Court of Appeal rejected that possibility, the underlying party can appeal directly to the BGH with the application to allow the cassation appeal. Only 10–15% of all cases are appealed to BGH, but if they are decided at that level, that adds another one to two years to the proceedings, and the decision might well be that the matter is referred back to the Court of Appeal for reconsideration.
It should be noted as well that under German law, the underlying party has to bear the costs of the proceedings, that is, the court fees and the lawyer’s fees of his opponent. For the purpose of this rule, lawyer’s fees are capped by a statutory scale, so usually not the full hourly fees are recoverable.
(ii) Arbitral proceedings in maritime cases will usually be considered under the rules of the German Maritime Arbitration Association (GMAA) or by an ad hoc tribunal. GMAA rules are flexible and can be amended by the parties to reflect their special requirements. By default, a GMAA tribunal consists of only two arbitrators, appointed by the parties. If these two cannot agree on a matter of procedure or law, they appoint an umpire. However, the majority of cases are decided by two arbitrators only. GMAA arbitration is not limited to considering cases of German law; many GMAA arbitrators are qualified as solicitors or barristers and consider cases under English law as well. The language of arbitration can be chosen by the parties; it is common to have arbitration proceedings in English under GMAA rules.
(iii) Mediation, expert adjudication and conciliation are provided for in the rules of GMAA and other arbitral institutions such as DIS (German Institute for Arbitration). However, in practice, they are rarely used.
In maritime cases, German courts and arbitration institutions compete with English courts and arbitration. The advantage of German courts and arbitration in this respect is certainly that a party receives a decision with the same quality as one might expect from an English court or tribunal, but the proceedings are less cumbersome and usually less expensive. The active approach of German judges and arbitrators helps to identify the core issues of the dispute and avoids lengthy submissions and several days of hearings on minor aspects that are irrelevant for the decision of the case. In addition, the judges and arbitrators will encourage settlements which help to reach a final solution. The downside of German courts may be the duration; German judges are very thorough and sometimes lack a proper commercial background that would allow them to render a more commercial and quicker decision. This last point can, however, be compensated by choosing arbitration.
1. Judgments from EU countries are recognised without any formality and enforced if they are accompanied by a certificate according to art. 53 of EU Regulation 1215/2012. The certificate according to art. 53 summarises in standardised form the content of the judgment, the date service was made, interests and their amount, and the date on which the judgment became enforceable. EU judgments do not require a confirmation by a German court and can be enforced in the same way as German judgment.
2. Judgments from countries with which Germany has a treaty about recognition and enforcement: Germany has bilateral treaties with many countries in the world about the enforcement of court decisions. In that case, court decisions need to be presented to a German court, which checks only formal requirements and may only consider a limited number of defences that constitute a violation of public order (such as a violation of the right to a fair trial) and, in the absence of any viable defence, issues a so-called “Exequatur” which renders the foreign judgment enforceable in Germany.
3. Judgments from third countries are recognised and enforced on the basis of reciprocity; that is, if the foreign country recognises and enforces German judgments, Germany will recognise and enforce judgments from these countries as well. A claimant wishing to enforce a foreign judgment in this category will have to present an original or certified copy of the judgment and in the proceedings it might become necessary to prove that reciprocity exists. However, for many countries there is an established praxis which can be looked up in the relevant commentaries, so no special evidence is required.
4. In the case that no reciprocity exists (this is the case, for example, for Russia), the foreign judgment will still be considered documentary evidence; that is, it is necessary to start proceeding on the merits again; however, the foreign judgment can be used as prima facie evidence of the existence of the claim and the defendant will have to argue that the (first) judgment was incorrect.
Germany is a Member State of the New York Convention 1958 (UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards), so in general, foreign arbitral awards are recognised and enforced in Germany without much problem (unless one of the grounds for refusal stated in the New York Convention is established). Applications to recognise and declare enforceable a foreign arbitral award have to be filed at the Higher District Courts (which are usually the second instance), which allows for a concentration of these decisions at a higher level with highly qualified judges. The court may order preliminary enforcement of the award while the matter of recognition and enforcement is pending. In general, Germany can be considered an arbitration-friendly country and there are but a few cases (usually related to a violation of fair trial) in which the recognition of a foreign arbitral award is refused.
Given the dominance of English law in the maritime world, there is a tendency for disputes to be shifted to London. The GMAA, with very flexible rules and a competitive cost structure, works against that by providing arbitration of English law disputes with German procedural law, which offers an advantage over the rather cumbersome proceedings in London.

References: art. 6
 art. 13
 art. 13
 art. 14
 art. 3
 art. 6
 art. 10
 art. 53
 art. 53