Source: https://iclg.com/practice-areas/shipping-law/shipping-2017/germany
Timestamp: 2017-09-24 02:59:22
Document Index: 17584699

Matched Legal Cases: ['art. 40', 'art. 12', 'art. 13', 'art. 6', 'art. 6', 'art. 917']

Shipping Law 2017 | Laws and Regulations | Germany | ICLG
Home Practice area Shipping Law Germany
The German Commercial Code (Handelsgesetzbuch, “HGB”) incorporated the Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels of 23 September 1910 (“Collision Convention”) into sec. 570 ff. German courts and arbitration tribunals apply these provisions based on European law (EC Regulation 864/2007, “Rome II”) or German law (art. 40 Introductory Act to the German Civil Code), inter alia, where the collision took place in German waters or – because of art. 12 Collision Convention – where all ships involved fly flags of contracting states.
The practice of German courts in terms of the burden of proof in respect of collision cases is, in fact, a deviation from the Collision Convention. Whereas the latter abolished presumptions of fault, German courts tend to use rules of experience and prima facie evidence for shifting the burden of proof. This often results in a more appropriate and modern proceeding and often a fairer result; however, it is a clear difference from any jurisdiction that applies the Collision Convention more literally.
Pollution in German territorial waters may give rise to criminal charges (sec. 324 Criminal Code, Penalties as per Water Acts of the coastal federal states) and far-reaching public law sanctions for the prevention of threats of pollution and remedying existing pollution as per the Federal Water Management Act (Wasserhaushaltsgesetz) and the Environmental Damage Act (Umweltschadensgesetz) in adoption of EC Directive 35/2004. These general provisions are broken down in respect of specific types of pollution.
The International Convention for the Control and Management of Ships’ Ballast Water and Sediments, 2004, has not yet come into effect internationally; Germany has ratified this convention, and has already implemented the first steps for its application.
The German law on salvage operations and salvage contracts (sec. 574 ff. HGB) is based on the International Convention on Salvage of 29 April 1989 (“Salvage Convention”). However, its respective provisions will only become effective where there is no contract in place covering the respective issues. In light of the commonly used Lloyd’s Open Form, the only issue that would usually end up in litigation in Germany is that of remuneration. Where an amount is not agreed upon, a court or tribunal may determine an appropriate level of remuneration. It does so by reference to a catalogue of criteria which is adopted from art. 13 of the Salvage Convention.
General average proceedings under German law are governed by sec. 588 ff. HGB. These provisions are only effective where the parties have not agreed otherwise, for instance by reference to the York-Antwerp Rules. Where German law does apply, it provides basic guidance on the procedure including distribution, claims for damages against general average parties having culpably caused the respective common danger, and remuneration claims including maritime liens.
Where there is a wreck or other marine obstacle that poses a danger to others, to waterways and swift travel, or to the environment, the relevant German authorities (in particular, Havariekommando and Wasser- und Schifffahrtsamt) may either order the removal to be effected by owners/demise charterers or the authorities may facilitate removal themselves.
The limitation regime of the Convention on Limitation of Liability for Maritime Claims (“LLMC”), as well as the Protocol of 1996, are directly applicable in Germany (sec. 611 HGB). As a result, the amendment to the LLMC, which was concluded by a tacit acceptance procedure in 2012, came into effect in Germany on 8 June 2015.
Where the relevant damages from a marine incident are attributed to either cargo damages or passenger injury, the respective limitation regimes remain applicable and may result in much lower limitation amounts (this is discussed in more detail in sections 2 and 3 below); this depends on a case-by-case assessment.
The limitation funds as per the LLMC regime may be constituted by way of cash deposits or by way of other securities deemed sufficient by the relevant court. The courts usually allow a bank guarantee or a Protection and Indemnity (“P&I”) Club letter of undertaking as sufficient security.
In light of the costs of wreck removal, sec. 612 HGB provides that a third fund (besides the two pursuant to art. 6 LLMC) may be established. As a matter of fact, it is still not entirely clear when the costs of wreck removal must be attributed to sec. 612 HGB as against being covered by the limitation amount under art. 6 para. 1 b) LLMC. There is still no case law in this respect and, as such, a “worst-case scenario” would be an obligation to establish three funds so as to comprehensively cover all liabilities.
Marine Casualties are handled and resolved by a number of Water-way Offices (Wasserstraßen-/Schifffahrtsämter). In the case of especially severe and complex marine casualties, a central command office will take over (Havariekommando). The respective authorities have a very wide discretion for handling and resolving any danger to others, to waterways and swift travel, and to the environment. The relevant authorities may either render binding orders to owners or charterers, employ vessels and personnel of their own, or instruct (and even order) private companies to cooperate and assist.
Following major casualties, it is common for police offices and public prosecutors’ offices to commence investigations so as to ascertain possible criminal charges. Further, the Federal Bureau of Maritime Casualty Investigation (Bundesstelle für Seeunfalluntersuchung, “BSU”) may commence independent and comprehensive investigations in case of any casualty within German waters or where a German vessel has been involved.
Cargo claims may be brought under a freight contract (including voyage charter parties) or under Bs/L. The carrier’s liability for loss of or damages to cargo generally requires that damage occurred during the time from accepting cargo for transport until its delivery. As a matter of course, the carrier may discharge itself from liability where the cause of damage may be attributed to the shipper (for instance, packing errors) or where a diligent carrier had no possibility to realise a danger or to avoid the damage (for instance, hidden unseaworthiness). Since descriptions in Bs/L as to the condition and quantity of cargo (and the absence of the same in ‘clean’ Bs/L) are prima facie evidence and may, under certain conditions, become indisputable, the defence against cargo claims often comes back to questions of negligence of the carrier.
German maritime law underwent a complete overhaul which took effect on 25 April 2013 and led to a number of significant amendments. The widely-known liability exceptions for fire and nautical errors under German law have now been abolished. However, a carrier may still rely on such defences if they are set out in general terms and conditions that have formed part of the relevant freight contract or B/L. However, apart from these defences, any amendments to the HVR/HR modelled regimes for the limitation of liabilities require individual contracts; as a result, there is not much space for general terms and conditions in this respect. Further, general terms and conditions may not come into effect in Bs/L where they are merely referred to and not substantively incorporated; the GenCon documents should not, therefore, be used under German law.
The legislation as regards ship arrest under German law was amended and updated in 2013. As there is not yet a substantial body of case law under the new legislation, it is currently unclear whether the creditor is required to provide security before the vessel can be arrested. However, as the new legislation for ship arrest was modelled on the Dutch legislation for ship arrest, a requirement for security would go against the legislative intention.
Any creditor of a shipowner can arrest the assets, including the vessel, of the shipowner under the prerequisites of arts. 916 and 917 ZPO. To arrest a vessel, the creditor has to establish a claim for payment against the shipowner. A bunker supplier has to consider two aspects when intending to arrest a vessel: (1) is his claim really directed against the shipowner (and not, as usual under a time charter, against the time charterer); and (2) does the physical bunker supplier who has no contractual relation to the shipowner really have a claim against the shipowner? Whereas the contractual supplier will not, regularly, have too much difficulty in establishing a claim against the shipowner, the physical bunker supplier will have.
The aforementioned art. 917 ZPO is also applicable for arrests of bunkers, cargo, etc. The only distinction is that if an arrest is not against a vessel, the applicant will have to establish that there is a concern that without an arrest order being issued, the enforcement of the judgment would be frustrated or be significantly more difficult. However, mere financial difficulties or imminent insolvency of the debtor is not sufficient; in such cases, a court would be likely to grant an arrest order where there is evidence that the debtor is hiding funds or secretly shifting assets abroad, or if there is evidence of a criminal act of the shipowner.
The German Code of Civil Procedure requires security to be provided by transferring cash into the account of the Court’s Cashier. This procedure is time-consuming and complicated. This is why courts, upon the corresponding application, allow the parties to provide security by a guarantee of a first-class European bank. A letter of undertaking issued by a P&I Club may also be acceptable, but this requires the agreement of both parties.
There are no disclosure proceedings. A party may be ordered to allow access to vessels, premises or items, but only for answering specific factual questions of the court. Further, a court may order a party to disclose a document where the party in possession of the same has already referred to it.
Upon the filing of the statement of claim, the claimant must deposit an advance of the court costs, based on the value of the claim. The court then serves the statement of claim on the defendant, and will request the defendant to file his/her statement of defence by a certain date (usually three to four weeks). In contrast to common law countries, German procedural law does not allow any disclosure or pre-trial discovery (for more detail, see section 5). The German legal system compensates any detriment from a lack of disclosure and pre-trial discovery by extensive rules of evidence, which often shifts the burden of proof onto the defendant.
German judges usually explain their views and tell the parties exactly which points are considered irrelevant and which relevant points may need further elaboration, often in the first hearing. In this way, the dispute is narrowed down to possibly only one or two specific issues which are actually decisive. This makes procedures more time-efficient and less expensive.
ii) Maritime arbitrations are usually conducted under the rules of the German Maritime Arbitration Association (“GMAA”) – see www.gmaa.de. The rules are flexible; parties frequently agree on GMAA rules and choose English law as the substantive law and/or English as the language of the proceedings. German arbitrators, being trained as German lawyers, tend to adopt the procedural principles explained above under i); thus, the explanations above apply mutatis mutandis.
In contrast to the concept which is followed in common law countries, German courts and arbitration panels do not apply a purely adversarial system but a mixture of adversarial, conciliatory, mediative and inquisitorial elements. In particular, the judge and the arbitrator take a much more active role in guiding the parties by actually determining factual issues with the expectation to find out “what really happened”. Judges and arbitrators are more inclined to do justice beyond securing a fair trial. Consequently, judges and arbitrators play a very active role: they decide which witnesses will be heard; they will appoint experts to investigate facts; and they openly discuss with the parties the legal issues at stake. Judges and arbitrators are forced by law to help the parties reach an amicable settlement at any stage of the proceedings; they even make specific suggestions for an amicable settlement without jeopardising their neutrality. The advantage of this system is clear: without having to start a separate ADR procedure, a large number of cases are amicably settled with the assistance of the judge or the arbitrators. This reduces time and costs.
European Enforcement Orders according to EU Regulation No. 805/2004 are directly enforceable in Germany but are rarely used in commercial disputes. Relevant for the enforcement of judgments are EU Regulation No. 44/2001 (“EuGVO”) covering more than 27 states, and the Lugano Convention. Besides, Germany has entered into bilateral treaties, for instance with Israel, the Netherlands and Tunisia.
With regard to procedural issues, there is a remarkable trend within the international shipping industry to agree on arbitration in Germany. The flexible, swift and cost-effective procedures under the rules of the German Maritime Arbitration Association (“GMAA”), tried and tested in hundreds of cases, have resulted in a number of German and non-German shipping companies choosing Hamburg or Bremen as a neutral place for their dispute resolution.