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UpdateWikborg Rein’s Shipping Offshore:

� WIKBORG REIN JANUARY �007

3 Editorial4 How will the market respond to the EU’s abolishment of liner conferences? 6 The new 2007 version of the Norwegian Marine Insurance Plan8 Norwegian net closes on substandard ships10 Assignment of contractual rights 12 Enforcing foreign judgements in Norway14 The importance of the “carrier” being entitled to global limitation 16 Liability regimes in offshore contracts – contractors be aware!17 Tax incentives for establishing business within the EU18 ITF actions in Norway20 Stricter rules for control and management of ballast water22 Emissions trading – the future for shipping?24 Moves towards greater transparency in the shipping industry25 Associated ship arrests in the South African jurisdiction26 New limitation limits for wreck removal, passenger injuries and damage caused by oil platforms28 The Norwegian system for protecting mortgagee interest30 WR news

PUBLISHER: Wikborg Rein/January �007EDITORS: Gaute Gjelsten and Herman SteenCOVER PHOTO: © O. Kobayashi (http://shipphoto.exblog.jp)

LAYOUT & DESIGN: Lise Røed PRODUCTION: SignaturNUMBER PRINTED: �000

WIKBORG REIN JANUARY �007 �

The activity of our Shipping Offshore Group has never been higher than in �006 and is reflecting the level of activity in the shipping and offshore industry in general. We are today counting 54 lawyers in the group and we are more than ever working on the international arena recognised as an “international law firm”. Our range of services is wide and requires specialists within all areas. At one end of the range, we have the traditional maritime law work related to collisions and other accidents at sea with shipboard investigations all over the world which are often followed by heavy litigation. At the extreme other end we have the more commercial aspects of the shipping and offshore industry with high profiled deals with advice on structuring of acquisition and takeovers, financing and stock exchange listing etc. In between these two ends there is a wide area of “ordinary course of business” which involves our clients’ daily challenges. This middle area constitutes the core of our business and may involve negotiations of newbuilding contracts, joint ventures, charterparties, offshore contracts, dispute handling and litigation, and many other matters.

This wide range is necessary to get the full picture and understanding of the business of our clients, but the legal knowledge must be combined with practical experience in order to be of any added value to the client. The expertise within our group has been sustained by the shipping lawyers of the firm over decades and passed on to the lawyers in the group today. We have not only developed our shipping group to take advantage of todays marked, but over time been able to recruit and develop the best talents with interest in shipping and offshore.

One great achievement during �006 that I would like to mention is Øystein Meland’s book on Shipbuilding Contracts. The timing of this book is perfect as we have been involved in more than 50 shipbuilding contracts over the past � years. His in depth knowledge and experience will prove useful if any of these contracts develop into legal disputes.

In the first half of �007 we will arrange two seminars that we hope will interest our clients. The first seminar will be a half day seminar which will discuss legal and practical challenges with shipbuilding contracts in China. The seminar will be held together with our Chinese lawyers in Shanghai and the English law firm Curtis Davis Garrard. The second seminar will focus on how competition law affects the businesses of our shipping and offshore clients, and will give practical guidelines in order to comply with new laws and regulations.

So, what will �007 bring? There are certainly many possible scenarios and predictions. Will the negative predictions related to the ability of yards and oil service suppliers to deliver in time and on budget be correct? Will consolidation continue in the shipping sector, or between rig companies? Will the Norwegian shipping and offshore companies continue to move their assets out of Norway to Singapore, Cyprus or other more favourable tax regimes, and how will it affect the Norwegian management? Nothing is as dynamic as the shipping and offshore industry and there is no reason to believe that the high level of activity will cease. We are prepared and confident that our Shipping Offshore Group possesses the people, the knowledge and the experience to handle the challenges. I have taken over the leadership of the group from Trond Eilertsen, and his achievements are not easy to match. My best plan is accordingly to build on our strength, and that means business as usual for �007.

I wish all our clients the best for �007.

Finn BjørnstadLeader of Wikborg Rein’sShipping Offshore Group

NAVIGATING THE CHALLENGES IN 2007

The EU Competitiveness Council decided on 25 September 2006 to repeal Regulation 4056/86 (the “Block Exemption”) after a two-year transition period. The repeal of the Block Exemption puts an end to the possibility for liner carriers to meet in conferences, fix prices and regulate capacities on routes to and from the EU.

The exemption from European competition rules was granted in 1986 on the assumption that it was necessary to ensure reliable transport services and stable freight rates. Since then, the market situation in the maritime sector has evolved considerably. We have seen an increase in the number of individual service contracts, the proliferation of operational co-operation agreements between shipping lines such as consortia and alliances, and a growing importance of independent operators.

The process of repealing the Block Exemption, which started in March �00�, was undertaken in the context of the conclusions of the Lisbon European Council in �000 which called on the Commission “to speed up liberalisation in areas such as gas, electricity, postal services and transport”.

In this article we will consider the repeal’s potential impacts on liner shipping services.

Effects on transport pricesIn the �00� report “Competition Policy in Liner Shipping”, OECD concluded that prices are likely to be lower and more stable in competitive shipping markets than in markets in which conferences

operate. Conferences are expected to have some impact on market rates due to the fact that conference members assemble, exchange views, fix prices and regulate capacity.

The impact of more competition on short and intermediate term rates will depend on the extent to which liner conferences have been able to set and maintain prices above competitive levels. If a liner conference has had significant price setting power on a particular route, the repeal of the Block Exemption is supposed to lead to greater initial fluctuations in prices compared to other routes where no party is in possession of such market power.

In the long term, increased competition will put stronger pressure on carriers to innovate, improve performance and reduce costs, which will be the basis for further rate reductions.

With respect to surcharges the repeal of the Block Exemption is expected to have a considerable impact. Each carrier will have to base surcharges on the carrier’s own cost structure. In the absence of conference “guidance”, the united front on surcharges will weaken, leading to lower overall rates.

While the market analysts seem to agree that the trend is likely to move towards lower overall rates, the understanding is more ambiguous with respect to price volatility. In a study commissioned by the European Commission, ICF Consulting (http://ec.europa.eu/transport/maritime/studies/doc/�005_05_icf_study.pdf) concluded that the repeal of the block exemption may increase volatility in the short term until the markets reach a new state of equilibrium. In a study by Global Insight, also commissioned by the European Commission (http://ec.europa.eu/comm/competition/antitrust/others/maritime/shipping_ report_�610�005.pdf), it is suggested that the repeal will not lead to more price volatility, arguing that without conferences price volatility is due to price-mixing behaviour which is normal and common in other industries. Effects on market structureThe opponents to the withdrawal of the Block Exemption have argued that without coordinated capacity and pricing policies the industry would be subject to destructive competition, leading to bankruptcies and unstable markets. There is, however, no empirical evidence to support this opinion. Although it is difficult to make a certain assessment of the consequences, high cost providers

4 WIKBORG REIN JANUARY �007

HOW WILL THE MARKET RESPOND TO THE EU’S ABOLISHMENT OF LINER CONFERENCES?

are likely to be forced to cut their cost to be able to compete, or will otherwise have to exit the industry. The outcome will largely depend on the existing exposure to competition on each route. A significant impact on market structure cannot be expected if the trade is already considered competitive. The impact will, on the other hand, be more significant if the trade is not already exposed to competition, especially if the present transport companies are high cost service providers. In such case we might expect changes in terms of the number of liners exiting and entering the trades (e.g. high cost liners are replaced by low cost liners). We could also expect a certain degree of consolidation between different companies aiming to increase their market power, and thereby get better control over the rates.

Effects on the availability of servicesThe availability of services may be af-fected in several different ways. Firstly, one could think that services offered on routes less profitable could be discontin-ued or disrupted if vessels are unable to

profit when the market is exposed to free competition. Alternatively, there might be some reconfigurations of routes, inter alia, changes to the scheduling, costs, service components or establishment of new trade routes and port of calls eliminating others. Secondly, the quality of the services rendered could be reduced as conference members start competing more aggressively on price.

The last mentioned consequence has been rejected by a report from the US Federal Maritime Commission. They feared the same when similar changes were adopted in the American Ocean Shipping Reform Act. Their experience was that increased competition in the liner industry contributed to a variety of service improvements.

Further, if a trade line is profitable it is not likely that the services are discontinued or disrupted after free competition is introduced to the market. If there is any disruption, it should at least only be temporary. If the trade line is less profitable, the structure of the current

transport offer will play an important role in the assessment. In case the current transport companies are covering specific routes by participating in operational agreement such as consortia or alliances, the transport offer is likely to remain the same also after the Block Exemption is effectively repealed.

FOTO: O. Kobayashi

or Berit Mehl, [email protected]

WIKBORG REIN JANUARY �007 5

FOR MORE INFORMATION, CONTACT:

Kristoffer Rognvik Larsen,[email protected]

Lars Tormodsgard, [email protected]

Øystein Meland, [email protected]

THE NEW 2007 VERSION OF THE NORWEGIAN MARINE INSURANCE PLAN The Norwegian Marine Insurance Plan (the “Plan”) is revised at regular intervals by the Permanent Revision Committee jointly established by the Norwegian insurance market and the Norwegian Shipowners’ Association. In this article Haakon Stang Lund, member of the Permanent Revision Committee, considers some of the novelties in the new Plan version.

The seaworthiness concept is abolishedThe new Norwegian Ship Safety Act (the “Act”), which is expected to be passed by the Parliament in February �007, is replacing the Seaworthiness Act of 190�. In the new Act, the seaworthiness concept is not used. Instead, the Act defines various safety and quality standards that the shipowner must comply with, the most important being the SOLAS Convention (International Convention for the Safety of Life at Sea of 1974, as amended), including the ISM

(International Safety Management) Code.

As a result of the new legislation the Plan’s previous § �-�� on ships’ seaworthiness is abolished and replaced by an obligation on the insured to adhere to the more specific safety and quality standards. It is difficult to form a definite opinion on whether this will have any significant impact on the cover. Seaworthiness is in itself a vague legal standard. It was introduced to the Norwegian marine insurance legislation in 19�0 and at the same time adopted by

the Plan. It may have served a purpose when the net of safety regulations was not as tight as it is today. The Permanent Revision Committee felt that such a legal standard was not required anymore and that it was more appropriate to apply the more explicit requirements laid down in the safety regulations.

Race II Exclusions IncorporatedThe “release of nuclear energy” exclusion contained in § �-8 litra (d) and § �-9 subparagraph � litra (b) has been replaced by the incorporation of the English RACE II clause. The reason is that the RACE II clause is incorporated in all re-insurance contracts and hence the insurers have no choice other than to incorporate the RACE II clause also in each individual insurance policy in order to ensure that there is no gap between the direct insurance contracts and the re-insurance agreement.

The perils covered by the RACE II clause numbers (1) to (4) largely correspond with the previous “release of nuclear energy” exclusion. Number (5), also known as the biochem exclusion, is clearly an extension of the previous exclusion.

In the wake of 9/11 the English market also introduced a so-called cyber attack exclusion, but this exclusion is normally possible to buy back from the re-insurers. FO

TO: © O. Kobayashi


Hence the cyber attack clause is not incorporated into the Plan exclusions.

Change of classification societyChange of classification society shall no longer result in automatic termination of the insurance. It is now defined as an alteration of risk, see the new § �-8 subparagraph � and § �-14 sub-paragraph 4.

This amendment means that the insurer must, pursuant to § �-9, demonstrate that he would not have accepted the insurance if, at the time of the contract was concluded, he had known that the change of classification society would take place. Thus, a change of classification society would normally no longer have any consequences for the owner if the insurer already has a portfolio of vessels classed with the new classification society.

But the rating or standing of classification societies may vary, and individual insurers may have adopted an acceptance policy which excludes from cover vessels classed with certain classification societies. Therefore, it is still highly recommendable to notify the insurers as soon as possible of any change of the classification society in order for the owner to be on the safe side.

It is important to note that loss or suspension of class still leads to automatic termination of the insurance pursuant to the Plan § �-14.

Compensation for unrepaired damage The Plan § 1�-� subparagraphs 1 and � have been amended so that the owner, at the expiry of the insurance period, will be entitled to cash compensation for the estimated reduction of the market value of the ship due to the damage without any obligation to carry out repairs. The compensation shall not exceed the

estimated costs of repairs. The owner will still have the option to carry out repairs and get the actual costs of repairs compensated as before.

If the vessel becomes a total loss or a constructive total loss (“CTL”) before the policy expires, the insurer is not obliged to compensate any unrepaired damage even if the total loss or CTL is compensated by another insurer.

The Norwegian conditions are thereby brought in line with English conditions and non-marine conditions in Norway and elsewhere. Previously § 18-10 contained a similar right for the owners of offshore structures, but this provision is repealed in the �007 version as the new § 1�-� is also applicable for offshore structures.

Inadequate maintenanceThe special exception from cover pursuant to § 1�-� subparagraph � is repealed so that consequences of wear and tear, corrosion, rot, inadequate maintenance and the like will be covered without any exception, provided of course that none of the general exceptions in part 1 of the Plan are applicable such as § �-�� on violation of safety regulations.

Trading limitsThere are two changes to § �-15 subparagraph � which make clear that the insurer may require, but is not necessarily entitled to, an additional premium for sailing in a conditional trading area. In mild winters there may be no or very limited risk of encountering ice even in the conditional areas. If the vessel does not encounter any ice on its voyage in the conditional area, then there is no basis for any claim for an additional premium.

Sailing in the excluded areas entails not only the ice risk, but also other risks such as generally rougher weather conditions in the winter, inaccurate charts, no or

limited repair facilities and no or limited salvage capacities. Therefore the insurer may charge an additional premium for sailing in the excluded areas regardless of the ice condition on the sailing route.

The “punishment” for sailing in the conditional areas without notifying the insurer in advance is increased to a maximum of USD 175,000.

The trading areas defined in the Plan’s Appendix have been changed. The waters between Sakhalin and Kamchatka have become a conditional area as opposed to an excluded area which it was before. From the Amchitka and Amukta passes, the Bering Sea north of the Aleutian Islands can also be accessed or departed, but ships sailing north of the Aleutian Islands may not proceed north of 54�0’ north.

The conditional area of the Baltic Sea has not been amended, but the time periods have been simplified and extended to comprise the period from 15 December to 15 May, both days included.

The �007 version of the Plan is available with its commentary, both in English and Norwegian, on the website www.norwegianplan.no, which also gives an overview of all the changes since the �00� version.


Haakon Stang Lund, [email protected]

Anders W. Færden, [email protected]


NORWEGIAN NET CLOSES ON SUBSTANDARD SHIPS In support of international initiatives to eliminate substandard shipping the Norwegian Parliament is expected to enact new legislation proposed by the Ministry of Trade and Industry enabling Norwegian marine insurance companies to exchange information on substandard ships with other insurance companies, classification societies, flag state authorities etc. without the approval of the insured.

Background: Current legislation and need for reformSection 1-6 (§ 1-� of the previous 1988 Act) of the Insurance Act of �005 imposes a fairly strict secrecy obligation on the insurer, which is generally accepted when it comes to sensitive information about an insured’s personal health records, sensitive business information etc. However, should information on the technical standard of an insured vessel be subject to the same restrictions? In the outset the answer is in the affirmative.

In June �004 the Maritime Transport Committee of OECD issued a Report on the Removal of Insurance from Substandard Shipping. One of the proposals in the report was that insurers should report to each other when they discovered substandard vessels or operations so that other insurers could avoid insuring such vessels and clients. In particular, the report pointed out that the P&I clubs were in a position to have a substantial impact if they were able to exchange information and thereby deny P&I cover for substandard vessels. The idea was that if substandard vessels were denied P&I cover they would sooner or later be put out of business.

The P&I clubs of the International Group followed up and commenced discussions on such cooperation. It soon transpired that the two Norwegian P&I clubs Gard and Skuld where unable to participate in this cooperation to the full extent because of the secrecy obligation imposed on them by said Insurance Act. It was deemed rather unfortunate that the Norwegian insurers were restricted in their contributions towards increasing the safety at sea.

Hence, the Norwegian market asked for an exception from the secrecy obligation in this regard. The Ministry of Finance (which is in charge of the Insurance Act) declined to propose new legislation to that effect. However, the Ministry of Trade and Industry came to the rescue of the shipping industry and proposed new legislation enabling the insurers to exchange information on the technical standards of vessels.

Original proposalThe legislation originally proposed by the Ministry of Trade and Industry was reviewed in an article in Wikborg Rein’s Shipping Offshore Update 1/�006. The proposed exception from the secrecy obligation took the form of § 71 in the proposal for enactment of the Norwegian

Ship Safety Act, which was circulated for comments from the industry in November �005.

The proposal allowed marine insurance companies to exchange certain information about safety defects of insured vessels and also to forward such information to the relevant Norwegian and international public authorities and classification societies without the prior written consent from the insured. Information could be provided about vessels currently being insured by the insurance company, as well as vessels having been insured by the company during the last three years prior to the request for information or the time when information is given.

Revised proposalFollowing the comment period the Ministry of Trade and Industry proposed to the Norwegian Parliament to enact the new Norwegian Ship Safety Act (Ot.prp. nr. 87 (�005-�006)), including the provision regarding exception from the secrecy obligation.

The formal proposal submitted to the Parliament is substantially the same as the original proposal circulated for comments in November �005.


However, based on comments from the industry, the proposal no longer includes a specific obligation on the part of the insurance companies to provide Norwegian public authorities with information regarding the safety of vessels flying Norwegian flag. The Ministry of Trade and Industry agreed with the industry that such a provision would distort competition in relation to insurers based in other countries. It also pointed out that § 46 in the proposed Act entitles Norwegian public authorities to request the information from the shipowners themselves as long as the request is in accordance with Norway’s international law obligations.

The final proposal contains an obligation for the insurer to provide the insured with a copy of the information given, in order to ensure that the information is accurate and to give the insured an opportunity to rectify any inaccurate information.

The final proposal specifies an additional requirement to provide information in that the information shall be directly relevant for the safety of the vessel. According to the travaux preparatoire from the Ministry of Trade and Industry, it has to be determined on a case to case basis whether the information in question is directly relevant for the safety of the vessel. The party requesting the information is obliged to demonstrate to the insurer that the information is relevant. A question is what kind of information can be considered as relevant to the safety of the vessel. The Act’s definitions of safety set out in chapters � (safety control), � (technical and operational safety), 5 (environmental safety) and 6 (safety- and anti-terror mobilisation) provides useful guidelines in this respect.

The proposal will not exonerate insurance companies from possible criminal and/or

tort liability by e.g. issuing incorrect information.

Entry into forceThe Act is expected to be passed by the Parliament in February �007 and will most likely enter into force shortly thereafter.

FOTO: © O. Kobayashi


Birgitte Karlsen, [email protected]



ASSIGNMENT OF CONTRACTUAL RIGHTS- LEGAL AND LINGUAL CHALLENGESA consequence of the international aspect of shipping and ship financing is that a number of contracts and related documents are drafted in English. This can often lead to confusion between the parties involved due to different interpretation of terms and expressions used in the documents.

Assignment vs. novationTerms which are often confused are “assignment” and “novation”. Under English law, assignment is normally used only when rights under a contract are transferred. This is as opposed to novation, where both rights and obligations are transferred.

Assignment of contractual rights is often made in the context of, inter alia, building contracts, charter parties and ship and shipbuilding financing. An assignment can be defined as a present transfer of rights by the assignor in favour of a third party, the assignee. The obligor is the party bound to perform the obligations in relation to the assigned rights.

A practical example is when a purchaser under a memorandum of agreement assignshis rights to purchase and take delivery of a vessel to one of its subsidiaries:

Another example is when a purchaser under a shipbuilding contract assigns his rights to take delivery of a newbuilding or to receive refund to its financing bank as security for his obligations under a loan agreement.

Sometimes a Norwegian party uses “assignment” as a translation of the Norwegian terms “transport” or “overdragelse”, notwithstanding whether only rights or both

rights and obligations are transferred. We also often see expressions like “assignment of the contract” or “assignment of the rights and obligations under the contract”. For instance, in the Standard Norwegian Shipbuilding Contract �000 clause XIII it is agreed that the parties cannot transf er their rights and obligations without the other party’s consent. The Norwegian version uses the term “transport av kontrakten”, whilst the English version uses the term “assign the Contract”. This would normally not make much sense to an English lawyer, as assignment under English law is only a transfer of rights, not obligations.

Instead, the term “novation” should have been used. A novation agreement creates a new contractual relationship between one of the original parties and a new third party. For example when the rights and obligations of a shipowner under a charter party are transferred to a new owner, a new contractual relationship is created between the new owner and the charterer. This is often formalised by a tripartite agreement called “novation agreement” between the original parties to the contract and a third party, where the contracting parties agree to terminate the contract and one of them enters into a new contract with the third party. The new contract replaces the terminated contract.

If a novation agreement is entered into under English law, there are important aspects to be aware of which give cause for concern, such as, guarantees issued in relation to the original contract may be discharged and hence should normally be re-issued if intended to apply to the novated contract.

Assignment by way of sale vs. assignment by way of securityAnother distinction can be drawn between the assignment by way of sale and the assignment by way of security. Whilst the first assignment is a definite or outright assignment (Norwegian: overdragelse til eie), the second is an assignment for security purposes which by the very nature is not intended to be definite

Assignee/Erverver

Obligor/Debtor/Debitor

Assignor/ Overdrager

Contract

Assignment



Linn Hertwig Eidsheim, [email protected]

Marie Efpraxiadis,[email protected]

(Norwegian: pant). A buyer’s assignment to a subsidiary of a right to take delivery of a vessel under a newbuilding contract is a practical example of assignment by way of sale. An example of assignment by way of security is where a purchaser under a newbuilding contract assigns his rights to take delivery or refund payments under the building contract in favour of his financing bank as security for the loan.

Under English law, security assignment is a present transfer of rights which is later re-assigned when the loan is repaid. Under Norwegian law security assignment is normally created as a pledge which does not involve immediate transfer of rights but is passive until and if the security assignment is enforced. Hence, the security assignment is normally discharged and not re-assigned, although variations may be observed in practice.

Norwegian law Security assignment under is normally made by way of an assignment agreement, including a notice of assignment and an acknowledgement, whereby the purpose of the notice is to ensure legal perfection for the assignment (pledge) and the acknowledgement is signed by the obligor for evidence purposes. If the assignment is not enforced, a transfer is not effected.

In English law a bundle of contractual rights may be assigned for security purposes. Under Norwegian law, we need to distinguish between assignment of receivables (Norwegian: enkle pengekrav) and other contractual rights. In practice this would mean to distinguish between for instance, the right to receive payment or refunds on the one hand, and the right to take delivery on the other.

The need for distinction is a consequence of Norwegian law - more specifically the Norwegian Pledge Act § 1-� (�) which requires legal basis in the Pledge Act or other legislation for establishing a valid pledge. With regard to receivables, the Pledge Act § 4-4 and § 4-9 contains legal basis for pledge and assignment by way of security.

For other contractual rights, such as taking delivery of a vessel, there is no provision in the Pledge Act or other legislation (except for a few scattered provisions) providing general legal basis.

There is a difference in opinion in the Norwegian legal theory as to whether it is possible in general to validly pledge or assign such rights by way of security. There is no decisive legal authority on the matter and hence it is unclear whether pledge or security assignment of contractual rights other than receivables may be validly created and enforced under Norwegian law. Despite this uncertainty, the requirement of an assignment of contractual rights other than receivables by way of security is regarded as standard practice in financing of both newbuildings and second hand vessels today, including transactions which are subject to Norwegian law. Legal opinions normally contain reservations or conditions in this respect.

This article is based on a lecture held by Marie Efpraxiadis and Linn Hertwig Eidsheim on 13 November 2006 in the Norwegian Maritime Law Association.

FOTO: © O. Kobayashi

Buyer’s Bank/Assignee

Builder/Obligor

Buyer/ Assignor

Notice of Assignment

Shipbuilding contract

Acknowle

dgement


ENFORCING FOREIGN JUDGEMENTS IN NORWAYInternational business transactions inevitably result in situations where individu-als and companies experience disputes having to be solved by the courts in other jurisdictions than their own. Often there is a need to enforce the judgement in a country other than the country in which the court is situated, in particular if the debtor is domiciled in another country.

If the judgement is in the form of an arbitration award, it can be enforced by way of application of the Norwegian rules implementing the widely adopted New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958). Judgements by ordinary courts in countries outside the EEA (European Economic Area) may be enforceable provided certain specific conditions in the Norwegian Civil Procedure Act are fulfilled. In this article we will consider judgements by ordinary courts in EEA countries, which may be enforced under the Lugano Convention (Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1988).

The Lugano ConventionThe Lugano Convention was implemented in Norway by the Lugano Act in 199�. It extends the jurisdiction and enforcement regime in civil and commercial matters in the Brussels Convention (Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1968), which applies between the EU member states, to the EFTA (European Free Trade Association) states.

Articles �6 and �1 of the Lugano

Convention provide that a judgement given in an EEA state shall be recognised and enforceable in other contracting states. Hence, Norwegian courts are obliged to recognize the foreign judgement without allowing the party against whom enforcement is sought (the “defendant”) to challenge the judgment on the basis of the merits of the case.

The actual enforcement under the Lugano Convention is subject to a separate procedure. According to Article �1 an application from the party seeking to enforce the judgement (the “claimant”) shall be lodged with a Norwegian court, requesting the court to summarily try the foreign judgement and declare it enforceable in accordance with ordinary Norwegian enforcement rules.

Norwegian jurisdictionThe application for enforceability must be submitted to the District Court having local jurisdiction in the matter, which will ordinarily be the District Court in the jurisdiction in which the defendant is domiciled. If the defendant is not domiciled in Norway, Norwegian courts may still have jurisdiction if the defendant has any assets in Norway, for example chattels, real estate or accounts

held with a Norwegian bank. In such case the court where the asset is located can claim jurisdiction.

The conditions for enforceabilityThe claimant must, in accordance with Article 46, produce a certified true copy of the judgment which adequately satisfies the court of its authenticity. In the case of a judgment given in default, the claimant must produce the original or a certified true copy of a document establishing that the proceedings were served on the party in default, or an equivalent document.

In accordance with Article 47 the claimant must produce documents establishing that, according to the law of the state of origin, the judgment is enforceable and has been served. In principle a non-formalized statement from a court in the state of origin evidencing the enforcement and proof of service of the judgement will suffice.

The enforcement application may be refused for one of the reasons specified in Articles �7 and �8 of the Lugano Convention, i.e. if e.g. the enforcement will be contrary to public policy or if the relevant judgement is a default judgement and the defendant was not

1� WIKBORG REIN JANUARY �007

duly served with the relevant documents or given sufficient time to arrange for a proper defence. These provisions should be contemplated before filing the enforceability application.

AppealThe court’s decision as to the enforceability of the judgment may be appealed by the claimant or the defendant to the Court of Appeal. The appeal decision may be contested by an

appeal to the Supreme Court.

The effect of enforceabilityA foreign judgment which has been declared enforceable in accordance with the Lugano Convention constitutes a basis for execution of the claim under the Norwegian Enforcement Act, §§ 4-1 and 4-17. On this basis the claimant may apply for distrain and forced sale of the defendant’s assets.


FOTO: © ScanStockPhoto

Gaute Gjelsten,[email protected]

Hågen Hansen,[email protected]

WIKBORG REIN JANUARY �007 1�

THE IMPORTANCE OF THE “CARRIER” BEING ENTITLED TO GLOBAL LIMITATION

The concept of shipowners being entitled to limitation of liability is thought to be of Dutch origin and dates back hundreds of years to the Middle Ages and still remains one of the core principles which underpin the distribution of risk involved in a maritime venture. In Norway the concept of limitation of liability was in its earliest form introduced by Fredr k II’s maritime code of 1561, whereas England and USA introduced this concept in the 18th and 19th centuries.

Global limitationPursuant to the International Convention Relating to the Limitation of Liability of Owners of Seagoing Ships of 1957 (“1957 Convention”) an “owner, charterer, manager and operator” is entitled to limit their liability. Similarly, the International Convention on Limitation of Liability for Maritime Claims of 1976 (“1976 Convention”) (and the 1996 Protocol) offers the benefit of global limitation to the “owner, charterer, manager and

operator of a seagoing ship”. The United States is neither party to the 1957 Convention nor the 1976 Convention, but under US law the Limitation of Vessel Owner’s Liability Act entitles shipowners and bareboat charterers to limit their liability.

Unit and weight limitationFor carriers of cargo by sea, other important limitation regimes are found in the rules governing the contract of carriage (normally evidenced by a bill of lading), such as the Hague Rules of 19�4 (“HR”), the Hague-Visby Rules of 1968 (“HVR”) and the United States Carriage of Goods by Sea Act of 19�6 (“US COGSA”). These rules offer carriers of cargo by sea the benefit of both certain liability exemptions and certain liability limitations. Under the HR/HVR and the US COGSA, the cargo carrier is exempted from liability for cargo damage e.g. when the loss was caused by “error in the navigation or the management or

the ship” or by the “perils, dangers and accidents of the sea”. Provided that the carrier is found liable, the HVR further offers the carrier the benefit of limitation of liability either by unit (666.67 SDR per unit) or by weight (� SDR per kilogram), whichever is the higher, cf. the HVR Article IV No. 5 (a). The US COGSA limits the carrier’s liability to US$ 500 per unit (customary freight unit), cf. the US COGSA § 1�04 (5).

The party entitled to limitation of liability under these rules is invariably referred to as the “Carrier”, cf. HV/HVR Article I and US COGSA § 1�01, defined as “the owner or charterer who enters into a contract of carriage with the shipper”. Most bills of lading contain so-called Himalaya clauses purporting to contractually extend the immunities and protections afforded the carrier by operation of law to other third-parties involved in the carriage, such as agents, managers, stevedores etc. Such Himalaya clauses are generally accepted

FOTO: O. Kobayashi

For cargo vessels, two set of limitation regimes often operate in parallel: the unit and weight limitation and the global limitation. Shipping is a particularly international business, sometimes with overseas post box companies acting as owners, inter-company charterparties or other tax-driven inter-company arrangements, and the purpose of this article is to look more closely at some of the pitfalls shipowners should consider before being too creative when organising their activities.


in many jurisdictions, but the effect of a Himalaya clause is dependent on the party identified as carrier in the bill of lading is also being regarded as carrier under the HV/HVR and US COGSA. If not, neither the carrier as identified in the bill of lading nor the third-parties purportedly protected by the Himalaya clause are afforded the benefit of the liability exemptions and limitations provided for in the HR/HVR and US COGSA.

The importance of being entitled to limitation under both limitation regimesIn respect of carriage of goods by sea, the global limitation regime and the unit and weight limitation regime normally operate in parallel. In order to benefit from both limitation regimes, it is important that the liable party is protected by both regimes. In recent years we have seen examples where shipowners and financial institutions due to tax or other financial reasons organise their shipping activities or investments in a manner where they accidentally may deprive themselves of the right to limitation under one or both regimes, e.g. by using a company as a contractual carrier that is not an “owner, charterer, manager [or] operator”. The following example illustrates the importance of being entitled to limitation under both regimes:

In the near future we will see car carriers with a capacity of up to 1�,000 cars. If we assume that the average value of each car is US$ 15,000, the total cargo value will be US$ 180 mill. Using an average weight of 1,�50 kg per car, the total limitation amount under the HVR in case of a total loss of the cargo would be approximately US$ 45,000,000 (SDR �0,000,000). With a roughly estimated gross tonnage (1969) of 85,000 tons, the global limitation amount under the 1976 Convention would be approximately US$ 17,000,000 (SDR 11,��8,500), and under the 1996 Protocol approximately

US$ 40,500,000 (SDR �7,�00,000). The importance of global limitation increases if the limitation fund can be established in a country party to the 1976 Convention (as opposed to the 1996 Protocol), and even more so in the case where the limitation fund can be established in a country party to the 1957 Convention, such as e.g. South Africa.

This is further illustrated by the fact that in case of a major casualty, the liability for cargo damage limited by the HV/HVR and the US COGSA is only one of several potential groups of claims. Other claims such as oil pollution clean-up costs from bunkers spills, salvage, damage to local fisheries, tourism claims, collision liability, wreck removal costs etc. will also often emerge in the wake of a major casualty. The liable party for such claims will normally be the shipowner, who may be entitled to limit such claims under the global limitation regime. However, the cargo claims may not be included in the limitation proceedings if (1) the contractual carrier being liable for cargo damage is not within the group of persons entitled to global limitation and (�) the cargo claims are governed by a law not automatically recognising also the actual carrier as “carrier” for the purpose of the HR/HVR or US COGSA. The result may be that the cargo claims are settled outside the limitation fund. For a 1�,000 unit capacity car carrier suffering a total loss, this may under a worst-case scenario result in an extra bill of approximately US$ 45,000,000 in respect of the cargo claims. Another important aspect is that a carrier not entitled to global limitation would normally also be deprived of the possibility of constituting a limitation fund, which in addition to the monetary consequences resulting from the cargo damage liability, may also significantly complicate the settlement of claims.

Identity of the carrierIn most jurisdictions, the contractual

carrier will be regarded as “carrier” under the HR/HVR as incorporated into national law and thus liable for cargo damage claims, as well as the liability exemptions and unit and weight limitations. In some jurisdictions (for example Norway) the actual carrier, normally the shipowner, will be regarded as “carrier”, but that is not always the case. It is thus important to ensure that the party identified as carrier in the bill of lading is also regarded as a “carrier” under the HV/HVR and US COGSA. When drafting bill of lading terms we would recommend that advice be obtained from local lawyers in the main trading jurisdictions.

In order to take advantage of both limitation regimes, it is further important that the “carrier” is also within the group of persons entitled to global limitation, i.e. an “owner, charterer, manager [or] operator”. This will normally be accomplished by ensuring that there is a charterparty or chain of charterparties between the registered shipowner and the contractual carrier, establishing the contractual carrier as a “charterer”.

Wikborg Rein’s Shipping Offshore department has broad experience in handling cargo claims and assisting shipowners and insurers with the drafting of bill of lading terms and shall be pleased to render assistance in this regard.


Henrik Hagberg,[email protected]



LIABILITY REGIMES IN OFFSHORE CONTRACTS - CONTRACTORS BE AWARE!Offshore contracts include a variety of services, such as construction or modification of offshore installations, drilling and sub-sea installation of pipelines. The contracts often involve complicated high risk offshore operations. Damage or delay can have enormous financial consequences. It is therefore important to consider carefully the agreed apportionment and limitation of liability.

Many standard contracts contain a fairly balanced liability regime. However, we often experience that important issues are not sufficiently regulated. We recommend considering the necessity of drafting additional provisions for each individual project, taking into account the relevant insurance coverage. In this article we will consider some of the most important elements which the contractor should have in mind when considering proposing additional liability provisions.

The parties’ property and personnelLiability for loss of or damage to the parties’ property and personnel is usually regulated in accordance with the “knock for knock” principle, which implies that each party is liable for loss or damage to its own personnel and property regardless of cause. This principle is closely connected with the parties’ possibilities to procure insurances, and provides for a predictable and reasonable apportionment of liability. Normally, the “knock for knock” principle does not apply if the loss or damage is caused by the other party’s leading personnel’s wilful misconduct or gross negligence.

Well and reservoirIt is important for the contractor that the oil company be responsible for damage to well and reservoir due to the fact that it is much easier for the oil company to obtain necessary insurance coverage. It would be unacceptable for the contractor to take this enormous financial risk without having insurance.

Down hole equipmentIn drilling contracts the oil company will usually agree to compensate the contractor for replacement of down hole equipment even when such equipment is provided by the contractor, except to the extent of fair wear and tear.

Contract object Responsibility for the contract object in construction contracts normally lies with the party having the care and custody, which means that the contractor is usually liable until delivery. In many standard contracts the contractor’s liability is unlimited if the loss or damage is not covered by insurance. We have seen a trend of reduced insurance coverage, which means that the contractor will have unlimited liability for loss or damage not covered by insurance. It is therefore important for the contractor to ensure that the contract object is fully covered by the insurances taken out.

Company provided items (CPI)In standard contracts the liability regime applicable to items provided by the oil company varies to a great extent. We usually recommend that the contractor ensures that the “knock for knock principle” applies in this respect.

Third party liabilityUsually, each party is responsible for the liability they incur towards a third party for damage to or loss of property and personal injuries. A recommendable alternative for contractors is to accept liability up to an agreed limit in return for an indemnity from the oil company

in respect of any claims exceeding the agreed limitation.

If there are any existing installations owned by third parties within the area of operation, the contractor should ensure that the oil company agrees to an indemnity of any loss or damage to the installations.

Pollution liabilityNormally the contractor is liable towards third parties (including governmental pollution control authorities) for pollution originating from its own equipment or vessel, whereas the oil company is liable for pollution originating from reservoir, well, facility, pipeline or other subsea or surface structures.

Aggregate limitationThe contractor’s total aggregate liability under the contract should be specified. Determining the limitation amount is a question of the parties’ relative bargain-ing power. Usually, contractors are able to negotiate a limitation amount of about 15-�0 percent of the total contract price.


Christian James-Olsen,[email protected]

Jon Heimset,[email protected]


TAx INCENTIVES FOR ESTABLISHING BUSINESS WITHIN THE EU


Marianne Iversen,[email protected]

Petter Breivik,[email protected]

The combination of Norwegian tax law and developments in EU tax law favours establishment of business in the EU. Some EU member states like Cyprus and Malta offer favourable tax conditions for certain types of businesses and may be interesting alternatives to Singapore.

Under the exemption method introduced by Norway in �004 dividends as well as capital gains upon disposal of shares are tax exempt for corporate shareholders. The tax exemption applies to shares in Norwegian companies and companies in the EU/EEA (European Economic Area). The tax exemption does not, however, comprise shares in “low taxation” countries.

The Cadbury Schweppes caseThe Cadbury Schweppes decision of 1� September �006 by the EU Court puts restrictions on the member states’ appli-cation of legislation on Controlled Foreign Companies (“CFC”) – in Norway known as the “NOKUS” provisions. These regu-lations provide that profits of a subsidiary resident in a low taxation country may be taxed in the shareholder’s residence state irrespective of any dividend distribution. It was held in the Cadbury Schweppes case that under the EU principle of freedom of establishment such regula-tions may, broadly speaking, apply only to wholly artificial tax arrangements.

This means that even if a subsidiary of a Norwegian company is subject to low or zero tax in an EU/EEA country, Norway may neither tax the subsidiary’s profits or dividends upon such distribution nor capital gains upon disposal of shares as long as the subsidiary has substance as required in the Cadbury Schweppes decision. This is as opposed to subsidiaries in other favourable tax countries like Singapore, where only dividends – and not capital gains – are exempted from Norwegian tax under the tax treaty and NOKUS provisions may

apply in case income is mainly of passive character.

The tax regimes in Cyprus and MaltaSome EU states like Cyprus and Malta offer surprisingly advantageous tax con-ditions for certain types of businesses.

Cyprus companies are generally taxed at a rate of 10 percent. However, shipping and ship management companies may be subject to a special tax regime (which applies until �0�0). No income tax is due on the profits of Cypriot shipping compa-nies which own ships under the Cypriot flag (parallel registration is allowed) and operate in international waters, but a tonnage tax must be paid based on the weight and age of the vessel. Ship management companies may choose between a general 4.�5 percent tax rate and a �5 percent of the tonnage tax rate.

Furthermore, Cyprus offers advantageous conditions for holding companies as the country does not levy any withholding tax on dividends to non-resident shareholders. Inbound dividends from non-resident companies may be tax exempted provided that the shareholding is at least 1 percent and the foreign tax burden on the income of the subsidiary is at least 5 percent or less than 50 percent of the income is investment income.

Malta also offers favourable tax conditions. Even if the general income tax rate in Malta is high (�5 percent) a tax refund for certain kinds of business (including rig activities) may be claimed, having the effect that the tax rate for practical purposes will be reduced

to 4.17 percent. Malta does not levy withholding tax on dividends paid to non-resident shareholders. Tax on inbound dividends is subject to a maximum tax rate of 6 percent, but in certain cases the participation exemption may lead to a zero rate.

Neither Cyprus nor Malta levies exit tax upon liquidation or emigration of a company.

The advantageous tax conditions of EU states like Cyprus and Malta may lead to a shift in the preferred place of establishment of e.g. rig companies, which have until now seemed to prefer Singapore. Tax aspects are of course only one of several elements to be considered when choosing an appropriate legal structure. Other important factors are, inter alia, infrastructure, language, legal system and business environment. In addition, tax regimes in other jurisdictions may also have to be taken into consideration, i.e. taxation in the “source” state – the state in which performance of rig activities are carried out.


ITF ACTIONS IN NORWAYMany shipowners around the world, especially those with vessels flying so-called “flags of convenience” (“FOC”), have faced the brutal reality of actions by the International Transport Workers’ Federation (“ITF”) in the form of boycott actions. Several of the Norwegian maritime unions are affiliated with ITF and regularly undertake actions in Norwegian ports on behalf of ITF. This article addresses some important features under Norwegian law with respect to boycott actions initiated by ITF.

The FOC campaignITF is an international federation of transport workers’ unions with inspectors all over the world. ITF has for more than 50 years waged a campaign against the use of FOC, defined as situations “where beneficial ownership and control of a vessel is found to lie elsewhere than in the country of the flag the vessel is flying”. In the view of ITF, the use of FOC “provides a means of avoiding labour regulation in the country of ownership, and becomes a vehicle for paying low wages and forcing long hours of work and unsafe working conditions”. As part of the campaign against the use of FOC, ITF has developed a set of standard collective agreements which contain minimum acceptable wages and working conditions applicable to all crew members onboard FOC vessels irrespective of nationality (e.g. ITF Standard Collective Agreement, ITF Uniform TCC Collective Agreement and ITF Offshore Standard Collective Agreement).

The FOC campaign involves inspections onboard FOC vessels to check whether the crew members are employed on terms which correspond to ITF minimum standards, and when such agreements are already in place, whether such agreements are in fact adhered to by the shipowners. In cases where ITF finds that the crew members are not employed on satisfying terms, or finds

that such agreements are not properly adhered to by the shipowner, ITF regularly undertakes actions against the vessel in order to enforce ITF policy.

Boycott in Norwegian portsActions by the Norwegian ITF affiliated organisations normally take place through a boycott of the vessel, i.e. preventing loading or discharging operations while the vessel is in port, which results in delays in the vessel’s loading/discharging and sailing schedules. Boycott by the seamen’s unions has a long history in Norway, and the Norwegian ITF affiliated organisations are of the more active organisations within ITF. Over the years several of the boycott actions undertaken by ITF in Norway have ended up in the courts.

The lawfulness of boycotts The underlying principle in Norwegian law is that a boycott is considered a lawful measure that can be applied in labour conflicts, within certain limits set forth in the Norwegian Boycott Act of 5 December 1947 No. 1 (the “Boycott Act”). Only if the boycott exceeds the limits set forth in the Boycott Act § �, the boycott will be considered unlawful and the person executing the boycott may be held liable for damages, cf. the Boycott Act § 4, and in extraordinary situations also be subject to prosecution and fines, cf. the Boycott Act § 5. Pursuant to the Boycott Act § �, a boycott action may be regarded

unlawful if the boycott action:

a) has an illegal purpose or cannot achieve its purpose without causing an unlawful act;b) is carried out or maintained by illegal means or by untrue or misleading information;c) will harm major community interests or operate in an excessive manner or there is a significant disproportion between what can be achieved by the boycott and possible resulting damage; ord) is carried out without reasonable warning or proper explanation of the grounds for the boycott.

Within the above limits, a boycott action will normally be regarded as lawful pursuant to the underlying principle in Norwegian law that a boycott is considered a lawful measure in labour conflicts.

In order to determine whether a boycott is lawful or not, proceedings may be initiated by filing a request for an interlocutory injunction with the local court where a threatened or actual boycott takes place, cf. the Boycott Act § �. Proceedings may be initiated on the basis of the warning of boycott. Oral hearings will normally be held within a couple of days. However, a suit for damages arising out of an unlawful boycott must follow the ordinary route


through the court system starting at the local district court.

In respect of boycott actions aimed at enforcing the shipowners to employ the crew members on terms satisfying to ITF, case law in Norway suggests that insofar as the level requested by ITF is “reasonable”, such actions are lawful under the Boycott Act, irrespective of whether the individual crew members support the boycott action or not. Recent cases from the district courts indicate that e.g. the level in the ITF Standard Collective Agreement exceeds what is regarded as “reasonable” and will not constitute a valid basis for a boycott action. Also boycott actions with the main purpose of forcing the crew members to become members of an ITF affiliated labour organisation will normally be regarded as unlawful, cf. the Norwegian Supreme Court’s decision in the San Dimitris, reported in Rt. 1959 page 1080. In respect of a so-called “recovery boycott”, recent case

law suggests that this will normally be regarded as lawful, but always depending on the circumstances of the particular case.

What to do if faced with a boycott warningWhen faced with a boycott warning issued by ITF in Norway, our general advice would be to enter into a dialogue with ITF to clarify the exact background and motive for the action, and on that basis explore the possibilities of avoiding a commencement of the boycott. We often see that when the complete picture is available to all parties, the matter is solved amicably without the need for court action. However, if court action is unavoidable, we will normally manage to draft and file with the court a request for an interlocutory injunction within 1� to �4 hours, provided we are in receipt of necessary documentation. What we clearly do not recommend is that the shipowner remains silent in the futile belief that ITF will surrender if they do

not manage to get a dialogue with the shipowner. In our experience that would only be wishful thinking and very seldom lead to a positive result.

We have several lawyers who are experienced with ITF actions in Norway and they are ready to be of assistance to shipowners and their insurers in case a boycott warning is issued in Norway.

Oslo:Trond Eilertsen [email protected], tel. + 47 �� 8� 76 1�

Gaute [email protected], tel. +47 �� 8� 76 �1

Henrik Hagberg, [email protected], tel. +47 �� 8� 75 5�

Bergen:Knud [email protected], tel. +47 55 �1 5� 64

Richard [email protected], tel. +47 55 �1 5� �1


FOTO: O. Kobayashi


On 14 December 2006 the Parliament authorised the Government to accede to the International Convention for the Control and Management for Ships’ Ballast Wa-ter and Sediments. The Convention was adopted by the IMO (International Mari-time Organisation) in 2004 and introduces strict regulations on the control and management of ships’ ballast water. Norway will be among the first countries to join the Convention.

The spreading of harmful aquatic organisms to areas where they do not belong has increased in recent decades. This is a serious threat to biological diversity and human health. An example is the introduction of the American comb jelly to the Black and Azov Seas, causing the near extinction of anchovy and sprat fisheries. Another example is the introduction of the Asian Chattonella algae to the southern coast of Norway in the spring of �001, killing a large number of farmed fish. It is generally accepted that the problem is largely due to uptake and discharge of ships’ ballast water combined with the expanded trade and traffic volume over the last few decades. The purpose of the Convention is to reduce and ultimately eliminate the risk of spreading of harmful aquatic organisms.

When the Norwegian Government proposed to the Norwegian Parliament to approve that Norway accede the Convention (St.prp. nr. 5 (�006-�007)), the Government pointed out that the Norwegian coastline is among the world’s most productive in terms of natural habitats, natural resources and basis for economic production in the marine industry. Norway has been active in the negotiations of the Convention in the IMO in order to contribute to

achieving a strict, effective and global regime in this area as soon as possible.

Scope of applicationBroadly speaking the Convention applies to ships entitled to fly the flag of a contracting state if they are engaged in international trade, see Article �. States may make exceptions for ships which are for example engaged in scheduled voyages between specified ports. The contracting states are obliged to apply the requirements of the Convention to ships from non-contracting states as may be necessary to ensure that no more favourable treatment is given to such ships.

Restrictions on ballast water uptake and dischargeThe Convention requires ships to conduct ballast water exchange at least �00 nautical miles from the nearest land, at least �00 metres in depth in water and in accordance with guidelines issued by IMO, see Regulation B-4. If it is not possible to conduct water ballast exchange as described, it shall be carried out as far from the nearest land as possible, at least 50 nautical miles from the nearest land and in water at least �00 metres in depth. The contracting states may in certain instances designate specific ballast exchange areas which do

not meet these requirements.

Obligation to clean the ballast water before dischargeDuring the period from �009 to �016 various requirements for cleaning ballast water will be phased in, see Regulations B-�, D-1 and D-�. Application of the cleaning requirements will depend upon when the ship was build and its ballast water capacity. In �016 the highest standard shall apply to all ships, requiring that the discharged ballast water’s total number of viable organisms and microbes shall not exceed concentrations equal to the EU standard for “excellent” bathing water.

Ballast water management plan, record book and certificatesIn order to ensure compliance with the Convention, each ship shall have on board and implement ballast water management and ballast water record book showing the uptake, discharge and management of the ballast water, see Regulations B-1 and B-�. The flag state shall ensure that ships flying its flag are surveyed and certified in relation to the Convention’s requirements.

Port state control – damages for undue delay to the shipThe port state is entitled to inspect

STRICTER RULES FOR CONTROL AND MANAGEMENT OF BALLAST WATER

�0 WIKBORG REIN JANUARY �007

whether the ships calling its ports or offshore installations are in compliance with the Convention, see Article 9. As a main rule the inspection shall be limited to verifying that a valid certificate is on board, inspection of the ballast water tank record book and/or a sample of the ship’s ballast water. If there is reason to believe that the ship is not in compliance with the Convention, a more comprehen-sive inspection may be undertaken.

Violation of the Convention may result in the ship being detained, excluded from port or offshore terminal or prevented from discharging the ballast water, see Article 10.

The contracting states undertake to avoid that a ship is unduly delayed by the inspection and control of the ship, see Article 1�. If unduly delayed, the ship is entitled to compensation for any loss or damage suffered thereby.

Entry into forceThe Convention shall enter into force one year after the date on which it is joined

by not less than �0 states, the combined fleets of which constitute not less than �5 percent of the gross tonnage of the world’s merchant ships. This is a strict requirement. As at December �006 only six countries have joined the Convention (The Maldives, Nigeria, Saint Kitts and Nevis, Spain, Syria and Tuvalu). These countries represent less than one percent of the world’s merchant fleet. Norway represents about �.4 percent of the world’s merchant fleet. It is assumed that it may take a few years before the Convention enters into force internationally.

Norwegian implementationThe Convention will be implemented into Norwegian law by regulations issued by the Ministry of the Environment pursuant to sections �1 to �8 in the new proposed Ship Safety Act which is expected to be passed by the Parliament in February �007.

Finalization of the draft regulations is anticipated during the spring of �007, and will be subject to a three month

consultation period. Subject to Norway’s obligations under international law, the Ministry intends to implement the Convention rules in relation to ships calling at Norwegian ports before the Convention enters into force internationally. In particular, the restrictions on ballast water uptake and discharge set out in the Convention are expected to enter into force by the end of this year. The Ministry is now considering which areas along the Norwegian coastline shall be designated as ballast exchange areas.


Herman Steen,[email protected]

Morten Lund Mathisen [email protected]

FOTO: O. Kobayashi

WIKBORG REIN JANUARY �007 �1

EMISSIONS TRADING - THE FUTURE FOR SHIPPING?Exhaust from ships is a major contributor to air pollution. Studies commissioned by the EU show that by the year 2020 shipping will contribute to the same amount of NOx-emissions and even greater SOx emissions compared to land-based sources. The approach of the IMO (International Maritime Organisation) has been adoption of Annex VI to MARPOL 73/78 (International Convention for the Prevention of Pollution from Ships 1973, as modified by the Protocol of 1978). The Annex came into force in May 2005 and provides for maximum levels of air pollution per vessel. Shipowners have raised the question of whether emissions trading might be a more suitable approach.

What is emissions trading?Emissions trading is a market based scheme used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A total cap on the allowable amount of emissions is fixed. The polluters are given allowances for emitting a specific amount and credits for reducing emissions. The total amount of credits cannot exceed the cap, limiting total emissions to that level. Companies that pollute beyond their allowances must buy credits from those who pollute less than their allowances. Basically it works more or less the same way as a stock exchange. In effect, the buyer is penalized for polluting, while the seller is rewarded for having reduced emissions. Pollution may be reduced by lowering the cap over time.

The Kyoto Protocol provides for emissions trading. As the responsibility for regulating ships’ emissions was kept out of the Kyoto process, the Protocol gives no legal basis for emissions trade in shipping. MARPOL 73/78 Annex VIAnnex VI, entitled “Prevention of Air Pollution from Ships”, sets limits on sulphur oxide (SOx) and nitrogen oxide (NOx) emissions from ship exhausts and

includes a global cap of 4.5 percent m/m on the sulphur content of fuel oil. It also designates SOx Emission Control Areas (“SECAs”) which require sulphur content in the fuel oil of 1.5 percent m/m or less. The Barents Sea and the North Sea have been designated as SECAs with effect from 19 May �006 and February �007, respectively. More SECAs are assumed to be proposed, particularly for North America’s west coast.

Why emissions trading might work in shippingWhile some vessels are able to reduce the emissions of NOx and SOx with moderate costs, it may be very expensive for others. The difference in abatement costs creates a potential for trade which both parties may benefit from, as market forces will allocate emission reductions to where they will be carried out at the lowest cost. Shipowners with low cost emission reductions may profit from keeping emissions below their cap in order to sell the surplus allowances at a higher price than the costs of reductions.

As opposed to CO� trading, such as under the Kyoto Protocol, SOx is not a global problem in the same sense. With CO� one has usually considered the place of the emissions to be without importance. SOx is different as there are areas that

are particularly acid-sensitive, something which the designation of certain areas as SECAs shows. The challenge is therefore to create an emissions trading regime that guarantees reductions in emissions where they are needed the most.

The shipowners’ initiativeSeveral interests in the shipping business would like to see Annex VI amended to open up for emissions trading. Some of these have founded the Shipping Emissions Abatement and Trading Group (“SEAaT” – see www.seaat.org). Sponsoring members of SEAaT include Shell Marine Products, P&O, the Norwegian Shipowners’ Association, the Swedish Shipowners’ Association, BP, Stena Line, Carnival Corporation and Teekay Shipping Corporation. SEAaT recommends to industry groups and legislators that emissions trading should be encouraged and developed for shipping, as emissions trading will enable the reduction of shipping emissions in a cost effective way without compromising environmental benefits.

Possible emissions trading regimesOne possible solution might be the creation of a regime where emissions trading takes place between shipowners operating within the same area, to ensure that total emissions within each area do

�� WIKBORG REIN JANUARY �007

not exceed the emission cap designated for that area.

It is not possible to predict whether an initiative may come from within the IMO to amend Annex VI to provide for emissions trading. However, it is assumed that it will take time to implement a global emissions trading programme. In the meantime, some have considered it better to start on a smaller scale. In �00�, the Swedish Shipowners’ Association (“SSA”) made a proposal to the European Commission on letting shipowners engage in emissions trading with land-based industries.

The motivation was the high costs of reductions at land compared with at sea, with high potential economic benefits for shipowners.

The European Commission found the proposal interesting, but difficult to implement and control, and asked the SSA to explain how the scheme would work in practice. The SSA presented its report last autumn. Broadly speaking, the practical implementation suggested in the report involves the installation of a measuring instrument on the vessel registering the composition of the emissions minute by minute, combined

with a GPS showing the vessel’s position at all times. Based on the registered measurements, a graph shows the SOx and NOx emissions. The graph is then compared with the relevant emission cap. If the emissions are below the cap, it is possible to trade the surplus on an emissions exchange. The benefits that may be achieved by the use of market instruments were also reviewed for the European Commission in a report made by the consultancy company NERA (National Economic Research Associates). The report was finalised in September �005 and recommended further consideration of a number of emissions trading schemes for shipping.

Some urge that the introduction of market based mechanisms for improving environmental performance in the shipping sector is premature. Implementation of an emissions trading regime would require sophisticated legislation as well as mechanisms for administering the programme. However, as described above, there are strong signals from the industry itself that it is ready and eager to take action. It is up to the IMO, EU and other legislative bodies to provide the business with the required legal framework. Once in place, it could turn out to be a win-win situation, in which both the environment and the shipping industry benefit.


Gry Bratvold, [email protected]

Trond Eilertsen [email protected]

FOTO: © BigStockPhoto

WIKBORG REIN JANUARY �007 ��

MOVES TOWARDS GREATER TRANSPARENCY IN THE SHIPPING INDUSTRYThe fear of terrorist activity in the wake of 9/11 has led to much legal “new-thinking”, not the least in the maritime field. As it became known that Osama bin Laden himself may be a shipowner with some 20 vessels anonymously flying flags of convenience (”FOC”), the US embarked on a campaign for greater transparency in the ship-owning industry. So far the issue has been considered by both the OECD (Organisation for Economic Co-operation and Development) and the IMO (International Maritime Organization) and has accelerated the passing of the US 883 exemption on gross freight tax.

The combination of single-ship companies and FOC registration provides beneficial shipowners with anonymity. Hence, the US Secretary of Transportation was in the Bill to Improve Seaport Security (introduced to the Senate in �00�), specifically tasked to ensure greater transparency of beneficial shipowners’ identities through international conventions or domestic legislation.

In �004 the OECD’s Maritime Transport Committee published a report entitled “Maritime Security – Opinions to Improve Transparency in the Ownership and Control of Ships”. In the report the Committee focused on measures that ship registries and governments can take to ensure transparency.

In particular, the Committee noted that shipping registries should refrain from promoting anonymity as an advantage of their register. Moreover, it urged that registries should develop proper procedures and have capable personnel for the identification of persons wishing to register vessels. The Committee furthermore emphasised that registries should ensure that the corporate vehicles used meet nationality requirements and are not circumvented through the use of

foreign holding companies, bearer shares and the like.

The report acknowledged that many ship registries are likely to continue to promote anonymity as they regard this as their competitive advantage. The Committee therefore suggested that governments should co-ordinate their action against corporate mechanisms that facilitate anonymity. There are in fact various developments taking place in this field already, in particular in the context of money-laundering and harmful tax-practices. In the shipping context the Committee recommended that ships with an ownership structure or a flag which promotes anonymity should be targeted for investigations and in extreme cases be restricted from access to port.

The IMO’s evaluation of transparency in the maritime sector has however been more moderate. The IMO’s Legal Committee concluded that for security purposes the issue is not beneficial ownership, but rather identification of the person with effective operational control of a vessel. This information, the Legal Committee felt, could be readily attained through the application of the ISM Code (International Safety Management Code). Although international consensus as to

the need for and level of transparency in the shipping industry seems to be unlikely to take place soon, it is worth noting that the US has taken certain legislative measures. Thus, after several legislative attempts the US 88� exemption from freight tax is now operative. In terms of the regulation qualifying taxpayers are exempt from the US 4 percent gross freight tax if they provide detailed disclosure of their beneficial ownership of vessels visiting the US. This tax exemption comes at a time when it is believed the Internal Revenue Service will clamp down on tax filings as they are now able to compare with the US Coast Guard’s records of port calls. The first tax returns subject to the new regulations were due on 15 June �006.



Trond Eilertsen [email protected]


ASSOCIATED SHIP ARRESTS IN THE SOUTH AFRICAN JURISDICTIONThe South African admiralty jurisdiction may be of great importance to claimants which are looking for security for their claim but for some reason cannot or will not arrest the vessel in respect of which the claim arose. These claimants cannot readily rely on the sister ship arrest provision in the Arrest Conventions of 1952 and 1999 due to the proliferation of single-ship companies.

The South African Admiralty Jurisdiction Regulation Act of 198� (the “Act”) effectively pierces the corporate veil to establish the existence of an associated ship which may be arrested as security for a maritime claim. The procedure permits a claimant to arrest a ship which, at the time of the arrest, is owned by a person (or company controlled by that person) if the same person (or company controlled by that person) owned the ship which gave rise to the claim when it arose.

According to the Act, a person is deemed to be in control of a company if he has power, directly or indirectly, to control the company. Not surprisingly, this piercing of the corporate veil has been the cause of litigation in South African courts. Early cases established that “power to control” required something more than mere control of the day to day management of the company. What is required is control of a company’s “direction and fate”. The courts have suggested that this type of control can be inferred to persons who are, inter alia, shareholders of the company, on the board of directors, managing directors/CEOs or conferred control by virtue of statutory peculiarities (e.g. judicial managers).

In effect, the inquiry into “power to control” is both a question of law and of fact. For the claimant it has proven determinative to discharge its evidential burden. This is illustrated by two

Supreme Court of Appeal judgments, Heavy Metal and Le Chong.

In the much debated 1999 Supreme Court of Appeal judgment in the Heavy Metal the majority held that “direct and indirect” control indicated de jure and de facto control respectively. In the case L, a Cypriot advocate, was a nominee shareholder of both the company owning the vessel in respect of which the maritime claim arose (the “guilty vessel”) and the company owning the associated vessel at the time of the arrest. L refused to reveal the identity of the true owner of the company owning the guilty vessel based on attorney-client privilege. The Court regarded L’s conduct as unconvincing and dishonest and led it to find the existence of association on the balance of probability. The majority thus concluded that they could infer from the facts sufficient grounds to establish direct control, i.e. de jure control, by L as he was the registered majority shareholder and thereby controlled the fate of the company.

The importance of proper evidence of control was again emphasised in the recent Supreme Court of Appeal judgment in Le Chong. In casu the allegedly guilty and associated vessels were chartered and owned respectively by two state-owned enterprises of the People’s Republic of China. After having heard extensive expert evidence on Chinese constitutional law the Court

found it impossible to decide whether the two ship-owning enterprises involved were regarded by Chinese law to be under common control. The claimant had therefore failed to discharge its onus to establish the presence of the requisite association.

As seen in Le Chong, associated ship arrests can also be brought against a vessel owned by a person (or company controlled by that person) who demise chartered the guilty vessel when the claim arose. Moreover, in �00� the Act was amended to include a provision which deems all charterers by demise in actions in rem as owners of a vessel for the period of the charter. On application to associated arrests this could result in the arrest of a demise chartered vessel based on the association with a guilty vessel (owned or demise chartered). This far reaching consequence of the provision has yet to be brought before the courts.



Morten Lund Mathisen [email protected]


NEW LIMITATION LIMITS FOR WRECK REMOVAL, PASSENGER INJURIES AND DAMAGE CAUSED BY OIL PLATFORMSAfter adopting the 1996 Protocol in 2000, Norway denouncment the 1976 Conven-tion in 2005. Norway made a reservation for claims relating to removal of wreck and cargo and incorporated a new limitation regime for such claims which came into force on 1 November 2006. The limitation amounts for passenger claims and damage caused by oil platforms were increased with effect from the same date.

Decouncement of the 1976 limitation conventionFollowing Norway’s denouncement of the Convention on Limita-tion of Liability for Maritime Claims 1976 (the “1976 Conven-tion”), Norway is party to the 1976 Convention as amended by the 1996 Protocol to the 1976 Convention (the “1996 Protocol”), the so-called 1996 Limitation Convention.

By denouncing the 1976 Convention, the previous dual system, under which the 1976 Convention and the 1996 Protocol applied side by side, has been abolished. The 1996 Limitation Conven-tion now applies in general for the following claims (cf. the Nor-wegian Maritime Code section 17�) (“1996 Protocol Claims”):

1. Personal injury (loss of life or injury to persons) or property damage (loss of or damage to property), if the injury or damage arose on board or in direct connection with the operation of the ship or with salvage.

�. Damage resulting from delay in the carriage of goods by sea, passengers, or their luggage. �. Other damage if it was caused by infringement of a non-contractual right and arose in direct connection with the operation of the ship or with salvage. 4. Measures taken to avert or minimize losses for which liability would be limited, and losses caused by such measures.

New limitation regime for removal of wreck and cargoWhen denouncing the 1976 Convention, Norway made a reservation that excludes claims relating to removal of wreck and cargo from the application of the 1996 Protocol. The reservation adds three new features to the Norwegian Maritime Code, which will be addressed below:

1. Specific limitation amounts for claims relating to removal of wreck and cargo. �. Different regulations of owners’ own costs. �. New considerations with respect to the question of breaking limitation.

Higher limitation amounts for claims relating to removal of wreck and cargoThe new limitation regime applies to claims for:

1. raising, removal, destruction or rendering harmless a ship which is sunk, stranded, abandoned or wrecked, and everything that is or has been on board the ship; �. removal, destruction or rendering harmless the ship’s cargo; and �. measures taken to avert or minimize losses for which liability would be limited, and losses caused by such measures.FO

TO: © BigStockPhoto


Before Norway made the reservation these claims had to be made against the same limitation fund as the 1996 Protocol Claims. Pursuant to the new rules of §§ 17�a and 175a in the Norwegian Maritime Code, the owner and/or the P&I club now have to arrange a separate fund for claims for removal of wreck and cargo. This means that claimants within both categories are much better off. The new limitation amounts are quite substan-tial, as illustrated below:

GRT (1969) 1996 Protocol Claims (the Martime Code section 175 no. �) (SDR)

Claims for removal of wreck and cargo(the Maritime Code section 175a) (SDR)

�00 1 million 1 million

�01 1 million � million

1000 1 million � million

1500 1 million � million

�000 1 million 4 million

�000 1,4 million 6 million

6000 �,6 million 1� million

10 000 4,� million �0 million

�0 000 8,� million �5 million

�0 000 1�,� million �0 million

70 000 �4,� million 50 million

Owners’ own costsAccording to the 1976 Convention and the 1996 Protocol, a prudent owner having taken measures in order to avert or minimise losses was not allowed to claim such costs in the limitation fund, cf. Article � (1) (f). The same rule will still apply for measures that owners take to minimise or avert losses within the scope of the 1996 Limitation Convention.

However, with respect to owner’s costs to minimise or avert losses within the scope of the reservation for claims for removal of wreck and cargo, Norway has adopted a similar rule as in the International Convention on Civil Liability for Oil Pollution Damage 199�. This means that the owner and/or the P&I club are given the same opportunity as third parties to claim their own costs in relation to removal of wreck and cargo and bunkers oil clean-up from the additional fund.

When adopting the new rules, Norwegian legislators also considered whether to amend the rules that apply to conduct barring limitation, i.e. Article 4. It has often been claimed that the 1976 Convention provides for a virtually unbreakable system of limiting liability. In practice, however, the authorities’ usual reaction to a ship grounding or a similar marine incident, is to promptly issue an official order stating e.g. that the owner

is obliged to remove the vessel and the oil onboard, and to prevent pollution. If the owner does not comply, the authorities may argue that such failure would constitute a conscious and deliberate act on the owner’s part and that liability therefore is unlimited.

In order to avoid the difficult and complex causation issues that may arise in such a situation, the Norwegian Maritime Law Committee suggested that the right to limit should remain regardless of whether the authorities had issued a general order to prevent pollution. The Committee further argued that the right to limit liability should only be barred in cases where the owner had acted deliberately or grossly negligent. In the white paper (“travaux preparatoires”), the Norwegian Department of Justice rejected the Committee’s suggestion. Therefore, it remains uncertain what the position will be after such a general order has been issued.

New limitation amounts for passenger claims Norway has signed, but not ratified, the 1974 Convention relating to the Carriage of Passengers and their Luggage by Sea (the “Athens Convention”), which came into force internationally �8 April 1987. Norway has also signed, but not ratified, the Protocol of �00� to the Athens Convention (the “Athens Protocol �00�”). Norway considered ratifying the Athens Convention as amended by the Athens Protocol �00�, but decided to wait until the latter has come into effect internationally. Instead, the limitation amount for passenger claims was increased from SDR 175,000 per passenger to SDR 400,000 per passenger.

New limitation amounts for oil platformsPursuant to the NMC section 507, the liability limitation for drilling platforms and similar mobile constructions intended for exploration, exploitation, storage or transportation of subsea natural resources, and not being regarded as ships, is SDR 1� million for personal injury and SDR �0 million for other claims. The new rules in effect from 1 November �006 increase the mentioned amounts to SDR �6 million and SDR 60 million, respectively.

Henrik Hagberg, [email protected]




THE NORWEGIAN SYSTEM FOR PROTECTING MORTGAGEE INTERESTThe system for protection of mortgagee interest in the Norwegian Marine Insurance Plan has largely remained unchanged since the 1964 edition because it has proved to function to the full satisfaction of the banks throughout all these years. In this article Haakon Stang Lund, member of the Permanent Plan Revision Committee, describes the system for protecting mortgagee interest.

Automatic co-insurance and extended coverUnder the Norwegian Marine Insurance Plan of 1996 (the “Plan”) the interest of the mortgagees is automatically co-assured under the owner’s (mortgagor’s) insurances, see § 7-1 first paragraph. The mortgagee stands in the shoes of the owner, meaning that if the owner forfeits his insurance cover then the same will be the case for the mortgagee’s co-insurance.

In order to remedy this potential weakness the protection of the mortgagee interest can be extended under § 8-4. The effect is that the mortgagee interest is protected even if the owner has forfeited cover under the insurance pursuant to Chapter � of the Plan, for instance § �-�� on violation of safety regulations. Thus, the protection is comparable to independent mortgagee interest insurance.

Notification of the mortgage by the mortgagee to the insurer is not required in order for the automatic co-insurance to take effect, but notification is highly recommendable in order to obtain the further protection contained in §§ 7-� to 7-4, which will be considered below.

Amendments to and cancellation of the insuranceOne effect of notification of the mortgage

to the insurer is that it prevents the insurerfrom terminating the insurance, for example, due to lack of payment of a premium, unless the mortgagee has been separately and specifically notified about the early termination with at least 14 days notice, see § 7-�. It is important to underscore that § 7-� does not apply to termination of the policy according to its own terms. Thus, the mortgagee must establish strict routines to ensure that a time policy is renewed at the end of the insurance period.

In war risk insurance there is an express exemption from the specific 14 days notice, see § 15-8. In the event of a relevant change of risk, the war risk insurer or the owner will be entitled to cancel the insurance by giving 7 days notice. The relevant change of risk is (1) outbreak of war between the five major powers defined in § 15-5, i.e. Great Britain, the United States of America, France, the Russian Federation and the People’s Republic of China and (�) use of nuclear arms for war purposes and other hostilities, including ter¬rorist attacks. Such termination applies also to the rights of the mortgagee, but the mortgagee is entitled to be immediately notified about such cancellation.

Handling of claims, claims adjustment etc.A further consequence of notification of

the mortgage to the insurer is that, in accordance with § 7-�, decisions required in respect of casualties, adjustments or claims against third parties may be made without the participation of the mortgagee. In this regard the mortgagee’s interest is protected by § 7-4, which is the standard loss payable clause in the Plan.

The standard loss payable clauseThe Plan’s standard loss payable clause in § 7-4 first paragraph provides that: “In the event of a total loss, the mortgagee’s interest takes priority.” The corresponding provision in the 1964 Plan applied only in relation to the owner. The background of the amendment was, as is stated in the commentary to § 7-4, that parties other than the owner may also be entitled to compensation. Accordingly, the rule was made more general. Priority is given over all other interests including the interests of co-assureds pursuant to Chapter 8. Thus, neither the original assured nor any of the co-assureds are entitled to any payment under the hull policy until the mortgagee is satisfied. The same applies to any hull interest policy and/or freight interest policy.

Compensation for a single casualty exceeding 5 per cent of the sum insured shall, in the absence of consent from the mortgagee, only be paid by the insurer upon presentation of a receipted


invoice for repairs carried out, see § 7-4 second paragraph. The purpose of this provision is to ensure that payment from the insurer for partial damage to the vessel shall be used for actual repair of the vessel, putting the ship in the same state as she was before the damage. Smaller repairs, costing less than 5 per cent of the sum insured, may be settled with the owners without any particular formalities in relation to the mortgagee being observed.

If the insurer shall pay compensation without repairs being carried out, this cannot be done without the consent of the mortgagee, see § 7-4 third paragraph. Under the �007 version of the 1996 Plan the right of the owner to receive a cash compensation without any obligation to repair the vessel is extended considerably, but no such payment can be done without the consent of the mortgagee. Thus, the mortgagee will remain in full control of the cash flow and has the option either to provide that the cash amount paid by the insurer is

secured for later repairs of the vessel or is used, for example, for an extraordinary down payment of the outstanding loan under the mortgage.Payments under a loss of hire insurance cannot be done without the consent of the mortgagee, provided that the mortgagee has also secured a mortgage on the ship’s freight income, see § 7-4 fourth paragraph.

Compensation from the insurer to cover the owner’s liability towards third parties for collision liability, salvage awards or other liability covered under the insurance can only be paid upon presentation of a receipt from the third party, see § 7-4 fifth paragraph. This secures that the third party is compensated and thus prevents or releases any maritime lien from securing such claim. It is noteworthy that even though the purpose of the provision is to prevent any maritime lien from having better priority than the mortgage, the fifth paragraph is general, so there is no need to examine whether the claim from the

third party is equipped with a maritime lien.

The consent of the mortgagee is required for the insurer to set off claims against the owner if the counterclaim has arisen out of the insurance contract relating to the ship in question and has fallen due in the course of the last two years prior to the settlement of the claim, see § 7-4 sixth paragraph. A practical example is the insurer’s potential set off of an unpaid premium against the owner’s claim under the insurance.

FOTO: O. Kobayashi



Anders W. Færden, [email protected]


PERSONNEL NEWS IN THE SHIPPING OFFSHORE GROUP [from June �006 to January �007]Finn Bjørnstad has succeeded Trond Eilertsen as head of the Shipping Offshore Group, the latter having taken the position as chairman of the board of Wikborg Rein. Anette Jahr has left the firm and set up her own practice. Mats E. Sæther has left the firm and joined another Oslo based law firm. Simone Trondal and Gøran Lunde Aarvik have been promoted to senior associates. Birgitte Karlsen has been promoted to senior associate and will return from the Singapore office to the Oslo office. Ingrid Lind

Groh will, as a part of her participation in the Norwegian Shipowners’ Association’s Maritime Trainee Programme, be relocated from the Oslo office to the Singapore office. Gry Bratvold has left the London office and returned to the Oslo office. Ingrid Høstmælingen has replaced her at the London office. Torgeir Willumsen has joined the Oslo office after having completed his law degree at the University of Bergen and Master of Laws degree at the University of Heidelberg.

SKIPSBYGGINGKOMMENTARER TIL NORSK STANDARD SKIPSBYGGINGSKONTRAKT (SHIPBUILDING - COMMENTARY TO NORWEGIAN STANDARD SHIPBUILDING CONTRACT)

«Skipsbygging» is the first Norwegian book on the particular legal relations related to ship-building in several years. The book is a commentary to «Ship �000», the Norwegian standard shipbuilding contract, which is recommended used when building ships in Norway as well as internationally. The book is an essential manual for lawyers, shipbuilders, shipowners, brokers and others involved in shipbuilding.

The author, Øystein Meland, is a partner at Wikborg Rein’s Bergen office and co-manager of the firms Shipping Offshore Group. He has worked with shipping matters for more than �0 years for Norwegian and foreign clients, and have over the last years been extensively involved in competition law related to maritime transport. He is presently advising in an international cartel matter relating to maritime transport, both in the US and in the EU. He is the manager of Bergen Shipowners’ Association, member of BIMCO Documentary Committee and the Legal Committee of the Norwegian Shipowners’ Associa-tion.

The book (only in the Norwegian language) can be ordered directly from the publisher:

Price: NOK 595�4� pages hardcoverISBN: 8�-71�8-4�1-5

Bodoni Forlag Tel.: + 47 55 �0 18 80, e-mail: [email protected]


WIKBORG REIN'S SHIPPING OFFSHORE GROUP

OUR ASSISTANCE INCLUDES:

- Registration of ships, choice of flag and registration;- Control and classification of ships;- Building and repair contracts for ships and rigs;- Sale and purchase of ships;- Ship finance, lien and mortgage;- Organisation and management of shipowners (corporate law, tax etc.);- Casualty work, including owner’s liability, limitation of liability, liability for oil spill and collisions, maritime inquiry and other public law issues;- The law of chartering, including bills of lading and charterparties;- Cargo claims;- Crew matters;- Arrest, salvage and general average;- Maritime insurance, including hull & machinery and P&I claims and interpretation of club rules;- Freight forwarding and land transportation

Wikborg Rein’s Shipping Offshore Group is Norway’s leading maritime practice in one the country’s largest law firms. With offices in Norway’s major commercial centres, Oslo and Bergen, and offices overseas in London, Singapore, Shanghai and Kobe, Wikborg Rein has a strong international profile. We serve clients across the full range of shipping, transport, and offshore activities, including marine insurers, ship owners, various offshore companies, shipyards, equipment providers, ship brokers and agents, shipping banks as well as companies related to freight forwarding and land transportation.

CONTACTS:

Oslo:Finn Bjørnstad, tel. +47 �� 8� 76 11, [email protected] Eilertsen, tel. +47 �� 8� 76 1�, [email protected] Stang Lund, tel. +47 �� 8� 76 05, [email protected] Anders W. Færden, tel. +47 �� 8� 75 44, [email protected] Gjelsten, tel. +47 �� 8� 76 �1, [email protected]

Bergen:Øystein Meland, tel. +47 55 �1 5� 75, [email protected] Heimset, tel. +47 55 �1 5� 7�, [email protected] Ove Røberg, tel. +47 55 �1 5� 65, [email protected]

London:Morten Lund Mathisen, tel. +44 �0 7��6 4598/+44 780� 444 �11, [email protected]

Singapore:Erlend W. Holstrøm, tel. +65 64�8 4498/+65 98�� 4410, [email protected] W. Fordham, tel. +65 64�8 4498/+65 9671 �4�5,[email protected]

Shanghai:Yafeng Sun, tel. + 86 �1 6��9 0101, [email protected] Berge Andersen, tel. + 86 �1 6��9 0101, [email protected]

Kobe:Oddjørn Slinning, tel. +81 78 �7� 1777, [email protected]

This Update is produced by Wikborg Rein. It provides a summary of the legal issues, but is not intended to give specific legal advice. The situations described may not apply to your circumstances. If you require legal advice or have questions or comments, please contact your usual contact person at Wikborg Rein or any of the contact persons mentioned herein. The information in this Update may not be reproduced without the written permission of Wikborg Rein.

We thank Eve de Coning for contributing with the articles ”Moves towards greater transparency in the shipping industry” and ”Associated ship arrests in the South African jurisdiction””

Photos by O. Kobayashi (http://shipphoto.exblog.jp) reprinted with his permission


www.wr.no

THE MEMBERS OF WIKBORG REIN’S SHIPPING OFFSHORE GROUP:

Oslo

Partners

Finn Bjørnstad(+47) �� 8� 76 11 , [email protected]

Trond Eilertsen(+47) �� 8� 76 1�, [email protected]

Anders W. Færden(+47) �� 8� 75 44, [email protected]

Gaute Gjelsten(+47) �� 8� 76 �1, [email protected]

Bernhard Haukali(+47) �� 8� 76 16, [email protected]

Erling C. Hjort(+47) �� 8� 76 01, [email protected]

Haakon Stang Lund(+47) �� 8� 76 05, [email protected]

Johan Rasmussen(+47) �� 8� 76 �5, [email protected]

Are Zachariassen(+47) �� 8� 76 7�, [email protected]

Senior Associates

Siri Birgitte Bang(+47) �� 8� 75 64, [email protected]

Marie Efpraxiadis(+47) �� 8� 75 15, [email protected]

Henrik Hagberg(+47) �� 8� 75 5�, [email protected]

Eirin M. Inderberg(+47) �� 8� 76 47, [email protected]

Birgitte Karlsen(+47) �� 8� 75 �6, [email protected]

Martin Nes(+47) �� 8� 76 55, [email protected] Alexander W. Owesen(+47) �� 8� 76 78, [email protected]

Simone Trondal(+47) �� 8� 76 �4, [email protected]

Associates

Annette Haugland Andreassen(+47) �� 8� 75 61, [email protected]

Ena Barder(+47) �� 8� 75 45, [email protected]

Gry Bratvold(+47) �� 8� 75 �7, [email protected]

Hilde Lund(+47) �� 8� 75 �6 , [email protected]

Louis Skyner(+47) �� 8� 75 95, [email protected]

Eirik Thomassen(+47) �� 8� 75 �1, [email protected]

Torgeir Willumsen(+47) �� 8� 75 67, [email protected]

Bergen

Partners Christian Friis(+47) 55 �1 5� �5, [email protected]

Jon Heimset(+47) 55 �1 5� 7�, [email protected]

Øystein Meland(+47) 55 �1 5� 75, [email protected]

Geir Ove Røberg(+47) 55 �1 5� 65, [email protected]

Katrine Trovik(+47) 55 �1 5� �0, [email protected]

Senior Associates

Øyvind Axe(+47) 55 �1 5� 66, [email protected]

Linn Hertwig Eidsheim(+47) 55 �1 5� 96, [email protected]

Terje Fiskerstrand(+47) 55 �1 5� 56, [email protected]

Lars Inge Ørstavik(+47) 55 �1 5� 69, [email protected]

Associates

Hågen Hansen(+47) 55 �1 5� 51, [email protected]

Christian James-Olsen(+47) 55 �1 5� 50, [email protected]

Kristoffer Larsen Rognvik(+47) 55 �1 5� 68, [email protected]

Lars Tormodsgard(+47) 55 �1 5� 70, [email protected]

London Partners

Morten Lund Mathisen(+44) �0 7� �6 45 98, [email protected]

Senior Associates

Gøran Lunde Aarvik(+44) �0 7� �6 45 98, [email protected]

Associates

Ingrid K. Høstmælingen(+44) �0 7� �6 45 56, [email protected]

Herman Steen (+44) �0 7� �6 45 98, [email protected]

Singapore

Partners Stephen W. Fordham(+65) 64 �8 44 98, [email protected]

Erlend Holstrøm(+65) 64 �8 44 98, [email protected]

Chuen Yee Chee(+65) 64 �8 44 98, [email protected]

Associates

Ingrid Lind Groh(+65) 64 �8 44 98, [email protected]

Foreign Counsel

Florence Ong(+65) 64 �8 44 98, [email protected] Karen Ong(+65) 64 �8 44 98, [email protected]

Grace Teo(+65) 64 �8 44 98, [email protected]

Shanghai

Chief Representative Lars Berge Andersen(+86) �1 6� �9 01 01, [email protected]

Senior Legal Consultant

Yafeng Sun(+86) �1 6� �9 01 01, [email protected]

Legal Consultants

Deborah Yu(+86) �1 6� �9 01 01, [email protected]

Chelsea Chen(+86) �1 6� �9 01 01,[email protected]

Joanna Zhao(+86) �1 6� �9 01 01, [email protected]

Kobe

Japan Representative Oddbjørn Slinning(+81) 78 �7� 17 77, [email protected]

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