Updates to maritime legislation – Lexology
The Shipping Law Updates is a publication of our regional shipping group that brings together legal expertise, industry knowledge and business acumen in the maritime and commercial fields of the diverse talent lawyer specializing in Rajah offices & Tann Asia. The publication provides an overview of the main legal, regulatory, jurisprudential and industrial developments in the region which have an impact on the shipping industry.
In this issue, we report on changes to the rules for the service of admiralty writs and arrest warrants in Malaysia to ensure safety amid the COVID-19 pandemic. We also examine the evolution of the registration and authorization rules for the demolition and recycling of ships in the Philippines.
Malaysia: Amendments to the rules of service for admiralty writs and arrest warrants
“Times are changed; we too are changed with them“, said the Roman poet Publius Ovidius Naso.
In accordance with these wise words, the Malaysian Courts Rules Committee has made changes to the admiralty method of service. in rem writs and arrest warrants.
These changes are part of a series of amendments aimed at ensuring that the practice of law in Malaysia remains uninterrupted, despite the restrictions brought about by the COVID-19 pandemic. The amendments, drafted with input from the Malaysian Bar Association’s Navigational Law and Admiralty Committee, provide an alternative to the usual method of serving letters. in rem briefs and warrants.
This update will discuss the changes and the intentions behind them. The changes came into effect on December 15, 2020.
The usual position
Actions in rem are actions against a reswhether it is a ship (or vessel), cargo or freight. Arrest warrants are requested by in rem claimants to ensure their debt is secure.
It has therefore been for a long time in common law jurisdictions that the writ and the warrant of arrest in a in rem claim against a ship is served on the ship itself (as opposed to service on the shipowners).
This is done by:
- Affixing of writ and warrant “For a short time on any mast of the ship or outside any suitable part of the ship’s superstructure”; and,
- “By withdrawing the writ or warrant, leaving a copy of it affixed to a sheltered and conspicuous part of a ship”.
In practice, this method of service requires the sheriff of the Admiralty (and the plaintiff’s attorneys) to contact the captain and crew of a ship to board the ship, explain the effect of the writ and warrant to the captain and affix the writ and warrant on the ship; impossible to do without cooperation (or at least acquiescence) and communication with the captain and crew.
This method of service, however, exposes everyone involved – whether the captain and crew, the admiralty sheriff or the plaintiff’s lawyers – to the risk of contracting COVID-19 due to the working conditions. close aboard ships and the (often prolonged) discussions that take place. Therefore, shipowners, law firms and court staff will need to consider whether those involved in the service of the writ and warrant should be (among other things) isolated from the workforce while awaiting test results. swabbing.
The new layout
New Rule 10 (1A) of Order 70 of the Rules of Court reads as follows:
“Notwithstanding paragraph (1) above, the Court or the Registrar may, in exceptional circumstances, order that service of the writ in an in rem action or warrant of arrest be effected by affixing the writ or warrant. outside any suitable part of the ship’s hull or superstructure and follow up immediately afterwards with electronic communication of a copy of it by or on behalf of the sheriff as notice to the owners and / or private charterers of the vessel, the master or managers of the vessel or the local agent, and the competent maritime service, by e-mail or by any other means. “ (Emphasis added)
What does it mean?
The amendment (in short) removes the obligation to board the ship when serving the writ and warrant. It allows the sheriff of the Admiralty (usually accompanied by the plaintiff’s lawyers) to simply affix the writ and warrant to the hull of the ship, then notify the arrest to the deceased owners or charterers, etc., by means of ‘electronic communication. .
The changes eliminate the need for the Admiralty Sheriff (or the plaintiff’s attorneys) to board the ship, to have physical contact with the captain and crew, to explain the effect of legal process and generally risking all parties – whether they be the crew, the marshal or the lawyers – of contracting the COVID-19 virus.
This change, which we can build on in the light of ‘exceptional circumstances’, protects the interests of all parties involved by:
- Maintain the long-standing practice of serving the writ and warrant on the ship;
- Mitigate the risks associated with this long-standing practice by avoiding any need for physical contact between the parties; and,
- Ensure prompt notification to all parties concerned with the employment of the vessel that the vessel is subject to in rem procedure.
Perhaps the most practical step for an applicant to take in a in rem request is to take note of the new requirement and to ensure that the spirit and the letter of the law are respected.
The applicant must then also ensure that the Affidavit of Service (usually sworn by the Sheriff of the Admiralty or the applicant’s attorneys) accurately reflects the manner in which the Writ and Warrant were served.
This can be done by ensuring that the affidavit details the time and place where the writ and warrant were served and presents relevant excerpts from the electronic communication that took place with the shipowners or charterers. deceased, etc. of the ship.
It is heartwarming to know that Malaysia (in line with other common law jurisdictions such as Singapore and Australia) has put into effect changes to ensure that the service of in rem writs and arrest warrants are not hampered by the pandemic. These changes – reflecting both long-standing practice and incorporating modern technology – will benefit both practitioners and industry players.
Philippines: registration and authorization for demolition and recycling of ships
The Philippine Maritime Industry Authority (MARINA), the Philippine government office responsible for accrediting shipbuilding and shipbreaking companies, issued Circular No. SR-2020-01 (“MC 2020-01“) prescribing the rules for registering and authorizing the demolition and recycling of ships.
Under MC 2020-01, entities are required to obtain a “one-time” registration certificate from MARINA before engaging in ship demolition or recycling activities. In addition to the registration certificate, MARINA will issue licenses to entities engaged in the demolition and recycling of ships. The license is a prerequisite for the granting of the incentives and is valid for five years (subject to annual presentation of the required documents). One of the incentives offered to shipbreaking and recycling entities is the exemption from value added tax on the importation of certain goods.
MC 2020-01 offers two classes for entities engaged in the demolition and recycling of ships. Class A entities can dismantle or demolish ships over 80 meters in length while Class B entities can work on ships over 80 meters.
Entities intending to engage in ship demolition and recycling activities are required to have the following:
- The statutes state that the entity is authorized to engage in the demolition and recycling of ships;
- Paid-up capital of at least 25,000,000.00 Php (for class A entities, the requirement is 50,000,000 Php);
- Ownership or possession (through a lease with a term of at least five years) of the site where the shipbreaking and recycling facility will be built;
- ISO 9001: 2015 certification;
- Certification issued by a government recognized body or a certification body accredited by accreditation offices associated with the Pacific Accreditation Cooperation; and
- Compliance with (i) Ministry of Labor and Employment guidelines on occupational safety and health in the construction, demolition and ship repair industries, and (ii) Ministry procedures and standards of the Environment and Natural Resources (DENR) for the management of hazardous waste.
MC 2020-01 provides that shipbreaking and recycling companies are required to do the following before dismantling a ship: (a) submit a ship demolition or recycling plan to MARINA, and (b) obtain a MARINA ship demolition and recycling permit. In addition, entities that import vessels for the purpose of demolition and vessel recycling are required to obtain an import authorization from MARINA. The imported vessel must be inspected by MARINA prior to issuance of the Ship Demolition and Recycling Permit.
Ship demolition and recycling activities can only be undertaken in the registered yard. MARINA may, however, authorize ship demolition activities on site for the following reasons:
- Danger to navigation caused by the ship;
- Repositioning the vessel is dangerous;
- Unavailability of a wrecker registered MARINA;
- Marine pollution can be caused by the ship; and
- Other cases requiring immediate attention and justifying the public interest.
On-site shipbreaking activities must be covered by a “Special Permit for On-Site Shipbreaking” issued by the Marina and other permits issued by relevant government agencies.
Our C&G team, together with our Singaporean colleagues at Rajah & Tann Singapore LLP, had the opportunity recently to advise on various practical and tax aspects of cross-border movements and responsible handling of the tonnage of former tankers designated for decommissioning. potentially in Indonesia or the Philippines.