Latin Terms Used in Shipping Law

Some might say that shipping law is one of the more old fashioned categories of civil law, especially in comparison with say Intellectual Property or Media law. And although the Woolf Reforms* signalled the death knell for much of the latin used in civil courts in England and Wales it is still common  to come across the use of legal latin in shipping law claims and cases.

Here is a list of some of the most common legal latin phrases and words and their meanings.

Latin – English – Meaning 

Ab Initio – From the outset – This is normally used to describe that something is invalid or unlawful from its beginning. For example if you entered an illegal contract and after some time operating under it someone breached it, you might say that the contract was invalid from the date of the breach whereas another party
might argue that the contract was void ab initio, in other words it was never effective.  

Bona Vacantia – Ownerless goods – Some legal systems, including the English legal system, have a concept of Bona Vacantia, to organise how to deal with property which is owned by no one. Examples of such property would be if someone set up a company and then suddenly moved to the Amazon (for a lfiestyle change). The company would eventually be dissolved for not trading and its assets, not being claimed by any shareholders, would be Bona Vacantia and go to the government (essentially). Another example is the assets of people who die with no known relatives and leaving no will.

De Minimus Non Curat Lex – The law does not concern itself with trifles – This is a very useful maxim. The point behind it is that the law is made for keeping order in society (criminal) and allowing confidence in personal and commercial contracts (that the Civil law will uphold them if broken). All this is for the greater good of everyone in the society. The law is not there to pick on tiny points and punish people or businesses for tiny technicalities which are of no interest to anyone. For example, if you walk on the grass where there is a sign that says ‘do not walk on the grass’, you may have technically broken an agreement with the landowner or caused criminal damage but neither the civil nor criminal courts will be interested in your actions as they are relatively insignificant. Another example, that I witnessed myself, was someone entering train station barriers to meet a friend on the platform. They were asked where they were going by an attendant on the platform and when they explained he told them the terms of their season ticket say they must only enter the area beyond the barriers for the purpose of travel. Whilst this may be true no court would be interested in such a minor indiscretion.

Nemo Dat Quod Non Habet – You cannot give what you do not have – English law recognises this concept, particularly in relation to the transfer of property. If I sold your car on Ebay, despite you being the owner clearly that would be a fraud so this subtle maxim would probably not be relevant. Where it is more relevant, for instance in a maritime law context, would be if your vessel goes on fire and, although put out, the repair cost will be more than the total insured value. The H&M insurers might agree to pay you the total insured value but in doing so obtain a proprietary interest in the vessel (i.e. a right to sell the fire damaged vessel and offset the proceeds, say £ 10,000 against their payout). If you then accept their cheque and then sell the wreck to a hobbyist boat restorer friend for £ 1, say, then the court could invaludate this sale because you have given something (the proprietary interest in the vessel) that was not yours to give.

Res Judicata – A judged matter – This means that a claim has been dealt with already and cannot be reopened. For example if a Claimant sues someone and they agree to pay them compensation. They spend the compensation and then issue legal proceedings for compensation the defendant would please Res Judicata as a defence on the basis the matter had already been dealt with. Similarly if you are sued and win your case before the court, only to find the Claimant sueing you again for the same claim, you could please Res Judicata.

* The 1996 Woolf Reforms (implemented to civil law cases from 1999 onwards) were designed to make the civil court process in England and Wales more approacheble, cheaper, quicker and easier to understand. As a result they abolished the use of latin in civil cases. As they related to civil cases you will still find latin used in criminal law (Actus reus etc.).

ARTICLE: The Sinking of the “Bulgaria” (2011)

 

Vessel: Passenger Ship “Bulgaria”

Year: 2011 (July)

Place: Tatarstan, Volga River, Russian Federation.

Incident: Sinking.

Casualties: 77 Adult fatalities, 11 children. 

Cause: Age & Maintenance of Vessel / Overcrowding / Heavy Weather. 

On 11 July the vessel “Bulgaria” was sailing, heavily overcrowded, when it rolled, allowing water to rush into the internal spaces, causing the vessel to sink. It took just three minutes to sink leaving almost 200 people overboard and trapped inside, two miles from land.

One of the most tragic reports from the incident was that two nearby vessels sailed past and refused to offer assistance to the survivors. It noew appears that legal proceedings will be issued against those two ships by the Russian government.

The ship was 55 years old and its construction meant that any water ingress to internal areas was fatal (there were no seperation comprtments in the hull). The extrememe overcrowding would not allow it to stay upright in the weather it experienced. Investigations into this tragic accident are ongoing.

NEWS: Greece Gets Tough on Yacht Owners

The Times Newspaper recently reported* that the Greek customs agency in charge of ship taxes is currently visiting every single vessel registered as residing in Greece, to check whether its vessel type has been correctly designated. The agency reports that in the past an estimated 1,400 yachts in Greece were designated as various forms of merchant vessel and even fishing vessel. This led to some paying less, or no, tax and others actually earning subsidies. 

ARTICLE: Legal Costs

Shipping law is one of the most niche areas of the legal system. Whilst there is a huge body of law, which is for the most part very complex, there are very few shipping law cases that result in legal proceedings. There are therefore relatively few firms (especially outside the big cities) who can concentrate their entire practice on an area of shipping law or even shipping law as a whole. For this and other reasons the costs of shipping law disputes tend to be towards the higher end of the spectrum.

Indeed, when a case involving shipping law does go to trial it is often found that there has not been a clarification of the law for some time – in the recent case of Global Process Systems v Syarikat Takaful Malaysia Berhad a question arose as to what constituted ‘inherent vice’ under a marine insurance policy and it was surprising how many different views appeared on what was one of the fundamental elements of marine insurance. This case was unusual in that the parties had particularly ‘deep pockets’ and were willing to hold their ground on the legal points. The claim therefore went from first instance decision to Court of Appeal and all the way to the Supreme Court (Judgment link). This is highly unusual for a shipping law case in England and the legal costs for the losing party must have been significant.

THE ‘ENGLISH RULE’ (the successful party can recover costs from unsuccessful party)

In most parts of the common law world costs are based on what is known as the ‘English Rule’; that costs ‘follow the event’. In other words the case is concluded and then the legal costs are divided as appropriate, usually meaning that the losing party pays their own costs and the costs for the other side. The logic is that in every dispute one side is at least theoretically wrong and had they amended their position the need for legal proceedings would have been avoided altogether.

This is a general rule and there are many nuances and exceptions to it. For instance in small claims track cases (low value disputes) the winning party normally will either not be able to recover any costs from the other side or only fixed amounts of costs. This is to stop parties with large amounts of funds available spending disproportionate amounts on legal fees in small disputes to ‘scare off’ the other side. For instance if you did not pay £ 150 on your phone bill because you were billed that amount by mistake. If the company did not listen and took you to court threatening that you would have to agree to pay it or be left owing them approx. £ 35,000 in legal costs.

The costs system in England, and the level of costs generally, is often cited as the main reason for there being relatively little use of the civil courts and a general reluctance to take disputes to legal proceedings in England. Lord Justice Jackson recently conducted a wholesale review of the system which is available here.

THE AMERICAN WAY (the successful party cannot recover costs from unsuccessful party) 

The USA is the best example of the alternative system. In the USA a successful party in litigation generally cannot recover their legal costs from the other side in the dispute. Like small claims in England this gives those people and companies of limited means the ability to use the court system freely, without the threat of incurring enormous unbudgeted defendant’s costs. The flip-side of this is that people perhaps lose a natural inhibition to litigate small or needless disputes that exists in England and the level of litigation is quite high.

AN ALTERNATIVE (the successful party can recover a fixed amount of costs from the unsuccessful party)

Lord Justice Jackson, who has conducted a wholesale review of the English costs system (linked to above) has been known to admire the German courts system for attribution of costs. This system is a blend of the English and American systems, where successful parties can recover reasonable costs but only up to a fixed amount.

“NO WIN – NO FEE”

Sometimes referred to in a maritime context as ‘no cure, no pay’, this is an agreement that the lawyer will only charge legal fees where they are successful in your legal case. This normally means that they obtain compensation from the other side for you (either in court or before going to court). This does not mean no win, no charge. Even where the lawyer is not successful they only waiver their legal fees and they may still charge you disbursements (telephone and travel costs, photocopying expenses, court fees, barrister’s fees etc.).

Because lawyers taking on these cases are risking being essentially unpaid for some of the work they do they will normally wish to charge more for the cases that they do win. For this reason in the USA it is common for such lawyers to note that is successful they are entitled to legal fees and / or a share of the compensation. This is known as a ‘contingent or contingency fee‘ and is normally not allowed for family or criminal cases.

Whilst it can seem unfair, if you have a civil claim but no ability to pay for legal representation to enforce it, the  contingency fee option is a real boon. In English law such fees are only allowed in very specific instances, where costs are not generally recoverable from the other side. Normally English solicitors may only use a ‘conditional fee‘ which is a percentage increase on their fees (or a ‘success fee’) that they get where they are successful. This is normally between 10  and 100 % and is recoverable from the other side in the dispute as long as they are properly informed about its existence.

ARTICLE: The “Exxon Valdez” Oil Spill (1989)

A photograph of the aftermath of the spill.

GUIDE: CARGO SHIPS

Cargo ships are some of the most distinctive ships of any genre of shipping; most uniquely designed to carry a specific type of cargo. Some of the main ones and most distinctive are set out below.

1.1 BULK CARRIERS WITH MULTIPLE HOLDS

1.2. GEARED BULK CARRIERS (HAVE THEIR OWN CRANES SO THEY CAN VISIT SMALLER PORTS)

2.1.A. LPG TANKERS

This particular type of vessel is now quite uncommon; thanks to the refrigerated containers which can on containerships there is little need for charterers or cargo interests to hire an entire refrigerated vessel.

ARTICLE: Cargo Ship Hull Colours

Cargo ship’s have a lot of hull to cover in paint and one of the considerations when purchasing or refurbishing a ship is which colour to paint the hull. 

Grey or Black would be natural choices, like in the navy and many merchant vessels agree:

Others are painted in their company livery, like:

Maersk (blue)

However, some companies are also in the habit of painting their ships in garish colours, such as:

The Pink Containership (which has a female Master, Captain Ebner, believe it or not):

The Yellow Feeder Vessel:

However, even the most gauche of the modern merchant ships would have trouble competing with the “dazzle ships” of World War I. The allies gave up on trying to camouflage the ships with grey or blue paint and instead conceded they could be spotted, and switched the paints function to be so confusing that through a small u-boat periscope it was very difficult for a Germany naval officer to identify the size, type, weight, course or speed of the ship; thus their torpedoes (which then were required to be precisely aimed), missed the target.

ARTICLE: Voyage Charters

Charterparties are contracts for the hire of a vessel (or part of, or space onboard, a vessel). Voyage charters are a type of charterparty where the charterer requires the vessel for one voyage only, i.e. if you needed to move 100 MT of iron ore from Brazil to China, you could charter a bulk carrier and use its holds to transport your cargo from Brazil to China.

As the charterer, you only need to provide the goods for shipment at the agreed time and pay the freight charges (‘freight’, not ‘hire’ as in time / bareboat charters). The shipowner will provide the ship, equipment, bunkers, Master and crew. They will also normally pay the port expenses, pilot fees etc.

Voyage charters are commonly used in the movement of bulk cargoes and normally the charterparty is entered into in advance of the goods actually being received and sometimes in advance of them being purchased by the shipper. Therefore when the goods are presented for shipment (at the ship’s rail) the Master will normally issue a Bill of Lading describing the type, amount and quality of cargo actually received. The Bill of Lading acts as a receipt only (rather than the contract of carriage itself – as in, for example, the Liner trades).

Many of the standard forms of voyage charter contain the suffix ‘voy’ (CEMENTVOY, ASBATANKVOY etc.), which gives a clue as to the type of charter they relate to, but a more extensive list of the main forms of voyage charter, and the cargoes commonly carried under them, is set out below:
GENCON 1976 (general bulk cargo)
GENCON 1994 (general bulk cargo)
ASBATANKVOY (oil and gas)
POLCOALVOY (coal)
AMWELSH 93 (coal)
SCANCON (Scandinavia cargo)
GRAINCON (grain)
NIPPONCOAL (coal)
OREVOY (ores)
NUBALTWOOD (wood from the Baltic)
GASVOY (liquid gas, but not LNG)
FERTIVOY 88 (fertilizer)
AUSTWHEAT 1990 (Australian wheat)
NORGRAIN 89 (North American grain)
HYDROCHARTER 1975 (phosphates etc.)

ARTICLE: Time Charters

Charterparties are contracts for the hire of a vessel (or part of, or space onboard, a vessel). Time charters are a type of charterparty where the charterer hires the vessel for a period of time. They normally hire the vessel with all its equipment, the Master and crew and in exchange the owner asks them to pay a ‘hire’ charge, which is paid daily or monthly.

Charterers in these situations may be buying and selling goods and require the use of a vessel for a number of months to transport goods in an area or in different parts of the world. Obtaining a vessel on time charter for a three month period and completing, say, seven voyages, would generally be much more cost effective than entering into seven seperate voyage charterparties with differnt ships.

Another scenario is where you identify potential demand for extra tonnage in acertain area (say bulk commodities being moved from northern Austrlia to Singapore and Hong Kong).You can then time charter a vessel from a shipowner and offer it for voyage charter on these routes. If successful, the freight you collect each week, or month, could far exceed the hire charges you are liable to pay to the shipowner and the admin costs of arranging the voyage charters.

Many of the standard forms of time charterparty contain the suffix ‘time’ (BALTIME, SHELLTIME etc.), which gives a clue as to the type of charter they relate to, but a more extensive list of the main forms of time charter, and the cargoes commonly carried under them, is set out below:
BALTIME 1939 (general)
SHELLTIME (offshore)
BARGEHIRE 94 (barges)
BOXTIME (containerships)
GENTIME (general)
NYPE 93 ‘New York Product Exchange’ (general)
SUPPLYTIME 89 (offshore)

ARTICLE: Bareboat Charters

Charterparties are contracts for the hire of a vessel (or part of, or space onboard, a vessel). Bareboat, or ‘demise’, charters are a type of charterparty where the charterer hires the vessel for a period of time and just hires the ship ‘bare’; in other words without a Master or crew. The charterer staffs the boat, supplies bunkers and is generally free to decide where to take the vessel and what to do with it (within the contractual limits set out in the charter). 

Often this is done as an alternative to buying a ship, whch can be a huge commitment. Say if a small shipping company is receiving more demand than it’s current fleet can supply, it may not want to order a new build ship or obtain a ship mortgage to buy a second hand vessel as both are very long term commitments and there is no guarantee that the demand will be sustained. Instead they may choose to pay six months’ or a year’s hire for a ship, crew it and capitalise on the upturned interest in this way. If the market remains high they can always increase the charter period or even make an offer to purchase the vessel, and if the interest fades then they can merely return the ship with no further commitment (and not suffering from any loss in hull value due to depreciation or lower freight rates).

Indeed, some shipping companies will never purchase their own fleet, preferring to hire vessels on long-term bareboat charters. In these companies it is not uncommmon for them to be allowed to paint the ship in their own livery whilst it is on charter so it does appear that they do in fact own it.

Many of the standard forms of time charterparty contain the prefix ‘bare’ (BARECON for example), which gives a clue as to the type of charter they relate to, but a more extensive list of the main forms of bareboat charter is set out below:
BARECON 2001