Around 90% of global trade is transported by commercial shipping, which moves the world’s food, energy and raw materials, as well as manufactured goods and components without which modern society simply cannot function.
In the service of world trade, numerous legal issues arise that could affect the international shipping industry. In addition, while the goal of the shipping industry is ultimately to completely eliminate maritime accidents, the sea remains an unpredictable and at times dangerous place to operate and accidents do unfortunately still occur endangering lives, property and the environment. A comprehensive international liability regime is in place to ensure that compensation is available when things go wrong.
Why international uniformity of law is crucial
The Maritime Law Committee comprises maritime lawyers and policy experts drawn from ICS national associations and their shipping company members, and from guest associations, to consider legal and liability issues of international concern on behalf of the shipping industry
Since its inception, ICS has participated in the development of international treaties to provide uniform regulation of shipowners’ legal liabilities to cargo owners, passengers, pollution damage claimants, and others, and to regulate other matters such as salvage, security, and some financial aspects of shipping.
This important work was traditionally undertaken by the international maritime lawyers’ association, the Comite Maritime International (CMI). When the Legal Committee of the IMO was formed some 50 years’ ago in the aftermath of the Torrey Canyon tanker disaster and the resulting oil pollution, it took on the work of developing treaties to regulate international shipping. The Torrey Canyon incident revealed in particular a need for an international regime for liability and compensation for the consequences of oil pollution from ships. The ICS Maritime Law Committee was established to provide a forum for the development of ICS positions to assist the IMO and other international regulators’ member States in their deliberations on this and future matters and deliver workable and sustainable solutions that maximise the amount of compensation available to claimants.
While issues concerning shipowners’ liabilities under IMO and other international conventions are central to the remit of this Committee, it also considers other legal issues that could affect the international shipping industry and provides advice on the legal aspects of matters on the agenda of other ICS Committees.
Why international uniformity of law is crucial
Shipping is a hugely capital-intensive industry with high overheads and low margins. International uniformity of law is crucial to provide shipowners with certainty as to the extent of their potential liabilities and manage the risks.
It has long been recognised that the risks of trading by sea are enormous and cannot be borne by the shipowner alone. International liability regimes for loss or damage to cargo limit the shipowner’s liability to a certain amount and allocate the risks between the shipowner and the cargo interests in a balanced way to ensure that insurance can be obtained by the commercial parties at reasonable cost.
A comprehensive international liability regime for the major third party liabilities arising from the operation of ships has been developed by IMO. The regime is designed to ensure swift and effective compensation through a strict liability of the shipowner regardless of fault, compulsory insurance, and claimants may bring their claims directly against the insurer. These measures are possible because the liability of the shipowner is limited to an amount that is certain and can be insured at reasonable cost. [ The regime ensures that high amounts of compensation are available for third party claims arising from shipping accidents to the benefit of all stakeholders, including governments and society at large.
The Maritime Law Committee reports directly to the ICS Board.
It is closely engaged with the work of the IMO Legal Committee and the International Oil Pollution Compensation Funds, considering key issues on the agenda of these bodies and formulating ICS positions.
The Committee also directs ICS representation when legal and liability matters affecting international shipping are discussed and / or regulations are proposed at regional (e.g EU) and national levels, and at other UN bodies such as UNCITRAL and UN DOALOS .
The Committee has a strong liaison relationship with the representatives of shipowners’ liability insurers, the International Group of P&I Clubs. It also works closely with other bodies concerned with the development and unification of international maritime law such as the CMI.
Shipowners’ liabilities to third parties resulting from maritime accidents are central to the remit of this Committee.
A key concern is to promote the harmonisation of international maritime law and especially to prevent any conflict of regional and national regulations with the international liability regime established by IMO, and defend the principle of limitation of liability. Past interventions in this respect include work on the EU Environmental Liability Directive, EU Passenger Liability Regulation, national ship-source pollution regulations (e.g. China), and on CMI discussions concerning the need for special liability arrangements in polar regions.
The Committee considers other issues where the legal rights and obligations of shipowners may be affected, as for instance ship arrest and maritime liens and mortgages issues, changes to the York Antwerp Rules on General Average, or the recent changes to the International Accounting Standards for Lease Contracts.
The Committee also provides advice on the legal and liability aspects of many of the issues on the agenda of the Marine and other technical committees. In recent years such issues have included, among others: Migrant Rescue at Sea, Piracy in the Gulf of Aden and Gulf of Guinea, Marine Autonomous Surface Ships, Ship Recycling, Places of Refuge and the Loss of Containers at Sea.
Current most pressing issues
- Unified interpretation of the test for breaking the owners’ right to limit liability under the IMO Conventions. [Add link to Key Issue/annual review 2019 titled “Defending the Global Pollution Liability Regime”]
- Ocean Governance: international negotiations for a new Convention under UNCLOS on the Conservation and Sustainable Use of Biodiversity in Areas Beyond National Jurisdiction (BBNJ) [Add link to Key Issue/annual review 2019 titled “UN Law of the Sea Implementing Agreement”].
- Advocating for the fair treatment of seafarers involved in maritime accidents or accused of crimes at sea. Discouraging the unwarranted criminalisation of seafarers.
- International negotiations for a new Convention on International Recognition of Judicial Sales of Ships. See UNCITRAL Working Group.