Malta Maritime Law Association
The Malta Maritime Law Association had the pleasure to meet the Malta International Shipowner’s Association ahead of the Malta Shipping Symposium which took place on 30th May.
During such meeting, both parties discussed the industry’s challenges and opportunities and confirmed the intention to collaborate on a common agenda meant to confirm Malta as the Flag of Choice to the Shipping Community.
The third annual Opportunities in Superyachts Conference was held at the Westin Dragonara in Malta on March 26 2015. As in previous years, the conference attracted a substantial number of local and foreign lawyers, marina and yard representatives, yacht and insurance brokers and financiers and audit firms.
Over the past eight years Malta has enjoyed success within the superyacht sector, steadily increasing the volume of its registered fleet and the number of yachts which are not necessarily registered in Malta but which have otherwise benefited from the solutions offered by the jurisdiction. As such, it is unsurprising that the presentations and panel discussions largely focused on what Malta offers owners and operators of private and commercial yachts.
Conference overview
During the conference, José Herrera – Parliamentary Secretary for Competitiveness and Economic Growth – referred to an announcement made in February 2015 by Transport Malta (the Maltese regulatory body in charge of shipping matters), which revealed a 13.6% increase in the registration of commercial yachts over 2014. The conference also coincided with the launch of Yachting Malta Ltd – a partnership between the government and the Royal Malta Yacht Club – which has the sole objective of promoting Malta as a leading destination for high-profile yachting events.
While undoubtedly representing the cornerstone of a maritime nation’s portfolio, success is not measured solely by the amount of registered tonnage or size of a jurisdiction’s flag – although Malta is the largest European flag and the sixth largest in the world, with latest published figures indicating that Malta has 292 privately registered yachts over 24 metres and 160 commercially registered yachts over 24 metres as of December 2014.
James Lawson – who chaired the conference – spoke of Malta as the “neatest and safest” option, not only with regard to registration requirements (leaving aside temporary importation scenarios where a non-EU flag would be mandatory), but also with regard to its corporate services, tax planning, general efficiency and consistently high-level service. The third session of the conference focused on tax, value added tax (VAT), corporate ownership and registration, which were exhaustively covered by means of an excellent presentation delivered by Janet Xanthopoulos, head of the yacht division of Monaco-based Monoeci Management.
Panel discussion
A panel discussion after the main presentation identified and discussed key topics, including: the impact of the application of VAT on charters in Malta; the accounting of VAT on imports of commercial yachts in Malta; and the security that Maltese law offers financiers. Other significant topics of discussion were the increases in owners registering their yachts under EU flags – which is seen as one of the factors contributing to Malta’s success – and various instances of owners choosing to switch their yachts from commercial use to private use. The panel’s concluding comments identified Malta as a leading example of the importance of EU member states maintaining tax regimes that are beneficial (as opposed to punitive) to owners in order for the sector to thrive.
For further information on this topic please contact Alison Vassallo at Fenech & Fenech Advocates on t. +356 2124 1232 or email alison.vassallo@fenlex.com. See also the Fenech & Fenech website.
Contributed by Fenech & Fenech Advocates ILO
First appeared, Times of Malta, Sunday, May 15, 2011. Author: Alison Vassallo .
The carriage of passengers on board commercial vessels out of a high risk zone is not to be entered into blindly or without a clear awareness of the legal intricacies involved. Beneath the great humanitarian concerns underlying the evacuations from Libya over the past weeks lies a steadily turning commercial cogwheel that few may be aware of.
By April 25, 615,939 people had fled violence in Libya by road, sea or air. Numerous shipping companies reacted to the crisis by operating round-trip charters between Benghazi and war-torn Misurata and Crete and Malta, mainly at the request of governments in Europe, Latin America, and the Far East. The crisis poses tragic humanitarian and socio-political implications but it also presents organisations with the requisite resources and expertise with a commercial reality. Were it not for these operators, tens of thousands of people would still be stuck in a war zone and the humanitarian consequences would potentially be more severe.
Malta’s geographical positioning has attracted a number of people to the realm of chartering vessels for evacuation. From a shipping perspective, the carriage of passengers on board commercial vessels out of a high risk zone may present a delicate legal scenario. This operation is certainly not one to be entered into blindly or without a clear awareness of the legal intricacies involved. The reality is that there is no standard form contract which caters for the carriage of passengers in such a particular scenario.
In contracting a voyage charter party for the carriage of goods, the parties would, in the normal course of events, resort to the terms of standard form contracts, most notably Gencon 1994. These contracts do not, by their nature, contemplate the carriage of people. The charter of a vessel for the carriage of passengers as opposed to cargo for a trip or a series of trips is the subject of a number of standard form agreements formulated by the international shipping community, namely the Bimco Cruisevoy and the Mediterranean Yacht Brokers Association Charter Agreement.
However, these contracts fall short of addressing the specific circumstances faced in the evacuation of people: they contemplate the carriage of passengers on board leisure vessels such as cruise liners and superyachts. This leads to the necessity of formulating what would essentially be an ad hoc agreement between the owner and the charterer. One of the main considerations which must be addressed by the parties at a very initial stage in their negotiations relates to whether the voyage charter party will be a berth charter party or a port charter party. In the case of a berth charter party, the vessel would be considered an arrived ship, and therefore ready to take on passengers upon its arrival at a designated berth.
In such a case, laytime (the time allowed to the charterer to load and discharge passengers) which is included in the lump sum freight, would start to run only on the ship’s arrival at a particular berth. This would obviously disadvantage the owner since any time spent outside the berth due to the inability of the vessel to berth – especially in scenarios like the evacuation of passengers from a high risk zone – would be at the owner’s expense. Alternatively, the voyage charter party can be designated as a port charter party.
In this case the vessel is deemed to be an arrived ship as soon as she is considered as having arrived at the ‘port’ which could be the anchorage. As opposed to a berth charter party, this is to the owner’s advantage and to the charterer’s disadvantage. Laytime would start to run as soon as the vessel is deemed to have arrived at the port and not necessarily at the berth – ultimately irrespective of whether the passengers are being loaded or discharged from the vessel. Both the laytime allowed for the charterer to load and discharge passengers and the rate at which demurrage (the pre-agreed rate of liquidated damages) will be charged by the owner once the laytime is exceeded, are to be clearly expressed in the agreement.
These are just some of the important considerations which people who may be unfamiliar with in this sector would not even contemplate when entering into charter parties in emergency scenarios. It is crucial that specialised professional legal advice is sought before a contract is finalised. This can go a long way in preventing a hastily approached business venture which can turn to litigation once the immediate urgency has died down or, even worse, lead to complex legal wrangling during the actual running of the contract.
These negative effects increase in gravity in scenarios where the consequences of a failed contract may stretch beyond the legal and commercial and touch human lives.
Dr Vassallo is an associate within the Litigation department at Fenech and Fenech Advocates.