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Trends and developments

Trends and developments

Are there any notable trends or recent legal developments in your jurisdiction’s shipping industry?

The Bahamas Maritime Authority is continuing its efforts to provide more enhanced customer service. Most recently, The Bahamas online registration information system (BORIS) was introduced to better facilitate the registration process. BORIS-registered users can securely submit applications electronically for:

  • Bahamas flag state endorsements;
  • seaman record books; and
  • ship security officer, offshore and other relevant training and proficiency certificates on behalf of seafarers who are employed or intended to be employed on board Bahamian-registered ships (further information is available here).

A new Merchant Shipping Act has been drafted, although it is not yet publicly available. The new legislation is expected to incorporate more modern and effective policies and procedures so that The Bahamas can remain competitive in today’s ever-evolving maritime sector.

Registration

Eligibility

Which ships are eligible for registration in the national shipping register(s) and which parties may register ships?

All ships, with the exception of fishing vessels, are eligible for registration in The Bahamas. Vessels with a net registered tonnage of 1,600 tons or more and which are no more than 12 years old on the date of registration may be registered without regard to the owner’s nationality. Vessels which are more than 12 years old cannot be registered without being subject to a detailed initial survey by a recognised classification society. Bahamian companies do not have to be registered as the owner of a vessel where the owner is not a Bahamian national, thus making The Bahamas an open registry.

Procedure

What are the procedural and documentary requirements for registration?

Registration may take place in Nassau, London, New York, Hong Kong or Greece. Registration documents can also be processed through the Bahamas Maritime Authority’s (BMA’s) Tokyo agency. The person who registers a vessel becomes the original registrar and thereafter administers that vessel.

To start the registration process, the vessel owner, which may be an individual or a corporation, must complete and submit to the registrar an Application to Register Form (R102), which includes the vessel’s name and general details. An individual or a corporation may authorise an agent to process the application and sign the necessary documents on its behalf. A Registration of Managing Owner Form (R104), which provides the full contact details of the managers responsible for the vessel’s day-to-day management, should also be submitted, together with copies of the vessel’s current class certificates (for further details please see Technical Procedures and Requirements for Registration of Ships).

After an application has been reviewed, the registrar will confirm the vessel’s suitability for provisional registration in the register (as applicable). Further, the registrar will reserve the vessel’s name and issue Bahamian identification details (ie, an official number, a call sign and a maritime mobile service identity number). The remaining registration forms and required documents listed below should then be submitted, together with the applicable registration fees.

Once all registration requirements are fulfilled, the vessel will be registered and the following Bahamian certificates and documents will be issued:

  • a provisional certificate of registry;
  • a radio communication licence;
  • a safe manning document;
  • a ship’s carving and marking note;
  • an oil pollution civil liability certificate (CLC);
  • a bunker CLC;
  • a continuous synopsis record;
  • a long-range identification and tracking conformance test report;
  • a maritime labour compliance (part one) declaration; and
  • a set of statutory ship publications.

Vessels are provisionally registered for six months to allow owners to complete all flag change formalities and fulfil BMA requirements for permanent registration (see requirements listed below).

Once all requirements are met, a permanent certificate of registry will be issued.

Grounds for refusal

On what grounds may a registration application be refused?

If a vessel does not meet the registration requirements set out by the BMA, its application will be refused.

Advantages

Are there any particular advantages of flying your jurisdiction’s flag?

Flying the Bahamian flag has the following advantages:

  • Reputation – The Bahamas has a reputation built on over 30 years of inspecting, monitoring and servicing its flag carriers to a very high standard. It celebrates being a flag state with one of the lowest port detention rates. Consequently, The Bahamas’ ship registry is on the white lists of all major seafaring nations.
  • Bareboat registration – The Bahamas allows dual registration of Bahamians vessel and Bahamian registration of foreign vessels once their primary country allows this. At the time of the bareboat charter, The Bahamas flag is suspended; however mortgages may continue to be recorded.
  • Young fleet – The Bahamas’ registry discourages ships which are more than 12 years old, although exceptions are made in certain circumstances.
  • International offices – The Bahamas’ registry has offices in several key locations to enable it to service ship owners.
  • Nautical inspectors – the BMA has a network of qualified and approved nautical inspectors to undergo safety and crew condition inspections on board Bahamian vessels and render assistance thereto.
  • Competitive fees – The Bahamas’ registration fees are reasonable and internationally competitive, based on a ship’s tonnage.
  • Tax exemptions – The Bahamas imposes no income tax on income or capital gains from its vessels. Other exemptions also apply, depending on the circumstances, such as with regard to customs and stamp duty.
  • Open registry – there are no restrictions on the nationality of a vessel’s owners or crew as long as it is engaged in foreign trade (ie, trade not exclusively within the islands of The Bahamas).
  • Simple registration process – both the vessel registration and mortgage processes are simple and straightforward. BMA employees are efficient with a turnover of a matter of days once the registrant has met all requirements.

Liens and mortgages

Registration

How are encumbrances such as maritime liens and mortgages registered in your jurisdiction and what are the effects of registration?

Mortgages must be registered. Maritime liens are provided for by Section 277 of the Merchant Shipping Act (see below).    

Securable claims and priority

What claims can be secured by maritime liens and what is the order of priority?

In accordance with Section 277 of the Merchant Shipping Act, the following claims will be secured by maritime liens on a ship:

(a) wages and other sums due to the master, officers and other members of the ship’s complement in respect of their employment on the ship;

(b) port, canal, and other waterway dues and pilotage dues and any outstanding fees payable under this Act in respect of the ship;

(c) claims against the owner in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;

(d) claims against the owner, based on tort and not capable of being based on contract, in respect of loss of or damage to property occurring, whether on land or on water, in direct connection with the operation of the ship;

(e) claims for salvage, wreck removal and contribution in general average.    

The maritime liens set out above shall rank –

(a)in the order listed therein save that liens securing claims for salvage, wreck removal and contribution in general average shall take priority over all other maritime liens which have attached to the ship prior to the time when the operations giving rise to the said liens were performed;

(b) shall as respects those set out in each of paragraphs (a), (b), (c) and (d) of subsection (1) of the said section rank pari passu as between themselves;

(c) shall as respects those set out in paragraph (e) of subsection (1) of the said section rank in the inverse order of the time when the claims secured thereby accrued.

The liens listed in Sections 277 to 281 of the Merchant Shipping Act take priority over all Bahamian vessel mortgages, even if such liens are incurred after the mortgages were registered.

Claims for contribution in general average will be deemed to have accrued on the date on which the general average act was performed; claims for salvage will be deemed to have accrued on the date on which the salvage operation was terminated.

Any lien exercisable by a shipbuilder or repairer over a ship or the appurtenances thereof in its possession will take priority over all claims arising after such possession was taken, but will be postponed to those claims which were created before the time of taking possession.

Extinguishment

Under what circumstances are maritime liens extinguished?

Maritime liens are extinguished once they have been satisfied.

Foreign liens

Are foreign liens recognised in your jurisdiction?

Once the lien falls within the ambit of the list of maritime liens listed above (Section 277 of the Merchant Shipping Act), it will be recognised in The Bahamas. Any pre-existing foreign-registered mortgage of a ship that is subsequently registered in The Bahamas may maintain its priority.

Transfer and assignment

Which rules govern the transfer and assignment of liens, mortgages and other encumbrances?

A registered mortgage of a ship or share may be transferred to any person. On the production of an instrument of transfer, which is prescribed on the form of the original mortgage, the registrar will record the transfer by:

  • entering in the register the name of the transferee as mortgagee of the ship or share; and
  • endorsing on the instrument of transfer a note that it has been recorded thereby.

The note will state the date and hour of the record.

The assignment of liens, among other things, may be subject to their local governing laws, similar to The Bahamas Choses in Action Act, which permits the assignment of any debt or legal chose in action of which express notice in writing has been given to the debtor.

Arrest

Grounds for arrest

Under what circumstances can a ship be arrested in order to secure a claim against it?

Vessels can be arrested for a wide range of claims, including:

  • claims for payments of an outstanding mortgage or debt secured against the vessel;
  • claims for the payment of outstanding wages to crew members and others employed on the vessel;
  • claims for the possession or ownership of a vessel, including disputes between co-owners and charterers; 
  • claims for damages either suffered or caused by the vessel;
  • claims for payment for repair, equipment, construction and dock charges;
  • claims for general costs, such as towage and pilotage;
  • salvage claims;
  • claims for payment relating to the vessel’s use, such as its charter;
  • claims for injury, inclusive of fatal injury claims, caused by the negligence of owners or crew or defects in the vessel; and
  • claims for loss of or damage to cargo.

Can a ship be arrested to secure a non-maritime claim?

No.

Can a ship be arrested to secure a claim against a sister ship?

‘Sister ships’ (ie, ships owned by the same owner or company) can be arrested to secure a claim against a ship.

Procedure

What are the procedural and documentary requirements for seeking arrest of a ship?

The application for the arrest of a vessel is done by way of an ex parte application to the Supreme Court. A simple arrest of a vessel would involve the commencement of proceedings providing an overview of the claim with supporting documents exhibiting all relevant documents. In accordance with Section 8 of the Bahamas Supreme Court Act, in order to arrest a ship, it is must be proven that the vessel in question is connected to the claim. Once the court is satisfied that this has been proven and the arrest warrant is executed, the admiralty marshall will proceed with the arrest.

Security

What security must the arresting party put up in order to secure arrest of a ship and how is this security calculated?

In most cases, the court uses its discretion and orders the arresting party to pay it a cash security.

What security can the arrested party provide for release of an arrested ship?

Arresting parties usually agree to a vessel’s release only where a letter of undertaking or bank guarantee has been provided.

Judicial sale of ships

Procedure

What is the legal procedure for the judicial sale of ships in your jurisdiction?

According to Ordinance 67, Rule 22 of the Rules of The Supreme Court:

(1) Where in an action in rem against a ship the Court has ordered the ship to be sold, any party who has obtained or obtains judgment against the ship or proceeds of sale of the ship may —

(a) in a case where the order for sale contains the further order referred to in paragraph (2), after the expiration of the period specified in the order under paragraph (2)(a); or

(b) in any other case, after obtaining judgment, apply to the Court by motion for an order determining the order of priority of the claims against the proceeds of sale of the ship.

(2) Where in an action in rem against a ship the Court orders the ship to be sold, it may further order —

(a) that the order of priority of the claims against the proceeds of the sale of the ship shall not be determined until after the expiration of 90 days, or of such other period as the Court may specify, beginning with the day on which the proceeds of sale are paid into Court;

(b) that any party to the action or to any other action in rem against the ship or the proceeds of sale thereof may apply to the Court in the action to which he is a party to extend the period specified in the order;

(c) that within 7 days after the date of payment into court of the proceeds of sale the marshal shall send for publication in Lloyd’s List and Shipping Gazette and such other newspaper, if any, as the Court may direct, a notice complying with paragraph (3).

(3) The notice referred to in paragraph (2)(c) must state —

(a) that the ship (naming her) has been sold by order of the Supreme Court in an action in rem, identifying the action;

(b) that the gross proceeds of the sale, specifying the amount thereof, have been paid into court;

(c) that the order of priority of the claims against the said proceeds will not be determined until after the expiration of the period (specifying it) specified in the order for sale; and

(d) that any person with a claim against the ship or the proceeds of sale thereof, on which he intends to proceed to judgment should do so before the expiration of that period.

(4) The marshal must lodge in the Registry a copy of each newspaper in which the notice referred to in paragraph (2)(c) appeared.

(5) The expenses incurred by the marshal in complying with an order of the Court under this rule shall be included in his expenses relating to the sale of the ship.

(6) An application to the Court to extend the period referred to in paragraph (2)(a) must be made by motion, and a copy of the notice of motion, must, at least 3 days before the day fixed for the hearing thereof, be served on each party who has begun an action in rem against the ship or the proceeds of sale thereof.

(7) In this rule “the Court” means a judge in person.

Foreign sales

Under what circumstances are foreign sales recognised?

The foreign court or person conducting a foreign sale must have:

  • had jurisdiction or legal authority to effect the sale; and
  • acted fairly for it to be recognised.  

Limitation of liability

Eligibility

What parties may limit liability for maritime claims?

Limitation of liability is governed by the Merchant Shipping (Maritime Claims Limitation of Liability) Act 1989, which incorporated the provisions of:

  • the Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 and the 1976 Protocol as set out in Part 1 of the First Schedule to the act; and
  • the Convention on Limitation of Liability for Maritime Claims 1976, as set out in Part 1 of the Second Schedule to the act.

According to Article I of the Second Schedule (Convention on Limitation of Liability for Maritime Claims 1976) to the Merchant and Shipping Act (Maritime Claims Limitation of Liability), ‘shipowners’ (defined in Article II(2) thereof as the owner, charterer, manager or operator of a seagoing ship) and ‘salvors’ (defined in Article II(3) as any person rendering services in direct connection with salvage operations) may limit their liability in accordance with Article 2 of said schedule.

For what claims can liability be limited? Are any claims explicitly exempt from the limitation of liability?

Article 2 of the Convention on Limitation of Liability for Maritime Claims establishes the following as claims subject to limitation:

Claims in respect of loss of life or personal injury or loss or damage to property (including damage to harbor works, basins and waterways and aids to navigation,) occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;

  1. claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;
  2. claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations;
  3. claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship;
  4. claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship;
  5. claims of a person other than the person liable in respect of measures and taken in order to avert or minimize loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures.

In addition, according to Article 3 of the convention, the following claims are explicitly exempt from the limitation if liability:

  1. claims for salvage or contribution in general average;
  2. claims for oil pollution damage within the meaning of the International Convention on Civil Liability for Oil Pollution Damage dated 29th November, 1969 or of any amendment or Protocol thereto which is in force;
  3. claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage;
  4. claims against the shipowner of a nuclear ship for nuclear damage;
  5. claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage operations, including claims of their heirs, dependents or other persons entitled to make such claims, if under the law governing the contract of service between the shipowner or salvor and such servants the shipowner is not entitled to limit his liability in respect to such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 6.

Limits

What limits are set for eligible claims?

The general limits of liability, with the exception of those for claims mentioned in Article 7, are set out in Article 6 of the Convention on Limitation of Liability for Maritime Claims as follows.

  1. In respect of claims for loss of life or personal injury;
    1. 333,000 Units of Account for a ship with a tonnage not exceeding 500 tons;

For a ship with a tonnage in excess thereof, the following amount in addition to that mentioned in (i):

for each ton from 501 to 3,000 tons, 500 Units of Account; for each ton from 3,0001 to 30,000 tons, 333 Units of Account; for each ton from 30,0001 to 70,000 tons, 250 Units of Account and for each ton in excess of 70,000 tons, 167 Units of Account,

  1. In respect of any other claims.
    1. 167,000 Units of Account for a ship with a tonnage not exceeding 500 tons;

For a ship with a tonnage in excess thereof of the following amount in addition to that mentioned in (i):

for each ton from 501 to 30,000 tons, 167 Units of Account, for each ton from 30,001 to 70,000 tons, 83 Units of Account.

Article 7 of the convention establishes that for loss of life or personal injury to passengers of a ship, the shipowner’s limit of liability will be 46,666 units of account multiplied by the number of passengers which the ship is authorised to carry according to its certificate (not exceeding 25 million units of account).

Limitation funds

What rules and procedures govern the establishment of limitation funds?

Article 11 of the Convention states as follows:

1. Any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation. The fund shall be constituted in the sum of such of the amounts set out in Articles 6 and 7 as are applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. Any fund thus constituted shall be available only for the payment of claims in respect of which limitation liability can be invoked.

2. A fund may be constituted, either by depositing the sum, or by producing a guarantee acceptable under the legislation of the State Party where the fund is constituted and considered to be adequate by the Court or other competent authority.

3. A fund constituted by one of the persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2 of Article 9 or his insurer shall be deemed constituted by all persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2, respectively.  

How are liability funds distributed?

Article 12 of the convention establishes that liability funds must be distributed among the claimants in proportion to their established claims against the fund.

Carriage of goods

International conventions

Is your jurisdiction party to any international conventions on the carriage of goods by sea? If so, does the relevant domestic implementing law contain any notable modifications (eg, extensions to the scope of application)?

The Bahamas is a party to the Carriage of Goods by Sea Convention, which has been implemented into its domestic legislation through the Carriage of Goods by Sea Act. The act makes the following notable modifications:

  • Article VI of the convention in relation to the carriage of goods by sea in ships carrying goods from any port in The Bahamas to any other port in The Bahamas have effect as though said article referred to goods of any class instead of to particular goods and as though the proviso to the second paragraph of said article were omitted; and
  • as regards Rules 4 and 5 of Article III in relation to bulk cargoes, where under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight is so ascertained or accepted is stated in the bill of lading, then – notwithstanding anything in the rules:
    • the bill of lading will not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading; and
    • the accuracy thereof at the time of shipment will not be deemed to have been guaranteed by the shipper.

Carrier’s responsibility

What is the official extent of the carrier’s responsibility for goods?

According to Article III(1) of the Carriage of Goods by Sea Act, carriers are bound, before and at the beginning of the voyage, to exercise due diligence to:

  • make the ship seaworthy;
  • properly attend to, equip and supply the ship; and
  • make the holds, refrigeration and cool chambers and all other parts of the ship in which goods will be carried fit and safe for their reception, carriage and preservation.

Subject to the provisions of Article IV, carriers must properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.  

After receiving the goods into their charge, carriers or their masters or agents must, on the shipper’s demand, issue it a bill of lading showing, among other things:

  • the leading marks necessary to identify that the goods are the same as those furnished in writing by the shipper before the loading of such goods starts, provided that such marks are stamped or otherwise shown clearly on the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage;
  • either the number of packages or pieces or the quantity or weight, as the case may be, as furnished in writing by the shipper; and
  • the apparent order and condition of the goods.

No carrier or master or agent of a carrier can be bound to state or show in the bill of lading any marks, numbers, quantities or weights which they have reasonable ground for suspecting do not accurately represent the goods actually received or which they have no reasonable means of checking.

After goods have been loaded, the bill of lading issued by the carrier or its master or agent to the shipper will, if the shipper so demands, become a shipped bill of lading, provided that – if the shipper previously took up any document of title to such goods – they surrender the goods as against the issue of the shipped bill of lading. The carrier may choose for such document of title to be noted at the port of shipment by the carrier, master or agent with the name or names of the ship or ships on which the goods have been shipped and the date or dates of shipment; when so noted, the same will – for the purpose of Article IV – be deemed to constitute a shipped bill of lading.

Contractual limitation of liability

May parties contract out of any legal provisions governing cargo liability?

Article III(8) of the Second Schedule to the Carriage of Goods by Sea Act provides that any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising from negligence, fault or failure in the duties and obligations provided therein for lessening such liability otherwise than as provided in these rules will be null and void and of no effect. However, a benefit of insurance or similar clause will be deemed to be a clause relieving the carrier from liability.

Moreover, Article VI of the said schedule of the act establishes that, notwithstanding the provisions of the preceding articles, a carrier or its master or agent and a shipper will – as regards any particular goods – be at liberty to enter into any agreement in any terms as to:

  • the responsibility and liability of the carrier for such goods; and
  • the rights and immunities of the carrier in respect of such goods or its obligation as to their seaworthiness.

However, such agreements must not contravene public policy or the care or diligence of the carrier’s (or its master’s or agent’s) servants or agents in regard to the loading, handling, stowage, carriage, custody, care and discharge of the goods carried by sea, provided that:

  • no bill of lading has been or will be issued; and
  • the terms agreed will be embodied in a receipt (which will be a non-negotiable document and marked as such).

Any agreement so entered into will have full legal effect.

Article VI of the Second Schedule to the act will not apply to ordinary commercial shipments made in the ordinary course of trade, but rather only to other shipments where the character or conditions of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed reasonably justify a special agreement.

Further, Article VII of the said schedule states that nothing contained therein will prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods before the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.

Therefore, cargo liability may be limited in accordance with the conditions established in the above articles.

Title to sue

Who has title to sue on a bill of lading?

The consignee has title to sue on a bill of lading.

Time bar

What is the time bar for cargo claims?

The time bar for cargo claims is 12 months.

Definition of ‘carrier’ and ‘goods’

How are ‘carrier’ and ‘goods’ defined in respect of cargo claims? Is there any especially pertinent case law on this issue?

‘Goods’ are defined as all types of good, ware, merchandise and article, except living animals and cargo, which by the contract of carriage is stated as being carried on deck and is so carried.

Defences available to carrier

Under what circumstances may the carrier rely on the perils of the sea defence? What other defences are available to the carrier?

Neither the carrier nor the ship will be responsible for loss or damage arising or resulting from:

  • acts, including of negligence or default, of the master, mariner, pilot or the servants of the carrier during the ship’s navigation or management;
  • fire, unless caused by the actual fault or privity of the carrier;
  • perils, dangers and accidents of the sea or other navigable waters;
  • acts of God;
  • acts of war;
  • acts of public enemies;
  • arrests or restraints of royals, rulers or people or seizure under a legal process;
  • quarantine restrictions;
  • acts or omissions of the shipper or owner of the goods or their agent or representative;
  • strikes or lock-outs or the stoppage or restraint of labour (for whatever reason), whether partial or general;
  • riots and civil commotions;
  • saving or attempting to save life or property at sea;
  • wastage in bulk or weight or any other loss or damage arising from an inherent defector the quality or vice of the goods;
  • insufficiency of packing;
  • insufficiency or inadequacy of marks;
  • latent defects not discoverable by due diligence; or
  • any other cause where there is no actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of its carrier. However, the burden of proof will be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of its agents or servants contributed to the loss or damage.  

Shippers will not be responsible for loss or damage sustained by a carrier or a ship arising or resulting from any cause without the act, fault or neglect of the shipper or its agent or servants.

Neither the carrier nor the ship will be or become liable for any loss or damage to or in connection with goods in an amount exceeding £100 per package or unit, or the equivalent of that sum in another currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

Goods of an inflammable, explosive or dangerous nature to whose shipment the carrier or its master or agent has not consented, with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation. In such cases, the shipper of such goods will be liable for all damages and expenses directly or indirectly arising or resulting from such shipment. Third parties

What legal protections and defences against cargo claims are available to agents of the carrier and other third parties (eg, Himalaya clauses)?

According to Article 11 of the First Schedule to the Maritime Claims Limitation of Liability Act (the Convention relating to the Carriage of Passengers and their Luggage by Sea (1974) Protocol, as amended in consequence of the Protocol of 19 November 1976), if an action arising from damage covered by this convention is brought against a servant or agent of the carrier or the performing carrier, such servant or agent will, if they can prove that they acted within the scope of their employment, be entitled to avail themselves of the defence and limits of liability which the carrier or performing carrier is entitled to invoke under the convention. 

Deviation from route

Under what circumstances is deviation from the agreed route allowed?

Any deviation to save or attempt to save life or property at sea and any other reasonable deviation will not be deemed to be an infringement or a breach of the applicable rules or the contract of carriage and the carrier will not be liable for any loss or damage resulting therefrom.

Claims against shipper

What claims can the carrier pursue in respect of the shipper’s failure to meet its obligations?

Under Article III(5) of the Second Schedule to the Carriage of Goods by Sea Act (the Rules Relating to Bills of Lading), a shipper will be deemed to have guaranteed to a carrier the accuracy at the time of shipment of the marks, number, quantity and weight of goods as furnished by it. Further, the shipper must indemnify the carrier against all losses, damages and expenses arising or resulting from inaccuracies in such particulars. A carrier’s right to such indemnity will in no way limit its responsibility and liability under the contract of carriage to any person other than the shipper.

Under Article IV(3) of the Second Schedule to the Carriage of Goods by Sea Act, a shipper will not be responsible for any loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault or neglect of the shipper, its agent or its servants.

Carriers can pursue a claim against a shipper where the latter fails to meet these obligations.

Multimodal carriage of goods

How is multimodal carriage regulated in your jurisdiction?

No specific legislation regulates multimodal carriage in The Bahamas.   

Marine accidents

Collision and pollution

What rules and procedures (under both domestic and international law) apply to the prevention of, liability for and remedy of:

(a) Collision?

Collision is governed by:

  • the International Regulations for Preventing Collisions at Sea 1972;
  • the Merchant Shipping Act;
  • the Merchant Shipping (Maritime Claims Limitation of Liability Act);
  • the Freeport Harbour Rules;
  • the Freeport (Marina and Inland Waterways) Bylaws; and
  • the Merchant Shipping (Training, Certification, Manning and Watchkeeping) Regulations.

(b) Oil pollution?

Oil pollution is governed by:

  • the International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78 (Annexes I/II, III, IV and V);
  • the MARPOL Protocol 97 (Annex VI);
  • the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties 1969; 
  • the International Convention on Oil Pollution Preparedness, Response and Cooperation 1990;
  • the Merchant Shipping (Oil Pollution) Act;
  • the Merchant Shipping (Oil Pollution) (Indemnification of Shipowners) Regulations;
  • the Merchant Shipping (Oil Pollution) Act (Dollar Equivalent) Order;
  • the Environmental Health Services Act;
  • the Merchant Shipping (Maritime Claims Limitation of Liability) Act; and
  • the Freeport (Marina and Inland Waterways) Bylaws.

(c) Other environmental damage caused by a ship?

Other environmental damage caused by ships is governed by:

  • the International Convention on the Control of Harmful Anti-fouling Systems on Ships 2001;
  • the International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004;
  • the Merchant Shipping Act; and
  • the Environmental Health Act.

Salvage

What is the legal regime governing salvage and general average?

The Merchant Shipping Act governs salvage and general average.

Places of refuge

What framework governs access to places of refuge for ships in distress?

The International Maritime Organisation governs access to places of refuge for ships in distress in The Bahamas – namely, Resolution A.949(23) (the Guidelines on Places of Refuge for Ships in Need of Assistance).

In practice, the port controller designates areas of refuge for distressed ships.

Wreck removal

What rules and procedures apply to the removal of wrecks in your jurisdiction?

The Merchant Shipping (Wreck Removal Convention) Regulations and the Nairobi International Convention on the Removal of Wrecks apply to the removal of wrecks in The Bahamas.   

According to Section 230 of the Merchant Shipping Act:

  1. Where a vessel is sunk, stranded or abandoned in any port under the control of a port authority or in or near any approach thereto, in such manner as in the opinion of the port authority to be, or to be likely to become, an obstruction or danger to navigation, the authority may —

(a) take possession of and raise, remove or destroy the whole or any part of the vessel;

(b) light or buoy the vessel or part until it is raised, removed or destroyed;

(c) sell, in such manner as it thinks fit, the vessel or part when so raised or removed, and also any other property recovered in the exercise of its powers under this section, and out of the proceeds of the sale reimburse itself for the expenses incurred by it in relation thereto under this section, and shall hold the surplus, if any, of the proceeds on deposit for paying to the person establishing his right to it: Provided that such deposit shall be forfeited to the authority unless such person makes his claim within one year of the sale;

(d) if the expenses connected with the raising, removal or destruction of the vessel exceed the value of any property recovered, the excess shall be a debt due to the port authority from the person who was the owner of the vessel at the time when the vessel was sunk, stranded or abandoned.

  1. Where a vessel is run aground or stranded, or is found in a dangerous or hazardous condition, in a port under the control of a port authority, or in or near the approaches thereto, and it appears expedient to the port authority to take charge of the operation of refloating or removing the vessel, it may, subject to subsection (3) of this section, appoint an officer to direct such operation, and such officer shall be authorized to do all things which in his opinion are necessary to refloat or remove the vessel, and the master and all persons present belonging to the ship shall obey the direction of such officer and render him such assistance as he may require.
  2. An officer to be appointed under subsection (2) of this section shall only be appointed with the approval of the Minister, and such officer may be appointed either generally or in a particular case.

Under what circumstances can the authorities order removal of wreckage?

Where the Port Authority believes that a wrecked, stranded or abandoned vessel is seen to be, or likely to become, an obstruction or danger to navigation, it may order its removal.  

Where a vessel is sunk, stranded or abandoned on the coast or on or near any rock, shoal or bank in The Bahamas or any adjacent seas and the minister believes that the vessel is or is likely to become an obstruction or a danger to navigation, they will have the same powers in relation thereto as a port authority.     

Marine security

Legal regime

What regime governs the imposition of security measures on ships and in port facilities?

The Ship and Port Facility (Security) Regulations 2016 and the International Ship and Port Facility Security (ISPS) Code govern the imposition of security measures on ships and in port facilities.   

Security officers

What rules apply to the qualification and conduct of security officers on ships and in port facilities? Are armed guards allowed on ships?

Part A of the ISPS Code applies to the qualification and conduct of security officers on ships and in port facilities. While armed guards are allowed on ships, the requirements of the ports of call should be determined.

Security information

What rules govern the provision of security information to port authorities?

The Ship and Port Facility (Security) Regulations 2016 govern the provision of security information to port authorities.  

Insurance

Mandatory coverage

What maritime risks must be covered under the law and what is the mandatory level of coverage?

Inland waters risks or any land risks which may be incidental to any sea voyage must be covered by an insurance policy.

Insurable risks and ships

What other risks are typically covered by marine insurance contracts concluded in your jurisdiction and what ships are insurable?

All seaworthy ships are insurable. Even ships which are under construction, being launched or undergoing any adventure analogous to a marine adventure should be covered by a marine insurance policy.

Subrogation rights

What is the legal regime governing marine insurers’ subrogation rights?

In accordance with Section 80 of the Marine Insurance Act:

(1) Where the insurer pays for a total loss, either of the whole, or in the case of goods of any apportionable part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for, and he is hereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss.

(2) Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by such payment for the loss.

Jurisdiction and dispute resolution

Competent courts

What courts are empowered to hear maritime cases in your jurisdiction?

The Supreme Courts of The Bahamas are empowered to hear maritime cases.  

Exclusive jurisdiction and arbitration clauses

Under what conditions will exclusive jurisdiction and arbitration clauses in shipping contracts be held as valid?

There is no registry for Bahamian arbitrations, which are, by nature, a completely private matter. Parties must agree to arbitration and the choice of jurisdiction must be reasonable.  

Maritime arbitration

What is the general state and prevalence of maritime arbitration in your jurisdiction?

Maritime arbitration is not prevalent in The Bahamas, although some such arbitrations have taken place. There are procedures and resources to facilitate maritime arbitrations, but maritime matters are normally dealt with in the Supreme Courts of The Bahamas.  

Recognition and enforcement

What regimes govern the recognition and enforcement of foreign judgments and arbitral awards?

A judgment obtained in a superior court in a country to which an order has been made declaring that The Bahamas’ Reciprocal Enforcement of Judgments Act applies may be enforced in The Bahamas by the judgment creditor applying to the court within 12 months from the date of the judgment or such longer period as may be allowed by the court to have the judgment registered in the court. On any such application, the court may, subject to Section 3 of the act, register the judgment in The Bahamas if all of the circumstances of the case lead it to consider that it would be just and convenient to do so.