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What maritime risks must be covered under the law and what is the mandatory level of coverage?
Maritime insurance is regulated in the Maritime Shipping Act and the Insurance Contract Act, allowing freedom of contract. Maritime insurance can cover:
- ships, boats and naval artefacts, even those under construction or scrapped;
- the civil responsibility derived from the exercise of navigation; and
- any other asset interests exposed to the maritime navigation risks.
The Maritime Shipping Act establishes mandatory civil liability insurance for:
- passenger vessels transporting more than 12 passengers;
- nautical charter contracts;
- damage due to contamination derived from ships, boats and naval artefacts; and
- pleasure ships.
In addition, the Law on State Ports and the Merchant Navy requires shipping companies to hold insurance covering the civil liability which they could incur during operation of their ships. The mandatory insurance requirement stems from the applicable international conventions – in particular, the International Convention on Civil Liability for Oil Pollution Damage 1992 and the International Convention on Civil Liability for Bunker Oil Pollution Damage.
Insurable risks and ships
What other risks are typically covered by marine insurance contracts concluded in your jurisdiction and what ships are insurable?
The risks typically covered by insurance contracts are:
- voyage or time-charter ships;
- cargo; and
- civil liability that establishes direct action against the insurer.
Maritime insurance covers navigation risks, subject to certain exclusions. The other risks typically covered in a maritime insurance contract are loss of freight insurance and loss of rent insurance. Under maritime insurance contracts, the following ships are insurable:
- merchant ships in all their modalities;
- fishing ships;
- pleasure ships and vessels with the option of boat race coverage; and
- naval artefacts.
What is the legal regime governing marine insurers’ subrogation rights?
The subrogation of the insurer’s rights is regulated in the Maritime Navigation Law, which establishes that once compensation has been paid by the insurer, it will be subrogated in the rights and actions corresponding to the insured until the limit of the compensation against whoever is liable for the accident. The insurer will be incapable of performing the rights to which it has subrogated in detriment of the insured. In case of concurrence of the insurer and the insured with the responsible third party, the return obtained will be distributed between them in proportion to their respective interests. The exemption from liability of the third party causing the damage, as agreed by the insured or the policy holder with the third party, is not opposable to the insurer, unless the exemption was expressly accepted by it and included in the policy.
Collision and pollution
What rules and procedures (under both domestic and international law) apply to the prevention of, liability for and remedy of:
Collision is governed by the Maritime Navigation Act, which refers to the Brussels Convention 1910 on the unity of certain rules as regards boarding and other conventions on the same issue (eg, the International Regulation to Prevent Boarding in the Sea).
(b) Oil pollution?
Oil pollution is governed by the Maritime Navigation Act and two conventions (the International Convention on Civil Liability for Oil Pollution Damage 76/92 and CFC 76/92), as well as other conventions to which Spain is a signatory. The liability regulations fall on the shipowner or the holder of the jacket platform. An almost objective system is established. Spanish membership of the European Union imposes higher requirements and higher quality regarding the construction of ships and imposes liability on whomever causes the pollution in line with the principles of prevention at source and polluter pays. Indemnity is foreseen only due to inevitable force majeure. Therefore, parties must take out insurance against civil liability for contamination.
(c) Other environmental damage caused by a ship?
Civil liability is also foreseen for damages caused by radioactive or nuclear substances.
What is the legal regime governing salvage and general average?
With regard to salvage, the Maritime Navigation Act refers to the International Convention on Maritime Salvage (London 1989) in terms of risk and useful results. The act regulates salvage contracts but imposes only a requirement to act with the necessary due diligence in order to avoid or reduce damage to the environment; otherwise, the contract is left to the will of the parties. If the returned result is useful, entitlement to an award is limited by the ship's value and the value of the goods rescued, and the award must be distributed between the shipowner and the contributors. A right to retention over the ship and the rescued goods is also established provided that it does not constitute a guarantee.
With regards to general average, the contribution and absence of formalities are established. A retention right over the merchandise is established provided that the liability to contribute is not guaranteed. Private liquidation is accepted in the absence of procedures before a notary public. The parties are free to agree how to take care of the liquidation; in the absence of an agreement, the York-Antwerp Rules apply.
Places of refuge
What framework governs access to places of refuge for ships in distress?
The maritime administration may impose requirements and conditions on the entry into safe havens of potentially polluting ships in order to guarantee the safety of people, maritime traffic, the environment and goods. The competent authority is the general director of the merchant navy; at present, no specific safe haven ports or the constitution of a guarantee is required.
What rules and procedures apply to the removal of wrecks in your jurisdiction?
These are regulated by the Law of State Ports and Merchant Navy. In the scenario of a ship sinking, the procedure is administrative and subject to appeal. The port authority will require owners, shipping agents, charterers, consignees or insurers to start the removal and will determine where the cargo, fuel, remains or the refloated ship will be placed within the established term, as well as the guarantees or safety measures that must be taken in order to prevent new sinking. For reasons of urgency, the port authority can demand the adoption of measures, potentially at the expense of the forced parties. If the port authority’s orders are not complied with, the authority can use execution mediums to remove the sunk ship, its fuel or the load on board. In all cases, the owner or shipping agent must pay the expenses. If the amounts accrued due to the removal are not paid, the port authority can dispose of the wreckage, taking its costs out of the sum raised by the disposal.
Under what circumstances can the authorities order removal of wreckage?
If the wreckage affects port activity or poses a serious risk to people, goods or the environment, the port authority will require owners, shipping agents, charterers, consignees or insurers to remove the wreckage and determine where the cargo, fuel, wreckage or the refloated ship may be placed, within the term fixed, as well as the guarantees or safety measures that must be taken to prevent a new sinking.
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