First-step analysis: shipping law and practice in France

Newbuilding contracts

Transfer of title

When does title in the ship pass from the shipbuilder to the shipowner? Can the parties agree to change when title will pass?

Pursuant to article L 5113-3 of the Transport Code, unless otherwise agreed, title in the ship passes from the shipbuilder to the shipowner only on the date of delivery of the ship after sea trials. The parties may agree that title will pass during the course of construction, before delivery.

Refund guarantee

What formalities need to be complied with for the refund guarantee to be valid?

As with shipbuilding contracts, there are no specific formalities to be complied with for the refund guarantee to be valid. The only requirements are that the refund guarantee must be made in writing and be properly executed by the parties thereto.

Court-ordered delivery

Are there any remedies available in local courts to compel delivery of the vessel when the yard refuses to do so?

The seller is under an obligation to deliver the ship to the purchaser. Pursuant to article 1610 of the Civil Code, if the yard, being solely responsible for the delay, fails to deliver the vessel, the purchaser may elect either to rescind the contract or request the delivery of the vessel (which may cause practical issues at the time of enforcement). In any case, the yard may be liable for damages.

Defects

Where the vessel is defective and damage results, would a claim lie in contract or under product liability against the shipbuilder at the suit of the shipowner; a purchaser from the original shipowner; or a third party that has sustained damage?

Pursuant to article L 5113-4 of the Transport Code, the shipbuilder is liable for latent defects of the ship, even if the ship was accepted without reservation by the customer. The owner can take action against both the shipbuilder and the shipbuilder’s sub-supplier, if the latter was responsible for supply or installation of the defective machinery or equipment. The owner must commence proceedings within one year of the discovery of the latent defect (Transport Code, article L 5113-5). Any lawsuit, including summary proceedings, stalls the limitation period.

According to article L 5113-6 of the Transport Code, the same provisions apply in the case of a ship repair contract.

The shipbuilding contract may contain specific provisions concerning the shipbuilder’s warranty regarding latent or apparent defects, in particular, extending its duration.

In addition, if the vessel does not comply with the contract specifications, the purchaser has a claim in damages against the seller (provided that the purchaser accepted delivery with reservation if the non-compliance was apparent on delivery, or the non-compliance was not apparent at the time of delivery).

The effects of an agreement for the sale and purchase of a ship are governed by the provisions of the Civil Code. Pursuant to article 1648 of the Civil Code, the action resulting from latent defects must be brought by the buyer within a period of two years following the discovery of the latent defect.

If the vessel is defective and loss or damage results from such defect, a direct claim in tort by any person (including third parties) incurring the loss or damage would lie in product liability against the shipbuilder, pursuant to articles 1245 et seq of the Civil Code. The damage to the defective vessel itself is not covered by these provisions. The vessel is defective if it does not provide the safety that a person is entitled to expect. This regime applies to all manufacturers, including shipbuilders. Such action for the recovery of loss or damage is time-barred after a period of three years from the date on which the claimant knew or should have known of the loss or damage, the defect and the identity of the manufacturer (Civil Code, article 1245-16).

Ship registration and mortgages

Eligibility for registration

What vessels are eligible for registration under the flag of your country? Is it possible to register vessels under construction under the flag of your country?

As there are several registries in France, ships are registered with the local customs authorities of their home port.

One of the registries is the French International Register (RIF) created in 2005 (Law No. 2005-412 of 3 May 2005). Article L 5611-2 of the Transport Code provides that the following vessels are eligible for registration with the RIF:

• vessels engaged in deep-sea trade or in international cabotage, except for passenger vessels sailing scheduled voyages between EU countries;
• commercially operated leisure vessels of over 15 metres in overall length, manned with a professional crew; and
• professional fishing vessels classified as the first category and navigating in areas defined by regulations.

Article L 5611-3 of the Transport Code provides the following list of ships that are not eligible for registration under the RIF:

• passenger ships sailing scheduled intra-community lines or, in accordance with a list fixed by regulation, scheduled international lines;
• vessels operating exclusively in national domestic trade (domestic cabotage);
• port assistance vessels, in particular those assigned to towing at the port, maintenance dredging, boatage, piloting and buoyage; and
• professional fishing vessels not mentioned in 3° of article L 5611-2 of the Transport Code and by regulatory measures taken for its application.

It is possible to register vessels under construction.

Who may apply to register a ship in your jurisdiction?

General registration

For general registration under the French flag RIF for vessels purchased in a non-EU country after all duties and taxes have been paid, or purchased in the European Union, and where the shipowner is an individual or group of individuals, the following conditions apply:

• single shipowners must come from a member state of the European Economic Area (EEA) (the European Union, Iceland, Liechtenstein or Norway);
• in the case of several shipowners, at least half of these individuals must be nationals of a EEA member state; and
• the shipowner (or the designated manager if there are several owners) must reside in France or elect domicile in France if he or she resides there for less than six months per year.

Where the shipowner is a legal entity or a group of companies, the following conditions apply:

• at least 50 per cent of the corporate shipowners must have their registered office or principal establishment in a EEA member state; and
• the ship must be managed and controlled by the registered office or a principal establishment in France or, failing that, by a permanent establishment of the vessel’s owner company domiciled in France.

In respect of a lessee of a new or second-hand vessel intended to be acquired by a leasing agreement, the conditions described above for the shipowner will also apply.

Temporary registration

For temporary registration (special approval for vessels flying under a foreign flag) for vessels purchased in a non-EU country after all duties and taxes have been paid, or purchased in the European Union, and where the shipowner is an individual or group of individuals, the conditions described above apply.

Where the shipowner is a legal entity or a group of companies, the following conditions apply:

• at least 25 per cent of the corporate shipowners must have their registered office or principal establishment in a EEA member state; and
• the ship must be managed and controlled by the registered office or a principal establishment in France or, failing that, by a permanent establishment of the vessel’s owner company domiciled in France.

In respect of bareboat chartered vessels (only if the laws of the state of the foreign flag allow suspension of their flag), the conditions regarding a bareboat charterer, whether a natural person or legal entity, are the same as for a shipowner under general registration under the French flag.

Suspension of registration

For suspension of registration under the French flag for vessels that are subject to a bareboat charter to a foreign company and that will fly a foreign flag for the entire lease period, and where the shipowner is a legal entity or a group of companies, the following conditions apply:

• the company cannot be established on EEA territory; and
• the ship must be managed and controlled by a permanent office (see conditions above) located outside French territory.

Documentary requirements

What are the documentary requirements for registration?

If the purchaser is entitled to register at the RIF (see question 5), it must follow a multi-stage process:

• reservation of the name;
• approval to sail under the French flag;
• registration; and
• declaration of the ship’s complement.

More precisely, the shipowner must request three kinds of documents from the RIF to fully register the ship:

• a name reservation request through Cerfa form No. 15807*02;
• a request for a transfer of ownership through the Cerfa form No. 15801*02, and in the case of second-hand vessels, for the change of flag or deletion of foreign flag; and
• an application for permission to fly the French flag and the registration through Cerfa form No. 15806*02. This application must be accompanied by various documents. The list of these documents varies depending on whether the ship is a new build or second-hand.

Documentary requirements regarding new vessels or vessels under construction

The application for permission to sail under the French flag and the registration must be accompanied by the following documents:

• the articles of association and a trade register extract for the purchaser;
• the shipbuilding contract and (if relevant) any addenda thereto;
• evidence of the signatories’ authority;
• any documents relating to the financing of the ship (for example, any lease contract);
• in the event that the ship is to be owned by an economic interest grouping:
• the bareboat charter to the end user; and
• the articles of association and trade registry extract pertaining to the charterer;
• the protocol of delivery and acceptance;
• any relevant co-ownership agreement;
• the minutes of the board of directors in which the purchase of the vessel was decided;
• a certificate of cancellation of the foreign flag if the ship has been under such a flag during the construction;
• the certificate of non-mortgage registration; and
• the international tonnage certificate of the previous flag state (if tonnage has been determined).

Documentary requirements regarding second-hand vessels

The list of documents regarding a second-hand ship is as follows:

• the articles of association and a trade register extract of the purchaser;
• deed of ownership or copy of the contract of sale if there has been a change of owner;
• evidence of signatories’ authority;
• any documents relating to the financing of the ship (for example, any lease contract);
• any relevant co-ownership agreement;
• international tonnage certificate of the previous flag;
• a cancellation certificate of the foreign flag;
• the certificate of non-mortgage registration; and
• the protocol of delivery and acceptance.

Dual registration

Is dual registration and flagging out possible and what is the procedure?

Dual registration by way of suspending a flag is possible in respect of ships that are bareboat chartered to a foreign company. Those ships will fly the foreign flag throughout the bareboat charter.

Mortgage register

Who maintains the register of mortgages and what information does it contain?

Maritime mortgages are registered on a special register maintained by the registry of ship mortgages at the local customs authorities of the home port of the vessel.

As the registry of ship mortgages is a public registry, one may gather information regarding, inter alia, the name of the vessel, the date of the registration of the mortgage, the identity of the creditors, the debtor and the secured amount.

Limitation of liability

Regime

What limitation regime applies? What claims can be limited? Which parties can limit their liability?

The Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976) as amended by the protocol of 1996 is in force in France. Amendments in relation to the increase of the limits of liability in the 1996 LLMC Protocol entered into force on 8 June 2015 under the tacit acceptance procedure according to article 8 7°) of the 1996 LLMC Protocol. It appears that these amendments have not yet been implemented domestically.

Under French law, articles L 5121-1 et seq of the Transport Code apply.

The limitation regime applies to both contractual and non-contractual claims. Article L 5121-4 provides a list of claims that cannot be limited, such as claims arising from salvage and assistance operations and general average contribution. The parties who can limit their liability pursuant to article L 5121-2 of the Transport Code are the charterer, the shipowner, the manager, the captain or their employees.

Procedure

What is the procedure for establishing limitation?

Under French law, it is not compulsory to set up a fund. In practice, however, it is common to provide a limitation fund. To establish limitation, an ex parte request must be made before a commercial court having territorial jurisdiction. Once the fund is set up (constituted either by a bank deposit or guarantee), the judge will record the constitution of the limitation fund. Creditors may then have the possibility of disputing the constitution of the fund; however, no specific maritime provisions are provided in that respect. Once all issues are resolved, the distribution of the fund takes place.

Factors used to calculate the fund include, among others, the nature of the damage, the relevant regime and the tonnage of the ship.

Notwithstanding the above, under French law, there is a separate right to plead limitation without setting up a fund.

According to the French Supreme Court, a shipowner may constitute a limitation fund before legal proceedings have been initiated (Cass Com 9 July 2013, No. 12-18.504) and before it has been required to respond to a claim that has already been commenced.

Break of limitation

In what circumstances can the limit be broken? Has limitation been broken in your jurisdiction?

Pursuant to article 4 of LLMC 1976, ‘a person liable shall not be entitled to limit his or her liability if it is proved that the loss resulted from his or her personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.’

Under French law, the limit will be broken if it is proved that the loss resulted from an inexcusable fault. French courts assess notably in abstracto the concept of such fault and assess the fault against the concept of professional conduct. For instance, any breach of the fundamental obligation of seaworthiness is an inexcusable fault.

By way of example, a dangerous reckless behaviour, an unworthy behaviour or contrary to the rules of professional conduct may constitute cases of inexcusable faults and notably:

• conduct barring limitation is likely to have occurred when the owner has not made proper arrangements for the testing of a crane prior to the discharge from his ship of a heavy piece of machinery. The discharge of a heavy crane without ensuring that the upper revolving part be safely blocked entails the presumption that the carrier has acted recklessly and with knowledge that a damage would probably occur (Court of Appeal of Montpellier (2e chambre section B) 7 December 1999, Jumbo Navigation NV v Mague Equipamentos de Movimentaçao and Others, affirmed by the Court of Cassation on 3 April 2002, No. 00-11.344); and
• the passenger carrier that does not prevent and warn a passenger not to stay on the front bridge when the vessel navigates through rough seas, cannot rely on the limitation of its liability. The injury the passenger suffered was the consequence of a failure to perform safety duties. The failure to perform such duties, which implied objectively the conscious of the probability of the damage and its reckless acceptation, constitutes an inexcusable fault (Court of Cassation: Civ. 1ère 18 June 2014, No. 13-11.898 (le Cristal)).

If limitation is broken, creditors are entitled to make a claim against any ship or property of the person on behalf of whom the fund was constituted, without being limited on the amount of the claim.

Pursuant to article 11 of LLMC 1976 and article L 5121-6 of the Transport Code, a limitation fund which has been constituted is only available for the payment of claims in respect of which limitation of liability can be invoked. Creditors to which the limitation of liability is not or no more applicable may not be limited by the constituted limitation fund, and may make a claim against any ship or property of the person on behalf of whom the fund was constituted.

Passenger and luggage claims

What limitation regime applies in your jurisdiction in respect of passenger and luggage claims?

The Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, as amended by the Protocol of 2002, is applicable for EU member states as the European Union has ratified the Athens Convention. Article 1 of EC Regulation No. 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents provides that the regulation lays down the community regime relating to liability and insurance for the carriage of passengers by sea, as set out in the relevant provisions of, notably, the Athens Convention. The regulation declares the Athens Convention applicable where the ship is flying the flag of, or is registered in, a member state, the contract of carriage has been made in a member state, or the place of departure or destination according to the contract of carriage is in a member state.

French Law No. 2016-700 dated 30 May 2016 authorises the accession of France to the Protocol of 2002 to the Athens Convention.

Port state control

Authorities

Which body is the port state control agency? Under what authority does it operate?

France is a party to the Paris Memorandum of Understanding on Port State Control of 1982 (the Paris MoU). Pursuant to the Paris MoU, each contracting party shall maintain an effective system of port state control with a view to ensuring that, without discrimination as to flag, foreign merchant ships calling at a port of its state, or anchored off such a port, comply with certain international standards as provided in international conventions listed under section 2 of the Paris MoU.

At its 51st meeting in May 2018, the Paris MoU committee has adopted new performance lists for flags and recognised organisations, effective from 1 July 2018. The French flag is ranked first on the white list.

Directive No. 2009/16/EC of the European Parliament and of the Council of 23 April 2009 on port state control (the 2009 Directive on Port State Control) takes into account the provisions of the Paris MoU.

On a national scale, port state control is operated by an office of port state control that is part of the Directorate of Maritime Affairs, under the authority of the Directorate-General of Infrastructure, Transport and Sea, which is part of the French Ministry for Ecological and Solidarity Transition.

On a regional scale, inspections are carried out by highly skilled and trained inspectors of Interregional Directorates of the Sea, and officials of the French Ministry for Ecological and Solidarity Transition.

Sanctions

What sanctions may the port state control inspector impose?

In compliance with the Paris MoU, during these inspections, inspectors may order the detention of a foreign vessel to request the rectification of all deficiencies detected that are clearly hazardous to safety. Under such circumstances, the inspector may also prohibit the ship from continuing a hazardous operation due to established deficiencies. These provisions are also provided by the 2009 Directive on Port State Control, which states that in the case of deficiencies that are clearly hazardous to safety, health or the environment, the competent authority of the port state where the ship is being inspected shall ensure that the ship is detained or the operation in the course of which the deficiencies are revealed is stopped.

Article L 5334-4, 1 of the Transport Code provides, in particular, that access to a port is denied to any ship that receives a formal prohibition order from a state acting in accordance with the provisions of the Paris MoU. New articles 41-8 et seq of Decree No. 84-810 dated 30 August 1984 (created by Decree No. 2012-161 dated 30 January 2012 and modified by Decree No 2016-1693 dated 9 December 2016) also describes the measures of the detention of a vessel and prohibition of vessels from accessing a port.

Appeal

What is the appeal process against detention orders or fines?

Article 41-12 of Decree No. 84-810 dated 30 August 1984 (created by Decree No. 2012-161 dated 30 January 2012, as modified by article 31 of the Decree 2014-28 dated 1 December 2014 and by article 10 of the Decree No. 2017-422 dated 28 March 2017) sets out the appeal procedure.

The appeal procedure provides that any appeal against a decision of an inspector shall be presented by the shipowner, operator of the ship, charterer for any maritime labour certification or its representative before the chief of the centre of ship safety. Any appeal against the decision rendered by the aforementioned chief shall be presented before the minister of maritime affairs.

The appeal shall be made by the shipowner, operator of the ship or its representative within 15 days of being notified of the decision of the inspector.

Classification societies

Approved classification societies

Which are the approved classification societies?

In France, the authorised classification societies are Bureau Veritas Marine & Offshore SAS, DNV-GL AS Rina Services SpA, Lloyd’s Register EMEA and the Korean Register of Shipping, which are all members of the International Association of Classification Societies, founded in 1968.

Liability

In what circumstances can a classification society be held liable, if at all?

The liability of a classification society may arise under contract law. French courts acknowledge the validity of non-liability clauses inserted in contracts entered into between shipowners and classification societies. Provisions limiting the liability of classification societies are also valid under French law. However, the application of such clauses is excluded in the event of gross negligence or wilful misconduct on the part of the classification society.

A classification society may also incur liability in tort and may be criminally liable.

Collision, salvage, wreck removal and pollution

Wreck removal orders

Can the state or local authority order wreck removal?

The state or a local authority can order wreck removal. The law provides extensive powers to the relevant administration to remove wrecks, in particular when they present a danger to navigation and the environment. Notably, under the circumstances described in article L 5242-18 of the Transport Code, the state or the port authority, as relevant, may act on their own initiative at the shipowner’s cost and risk.

International conventions

Which international conventions or protocols are in force in relation to collision, wreck removal, salvage and pollution?

Regarding collisions, the International Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels (Brussels, 23 September 1910), the International Convention for the Unification of Certain Rules relating to Penal Jurisdiction in Matters of Collision and Other Incidents of Navigation, the International Convention for the Unification of Certain Rules relating to Civil Jurisdiction in Matters of Collision (both adopted in Brussels on 10 May 1952) and the International Regulations for Preventing Collisions at sea dated 20 October 1972 are in force in France.

Regarding salvage, the International Convention for the Unification of Certain Rules of Law relating to Assistance and Salvage at Sea (Brussels, 23 September 1910) and the International Convention on Salvage (London, 28 April 1989) are in force in France.

Regarding pollution, the International Convention for the Prevention of Pollution from Ships 1973 (MARPOL) as modified by the protocol of 1978, the International Convention on Civil Liability for Oil Pollution Damage 1969 (CLC) as replaced by the protocol of 1992, and the 1992 protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Fund 1992) are in force in France.

Regarding wreck removal, the French Law No. 2015-820 (dated 7 July 2015) authorises the ratification of the Nairobi International Convention on the Removal of Wrecks adopted on 18 May 2007, and Decree No. 2016-615 (dated 18 May 2016) relates to the publication of the said Convention under French law.

Salvage

Is there a mandatory local form of salvage agreement or is Lloyd’s standard form of salvage agreement acceptable? Who may carry out salvage operations?

There is no mandatory local form of salvage agreement. The Lloyd’s standard form of salvage agreement is acceptable. Another form of salvage agreement commonly known as the ‘Formule Villeneau’ may also be used.

There are no specific restrictions on who may carry out salvage operations. Usually, these are carried out by specialised companies.

Ship arrest

International conventions

Which international convention regarding the arrest of ships is in force in your jurisdiction?

The International Convention for the Unification of Certain Rules relating to the Arrest of Seagoing Ships, Brussels, 10 May 1952 (the 1952 Convention), is in force in France. However, France is not a party to the International Convention on the Arrest of Ships signed in Geneva on 12 March 1999.

Claims

In respect of what claims can a vessel be arrested? In what circumstances may associated ships be arrested? Can a bareboat (demise) chartered vessel be arrested for a claim against the bareboat charterer? Can a time-chartered vessel be arrested for a claim against a time-charterer?

In France, the applicable source of law will be either the 1952 Convention or Decree No. 67-967 and the Transport Code.

Under French law and according to article L 5114-22 of the Transport Code, a ship may be arrested pursuant to an ex parte request for an order of conservatory arrest for any claim, as long as the claim appears to be well founded in theory.

Under the 1952 Convention, a vessel can be arrested in respect of a maritime claim as defined and listed by article 1 of the 1952 Convention. The 1952 Convention will apply to any vessel flying the flag of a contracting party in the jurisdiction of any contracting party to the 1952 Convention.

If the vessel is flying the flag of a non-contracting party to the 1952 Convention, the vessel may be arrested in the jurisdiction of any contracting state in respect of any of the maritime claims enumerated in article 1 of the 1952 Convention, or of any other claim for which the law of the contracting state permits arrest.

In relation to associated ships, in the 1990s the French courts developed the ‘theory of the community of interests’ enabling the creditors of company X, shipowner of vessel A, to arrest vessel B, owned by company Y, if such creditors are able to provide evidence of some confusion of assets between X and Y. Such evidence was, at that time, easily provided.

Following the development of the theory, the French courts were quickly overwhelmed by the number of arrests in France by creditors from around the world and had to tighten the criteria. Since then, in a series of decisions of the French Supreme Court, it was held that creditors must demonstrate that the companies are fictitious, which in practice is extremely difficult to evidence.

Under French law the creditors can only arrest a vessel that is owned by a debtor. By exception, there are two situations in which a creditor can arrest a vessel based on a claim held against a time-charterer or a bareboat charterer:

• if a creditor legitimately believes he or she has entered into a contract with a shipowner; or
• if a claim benefits from a maritime lien based on article L 5114-8 of the Transport Code (CA, Pau, 6 December 1984, Navire Spartan).

The possibility of arresting a ship for a claim held against a charterer is expressly addressed in the 1952 Convention:

• in the case of a claim held against a bareboat charterer, article 3(4) paragraph 1 of the Convention expressly states that it is possible to arrest a chartered vessel in the case of a charter with demise (CA, Montpellier, 1 December 2003); and
• in the case of a claim held against a time-charterer, French courts apply article 3(4) paragraph 2 of the convention, which allows arresting cases where a person other than the registered owner of a ship is liable in respect of a maritime claim relating to that ship (T Com Marseille, 4 June 2003).

The 1952 Convention lays down certain conditions relating to the quality of the claim. It must be a ‘maritime claim’ (as defined and listed by article 1 of the 1952 Convention), and such maritime claim must directly relate to the ship.

Maritime liens

Does your country recognise the concept of maritime liens and, if so, what claims give rise to maritime liens?

French law recognises the concept of maritime liens. The creation of such maritime lien is automatic, requiring no formality on the part of the creditor.

Claims giving rise to maritime liens are set in an exhaustive list in order of priority in article L 5114-8 of the Transport Code:

• legal costs incurred in relation to the sale of the ship and the distribution of the proceeds of the sale;
• tonnage taxes or port taxes and other taxes of the same kind, pilotage fees and costs associated with the custody and preservation of the vessel since the vessel entered the last port;
• crew costs;
• salvage and assistance of the vessel and contribution to general average;
• compensation for collisions or accidents at sea, compensation for damage caused to port or inland-waterway structures, compensation for personal injury to passengers and crews, and compensation for loss or damage to cargo and/or luggage; and
• costs incurred by a captain outside the home port of the vessel for the preservation of the ship or the continuation of the journey.

According to article L 5114-17 of the Transport code, maritime liens expire after a period of one year, except for costs incurred by a captain (mentioned above), for which the period is reduced to six months.

Wrongful arrest

What is the test for wrongful arrest?

A wrongful arrest would lie in the abuse of the right to arrest a vessel. An absence of legitimacy, malice or the inappropriateness of the measure may constitute an abuse. In the event of such an abuse, the judge may award damages to the arrestee.

Bunker suppliers

Can a bunker supplier arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel?

It is possible for a bunker supplier to arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner of that vessel. The creditor of a charterer may arrest the vessel as long as the creditor benefits from a maritime lien.

Under French law and pursuant to article L 5114-8, 6 of the Transport Code, the bunker supplier will have a maritime lien if it entered into a contract with the captain of the vessel in relation to the supply of bunkers ordered outside the vessel’s home port.

In addition, under international law and pursuant to the 1952 Convention, the claimant is entitled to arrest a ship in respect of a maritime claim arising out of goods or material wherever supplied to a ship for its operation or maintenance.

Security

Will the arresting party have to provide security and in what form and amount?

The arresting party does not have to provide security. The debtor can obtain the release of the arrest if it can provide a satisfactory guarantee to the arresting party.

How is the amount of security the court will order the arrested party to provide calculated and can this amount be reviewed subsequently? In what form must the security be provided? Can the amount of security exceed the value of the ship?

The amount, form and terms of the guarantee are usually agreed between the parties. The release is given, in this case, without the intervention of a judge. If there is no agreement between the parties as to the amount of the guarantee, the judge ruling by way of summary proceedings is competent to appreciate the sufficiency of the amount of the guarantee.

The release of the arrest of the vessel is granted or ordered after the constitution of a guarantee, which can take the following forms:

• bank guarantee, as explicitly provided by article L 512-1 of the Code of Execution of Civil Procedures;
• guarantee issued by an insurer and notably a protection and indemnity club;
• deposit with the relevant registry or a receiver designated by the parties; and
• limitation fund constituted in accordance with the Convention on Limitation of Liability for Maritime Claims 1976 and the 1996 Protocol.

The amount of the guarantee would be limited to the value of the ship. This position seems to be prevalent under French law and can be found notably under article 4.2 of the International Convention on Arrest of Ships 1999, which states that ‘In the absence of agreement between the parties as to the sufficiency and form of the security, the court shall determine its nature and the amount thereof, not exceeding the value of the arrested ship.’

Formalities

What formalities are required for the appointment of a lawyer to make the arrest application? Must a power of attorney or other documents be provided to the court? If so, what formalities must be followed with regard to these documents?

In relation to ship arrest under French law, powers of attorney are not required for the appointment of a lawyer to make an arrest application.

Ship maintenance

Who is responsible for the maintenance of the vessel while under arrest?

The bailiff in charge of the arrest of a ship will designate a person responsible for the surveillance of the vessel while under arrest. The French Supreme Court held in a decision dated 3 March 1998 (Cass Com 3 March 1998, 95-20.692) that the shipowner is responsible for the maintenance of the arrested vessel.

Proceedings on the merits

Must the arresting party pursue the claim on its merits in the courts of your country or is it possible to arrest simply to obtain security and then pursue proceedings on the merits elsewhere?

Whether pursuant to the 1952 Convention or under French law, a French court’s examination of the merits of the claim to decide the arrest of a ship will be limited to the allegation of the claim. The parties must then pursue the claim on its merits in the courts that have jurisdiction to decide.

Injunctions and other forms of attachment

Apart from ship arrest, are there other forms of attachment order or injunctions available to obtain security?

Pursuant to article 531 of the Civil Code, the attachment of a ship is subject to a specific legal regime, as a ship represents a specific type of property. Pursuant to the Transport Code, apart from the ship arrest, a creditor can benefit from a maritime lien that can be executed on the freight, if the claim has become due during the transport and if its value is still in the hands of the captain or the owner’s agent (L 5114-8 to L 5114-9). In addition, the creditor can seek the arrest of the debtor’s receivables.

Delivery up and preservation orders

Are orders for delivery up or preservation of evidence or property available?

Orders for delivery up or preservation of evidence or property are not available in their conventional form in French maritime law. Pursuant to article 531 of the Civil Code, the attachment of a ship is subject to a specific legal regime, as a ship represents a specific type of property. Therefore, procedural measures envisaged by the Transport Code are applicable to ships. Article L 5114-21 of the Transport Code provides that a judge may issue an order pursuant to which a ship that has been placed under arrest obtains a right to leave the port for one or several journeys upon the deposit of adequate security and on condition that the ship returns to the port within the term specified by the judge. In the event that the ship does not return to port within the specified time period, the security is awarded to the creditors.

Bunker arrest and attachment

Is it possible to arrest bunkers in your jurisdiction or to obtain an attachment order or injunction in respect of bunkers?

Yes, it is possible to arrest bunkers of the ship. The arrest of the ship’s bunkers is subject to the same legal regime as the arrest of the ship itself.

Judicial sale of vessels

Eligible applicants

Who can apply for judicial sale of an arrested vessel?

Creditors of the shipowner may apply for judicial sale of the vessel.

Procedure

What is the procedure for initiating and conducting judicial sale of a vessel? How long on average does it take for the judicial sale to be concluded following an application for sale? What are the court costs associated with the judicial sale? How are these costs calculated?

The procedure for initiating and conducting judicial sale of a vessel is provided by articles R 5114-29 et seq and L 5114-23 et seq of the Transport Code.

The initial step in such procedure is the notification by a bailiff to the shipowner of an order to pay (article L 5114-23 of the Transport Code). The creditor must be in possession of an executory title, namely, either a judgment evidencing that the payment is due or, in certain cases, a notarised deed. If payment is not made, the bailiff will then issue attachment minutes, which will be notified to the relevant port authorities.

In relation to the second phase of the procedure, summons to appear will be served in order to carry out the auction of the ship and the attachment minutes will be filed with the relevant ship and mortgage registry. The arrest will then be notified to the creditors. The court will determine the conditions regarding the auction sale of the vessel.

The timing of the procedure will depend on a number of factors, for example, whether the ship is registered under the French flag or a foreign flag. The court costs in connection with the sale will be determined by the judgment given by the court. The costs will usually reflect the fees incurred in relation to the ship’s detention and the expenses incurred in the course of court proceedings.

Claim priority

What is the order of priority of claims against the proceeds of sale?

The order of priority of claims against the proceeds of sale may be set out as follows:

• maritime liens, article L 5114-8 of the Transport Code, provides the following list of maritime liens:
• legal costs incurred in relation to the sale of the ship and the distribution of the proceeds of the sale;
• tonnage taxes or port taxes and other taxes, pilotage fees and fees associated with the conservation of the vessel since the entry of the vessel at the costs incurred in the last port of call;
• crew costs;
• salvage and general average contribution;
• claims arising out of collisions, accidents at sea and damage to port structures and cargo; and
• costs incurred by the captain outside the home port of the vessel for the preservation of the ship or the continuation of the journey;
• mortgages over the ship;
• other secured claims; and
• all other unsecured claims.

Legal effects

What are the legal effects or consequences of judicial sale of a vessel?

The judicial sale of a vessel will serve to extinguish prior liens and encumbrances including maritime liens as provided by article L 5114-19, 2 of the Transport Code.

Foreign sales

Will judicial sale of a vessel in a foreign jurisdiction be recognised?

The judicial sale of a vessel in a foreign jurisdiction will be recognised in France. It was held in a decision dated 4 October 2005 (No. 02-18.201) by the French Supreme Court that a decision of a foreign court regarding a judicial sale has legal effects in France.

International conventions

Is your country a signatory to the International Convention on Maritime Liens and Mortgages 1993?

France is not a party to the International Convention on Maritime Liens and Mortgages 1993.

Carriage of goods by sea and bills of lading

International conventions

Are the Hague Rules, Hague-Visby Rules, Hamburg Rules or some variation in force and have they been ratified or implemented without ratification? Has your state ratified, accepted, approved or acceded to the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea? When does carriage at sea begin and end for the purpose of application of such rules?

• The Hague Rules 1924 entered into force on 2 June 1931 and France ratified these rules on 9 April 1936;
• the Hague-Visby Rules 1968 entered into force on 23 June 1977 and France ratified these rules on 10 July 1977;
• the SDR Protocol 1979 entered into force on 14 February 1984 and France ratified this protocol on 18 November 1986;
• the Hamburg Rules entered into force on 1 November 1992 but they have not been ratified by France; and
• the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (the Rotterdam Rules), which is not yet in force, has not been ratified by France.

For the purpose of the application of such rules, carriage at sea begins when the goods are loaded on to the vessel and ends when they are discharged from the vessel.

Multimodal carriage

Are there Conventions or domestic laws in force in respect of road, rail or air transport that apply to stages of the transport other than by sea under a combined transport or multimodal bill of lading?

The following conventions regarding road, rail and air transport that apply to stages of the transport other than by sea are in force in France:

• the Convention on the Contract for the International Carriage of Goods by Road 1956 and the Protocol of 1978;
• the Convention Concerning the International Carriage of Goods by Rail 1980 as amended by the Protocol of 3 June 1999; and
• the Convention for the Unification of Certain Rules for International Carriage by Air 1999.

Regarding domestic law, the Transport Code, applicable since 1 December 2010, is in force.

Title to sue

Who has title to sue on a bill of lading?

In principle, the consignee has title to sue on a bill of lading (Cass Com 24 November 1975, No. 74-12.782).

The French Supreme Court has recognised that the consignor may have title to sue on a bill of lading if the consignor suffered loss or damage. The real consignee may also have title to sue on a bill of lading.

Charter parties

To what extent can the terms in a charter party be incorporated into the bill of lading? Is a jurisdiction or arbitration clause in a charter party, the terms of which are incorporated in the bill, binding on a third-party holder or endorsee of the bill?

In principle, clauses of the charter party that are not incorporated in the bill of lading and that have not been accepted by the holder of the bill of lading are not binding. A reference in the bill of lading to a clause in the charter party will not be binding.

However, if the clause of the charter party is entirely reproduced in the bill of lading, and if the holder or endorsee of the bill of lading has accepted such clause, it will be binding.

The above principle appears to be tempered by the jurisprudence in respect of arbitration clauses.

Demise and identity of carrier clauses

Is the ‘demise’ clause or identity of carrier clause recognised and binding?

The ‘demise’ and identity of carrier clauses are not prohibited under French law. However, such clauses are not considered to be binding by the French courts.

Shipowner liability and defences

Are shipowners liable for cargo damage where they are not the contractual carrier and what defences can they raise against such liability? In particular, can they rely on the terms of the bill of lading even though they are not contractual carriers?

In a large number of charterer’s bills of lading, the name of the carrier is not provided. Where such bill of lading is kept by the charterer, the contractual relations are governed by the charter agreement. However, issues arise where this type of bill of lading is passed on to a consignee who is a third party to the charter agreement. In the event of loss or damage to cargo the third-party holder may only rely on the charterer’s bill of lading, which does not provide information on the carrier. In this respect, the French Supreme Court has held that when the bill of lading mentions neither the shipowner’s nor the charterer’s name and when the charter party that it refers to is not reproduced in or attached to the bill of lading, the recipient and its insurers are entitled to bring an action against the apparent carrier, namely, the shipowner. This entitlement exists regardless of the existence of information regarding the identity of the charterer, which may have resulted from elements external to the bill of lading and which were revealed after delivery thereof (Cass Com 21 July 1987, 86-10.195, Bull 1987 IV No. 211 p.156).

It is interesting to note that article 37 of the Rotterdam Rules states that if the carrier is not identified in the contract particulars, but the contract particulars indicate that the goods have been loaded on board a named ship, the registered owner of that ship is presumed to be the carrier. However, the shipowner will not be held liable if he or she proves that the ship was under a bareboat charter at the time of the carriage, identifies this bareboat charterer and indicates its address, in which case this bareboat charterer is presumed to be the carrier. Alternatively, the registered owner may rebut the presumption of being the carrier by identifying the carrier and indicating its address (Court of Appeal of Rouen, 6 October 2016, No. 15/01504, X et a v Allianz Global). The bareboat charterer may also rebut the presumption of being the carrier in the same manner.

Deviation from route

What is the effect of deviation from a vessel’s route on contractual defences?

Loss or damage resulting from a vessel’s deviation either to save or attempt to save lives or property at sea or any reasonable deviation, will not be considered as a breach of the contract of carriage and the carrier will not be liable for any subsequent loss or damage as provided by the Hague Rules and article L 5422-12 of the Transport Code.

However, the carrier may be held liable for any loss or damage resulting from an unreasonable deviation, such as a voluntary deviation towards a manifestly unsuitable port.

Liens

What liens can be exercised?

Pursuant to article L 5422-8 of the Transport Code, the carrier has a lien on the cargo for payment of its freight.

Article L 5114-8, 5 of the Transport Code provides for, among other things, a lien on the ship in relation to claims for loss or damage to cargo.

Delivery without bill of lading

What liability do carriers incur for delivery of cargo without production of the bill of lading and can they limit such liability?

A delivery without production of the bill of lading may render the carrier liable. In practice, it is common for the consignee or his or her representative not to be in possession of the bill of lading at the discharge port. The carrier will accept to deliver the cargo without production of the bill of lading provided that an ‘autonomous guarantee’ is issued. The French courts have held that delivery of cargo by the carrier without the delivery of such guarantee requested by the consignor is a breach of contract.

Under the Rotterdam Rules, the limitation of liability not only covers loss or damage to the cargo but also covers breaches of the carrier’s obligations. The Rotterdam Rules also provide specific provisions regarding delivery of cargo in the absence of a negotiable transport document.

Shipper responsibilities and liabilities

What are the responsibilities and liabilities of the shipper?

In addition to the duty to present the goods properly packed and marked at the time and place determined in the bill of lading, the shipper has a duty of sincerity regarding the nature and value of the goods, in particular regarding dangerous goods.

The shipper is also responsible for paying for the freight, unless otherwise agreed by the parties. A ‘paid freight’ note is usually fixed on the bill of lading.

Pursuant to article L 5422-10 of the Transport Code, the shipper is liable for any damage to the ship or other goods caused by its fault or the inherent defect of its goods. If the shipper did not respect his or her duty of sincerity regarding the nature of the goods, the carrier will not be liable for the loss of these goods.

Article L 5422-11 of the Transport Code provides a one-year time limit on claims against the shipper.

Shipping emissions

Emission control areas

Is there an emission control area (ECA) in force in your domestic territorial waters?

Yes. France is a member state of the International Maritime Organization and it is through this organisation that the International Convention for the Prevention of Pollution from Ships (MARPOL) was adopted in 1973. In 1997, an amendment was adopted and a new Annex VI was added. Annex VI entered into force on 19 May 2005 and was modified in 2008 and new guidelines were added notably in 2013.

This annex sets emission limits for ship exhausts such as sulphur oxides, nitrogen oxides, suspended particles, volatile organic compounds and banned substances that weaken the ozone layer. In Europe, the Baltic Sea became the first fully implemented sulphur oxides emission control area (SECA) in August 2006. One year later, in August 2007 the North Sea and the English Channel became the second SECA.

Annex VI is integrated into EU law by Directive No. 2016/802/EU of the European Parliament and of the Council of 11 May 2016 relating to a reduction in the sulphur content of certain liquid fuel. This directive applies to all ships whatever their flag state. Therefore, any ship that is located in the territorial waters or exclusive economic zone of an EU member state must comply with the requirements of the directive.

Sulphur cap

What is the cap on the sulphur content of fuel oil used in your domestic territorial waters? How do the authorities enforce the regulatory requirements relating to low-sulphur fuel? What sanctions are available for non-compliance?

According to Directive No. 2016/802/EU, the applicable cap on the sulphur content of fuel oil depends on the geographic area in which the ship is navigating:

• within an emission control area: the sulphur content of any fuel oil used by any ship navigating in this area must not exceed 1 per cent m/m. Since 1 January 2015, this threshold has decreased to 0.1 per cent; and
• outside an emission control area: the sulphur content of any fuel oil used by any ship must not exceed 4.5 per cent m/m. Since 18 June 2014, this threshold has decreased to 3.5 per cent and from 1 January 2020, the authorised percentage will be 0.5 per cent.

According to Annex VI of the MARPOL Convention, under the general requirements, the sulphur content of any fuel oil used on board ships shall not exceed the following limits:

• 4.5 per cent m/m prior to 1 January 2012;
• 3.5 per cent m/m on and after 1 January 2012; and
• 0.5 per cent m/m on and after 1 January 2020.

Within an emission control area, the sulphur content of fuel oil used on board ships shall not exceed the following limits:

• 1.5 per cent m/m prior to 1 July 2010;
• 1 per cent m/m on and after 1 July 2010; and
• 0.1 per cent m/m on and after 1 January 2015.

In France, the control procedure is provided in a ministerial order dated 23 November 1987 relating to ships’ security. In accordance with article 213-6.18 of this order, the details of the fuel oil used by a vessel must be recorded in a bunker delivery note, accompanied by a sealed sample. This sample should be signed by the supplier and the ship’s representatives. It should also be retained on board for a period of at least 12 months and in an accessible place since an inspection can occur at ‘any reasonable time’.

Article L 218-15 of the French Environmental Code provides that a master of a ship who is found guilty of violating the MARPOL Convention and, in particular, Rule 14 (regarding sulphur emissions), will be punished with a €200,000 fine and imprisonment for up to one year.

Once Directive No. 2016/802/EU is implemented, its provisions relating to controls and sanctions will therefore be applied. In this regard, the directive is quite clear but not particularly innovative. Concerning the controls, the member states shall take all necessary measures to check by sampling that the accepted sulphur threshold is complied with. Moreover, according to the Commission, the sanctions imposed by the member states shall be effective, proportionate and dissuasive.

Ship recycling

Regulation and facilities

What domestic or international ship recycling regulations apply in your jurisdiction? Are there any ship recycling facilities in your jurisdiction?

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships 2009 (the Hong Kong Convention 2009) was signed by France on 19 November 2009 and ratified on 2 July 2014. However, the Hong Kong Convention 2009 will only enter into force two years after 15 states, representing 40 per cent of the world’s merchant shipping by gross tonnage, and on average 3 per cent of recycling tonnage for the previous 10 years, have either signed it without reservation as to ratification, acceptance or approval, or have deposited instruments of ratification, acceptance, approval or accession with the Secretary General. None of these conditions has currently been met.

To anticipate the implementation of the Hong Kong Convention 2009, the European Parliament and the Council of the European Union adopted the Ship Recycling Regulation on 20 November 2013 (Regulation (EU) No 1257/2013). This regulation has been embodied in French law by Decree No. 2015-1827 dated 30 December 2015 and articles D 543-271 et seq of the French Environmental Code.

A European List of ship recycling facilities is prepared in accordance with article 14 of the EU regulation, based on permission or authorisation granted by member states. In France, there are currently four ship recycling facilities recognised by the Commission Implementing Decision (EU) 2018/1906 of 30 November 2018:

• Gardet & De Bezenac Recycling/Groupe Baudelet Environnement - GIE MUG;
• Grand Port Maritime de Bordeaux;
• Les Recycleurs Bretons; and
• Démonaval Recycling.

Jurisdiction and dispute resolution

Competent courts

Which courts exercise jurisdiction over maritime disputes?

The French commercial courts will usually have jurisdiction regarding maritime disputes. However, it is important to note the use of arbitration in settling international maritime disputes. A large number of contracts, such as shipbuilding contracts, contracts in respect of salvage operations and charter agreements, provide an arbitration clause.

The French Maritime Court will exercise jurisdiction over maritime disputes regarding, among other things, offences committed by professionals of the maritime industry, the captain of a ship or the crew.

Service of proceedings

In brief, what rules govern service of court proceedings on a defendant located out of the jurisdiction?

In addition to Council Regulation (EC) No. 1393/2007 of 13 November 2007 on the service in member states of judicial and extrajudicial documents in civil or commercial matters (service of documents), the main rules in France that govern service of court proceedings on a defendant located out of the jurisdiction are set out in the French Code of Civil Procedure.

Furthermore, articles 14 and 15 of the Civil Code set out the rule known as ‘privileged jurisdiction’. Article 14 states that: ‘an alien, even if not residing in France, may be cited before French courts for the performance of obligations contracted by him in France with a French person; he or she may be called before the courts of France for obligations contracted by him in a foreign country towards French persons’ and article 15 states that: ‘a French national may be called before a French court with respect to obligations he or she has borne abroad, even towards an alien.’

Arbitration

Is there a domestic arbitral institution with a panel of maritime arbitrators specialising in maritime arbitration?

The Paris Maritime Arbitration Chamber (CAMP) is the French arbitral institution specialising in settling maritime disputes in a fast and economical way. The CAMP is made up of institutional members, which are legal entities and professionals of the maritime sector.

The activity of the Chamber varies. Statistically, according to the CAMP, about 100 requests for arbitration are filed each year.

Foreign judgments and arbitral awards

What rules govern recognition and enforcement of foreign judgments and arbitral awards?

Regarding the recognition and enforcement of foreign judgments, the European Union rules are laid down in Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. The provisions of the Code of Civil Procedure will also apply.

Regarding the enforcement of foreign arbitral awards, France is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. Pursuant to this convention, each of the contracting states shall recognise the arbitral awards as binding and enforce them in accordance with the procedural rules of the territory where the award is relied upon.

Asymmetric agreements

Are asymmetric jurisdiction and arbitration agreements valid and enforceable in your jurisdiction?

The validity of asymmetric jurisdiction and arbitration clauses remain unsettled under French law, due to recent controversial decisions of the French Supreme Court.

In the Rothschild case (Cass Civ 1, 26 September 2012, 11-26.022), the court held that an agreement providing an option for one party to choose between an indefinite choice of jurisdiction is void.

This rejection of asymmetric jurisdiction clauses was later justified by the French Supreme Court in the Danne Holding v Crédit Suisse case (Cass Civ 1, 25 March 2015, 13-27.264) on the basis that such clause was drafted without an objective criteria setting out the basis for any alternative jurisdiction, and thus was contrary to the Lugano Convention’s principles, which requires foreseeability and legal certainty.

However, in its latest decisions (Cass Civ 1, 7 October 2015, 14-16.898, Société eBizcuss.com v Apple Sales International, Apple Inc and Apple Retail France and Cass Civ 1, 3 October 2018, 17-21.309, SCI Saint-Joseph c/ Société Dexia banque internationale), the Supreme Court gave effect to a clause providing a limited choice to the beneficiary of the option, or has showed signs that such clause may be valid if they were drafted with sufficient precisions - for example, by referring to a jurisdiction’s rule in force in a member state. In light of this these decisions, it is considered that asymmetric clauses may be valid under French law, provided that the choice offered to the beneficiary is objectively limited and foreseeable.

Breach of jurisdiction clause

What remedies are available if the claimants, in breach of a jurisdiction clause, issue proceedings elsewhere?

In principle, French courts do not issue anti-suit injunctions.

Under French law, if the claimant, in breach of a jurisdiction clause, issues proceedings elsewhere in France, the party who wishes to raise the plea of lack of jurisdiction, under penalty of inadmissibility, must do so before the court at which the matter is brought and explain which jurisdiction it believes the matter should be brought before (article 75 of the Code of Civil Procedure).

What remedies are there for the defendant to stop domestic proceedings that breach a clause providing for a foreign court or arbitral tribunal to have jurisdiction?

The defendant can raise a plea of lack of jurisdiction before the court.

In the presence of an arbitration clause, the ‘compétence-­compétence’ principle applies. Where a dispute, which is referred to an arbitration tribunal pursuant to an arbitration agreement or arbitration clause, is brought before a court of law of the state, the latter must decline jurisdiction unless the matter has not yet been brought before an arbitration tribunal and the arbitration agreement is manifestly null (article 1448 of the Code of Civil Procedure).

Limitation periods for liability

Time limits

What time limits apply to claims? Is it possible to extend the time limit by agreement?

Time limits vary depending on the nature of the claim.

In respect of contractual claims, a one-year time limit applies to claims arising under a contract of carriage governed by French law as well as claims arising under a voyage or time charter agreement governed by French law. The one-year time limit also applies to cargo claims under the Hague Rules 1924. The time limit can be extended by agreement.

In relation to liability in tort a longer time limit applies, which will usually be of five years for commercial disputes. However, in respect of claims against the carrier, whether the claims are grounded in contract or in tort, the one-year limit applies.

Court-ordered extension

May courts or arbitral tribunals extend the time limits?

Courts and arbitral tribunals may not extend the time limits.

Miscellaneous

Maritime Labour Convention

How does the Maritime Labour Convention apply in your jurisdiction and to vessels flying the flag of your jurisdiction?

The Maritime Labour Convention applies to its full extent in France and to vessels flying the French flag. Indeed, the French Law No. 2012-1320 dated 29 November 2012 authorises the ratification of the Maritime Labour Convention. The Convention entered into force on 20 August 2013, and has been in force in France since 28 February 2014.

Relief from contractual obligations

Is it possible to seek relief from the strict enforcement of the legal rights and liabilities of the parties to a shipping contract where economic conditions have made contractual obligations more onerous to perform?

In the absence of a contractual ‘hardship’ clause, it has traditionally been very difficult to obtain relief from the strict enforcement of the legal rights and liabilities of the parties to a shipping contract. However, pursuant to the ministerial order dated 10 February 2016 reforming the French Civil Code, which came into force on 1 October 2016 with respect to contracts concluded on and after that date, new article 1195 of the French Civil Code provides that if a change in circumstances that was unforeseeable at the time a contract was entered into renders performance thereof excessively onerous for a party who had not agreed to assume the risk thereof, such party may request the other contracting party to renegotiate the contract, provided the requesting party continues to perform its own obligations during such negotiation. In the event that the other contracting party refuses such negotiation or in the event that such negotiations are unsuccessful, the parties may agree to terminate the contract, on the date and pursuant to such conditions as they may determine, or may request the judge to adapt the contract. In the event of failure to agree within a reasonable period, the judge may, at the request of a party, revise the contract or terminate it, on such date and pursuant to such conditions as are fixed by the judge.

Separately, new article 1218 of the French Civil Code, also added by the aforementioned ministerial order, codifies previous case law to the effect that the occurrence of an event that constitutes force majeure (ie, an event that is beyond the control of the obligor, which could not have been reasonably foreseen at the time of the entry into of the contract and the effects of which cannot be avoided by appropriate measures and which prevents performance of its obligation by the obligor) may affect performance of the contract. Under article 1218, a distinction is drawn between the effects of the force majeure: on the one hand, if the effects are temporary, performance of the obligation is suspended unless the delay resulting therefrom justifies termination of the contract. On the other hand, if the effects are definitive, the contract is automatically terminated and the parties are discharged of their obligations. However, the defaulting contractor will not be free from his or her contractual duties if he or she has either accepted to undertake the impossibility of execution, or if he or she has been given notice to execute his or her contractual duties before the impossibility occurred (articles 1351, 1351-1 of the French Civil Code).

Other noteworthy points

Are there any other noteworthy points relating to shipping in your jurisdiction not covered by any of the above?

France adopted Law No. 2011-13 of 5 January 2011 regarding Anti-Piracy and State Police Powers at Sea, amending Law No. 94-589 of 15 July 1994. This law enhances preventive and repressive measures, in particular on the high seas, to provide a more efficient anti-piracy regime.

Update and trends

Key developments of the past year

Are there any emerging trends or hot topics that may affect shipping law and regulation in your jurisdiction in the foreseeable future?

Emerging trends66 Are there any emerging trends or hot topics that may affect shipping law and regulation in your jurisdiction in the foreseeable future?

The aforementioned reform of the French Civil Code on contract law and the general regime and proof of obligations impacts maritime matters, notably in relation to unequal clauses. Pursuant to the new article 1171, in standard form agreements imposed by one party on another (contrat d’adhésion), contractual clauses (other than those dealing with (i) the principal object of the contract or (ii) the price of the service provided) that create a significant imbalance between the rights and obligations of the parties to the contract can be set aside by the judge at the request of the detrimentally affected contracting party. General terms and conditions of insurance policies or bills of lading also enter in the scope of such article. To identify the existence of such significant imbalance clauses, careful attention must be paid to all provisions of the contract.

Please note the costs to be paid in relation to mortgage registration with the Custom authorities of a ship flying French flag are no longer to be paid (article 26 of Finance Law (loi de finances) No. 2018-1317 of 28 December 2018 for 2019).

These registration costs represented a percentage of the amount secured by the ship mortgage (0.05 per cent) and as such, they could have a disincentive effect to the constitution of ship mortgage in France. From 1 January 2019, when a ship mortgage is registered in France with the relevant Customs authorities, registration costs for such ship mortgage are no more due. This measure should facilitate the registration of a ship mortgage constituted on ships flying French flag.