Monday, July 19, 2021

OWNERSHIP AND NATIONALITY OF SHIPS UNDER ETHIOPIAN MARITIME LAW

 

A ship is a special movable property (Art.3, Mar. Code) with peculiar features. The right of ownership of a ship is equivalent to ownership of movable goods (chattels) of a special character. Accordingly, delivery of a ship is not necessary, as it is of other goods or chattels, in order to pass ownership to the purchaser (see Arts.45 ff. of the Maritime Code).

 

Ships need to have nationality. This distinguishes them from other special moveable properties. One may ask why ships need to be registered. Chiristopher Hill, in his Marirtime Law, gives the following reasons why ships, unlike other movable things, are subjected to the requirement of nationality. Excerpts:

 

Hill C., 1985, Maritime Law, 2nd ed., London: Lloyd’s of London Press Ltd, pp. 6-7.

 

Ships…being large and valuable asset, are regrettably unique, and can disappear from one side of the world to another, escaping jurisdictions. Also, they are potentially the means by which their owners can incur liabilities to third parties –sometimes of catastrophic proportions. It is, therefore, logical that shipsshould be given a nationality so that their owner’s obligations, duties, rights, liabilities, immunities, etc., can the more easily be regulated and recognized.

 

The term ‘nationality’ describes the legal relationship between a state and a ship authorized by the state to fly its flag. In other words, the nationality of a ship refers to the state which has authority and responsibility over the ship as symbolized in the flying of a national flag. The ascription of nationality to a ship is one of the most important means by which public order is maintained at sea.

 

States usually grant their nationality to vessels by means of registration and by authorizing vessels to fly their flag. Though each nation has the right to confer its nationality on a ship and to prescribe the rules governing such grants, international law has developed certain limitations. One of such limitations is the principle of “genuine link”. The principle of genuine link prohibits states from granting nationality to ships lacking “genuine link” to the state. The elements of genuine link vary among nations, but often include: ownership by nationals, national officers, national crew, and national built.

 

Though international instruments like the United Convention on the Law of the Sea – UNCLOS (Art.91) –mention the requirement of genuine link, it remains uncertain what the consequences are if there is no genuine link between a vessel and the State whose nationality it purports to bear. According to a widely held view, the role of the principle of “genuine link”, as incorporated under UNCLOS, is to impose upon every State the obligation and the responsibility to exert effective jurisdiction, so that ships flying its flag comply with international treaties or agreements such as IMO (International Maritime Organisation), ILO (International Labour Organisation) and FAO (Food and Agriculture Organisation). UNCLOS, as the universal law of the sea “framework treaty”, accepts that conditions for the granting of nationality are clearly within the domain of domestic law: “Every State shall fix the conditions for the grant of its nationality, registration of ships and right to fly its flag.” This means that requirements to register a ship, such as ownership, nationality of crew, or domicile of the shipowner, should not, according to UNCLOS, be regulated internationally.  

                                                                                                                                                      

Thus, it is clear that each state under international law may determine for itself the conditions on which it will grant its nationality to a merchant ship. In other words, each state under international law may determine for itself the conditions on which it will grant its nationality to a merchant ship, thereby accepting responsibility for it and acquiring authority over it. No one is in power to question the regularity and validity of a registration except the flag state itself. This loophole is, however, manipulated by some states that are later named flag of convenience or open registries. Over the past few decades, the use of flag of convenience has grown from a small proportion to account for a large percentage of shipping worldwide, over half.

 

Shipowners in traditional maritime nations opt for flag of convenience to avoid the stringent safety and labour regulations in home country and to benefit from easy access to registry and low tax schemes. Whereas, host countries are motivated by the financial advantages the practice generate to their economy. None the less, the bad sides of the practice are more evident than its good sides.

 

One of the problems of flag of convenience registrations is that the host countries are normally unable or unwilling to provide enforcement mechanisms for safety and social regulations. In fact, it is frequently stated that flags of convenience include a large proportion of low quality vessels operating under minimum maritime safety conditions. Moreover, the personnel of flag of convenience vessels have in various instances been given lower than average standards.

 

International measures to counter registration under flags of convenience have not been that much successful. Nonetheless, there are genuine flag states that insist, in line with UN rules, there must be a genuine link between the ship owner and the flag state. These countries therefore, put restrictions on foreign ownership and apply national laws, including labour laws, on board unlike the flag of convenience system –which places a large part of the industry beyond the influence of government control. Ethiopia is one of the maritime nations that do not favor flag of convenience

 

The Ethiopian concept of genuine link has been incorporated under Art. 4 of Mar. Code. Accordingly, ownership of Ethiopian ship is restricted to (1) Ethiopian subjects, (2) Bodies Corporate established as per Ethiopian law, (3) foreigners domiciled in Ethiopia and having their principal place of business in Ethiopia. Thus, the nationality of a ship under Ethiopian law depends on its ownership by these persons. Ethiopia accords nationality to a ship only if it is owned by Ethiopian natural and/or juristic person and foreigners, their principal place of business being here, domiciled in Ethiopia.

 

In order to acquire the Ethiopian nationality, i.e. flag, the shipowner has to register the vessel at Addis Ababa or other Ethiopian towns designated by the appropriate body (Maritime Affairs Authority) as a place/s port/s of registration. The Maritime Affairs Authority, established by Maritime Sector Administration Proclamation, Procl. No. 549/2007, is now the registrar for this purpose. It registers Ethiopian ships thereby authorizing the same to fly Ethiopian flag upon fulfilling the required formalities. Before entering any vessel in the register, the Authority will make sure that it is owned by persons qualified for owning Ethiopian ship as per Article 4 of the Maritime Code.

 

Apart from being owned by qualified persons, the vessel is expected to have the technical competence to provide the intended services (See Transport Procl. No 468/2005). Most importantly, the shipowner has to complete the vessel crew in conformity with relevant national and international standards. The Transport Proclamation, under Article 23, provides: “no person shall be engaged as seafarer unless he has obtained a permit granted by the Authority.” Though the effect of hiring crews without a permit is provided nowhere in the proclamation, the Authority who also has the power to issue and renew certificate of seaworthiness is expected to deny the same for vessels failing to hire only seafarers with certificate of competence and seaman’s book. Incidentally, it is worthnoting that the Maritime Sector Administration Proclamation repealed some provisions of the Transport Proclamation (Procl. No. 468/2005) and the incompatible provisions of the 1960 Maritime Code dealing with registration. The repealed provisions of the Code envision a registry kept at “home ports,” which is the case in many coastal shipping nations.  

 

Nationality and registration might not be required for all vessels. Some jurisdictions do not require registration for small vessels. The English Merchant Shipping Act of 1894 exempt [from the obligation to register] ships not exceeding 15 tons burden employed soley in navigation on the rivers and or coasts of the United Kingdom. Sweden, on the other hand, has a ship register for Swedish vessels over twelve meters long and over four meters wide. Similarly, the possibility for small Ethiopian boats to avoid the legal and administrative requirements of registration is not closed. Article 15 of the Maritime Sector Administration Proclamation states the following: “the Minister [of Transport and Communication], by directives, may waive the application in whole or in part of this proclamation to small vessels.

Incidentally, it should be noted that registration under Ethiopian law concerns vessels as defined under Article 1 of the Maritime Code as well as ships and motor boats used for inland water transport. Registration of Ships Council of Ministers Regulations No. 1/1996 requires the registration of both seagoing vessels and watercrafts used for inland water transport.

Dear Students, what do you think would the effect of nationality of ship be? In the forgoing discussion, the different legal effects of nationality of ships have incidentally been mentioned. The legal effects of nationality of ship pertain primarily to the assumption by the flag state of jurisdiction in matters relating primarily to the internal affairs of the ship.

Some of the foundational issues in the development of maritime law were the questions of: (1) which law applies to a seagoing vessel?; (2) which law governs the rights of crew members (including matters of working conditions, health and safety)?; (3) which law regulates the construction and structure of a vessel to ensure seaworthiness?; (4) which law applies to the commission of a tort or crime aboard a vessel?  The response to these questions gave rise to the principle of the “law of the flag state.” In its simplest form, the law of the flag has been described as the notion that seagoing vessels are like floating bits of territory of the sovereign whose flag it flies, with the law of the sovereign governing the vessel and those on board. This, however, does not exclude any other states from assuming jurisdiction where appropriate.  Shipping states do not always assume jurisdiction in matters involving ships flying their flag. The history of maritime law demonstrates that other factors than the principle of “the law of the flag” were applied by courts in states (other than the “flag state”) to  either assume jurisdiction on matters involving ships flying other nation’s flag or  decline on the applicability of the law of the flag state by the same. Other factors include: (1) place of the wrongful act; (2) allegiance or domicile of the injured; (3) allegiance of the defendant shipowner; (4) place of contract; (5) inaccessibility of the foreign forum; and (6) the law of the forum. For instance, an Ethiopian ship may serve in international carriage between ports in the Middle East and Europe; and almost all transactions regarding this part of the Ethiopian merchant fleet may likely be governed by the law of any concerned Middle East or European states where, for example, the transaction is entered into. Moreover, resort to international commercial arbiral tribunals is frequent in maritime transactions; and hence, the application of international principles of maritime law, in place of the law of the falg, is frequent. 

According to Article 6 of the Maritime Code, vessels that have acquired the nationality of Ethiopia are entitled to the right of navigation under the flag of Ethiopia.  This is particularly important for absence of nationality [flag], under international law, precludes a ship from engaging in international trade or navigation of any sort in the high seas, let alone in territorial seas of any particular coastal state. Moreover, benefits from treaties on which rights to enter foreign ports are based are unavailable to stateless ships. Any state can exercise jurisdiction over stateless ships. Finally, coastal maritime nations limit coastal maritime business to national ships. Such privilege to national ships is also recognized under Article 6(2) of our Maritime Code, enacted during the time when Ethiopia was a coastal state.

No comments:

Post a Comment

Sources of Agency Authority

Source: Law of Agency Teaching Material Introduction  Obviously, an agent is a person who has the authority to act in the name and on behalf...

Popular Posts