This country-specific Q&A provides an overview of Shipping laws and regulations applicable in Australia.
What system of port state control applies in your jurisdiction? What are their powers?
The Australian Maritime Safety Authority (AMSA) is the regulatory body responsible for port state control in Australia. Specifically, any vessel approaching, entering, using or leaving any Australian port.
Under the Navigation Act 2012 (Cth), AMSA has the power to inspect vessels and issue directions or detain a vessel, if it identifies any deficiencies in contravention of Australian law or non-compliance with international conventions to which Australia is a signatory. In May of this year, AMSA issued an unprecedented 36 month ban to a vessel after it found that the ship was unseaworthy and that the living conditions on board were in breach of the Maritime Labour Convention 2006.
Are there any applicable international conventions covering wreck removal or pollution? If not what laws apply?
Australia has signed but not ratified the Nairobi International Convention on the Removal of Wrecks 2007. The Navigation Act regulates wrecks and addresses the same points as the Convention, except for insurance.
Conversely, Australia has ratified the International Convention on Civil Liability for Oil Pollution Damage, which is given effect by the Protection of the Sea (Civil Liability) Act 1989 (Cth). Australia has also ratified the International Convention on Civil Liability for Bunker Oil Pollution Damage, which is given effect by the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Act 2008 (Cth).
What is the limit on sulphur content of fuel oil used in your territorial waters? Is there a MARPOL Emission Control Area in force?
Sulphur content limits
Australia has adopted a series of amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) to control and limit sulphur emissions. The sulphur requirements are prescribed in MARPOL Annex VI, the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth), and Marine Order 97. The limit for the sulphur content of ships’ fuel oil has been reduced to 0.5 per cent mass by mass. Also, as of March 2020, ships cannot carry fuel oil with a sulphur content of more than 0.5 per cent m/m, unless the fuel is being carried as cargo.
Emission Control Areas
AMSA Marine Notice 6/2018 imposes a limitation on sulphur emissions from cruise vessels whilst at berth in the Port of Sydney Harbour. Otherwise, there are no emission control areas in force in Australian domestic waters.
Are there any applicable international conventions covering collision and salvage? If not what laws apply?
The proportionate fault rule for losses caused by the fault of two or more vessels found in the Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels is given effect in Australia by the Navigation Regulation 2013 (Cth).
Australia has signed but not ratified the International Convention on Salvage 1989. The Navigation Act 2012 (Cth) regulates salvage and gives effect to the main parts of the Convention. The provisions apply to territorial waters.
Is your country party to the 1976 Convention on Limitation of Liability for Maritime Claims? If not, is there equivalent domestic legislation that applies? Who can rely on such limitation of liability provisions?
Yes, the Convention on Limitation of Liability for Maritime Claims 1976 has force of law in Australia under the Limitation of Liability for Maritime Claims Act 1989 (Cth) (LLMCA). The new limits applied from 8 June 2015.
Ship owners (including owner, charterer, manager and operator of a seagoing ship) and salvors may limit their liability per Article 1 for the claims set out in Article 2.
The LLMCA does not apply in relation to ships that belong to the naval, military or air forces of a foreign country.
If cargo arrives delayed, lost or damaged, what can the receiver do to secure their claim? Is your country party to the 1952 Arrest Convention? If your country has ratified the 1999 Convention, will that be applied, or does that depend upon the 1999 Convention coming into force? If your country does not apply any Convention, (and/or if your country allows ships to be detained other than by formal arrest) what rules apply to permit the detention of a ship, and what limits are there on the right to arrest or detain (for example, must there be a “maritime claim”, and, if so, how is that defined)? Is it possible to arrest in order to obtain security for a claim to be pursued in another jurisdiction or in arbitration?
Australia is not a party to any international convention regarding the arrest of ships. Ship arrests in Australia is governed by the Admiralty Act 1988 (Cth).
Under the Admiralty Act, claims can be made in rem against a ship for maritime liens (section 15), proprietary maritime claims (section 16), general maritime claims (section 17) and demise charterer’s liabilities (section 18).
Maritime liens attach to a ship and are enforceable against the ship notwithstanding changes in ownership. The four maritime liens actionable in Australia are for:
Damage done by a ship;
Wages of the master or a member of the crew; and
Australia follows the UK position, whereby a maritime lien will only be enforceable if it corresponds to a local Australian maritime lien.
Proprietary maritime claims attach to a ship in rem and include claims relating to:
The possession, title, ownership or mortgage of a ship or of a share in a ship or of a ship’s freight;
Claims between co-owners of a ship relating to the possession, ownership, operation or earnings of the ship;
Enforcement of a judgment against a ship; and
Interest in relation to the above.
General maritime claims attach a ship in rem and include claims in connection with:
Damage done by a ship (whether by collision or otherwise);
Liability of the owner of a ship arising under the Protection of the Sea (Civil Liability) Act 1981 (Cth);
Loss of life, or personal injury;
An act or omission of the owner or charterer of the ship in the navigation or management of the ship, including in connection with the loading of or unloading of goods, embarkation or disembarkation of persons, and the carriage of goods or person on the ship;
Loss or damage of goods carried by a ship;
An agreement that relates to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by a charter party or otherwise;
Salvage, general average, towage or pilotage of a ship;
Goods, materials or services for a ship’s operation or maintenance;
The construction of a ship, alteration, repair or equipping of a ship;
A liability for port, harbour, canal or light tolls, charges or dues, or tolls, charges or dues of a similar kind, or a levy in relation to a ship;
Wages or other amounts owing to a master or a member of the crew;
The enforcement of, or a claim arising out of, an arbitral award made in respect of a proprietary or general maritime claim; and
Interest in respect of the above claims.
Under section 18, proceedings against a demise charterer can be commenced if the demise charterer was the owner, charterer or in possession and control of that ship when the cause of action arose.
It is possible to arrest a ship in Australia when the claim itself has no connection with Australia so long as it falls within one of the claims above (except for maritime liens) upon which an in rem proceeding can be commenced under the Admiralty Act. However, in these circumstances, the Australia proceedings are likely to be subject to a stay application by the defendant on the grounds of forum non conveniens in reliance of the arbitration or foreign jurisdiction clause.
However, even if the Australian court were to conclude that it is appropriate for the proceedings before it to be stayed on either basis, it is nevertheless also open to the Court to do so on terms that the ship arrested pursuant to the in rem proceeding be retained by the Court as security for the satisfaction of any award or judgment that may be made in the arbitration or proceedings in the court of a foreign country or that equivalent security be provided for the satisfaction of any award or judgment that might be made in the arbitration or court of the foreign country. This is power conferred on the Courts by section 29 of the Admiralty Act.
Accordingly, in this way it is possible for a plaintiff to obtain security for litigation elsewhere (including by way of arbitration), even if the underlying substantive claim is not eventually heard or determined in Australia.
For an arrest, are there any special or notable procedural requirements, such as the provision of a PDF or original power of attorney to authorise you to act?
No power of attorney is required.
The arresting party will need to prepare an affidavit in support of the application for arrest. The affidavit will annex supporting documents that will need to be in English or in translation and the deponent can be a local solicitor or the arresting party as appropriate. Original documents are not required; scanned and emailed copies of originals will general be sufficient.
Once the affidavit has been prepared, proceedings can be commence and the vessel arrested within a matter of hours.
What maritime liens are recognised?
The four maritime liens currently recognised in Australia (under section 15 of the Admiralty Act) are for:
Damage done by a ship;
Wages of the master or a member of the crew; and
Australia follows the UK position, whereby a maritime lien will only be enforceable if it corresponds to a local Australian maritime lien.
Is it a requirement that the owner or demise charterer of the vessel be liable in personam? Or can a vessel be arrested in respect of debts incurred by, say, a charterer who has bought but not paid for bunkers or other necessaries?
Except in the case of a maritime lien, it is a requirement that the owner or demise charterer of the vessel be liable in personam.
There was a short-lived period during which Australian courts recognised and gave effect to foreign maritime liens in certain circumstances, relevantly including a lien for the supply of necessaries (bunkers) ordered by charterers. However, that position has now been reversed and foreign maritime liens will only be recognised if they correspond to the heads of maritime lien provided for in the Admiralty Act.
Are sister ship or associated ship arrests possible?
In order to effect an associate or surrogate arrest in Australia, the provisions of section 19 of the Admiralty Act must be satisfied. Section 19 provides that a general maritime claim concerning a ship can be pursued against another ship if:
a relevant person in relation to the claim was, when the cause of action arose, the owner or charterer of, or in possession or control of the first-mentioned ship; and
that person is, when the proceedings are commenced, the owner of the second-mentioned ship.
For the purposes of section 19, an owner includes an equitable owner.
Does the arresting party need to put up counter-security as the price of an arrest? In what circumstances will the arrestor be liable for damages if the arrest is set aside?
Security of arresting party
The arresting party must give the Court an undertaking to pay the Admiralty Marshal’s costs and expenses associate with the arrest. The Admiralty Marshal will obtain indemnity insurance for the period the vessel is in the custody of the Admiralty Marshal. The costs of that insurance will be an expense incurred by the Admiralty Marshal payable by the party issuing the application for the arrest of the vessel.
No other security is required.
Pursuant to section 34 of the Admiralty Act, a claim can be made for damages for unjustified arrest by a person with an interest in the ship or who has suffered loss of damage as a direct result when:
a party unreasonably and without good cause:
demands excessive security in relation to the proceeding; or
obtains the arrest of a ship or other property; or
a party or other person unreasonably and without good cause fails to give the consent required for the release form arrest of a ship or other property.
This section has not been subject to a judgment in Australia. However, obiter in other cases and leading commentary recognises that the threshold to establish unjustified arrest in Australia is very high and will only be satisfied where a party ‘unreasonably and without good cause’ obtains the arrest of a ship.
How can an owner secure the release of the vessel? For example, is a Club LOU acceptable security for the claim?
Strictly speaking, the Admiralty Rules 1988 (Cth) provide for the release of a ship from arrest as of right only upon payment into court or the provision of a bail bond signed by two sureties. As such, a responding party cannot insist that the arresting party accept a Club LOU or such an LOU on any particular terms.
However, the Court can also release a ship from arrest where it is satisfied that the arresting party has otherwise made security arrangements that it considers satisfactory and/or upon the agreement of the parties. In practice, Club LOUs are often accepted as satisfactory security by arresting parties.
Describe the procedure for the judicial sale of arrested ships. What is the priority ranking of claims?
If it becomes apparent that the in rem proceedings are unlikely to be defended, the Court may order on application by the arresting party or on the court’s own motion that an arrested ship be valued, valued and sold or sold without valuation. Once such orders are made the Admiralty Marshal will generally oversee the process and a broker will be appointed to conduct the sale.
The Admiralty Act is silent about the principles governing the priority of claims on a fund representing the proceeds of sale but the equitable principles referred to in the English cases are followed by Australian courts in determining priorities. Broadly speaking, a maritime lien on a vessel takes priority over any interests including a mortgage on the vessel, whether registered or unregistered, and whether prior or later in time.
The priority of other registered and unregistered security interests in respect of the proceeds of sale are determined in accordance with the regime created by the Personal Property Securities Act 2009 (Cth).
Who is liable under a bill of lading? How is “the carrier” identified? Or is that not a relevant question?
In Australia, liability for marine cargo claims is governed by the Carriage of Goods by Sea Act 1991 (Cth) which incorporates an Australian amended version of the Hague-Visby Rules (see further below).
The carrier may be liable for a range of claims under a bill of lading made by a cargo owner or the lawful holder of a sea carriage document under the amended Hague Rules, which includes negotiable and non-negotiable bills of lading, sea waybills and the person identified on a ship’s delivery order (in the absence of a bill of lading).
The shipper or consignee (or anyone defined as a “Merchant” under the bill of lading) may also be liable to the carrier under the terms and conditions of the bill of lading (or alternatively at common law), for claims such as delay or damage caused by mis-declaration of cargo, shipping dangerous goods or container demurrage and detention charges and related expenses. A person who demands or takes delivery, or makes a claim under a sea carriage document may have a similar liability to the carrier.
Under the Australian amended Hague Rules, the ‘carrier’ is defined as the owner or charterer who enters into a contract of carriage with a shipper. The identity of the carrier will usually be defined in the terms and conditions of the bill of lading. If this is not the case, then the carrier’s identity will be determine by the manner in which the bill of lading was issued or executed. Where a bill of lading is signed by or on behalf the Master, the carrier will ordinarily be the vessel’s registered owner or demise charterer (as the case may be).
Is the proper law of the bill of lading relevant? If so, how is it determined?
The majority of bills of lading or other sea carriage documents will include a choice of law clause selecting whichever law is preferred by the carrier and will frequently include what is known as a ‘clause paramount’ which is often a cascading clause applying either the Hague, Hague Visby or Hamburg rules as applied compulsorily in various jurisdictions. In Australia, those clauses will have varying levels of effectiveness depending upon the port of shipment and port of destination.
Pursuant to section 11 of the Carriage of Goods by Sea Act, the amended Hague Rules compulsorily apply to all shipments from a port in Australia to a port outside Australia and any agreement which purports to preclude or limit this compulsory choice of law is invalid.
The Carriage of Goods by Sea Act also provides that the amended Hague Rules will apply to shipments from ports outside Australia to a port in Australia unless the contract would otherwise be governed by the Hague, Hague-Visby or Hamburg Rules, either pursuant to the mandatory force of law of an applicable jurisdiction or by virtue of incorporation into the sea carriage document. For example, if the shipment is from the United States, an Australia Court would apply the unmodified version of the Hague Rules which applies compulsorily under US law.
Are jurisdiction clauses recognised and enforced?
In addition to the compulsory application of the amended Hague Rules to outbound shipments, the Carriage of Goods by Sea Act also provides that any agreement which purports to preclude or limit the jurisdiction of an Australian Court will be of no effect for both outbound and inbound shipments.
What is the attitude of your courts to the incorporation of a charterparty, specifically: is an arbitration clause in the charter given effect in the bill of lading context?
If the incorporating clause in the bill of lading does not expressly mention an arbitration clause, it will generally be inadequate to incorporate the arbitration clause unless it is broad enough to, for instance, include disputes under the bill of lading. An arbitration clause in a charter party should be expressly referred to in the bill of lading for it to be recognised by an Australian court.
Is your country party to any of the international conventions concerning bills of lading (the Hague Rules, Hamburg Rules etc)? If so, which one, and how has it been adopted – by ratification, accession, or in some other manner? If not, how are such issues covered in your legal system?
As discussed above, the Carriage of Goods by Sea Act incorporates into Australian local law a variant of the Hague-Visby Rules (the amended Hague Rules). The amended Hague Rules apply to all shipments out of Australia.
In the case of imports, the Australian courts will apply the version of the relevant convention (being either the Hague, Hague-Visby or Hamburg Rules) applicable to the shipment by agreement or law.
The amended Hague Rules apply ‘CY to CY’, that is from the container yard at the port of export in Australia to the container yard at the place of import.
Is your country party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards? If not, what rules apply? What are the available grounds to resist enforcement?
Yes, and the Convention it is substantially reflected into domestic law by way of the International Arbitration Act 1974 (Cth).
Please summarise the relevant time limits for commencing suit in your jurisdiction (e.g. claims in contract or in tort, personal injury and other passenger claims, cargo claims, salvage and collision claims, product liability claims).
Various limitation periods are set out in State and Territory legislation. In general, claims for breach of contract and liability in tort and personal injury may be made up to six years after the cause of action arose (with the exception of the Northern Territory, where the limitation is three years).
The Limitation Act 1969 (NSW) imposes a two-year limitation period on actions in rem in Admiralty, but this may be extended on such terms as a court sees fit, including if there has not been reasonable opportunity to arrest the vessel.
Under the Admiralty Act, a proceeding may be brought on a maritime claim, or on a claim on a maritime lien or another charge, at any time before the end of the limitation period that would have been applicable if the proceeding had not been brought under the Act. If no proceeding could have so brought, a proceeding may be brought before the end of three years after the cause of action arose.
What restrictions, if any, has your jurisdiction imposed on crew changes in the wake of the Coronavirus pandemic?
Despite the myriad of restrictions imposed by Australia’s federal and State and Territory governments during the course of the pandemic, crew changes are occurring in Australia. According to AMSA, the Australian government are working closely with State and Territory authorities, and industry to facilitate crew changes. At the time of writing, there are plans in place for States and Territories to lift or reduce many restrictions and border closures over the coming months, with Christmas and summer holidays in sight and as Australia plans to open itself up to the world again. This comes with the exception of Western Australia and the Northern Territory who have very low or no cases of community transmission and are therefore unlikely to ease restrictions for arrivals or open their borders until 2022.
Accordingly, Crew members and ship managers should check the individual requirements of the relevant State or Territory (and other considerations such as availability of flights and entry quotas) prior to making arrangements for crew changes.
Does your system of law recognize force majeure, or grant relief from undue hardship? If so, in what circumstances might the Covid-19 pandemic enable a party to claim protection or relief?
Yes, Australian law does recognise force majeure – but only as a creature of contract and not as a proposition under general law.
Unlike English law, under which such clauses are traditionally given a ‘strict and narrow’ construction, under Australian law such clauses will be construed according to their ‘ordinary and natural meaning.’ The result is likely to be that parties can more readily rely on force majeure clause in contracts subject to Australian law.
However, whether the COVID-19 pandemic will enable a party to claim protection or relief will depend on the specific drafting of the clause. Additionally, the party seeking to rely on the clause must be able to prove that it was the COVID-19 pandemic that caused its inability to perform its obligations, rather than a supervening event which made it more difficult to meet their obligations.
Privacy & Cookies Policy