I COMMERCIAL OVERVIEW OF THE SHIPPING INDUSTRY
Colombia could be considered a non-traditional maritime jurisdiction despite having access to both the Atlantic and Pacific oceans. The fleet under the Colombian flag, for instance, is not large as compared with other countries. However, in 2018, 692 ships2 were registered under the domestic flag for local use and 398 others were registered for use in international maritime traffic.3 Local ports are also growing, the most important of which are located in the cities of Buenaventura (on the Pacific coast), Cartagena, Santa Marta and Barranquilla (on the Atlantic coast).
Three entities are involved in the maritime sector at the domestic level: the Ministry of Transportation, which is the government entity responsible for developing public policy on transport and infrastructure; the General Maritime Directorate (DIMAR) – the national maritime authority – which executes policies conceived by the Ministry of Transportation, coordinates the development of maritime activities and exercises competencies as coastal state, port state and flag state; and the National Superintendence of Ports and Transportation, which exercises surveillance, inspection and control of the public transport service.
II GENERAL OVERVIEW OF THE LEGISLATIVE FRAMEWORK
Colombia does not have a proper maritime code or law as is in place in other countries. Thus, being a country affiliated with the Romano-Germanic family of law, there are several pieces of domestic law that deal separately with different maritime issues. The main pieces of legislation are as follows:
- Book 5 of the Colombian Commercial Code (the Code), namely, the book of navigation, which deals with important subjects such as the general regime of the vessel and its property, risks and damage caused in navigation, assistance and salvage, contracts for the carriage of goods, charter parties and maritime insurance.
- Decree 2324/1984, which sets out the basic structure of the DIMAR (modified by Decree 5057/2009) and establishes its main functions and attributions. Importantly, Decree 2324 still deals with the procedure that is to be followed by the investigating authority (i.e., harbour masters) in cases of maritime accidents, such as collisions and groundings, that occur within Colombian waters.
- Title III of Decree 1079/2015, which deals, inter alia, with local regulations applicable in particular to several aspects of the public service of the carriage of goods on maritime and inland waterways.
- Law 730/2001, regarding the registry of ships and naval artefacts under the Colombian flag and establishing the requirements to do so.
- Law 1/1991, dealing with local ports and their activities in Colombia.
Apart from these, other key matters are subject to the relevant international instruments that have been ratified by Colombia, namely SOLAS, the COLREGs, MARPOL (73/78), the FAL Convention, the Load Lines Convention, the STCW Convention 1978 and the 1992 CLC and Oil Pollution Fund conventions.
III FORUM AND JURISDICTION
In the event of a maritime accident (i.e., a non-contractual dispute), such as a collision or grounding, in Colombian waters, the harbour master of the relevant area (as the local representative of the DIMAR) will initiate an investigation following the parameters set out in Decree 2324/1984. The aim of that investigation is to assess the liability of the parties involved and to determine whether any ship involved has violated domestic merchant marine rules. As part of this procedure, any party that is considered to have suffered any damage or loss as a consequence of the incident could claim damages and submit evidence to support any claim brought before the harbour master.
On the other hand, commercial and maritime disputes emerging from contracts should be addressed to civil judges and courts, according to the domestic general procedural rules established in the Colombian General Procedural Code. Thus, as a general rule, claims brought, for instance, on the basis of a contract of carriage of goods by sea or inland waterways, can be submitted to local civil judges unless there is an arbitration clause or a jurisdiction clause pointing to a different jurisdiction to deal with the merits of the claim.
ii Arbitration and ADR
Our jurisdiction is not a well-known arbitration forum for maritime-related disputes. Thus, local arbitrators have not dealt with many cases in this particular field of law at the domestic level. However, the institution of commercial arbitration itself is well developed in Colombia and arbitration centres at the chambers of commerce in cities throughout the country have reputed commercial arbitrators who could deal with claims of this nature.
A relatively recent arbitration law, Law 1563/2012, sets out new parameters for carrying out both national and international arbitration procedures in Colombia. Regarding national arbitration, the new law aims to promote this method of ADR, make the institution more flexible and modernise the institution.4 The key features of the new law are as follows:
- having all the relevant provisions in one piece of legislation;
- providing ample scope for the subjects that could be taken to arbitration;
- allowing parties to freely determine the rules of arbitration in cases where the Colombian state or any of its entities are not a party to the procedure;
- allowing hearings to be carried out by electronic means; and
- providing a maximum period of one year to carry out the proceedings, unless another time period is provided.5
In relation to international arbitration, the new law follows the basic parameters of the UNCITRAL Model Law on International Commercial Arbitration.6
iii Enforcement of foreign judgments and arbitral awards
Colombia has ratified both the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards and the Inter-American Convention on International Commercial Arbitration. Further, Article 111 et seq. of Law 1563/2012 establish the procedure for recognising and executing foreign arbitral awards, in whichever country said awards have been provided. Indeed, under No. 3 of Article 111, any foreign arbitral award must have previously been recognised by the domestic competent judicial body. Additionally, Law 1563/2012 provides some specifics regarding the cases in which recognition is to be denied. Under Article 116, the competent judicial authority would grant execution of the relevant arbitral award.
The procedure for recognition of foreign arbitral awards in Colombia is described in Article 115 of Law 1563/2012. The basics of this procedure are as follows: once the petition is filed along with the documents specified in Article 111, the judicial competent body will allow 10 days for other parties to submit any consideration regarding the petition. Once this period has expired, the judicial competent body will decide on the request within the following 20 days.
Article 605 et seq. of the Colombian General Procedural Code (the Code) establish that a foreign judgment will have the same force in Colombia as is given by the bilateral treaty with the relevant country, or if no treaty is in place on the issue in question, it will have the force that is given to Colombian judicial decisions in that country. Article 607 establishes the procedure for the exequatur to be carried out in Colombia and Article 606 states the requirements for the foreign judgment to have effect in the country. In general terms, exequatur procedures should be initiated before the Supreme Court of Justice and a copy of the foreign judgment translated into Spanish should be produced. If the Court grants the exequatur, a regular local judge should execute it, following the general parameters established by the Code.
IV SHIPPING CONTRACTS
The shipbuilding industry is not well developed in Colombia. However, in recent years the industry has sustained significant growth resulting from the expansion of the local market for vessels used in offshore oil and gas projects, and for both defence and commercial purposes in inland waterways. There is no specific piece of legislation dealing with shipbuilding contracts in Colombia; only Paragraph 2 of Article 1438 of the Code states that shipbuilding contracts, despite their commercial nature, will be governed by civil law rules.
ii Contracts of carriage
Colombia has not properly ratified any of the current international instruments, namely, the Hague Rules, the Hague-Visby Rules, the Hamburg Rules and the Rotterdam Rules. However, to a certain extent, the country has purported to follow the parameters of the Hague Rules since the provisions of the Code on this subject were supposed to have been inspired by them.7 These provisions of the Code are applicable in particular to contracts of carriage of goods by sea ruled by Colombian law and to contracts for the carriage of goods through inland waterways (Article 28 of Law 1242 of 2008).
Regarding the similarities already mentioned between the Hague Rules and the Code, some of the basic features of the international scheme were incorporated into the Code. For instance, Article 1582 of the Code requires a carrier to exercise due diligence to make the ship seaworthy, although it also requires him or her to 'maintain' this obligation during the voyage (whereas the international convention refers only to said obligation in relation to 'before and at the beginning of the voyage'). Additionally, no reference whatsoever is made to due diligence where the Code requires a carrier to make the holds, cool chambers and other parts of the ship in which goods are carried, fit for carriage (as is the case under Article III Rule 1(c) of the Hague Rules). The obligation of 'care' for the cargo is provided for in the Hague Rules in a similar way as in Article 1600 No. 2 of the Code.
Duties and liabilities of the shipper
Article 1599 of the Code expressly states that, unless otherwise agreed by the parties, the shipper is obliged to place goods in a berth or warehouse, 'with the usual or appropriate expectation for loading'. Furthermore, Article 1617 of the Code expressly points out that the shipper guarantees the accuracy of the marks, number, quantity, quality and even the condition and weight of the goods, in the way said particulars are declared at the moment of handing over the goods to the carrier for transportation purposes. Additionally, Article 1616 requires the shipper to provide the carrier with any documents or information that may be needed for the carriage. The shipper is liable to the carrier in the event that these documents are not properly provided, and the carrier is not obliged to verify whether the documents or information are sufficient and legitimate. Note also that no limitation is provided for the shipper in the case of damage or loss caused to the carrier and third parties resulting from the breach of the shipper's obligations under the contract of carriage.
Regarding the subject of liability exceptions available to carriers, the Code emulates the provisions in Article IV Rule 2 of the Hague Rules, with the notable exception of Paragraph (q), which was discarded at the local level.
A carrier, under Article 1624 of the Code, can exercise a lien over the cargo if freight has not been paid by either the shipper or the consignee. The carrier can ask a judge to put the goods in a warehouse until the freight and any expenses are duly covered.
There are certain details regarding multimodal carriage at the domestic level that should be highlighted. First, Colombia is a party to the Andean Community (CAN). This is relevant, since the CAN has enacted Decision 331 (partially modified by Decision 393), which deals with multimodal contracts, despite there not being an authoritative instrument at the international level that deals with this subject. In a decision of 3 September 2015, the Colombian Supreme Court took the view that said regulation must be applied even in cases when the maritime transport commences in a non-member country, so long as the destination port is in Colombia (as a member country of the CAN). In that specific case, the Court considered Decision 331 as modified by Decision 393 applicable to a situation where the place of origin of the cargo was in the United States and the place of destination was in Colombia. In our view, this opens a door for local judges to follow said parameter in other cases where either the origin or discharge is to be effected in Colombian territory.
iii Cargo claims
Under domestic law, the person entitled to claim the goods or to demand fulfilment of the obligations imposed by the law on the carrier will be the legitimate holder of the bill of lading if such a document has been enacted. In this respect, the Colombian Supreme Court has clarified that (1) the legitimate holder is the person entitled to claim delivery of the goods and to exercise the rights derived from the contract of carriage (decision of 16 December 2010, LJ Arturo Solarte Rodriguez), and that (2) even if the bill of lading does not have the complete set of requirements that the Code establishes for it to be considered a negotiable title, said document could in any case authorise the holder to claim delivery of the goods (decision of 24 May 1990, LJ Carlos Esteban Jaramillo Schloss).
iv Limitation of liability
Neither the LLMC Convention nor the 1996 Protocol has yet been ratified by Colombia. Instead, Article 1481 of the Code states that the shipowner will only be responsible up to the value of his or her vessel, the vessel's accessories and freight, and for any breach of obligation related, among others, to:
- damage or loss suffered during navigation or while in berth as a consequence of negligence of the master or crew;
- damage caused to cargo delivered to the carrier for transportation purposes or cargo on board;
- other obligations emerging from contracts of carriage or charter parties;
- obligations related to the removal of a wreck; and
- payments to be made as a consequence of assistance or salvage.
As has already been explained, domestic legislation has some similarities with the Hague Rules and Hague-Visby Rules, but there are some important differences – in particular the way the Code has addressed a carrier's limitation of liability. Article 1643 of the Code states that the carrier is to be responsible for the declared value of the cargo; however, if no declared value is provided, but the nature of the cargo is so described, then, under Article 1644, the carrier will be liable to the value of the carried goods at the place of loading. However, the provision adds that in such a case, a maximum liability could be agreed, thereby not clarifying whether said limitation could be higher or lower than the original parameter already mentioned in the Code. This discussion was solved to a degree in a decision of 8 September 2011, in which the Supreme Court of Justice analysed the aforementioned provision and declared that for these purposes any limitation will be valid whenever it is not a derisory one. In our view, this constitutes a clear departure from the Hague Rules and Hague-Visby Rules.
i Ship arrest
Decision 487/2000 of the CAN, which was inspired by the Arrest Convention 1999, is the domestic legislation that deals with ship arrest. Under Decision 487, any 'maritime credit' could be the basis for requesting an arrest. The concept of maritime credit as stipulated in Decision 487 is in line what is considered to be a 'maritime claim' under the Arrest Convention 1999 (Article 1). Thus, a maritime credit under Decision 487 could emerge from situations such as loss or damage caused by the operation of a ship, loss of life or personal injury in direct connection with the operation of a ship, salvage operation, damage or threat of damage to the environment, any agreement related to the use or hire of a ship, or any agreement relating to the carriage of goods or passengers: all these situations are specified in Article 1 of the Arrest Convention 1999. Bunkers are specifically considered to be a maritime credit in No. 12 of Article 1 of Decision 487 in the same manner as they are considered to be a maritime claim under Paragraph (l) of Article 1 of the Arrest Convention 1999.
In Colombia, an arrest order must be issued by a regular civil judge, not by a harbour master. Under Article 40 of Decision 487, domestic procedural rules are applicable in carrying out an arrest. This has created confusion as there is no specific local procedure appropriate to this type of claim. Thus, an arrest in Colombia could take much longer than in other jurisdictions. What usually happens is that the judge will initiate proceedings, analyse the basis of the claim and then request counter-security to provide the arrest. To date, there are no known cases setting out the parameters of what could be considered a wrongful arrest in our jurisdiction. However, it should be borne in mind that under Article 51 of Decision 487, a creditor could be liable if the arrest is unlawful or unjustified or if there has been a request of an excessive security.
In any case, it is clear under Decision 487 that a party obtaining an arrest could pursue the claim on its merits in a different jurisdiction (Articles 38 to 52).
ii Court orders for sale of a vessel
As Colombia is not a traditional maritime jurisdiction, an order for sale of a vessel in Colombia is quite unusual. In any case, Article 1454 of the Code states that the judicial sale of a ship would take place in accordance with regular provision of domestic procedural law, but that the sale will be announced additionally by posting notices on the ship and in the harbour master's office at the place of registry and at the place where the ship is located. Nevertheless, under Article 10 of Decision 487, creditors covered by a mortgage retain their right to request the judicial sale of a ship even if the ship has passed into the domain of a third party with just title and good faith.
Colombia has adopted SOLAS (and the 1978 Protocol), which is incorporated in Law 8 of 1980. Further, Decree 730 of 2004 deals with some aspects of Chapter XI-2 of SOLAS internally and established the DIMAR as the designated authority for the purposes of applying said provisions.
There has been some discussion as to whether automatic amendments of SOLAS could enter into force at the domestic level without any ratification of the amendment itself. With the debate still unresolved, the Ministry of Transportation enacted Resolution 2793/2016, regarding requirements and procedures for verifying the gross mass of containerised cargoes; this was followed by Resolution 4/2016 of the DIMAR, which has the same objective. These domestic regulations essentially reproduce what is in the SOLAS amendment and take into account what the IMO has explained on the subject in the Guidelines Regarding the Verified Gross Mass of a Container Carrying Cargo.
Colombia has ratified, among others, the COLREGs, MARPOL (73/78), the FAL Convention, the Load Lines Convention, the STCW Convention, and the 1992 CLC and Oil Pollution Fund 1992 conventions.
ii Port state control
The DIMAR, as the national maritime authority, exercises port state control in Colombian territory. Thus, it exercises its authority over any ship while in a Colombian port to verify the fulfilment of requirements in relation to maritime safety and other obligations established by international conventions. Colombia is also a member of the Operational Network for Regional Cooperation of Maritime Authorities of the Americas (ROCRAM), which allows national maritime authorities in member countries to share views on maritime safety and security, facilitation of maritime traffic, protection of the marine environment, among other important issues.8 Member countries to the ROCRAM have further entered into the Viña del Mar MOU, which relates specifically to port state control and, in particular, makes it compulsory for any foreign ship that enters into their ports to fulfil all the obligations imposed by the applicable international conventions.9
iii Registration and classification
The procedure for registration of ships in Colombia is contained in Law 730/2001. Under this law, there are two methods of registration: provisional and definitive. The basic difference is that in the case of provisional registration some of the documents that should be produced with the request for registration can be submitted in the form of a statement that the required certificate has already been requested from the relevant authority (although not yet formally obtained). Said certifications should be produced in a full, formal way in order to be eligible for definitive registration under the Colombian flag.
Originally, Law 730/2001 was applicable to both ships and naval artefacts only if they were involved in transportation and fishing operations. However, according to Decree 19/2012, said regime is applicable to any ship or naval artefact (i.e., not self-propelled) even one still under construction, irrespective of its destination (navy vessels excluded). In an attempt to make the registration system more efficient, Resolution 115/2013 of the Ministry of Information, Technologies and Communications delegated to the DIMAR some of the functions regarding maritime frequencies, maritime radio navigation and mobile satellite services.
iv Environmental regulation
Colombia has ratified the CLC Convention 1992 (under Law 55/89 and Law 523/89), the Oil Pollution Fund Convention (under Law 257/1996 and Law 523/1999) and MARPOL (73/78) (under Law 12/1981). Otherwise, Decree 321/1999 adopts the National Contingency Plan Against Spills of Hydrocarbons, Derivatives and Harmful Substances. Regarding offshore activities, the DIMAR has enacted Resolution 674/2012, which establishes certain conditions, procedures and security measures for developing such operations in the country.
v Collisions, salvage and wrecks
Colombia has not ratified the Collision Convention 1910. However, the COLREGs were ratified by Law 13/1981. Article 1531 et seq. of the Code provide rules that establish the parameters for collisions caused by force majeure events or through the fault of the master, crew members or pilot of one the ships involved, and those in which both vessels are at fault.
Colombia is not a party to the 1989 Salvage Convention. Nonetheless, the Code includes provisions regarding salvage in Article 1545 et seq.
Resolution 071/1999 of the Ports and Transport Superintendence entitles the Colombian government to recover expenses incurred in the removal of a wreck whenever said wreck has not been removed by the master, shipowner or ship agent involved.
vi Passengers' rights
Colombia is not a signatory to the Athens Convention. However, the Code includes provisions regarding passengers' rights in Article 1585 et seq.
vii Seafarers' rights
Colombia has not yet ratified the Maritime Labour Convention 2006. Despite the fact that the Code has incorporated some provisions for dealing with this issue (mainly establishing specific obligations for seafarers in Article 1508), there is no proper labour regime in place in Colombia for seafarers apart from provisions in Decree 1015/1995, which refer – in a very incomplete manner – to some aspects of seafarers' employment contracts.
Colombia needs to improve and update its legal framework in the field of maritime law. Despite some valuable efforts that have taken place in the field (i.e., modifications to Law 730/2001 to make it applicable to all types of vessels and naval artefacts, and the enactment of Resolution 674/2012 regarding offshore activities), a piece of legislation dealing integrally with all major aspects of maritime law at the local level, and modernising some old-fashioned regulations, is without doubt much needed. In this regard, the DIMAR has initiated a project called 'Legal strengthening of the maritime authority', which aims, among other things, to contribute substantially to finding a solution to this problem.
1 Javier Franco is a partner at Franco & Abogados Asociados.
2 Dirección General Marítima – DIMAR. 'Registro Naves Colombianas'. Period: 2018. http://app.dimar.mil.co/zonadescarga/Formularios/frmConsultasConsolidadas.aspx?IDReporte=2.
3 Dirección General Marítima – DIMAR. 'Registro Naves de Tráfico Marítimo Internacional'. Period: 2018. http://app.dimar.mil.co/zonadescarga/Formularios/frmConsultasConsolidadas.aspx?IDReporte=8.
4 Correa Palacio, Ruth Stella. 'Presentación' in Estatuto Arbitral Colombiano, Legis, Bogotá, 2013, page xxiv.
5 ibid., pages xxiv to xxv.
6 ibid, page xxvi.
7 Commission for the revision of the Colombian Commercial Code, session of 21 February 1958, minute No. 271, page 5.