The Shipping Law Review: Denmark
Commercial overview of the shipping industry
As at January 2021, the Danish merchant fleet comprised 764 vessels.2 The Danish-flagged merchant fleet has experienced a significant growth in the number of ships and gross tonnage (GT) since 2010. The number of vessels has increased by 184 (equivalent to 10.6 million GT), which corresponds to an increase of 31.7 per cent since 2010. Danish vessels currently account for 22.3 million GT (or 62 million GT if Danish-owned vessels under foreign flags and chartered vessels are included). This places Denmark as the fifth-largest shipping nation in the world. In 2020, the Danish-flagged merchant fleet grew in size by one million GT, corresponding to an increase of 4.79 per cent. In 2019, exports by Danish shipping companies were worth more than 207 billion Danish kroner, more than any other industry sector.3 Approximately 96,000 people are employed in the Danish maritime cluster.4
General overview of the legislative framework
The Danish legal system is divided into three separate jurisdictions: Denmark, the Faroe Islands and Greenland.
This chapter deals solely with the law applicable in Denmark, but the maritime and procedural systems in the Faroe Islands and Greenland are almost identical (based on Danish legislation) and with appeal to either the Danish high courts or the Danish Supreme Court.
The Merchant Shipping Act (MSA)5 constitutes the main legislative framework for Danish maritime law and is to a large extent based on international maritime conventions such as the Protocol to amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading 1968 (the Hague-Visby Rules), the UN Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules), the Convention on Limitation of Liability for Maritime Claims 1976 (the LLMC Convention 1976), the International Convention on Civil Liability for Oil Pollution Damage 1969, replaced by the 1992 Protocol (the CLC Convention), the International Convention on Salvage 1989 (the 1989 Salvage Convention) and the Nairobi International Convention on the Removal of Wrecks 2007 (Nairobi WRC 2007). The MSA is supplemented by the Administration of Justice Act (AJA)6 on general procedural issues and other acts on particular areas of law. In addition, EU law is increasingly of relevance, in particular in relation to the carriage of passengers and in respect of safety, offshore and environmental matters.
The Danish Maritime Authority (the Authority), an agency under the Ministry of Industry, Business and Financial Affairs, regularly issues circulars and guidelines that regulate most aspects of the shipping industry – ship safety, navigation, seafarers and manning, as well as ship registration, being its core areas of responsibility.7
Forum and jurisdiction
Maritime disputes must, in most instances, be initiated at either one of the 24 district courts or at the Maritime and Commercial High Court in Copenhagen, which considers disputes in commercial and maritime matters.8 The latter Court, therefore, is very experienced in deciding maritime disputes and agreed to be the preferred court in maritime contracts. The decisions of the district courts can be appealed to either the Western or Eastern High Court. The Maritime and Commercial High Court's decisions can be appealed to either the high courts or the Supreme Court, depending on the specific circumstances of the case in question.9
The international competence of the Danish courts, in relation to maritime disputes, will in most cases be determined by Regulation (EU) No. 1215/2012 (the Brussels I bis Regulation). This Regulation applies in Denmark, irrespective of the Danish opt-out to the EU's judicial cooperation, pursuant to an agreement between Denmark and the European Union entered into on 19 October 2005.10 The Brussels I bis Regulation is supplemented by the AJA, in particular Chapters 21 and 22, and certain provisions in the MSA covering specific instances, such as carriage of goods and marine pollution.
The limitation periods for maritime claims are set out in Chapter 19 of the MSA, and vary from one to three years depending on the type of claim. By way of example, the limitation period for claims for salvage and special compensation is two years from the day on which the salvage operations were terminated and one year in relation to maritime liens and actions under a bill of lading. As for claims that are not listed in the MSA, the generally applicable limitation period under Danish law is three years from the due date of the claim.11 The claimant's unawareness of the claim or the debtor may suspend the limitation period by a maximum of 10 years or, for claims relating to personal injury and environmental damage, 30 years.
ii Arbitration and ADR
The Danish Institute of Arbitration resolves commercial and maritime disputes through confidential arbitration and mediation procedures. The Institute was established in 1981 and is based in Copenhagen.12 Ad hoc arbitration is also commonly used in maritime disputes.
Arbitration proceedings are governed by the Arbitration Act13 (AA), which is based on the 1985 UNCITRAL Model Law. A draft bill to update the AA based on the 2006 Model Law amendment has been prepared by an expert committee but is yet to be presented before Parliament.
The Nordic Offshore and Maritime Arbitration Association (NOMA) was established in late 2017 by leading forces in the maritime sector, including specialist lawyers and trade associations from the Nordic countries. NOMA specialises in maritime disputes and is expected over time to become the preferred resolution body when dealing with maritime disputes. The NOMA rules are based on UNCITRAL Arbitration Rules, as amended to fit international maritime disputes. An increasing number of owners, charterers, operators, builders and suppliers opt for arbitration in accordance with the NOMA rules in their contracts. For instance, the Baltic and International Maritime Council (BIMCO) refers to the NOMA rules on its website as an alternative dispute resolution centre for Nordic countries, and the Nordic Marine Insurance Plan 2019 sets out NOMA as the default solution in cases where the claim leader is non-Nordic and as an option when the claims leader is Nordic.
iii Enforcement of foreign judgments and arbitral awards
Under the Brussels I bis Regulation, judgments issued in other EU Member States can be recognised and enforced without any declaration of enforceability being required. Recognition and enforcement may be refused on certain grounds, however, including public policy, insufficient service of the writ to the defendant (default judgments) and if the judgment is irreconcilable with an earlier judgment.14 Judgments from the European Economic Area (EEA) States (Norway, Liechtenstein, Iceland and Switzerland) can be recognised and enforced based on the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 1988, 2007 (the Lugano Convention), which is similar in many respects to the former Brussels I Regulation.15
Effective as of 1 September 2018, the Convention of 30 June 2005 on Choice of Court Agreements (the Hague Choice of Court Convention) entered into force in Denmark. Consequently, judgments from other contracting states, such as Mexico, Singapore and Montenegro, can also be recognised and enforced in Denmark, provided that the parties to the dispute have agreed on the jurisdiction of the foreign court in question (subsequent to the entry into force of the Convention in that state) and the matter falls within the scope of the Convention. Importantly, the Hague Choice of Court Convention does not apply to the carriage of passengers and goods and other maritime matters.16 Within the European Union and the EEA, the Brussels I bis Regulation and the Lugano Convention will take precedence over the Hague Choice of Court Convention.
Under Sections 223a and 479 of the AJA, the Minister of Justice has the authority to lay out provisions on the recognition and enforcement, respectively, of foreign judgments. However, this authority has never been exercised. Apart from a few provisions on specific types of cases, there is no applicable statutory basis for the recognition and enforcement of foreign judgments. However, based on recent case law, it has been asserted in Danish legal literature that foreign judgments might be recognised in some instances if the parties had agreed on the jurisdiction of the foreign court issuing the judgment, subject to certain additional conditions.
In respect of judgments from the United Kingdom, now that the Brexit transition period has ended, the Brussels I bis Regulation will no longer apply to judgments rendered in court proceedings initiated after 31 December 2020.17 In some of these cases, the Hague Choice of Court Convention may apply as the United Kingdom is deemed to have acceded to the Convention on 1 October 2015 by way of it being a member of the European Union at that time. Owing to the limited scope of the Hague Choice of Court Convention, in particular in maritime matters, and owing to the uncertainty and limitations as to the recognition of judgments on a non-statutory basis, commercial parties will probably have difficulty in obtaining enforcement of English judgments in Denmark, unless the United Kingdom and the European Union reach a bilateral agreement to supplement the Brussels I bis Regulation.
Arbitral awards can be recognised and enforced under certain conditions as set out in the AA, which in this regard is based primarily on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention). Recognition and enforcement may be denied only on a few specific statutory grounds, including public policy and non-arbitrability.18
Under Danish law, shipbuilding contracts are subject to the general principle of contractual freedom. Thus, the parties to a shipbuilding contract will have considerable latitude to enter into a contract on individually negotiated terms. Often, this will be based on a standard form of shipbuilding contract, such as BIMCO's NEWBUILDCON 2007, or the parties' own templates.
Shipbuilding contracts are generally regarded as sale of goods contracts and are regulated by the Sale of Goods Act (SGA).19 However, the SGA applies only to the extent that the parties have not departed from its provisions in their contract. Given the detailed nature of most shipbuilding contracts, the SGA will most often not be applied.
ii Contracts of carriage
Chapter 13 of the MSA governs contracts of carriage, based on the Hague-Visby Rules, including the SDR Protocol, 1979, which Denmark has ratified. Although Denmark has not ratified the Hamburg Rules, these have in part been incorporated in the MSA. Denmark has signed but not yet ratified the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2009 (the Rotterdam Rules).
Under Section 262 of Chapter 13 of the MSA, the carrier must perform the carriage with appropriate care and dispatch, and otherwise safeguard the interests of the cargo owner.
The obligations and liability of the shipper are regulated in Section 290 of the MSA, which follows Article 12 of the Hamburg Rules. Pursuant to Section 290, a shipper is only liable for loss sustained by the carrier or the sub-carrier that is caused by the fault or neglect of the shipper or any person for whom he or she is responsible. The same applies to any person for whom the shipper is responsible.
Some of the MSA provisions also govern multimodal transport, including Section 285, whereby the contracting carrier may limit his or her liability for losses arising out of the carriage of the cargo by a sub-carrier under certain circumstances.
iii Cargo claims
Danish law on liability for cargo claims and bills of lading are based on the Hague-Visby Rules. These apply mandatorily for transports between the Nordic countries and as set out in the Hague-Visby Rules.
Claims for damage or loss to cargo and for delay can be brought by the lawful owner of the bill of lading against the carrier. The carrier is liable for any loss, damage or delay to the cargo caused while the cargo was in the carrier's custody.20 The carrier can counter this presumption of negligence and avoid liability by proving that the carrier and its crew acted with due care in the carriage of the cargo. Further, a number of exemptions from liability apply.21 The carrier is not liable for losses caused by measures to save persons or reasonable measures to salvage a ship or other property at sea.22 If the carrier's negligence is not the only cause of damage, it is only liable for the part of the loss attributable to its negligence.23 The carrier is not liable for loss because of error in navigation or fire that was not caused by the carrier,24 unless the loss was caused by unseaworthiness.25 An exclusion of liability for deck cargo and transport of live animals is set out in Sections 263 and 277 of the MSA.
The carrier is entitled to limit liability for cargo claims.26 Liability can be limited to the higher amount of 667 special drawing rights (SDRs) per package or 2 SDRs per kilo of cargo lost or damaged.
The limitation period for claims for compensation under Sections 275 and 276 of the MSA is one year from the day on which the goods were delivered or should have been delivered.
iv Limitation of liability
Chapter 9 of the MSA, which is based on the LLMC Convention 1976 as amended by the LLMC Protocol 1996, governs the rights for owners, charterers, managers and operators of a vessel to limit liability for claims arising in connection with the use of the vessel.27 The claims for which limitation applies (including damage to property and personal injury, and loss resulting from delay) are listed in Section 172 of the MSA, whereas the claims that are excluded from limitation (including claims for salvage and damage from oil pollution) are listed in Section 173.
The limits for liability in the MSA have been amended in accordance with amendments to the LLMC Convention 1976 that entered into force on 8 June 2015.30 The increased limits apply to all incidents occurring on or after that date.
Under Section 175(1) of the MSA, claims for death of a vessel's own passengers are limited to 400,000 SDRs multiplied by the number of passengers.
Pursuant to Section 175(2) of the MSA, claims for death and personal injury other than the vessel's own passengers can be limited to 3.02 million SDRs for vessels of up to 2,000 tonnes. For vessels with a greater tonnage, the limits are increased as follows:
- for every tonne from 2,001 to 30,000 tonnes, by 1,208 SDRs;
- for every tonne from 30,001 to 70,000 tonnes, by 906 SDRs; and
- for every tonne above 70,000 tonnes, by 604 SDRs.
Pursuant to Section 175(3) of the MSA, liability in respect of wreck removal claims is limited to 2 million SDRs for non-passenger vessels. For non-passenger vessels, the limits are increased as follows:
- for every tonne from 1,001 to 2,000 tonnes, by 2,000 SDRs;
- for every tonne from 2,001 to 10,000 tonnes, by 5,000 SDRs; and
- for every tonne above 10,001 tonnes, by 1,000 SDRs.
These special limits for wreck removal claims do not apply to passenger vessels, which, according to the legislative preparatory works, is because passenger vessels are seldom involved in major casualties.
All other claims are regulated in Section 175(4) of the MSA, and these can be limited to 1.51 million SDRs for vessels with a tonnage of up to 2,000 tonnes.31 For vessels with a greater tonnage, the limits are increased as follows:
- for every tonne from 2,001 to 30,000 tonnes, by 604 SDRs;
- for every tonne from 30,001 to 70,000 tonnes, by 453 SDRs; and
- for every tonne above 70,000 tonnes, by 302 SDRs.
These limitation amounts do not apply to claims relating to oil pollution from tankers, as these may be limited pursuant to Section 194 of the MSA (based on the CLC Convention) to between 3 million and 59.7 million SDRs, depending on the vessel's tonnage.
As regards passenger injury or death, owners may limit their liability to 400,000 SDRs per passenger on each occasion (injury or death) under Annex I, Article 7 of the Passenger Liability Regulation.32 As regards other personal injury claims, the general applicable limits under the LLMC Convention 1976 apply.
Sections 177 to 180 and Chapter 12 of the MSA set out the procedural rules for establishing a limitation fund.
i Ship arrest
Under Danish law, a vessel may be arrested either under Chapter 4 of the MSA, which is based on the International Convention Relating to the Arrest of Sea-Going Ships 1952 (the Brussels Convention), as security for 'maritime claims', or under Chapter 56 of the AJA for other claims. If the MSA applies, the rules in Chapter 56 of the AJA apply only to the extent that the rules do not conflict with the MSA (Section 96). Arrest falls under the jurisdiction of the Danish bailiff courts, which are located at each of the 24 district courts.
Under the MSA, a vessel can only be arrested as security for a 'maritime claim' (listed in Section 91) against the owner and only if the vessel is present in Danish waters. For certain claims, sister ship arrest may be made.33 However, for other claims (notably disputes concerning ownership of and mortgages over a vessel), only the vessel to which the claim relates is subject to arrest.
The court may order the creditor applying for arrest to put up security for the potential loss of the debtor.34 Proceedings on the merits must be commenced against the debtor within a week of the date of the arrest, or if the claim on which the arrest is based is under foreign jurisdiction, two weeks after the date of the arrest.35
Some of the maritime claims listed in Section 91 also constitute maritime liens under Chapter 3 of the MSA, which is in part based on the International Convention for the Unification of Certain Rules relating to Maritime Liens and Mortgages (Brussels, 1967). Under Section 51 of the MSA, these include crew wages, port fees and duties, claims for damage arising out of the operation of the vessel and claims for salvage (but notably not claims for payment of bunkers supplied to the vessel). Maritime liens over cargo are listed in Section 61 of the MSA.
As opposed to arrest under the MSA, under the AJA, an asset of the debtor (including a vessel) can be arrested as security for any claim (i.e., those that are not maritime claims). However, the creditor must show that the possibility of recovering the underlying claim from the debtor will cease to exist at a later stage or be fundamentally reduced if the arrest is not granted.36
ii Court orders for sale of a vessel
Judicial sales of vessels are regulated by the general rules on judicial sales of personal property laid down in Chapters 49 and 50 (Sections 538 to 559) of the AJA. Rights over vessels, including maritime liens, are generally regulated by the MSA.
Under Section 538(1) of the AJA, the levying of an execution on goods entitles a creditor to request a judicial sale of the goods to cover his or her claim. Under Section 478 of the AJA, execution can be levied on the basis of, inter alia:
- decisions of courts or other authorities, provided their decisions are enforceable according to Danish law, including in relation to costs;
- a written demand for payment undisputed by the debtor and endorsed by the bailiff's court under Section 477e(2) of the AJA;
- negotiated settlements of disputes entered into by the parties before the above-mentioned authorities (intra-judicial);
- other negotiated settlements of disputes concerning payable debt, provided it is explicitly decided in the settlement that it can serve as a basis of enforcement (extrajudicial);
- instruments of debt, not included in point (d) above, provided it is explicitly decided in the document that it is enforceable;
- mortgage deeds; or
- bills of exchange.
In addition, arbitration awards can form the basis of execution under the same rules as judgments under point (a), above, with some exceptions (set out in Sections 38 and 39 of the AA). The execution is levied by the bailiff's court against the vessel itself.
Under Danish law, all creditors, not only the creditor who has arrested the vessel, may levy execution in the asset (vessel) as they are treated equally. As such, an arrest does not in itself give the arrest applicant any priority in the distribution of the proceeds of the sale.
When an execution has been levied on a vessel, the creditor may request the bailiff's court in which the execution was levied to schedule a judicial sale.37 To protect his or her execution against claims from other creditors or other third parties acquiring rights over the vessel, the creditor must therefore register the execution with the Danish Ship Register or the Danish International Ship Register.38
The Safety at Sea Act (SSA) sets out the main obligations relating to navigation and safety at sea in Denmark and in relation to Danish-flagged vessels.39 The SSA is based on international conventions such as the International Convention for the Safety of Life at Sea 1974 (SOLAS), the International Convention on Load Lines 1966 (the Load Lines Convention), the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1995 (the STCW Convention) and the International Convention for the Prevention of Pollution from Ships 1973 (as modified by the Protocol of 1978) (MARPOL (73/78)) and various EU regulations. The purpose of the SSA is to ensure safety at sea; in particular, to ensure the seaworthiness of vessels on departure from port. The Danish Act on the Manning of Ships regulates the manning requirements.40
ii Port state control
Denmark has ratified SOLAS and the Paris Memorandum of Understanding on Port State Control 1982 (the Paris MOU), the latter requiring the contracting states to execute efficient port state control on ships from any state. The Authority is responsible for port state control.
In the event that a vessel does not comply with the applicable regulations, the Authority may order the owners to rectify any deficiencies. Under Sections 14 and 16 of the SSA, the Authority and the local port master may confiscate a vessel's certificates and detain the vessel.
iii Registration and classification
Denmark maintains two ship registers – the Danish Ship Register (DAS) and the Danish International Ship Register (DIS) – which are governed by Chapters 1 and 2 of the MSA and the DIS Act,41 respectively. The income generated by vessels registered under the Danish flag (whether with the DAS or the DIS) may be subject to the Danish tonnage tax regime, which is considered one of the most competitive and attractive shipping taxation systems in the world. The rules on taxation are primarily set out in the Tonnage Taxation Act.42
When a vessel is registered with the DAS or the DIS, it becomes subject to Danish jurisdiction and is entitled to fly the Danish flag. It will also have to comply with Danish mandatory legislation.
Registration with the DAS
Danish vessels must be registered under the Danish flag.43 For a vessel to be considered Danish, the owner of the vessel must be Danish, which will be the case if the owner is (1) a Danish citizen, (2) a legal person established pursuant to Danish legislation, or (3) a legal person registered as a Danish company, foundation or association in the country.44 No licences are required to establish a business in Denmark with the purpose of owning or commercially operating vessels.
Registration with the DIS
The criteria for registration with the DIS are less strict than for registration with the DAS. Also, registration with the DIS allows the vessel's crew to exempt their wages from being subject to taxation. However, a vessel registered with the DIS may not transport passengers from one Danish port to another.
Vessels in international trading may be registered with the DIS subject to certain requirements. Vessels not considered Danish under the MSA (see above) may be registered with the DIS if the (foreign) owner fulfils two conditions.45 First, the owner must appoint a representative in Denmark who is authorised to accept service of legal documents and who may be contacted by authorities for inspection purposes. Second, the vessel must have 'economic activity' in Denmark. Since 1 January 2018, this condition can be fulfilled not only through the technical or commercial management being carried out from Denmark, but also if (1) the vessel fulfils the requirements to be covered by the tonnage tax regime (see above), or (2) the person who has applied for the vessel's Document of Compliance (under the International Safety Management Code), such as the appointed representative, is established in Denmark. Through the latter option, a vessel may thus be registered with the DIS even though the actual economic activity is not substantial in Denmark, which may open the way for a substantial increase of vessel registrations with the DIS.
Bareboat registration with the DIS
A legal entity in the European Union or the EEA that complies with the criteria for registration with the DIS may also make a bareboat registration with the DIS. A bareboat-registered vessel must be under the flag of an EU or EEA Member State. A bareboat registration may be granted for a maximum of five years; it may be prolonged by one year at a time. Bareboat registration with the DIS does not allow for other rights, such as mortgages, to be registered with the DIS.
On 26 April 2018, the government adopted a bill abolishing the regime of registration fees.46 Ship registration is now subject only to an annual fee, which is due for payment on 1 March each year. The annual fee is calculated on the basis of the ship's GT.47
Registration of rights
Under Section 28 of the MSA, all rights over vessels (except for maritime liens and possessory liens, for which, see Section 30) must be registered with the DAS to obtain protection against claims from, and acquisitions by, third parties. This also applies for vessels under construction.
Under Section 10(3) of the MSA, vessels under construction in Denmark can be registered with the Danish Shipbuilding Register provided that the vessel can be identified easily and individually. Registration with the Shipbuilding Register is optional and the owner does not need to be Danish. When construction of the vessel is completed, the vessel must be deleted from the Shipbuilding Register and registered with the DAS or the DIS.
The following classification societies are recognised by the Authority to undertake statutory certification and services on Danish-flagged vessels:
- the American Bureau of Shipping;
- Bureau Veritas;
- the China Classification Society;
- Class NK (Nippon Kaiji Kyokai);
- the Indian Register of Shipping;
- the Korean Register;
- Lloyd's Register;
- the Polish Register of Shipping; and
- Registro Italiano Navale.48
There is some uncertainty as to whether classification societies will be subject to liability for negligence in carrying out their work; however, the exclusion of liability clauses in the terms and conditions of classification societies has not been set aside by the Danish courts.
iv Environmental regulation
Ship-source pollution and environmental damage is primarily governed by the MSA and the Protection of the Marine Environment Act,49 while supplementary rules follow from, inter alia, the Environment Protection Act,50 the Environmental Damage Act,51 the Nature Protection Act52 and the Coastal Protection Act (CPA).53 These regimes incorporate the international conventions and EU directives mentioned below into Danish law. Under Danish law, shipowners are generally strictly liable for ship-source pollution.
The CLC Convention is implemented in Chapter 10 of the MSA. Danish law on liability for oil pollution differs to some extent from the CLC Convention. The channelling provisions of the Convention are implemented in Danish law, albeit with some important changes on shipowners' recourse claims against charterers and cargo owners. Danish law on recourse claims by shipowners is considered more onerous for charterers and cargo owners than Article III.4 of the CLC Convention.54
Denmark has ratified other conventions relating to marine pollution liability, including the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 (the Oil Pollution Fund Convention), the 2003 Protocol establishing an International Oil Pollution Compensation Supplementary Fund, and the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the Bunker Convention). These are supplemented by the International Convention for the Prevention of Pollution from Ships (MARPOL) (73/78), which sets out detailed regulations for the operations of vessels.
Denmark has also acceded to international conventions and regulations on particular environmental matters, in part through EU law. These include the Convention for the Control and Management of Ships' Ballast Water and Sediments 2004 (the Ballast Water Management Convention), Directive 2005/35/EC on ship-source pollution and on the introduction of penalties for infringements, Directive 2008/99/EC on the protection of the environment through criminal law, Directive 2008/98/EC on waste, Regulation (EC) No. 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals, Regulation (EC) No. 1013/2006 on shipments of waste (relevant to ship recycling) and Regulation (EU) No. 1257/2013 on ship recycling.
v Collisions, salvage and wrecks
The rules on collisions can be found in Chapter 8 of the MSA. In the event of a collision caused by the fault of one side, that ship shall compensate the other ship for any damage suffered to the ship itself, its cargo and any passengers on board.55
When the cause of a collision can be attributed to both vessels involved, liability for the damage is to be divided between the parties on the basis of each party's fault.56 In practice, this will often be based on discretionary assessments and is often divided into fractions such as one-half, one-third to two-thirds and one-quarter to three-quarters. If a collision is accidental without any fault by any of the parties involved, each party is responsible for the damage caused to its own ship.
The rules on salvage are found in Chapter 16 of the MSA and are based on the 1989 Salvage Convention. It is a condition for a claim for payment for salvage that the salvaged item was in actual danger.57 When determining the payment for salvage, the circumstances listed in Section 446, Paragraphs (a) to (j) of the MSA are to be considered. In general, salvage of between 5 per cent and 10 per cent of the value of the salvaged items is not unusual.
Danish law operates a 'no cure, no pay' principle whereby the salvage has to be successful to entitle the salvor to a claim for salvage. However, where salvage is undertaken in circumstances where there is a threat to the environment, salvage may be payable even if the salvage operation was not successful.58
Depending on the dangers and other circumstances relating to a wreck, the Danish authorities may order the removal of the wreck or demand reimbursement for any government expenses incurred in connection with wreck removal, pursuant to either the CPA, the Protection of the Marine Environment Act, the Act on Additions to the Act on Wreckage59 or Chapter 8a of the MSA, which incorporates the Nairobi WRC 2007.
According to Sections 164(2) and 172(1)(4) of the MSA, a shipowner may limit its liability for wreck removal in accordance with the general limitation rules set out in Chapter 9 of the MSA. It is not yet settled whether shipowners may refuse to observe orders under the CPA and other legislation stated above, if such action would entail wreck removal costs that exceed the limitation amounts otherwise enjoyed by owners.
vi Passengers' rights
The rights of passengers travelling by sea or inland waterways are regulated by Regulation (EU) No. 1177/2010, including with regard to cancellation and delay of more than 90 minutes to and from ports situated in the European Union and cruises departing from an EU port. The Regulation provides additional rights for disabled persons and persons with limited mobility.
The Passenger Liability Regulation (PLR) governs the liability of carriers of passengers in the event of accidents based on the Athens Convention on the Carriage of Passengers and their Luggage by Sea 1974 (the Athens Convention). It applies to all carriers involved in international carriage, including carriage between EU Member States and some types of domestic carriage.
Sections 401 to 432 of the MSA contain provisions regarding passengers' rights, including claims relating to delay. However, the majority of regulations regarding passengers' rights are to be found in the PLR, not in the MSA.
vii Seafarers' rights
The rights of Danish seafarers are regulated by the Seafarers Act.60 The purpose of the Act is to protect seafarers by ensuring proper conditions of employment and to contain provisions on standards for employment contracts, rest hours, the right to return home and sickness. This Act is supplemented by general regulations on workers' rights in Denmark.
Denmark is a party to the Maritime Labour Convention. At least one vessel has been detained by the Authority on violations of the Convention.
The covid-19 pandemic has greatly affected the various parts of the shipping sector and increased volatility in the freight markets. Danish shipping companies are leading in the container and product tanker markets, in which earnings increased during 2020. Other parts of the industry, in particular the cruise and cross-national ferry services, have experienced major shortfalls in revenue, though partly offset by government subsidies, in particular in the ferry sector. Danish shipping companies have so far been relatively resilient and effective in combatting the crises but the future, in particular in the event of a global economic downtown, is unusually hard to predict.
1 Jens V Mathiasen is a partner and Thomas E Christensen is an senior legal counsel at Gorrissen Federspiel.
4 Report by COWI, prepared on behalf of the Danish Maritime Authority, p. 5, www.soefartsstyrelsen.dk/Media/2/5/DetBlaaDanmark2019.pdf.
6 Consolidated Act No. 938 of 10 September 2019 as amended by Act No. 1445 of 29 September 2020.
8 See Administration of Justice Act [AJA],Sections 224 and 225.
9 See id., Section 368.
10 See Consolidated Act on the recognition and enforcement of certain foreign judgments etc. in civil and commercial matters No. 1282 of 14 November 2018.
11 Consolidated Act on Limitation No. 1238 of 9 November 2015 as amended by Act No. 140 of 28 February 2018; see Limitation Act, Section 3.
13 Act No. 553 of 24 June 2005 as amended by Act No. 106 of 26 February 2008.
14 See Brussels I bis Regulation, Articles 39 and 45.
15 Council Regulation (EC) No. 44/2001 of 22 December 2000. See Lugano Convention, Article 34, and Act on the recognition and enforcement of certain foreign judgments etc. in civil and commercial matters No. 1282 of 14 November 2018.
16 Hague Choice of Court Convention, Article 2(2).
17 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, Article 67(2)(a).
18 Arbitration Act [AA], Sections 38 and 39.
19 Consolidated Act No. 140 of 17 February 2014.
20 See Merchant Shipping Act [MSA], Section 274(1).
21 The exemptions are incorporated from the Hague-Visby Rules and the Hamburg Rules.
22 See MSA, Section 275(2).
23 See id., Section 275(3).
24 See id., Section 276(1).
25 See id., Section 276(2).
26 See id., Sections 280 to 283.
27 See id., Section 171.
28 See id., Section 174.
29 See id., Section 172(2).
30 See id., as amended by Act No. 1526 of 19 December 2017, Section 175.
31 The limits for liability for vessels of 300 tonnes or less are set out in Executive Order No. 463 of 11 May 2018.
32 Regulation (EC) No. 392/2009 on the liability of carriers of passengers by sea in the event of accidents.
33 See MSA, Section 93(1).
34 See AJA, Section 629 and MSA, Section 94.
35 See AJA, Section 634.
36 See id., Section 627.
37 See id., Section 539.
38 See MSA, Section 28(1).
39 Consolidated Act No. 1629 of 17 December 2018.
40 Consolidated Act No. 74 of 17 January 2014 as amended by Act No. 400 of 2 May 2016.
41 Consolidated Act No. 390 of 1 April 2020.
42 Consolidated Act No. 945 of 6 August 2015, as last amended by Act No. 1583 of 27 December 2019.
43 See MSA, Section 10.
44 See id., Section 1.
45 See Consolidated Act No. 390 of 1 April 2020, Section 1(2).
46 Act No. 359 of 29 April 2018.
48 Agreement Governing the Authorisation of [Recognised Organisation (RO)] to undertake Statutory Certification Services on behalf of the Danish Maritime Authority (the Danish RO Agreement 2015).
49 Consolidated Act No. 1165 of 25 November 2019 as last amended by Act No. 126 of 30 January 2021.
50 Consolidated Act No. 1218 of 25 November 2019, as last amended by Act No. 126 of 30 January 2021.
51 Consolidated Act No. 277 of 27 March 2017, as last amended by Act No. 126 of 30 January 2021.
52 Consolidated Act No. 240 of 13 March 2019, as last amended by Act No. 126 of 30 January 2021.
53 Consolidated Act No. 705 of 29 May 2020.
54 MSA, Section 193, Subsection 2, Paragraphs (2) and(3).
55 See id., Section 161(1).
56 See id., Section 161(2).
57 See id., Section 441(a).
58 See id., Section 449.
59 Consolidated Act No. 838 of 10 August 2009, as last amended by Act No. 27 December 1711.
60 Consolidated Act No. 1662 of 17 December 2018.