The Shipping Law Review: Portugal
Commercial overview of the shipping industry
Portugal is an importers and exporters jurisdiction rather than a shipowners jurisdiction. However, there are three Portugal-based players operating as shipowners in the cargo and passenger trades (ETE, GSLines and Bensaude) that deal with the mainland and inter-island (Azores and Madeira) trades or with the former Portuguese colonies of Cape Verde, Guinea Bissau, São Tomé, Angola and Mozambique. A Portugal-based ship manager, Portline Bulk, handles 12 foreign-flagged bulk cargo vessels that operate worldwide. There is also a Portugal-based deep sea and river cruise vessels owner/operator (Douro Azul/Mystic Cruises), which has recently purchased and ordered new buildings in a local yard.
Only three merchant vessels are registered in the Conventional Registry and 630 in the International Shipping Registry of Madeira.
A Portuguese group, Martifer, operates two shipyards, one at Viana do Castelo (West Sea), where the most recent newbuild cruise vessels are being built, and one at Aveiro (Navalria), which is the sole Portuguese facility licensed under the European List of Ship Recycling Facilities. Group ETE operates a yard in Lisbon (Navaltagus) dedicated to repairing and building smaller vessels, such as tugs and pilot boats. Lisnave is the key repair yard based at Mitrena, Setubal, which repairs all types of merchant vessels and undertakes all major repair projects of deep-sea merchant vessels, such as tankers and bulk carriers.
According to the most recent statistics available (for 2020), Portugal has moved 79,326,048 tons of cargo, of which 32,142,212 tons was export cargo and 47,183,836 tons was import cargo. Of this, about 39 per cent of this was liquid bulk cargo and about 35 per cent was containerised cargo. The Port of Sines has moved the majority of cargo (49 per cent) followed by Leixões (19 per cent), Lisbon (11 per cent), Setubal (8 per cent) and Aveiro (6 per cent). During 2020, Portugal has moved 1,844,329 containers, of which 916,420 were exported and 927,909 imported. Roughly 23,908 vessels called at Portuguese ports in 2020, of which 34 per cent were container vessels, 33 per cent general cargo vessels, 18 per cent liquid bulk cargo vessels, 6 per cent passenger vessels, 4 per cent solid bulk cargo vessels and 1.41 per cent passenger cruise vessels. Around 377,024,992 gross tonnage called at Portuguese ports with vessels sailing mostly under the Panamanian, Liberian and Portuguese flags. In terms of trade patterns, the Port of Sines is focused on containerised cargo (as it operates a terminal that is primarily used as a trans-shipment hub for the Mediterranean Shipping Company) and liquid bulk cargoes such as oil and gas. Lisbon is the strongest in solid bulk cargoes such as agricultural products and other commodities. Leixões is similar to Sines in the types of cargo moved but with much more own, and less transhipped, export and import cargo originated in the area's industries and factories. In addition, some ports such as Viana do Castelo, Setubal and Aveiro serve specific industries located near the ports such as wind power equipment (Viana do Castelo), paper or car factories (Setubal) and chemical industry (Aveiro). Leixões, Lisbon and Portimão are the key ports serving passenger cruise vessels.
General overview of the legislative framework
The key legislation is comprised of the Constitution, EU legislation, international conventions, and Portuguese laws and decree laws. The provisions of the Constitution have overriding authority over EU legislation and over international conventions, followed by laws and decree laws.
The following key EU Regulations also apply:
- Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Recast Regulation);
- Regulation (EC) No. 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents;
- Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I Regulation); and
- Regulation (EC) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II Regulation).
The key maritime conventions in force are:
- International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the Bunker Convention);
- Nairobi International Convention on the Removal of Wrecks 2007 (the Nairobi WRC 2007);
- Maritime Labour Convention 2006 (MLC);
- International Convention on Civil Liability for Oil Pollution Damage 1992 (the CLC Convention);
- Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Supplementary Fund Protocol 2003);
- Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974 (PAL PROT 2002);
- International Convention on the Control of Harmful Anti-fouling Systems on Ships 2001;
- 1996 Protocol to the Convention on Limitation of Liability for Maritime Claims 1976 (the LLMC Convention 1976);
- United Nations Convention on the Law of the Sea 1982 (UNCLOS);
- International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 (the STCW Convention);
- International Convention for the Safety of Life at Sea 1974 (SOLAS);
- International Convention for the Prevention of Pollution from Ships 1973 (as modified by the Protocol of 1978) (MARPOL 73/78);
- International Regulations for Preventing Collisions at Sea 1972 (COLREGs);
- International Convention on Tonnage Measurement of Ships 1969 (the Tonnage Convention);
- International Convention on Load Lines 1966 (the Load Lines Convention);
- International Convention for the Unification of Certain Rules relating to Penal Jurisdiction in Matters of Collision and Other Incidents of Navigation 1952;
- International Convention for the Unification of Certain Rules relating to Civil Jurisdiction in Matters of Collision 1952;
- 1952 International Convention Relating to the Arrest of Sea-going Ships (the 1952 Arrest Convention);
- International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (the Hague Rules);
- Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels 1910; and
- Convention for the Unification of Certain Rules of Law with respect to Assistance and Salvage at Sea 1910,
The following key laws and decree laws apply:
- Decree Law 37,748 of 1 February 1950 – introduced the Hague Rules into national law;
- Decree Law 287/83 of 22 June – dual registration of merchant ships;
- Decree Law 349/86 of 17 October – carriage of passengers by sea act;
- Decree Law 352/86 of 21 October – carriage of goods by sea act;
- Decree Law 431/86 of 30 December – towage contracts act;
- Law 35/86 of 4 September – jurisdiction of the maritime courts;
- Decree Law 191/87 of 29 April – charter parties act;
- Decree Law 96/89 of 28 March as amended – International Ship Registry of Madeira;
- Decree Law 201/98 of 10 July – statutory law ships regime;
- Decree Law 202/98 of 10 July – liabilities related to the ship;
- Decree Law 203/98 of 10 July – salvage;
- Decree Law 235/2000 of 26 September – maritime pollution contravention offences;
- Decree Law 45/2002 of 2 March – maritime contravention offences;
- Decree Law 64/2005 of 15 March – wreck removal;
- Decree Law 53/2019 of 17 April – dry port;
- Decree Law 158/2019 of 22 October – logistics unique window; and
- Decree Law 159/2019 of October – armed guards on board Portuguese flagged vessels.
Forum and jurisdiction
The Lisbon Admiralty Court exercises jurisdiction over disputes that have a material connection with Portugal's mainland. The relevant material connection arises from the port where the ship is anchored, the port where the goods were loaded or discharged, or where the tortuous event happened. If the relevant connection is linked to the Azores or Madeira Islands territory, the Islands' respective civil courts shall have jurisdiction.
There is no specific procedural time bar to pursue a claim in court. The underlying substantive claim relevant time bar applies. A time bar period can be qualified under Portuguese law as a prescription or as a caducity time bar period. The main differences lie in the fact that a prescription limitation period cannot be extended by agreement and will only be interrupted with service of court proceedings on the defendant. A caducity limitation period can be extended by agreement and it will be interrupted merely by the filing of papers in court. The most relevant time limits are (1) tort: three years (prescription), (2) contract: 20 years (prescription), and (3) carriage of goods by sea: one year (Hague Rules) or two years (Decree Law 352/86) (caducity).
ii Arbitration and ADR
Arbitration and mediation are available as alternative sources of conflict resolution. Arbitration in Portugal is ruled by Law No. 63/2011 and mediation is ruled by Law No. 29/2013. The country is a contracting party of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). However, neither arbitration nor mediation or any other alternative dispute resolutions are commonly used to resolve maritime disputes. The Portuguese jurisdiction assists claimants quite frequently in obtaining security by way of arrest of ships to secure claims pursued in foreign arbitration proceedings such as London-based shipping arbitration disputes.
iii Enforcement of foreign judgments and arbitral awards
A foreign final and unappealable judicial decision can be enforced in Portugal against assets located in Portugal. If the judicial decision is granted in a country outside the European Union that is not bound by the Brussels I Regulation (recast), the judicial decision must be first recognised in separate proceedings at the Court of Appeal to be then enforced after recognition at the first instance court in enforcement proceedings. If the final decision was granted in an EU Member State, as per the Brussels I Regulation (recast), the automatic recognition of the final judicial decision and its enforcement can be requested at the first instance court competent for the enforcement.
A final and unappealable arbitration award granted in a foreign country can be enforced under the terms of the New York Convention and under the terms of the national Arbitration Law No. 63/2011 and of the Civil Procedure Code. As per Arbitration Law No. 63/2011, a final and unappealable arbitration award granted in a foreign country should be recognised at the Court of Appeal and the enforcement of the recognised award should be then requested at the first instance court competent for the enforcement proceedings.
There is no specific time bar to enforce an award or judgment. The time bar relevant to the underlying substantive claim applies.
The parties to a shipbuilding contract may agree on when title in the ship will pass from the shipbuilder to the shipowner, provided they do so in writing as a building contract (or any amendments thereto) governed by Portuguese law must be produced in writing, as per Articles 12 and 16 of Decree Law 201/98. In the absence of any such agreement between the parties, title in the ship shall pass from the shipbuilder to the shipowner when the shipbuilder delivers the new ship and the shipowner accepts the new ship, except for the materials supplied by the shipowner for the newbuild, which are considered owned by the shipowner, pursuant to Article 16 of Decree Law 201/98.
A shipbuilding contract is governed by the written clauses of the contract, by Decree Law 201/98 and, in subsidiary terms, by the general rules applicable to construction or repair contracts (Civil Code, Articles 1207 to 1230) provided that those general rules do not contradict the specific rules of Decree Law 201/98.
Article 25 of Decree Law 201/98 establishes that the shipbuilder has a retention lien by operation of law over the newbuild to guarantee its claims arising from building the new ship. The Civil Code also contains general rules on retention liens (Articles 754 to 761). Article 756 of the Civil Code states that no such retention lien exists (or that it is unlawful, if exercised) when the claims (on which the shipbuilder is supporting its retention lien) were incurred or caused to be made in bad faith by the shipbuilder, or when the party against whom it is being exercised has offered, in or out of court, sufficient security to guarantee the claims of the shipbuilder.
When the shipbuilder is lawfully exercising its retention lien, and if out-of-court negotiations fail, the shipowner may start court proceedings offering security. Pending any such proceedings, the shipbuilder is notified by the court to declare whether the security offered is satisfactory and sufficient. It shall rest with the judge to make the ultimate decision on the type, nature and amount of the security to be provided. A cash deposit in court of the amount of the claim allegedly owed by the shipowner to the shipbuilder will be sufficient to have the ship released.
When the shipbuilder is unlawfully exercising a retention lien, the shipowner can elect to do any combination of the following:
- to commence proceedings to obtain a judgment against the shipbuilder ordering payment of all losses and damages caused to the shipowner by the said unlawful retention lien of the ship and ordering delivery of the ship;
- if, under the newbuild contract, title has already passed to the shipowner, to enforce the newbuild contract in a special enforcement proceeding aimed at obtaining delivery of the ship; or
- to apply for a provisional order to be issued by the judge aimed at obtaining the provisional delivery of the ship pending and subject to a final resolution of the dispute.
The use of any of the above remedies will have to be assessed based on the circumstances of the case. The shipbuilder will normally refuse delivery alleging a retention lien. Any of the remedies should be then used in conjunction with the offering (either in or out of court) of security to the shipbuilder.
ii Contracts of carriage
The Hague Rules became Portuguese law by means of Decree Law 37748 of 1 February 1950. Application of the Hague Rules is mandatory if the bill of lading was issued in the territory of a contracting state.
Decree Law 352/86 will apply, as a subsidiary to the international conventions in force in Portugal (in respect of issues not dealt with by the conventions), to contracts for the carriage of goods by sea. Decree Law 352/86 rules, inter alia, on preloading and post-discharge responsibilities and liabilities, on package and unit limitation calculation and amounts, and on limitation periods. Decree Law 352/86 introduced into Portuguese law some of the amendments regarding package and unit calculation introduced by 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). It has also inserted the limitation period of two years required under the UN Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules). However, this applies only when the Hague Rules are not applicable; when liabilities arise in connection with the Hague Rules, the one-year limitation period is to be applied. The Hague Rules must be applied in conjunction with Decree Law 37748 and especially with Decree Law 352/86.
Portugal has not ratified, accepted, approved or acceded to the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2009 (the Rotterdam Rules).
Pursuant to Article 1(e) of the Hague Rules, carriage of goods by sea encompasses the time elapsed from the moment the goods are loaded on board the ship up to the moment they are discharged from the ship (in other words, from and up to the moment they have passed the ship's rail or 'tackle to tackle'). Under Article 6 of Decree Law 352/86, the carrier's liability for the goods in respect of the period between receipt and loading of the goods is ruled by the provisions of the bailment contract contained in the Civil Code. The bailment contract regime is applied also from the moment the goods have been discharged onwards. It is fair to conclude, then, that carriage by sea commences and ends from and up to the moment the goods have passed the ship's rail at her loading and discharge ports.
A lien can only operate by force of law and not by contract under Portuguese law. The carrier enjoys a retention lien by operation of statutory law over the carried goods to secure any claims arising from the carriage by sea, as per Article 21 of Decree Law 352/86. When the carrier intends to exercise the retention lien, a notice must be served on the receiver or on the consignee within 15 days of the ship's arrival in port. The carrier may elect to leave the goods on board the ship or to have them discharged and deposited. The carrier shall be prevented from claiming any compensation for the ship's stoppage if he or she elects to leave them on board and shall be obliged to assure their diligent keeping and maintenance. The keeping and maintenance costs shall run on cargo's interest. The carrier shall have a duty to start proceedings within the time limit of 30 days after serving the notice informing cargo interests that he or she is exercising his or her retention lien. When the cargo is of a perishable nature, the carrier is entitled to apply to the court for permission to perform the anticipated sale of the cargo. The carrier must also serve a notice to cargo interests if they are known, informing them that it will apply for permission to have the cargo sold. The order shall be issued ex parte but the counterparty may prevent the anticipated sale by offering adequate security. The carrier shall have a retention lien over the sale proceeds but the court can order the deposit of those proceeds.
The shipper remains the sole party to the contract of carriage before the receiver has presented the bill of lading at the discharge port and or has taken delivery of the cargo. Both shipper and receiver, provided they have adhered to the contract, remain liable in respect of the carrier for freight, demurrage or other expenses incurred.
Multimodal bills of lading give rise to the question of which regime (land or sea regime) shall apply in respect of the carrier's liability. There is not much guidance on what the local courts may rule on this point but the following criteria have been used: (1) the terms of the bill of lading shall be considered by the court; or (2) if the event giving rise to the loss or damage is particularly localised on land or sea, the court will apply the relevant regime where the loss or damage has occurred. The difficulty rests when it is not possible to determine whether the loss or damage occurred on the sea leg or the land leg.
iii Cargo claims
Title to sue under a bill of lading may be held by the initial party (shipper or receiver) to the contract for the carriage of goods by sea or an assigned third party on the rights of the former; the holder of a bill of lading when a bearer bill of lading has been issued; the named consignee when a not-to-order bill of lading has been issued; or the named consignee or the endorsee when a bill of lading has been issued to order.
Pursuant to freedom of contract principles, between owner and charterer, the terms of the charter party can be incorporated into a bill of lading. The incorporation will be ineffective regarding the third-party holder or endorsee as he or she is not a party to the charter party but merely a party to the contract for the carriage of goods by sea titled by the bill of lading. This will not be the case regarding the clauses of the charter party fully reproduced in the bill of lading. In this case, the clauses may be effective depending on the interpretation of the clauses of the contract. The same reasoning is valid for a jurisdiction or an arbitration clause in a charter party, the terms of which are incorporated in the bill. In addition, Article 29(b) of Decree Law 352/86 states that 'within the relations between carrier and third-party holder of the bill of lading, with prejudice of what on the contrary may be stated in the charter party, where the bill of lading has been issued pursuant to the charter party, the rules of Decree Law 352/86 will prevail'. Article 30 of Decree Law 352/86 states that the Portuguese courts will have jurisdiction for actions arising from the carriage of goods by sea if, inter alia, the port of loading or discharge is in Portuguese territory, or the head office, branch or agency of the shipper, receiver or consignee or the carrier is in Portugal.
Law 63/2011 (the Arbitration Act) states that the arbitration clause must be produced in writing and inserted in a document signed by the parties or to be contained in exchanges of letters, telexes, telegrams or faxes or in other means of telecommunication of which there persists evidence in writing, including electronic means of communication. 'In writing' includes also situations where the convention is contained in a form of electronic, optic or magnetic support. Subject to being in compliance with the Standard Terms Act, a written contract may include reference to a different document that contains the arbitration clause, but this indirect option needs to be drafted in the contract in a way that the arbitration clause is to be considered as an integral part of the contract. To the best of our knowledge, under the Arbitration Act, a valid incorporation needs to be included verbatim on the bill of lading or contained in a different document to which a contract signed by the third party and the owner refers.
The identity of the carrier clause is normally a standard one. Standard forms of contracts are governed by Decree Law 446/85. It is defensible to sustain that the carrier clause will be valid and binding when evidence is produced in court that cargo interests knew or ought reasonably to have known of the existence and extent of the clause. However, only the carrier of the goods can issue bills of lading, as per Article 8(5) of Decree Law 352/86. Pursuant to Article 10, Paragraph 1 of Decree Law 352/86, bills of lading issued by someone who does not have the status of sea carrier are null and void. Whoever issues a bill of lading (other than the sea carrier of the goods) is liable for damage caused to the shipper and to others interested in the goods, pursuant to Article 10, Paragraph 2 of Decree Law 352/86. This does not prevent an agent of the carrier from signing bills of lading on behalf of the carrier. Under Article 28 of Decree Law 352/86, if the bill of lading is considered null and void or if the sea carrier is not identifiable by the wording of the bill of lading, the carrying ship will be liable in rem before cargo interests under the same terms as the carrier.
iv Limitation of liability
Portuguese law and practice provide for the following types of statutory law limitation of liability regimes:
- package and unit limitation of liability under the Hague Rules to which the carrier may avail himself or herself for cargo loss or damage; and
- tonnage limitation of liability provided for in:
- the LLMC Convention 1976 (Protocol 1996);
- the CLC Convention;
- the Bunker Convention;
- PAL PROT 2002;
- the Nairobi WRC 2007.
Contractual provisions limiting or excluding liability are generally enforceable if they refer to loss or damage caused by an act or omission of a servant, an employee or subcontractor of the debtor or tort feasor that involves only light negligence. Intentional or grossly negligent acts or omissions are barred from limitation or exclusion of liability. In addition, contractual clauses limiting or excluding liability arising out of death or personal injury claims are null, void and of no effect.
i Ship arrest
A vessel can be arrested under the 1952 Arrest Convention based on one of the maritime claims identified in Article 1, Paragraphs (1)(a) to (1)(q) of the Convention. Pursuant to Article 8(2) of the Convention, a ship sailing under the flag of a non-contracting state of the 1952 Convention can be arrested for one of the maritime claims listed therein. The governing law of the claim has no implications on the possibility of having an arrest order if the arrestor can produce sufficient evidence in court of the existence of a maritime claim. Until a judgment of late 2009, as a general principle of law, it was not possible to arrest an associated ship. However, the Lisbon Admiralty Court has accepted, in this judgment, the arrest of two vessels under the doctrines of associated ship arrest and of 'piercing the corporate veil'. The arrest order issued in the first instance was withdrawn pursuant to an out-of-court settlement agreement and hence was not tested on appeal. However, it did pave the way to allow further arrests by use of the aforementioned doctrines.
The aim of an arrest order issued by a Portuguese judge is solely to allow the creditor to obtain security for its claim. An arrest order is fully dependent on a main proceeding on the merits, commenced to obtain a judgment or an award, or fully dependent on an enforcement proceeding if the judgment or award exists already. It is possible to arrest simply to obtain security and then pursue proceedings on the merits elsewhere. However, in some situations this may not be the case, taking into consideration Article 7 of the Arrest Convention, if the courts of the country in which the arrest order has been obtained shall have jurisdiction on the merits – this will be the case, inter alia, when the arrestor is domiciled in the country where the arrest has been granted or when the claim arises from a collision.
Pursuant to Article 390(1) of the Civil Procedure Code and Article 621 of the Civil Code, if an arrest order is considered unfounded or expires by reasons imputed to the arrestor, the arrestor will be held liable for damage caused with fault to the arrestee, provided the arrestor has not acted with the normal prudence required. The arrest order expires, inter alia, when the main proceeding on which it is fully dependent is not commenced within the given time or if it is stalled by negligence of the applicant for more than 30 days. The ultimate failure of the claim (i.e., final and non-appealable judgment refusing the claim) is not a sufficient basis per se for a wrongful arrest claim. A situation where an arrestor acts without the normal prudence required will involve false statements regarding the facts or the use of fabricated evidence.
Pursuant to Article 1(1)(k) of the 1952 Arrest Convention, a claim arising from supplies of products – such as bunkers – or materials supplied to a ship for her operation or maintenance, wherever those supplies are created, constitutes a maritime claim under the Convention. Subject to the provisions of Article 3(1) of the Convention, an applicant arrestor or creditor can arrest the ship in respect of which the claim refers or arises from 'the offending ship'. Under Article 3(4) of the Convention, if there exists a charter party where the nautical management has been passed from the owner to the charterer and when solely the charterer is liable in persona, the creditor may arrest the ship in respect of which the claim refers or arises or any other ship owned by the charterer. This rule has been interpreted by the courts to include voyage or time charterers and hence to allow arrest orders against the supplied ship where only charterers are liable in persona. A bunker supplier can therefore arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel.
The judge can request that the arrestor provide security and to make the granting of the arrest order dependent on the provision of security. Security can be produced, inter alia, in cash or via a bank guarantee. The judge will ultimately assess the sufficiency and the quality of the security offered. This is not common practice in Portuguese courts and, hence, it is difficult to suggest what amount will be required as security by the judge. Courts have used the requirement of the provision of security if and after the arrest order has been disputed in court by the arrested party – courts have determined the provision of security by the arresting party to maintain the arrest order.
ii Court orders for sale of a vessel
The judicial sale of a vessel cannot, as a general principle, be performed in the arrest procedure but only in the enforcement procedure where a creditor is enforcing a judgment or an award. Considering that the process of obtaining a judgment or an award may take considerable time, the Lisbon Admiralty Court has long been authorising the anticipated sale of arrested vessels within the arrest procedure. The test for issuance of the sale order is accomplished when the arrested ship's value is depreciating because of poor or lack of maintenance or for any other reason. The sale procedure is complex, starting with an application, a valuation, an approval order by the judge, preparation of notices to potential buyers and actual sale by a private treaty sale. The process may be concluded within a period of up to six months counted from the date of the application.
Portugal has adhered to the Tonnage, Load Lines, SOLAS, MARPOL, MLC and STCW conventions and has implemented various internal laws and regulations enforcing the International Safety Management Code, the International Ship and Port Facility Security Code and various other International Maritime Organization regulations that aim to assure safety of life at sea and minimise risk to the marine environment during ships' operations. A port and coastal vessel traffic control system is also in place.
ii Port state control
The General Direction of Natural Resources, Safety and Maritime Services (GDNR) has duties and powers in respect of port state control. The national port state control regime is contained in Decree Law No. 61/2012 (as amended). Sanctions are imposed by the inspector of the GDNR or by the harbour master and may include detention, stoppage of operations (e.g., cargo discharge), refusal of entry and stay in Portuguese ports, and fines of up to €44,000. The detention sanction and the fines are applied by the GDNR. The stoppage of operations and the refusal of entry and stay in Portuguese ports are applied by the harbour master. The harbour master will not issue the ship's clearance while the ship remains detained.
iii Registration and classification
Portugal uses a dual system of registration for merchant ships. A merchant ship can be registered in the Conventional Registry or in the International Shipping Registry of Madeira. The main differences between the Conventional Registry and the International Shipping Registry of Madeira rest on the fact that the latter has fewer requirements regarding the nationality of crew members and shipowners, and crews do not have to comply with social security compulsory dues other than tax exemptions on the former.
An application for registration should include, inter alia, the following documents:
- certificate of ownership or bill of sale or contract of sale and purchase;
- the ship's main technical certificates, such as class certificate, tonnage certificate, seaworthiness certificate, etc;
- protection and indemnity certificates;
- certificate of incorporation or of incumbency of the company or passport of the physical person;
- underlying registry permission in the case of a bareboat in registration;
- mortgage agreement; and
- permission from the mortgagee to register.
Ownership rights, pledges and mortgages, arrests and seizures may be registered over vessels.
The following classification societies are recognised in Portugal: Lloyd's Register of Shipping, Bureau Veritas, American Bureau of Shipping, Registro Italiano Navale, DNV, Class NKK (Nippon Kaiji Kyokai) and Korean Register.
iv Environmental regulation
The following international conventions and protocols on pollution are in force:
- the Protocol of 1992 to amend the CLC Convention;
- the Protocol of 1992 to amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage;
- the Supplementary Fund Protocol 2003;
- the Bunker Convention; and
- MARPOL 73/78, its optional Annexes III, IV, V and the 1997 Protocol on Annex VI.
There is a consistent tendency to criminalise and prosecute seafarers and shipowners for pollution crimes in recent years.
Decree Law 281/2000 of 10 November includes amended rules on sulphur emissions. The statutory cap is 0.50 per cent mass/mass for ships sailing within Portuguese waters; for moored ships in Portuguese ports the limit is 0.10 per cent mass/mass. The authorities keep a record of the bunker suppliers. The bunker suppliers need to deliver a sealed sample of the oil supplied and a delivery order with an indication of the amount of sulphur. The sealed sample needs to be signed by the supplier's representative and by the ship's master. The samples need to be kept on board until the bunkers are consumed but never for a period of less than 12 months from supply. The delivery orders need to be kept by the ship and by the suppliers for three years; the authorities can check these and obtain copies of them. A monetary fine of between €1,250 and €30,000 will be applicable in the event of deficient filing of the delivery order or if the delivery order is not retained, or if the sample is not retained, if the breach is by a corporate entity. If the breach is by a natural person, the fine will be between € 1,000 and €3,740.
v Collisions, salvage and wrecks
The international conventions in force in respect of collisions are:
- the Convention for the Unification of Certain Rules relating to Civil Jurisdiction in Matters of Collision 1952;
- the Convention for the Unification of Certain Rules of Law with respect to Collision between Vessels 1910; and
- the International Convention for the Unification of Certain Rules Relating to Penal Jurisdiction in Matters of Collision or Other Incidents of Navigation 1952.
Regarding salvage, the international convention in force is the Convention for the Unification of Certain Rules of Law with respect to Assistance and Salvage at Sea 1910. Portugal is not a contracting state of the International Convention on Salvage 1989 but has introduced most of this last convention's provisions into internal law by means of Decree Law No. 203/98. As per Article 1 of Decree Law 203/98, salvage is defined as any act or activity that aims to render help to ships, crafts or other assets, including freight at risk, when in peril at sea. A salvor is defined as one who renders help to assets in peril at sea.
Pursuant to Article 5 of Decree Law 64/2005, the following entities may order wreck removal: harbour master; port administration; relevant administrative state entity with jurisdiction over an environmental protected area; and administrative state entity with jurisdiction over the River Douro.
vi Passengers' rights
The key provisions regarding passengers' rights are PAL PROT 2002 and Regulation (EC) No. 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents, and Decree Law 349/86 of 17 October (on contracts of carriage of passengers by sea).
A key difference to other jurisdictions is the fact that contractual provisions (either in terms of carriers' tickets or otherwise) containing clauses limiting or excluding liability for personal injury claims or death claims are null, void and of no effect.
vii Seafarers' rights
The Portuguese state is a party to the MLC, which applies jointly with other internal laws relating to the employment of seafarers on board Portugal-flagged vessels, liability for employment accidents and rules relating to seafarers' rights to compensation.
Portuguese law sets out a mandatory and statutory law system of vicarious capped liability of the employer arising out of employment accidents that may be suffered by an employee under certain circumstances. The provisions are contained mostly in Law 98/2009 of 4 September. As a general principle, an employment accident that may trigger the employer's liability arises when the employee becomes injured during working hours and in the workplace as a result of the performance of his or her employment duties. The employer must obtain compulsory insurance coverage for this liability. The compulsory insurance cover needs to allow direct action against the insurer and may need to be subject to Portuguese law. The employer (or his or her insurer, if liability is transferred as is mandatory) must compensate the injured or the deceased's next of kin for the following types of damages: (1) medical treatments and medical costs; (2) adaptation costs; (3) an annual life pension that shall be calculated based on the annual wages multiplied by a certain applicable factor; and (4) funeral expenses.
The internal regime for port state control was amended to contemplate the entering into force of the MLC. This has led to strict control of the MLC conditions relating to all vessels calling at Portuguese ports.
Portugal's ports have been considered a key part of infrastructure for the economic development of the country. Following the successful implementation of the maritime windows that have been operating in various Portuguese ports for some time now, a national logistics single window legal regime was created, whereby a paperless online digital system has been set up for all the formalities required for the movement of vessels, cargo and passengers in Portuguese ports, in compliance with Regulation (EU) 2019/1239 of the European Parliament and of the Council of 20 June 2019 establishing a European Maritime Single Window. The aim of the national logistics single window is to serve as a national hub with the aim of allowing an entirely dematerialised process for clearing vessels, cargoes and passengers starting with the inland players, such as exporters, up to the moment the cargoes have left port. The logistics single window is now working in some ports and it is expected to be used nationwide in the near future.
A dry port regime has been implemented with the aim of allowing movement of goods from and to the Portuguese customs jurisdiction with postponed customs clearance effected not in the port area but further inland, thereby reducing the formalities and bond requirements.
A tonnage tax system, coupled with a favourable legal system in respect of seafarers' income and social security dues, was created for vessels and shipowners operating within the Portuguese Conventional Registry but unfortunately no entities have taken advantage of this new system.
There is currently an active and rather alarming trend in prosecuting seafarers and shipowners for pollution and other maritime offences. In many instances, these prosecutions have been unjustifiable and without any legal or factual grounds.
1 Mateus Andrade Dias is a partner at Andrade Dias & Associados – Sociedade de Advogados, SP, RL.