The Shipping Law Review: Ukraine
Commercial overview of the shipping industry
Ukraine is a maritime country with access to the Black Sea and the Sea of Azov. Several Ukrainian ports are located along the Danube, Europe's longest river – which flows through 10 countries (not counting new private terminals and ports). The Ukrainian port system has 18 seaports, 13 of which are in the continental territory of Ukraine and are in the temporarily occupied territory of the Autonomous Republic of Crimea. The total capacity of continental ports and terminals is 313.3 million tonnes. The Crimea Peninsula has been under Russian control since 20 February 2014 and Russia's annexation of the Autonomous Republic of Crimea is not recognised by Ukraine. As of 15 July 2014, all ports in the Autonomous Republic of Crimea have been closed and all vessels and their crews that violate the occupied territory regime would be held liable under Ukrainian law.
The main advantages of the Ukrainian maritime port industry are:
- the high export potential of agricultural cargoes, sunflower oil, ferrous metals, coal and iron ore concentrate;
- the availability of cargo handling facilities;
- the favourable location of seaports to provide transit freight traffic;
- the existence of a legal framework with the potential for attracting private investment for the development of the port industry concessions; and
- the availability of highly qualified port industry professionals.
In Ukraine, as in the rest of the world, the demand for inland waterway transport is growing. Cargo owners, primarily grain traders, are trying to reduce transportation costs and improve logistics in the face of economic instability, rising fuel prices and increasing disruption to rail and road transport because of the conflict in the east.
River shipping is becoming increasingly relevant and the demand is growing. Inland water transport may regain lost ground in the near future and be able to compete with rail and road transport.
A new Law 'On inland waterways' is a positive development for inland waterway infrastructure and both local and foreign investors have welcomed the support from the government. The development of river transport, as a 'green' means of transportation, is also having a significant positive effect on social development and the environment in Ukraine.
According to expert analytical studies in the field of freight transport,2 the potential cargo base of 12 regions from which goods can potentially be transported along the Dnieper River, subject to the overall growth of the economy, is about 60 million tons, rising to 80 million tons by 2030. Given that Ukraine's economy is tending towards exports, inland water transport on the Dnieper can potentially reach 45 million tons per year (30 million tons of exports and 15 million tons of imports).
General overview of the legislative framework
The Ukrainian shipping industry is regulated by Ukrainian law and the international conventions ratified by the the Parliament of Ukraine. The Ukrainian legal system follows the Romano-Germanic legal tradition and civil law framework. Codified acts are the traditional source of law and these have a prevailing status. Therefore, common law is not a significant part of the Ukrainian legal system. General principles of shipping industry regulation are formed by the Merchant Shipping Code of Ukraine, the Ukrainian Law 'On ports' and the Ukrainian Law 'On inland waterways'.
For cases concerning foreign economic activity but with a partial connection to Ukraine, foreign law may be applied. If one party is a foreign entity, the parties in a legal relationship are entitled to specify the applicable law that is acceptable to all parties. When no law is specified by the parties, the international agreements concluded by Ukraine and Ukrainian law provisions will define the applicable law. The regulations applicable to legal relationships are defined according to the provisions of the Ukrainian Law 'On international private law' for disputes on the applicable law.
The law that defines the status of a foreign legal entity in Ukraine is the local law of the jurisdiction where the legal entity is registered. All entities must act according to the local law in the place where the action is carried out.
International conventions that have been ratified by the Parliament of Ukraine become an integral part of the Ukrainian legislation and supersede all Ukrainian codes and laws.
The conventions that Ukraine has ratified include the following:
- the International Regulations for Preventing Collisions at Sea 1972 (COLREGs);
- the International Convention for the Prevention of Pollution from Ships 1973 (MARPOL);
- the International Convention on Maritime Search and Rescue 1992;
- the York Antwerp Rules, taking into consideration the 2016 edition thereof;
- the International Convention Relating to the Arrest of Sea-Going Ships 1952 (the Brussels Convention);
- the Athens Convention on the Carriage of Passengers and their Luggage by Sea 1974 (the Athens Convention);
- the International Convention on Salvage 1989 (the 1989 Salvage Convention); and
- the International Convention on Load Lines 1966 (the Load Lines Convention).
For interactions relating to shipping, the following are usually applied: the Merchant Shipping Code of Ukraine, the Commercial Code of Ukraine, the Civil Code of Ukraine, the Customs Code of Ukraine and the Taxes Code of Ukraine.
The following laws and acts are the most relevant to the shipping industry:
- the Ukrainian Law 'On ports';
- the Ukrainian Law 'On international private law';
- the Ukrainian Law 'On foreign economic activity';
- the Ukrainian Law 'On environmental protection';
- the Ukrainian Law 'On inland waterways';
- 'The list of marine ports of Ukraine open to foreign vessels', approved by Decree No. 466–p of the Cabinet of the Ministry of Ukraine; and
- the Ukrainian Law 'On port customs', approved by Order No. 316 of the Ministry of Infrastructure.
Forum and jurisdiction
The judiciary is built on the principles of territoriality, specialisation and instance. The judicial system consists of local courts, courts of appeal, the Supreme Court and higher specialist courts. The unity of the judicial system is ensured by:
- the 'sole' principles of organisation and activity of courts (i.e., the principles used do not differ depending on the type of court);
- the sole status of judges;
- the obligation character of the rules of justice established by law for all courts;
- the unity of jurisprudence;
- the obligation to execute court decisions in the territory of Ukraine;
- a single procedure for organisational support of the courts;
- court funding exclusively from the State Budget of Ukraine; and
- the resolving of internal court issues by judicial self-governing bodies.
Courts specialise in civil, criminal, commercial and administrative offences; there are no specialist maritime courts. Shipping disputes are decided by the relevant court, depending on its specialisation and the location of the dispute. General courts deal with civil and criminal cases under the Civil Procedure Code of Ukraine and the Criminal Procedure Court of Ukraine. Commercial courts are competent when both parties are legal entities that are engaged in commercial activity. Proceedings at commercial courts are conducted according to the provisions of the Commercial Procedure Code of Ukraine. The administrative courts are competent when one of the parties is a public entity of Ukraine, according to the Code of Administrative Procedure of Ukraine.
Higher specialist courts operate in the judicial system as courts of first instance and appellate courts for the consideration of particular categories of cases. The higher specialis courts are the High Court on Intellectual Property and the Supreme Anti-Corruption Court. Higher specialist courts shall hear cases under their jurisdiction provided by procedural law.
The High Court is the highest court in Ukraine's judicial system, and it ensures the consistency and unity of case law in the manner established by procedural law. The High Court includes the Grand Chamber of the Supreme Court, the Administrative Court of Cassation, the Commercial Court of Cassation, the Criminal Court of Cassation and the Civil Court of Cassation. Each cassation court is presided over by specialist judges.
In addition, Ukraine recognises and enforces the decisions of the European Court of Human Rights.
Any Ukrainian court can rule on a shipping dispute. In general, a case is heard by the defendant's local court. In some cases (such as those concerning wages debts and moral damage remuneration), the claimant is entitled to turn to the local court of their place of residence. Cases concerning vessels are heard at the court that is local to the port of registry or where the vessel is berthed. The term 'maritime claim' is included in the Civil Procedural Code and Commercial Procedural Code. The procedure for ship arrest is provided under the rules of claim security, before and after the presentation of the claim.
Once an application for ship arrest is approved, the court sets a term of 30 days within which the main claim must be heard in court.
The general limitation period applicable for claims in Ukraine is three years, calculated from the moment of violation or damage. For certain types of cases, a one-year period applies. Parties are authorised to extend the limitation period by written agreement. However, it is not possible to shorten the limitation period by such an agreement.
ii Arbitration and ADR
There are no obligatory procedures for arbitration or mediation in Ukraine. Parties may opt to use mediation procedures voluntarily. Mediation procedures are not regulated by a specific law.
Arbitration procedures are regulated by the Ukrainian Law 'On international commercial arbitration'. Parties may use arbitration for dispute resolution by signing an applicable written agreement.
The Maritime Arbitration Commission (MAC) at the Ukrainian Chamber of Commerce and Industry (UCCI) is the specialist institution for rulings on maritime disputes. It operates under the provisions of the Statute on the Maritime Arbitration Commission at the UCCI.
The MAC settles disputes arising out of contractual or other civil law relationships in the merchant shipping sector regardless of whether (1) all parties are subject to the law of one jurisdiction (either Ukrainian or foreign), or (2) some parties are subject to Ukrainian law and others are subject to foreign laws. In particular, the MAC settles disputes arising out of:
- the affreightment of vessels, the carriage of goods by sea and the carriage of goods in mixed navigation (river–sea);
- the marine towage of vessels or other floating objects;
- marine insurance and reinsurance;
- the sale and purchase, mortgage and repair of seagoing vessels and other floating objects;
- the pilotage, escorting through ice, agency or other servicing of seagoing vessels, or vessels engaged in inland navigation insofar as the relevant operations are connected with the sailing of those vessels on sea routes;
- the use of vessels for scientific research, extraction of minerals, hydrotechnical or other related work;
- the salvage of seagoing vessels or vessels engaged in inland navigation;
- the raising of vessels and other property sunk in sea waters;
- a collision between seagoing vessels, or between vessels engaged in inland navigation and at sea, and damage caused by a vessel to port structures, navigational aids or other objects; and
- damage to fishing nets or other fishing gear, or injury sustained while fishing at sea.
The MAC also settles disputes arising in connection with the sailing of seagoing vessels and vessels engaged in inland navigation on international rivers in the instances that have been specified in this chapter, and disputes arising in connection with the transportation of the cargo of foreign countries by vessels engaged in inland navigation.
The procedures for court hearings and decisions and the amounts of fees are stipulated by statute and the rules of the arbitration court.
An arbitration court decision can be appealed to the local commercial court of appeal within 90 days of the decision being issued. The party to the case or any other person concerned in the case is entitled to appeal the decision.
The Commercial Procedure Code of Ukraine lists the following grounds for overruling a decision by the arbitration court:
- the case cannot be decided by an arbitration court;
- the decision concerns a matter not covered by the arbitration clause;
- the arbitration agreement or clause is invalid;
- the arbitrator or arbitrators are not authorised to issue the decision; and
- the decision concerns the rights of a person or persons who are not party to the case.
Decisions by arbitration courts are enforced by the Commercial Court of Appeal.
A party can apply to the Commercial Court of Appeal for enforcement of a decision up to three years after the date of issuance of the decision. An application for enforcement of an arbitration court decision must be approved within 15 days of the date of receipt.
Article 355 of the Commercial Procedure Code of Ukraine lists of grounds for refusing to enforce an arbitration court decision:
- the decision of the Commercial Court of Appeal cancelling the arbitration court's decision has come into force;
- the arbitration court's decision was in respect of a case that the arbitration court was not authorised to judge;
- the time limit for enforcing the arbitration court's decision has expired and cannot be extended;
- the arbitration court's decision concerns a matter not covered by the arbitration clause;
- the arbitration agreement or clause is invalid;
- the arbitrator or arbitrators are not authorised to make the decision;
- the arbitration court that heard the case refused to present the materials of the case to the Commercial Court of Appeal; or
- the arbitration court's decision concerns the rights of a person or persons who are not party to the case.
iii Enforcement of foreign judgments and arbitral awards
The procedures for enforcement of foreign judgments and arbitral awards are stipulated by Section IX of the Civil Procedure Code of Ukraine. Enforcement of foreign rulings in any disputes (including maritime disputes) is dealt with by the general courts.
An application to enforce in Ukraine the judgment of a foreign court must be made within three years of the date of the judgment coming into force. An application to enforce a foreign court judgment requiring periodic payments can be made up to the date of the final payment. A creditor must apply to the general court that is local to the place of the debtor's official residence or of the debtor's property.
The creditor must include with the application:
- a certified copy of the foreign judgment;
- a document certifying that the foreign judgment has come into force (if not stated in the text of the judgment);
- a document verifying that the debtor has been notified of the outcome of the case (if the debtor did not take part in the hearing);
- a document certifying the terms and means of enforcement (if applicable);
- a power of attorney (if applicable); and
- a certified translation of all the documents into Ukrainian (or other language as stated in the international agreement).
The court notifies the debtor of the filing of the application within five days of receipt thereof. The debtor then has one month to file an objection with the court.
The court is entitled to refuse to enforce a foreign judgment on the following grounds:
- the international agreement denies enforcement;
- the foreign judgment did not come into force;
- the debtor did not have an opportunity to participate in the case because no proper notification had been provided;
- the case must be decided exclusively by a Ukrainian court or other Ukrainian authority according to Ukrainian law;
- a case between the same parties and on the same grounds was initiated in Ukraine before initiation of the case in question in the jurisdiction of the judgment at issue;
- the terms of the judgment enforcement have not been met;
- the subject of the case cannot be decided by a Ukrainian court, according to Ukrainian law;
- enforcement of the judgment would endanger the interests of Ukraine; or
- a judgment concerning the same parties and the same grounds has already been enforced in Ukraine.
A foreign judgment that cannot be enforced shall be acknowledged as a judicial fact under the procedure defined by Section IX, Chapter 2 of the Civil Procedure Code of Ukraine.
An applicant for a foreign judgment enforcement procedure must conclude the application on receipt of acknowledgment and attach a certified copy of the foreign judgment, a document certifying that the foreign judgment has come into force (if this is not stated in the judgment text), a power of attorney (if applicable) and a certified translation into Ukrainian (or another language stated in the international agreement) of all the documents.
Ukrainian shipbuilding companies are mostly concentrated in the Nikolaev and Kherson regions. Dealings concerning shipbuilding contracts and sale and purchase agreements are regulated by the Civil Code and Commercial Code of Ukraine. Ukrainian law allows the parties to define the wording of obligations and rights, the means of fulfilment of the contract, and any other terms and conditions of purchase. The parties are entitled to conclude both preliminary agreements and additional agreements. As soon as an agreement is finalised, it is deemed to have been accepted by all parties. The parties also define the form of the agreement (whether in writing or certified by a notary). Title passes to the buyer when the ship is delivered in accordance with the acceptance protocol; however, the parties can opt for an alternative means for the ship's title to pass. By concluding the preliminary agreement, the purchaser has control of the shipbuilding process.
It is preferable for the parties to declare the amount of the bank guarantee provided by the shipyard during the construction period. Penalties for non-performance of the agreement may be included in the wording of the agreement. In the event of a shipyard's failure to fulfil any provision of the contract, the purchaser has the right to apply to court for reimbursement of costs.
According to Article 151 of the Customs Code, objects for shipbuilding and ship reconstruction shall be under customs control for up to 730 days. The reconstruction customs regime is usually used for foreign vessels that proceed to Ukrainian shipyards for reconstruction.
Shipbuilding prospects in Ukraine are in the development process and the industry is now focused on sea-river models of tankers, general cargo vessels and sailing yachts.
ii Contracts of carriage
The carriage of goods is regulated by the Merchant Shipping Code of Ukraine, the Commercial Code, the Civil Code and the Law on Transport. Carriage of goods by both river and sea is regulated by the Budapest Convention on the Contract for the Carriage of Goods by Inland Waterways 2005. Ukraine has not ratified the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (the Hague Rules), 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) or the UN Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules), and is not a party to the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2009 (the Rotterdam Rules). However, any provisions of, for example, the Hague Rules that are incorporated in bills of lading shall be obligatory for the parties thereto.
There are no laws specifically regulating transport by more than one mode or multimodal bills of lading. The Ukrainian Law 'On transport' is the main legislation regulating transport in general. The Merchant Shipping Code of Ukraine regulates the maritime transport sector. Contracts of carriage by maritime transport are regulated by Section V, Chapter 2 of the Merchant Shipping Code of Ukraine.
The bill of lading is the main document proving acceptance of a cargo for carriage. However, according to the Merchant Shipping Code of Ukraine, 'other written evidence' issued by the carrier may prove acceptance of the cargo for carriage.
The shipper is entitled to cancel the contract of carriage and return the cargo at any time by presenting all bills of lading issued for the shipper.
The carrier is obliged to prove the seaworthiness of the ship. Any agreements reducing the responsibility of the carrier regarding seaworthiness are invalid. The carrier can avoid responsibility by proving that he or she exercised due diligence in preparing the ship.
Cabotage is carried out by ships flying the Ukrainian flag or foreign ships that have the necessary permission from the Ministry of Infrastructure of Ukraine, as required by the Merchant Shipping Code of Ukraine. Permission to carry out cabotage is not included in the list of permission documents issued by the Ministry of Infrastructure of Ukraine. The Ministry responds to applications by shipowners with formal letters of permission.
A carrier may execute the right of lien at the port of arrival if the freight is not paid in time. The cargo shall be held by the carrier on the vessel or in the warehouse at the port of arrival. The carrier has the right of lien as long as he or she possesses the cargo. This is a natural right of the carrier and may not be stipulated in the charter party. The vessel, cargo or freight may be the lien when this is commensurate with the claim.
iii Cargo claims
The party whose rights have been violated has the right to claim for damages. Most cargo claims are heard by the commercial courts, which are authorised to decide a case between two or more legal entities. However, if one of the parties is a physical person, the commercial court is not authorised to hear the case. The claimant is entitled to apply to the court that is local to the place of registration of the defendant.
When the defendant is related to a legal entity, the claimant should apply to the court that is local to the place of registry of the relative. When the defendant is a foreign legal entity and does not have a place of registration in Ukraine, the claim shall be applied to the court at the place that is local to the defendant's property. If a carrier is the defendant, the case can be heard only by the court that is local to the carrier's location.
Cases concerning the arrest of a vessel in respect of a maritime claim can be heard only at the court that is local to the port where the vessel was registered or is currently located.
The parties to the case are entitled to draw up an arbitration agreement or sign an arbitration clause. The commercial court assumes the validity of any arbitration agreement or clause, unless proven otherwise.
The charter party terms may be incorporated into the bill of lading when the charter party is identified on it. Demise clauses and identity-of-carrier clauses are not recognised or binding.
iv Limitation of liability
Limitation of liability is regulated generally by the Merchant Shipping Code of Ukraine.
If the cargo value is not declared in the bill of lading, the carrier's liability for damaged or lost cargo shall be limited to 666.67 special drawing rights (SDRs) or 2 SDRs per kilogram of the gross mass of the cargo, whichever is the greater.
Claims arising from marine casualties caused by the pilot are covered by an emergency pilotage fund, which corresponds to 10 per cent of all pilot charges received in the preceding year.
The liability of the operator of a nuclear vessel in respect of nuclear damage is limited by the provisions for limitation funds set out in Article 324 of the Merchant Shipping Code.
A carrier's liability in respect of a claim resulting from the death or injury of a passenger is limited to 175,000 special drawing rights (SDRs).
In respect of damaged or missing luggage, a carrier's liability is limited to 1,800 SDRs per item per passenger.
i Ship arrest
Ukraine ratified the 1952 Brussels Convention on 16 May 2012. The Civil Procedure Code of Ukraine and the Commercial Procedure Code of Ukraine, which regulate ship arrests in maritime claims, were adopted by the national legislative system.
The general practice used for ship arrests has become more stable. Changes to the procedural legislation have sped up the procedure for arrest of ships.
Parties have the right to apply for arrest of a vessel at its scheduled port of destination in Ukraine. At the time of applying for registration, the vessel may be outside Ukrainian territory.
An application for arrest in respect of a maritime claim must contain:
- a description of the maritime claim;
- grounds for the need to arrest the ship; and
- evidence to prove that the vessel is registered in Ukraine or stands in the territorial waters of Ukraine or plans to move into the territorial waters of Ukraine.
Arrest of a sister ship is possible in Ukraine. An application for such an arrest is decided within two days of receipt by the court. The court is entitled to request counter security from the party applying for an arrest to cover possible loss. The type and amount of the counter security is defined by the court considering the case. Ukrainian courts recognise bank guarantees as an appropriate form of counter security.
A defendant is entitled to claim reimbursement of costs and for damages resulting from a wrongful arrest.
Letters of undertaking have not yet been regulated by Ukrainian legislation by special maritime law or code. However, recent court cases indicate the possibility of using such letters as a substitute for arrest as a measure of securing a maritime claim in the framework of a legal process.
ii Court orders for sale of a vessel
The judicial sale of an arrested vessel may be initiated by:
- the claimant who suffered damage or injury in direct connection with the operation of the vessel;
- the creditor;
- a crew member;
- local port authorities; or
- the salvor.
The judicial sale of the vessel shall be public and accessible. The initiator of the judicial sale must issue a written notice to every party concerned within 30 days. The relevant parties to the judicial sale of a vessel are (1) the registered owner of the vessel, (2) the local authority in the country of registration of the vessel, and (3) all holders of the vessel's encumbrances issued to the bearer and that have not been issued to bearer.
The written notice shall inform the parties concerned of the time and place of the judicial sale. When it is uncertain whether all concerned parties are known, a public announcement shall be made in the central state newspaper.
Generally, the right to ownership of the vessel arises from the moment of its registration in the State Register of Vessels. According to the procedure for the judicial sale of a vessel, the new owner of a vessel that has been forcibly sold will not be able to register it unless the previous owner has filed an application for removal of the vessel from the State Register. If this has not been done, the new ownership right to the vessel will not officially arise, in contradiction of Part 5, Article 12 of the International Convention on Maritime Liens and Mortgages 1993 (the Maritime Liens and Mortgages Convention), which came into force in Ukraine on 4 January 2003.
Ukraine acceded to the International Convention for the Safety of Life at Sea 1974 (SOLAS).
The safety regime for maritime transport is regulated by the Decree of the safety control system for sea and river transport stipulated by the Order of the Ministry of Transport of Ukraine No. 904, dated 20 November 2003.
The Decree on security was concluded in line with the standards of the International Safety Management Code 1998 (the ISM Code), International Maritime Organization (IMO) Assembly Resolution A.847(20), IMO Assembly Resolution A.884(21), IMO Assembly Resolution A.851(20), IMO Assembly Resolution A.852(20) and IMO Assembly Resolution A.912(22).
The administrators of maritime ports are authorised to control safety within the territory of a maritime port. The harbour masters provides security over the territorial waters and the waters of the maritime ports. The safety regime in Ukraine has no distinctive features that differ from international standards.
Anyone engaged in international shipping that plans to enter the territorial waters of Ukraine should be mindful that, in the event of any violation of safety standards, the vessel concerned will be detained by the harbour master.
ii Port state control
The State Service for Marine and River Transport of Ukraine (the Maritime Administration) is a central executive body whose activities are directed and coordinated by the government of Ukraine through the Minister of Infrastructure, and which implements state policy in the areas of sea and river transport, merchant shipping, navigation on inland waterways, navigational and hydrographic navigation facilities, and in the field of safety in sea and river transport (except for the safety of navigation of ships in the fishing industry).
The Maritime Administration has obtained the following authorities:
- to provide fulfilment of obligations arising from Ukraine's membership of international organisations, whose activities concern sea and river transport, commercial shipping, navigation on inland waterways, and navigational and hydrographic navigation facilities;
- the implementation of state supervision (control) for safety at sea and on river transport, for merchant shipping, navigation on inland waterways, and navigational and hydrographic provision of navigation (except for fishing vessels of the fishing fleet); and
- to carry out the supervision of the state of sea routes, the operation of the services of regulating the movement of ships and pilotage, among other things.
Information regarding the detention of ships is not public. When a ship's violation is detected by the authorities, the ship's agent and the master receive a demand to correct the violation or pay a fine. Ships may be detained by the harbour master based on a refusal to respond to such a demand.
iii Registration and classification
An application for registration must include the following documents:
- State Shipping Registry of Ukraine questionnaire;
- a copy of the document confirming ownership;
- a copy of the tonnage certificate;
- a copy of the certificate of seaworthiness or classification survey certificate;
- (for a passenger vessel) a copy of the passenger certificate;
- a copy of the manning certificate;
- a copy of the civil liability insurance policy (or other similar document) held by the shipowner against damage from oil pollution under the international treaties to which Ukraine is a signatory;
- a temporary certificate of the right to sail under the Ukrainian flag (if any);
- a document confirming the vessel's encumbrances or the absence thereof;
- a copy of a document of identification of the shipowner; and
- a document that confirms cancellation of the previous registration.
In addition, information about the vessel's function, documents of identification and photographs of the vessel shall be presented. Temporary registration in a bareboat charter requires additional documents, such as a copy of the charter party, written approval from the shipowner and the mortgagee's approval (if applicable). The documentary copies must be certified by a notary or other authorised entity.
The Register of Shipping of Ukraine is a classification society acting in Ukraine. It was created by the Resolution of the Cabinet of Ministers of Ukraine No. 814 of 8 June 1998.
In 2002, the Register developed and approved a concept that established the main directions and procedure for the development of regulatory documents. It is responsible for the classification of all vessels and floating crafts, without exception, and has developed rules for many types and purposes of vessels, such as the 'Rules for the Classification and Construction of Sea-Going Ships, Mixed and Inland Navigation Vessels and Small Vessels' and 'Guidelines for Technical Supervision over the Construction of Ships, Manufacturing of Materials and Products and the Rules for the Inspection of these Vessels'.
To enable the expansion of its activities, the Register has now developed its 'Rules for the classification, construction and equipment of floating drilling rigs and offshore fixed platforms'.
Since being established, the Register of Shipping of Ukraine has become an authoritative classification body with a wide range of activities and powers both in Ukraine and within the international market of classification services.
Currently, the Register also performs conventional surveys and other functions of an organisation recognised in the field of ship security in accordance with the powers delegated to it by such states as Ukraine, Belize, Georgia, Moldova, the Comoros Union and Mongolia.
iv Environmental regulation
The relevant legislation is the Ukrainian Law 'On environmental protection' and MARPOL.
On 9 September 2020, the Cabinet of Ministers of Ukraine issued Resolution No. 802 'About formation of interregional territorial bodies and liquidation of territorial bodies of the State ecological inspection'. The Resolution stated the intention to form the State Ecological Inspection of the South-Western District (Mykolaiv and Odessa regions). The Resolution also prescribed that existing State Ecological Inspectorate in the Odessa region will be wound up.
Authority has passed to the new State Ecological Inspection of the South-Western District (Mykolaiv and Odessa regions) in respect of the environmental protection of waters in the Mykolaiv and Odessa regions, where most ports are located.
Ecological inspectors take measurements of polluting liquids near a ship. If there is sufficient evidence of pollution, the inspector is authorised to board the ship to carry out further inspection. A ship's master's refusal to allow an inspector on board or to carry out an inspection constitutes an administrative offence.
The ecological inspector is authorised to address the following administrative offences and violations:
- violation of another person's right to a secure environment;
- violation of ecological standards;
- providing false information about the environmental status of the vessel;
- violation of demands for environmental security;
- ignoring orders from public authorities regarding environmental security;
- refusal to provide authentic information regarding the environmental state of the vessel and pollution; and
- humiliation of the honour and dignity of an ecological inspector.
If a source of pollution is detected, the ecological inspector will estimate the damage incurred. The shipowner is then issued with a claim, signed by the relevant Ecological Inspection, requesting compensation for the damage with an out-of-court settlement. If the shipowner refuses to pay the stated settlement amount, the Ecological Inspection can initiate detention or arrest of the ship. The practice of arrest removal is permitted. The fines imposed by the Ecological Inspection may be appealed through the administrative court of Ukraine.
v Collisions, salvage and wrecks
Ukraine is a party to the International Convention on Civil Liability for Oil Pollution Damage (the CLC Convention) as of 4 July 2002 and became a party to the 1989 Salvage Convention on 22 March 2017.
Ukraine is also a party to the Agreement on Cooperation regarding Maritime Search and Rescue Services among Black Sea Coastal States 1998, which was ratified on 28 November 2002. The Agreement regulates the procedure for carrying out joint salvage operations.
The law of the flag will regulate the reimbursement for damage or loss caused by the collision of vessels of the same flag in inland waters and territorial waters that does not involve any third parties. If one party to the collision violated the COLREGs, that party will be liable for all damage suffered by other parties.
If a collision results from a force majeure or when the cause of a collision is unknown, the parties cover any loss or damage suffered at their own cost. If one or more parties involved in a collision are in violation of the COLREGs, each party will be liable to an amount equivalent to its guilt or in equal parts. All parties are liable for death or injury suffered by a third party in a collision.
vi Passengers' rights
Ukraine acceded to the Athens Convention on 15 July 1994.
Any passenger transportation agreements limiting passenger rights are assumed to be invalid.
Passenger insurance must be provided for the duration of the passenger transportation agreement. The insurance premium is included in the cost of the ticket. A passenger is entitled to cancel the passenger transportation agreement at any time before the journey starts. In this case, the passenger will receive the money paid for passage and luggage transportation.
vii Seafarers' rights
The Maritime Labour Convention 2006 (MLC) has not been ratified by Ukraine. The status of Ukrainian seafarers is defined by the Merchant Shipping Code of Ukraine, the Code of the Labour Laws of Ukraine and the Ukrainian Law 'On payment of wages'.
The status of the crewing agency is stipulated by the 'licence demands to provide the commercial activity of mediation in employment abroad'.
The provisions of the MLC are applicable to Ukrainian seafarers in the event that the country of the vessel's flag has ratified the Convention.
Ukrainian seafarers are entitled to turn to the Ukrainian courts for protection of their rights. Under Ukrainian employment law, a seafarer may claim the full amount of wages due, remuneration for any period of non-payment of wages and compensation for any personal injury.
A seafarer's relatives (not only the next of kin) are entitled to claim compensation in the event of the death of a seafarer and for any moral damage suffered by seafarers.
The Law 'On Inland Water Transport' No. 1054-IX was adopted by parliament on 3 December 2020 and signed by the President of Ukraine on 30 December 2020.
The Law defines the legal, economic and organisational basis for inland waterway transport activities. It determines the working conditions of water transport and the use of waterways. It also regulated issue concerning sunk vessels and property on inland waterways and the liability of shipowners for violation of legislation on inland waterway transport, among other things.
Furthermore, the Law implements the requirements of the directives and regulations of the European Union in accordance with the Association Agreement with the European Union.
According to the Minister of Infrastructure of Ukraine, the adoption of the Law will help to create healthy competition in the transportation market, improve investment in the inland waterways sector, and stimulate the development of the shipbuilding and ship repair industries. The Law will come into force on 1 January 2022.
Ukraine has already adopted a number of laws that enable safe investment in infrastructure and the shipping industry, which is becoming a very important part of the Ukrainian economy.
1 Evgeniy Sukachev is the senior partner, Anastasiya Sukacheva is a partner and Irina Dolya is an associate at Black Sea Law Company LLC.