History of U.S. Maritime Law ��1-4 Q 1.2 Where did U.S. maritime law come from? ��1-4 Q 1.2.1 What are the main features of English maritime law? ��1-4 Q 1.2.2 How did the English admiralty courts develop? ��1-5 Q 1.2.3 What is the origin of U.S. admiralty courts? ��1-5 Q 1.2.4 What is the extent of federal admiralty jurisdiction? ��1-5

Maritime vs. Non-Maritime Law ��1-6 Q 1.3 How is maritime law different from other law in the United States? ��1-6

Maritime Law Status Today ��1-7 Q 1.4 What is the status of maritime law in the United States? ��1-7 Q 1.4.1 Can maritime law extend to non-maritime activities? ��1-7 Q 1.4.2 What is the relationship between maritime law and state law in the United States? ��1-8

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Chapter 2 Finding Maritime Law

Sources of Maritime Law ��2-2 Q 2.1 What are the sources of U.S. maritime law? ��2-2 Q 2.2 What areas of the law are associated with each source? ��2-2 Q 2.3 What is the basis of judge-made maritime law? ��2-3 Q 2.4 What are the major maritime legislative acts? ��2-3

Impact of International Conventions ��2-4 Q 2.5 What is the impact of international conventions on maritime law? ��2-4

U.S. Agencies Regulating Maritime Law ��2-6 Q 2.6 What are the primary agencies that help shape maritime law? ��2-6

International Law Sources ��2-7 Q 2.7 Where can international conventions and related guidance be found? ��2-7 Q 2.8 How uniform is international maritime law? ��2-8 Q 2.9 How uniform is U.S. maritime law? ��2-9

Chapter 3 What Constitutes a Maritime Contract?

Maritime Contracts Defined ��3-2 Q 3.1 What difference does it make if a contract is a maritime contract? ��3-2 Q 3.2 Is there a general rule for when a contract is a maritime contract? ��3-3 Q 3.3 Which contracts are usually considered maritime contracts? ��3-3 Q 3.4 Which contracts are usually not considered maritime contracts? ��3-3 Q 3.4.1 Can a vessel charter be considered a financing agreement that is not a maritime contract? ��3-4

“Mixed Contracts” ��3-4 Q 3.5 What are “mixed contracts”? ��3-4 Q 3.6 How are “mixed contracts” treated? ��3-5

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Formation ��3-5 Q 3.7 What formalities are required for maritime contracts? ��3-5 Q 3.8 When is a maritime contract formed? ��3-6 Q 3.9 Does a written maritime contract need to be in a single document? ��3-6

Implied Terms ��3-7 Q 3.10 What are some other features of maritime contract law? ��3-7

Enforcement ��3-8 Q 3.11 How are maritime contracts enforced? ��3-8

“Saving to Suitors” Clause ��3-8 Q 3.12 What is the “Saving to Suitors” clause? ��3-8

PART II FOR THE VESSEL OWNER

Chapter 4 Vessel Ownership and Operations

Vessel Ownership Defined ��4-2 Q 4.1 How are vessels owned? ��4-2

Ownership vs. Operation ��4-2 Q 4.2 What is the difference between ownership and operation? ��4-2 Q 4.3 Can someone other than the title holder(s) be considered the “owner” of the vessel? ��4-2 Q 4.4 What is a “bareboat” charter party or charter? ��4-3

Leasing Types ��4-3 Q 4.5 What other forms of charters are used? ��4-3 Q 4.6 Do vessel owners or operators subcontract some of their functions? ��4-4 Q 4.7 How effective are vessel owner, operator and manager structures? ��4-4

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Chapter 5 Vessel Registration

Definition ��5-2 Q 5.1 What is vessel registration? ��5-2 Q 5.1.1 What is a bareboat charter registry? ��5-2 Q 5.2 What national flag does a vessel fly? ��5-3 Q 5.3 Which countries register vessels? ��5-3

Kinds of Registries ��5-3 Q 5.4 What is the difference between an “open registry” and a “national registry”? ��5-3 Q 5.5 What is the origin of open registries? ��5-3 Q 5.6 What are the leading registries in the world? ��5-4

Choosing a Registry ��5-4 Q 5.7 How does an owner choose a registry? ��5-4

Consequences of Registry Choice ��5-5 Q 5.8 What are the consequences of a vessel registry choice? ��5-5 Q 5.9 Can vessels be requisitioned by the countries that register them? ��5-5

Requirements for Registry ��5-6 Q 5.10 What is generally required to register a vessel? ��5-6 Q 5.11 What is required for new construction vessels? ��5-6 Q 5.12 What is required for used vessels? ��5-6 Q 5.13 What is required from the transferring registry? ��5-7

U.S. Registry Requirements ��5-7 Q 5.14 Which U.S. Government agency maintains the U.S. registry? ��5-7 Q 5.15 Which vessels are eligible to be registered by the U.S. Coast Guard? ��5-8 Q 5.16 Does a vessel registered with the U.S. Coast Guard have to be built in the United States? ��5-8 Q 5.17 Which entities qualify as U.S. citizens eligible to register a vessel with the U.S. Coast Guard? ��5-8 Q 5.18 Can a limited liability company register a vessel with the U.S. Coast Guard? ��5-9 Q 5.19 Does a U.S.-registered vessel have to employ a U.S.-citizen crew? ��5-9

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Q 5.20 Are there any exceptions for employing a foreign officer on board a U.S.-flag vessel? ��5-9 Q 5.21 What does the U.S. Coast Guard require to register a vessel? ��5-10

Electronic Filing ��5-11 Q 5.22 Does the U.S. Coast Guard accept electronic filings? ��5-11

Re-Flagging ��5-11 Q 5.23 What U.S. Government approvals are needed to re-flag a U.S. vessel as foreign? ��5-11

Chapter 6 Building a Vessel

In General ��6-2 Q 6.1 Where are commercial vessels built? ��6-2 Q 6.2 Are there shipyards in the United States? ��6-3

Vessel Construction Contracts ��6-3

In General ��6-3 Q 6.3 Is a vessel construction contract a “maritime contract”? ��6-3 Q 6.4 Are standard vessel construction contracts available? ��6-3 Contract Elements ��6-4 Q 6.5 What are the typical elements of a vessel construction contract? ��6-4 Payments ��6-5 Q 6.6 When does the buyer usually pay for the vessel? ��6-5 Passing of Title ��6-5 Q 6.7 When does title usually pass from the shipyard to the buyer? ��6-5 Security Interest ��6-6 Q 6.8 Can a buyer obtain security in a partially completed vessel? ��6-6 Applicable Law ��6-6 Q 6.9 What law applies to U.S. shipbuilding contracts? ��6-6

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Supervision ��6-6 Q 6.10 Who supervises the shipyard during construction? ��6-6 Risk of Loss ��6-7 Q 6.11 Which party has the risk of loss if a vessel is destroyed while under construction? ��6-7 Buyer Rights If Builder Defaults ��6-7 Q 6.12 What are the buyer’s usual rights if the builder defaults? ��6-7 Refunds and Bonds ��6-8 Q 6.13 What is a “refund guarantee”? ��6-8 Q 6.14 What is a “performance bond”? ��6-8 Q 6.15 What is a “payment bond”? ��6-9 Forcing a Delivery ��6-9 Q 6.16 Can a buyer force a shipyard to deliver a vessel? ��6-9 Buyer’s Rights on Default ��6-10 Q 6.17 What are the builder’s usual rights if the buyer defaults? ��6-10

Recording a Mortgage ��6-10 Q 6.18 At what point can a U.S. vessel mortgage be recorded on a vessel under construction? ��6-10

Risk Insurance ��6-11 Q 6.19 Can a vessel purchaser insure against risks to, or related to, the vessel while under construction? ��6-11

Chapter 7 Selling or Purchasing an Existing Vessel

Arranging a Sale ��7-2 Q 7.1 How is the sale and purchase of a vessel usually arranged? ��7-2

Elements and Form of Agreement ��7-3 Q 7.2 What are the basic elements of agreement for a vessel sale and purchase? ��7-3 Q 7.3 Is there a standard form usually used in a vessel purchase and sale? ��7-3

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Offer and Acceptance ��7-3 Q 7.4 Can a contract to sell a vessel be formed without the execution of a contract document? ��7-3 Q 7.4.1 Is a vessel sale contract binding before a Memorandum of Agreement or MOA is signed by both parties? ��7-4

Elements of a Vessel Sale ��7-4

Usual Steps ��7-4 Q 7.5 What are the usual steps in a vessel sale and purchase? ��7-4 Sold “As Is” ��7-5 Q 7.6 What condition must the vessel be in upon delivery from the seller to the purchaser? ��7-5 Q 7.7 Is a vessel sale contract subject to any implied warranties? ��7-6 Inspection of Vessel ��7-7 Q 7.8 Does the purchaser usually inspect the vessel to be purchased? ��7-7 Seller/Buyer Duties ��7-7 Q 7.9 What are the primary duties of the purchaser and seller under a typical vessel sale contract? ��7-7 Vessel Delivery ��7-7 Q 7.10 What happens after the seller tenders the Notice of Readiness of Delivery? ��7-7

Purchaser Rejection ��7-8 Q 7.11 Can the purchaser reject a vessel delivered with a defect that arose after inspection and before delivery? ��7-8

When Risk of Loss Moves to Buyer ��7-8 Q 7.12 What happens if the vessel is damaged after the sale contract is signed, but before the closing? ��7-8

Closing Documents ��7-9 Q 7.13 What documents is the seller usually required to deliver to the purchaser at closing? ��7-9 Q 7.14 How are existing mortgages and liens usually handled in a vessel purchase and sale? ��7-10

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Q 7.15 What happens if the purchaser discovers that the purchased vessel has liens after the purchase? ��7-10

Completing the Sale ��7-11 Q 7.16 At what point in a transaction is a vessel considered “sold”? ��7-11 Q 7.17 What are the duties of the parties if a sale is not consummated? ��7-11 Q 7.18 Under what conditions can a sale contract be canceled without penalty to either party? ��7-12

Tax Considerations ��7-12 Q 7.19 Are there tax considerations in a vessel sale? ��7-12

Chapter 8 Vessel Chartering or Leasing

Charters: In General ��8-2 Q 8.1 Is it possible to have a legally binding oral charter? ��8-2 Q 8.2 Do charters vary by the cargo carried or the type of vessel? ��8-2

Kinds of Charters ��8-3

Bareboat Charter ��8-3 Q 8.3 What distinguishes a bareboat charter from other charters? ��8-3 Space and Other Charters ��8-3 Q 8.4 What is a space charter? ��8-3

Implications of a “Bareboat Charter” ��8-3 Q 8.5 Why is it important whether a charter is considered a bareboat charter? ��8-3 Q 8.6 Will the vessel owner be liable to third parties harmed through the operation of the vessel if the vessel is bareboat-chartered? ��8-4 Q 8.7 In a bareboat charter arrangement, who is usually responsible for the condition of the vessel? ��8-5 Q 8.8 Will the vessel owner be liable to third parties harmed through the operation of the vessel if the vessel is time- or voyage-chartered? ��8-5 Q 8.9 Does a vessel owner have to be concerned about liability when a vessel is bareboat-chartered? ��8-6

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Vessel Owner’s Warranties ��8-6 Q 8.10 Does a vessel owner generally warrant the vessel’s “seaworthiness”? ��8-6

Responsibilities of Owner and Charterer ��8-7 Q 8.11 Is a voyage charterer or time charterer liable for the vessel’s seaworthiness or negligence of the vessel’s crew? ��8-7 Q 8.12 Who is responsible if a change in law during a charter period requires a modification to the vessel under charter? ��8-7 Q 8.13 Who pays for the vessel fuel under various charters? ��8-8 Q 8.14 Who is responsible for the vessel fuel under various charters? ��8-8

Bill of Lading ��8-9 Q 8.15 How do “bills of lading” relate to charters? ��8-9

Terms Commonly Used in a Charter ��8-9 Q 8.16 What are some of the basic charter terms unique to shipping? ��8-9 Q 8.16.1 What is a “hell or high water” charter hire provision? ��8-9 Q 8.16.2 What is “FIO” or “FIOS”? ��8-10 Q 8.16.3 What are “demurrage,” “dispatch” and “lay days”? ��8-10 Q 8.16.4 What is “dead freight”? ��8-11 Q 8.16.5 What is “vetting”? ��8-11 Q 8.16.6 What are “Cesser Clauses”? ��8-11 Q 8.16.7 What is a “Both to Blame” collision clause? ��8-12 Q 8.16.8 What is “general average”? ��8-12 Q 8.16.9 What is a “New Jason clause”? ��8-13

Chapter 9 Crewing a Vessel

Labor Law in a Maritime Context ��9-3 Q 9.1 Are maritime labor laws comparable to landside labor laws? ��9-3 Q 9.2 How did the protection of seamen by courts and the law come about? ��9-3 Q 9.3 What protections are provided to U.S. seamen by statute? ��9-3

Definition of Terms ��9-4 Q 9.4 Who is a “seaman”? ��9-4 Q 9.5 What are crew “shipping articles”? ��9-4

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Paying Seamen’s Wages ��9-4 Q 9.6 Does federal law set out the timing of the payment of seamen’s wages on U.S.-flag vessels? ��9-4 Q 9.7 Does federal law regarding payment of seamen apply to foreign vessels? ��9-5 Q 9.8 When can a vessel owner refuse to pay seamen’s wages? ��9-5 Q 9.9 Do federal seamen wage statutes apply to crew members on fishing vessels? ��9-5 Q 9.10 Do federal seamen wage statutes apply to U.S.-flag vessels engaged in the U.S. coastwise trade? ��9-5 Q 9.11 Do federal seamen wage statutes apply to U.S.-citizen seamen discharged in a foreign port? ��9-6

Overtime ��9-6 Q 9.12 Are seamen entitled to overtime by law? ��9-6

Whistleblower Rights ��9-7 Q 9.13 Are seamen protected if they report vessel safety violations? ��9-7

No Right to Strike ��9-7 Q 9.14 Can seamen strike? ��9-7

The Jones Act ��9-7

Origin and Definition ��9-7 Q 9.15 What is the “Jones Act” with respect to seamen? ��9-7 Q 9.16 What is the origin of the Jones Act for seamen? ��9-8 Seamen’s Benefits ��9-8 Q 9.17 What is “maintenance and cure”? ��9-8 Q 9.18 Who qualifies for seamen’s benefits under maritime law? ��9-8

Not Exclusive Remedy ��9-9 Q 9.19 Is the Jones Act a seaman’s exclusive remedy for injury or death? ��9-9

Damages ��9-9 Q 9.20 What damages are recoverable under the Jones Act? ��9-9

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International Crews ��9-9 Q 9.21 What governs the engagement of seafarers on foreign (non-U.S.) vessels? ��9-9

Required Training ��9-10 Q 9.22 What training are seamen required to have? ��9-10 Q 9.23 Which credentials are required for mariners? ��9-10 Q 9.24 Which regulatory bodies establish the training standards? ��9-11 Q 9.25 What is the STCW? ��9-11 Q 9.26 How are seafarers credentialed under the STCW Code? ��9-12

Maritime Labour Convention ��9-13 Q 9.27 What is the Maritime Labour Convention? ��9-13 Q 9.28 What is the substance of the Maritime Labour Convention? ��9-14 Q 9.28.1 What are the social welfare protections contained in the Maritime Labour Convention? ��9-14 Q 9.29 What vessel certification does the Maritime Labour Convention require? ��9-14 Q 9.30 Do vessels registered in countries that have not ratified the Maritime Labour Convention have to comply with it? ��9-15 Q 9.31 Which countries have ratified the Maritime Labour Convention? ��9-15 Q 9.32 Has the United States adopted the Maritime Labour Convention? ��9-15

Chapter 10 Insuring a Vessel

Insurable Risks ��10-2 Q 10.1 What risks does a vessel face that insurance might cover? ��10-2

Applicable Law ��10-3 Q 10.2 What law applies to marine insurance? ��10-3 Q 10.3 How are marine insurance contracts interpreted? ��10-3

Definitions ��10-4 Q 10.4 What does it mean that marine insurance is usually “pay to be paid”? ��10-4 Q 10.5 What is uberrimae fidei? ��10-4

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Marine Insurance Providers ��10-4 Q 10.6 What entities provide marine insurance and how do they do so? ��10-4 Q 10.7 What is the International Group of P&I Clubs? ��10-5

Kinds of Marine Insurance ��10-6 Q 10.8 What are the main types of marine insurance? ��10-6

Policy Clauses ��10-7

Owner Warranties ��10-7 Q 10.9 What warranties does a vessel owner usually give to the insurance provider? ��10-7 Prompt Notice ��10-8 Q 10.10 Does an insured need to give prompt notice of a claim? ��10-8 “Insurable Interest” ��10-8 Q 10.11 Is it necessary that the insured have an “insurable interest”? ��10-8 Losses Covered ��10-8 Q 10.12 What losses does protection and indemnity insurance cover? ��10-8 Q 10.13 What losses does hull and machinery insurance cover? ��10-8 Actual vs. Constructive Total Loss ��10-9 Q 10.14 What is a “constructive total loss”? ��10-9 “Institute Clauses” ��10-9 Q 10.15 What are “Institute Clauses” or “Institute Warranties”? ��10-9 Collisions ��10-9 Q 10.16 Do hull and machinery policies cover vessel collisions? ��10-9 Wreck Removal ��10-10 Q 10.17 Is the insurer liable to pay for wreck removal in the event of a serious accident? ��10-10 Subrogation Rights ��10-10 Q 10.18 Do marine insurance policies contain subrogation rights? ��10-10

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War Risks ��10-10 Q 10.19 Do marine insurance policies cover risks arising from war or violence? ��10-10 Q 10.20 How do vessel owners cope with war- or terrorism-related risks? ��10-11 Q 10.21 Does the U.S. Government provide war risk insurance to vessel owners? ��10-11 Pollution Risks ��10-11 Q 10.22 Which marine insurance policies cover pollution-related risks? ��10-11

Other Kinds of Insurance ��10-12 Q 10.23 What other types of marine insurance are available? ��10-12

Chapter 11 Sources of Government Regulation of Vessels

Which Countries Can Regulate Vessels? ��11-2

Port vs. Flag State ��11-2 Q 11.1 Which countries regulate vessels? ��11-2 Q 11.2 What is the relationship between flag-state and port-state vessel regulation? ��11-2 Limitations on U.S. Port-State Regulation ��11-3 Q 11.3 What are the limits of U.S. port-state regulation with respect to foreign vessels? ��11-3 Q 11.4 Can the U.S. Government regulate the foreign vessel cruise industry serving the U.S. market? ��11-3

Applicable Regulation ��11-4

International Standards ��11-4 Q 11.5 What is the source of standards applicable to vessels? ��11-4 Q 11.6 What is the “IMO”? ��11-4 Q 11.7 What are the principal international maritime conventions? ��11-4 Q 11.8 How are international conventions implemented in the United States? ��11-6

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Q 11.9 How are international maritime conventions enforced in practice? ��11-6 Q 11.9.1 Is there an international convention dealing with polar conditions? ��11-7 U.S. Regulators ��11-7 Q 11.10 Which federal agencies are involved in vessel inspections? ��11-7 Inspection of U.S. Towing Vessels ��11-8 Q 11.11 When did the U.S. Coast Guard commence inspecting towing vessels? ��11-8 Q 11.12 To which vessels does subchapter M apply? ��11-9 Q 11.13 How do vessels comply with subchapter M? ��11-9

Chapter 12 Environmental Regulation

Regulated Vessel Discharges ��12-3 Q 12.1 Which vessel discharges and emissions are regulated? ��12-3

Applicable U.S. Laws ��12-4

In General ��12-4 Q 12.2 What are the primary federal environmental laws governing vessels? ��12-4

Oil Pollution Regulation—OPA 90 ��12-4 Q 12.3 What are the main sources of law governing oil pollution from vessels? ��12-4 Q 12.4 What is the rule on the discharge of oil into U.S. waters? ��12-5 Q 12.5 What is the U.S. legal standard of a “harmful quantity” of oil? ��12-5 Q 12.6 What is the relationship between OPA 90 and the Clean Water Act? ��12-6 Q 12.7 What are the major areas covered in OPA 90? ��12-6 Q 12.8 What is the relationship between OPA 90 and state laws? ��12-7 Q 12.9 Which other federal laws may potentially apply to oil spills? ��12-8

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Regulation of Other Water Pollutants ��12-8 Q 12.10 What else may not be discharged into U.S. waters under the Clean Water Act? ��12-8 General Liability Theory ��12-8 Q 12.11 What is the general liability theory of OPA 90? ��12-8 “Responsible Party” ��12-9 Q 12.12 Who is a “responsible party” for an oil spill from a vessel? ��12-9 Q 12.13 Does the vessel owner remain a responsible party when a vessel is demise-chartered to a third party? ��12-9 Q 12.14 Is the lender/owner under a lease-finance arrangement a “responsible party”? ��12-9 Q 12.15 Does a responsible party have to be negligent to be liable for an oil spill? ��12-10 Liability Limitations ��12-10 Q 12.16 Is there a limit to the costs and damages payable by the responsible party to the federal government? ��12-10 Q 12.17 Are the OPA 90 limits on liability subject to exceptions? ��12-11 Q 12.18 Is there a limit to the costs and damages payable by the responsible party to other persons? ��12-12 Punitive Damages ��12-12 Q 12.19 Can a responsible party be exposed to punitive damages for an oil spill? ��12-12 Q 12.20 How does the Limitation on Liability Act work in an oil spill context? ��12-13 Defenses to Liability ��12-13 Q 12.21 Does a responsible party have any defenses in the event of a spill? ��12-13 Q 12.22 Do vessel owners or operators have to be able to show an ability to pay potential OPA 90 costs and damages? ��12-14 Criminal Sanctions ��12-14 Q 12.23 Could criminal sanctions apply to oil spills? ��12-14 Removal Actions ��12-14 Q 12.24 Who is responsible for undertaking removal actions? ��12-14 Q 12.25 Who is responsible for coordinating a spill response? ��12-15

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Oil Spill Liability Trust Fund ��12-15 Q 12.26 What is the Oil Spill Liability Trust Fund? ��12-15 Practical Concerns Regarding Oily Water Discharges ��12-15 Q 12.27 How concerned should vessel owners and operators be about operational discharges of oil and oily water in violation of MARPOL? ��12-15 Q 12.28 What are the common MARPOL oil and oily water discharge violations? ��12-16 Q 12.29 How—and why—do personnel violate MARPOL machinery space regulations? ��12-18 Q 12.30 How can companies be held vicariously criminally liable for the misconduct of crewmembers? ��12-19 Q 12.31 What is the cause of continuing MARPOL violations and prosecutions? ��12-20

Ballast Water Discharges ��12-22

Sources of Law ��12-22 Q 12.32 What are the main sources of law governing ballast water discharges from vessels? ��12-22 Q 12.33 What is the difference between Coast Guard ballast water regulations and the BWM Convention? ��12-22 Why Regulated ��12-22 Q 12.34 Why is ballast water regulated? ��12-22 High Seas Ballast Water Exchange ��12-23 Q 12.35 What are the basic requirements of the National Invasive Species Act of 1996? ��12-23 Q 12.36 Is high seas ballast water exchange always mandatory under NISA? ��12-24 Ballast Water Management Program Requirement ��12-24 Q 12.37 What actions has the U.S. Coast Guard taken since making high seas ballast water exchange mandatory? ��12-24 Q 12.38 What does the Coast Guard’s 2012 ballast water rule require? ��12-24 Q 12.39 When will vessels be required to have Coast Guard–approved ballast water management systems? ��12-25

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EPA Requirements ��12-25 Q 12.40 How is the Environmental Protection Agency regulating ballast water? ��12-25 Q 12.41 What discharge limits does the Vessel General Permit contain? ��12-26 Q 12.42 Does the Vessel General Permit apply to small commercial vessels? ��12-28 Q 12.43 How well coordinated are Coast Guard and EPA ballast water enforcement regimes? ��12-28 International Requirements ��12-29 Q 12.44 What international requirements apply to ballast water discharges? ��12-29

Air Emissions from Vessels ��12-29 Q 12.45 What are the main sources of law governing air emissions from vessels? ��12-29 Q 12.45.1 What is the low 2020 sulfur limit on vessel air emissions? ��12-30 Required Certificates and Records ��12-30 Q 12.45.2 What certificates are vessels required to have to comply with Annex VI? ��12-30 Q 12.45.3 Are vessel operators required to maintain Annex VI compliance records? ��12-31 Inspections ��12-31 Q 12.45.4 Are vessels subject to inspection for Annex VI compliance? ��12-31 Q 12.45.5 What should a vessel owner do when there is no compliant fuel available? ��12-32 ECAs ��12-32 Q 12.45.6 What is an “ECA”? ��12-32 Q 12.45.7 Where are the MARPOL Annex VI ECAs? ��12-32 Q 12.45.8 How does the ECA sulfur limit relate to the 2020 worldwide low sulfur limit? ��12-32

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Chapter 13 Vessel Security, Piracy and Stowaways

In General ��13-2 Q 13.1 Who is responsible for the security of the vessel? ��13-2

Regulation: MTSA and ISPS ��13-2

Adoption ��13-2 Q 13.2 How did the events of 9/11 affect government regulation of vessels? ��13-2 Q 13.3 When did MTSA and ISPS go into effect? ��13-3 MTSA and ISPS Requirements ��13-3 Q 13.4 What is the purpose of MTSA and ISPS? ��13-3 Q 13.5 What are the general requirements of MTSA? ��13-3 Q 13.6 How does ISPS relate to MTSA? ��13-3 Vessel Security Plan ��13-4 Q 13.7 Which vessels must have vessel security plans? ��13-4 Q 13.8 What are the basic elements of a vessel security plan? ��13-4 International Ship Security Clearance ��13-4 Q 13.9 What is the consequence if a vessel arrives in port without a valid International Ship Security Certificate? ��13-4 Crew Shore Leave ��13-5 Q 13.10 How did MTSA affect the ability of vessel crews to go ashore? ��13-5 Q 13.11 What notice of arrival requirements apply to vessels arriving in U.S. waters? ��13-5

Piracy ��13-5

Defined ��13-5 Q 13.12 What is piracy? ��13-5 Q 13.12.1 How prevalent is piracy around the world? ��13-6 U.S. Regulation ��13-6 Q 13.12.2 What does U.S. law provide with respect to piracy? ��13-6 Q 13.12.3 What definition of “piracy as defined by the law of nations” have U.S. courts applied? ��13-7

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Q 13.12.4 Are there any proposals to change the U.S. definition of “piracy”? ��13-7 Q 13.12.5 Which country has jurisdiction to prosecute an act of piracy on the high seas? ��13-7 Measures to Protect Against Piracy Risks ��13-8 Q 13.12.6 How do vessel operators and charterers manage piracy risks? ��13-8 Q 13.12.7 What is the international norm for engaging security guards on a vessel? ��13-8 Q 13.12.8 What rights does a vessel crew have to defend itself from piracy? ��13-9 Q 13.12.9 What regulatory requirements apply to U.S.-flag vessels regarding defending against piracy? ��13-9 Ransom Demands and Insurance ��13-9 Q 13.12.10 Are vessel owners entitled to pay pirates ransom to recover captured vessels and crew? ��13-9 Q 13.12.11 Can a vessel owner obtain insurance to cover ransom payments? ��13-10 Piracy vs. Barratry ��13-10 Q 13.12.12 How is “piracy” different from “barratry”? ��13-10

Stowaways ��13-10 Q 13.13 Who is responsible for vessel stowaways? ��13-10

Chapter 14 Vessel Classification

Defined ��14-2 Q 14.1 What is vessel classification? ��14-2 Q 14.1.1 What is the purpose of vessel classification? ��14-2

Classification Societies ��14-3 Q 14.2 How did vessel classification get started? ��14-3 Q 14.3 How are vessel classification societies regulated? ��14-3 Q 14.4 Which are the major vessel classification societies? ��14-3 Q 14.5 How important are classification societies to the worldwide maritime industry? ��14-4

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Classification ��14-4

Certificates ��14-4 Q 14.6 How does the classification system work? ��14-4 Q 14.7 What sort of certificates are issued by classification societies? ��14-5 Notations ��14-5 Q 14.8 What notations are used by classification societies to indicate compliance with society rules? ��14-5 Government Regulation and Societies ��14-6 Q 14.9 Is a classed vessel subject to government inspection? ��14-6 Q 14.10 Are certain government inspections delegated to classification societies? ��14-6 Q 14.11 Does vessel classification substitute for good vessel owner practices? ��14-7 Class Liability for an Accident ��14-7 Q 14.12 Are vessel classification societies liable if the vessel is in an accident? ��14-7

Chapter 15 Economic Trading Restrictions—The Cabotage Jones Act

Definition of “Cabotage” ��15-2 Q 15.1 What is “cabotage”? ��15-2

The “Jones Act” ��15-2 Q 15.2 What is the cabotage “Jones Act”? ��15-2 Q 15.3 What does the Jones Act restrict? ��15-3 Q 15.4 Which countries have maritime cabotage laws? ��15-3 Q 15.5 What is the origin of the Jones Act’s restrictions? ��15-3 Q 15.6 What is the purpose of the Jones Act? ��15-3

Other U.S. Cabotage Laws ��15-3 Q 15.7 Are there other U.S. cabotage laws like the Jones Act? ��15-3 Q 15.8 Is there a “Jones Act” for fishing? ��15-4

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Penalties ��15-4 Q 15.9 What are the penalties for violating the Jones Act and related laws? ��15-4 Q 15.10 Can a Jones Act vessel lose its eligibility? ��15-4

Regulating Agencies ��15-5 Q 15.11 Which federal agencies have regulatory authority in connection with the Jones Act? ��15-5 Q 15.11.1 What is “JADE”? ��15-5

Qualifying Vessels ��15-6 Q 15.12 Which vessels can qualify under the Jones Act? ��15-6 Q 15.13 Are there any exceptions to the U.S.-build requirement in the Jones Act? ��15-6 Q 15.14 When is a vessel disqualified by being “rebuilt” foreign? ��15-6 Q 15.15 Does the Coast Guard provide advance “U.S.-build” guidance? ��15-7 Q 15.16 Does a vessel have to qualify under the Jones Act if it is not documented with the U.S. Coast Guard? ��15-7

U.S. Citizenship Requirements ��15-7 Q 15.17 Who can qualify to own and operate a Jones Act vessel? ��15-7 Q 15.18 Are there exceptions to the Jones Act U.S. citizenship requirements? ��15-7 Q 15.19 Does the Jones Act prohibit foreign investment in U.S. maritime companies? ��15-8 Q 15.20 Can a public company qualify as a Jones Act U.S. citizen? ��15-8

Waiver ��15-8 Q 15.21 Can the Jones Act be waived? ��15-8 Q 15.22 Is there a waiver process for small passenger vessels? ��15-9

Offshore Application of the Jones Act ��15-9 Q 15.23 Does the Jones Act extend offshore? ��15-9 Q 15.24 Does the Jones Act extend to offshore alternative energy projects? ��15-10

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Definitions ��15-10

“Cruise to Nowhere” ��15-10 Q 15.25 What is a “cruise to nowhere”? ��15-10 “Marine Highway” ��15-11 Q 15.26 What are “marine highways”? ��15-11 “Fair Inference Rule” ��15-11 Q 15.27 What is the “fair inference rule”? ��15-11

Chapter 16 U.S. Government Support for U.S. Vessels

Background ��16-3 Q 16.1 Why does the U.S. Government support privately owned vessels? ��16-3

Government Support Programs—General ��16-3 Q 16.2 What are the main U.S. Government support programs for foreign trading vessels? ��16-3 Maritime Security Program ��16-3 Q 16.3 What is the Maritime Security Program? ��16-3 Q 16.3.1 What is the history of the Maritime Security Program? ��16-4 Q 16.3.2 How does the Maritime Security Program work? ��16-4 Q 16.3.3 What payment does the U.S. Government provide under the Maritime Security Program? ��16-4 Q 16.3.4 Which vessels are eligible for the Maritime Security Program? ��16-5 Q 16.3.5 When are vessels selected for the Maritime Security Program? ��16-5 Q 16.3.6 Who is eligible for the Maritime Security Program? ��16-5 Q 16.3.7 Is the Maritime Security Program limited to U.S. citizens? ��16-6 Q 16.3.8 Do Maritime Security Program vessels have to be built in the United States? ��16-6 Q 16.3.9 Can a Maritime Security Program vessel operate in the U.S. domestic trade? ��16-6

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Q 16.3.10 Are Maritime Security Program vessels committed to the U.S. Government in times of national emergency? ��16-7 Q 16.3.11 Is it possible to enter into a VISA Agreement and commit vessel capacity without having a Maritime Security Program vessel? ��16-7 Q 16.3.12 Are Maritime Security Program Agreements transferable? ��16-7 Q 16.3.13 What is the inspection standard applicable to foreign-built vessels entering the Maritime Security Program? ��16-7 Cargo Preference ��16-8 Q 16.4 What is cargo preference? ��16-8 Q 16.4.1 What are the current cargo preference laws and requirements? ��16-9 Q 16.4.2 What is the purpose of cargo preference? ��16-9 Q 16.4.3 How important is cargo preference to the maintenance of a U.S.-flag fleet? ��16-10 Q 16.4.4 How does cargo preference relate to the Maritime Security Program? ��16-10 Q 16.4.5 Does a U.S.-flag foreign-built vessel qualify to carry U.S. Government reserved cargoes? ��16-10 Q 16.4.6 Can a foreign-built vessel be modified outside the United States and qualify to carry U.S. Government reserved cargoes? ��16-10 Q 16.4.7 Are U.S.-flag rates limited under cargo preference law? ��16-11 Q 16.4.8 Does cargo preference apply to the import of goods used on federal highways? ��16-11 Q 16.4.9 What is the “McCumber Amendment”? ��16-11

Vessel Repair Duty ��16-11 Q 16.5 What is the vessel repair duty applicable to U.S.-flag vessels? ��16-11 Q 16.5.1 Does the repair duty apply to all countries? ��16-12 Q 16.5.2 Does the repair duty apply to all foreign shipyard work? ��16-12 Q 16.5.3 What if the U.S.-flag vessel never returns to the United States? ��16-12 Q 16.5.4 How does a vessel owner apply for relief from the vessel duty? ��16-13

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Chapter 17 Taxes

The Tonnage Tax ��17-2 Q 17.1 What special tax provisions apply to U.S.-flag vessel owners? ��17-2 Q 17.1.1 How does the tonnage tax work? ��17-2 Q 17.1.2 Does the tonnage tax apply to all vessel-related income? ��17-2 Q 17.1.3 How does a vessel owner or operator elect to operate under the tonnage tax? ��17-3 Q 17.1.4 Can a vessel owner or operator switch back and forth between the tonnage tax and federal income tax? ��17-4 Q 17.1.5 Can a partnership or a limited liability company vessel owner take advantage of the tonnage tax? ��17-4

Tax Provisions for Resident Owners of Foreign-Flag Vessels ��17-4 Q 17.2 What special tax provisions apply to U.S. resident owners of foreign-flag vessels? ��17-4 Q 17.2.1 What is “subpart F”? ��17-4 Q 17.2.2 What is the history of foreign-source income taxation for U.S. resident vessel owners? ��17-5 Q 17.2.3 What is “foreign base company shipping income”? ��17-5 Q 17.2.4 Might foreign shipping-related income still be encompassed by subpart F? ��17-5 Q 17.2.5 How did the 2017 tax changes affect subpart F shipping income? ��17-6

PART III FOR THE VESSEL BANKER

Chapter 18 Ownership Considerations

Vessel Ownership Considerations for a Banker ��18-2 Q 18.1 What should a banker consider before owning a vessel? ��18-2 Potential Liabilities ��18-2 Q 18.2 Is a banker open to all potential liabilities arising from a vessel if it is the vessel’s owner? ��18-2 Q 18.3 What other liabilities might affect a banker as owner? ��18-2

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Shield for Non-Managers ��18-3 Q 18.4 How does federal law shield a banker as vessel owner? ��18-3

Other Considerations ��18-3 Q 18.5 What else should a banker consider before owning a vessel? ��18-3

Chapter 19 Maritime Liens

Definition ��19-2 Q 19.1 What is a “maritime lien”? ��19-2

Recordation ��19-2 Q 19.2 Must maritime liens be perfected by recordation? ��19-2 Q 19.2.1 Can a maritime lien be created by agreement? ��19-3

Pre-Existing Liens ��19-3 Q 19.3 When a vessel is sold, does that extinguish existing maritime liens on that vessel? ��19-3

Termination of a Lien ��19-3 Q 19.4 How is a maritime lien terminated or destroyed? ��19-3 Q 19.5 How can a maritime lien be extinguished by laches? ��19-4

What a Lien Applies To ��19-4 Q 19.6 Does a maritime lien apply to the vessel’s equipment and what the vessel might earn? ��19-4 Q 19.7 Does a maritime lien apply to leased equipment on board the vessel at the time the vessel is arrested? ��19-4 Q 19.8 Can a carrier obtain a maritime lien? ��19-5

Applicable Law ��19-5 Q 19.9 What law applies to the creation of maritime liens? ��19-5 Q 19.9.1 What are the relevant factors courts use to determine the applicable law in admiralty? ��19-6 Q 19.10 What law applies to maritime liens in the United States? ��19-6 Q 19.10.1 Can the choice of law have significance with regard to maritime liens? ��19-6

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Maritime Lien Act ��19-7 Q 19.10.2 Which claims give rise to maritime liens under the Maritime Lien Act? ��19-7 “Necessaries” ��19-7 Q 19.10.3 What is the meaning of “necessaries”? ��19-7 Q 19.10.4 Can anyone order necessaries on behalf of a vessel and have such order give rise to a maritime lien? ��19-8 Q 19.10.5 How has the authority to order necessaries been construed in the O.W. Bunker bankruptcy? ��19-8 Lien Prioritization ��19-8 Q 19.10.6 How are maritime liens prioritized among potential vessel claims? ��19-8 Q 19.10.7 How are maritime liens prioritized within each rank category? ��19-9 Q 19.10.8 Can maritime liens be filed and recorded with the Coast Guard? ��19-9

Lien Enforcement ��19-10 Q 19.11 How are maritime liens enforced? ��19-10 Q 19.12 Who may assert a maritime lien against a vessel? ��19-10

Chapter 20 Vessel Mortgages

In General ��20-2 Q 20.1 What is a ship mortgage? ��20-2

Preferred Ship Mortgages ��20-3

Defined ��20-3 Q 20.2 What makes a ship mortgage a preferred ship mortgage? ��20-3 Consequences of Preferred Ship Mortgage Status ��20-3 Q 20.3 What are the consequences of a ship mortgage being a preferred ship mortgage? ��20-3 Governing Law ��20-4 Q 20.4 What law governs preferred ship mortgages in the United States? ��20-4

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Requirements for Preferred Status ��20-5 Q 20.5 What requirements must be satisfied to create a valid preferred ship mortgage under U.S. law? ��20-5 Recording Requirements ��20-5 Q 20.6 What are the recording requirements for a U.S. preferred ship mortgage? ��20-5 Q 20.7 How is a U.S. preferred ship mortgage actually recorded? ��20-6 Q 20.8 Can the Coast Guard reject a mortgage filing as defective? ��20-6 Q 20.9 What does it mean for a filing to be in “substantial compliance” with the recording requirements? ��20-6 Citizenship Requirements ��20-6 Q 20.10 Does the mortgagee have to be a U.S. citizen for a U.S.-flag vessel mortgage? ��20-6 Special Requirements for Fishing Vessel Over 100 Feet ��20-7 Q 20.11 What are the requirements for the mortgagee of a fishing vessel over 100 feet in length? ��20-7 Q 20.12 Can a mortgage on a non-U.S. vessel be a preferred mortgage under U.S. law? ��20-8 How Does It Work? ��20-8 Q 20.13 How does a preferred ship mortgage work? ��20-8 Q 20.14 Can a preferred ship mortgage cover more than one vessel? ��20-8 Q 20.15 Were vessel mortgages recognized as creating maritime liens under common law? ��20-8 Terms of Preferred Ship Mortgages ��20-9 Q 20.16 What are the usual terms contained in a preferred ship mortgage? ��20-9 Q 20.17 Is a preferred ship mortgage a “stand-alone” document? ��20-12

Mortgage Enforcement ��20-12 Q 20.18 How are preferred ship mortgages enforced in the United States? ��20-12 Q 20.19 What actions does a court take to enforce a mortgage? ��20-13

Priority Against Other Claims ��20-13 Q 20.20 What is the priority of a preferred ship mortgage with regard to other claims against the vessel? ��20-13

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Q 20.21 What is included within the coverage of a preferred ship mortgage? ��20-14

Assignment ��20-14 Q 20.22 Can a preferred ship mortgage be assigned? ��20-14

Enforcement by Non-Citizen ��20-14 Q 20.23 How does a non-citizen mortgagee enforce a preferred ship mortgage on a U.S.-flag vessel in the coastwise trade? ��20-14

Termination and Release ��20-15 Q 20.24 How is a preferred ship mortgage terminated? ��20-15 Q 20.25 Can a mortgagee release some but not all of the vessels under a preferred fleet mortgage? ��20-15

Enforcing a Foreign Mortgage ��20-15 Q 20.26 Are the procedures for foreign preferred ship mortgages the same? ��20-15

Chapter 21 What a Banker Needs to Know About Marine Insurance

In General ��21-2 Q 21.1 Does a mortgagee have an insurable interest in a vessel? ��21-2

Covered by Owner’s/Operator’s Policy ��21-2 Q 21.2 How is a lender’s interest protected under marine insurance in practice? ��21-2 Q 21.3 What steps does a lender take to be protected under an owner/operator’s marine insurance policies? ��21-3 Q 21.3.1 What terms are found in an Assignment of Insurances? ��21-3 Q 21.3.2 What provisions are commonly found in a Broker’s Letter of Undertaking? ��21-4 Q 21.3.3 How is an Assignment of Insurances negotiated? ��21-5

Impact of Default by Policy Owner ��21-6 Q 21.4 Is a banker’s interest in a vessel protected if the vessel owner or operator defaults under the insurance policy? ��21-6

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Q 21.5 Does an “additional assured” have rights under the insurance policy? ��21-6 Q 21.6 How can a banker protect its interest in the vessel from the possibility of vessel owner or operator default? ��21-6 Q 21.7 How does mortgagee’s interest and innocent owner’s interest insurance work? ��21-6

Pollution Claims ��21-7 Q 21.8 Can a mortgagee protect its interest from pollution claims? ��21-7

Vessel Under Construction ��21-8 Q 21.9 How can a banker protect its interest in a vessel under construction? ��21-8

Impact of Insolvency ��21-8 Q 21.10 Does marine insurance continue to apply if the insured becomes insolvent? ��21-8 Q 21.11 How does a lender get the benefit of marine insurance when buying a marine loan package from a previous lender? ��21-8

Chapter 22 Bankruptcy

In General ��22-2 Q 22.1 What makes maritime bankruptcies challenging? ��22-2

Impact of a Bankruptcy Filing ��22-3 Q 22.2 Does the filing of a bankruptcy petition in the United States affect ongoing admiralty proceedings against the debtor’s property? ��22-3 Q 22.3 Does the filing of a bankruptcy petition terminate maritime liens? ��22-3

Bankruptcy Court Jurisdiction ��22-4

Over Debtor’s Property Outside of United States ��22-4 Q 22.4 Does a U.S. bankruptcy court have jurisdiction over debtor’s property outside the United States? ��22-4

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Q 22.5 Are vessel mortgagees prevented from enforcing their mortgages by the bankruptcy automatic stay? ��22-5 Q 22.6 How can a debtor protect against vendors arresting vessels in foreign jurisdictions? ��22-5 Q 22.6.1 Can a lien holder subject to the bankruptcy court jurisdiction protect its interest when the vessel is arrested in a foreign court? ��22-5 Q 22.6.2 What are the critical steps in balancing the bankruptcy case with the foreign vessel arrest case? ��22-6 Over Maritime Liens ��22-7 Q 22.7 Does a U.S. bankruptcy court have jurisdiction over maritime liens? ��22-7 Q 22.8 Do maritime liens arise in the ordinary course after the filing of a bankruptcy petition? ��22-7 Over Maritime Liens Outside of United States ��22-8 Q 22.9 Does a U.S. bankruptcy court have jurisdiction over maritime liens outside the United States when the creditor has not filed a claim? ��22-8

Impact on Payments for Necessities ��22-8 Q 22.10 Are payments made by a debtor for vessel necessities prior to the filing of a bankruptcy petition voidable preferential transfers? ��22-8

Charter Obligations Under Bankruptcy ��22-9 Q 22.11 Must the bankrupt vessel owner continue to perform existing charters of vessels? ��22-9

Status of Bareboat Charters ��22-9 Q 22.12 How are vessels bareboat-chartered to the bankrupt debtor treated by bankruptcy courts? ��22-9

Priority and Sale ��22-10 Q 22.13 Does a bankruptcy court apply the order of priority of maritime liens otherwise applicable to such liens? ��22-10 Q 22.14 Does a U.S. bankruptcy court have the authority to sell a vessel free and clear of all liens? ��22-10 Q 22.15 What are the unique risks presented by a maritime-related bankruptcy? ��22-10

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Q 22.16 How can a vessel owner protect its vessels from arrest when faced with competing claims for payment in a maritime-related bankruptcy? ��22-11 Q 22.17 How are maritime companies valued in a U.S. bankruptcy? ��22-11

O.W. Bunker Bankruptcy ��22-12 Q 22.18 What is the O.W. Bunker bankruptcy? ��22-12 Q 22.19 What is the significance of the O.W. Bunker bankruptcy? ��22-12 Q 22.20 How have the courts resolved the disputes between physical suppliers and O.W. Bunker’s creditors? ��22-13

Jones Act Company Bankruptcies ��22-13 Q 22.21 What is the main difference between the bankruptcy of a non-U.S. vessel owning company and a Jones Act company? ��22-13 Q 22.22 How are citizenship issues generally resolved in the case of a bankrupt Jones Act company? ��22-14

Chapter 23 Federal Government Vessel Financing Programs

U.S. Government Financing Programs ��23-2 Q 23.1 What financing programs does the U.S. federal government maintain to support U.S.-flag shipping? ��23-2

Title XI Government Guarantee Financing ��23-2

In General ��23-2 Q 23.2 What is Title XI government guarantee financing? ��23-2 Q 23.2.1 How active has the Title XI program been? ��23-3 Approval/Denial Timing ��23-3 Q 23.2.2 How long does the Title XI application review process take? ��23-3 Eligible Vessels and Technology ��23-3 Q 23.2.3 Which vessels are eligible for Title XI guarantee financing? ��23-3 Q 23.2.4 What types of shipyard technology investments are eligible for Title XI guarantee financing? ��23-3

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“Actual Cost” Defined ��23-4 Q 23.2.5 How does the law define “actual cost” which can be financed? ��23-4

Capital Construction Fund ��23-4

In General ��23-4 Q 23.3 What is the Capital Construction Fund program? ��23-4 Federal Agencies ��23-5 Q 23.3.1 Which federal agencies administer CCF? ��23-5 Who Can Enter into CCF Agreements? ��23-5 Q 23.3.2 How many companies are parties to CCF agreements? ��23-5 Q 23.3.3 Which persons are eligible to enter into a CCF agreement? ��23-5 Permitted Sources and Uses of Funds ��23-6 Q 23.3.4 What are permitted sources of CCF deposits? ��23-6 Q 23.3.5 What are permitted CCF uses of funds? ��23-6 Q 23.3.6 Is there an exception for the use of CCF for certain short sea shipping activities? ��23-6 Q 23.3.7 Can a CCF be utilized for offshore supply vessels and crew boats? ��23-6 Q 23.3.8 Is there a penalty if a vessel built with CCF funds is used in the prohibited contiguous trade? ��23-7 Q 23.3.9 How long can CCF fund balances be maintained without being used? ��23-7 Q 23.3.10 Can CCF be utilized to refinance a vessel? ��23-7 Q 23.3.11 Can CCF agreements and fund balances be transferred? ��23-7 Q 23.3.12 What is the penalty for unqualified CCF withdrawals? ��23-7

Capital Reserve Fund Program ��23-8 Q 23.4 What is the Capital Reserve Fund program? ��23-8 Q 23.4.1 What are CRF qualified purposes? ��23-8 Q 23.4.2 What is the tax benefit of a CRF? ��23-8 Q 23.4.3 How long can CRF funds be kept on deposit? ��23-8

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PART IV FOR SHIPPERS OF GOODS AND COMMODITIES

Chapter 24 Players and Terms in International Cargo Shipping

Players in International Shipping ��24-2

Four Categories ��24-2 Q 24.1 What players are involved in the world of international shipping? ��24-2 Player Definitions ��24-2 Q 24.1.1 What sort of persons are “vessel interests”? ��24-2 Q 24.1.2 What sort of persons are “cargo interests”? ��24-3 Q 24.1.3 Is an ocean “carrier” the same as a “shipper”? ��24-3 Q 24.1.4 What other interests are involved in international shipping? ��24-3 Q 24.1.5 What is an “ocean tramp”? ��24-3 Q 24.1.6 What is a “liner” vessel? ��24-4 Q 24.1.7 What is a “common carrier”? ��24-4 Q 24.1.8 What are “ocean transportation intermediaries” or “OTIs”? ��24-4 Q 24.1.9 What is an “ocean freight forwarder”? ��24-4 Q 24.1.10 What is a “non-vessel operating common carrier” or “NVOCC”? ��24-5 Brokers ��24-5 Q 24.1.11 What role do freight brokers play? ��24-5 Cargo Surveyors ��24-5 Q 24.1.12 What functions do cargo surveyors perform? ��24-5 Chart of Involved Parties ��24-6 Q 24.1.13 Who are the other parties involved in maritime transportation? ��24-6 Table 24-1: Maritime Transportation Overview ��24-6

Trade Terms ��24-11

Source ��24-11 Q 24.2 What is the source of common international trade terms? ��24-11

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Terms Specifically Applicable to Maritime Transport ��24-12 Q 24.2.1 Which terms apply specifically to maritime transport? ��24-12 Terms Applicable to All Modes of Transport ��24-12 Q 24.2.2 Which terms apply to all modes of transport? ��24-12

Chapter 25 Government Economic Regulation of Liner Shipping

Federal Laws Applicable to Liner Shipping ��25-2 Q 25.1 What are the U.S. economic laws governing liner shipping? ��25-2 Definitions ��25-2 Q 25.2 What is a “liner”? ��25-2 Q 25.3 What is an “ocean tramp” service? ��25-3 Q 25.4 What is a “conference”? ��25-3 Q 25.5 What is a “shipping alliance”? ��25-4

Liner Antitrust Immunity ��25-4 Q 25.6 What antitrust immunity has been accorded ocean liner companies? ��25-4 Q 25.7 How has antitrust immunity changed over time? ��25-4 Q 25.8 What antitrust immunity is currently available to ocean carriers? ��25-5

Federal Maritime Commission (FMC) ��25-5 Q 25.9 Which government agency regulates ocean common carriage? ��25-5 FMC Filings ��25-5 Q 25.10 What kinds of agreements must be filed with the FMC? ��25-5 Q 25.11 Do tariffs have to be filed with the FMC? ��25-8 Service Contracts with Vessel Operating Common Carriers ��25-9 Q 25.12 What are “service contracts”? ��25-9 Q 25.12.1 Do service contracts have to be filed with the FMC? ��25-9 Q 25.12.2 Are any commodities exempt from service contract filing requirements? ��25-10

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Other Agreements ��25-10 Q 25.13 Do marine terminal operator agreements have to be filed with the FMC? ��25-10 Q 25.14 Do charter parties have to be filed with the FMC? ��25-10 Q 25.15 What is the effect of filing a subject agreement with the FMC? ��25-11 Q 25.16 What is the process for FMC review of common carrier agreements? ��25-11 Pre-Filing Discussion ��25-11 Q 25.17 May ocean common carriers discuss issues related to their service prior to providing notice to the FMC? ��25-11 Q 25.18 Have tariffs become irrelevant with the prevalence of service agreements? ��25-12 Q 25.19 What is a “rules tariff”? ��25-12 Shipper Agreements with Non-Vessel Operating Common Carriers (NVOCCs) ��25-12 Q 25.20 Do NVOCCs offer agreements similar to service contracts with VOCCs? ��25-12 Q 25.21 What is a NVOCC Service Arrangement? ��25-12 Q 25.22 Does a NVOCC have to file its NSAs with the FMC? ��25-13 Q 25.23 What is a NVOCC Negotiated Rate Arrangement? ��25-13 Q 25.24 Does a NVOCC have to file its NRAs with the FMC? ��25-14 Other Regulated Entities ��25-15 Q 25.25 What other ocean shipping matters are subject to federal economic regulation? ��25-15 Q 25.26 How are ocean transportation intermediaries regulated? ��25-15 Q 25.27 How are “controlled carriers” regulated? ��25-15 FMC Enforcement Authority ��25-15 Q 25.28 What enforcement authority does the FMC have? ��25-15 Q 25.29 What rights does a private party have if a common carrier, ocean transportation intermediary, or marine terminal operator violates the Shipping Act? ��25-17 “Just and Reasonable” Rates ��25-18 Q 25.30 What is a “just and reasonable” level with regard to rates or charges? ��25-18 Q 25.31 What happens if a controlled carrier maintains rates or charges below a just or reasonable level? ��25-18

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Chapter 26 Bills of Lading

Definition ��26-2 Q 26.1 What is a “bill of lading”? ��26-2

Carriers and Shippers ��26-2 Q 26.2 Who are the parties to a bill of lading? ��26-2 Q 26.3 Who issues the bill of lading? ��26-3 Q 26.4 Can an ocean transportation intermediary such as a “Non-Vessel Operating Common Carrier” be considered a “carrier”? ��26-3 Q 26.5 Can an ocean transportation intermediary such as a freight forwarder be considered a “carrier”? ��26-3

Governing Law ��26-3 Q 26.6 What law governs ocean bills of lading in U.S. trade? ��26-3 Q 26.7 How do the Harter Act, COGSA and Pomerene Act apply to today? ��26-4 Q 26.8 What are the “Hague,” “Hague-Visby” and “Hamburg” rules? ��26-4 Q 26.9 What are the “Rotterdam Rules”? ��26-4 Q 26.10 How do the Rotterdam Rules compare to COGSA? ��26-5 Q 26.11 Does COGSA apply to inland transportation? ��26-5

Negotiable vs. Non-Negotiable ��26-6 Q 26.12 What is the difference between a “negotiable” bill of lading and “non-negotiable” bill of lading? ��26-6 Q 26.13 How does the type of bill of lading affect who is the proper recipient of the goods? ��26-6 Q 26.14 What is a “straight” bill of lading? ��26-6 Q 26.15 What is a “through” bill of lading? ��26-6

Duties Under a Bill of Lading ��26-7 Q 26.16 What are the primary duties of the carrier under a bill of lading? ��26-7 Q 26.17 What are the primary duties of the shipper under a bill of lading? ��26-7

Required Information ��26-8 Q 26.18 What information must a bill of lading contain? ��26-8 Q 26.19 How are bills of lading generally interpreted? ��26-8

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Chapter 27 Liabilities and Defenses of Carriers

Carrier Liabilities...... 27-2 Q 27.1 Can a carrier impose exculpatory clauses on a shipper under current law?...... 27-2 Q 27.2 Can a carrier require a shipper to obtain cargo-related insurance for the benefit of the carrier?...... 27-2 Q 27.3 Is a carrier strictly liable for loss or damage to cargo under COGSA?...... 27-3 Q 27.4 Can an ocean carrier be liable for misdelivery of goods?...... 27-3 Q 27.5 Can the ocean carrier delegate its duty to load and stow the cargo on the vessel?...... 27-3

Carrier Defenses...... 27-3 Q 27.6 In general, what defenses does a carrier have under COGSA?...... 27-3 Q 27.6.1 Is the carrier liable for losses where the vessel is unseaworthy?...... 27-4 Q 27.6.2 Is the carrier liable for losses where the crew is inadequate or makes mistakes?...... 27-4 Q 27.6.3 How does a carrier assert a defense against a claim of vessel unseaworthiness?...... 27-4 Q 27.6.4 Is the carrier responsible for properly caring for the cargo on board the vessel?...... 27-5 Q 27.6.5 Does the carrier have a defense in the event of a vessel fire?...... 27-5 Q 27.6.6 What is the “perils of the sea” defense?...... 27-5 Q 27.6.7 Are carriers responsible when the goods themselves have inherent defects?...... 27-6 Q 27.6.8 Is there a “catch-all” defense available to carriers? ��27-6 Q 27.6.9 Can a carrier contract away its COGSA defenses? ��27-6 Q 27.6.10 Does a carrier potentially lose its defenses if the vessel engages in a deviation? ��27-6

Multiple Causes of Accident ��27-7 Q 27.7 How is fault assessed when there is more than one accident cause? ��27-7

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Measuring Damages ��27-7

Cargo Damaged or Lost ��27-7 Q 27.8 How are damages measured when cargo is damaged or lost? ��27-7 Q 27.9 Is a shipper stuck with COGSA limits of liability? ��27-7 Delayed Delivery ��27-8 Q 27.10 Can a shipper recover damages for a delivery delay? ��27-8

Making a Claim ��27-9 Q 27.11 What does a shipper have to do to make a claim for damaged cargo? ��27-9

COGSA Time Limits ��27-10 Q 27.12 What is the time limit for recovery pursuant to COGSA? ��27-10

Chapter 28 Marine Cargo Insurance

Definition ��28-2 Q 28.1 What is marine cargo insurance? ��28-2

Who Can Obtain? ��28-3 Q 28.2 Who can procure marine cargo insurance? ��28-3

Types of Insurance ��28-3 Q 28.3 What types of cargo insurance policies are available? ��28-3 Q 28.4 Do all-risks and named peril insurance policies work the same way? ��28-3 Q 28.5 Which marine cargo insurance policy offers the broadest coverage? ��28-4 Q 28.6 What marine cargo insurance policy offers the least coverage? ��28-4

Standard Insurance Terms ��28-4 Q 28.7 What are the Institute Clauses A, B and C? ��28-4 Q 28.8 What is “with average”? ��28-5 Q 28.9 How are war-related risks covered? ��28-5

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Coverage Differences ��28-5 Q 28.10 What other circumstances are covered by Institute Clauses? ��28-5 Q 28.11 When does marine cargo insurance begin to apply and when does it end? ��28-5 Q 28.12 Does a cargo owner need to arrange insurance for every shipment? ��28-5 Q 28.13 Are all cargo insurance policies the same for all cargoes? ��28-6 Q 28.14 Are cargo owners limited to “Institute” clauses? ��28-6

Procuring Marine Cargo Insurance ��28-7 Q 28.15 How does a cargo owner procure cargo insurance? ��28-7 Q 28.16 Are cargo policies “standard”? ��28-7 Q 28.17 What is the measure of damages available to be paid for lost cargo? ��28-7

Cargo Owner’s Obligation When Loss Discovered ��28-8 Q 28.18 What is the cargo owner’s obligation with regard to a claim? ��28-8

Chapter 29 Bulk Cargo Shipping

In General ��29-2 Q 29.1 What sort of cargoes are transported in bulk? ��29-2 Q 29.2 What agreement is usually utilized to ship bulk cargoes? ��29-2

Voyage Charter Typical Terms ��29-2 Q 29.3 What are the typical terms in a voyage charter? ��29-2

Loading/Discharging Bulk Cargoes ��29-3 Q 29.4 Who is responsible for arranging for the loading and discharging of bulk cargoes? ��29-3

Timing of Delivery ��29-3 Q 29.5 How is the timing of the delivery of bulk cargoes handled in charters? ��29-3

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Safe Place to Load/Unload ��29-3 Q 29.6 Under a voyage charter, who is responsible for ensuring that the vessel will have a safe place to load and unload its cargo? ��29-3

Late Vessels and Cargo Shortage ��29-4 Q 29.7 Can the charterer cancel a charter if the vessel is late? ��29-4 Q 29.8 What happens when the shipper fails to ship the agreed amount of cargo? ��29-4 Q 29.9 Does COGSA apply to charters for the carriage of bulk cargo? ��29-5

PART V WHEN THINGS GO WRONG

Chapter 30 Maritime Torts

Definitions...... 30-2

“Tort”...... 30-2 Q 30.1 What is a “tort”?...... 30-2 Q 30.2 When is a “tort” a “maritime tort” and within maritime jurisdiction?...... 30-2 “Navigable Waters”...... 30-3 Q 30.3 What are “navigable waters”?...... 30-3 “Maritime Connection”...... 30-4 Q 30.4 How is an incident described when evaluating its “maritime connection”?...... 30-4 “Impact on Maritime Commerce”...... 30-4 Q 30.5 What matters have an “impact on maritime commerce”?...... 30-4 “Traditional Maritime Activity”...... 30-5 Q 30.6 What matters are “traditional maritime activity”?...... 30-5 Q 30.7 What water-related torts are not “maritime torts”?...... 30-5 Q 30.8 Do maritime torts necessarily involve vessels?...... 30-6

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Impact of Plaintiff’s Negligence...... 30-6 Q 30.9 How does maritime law treat the negligence of a plaintiff?...... 30-6

Standard for Determining Negligence...... 30-7 Q 30.10 How is negligence determined in maritime law?...... 30-7

Chapter 31 Maritime Case Forums

Jurisdiction in General ��31-2 Q 31.1 What courts have jurisdiction to hear maritime cases? ��31-2 State Court Jurisdiction ��31-3 Q 31.2 What maritime cases can be tried in state courts? ��31-3 Exclusive Federal Jurisdiction ��31-3 Q 31.3 What types of cases are really subject to exclusive admiralty jurisdiction in federal courts? ��31-3

Policy for Jurisdiction ��31-4 Q 31.4 Why are some maritime cases exclusively federal and others are not? ��31-4

Impact of State vs. Federal Jurisdiction ��31-5 Q 31.5 Does the forum of a maritime case make any difference? ��31-5

Judge Only or Jury Trial ��31-6 Q 31.6 Can a maritime case be tried to a jury? ��31-6

Choice of Forum ��31-7 Q 31.7 Who decides which court will handle the case? ��31-7 Q 31.8 Can the likely defendant from a maritime accident ever pick the forum? ��31-8 Q 31.9 How can a claimant in a limitation case avoid the federal maritime court and get a jury? ��31-8

Removal to Federal Court ��31-9 Q 31.10 If the plaintiff chooses state court, can the defendant remove it to federal court? ��31-9

Maritime Law Answer Book 2020

Related State Law Claims ��31-11 Q 31.11 Does a federal court hearing an admiralty case have the jurisdiction to hear related state law claims? ��31-11

Unlimited Venue in Federal Court ��31-11 Q 31.12 Can a maritime claim be brought in any federal court with jurisdiction? ��31-11

Maritime Cases in Foreign Courts ��31-12 Q 31.13 Can maritime cases be brought in foreign courts? ��31-12

Chapter 32 Maritime Litigation

Creating a Maritime Case ��32-2

Rule 9(h) Election ��32-2 Q 32.1 When is a federal case a maritime case? ��32-2 Overturning a 9(h) Election ��32-3 Q 32.2 Can a defendant overturn a Rule 9(h) election? ��32-3 Effect of 9(h) Election ��32-3 Q 32.3 What is the effect of a Rule 9(h) election? ��32-3 Third Parties ��32-4 Q 32.4 Can a third party be brought into a federal maritime case? ��32-4

Supplemental Rules ��32-5 Q 32.5 Are maritime cases subject to a special set of rules? ��32-5

Pleadings in Maritime Cases ��32-6 Q 32.6 Are maritime pleadings in federal court subject to special rules? ��32-6

Statutes of Limitations ��32-7 Q 32.7 How long does a plaintiff have to file a case in a maritime forum? ��32-7

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Claims Against the United States ��32-9 Q 32.8 Can a person bring a maritime claim against the United States? ��32-9 Q 32.9 What is the limitation period for maritime claims against the United States? ��32-10

Other Considerations ��32-10 Q 32.10 Is a party to a maritime case subject to general jurisdiction if the party appears to defend against a maritime attachment or maritime arrest? ��32-10 Q 32.11 Can a party to a maritime case appeal an interlocutory decision of the court? ��32-11 Q 32.12 What types of damages are available in maritime cases? ��32-11 Q 32.13 Is prejudgment interest available in maritime cases? ��32-12 Q 32.14 What are some other characteristic features of maritime practice? ��32-12

Chapter 33 Choice of Law

General Rule ��33-3 Q 33.1 What law applies to a maritime contract? ��33-3 Q 33.2 What cases are “inherently local”? ��33-3 Q 33.3 What is the federal interest in a “uniform maritime law”? ��33-3 Q 33.4 What happens if there is not any maritime law on the point at issue? ��33-4

Marine Insurance Cases ��33-4 Q 33.5 Are marine insurance contracts governed by federal maritime law? ��33-4

Federal vs. State Law in Maritime Cases ��33-5 Q 33.6 Does federal maritime law displace state law in other (non-contract) cases? ��33-5 Q 33.7 Can state law claims be brought in a maritime tort case? ��33-6 Q 33.8 Do federal maritime regulations preempt state law maritime regulations? ��33-6 Q 33.9 Are the lines between federal law and state law always clear? ��33-7 Q 33.10 What law governs cases on the outer continental shelf? ��33-7

Maritime Law Answer Book 2020

Which State Law Governs When Multiple States Are Involved? ��33-7 Q 33.11 What state law governs in cases involving multiple states? ��33-7

International Maritime Disputes ��33-8 Q 33.12 What law governs in international maritime disputes? ��33-8

Contractual Choice-of-Law Provisions ��33-9 Q 33.13 Are contractual choice-of-law clauses valid and enforced? ��33-9 Q 33.14 What are the risks of a contractual choice-of-law clause? ��33-10

Chapter 34 Collisions

Definitions ��34-2 Q 34.1 What is a “collision” under maritime law? ��34-2 Q 34.2 What is an “allision”? ��34-2

Fault ��34-2 Q 34.3 How is fault for a collision determined? ��34-2 Q 34.4 When is fault not “proximate fault”? ��34-3

Presumptions of Fault ��34-4

Navigation Rules ��34-4 Q 34.5 What are the maritime navigation rules? ��34-4 Q 34.6 How do the COLREGS/NAVRULES apply to collision cases? ��34-5 Other Presumptions ��34-5 Q 34.7 What other presumptions are used in collision cases? ��34-5 Q 34.8 How are presumptions used in a collision case? ��34-6 Q 34.9 Can a presumption be rebutted? ��34-7 Q 34.10 What are other bases of fault in a collision? ��34-7

Defenses to Fault ��34-8 Q 34.11 What are the defenses to fault in a collision? ��34-8 Q 34.12 What is an error “in extremis”? ��34-8

Liability ��34-9 Q 34.13 How is liability for a collision determined? ��34-9

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Joint and Several Liability ��34-9 Q 34.14 What happens when there are multiple parties at fault? ��34-9 Q 34.15 How are damages allocated for cargo damaged in a collision? ��34-10

Chapter 35 Salvage and General Average

Salvage ��35-2

Definition ��35-2 Q 35.1 What is “salvage” under maritime law? ��35-2 When Payable ��35-2 Q 35.2 When is a salvage award payable? ��35-2 Determination of Award ��35-3 Q 35.3 How is the amount of a salvage award determined? ��35-3 Q 35.4 Does a salvor get an award—or an increased award—for preventing pollution from a vessel? ��35-4 Q 35.5 What happens if a salvor ignores the environmental harm from a damaged or sinking vessel? ��35-5 Q 35.6 Does a salvor get an award for saving lives? ��35-5 Salvage Circumstances ��35-6 Q 35.7 What happens in a salvage situation? ��35-6 Crew Member Award ��35-7 Q 35.8 Can a crew member get a salvage award? ��35-7 Industry Standard Salvage Form ��35-7 Q 35.9 What is a “Lloyd’s Open Form”? ��35-7 “Contract Salvage” ��35-8 Q 35.10 What is “contract salvage”? ��35-8 Who Pays ��35-9 Q 35.11 Who pays the salvage award? ��35-9 Time Limit for Claim ��35-10 Q 35.12 What is the time limit for bringing a salvage claim? ��35-10

Maritime Law Answer Book 2020

General Average ��35-10

Definition ��35-10 Q 35.13 What is “general average”? ��35-10 Determination of Share ��35-11 Q 35.13.1 How are general average shares determined? ��35-11 Q 35.13.2 How does general average work? ��35-11 “New Jason Clause” ��35-11 Q 35.13.3 What is a “New Jason Clause” and what does it have to do with general average? ��35-11

Chapter 36 Personal Injury

Available Remedies ��36-2 Q 36.1 What remedies are available to injured seamen? ��36-2

Categories of Persons on Vessels ��36-3 Q 36.2 How are persons on vessels classified for purposes of determining their remedies for injuries on vessels? ��36-3

Seamen ��36-4

Definition ��36-4 Q 36.3 Who are “seamen” entitled to seamen’s remedies? ��36-4 Who is a Seaman? ��36-5 Q 36.4 Does a person have to navigate a vessel to be a seaman? ��36-5 Q 36.5 Does a person have to be on a ship for a certain period of time before the person is a seaman? ��36-5 Q 36.6 Does a person have to work on one particular vessel? ��36-6 Q 36.7 Is a vessel pilot a “seaman” under the Jones Act? ��36-6 Examples of Seamen and Non-Seamen ��36-6 Q 36.8 Does work on a barge count as work on a vessel? ��36-6

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Maintenance and Cure ��36-8

Definition ��36-8 Q 36.9 What is maintenance and cure? ��36-8 Q 36.10 For how long is a seaman entitled to maintenance and cure? ��36-8 Covered Injuries ��36-8 Q 36.11 Are all injuries to seamen covered by maintenance and cure? ��36-8 Effect of Seaman’s Negligence ��36-9 Q 36.12 Is maintenance and cure still payable if the seaman was injured due to the seaman’s own negligence? ��36-9 How Much is Payable for Maintenance and Cure, and Who Pays ��36-10 Q 36.13 How much does a seaman receive for maintenance and cure? ��36-10 Q 36.14 Who is responsible to pay maintenance and cure? ��36-10 Q 36.15 What happens if an injury is caused through the fault of someone else? ��36-11 Q 36.16 Can a seaman seek punitive damages in addition to a maintenance and cure claim? ��36-11 Which Courts Have Jurisdiction? ��36-11 Q 36.17 What courts have jurisdiction to try a maintenance and cure action? ��36-11 Q 36.18 Does a claim for maintenance and cure bar a Jones Act claim? ��36-11

Warranty of Seaworthiness ��36-12

Definition ��36-12 Q 36.19 What is the warranty of seaworthiness? ��36-12 Elements of a Claim ��36-12 Q 36.20 What does a seaman have to prove to establish a claim for unseaworthiness? ��36-12 Who Can Be Sued? ��36-12 Q 36.21 Who can be sued for an unseaworthiness claim? ��36-12

Maritime Law Answer Book 2020

Damages ��36-13 Q 36.22 What damages are available for an unseaworthiness claim? ��36-13 Court Jurisdiction ��36-13 Q 36.23 What courts have jurisdiction to try an unseaworthiness action? ��36-13 Q 36.24 Can a seaman sue for unseaworthiness and later sue for negligence under the Jones Act? ��36-13

Jones Act Claim ��36-13

Definition ��36-13 Q 36.25 What is a Jones Act claim? ��36-13 Elements of a Claim ��36-14 Q 36.25.1 What does a seaman have to prove to establish a Jones Act claim? ��36-14 Burden of Proof ��36-14 Q 36.25.2 What is the burden of proof for a Jones Act claim? ��36-14 Q 36.25.3 Can a seaman still recover under the Jones Act if the seaman was negligent? ��36-14 Q 36.25.4 What injuries are compensable under the Jones Act? ��36-15 Damages ��36-16 Q 36.25.5 What damages are available under the Jones Act? ��36-16 Q 36.25.6 Can a seaman claim a maritime lien under the Jones Act? ��36-16 Court Jurisdiction ��36-16 Q 36.25.7 What courts have jurisdiction to try a Jones Act action? ��36-16 Foreign Seamen ��36-17 Q 36.25.8 Can a foreign seaman bring a claim for seamen’s remedies? ��36-17 Q 36.25.9 What law applies to a Jones Act case involving a foreign seaman? ��36-17 Q 36.26 Does a Jones Act claim have to be tried separately? ��36-18

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Chapter 37 Limitation of Liability

Shipowner’s Limitation of Liability Act ��37-3

In General ��37-3 Q 37.1 Can a vessel owner limit its liability from risks involved in the ownership of vessels? ��37-3 Q 37.2 What types of claims are subject to limitation? ��37-3 Limit on Liability ��37-3 Q 37.3 What are the general limits on the vessel owner’s liability under the Limitation Act? ��37-3 Q 37.3.1 What are the limits on the vessel owner’s liability for personal injury or death under the Limitation Act? ��37-4 Q 37.4 If the owner is able to limit its liability, does the owner’s liability insurance have to pay more than the limitation amount? ��37-4 Standard for Limited Liability ��37-5 Q 37.5 What are the circumstances under which a vessel owner can limit its liability? ��37-5 Q 37.6 What does it mean for something to be “without the privity or knowledge of the owner”? ��37-5 Specific Situations ��37-6 Q 37.7 Can the owner limit its liability if the vessel is not seaworthy? ��37-6 Q 37.7.1 Are the acts or knowledge of the master attributable to the owner to defeat limitation of liability? ��37-7 Q 37.7.2 What other acts are attributable to an owner to defeat the right of limitation of liability? ��37-7 Q 37.8 Can an owner reduce the risk of liability by reducing its involvement in vessel management? ��37-8 Other Exclusions from the Act ��37-9 Q 37.9 What types of losses are subject to limitation under the Limitation Act? ��37-9 Q 37.10 Are only maritime claims subject to limitation under the Limitation Act? ��37-9

Maritime Law Answer Book 2020

Rule F Proceeding ��37-10

Limitation Proceeding ��37-10 Q 37.11 How are the vessel owner’s rights under the Limitation Act implemented? ��37-10 Q 37.12 What if the vessel owner does not believe that its vessel is at fault in the accident at issue? ��37-10 Who Is Covered? ��37-10 Q 37.13 Who can take advantage of the Limitation Act? ��37-10

Procedure ��37-11

Initiating the Procedure ��37-11 Q 37.14 How does a limitation proceeding” work? ��37-11 Q 37.15 When can the vessel owner file a “petition for limitation”? ��37-12 Q 37.16 When does the six-month period of time to file a limitation action start? ��37-12 Q 37.17 Is the six-month time period to file a limitation action jurisdictional? ��37-13 Content of “Complaint for Limitation” ��37-13 Q 37.18 What goes into the “complaint for limitation or exoneration”? ��37-13 Limitation Fund ��37-14 Q 37.19 What is the “limitation fund”? ��37-14 Q 37.20 How does a “complaint for limitation” expedite resolution of claims from a maritime accident? ��37-15 The Answer ��37-15 Q 37.21 How does a claimant participate in the limitation proceeding? ��37-15 Effect of Judgment ��37-15 Q 37.22 What is the effect of a judgment in a limitation proceeding? ��37-15 Third-Party Participation ��37-16 Q 37.23 Can other parties participate in a limitation proceeding? ��37-16 Which Court? ��37-17 Q 37.24 What courts have venue for limitation proceedings? ��37-17

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Right to Jury ��37-17 Q 37.25 Is there a right to a jury in a limitation proceeding? ��37-17 Trial Procedure ��37-18 Q 37.26 How does a limitation trial typically proceed? ��37-18

Impact of Verdict ��37-19 Q 37.27 If the owner’s vessel is found responsible, but the owner is granted limitation, how is the limitation fund divided among the claimants? ��37-19 Q 37.28 What circumstances may lead a court to exonerate the vessel and its owner? ��37-20 Q 37.29 What circumstances may lead a court to deny exoneration but allow limitation to the vessel owner? ��37-20

Policy Reasons Behind the Limitation Act ��37-20 Q 37.30 What are the policy reasons behind the Limitation Act? ��37-20

Multinational Interests ��37-22 Q 37.31 What law applies to a limitation proceeding involving multinational interests? ��37-22

International Limitation of Liability Law ��37-22 Q 37.32 What is the international law of limitation of liability? ��37-22 Q 37.33 What are the limits of a vessel owner’s liability under the International Convention on Limitation of Liability for Maritime Claims? ��37-23

Chapter 38 Maritime Arrest

Definition ��38-2 Q 38.1 What is a “maritime arrest”? ��38-2

“Order for Maritime Arrest” ��38-3

Obtaining ��38-3 Q 38.2 How does a claimant get an “Order for Maritime Arrest”? ��38-3 Q 38.3 What rights does a plaintiff have if the judge denies an application for a warrant of maritime arrest? ��38-3

Maritime Law Answer Book 2020

Q 38.4 Does the vessel owner have the right to argue against the signing of the warrant of maritime arrest? ��38-4 Implementing the Order to Arrest ��38-4 Q 38.5 What happens after the judge signs the Order for Maritime Arrest? ��38-4 Q 38.6 How is a vessel actually arrested? ��38-5 Q 38.7 Who controls a vessel that is under arrest? ��38-5 Controlling Procedural Rules ��38-7 Q 38.8 What rules govern the procedure for a maritime arrest? ��38-7 Activity Post-Arrest ��38-7 Q 38.9 What happens after a vessel is arrested? ��38-7 Q 38.10 Can a person be liable for arresting a vessel if the arrest is vacated? ��38-8 Agreement to Release Vessel ��38-8 Q 38.11 If the arrest is sustained, must the vessel remain in limbo until the case is decided? ��38-8 Q 38.12 What is a “Letter of Undertaking”? ��38-8

Maritime Arrest Trial ��38-9 Q 38.13 How is a maritime arrest adjudicated? ��38-9

Payment of Judgment ��38-9 Q 38.14 How are claims paid if the judge decides in favor of one or more of the claimants? ��38-9 Q 38.15 In what order are maritime lien claims paid? ��38-10 Q 38.16 What happens if a party with a maritime lien claim against the vessel decides not to join in the lawsuit against the vessel in rem? ��38-11

International Arrest ��38-11 Q 38.17 Are the procedures in other countries the same? ��38-11 Q 38.18 How does a buyer of a vessel from a foreign judicial sale know if the vessel will be free of prior liens? ��38-11

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Chapter 39 Maritime Attachment

Definition ��39-3 Q 39.1 What is a “maritime attachment”? ��39-3

Property That May Be Attached ��39-4 Q 39.2 What types of property may be attached? ��39-4 Q 39.3 What is “garnishment” and is it different from “attachment”? ��39-4

Effect of Attachment ��39-5 Q 39.4 What is the effect of a maritime attachment? ��39-5

Purpose of Attachment ��39-5 Q 39.5 What is the purpose of maritime attachment? ��39-5 Q 39.6 Do the purposes of maritime attachment matter? ��39-5

When Available ��39-6 Q 39.7 When is maritime attachment available? ��39-6 Q 39.8 Must the property to be attached be related to the claim? ��39-7

“Writ of Maritime Attachment” ��39-7

Procedure ��39-7 Q 39.9 How does a claimant get a “Writ of Maritime Attachment”? ��39-7 “Attorney’s Affidavit” ��39-8 Q 39.10 What goes into the “Attorney’s Affidavit”? ��39-8 Q 39.11 What must be submitted with the Verified Complaint and the Attorney’s Affidavit? ��39-9 Request for Immediate Attachment ��39-11 Q 39.12 What are exigent circumstances supporting a request for immediate issuance of “Process of Maritime Attachment”? ��39-11

Property Issues ��39-12

After-Acquired Property ��39-12 Q 39.13 Does “Process of Maritime Garnishment” reach after-acquired property? ��39-12

Maritime Law Answer Book 2020

Bank Funds ��39-12 Q 39.14 What happens if a bank turns over after-acquired property in response to a garnishment order? ��39-12 Q 39.15 How do plaintiffs “catch” bank deposits by maritime garnishment? ��39-12 Q 39.16 Does the defendant have the right to argue against the signing of the Order for Issuance of Process of Attachment (or Garnishment)? ��39-13

Implementing a Signed Order ��39-14 Q 39.17 What happens after the judge signs the “Order for Issuance of Process of Attachment”? ��39-14 Q 39.18 Who can serve as a “Special Process Server”? ��39-14 Q 39.19 What happens when a vessel is attached? ��39-14 Q 39.20 Who controls a vessel that has been attached? ��39-15 Q 39.21 How is intangible property actually garnished? ��39-15

The Lawsuit—Post-Attachment ��39-15 Q 39.22 What happens after property is attached? ��39-15

Vacating an Attachment ��39-16 Q 39.23 Can a plaintiff defeat maritime attachment by showing that it is not necessary or equitable? ��39-16 Q 39.24 What are the few limited circumstances where an otherwise valid maritime attachment will be vacated? ��39-16 Jurisdiction ��39-17 Q 39.25 Can an otherwise valid maritime attachment be upheld if the court finds that it lacks maritime jurisdiction? ��39-17 Q 39.26 Must an underlying case have a connection to the district where Process of Maritime Attachment is sought? ��39-18 Choice of Forum ��39-18 Q 39.27 Can a maritime attachment be vacated by showing a contractual choice of forum agreement? ��39-18 Concurrent Litigation ��39-19 Q 39.28 Can a maritime attachment be vacated if the parties are already in litigation or arbitration in some other jurisdiction or forum? ��39-19

Table of Contents

The Garnishee ��39-19 Q 39.29 What are the responsibilities of a garnishee? ��39-19 Q 39.30 What is “fair game” for interrogatories served on a garnishee? ��39-20 Q 39.31 Who pays the costs incurred by the garnishee? ��39-20

Governing Rules for a Maritime Attachment ��39-20 Q 39.32 What rules govern the procedure for a maritime attachment or garnishment? ��39-20

Liability for Improper Attachment ��39-21 Q 39.33 Can a person be liable for attaching property if the attachment is vacated? ��39-21

Agreement to Release Attached Property ��39-21 Q 39.34 If an attachment is upheld, must the property remain in custody until the case is decided? ��39-21 Q 39.35 What is a Letter of Undertaking? ��39-22

Adjudicating the Case ��39-22 Q 39.36 How is a maritime attachment case adjudicated? ��39-22 Q 39.37 Can a maritime attachment case be joined with a maritime arrest case? ��39-23 Q 39.38 Can a maritime attachment case be tried to a jury? ��39-24

Chapter 40 Cargo and Charter Dispute Resolution

In General ��40-2 Q 40.1 How do cargo disputes come about? ��40-2

Initiating the Case ��40-3 Q 40.2 What law governs the shipment of cargo? ��40-3 Q 40.3 Does COGSA take priority over “choice of law” clauses that choose a different law? ��40-3 Q 40.4 Do cargo cases subject to COGSA have to be brought in the United States? ��40-3 Q 40.5 When must a shipper give notice of damage? ��40-3

Maritime Law Answer Book 2020

Q 40.6 How much time does a shipper have to file suit or start arbitration? ��40-4 Q 40.7 How is a cargo case initiated? ��40-4

Defendants and Burden of Proof ��40-4 Q 40.8 Who are the proper defendants in a cargo claim case? ��40-4 Q 40.9 Who bears the initial burden of proof in a cargo damage claim? ��40-5

Defeating Liability ��40-5 Q 40.10 Can the carrier defeat liability once the shipper has established its initial case? ��40-5 Q 40.11 Does a plaintiff have a duty to mitigate its damages? ��40-7

Procuring Evidence of Damage ��40-7 Q 40.12 How does the shipper get evidence of damage? ��40-7 Q 40.13 What is a joint survey? ��40-8

Liability Limits ��40-8 Q 40.14 What are the limitations of the carrier’s liability? ��40-8 Q 40.15 What is a “customary freight unit”? ��40-8 Q 40.16 Can the shipper avoid the carrier’s limitation of liability by suing the subcontractors for damage? ��40-9

Other Sources of Liability ��40-10 Q 40.17 Is the carrier responsible for damage caused by subcontractors? ��40-10 Q 40.18 Is the carrier liable if the delivery takes too long? ��40-11

Service Agreements ��40-11 Q 40.19 What is the effect of a service agreement or contract of affreightment? ��40-11

Arbitration ��40-11 Q 40.20 How are charter disputes typically resolved? ��40-11

Table of Contents

Chapter 41 Maritime Arbitration

In General ��41-3 Q 41.1 When can a claim be taken to arbitration? ��41-3 Q 41.2 What law governs the enforcement of maritime arbitration agreements? ��41-3

Arbitration Agreement Requirements ��41-3 Q 41.3 Does an agreement to arbitrate have to be in writing? ��41-3 Q 41.4 Is there a specific form of writing that is required for an agreement to arbitrate? ��41-3 Q 41.5 Does an arbitration agreement have to be signed? ��41-4

Impact of an Arbitration Agreement ��41-5 Q 41.6 What is the scope of an agreement to arbitrate? ��41-5 Q 41.7 What happens if one party refuses to arbitrate? ��41-5 Q 41.8 Is an agreement to arbitrate “arbitrability” enforceable? ��41-5 Q 41.9 Can a court order arbitration if the arbitration agreement is for foreign arbitration? ��41-6 Q 41.10 What happens if one party starts a lawsuit despite an arbitration agreement? ��41-6 Q 41.11 Is a party to an arbitration agreement prohibited from starting a maritime court case? ��41-7

Legal Framework for Maritime Arbitration ��41-7 Q 41.12 What substantive law governs a maritime arbitration? ��41-7 Q 41.13 What rules govern a maritime arbitration? ��41-7 Q 41.14 What are some of the more well-known maritime arbitration organizations? ��41-8

Who Can Be an Arbitrator? ��41-9 Q 41.15 Who can serve as an arbitrator? ��41-9

Arbitration Procedure ��41-10 Q 41.16 How is a maritime arbitration conducted? ��41-10 Q 41.17 What Rules of Evidence apply to arbitrations? ��41-11 Q 41.18 How is evidence admitted to an arbitration? ��41-12 Q 41.19 How are witnesses examined in an arbitration? ��41-12 Q 41.20 How does an arbitration panel announce who wins? ��41-13

Maritime Law Answer Book 2020

After the Decision ��41-13 Q 41.21 Can an arbitration panel award the payment of attorneys’ fees? ��41-13 Q 41.22 What happens if the losing party does not pay the award? ��41-14 Q 41.23 What is the time limit for confirming an arbitration award? ��41-14 Q 41.24 Can an arbitration award be enforced without confirming the award? ��41-14

Vacating or Appealing an Award ��41-15 Q 41.25 Can a losing party appeal an arbitration award? ��41-15 Q 41.26 What are the grounds for vacating an arbitration award? ��41-15 Q 41.27 Can an arbitration award be overturned if the arbitrators make a mistake of law? ��41-16 Q 41.28 Can the parties agree to allow a reviewing court to review the legal decisions of the arbitration? ��41-16 Q 41.29 Can an arbitration award be overturned if the arbitrators make a mistake of fact? ��41-16

When to Choose Arbitration ��41-17 Q 41.30 Is arbitration a good choice for the resolution of maritime disputes? ��41-17

Index ��I-1

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