Bottlenecks in Vietnam Maritime Code Need Removing

According to the Law Reviewing Group, the provisions of the Maritime Code and other related legal documents are not clearly defined, lack of feasibility or contradictory to other legal documents in terms of the legal status of shippers and consignors; ship and freight insurance; ship register, ship detention, authority and salute of limitations of conflict settlement in shipping. These are engendering legal “bottlenecks” against maritime companies.

 

Ms Trinh Minh Hien, Director of Legal Department under the Ministry of Transport, said according to the Civil Procedure Code, courts of Vietnam has absolute jurisdiction over disputes arising from contracts where a part or the entirety of contracts thereof are performed on the territory of Vietnam. However, Article 100 of the Maritime Code 2005 stipulates that where a bill of lading is issued pursuant to a voyage charter party and the holder of such bill of lading is not the charterer, the rights and obligations of the carrier and of the holder of the bill of lading shall be governed by the clauses in the bill of lading; if the clauses in the voyage charter party have been inserted into the bill of lading, such clauses shall apply.

 

The above provisions inadvertently exclude the courts of Vietnam from the jurisdiction of resolving such disputes, thus affecting legitimate rights and interests of Vietnamese businesses in general and insurers in particular.

 

Furthermore, the Clause 5, Article 4 of the Decision No. 51/2005/QD-BGTVT provides that the authorisation of foreign recognised organisations to survey, classify and issue certificates shall be affected with regard to each seagoing ship and this regulation is contrary to the regulations of the International Maritime Organisation (IMO). This leads to the “give and take” mechanism and distresses businesses. Lawyer Ngo Thanh Le, member of Law Reviewing Group, said: The authorisation of foreign recognised organisations to survey, classify and issue certificates... should be exercised by the Transport Minister or authorised to the Vietnam Maritime Administration as a State specialised maritime agency to perform.

 

Sharing this point, Lawyer Ta Hoa Binh from Dong Do Marine Joint Stock Company, said the ship’s owner and the charterer should not be equated because the charterer is legally never the owner of the ship in both literal and figurative meanings although in some cases of laws rights and interests of the ship’s owner are also applied to the charterer or the ship’s operator. In addition, the Article 97 of the Maritime Code says the limitation period for instituting proceedings regarding loss or damage to cargo carried pursuant to freight documents shall be one year from the date on which the cargo was delivered or should have been delivered to the consignee while the Article 118 reads the limitation period for instituting proceedings regarding performance of voyage charter parties shall be two years from the date on which a complainant knows or should have known of the infringement of its interests. Such provisions send Vietnamese ship owners to a huge disadvantage because, according to international common practices, the limitation period for instituting proceedings regarding loss or damage to cargo is one year regardless of whether it carries normal or bill of lading or voyage charter bill of lading. Protection and indemnity (P&I) insurance associations also accept only one-year statute of limitations. According to the Vietnamese laws, Vietnamese ship owners are self-responsible when their proceedings lodged with respect to loss or damage to cargo are extended to the second year.

Mr Vo Nhat Thang, lawyer at the Vietnam International Arbitration Centre (VIAC) put the accent on principles of fairness and equality for all parties involved in the shipping process. It is irrational to concentrate all authority of classifying seagoing ships on the Vietnam Register, which is not a State specialised management agency but only a register agency. This engenders the “give and take” mechanism and afflicts ship owners, Thang added.

 

One of pressing problems is the unclearly defined legal status of shippers and consignors. Mr Vu The Quang, an official at the Legal Department under the Vietnam Maritime Administration, said: In reality, many exporters use FOB basis and view themselves as shippers to take proceedings against carriers to claim the coverage for loss of cargo. But, they cannot tell on which legal foundation they can start proceedings against the carriers. Given this reality, Mr Quang recommended the merger of the two definitions of shippers and consignors.

 

With respect to provisions on the authority of director of port authorities, Ms Tran Thi Hai Yen, Deputy Director of Legal Department subordinated to the State-run Vietnam National Shipping Lines (Vinalines), said: The provisions on duties and powers of directors of seaport authority as stipulated by the Clause 3, Article 67, Maritime Code have problems (To issue permits to and to supervise seagoing ships entering, leaving and operating in seaports; to prohibit from entering seaports any seagoing ship which fails to satisfy all necessary conditions on marine navigation safety and marine navigation security and prevention of environmental pollution.) That director of port authority is entitled to prohibit seagoing ship from entering seaport is as it should be and regulations on the case “fails to satisfy all necessary conditions on marine navigation safety and marine navigation security and prevention of environmental pollution” are applicable to ships, not navigable channels and berths.

 

According to the Law Reviewing Group, the far distance between seaports and head offices of port authorities take time to finalise administrative fines. Point B, Clause 2, Article 29 of the Decree 48/2011/ND-CP limits provides that directors of seaport authorities are entitled to impose administrative fines of at most VND10 million while many violations are beyond the authority of directors of port authorities.

 

Therefore, the group proposed raising the fine limit for directors of port authorities at VND50 million and supplementing some other duties and powers.