Legal Regulation of Sea Towage Contracts in the EU Countries

Abstract

In this article, the authors are trying to consider and analyze the main peculiarities of legal regulation of the contract of towage at sea in such common law countries as Great Britain, USA and Canada, and some countries of the European Union (Germany, Lithuania, Poland). The first part of the study is devoted to the analysis of the influence of towing technology on its legal regulation. The authors consider different towing options with the main difference being towing guidelines. The article analyzes how the technological aspects of towing have influenced the development of various standard forms of towage contracts adopted in the international maritime sector. The second part of the study analyzes the connections, similarities and differences between towing and salvages. Salvages services are provided when the vessel is in such ISSN 2524-101X eISSN 2617-541X 38 LEX PORTUS VOL 7 ISS 6 2021 a dangerous situation that the master has no real choice but to accept salvages services so that the vessel or cargo is not lost. Towing services are provided when the vessel is safe, so the shipowner can choose to have the vessel repaired on site or conclude a towing contract to bring the vessel to a convenient port. The nature of towage and salvages services at sea also determines the difference between towage and salvages charges. Payment for towing services is carried out on the basis and under the terms of the towing contract. At the same time, given the surprising nature of salvages at sea, it is impossible to foresee in advance the amount of remuneration for salvages operations at sea, therefore, the amount of remuneration usually depends on the value of the salvaged property. The third part analyzes the contract of towage, the rights, and obligations of the parties, especially the legal regulation of carriage, some court decisions of common law countries and some of European Union countries, such as Germany, Lithuania, Poland. In Lithuania and Poland, a towage contract can be classified as consensual, paid, and bilateral. In some cases, a contract of towage may be considered as multilateral. Briefly comparing the Lithuanian and Polish legal regulation of towage relations, one can conclude that there are no special differences between them. At the same time, In German law a towage contract is not codified as a specific art of a contract. German law regulates that a towage contract (Germ. Schleppvertrag or Remorkvertrag) can be recognized either as a contract to produce a work (Germ. Werkvertrag), or as a contract for services (Germ. Dienstvertrag) or a contract of carriage (Germ. Frachtvertrag). In common law countries, a contract of towage is considered to be a service contract. Therefore, in accordance with the contract of towage, the owners of the tug undertake to provide a towing service themselves, during which they are the performer, the crew, and supply, at the same time. Therefore, they undertake to provide 1) an agreed or specified service, or 2) to achieve an agreed specific result, or 3) to provide services for an agreed or specified period of time in exchange for periodic or lump sum payments. The keywords: contract of towage at sea, types of towing, contract of towage as a service contract, the responsibility of the tug owner, the responsibility of the owner of the towed vessel, towing and salvage. Introduction Disputes regarding towage services have recently increased in the jurisdiction of Lithuania. However, since the Republic of Lithuania regained its independence in 1990 and, later, had to recreate a new judicial system, there are not so many court decisions regarding towage relations. Whereas in common law countries and some 39 LEX PORTUS VOL 7 ISS 6 2021 European continental law countries the legal regulation of towage services has been intensively developed since the 19th century. At any rate, Lithuanian legislators took efforts to fill the gap of missing legislation and the legal nature of towage contract has been codified in the Republic of Lithuania Law on Merchant Shipping (hereinafter referred to as LMS, lit. Lietuvos Respublikos Prekybinės laivybos įstatymas) and The Republic of Lithuania Code of Inland Waterway Transport (hereinafter referred to as IWTC, lit. Lietuvos Respublikos vidaus vandenų transporto kodeksas). Many regulations in these acts are similar to legal regulations in common law and continental law countries because legislators took into consideration legal doctrine and good experience of other countries. The aim of this article is to review peculiarities on legal regulation to towage contract within various common law and continental countries and to present legal regulation on towage contract in Lithuania. Thus, this article should also be useful for analyzing differences and similarities among different countries, including the UK, the USA, Canada, Germany, Poland and also Lithuania. This article also tends to reveal that despite the immense impact that the Baltic and International Maritime Council (BIMCO) has made on harmonizing relations between contracting parties for towage services, after it presented the standard towage contracts, such as “Towhire” and “Towcon”, not all the special circumstances can be foreseen in the standard contracts, and depending on applicable national law the outcomes of court decisions might differ. Thus, this is one more reason to compare legal nature of towage contracts among different national legal systems. Methodology This research is concentrated on legal definition of a towage contract in various common law and continental law countries. The aim of this research was to disclose different approaches to regulate towage services in separate legal systems that might affect 40 LEX PORTUS VOL 7 ISS 6 2021 contracting parties. The research in this article has been performed through reviewing legislative acts and legal doctrine on towage contracts from common law countries including UK, USA and Canada and continental law countries, including Lithuania, Poland and Germany. 1. Nature of towage services and its impact on legal development The legal nature of a towage contract depends on technical aspects of the towage. Moreover, developing technologies in marine industries have triggered the development of legal nature of towage contract as well. For example, it is considered that the towage as a service began to expand when the English sailors were competing with American sailors. English sailing vessel owners sought to compete with the faster American clippers. Having realized that passages were from warehouse to warehouse rather than from land to land, English sailors found the way to reduce the time lost at the end of voyage. Thus, initially tugs were used only in sheltered waters and estuaries (Gold et al., 2003, p. 575). Today modern tugs have been significantly developed and meet the requirements for the shipping and other marine industries in inshore, offshore, and deepsea areas. They can be divided into three groups: Ocean-going and Salvage, Coastal, and Harbour and River (Gold, 2002, p. 214–215). In British legal doctrine a tug owner is often described as a “letting” the tug to the tow; the tow is usually described as “the hirer” of the tug (Rainey, 2018, p. 3). In other words, the tug is a vessel that provides propulsion to another vessel for a specific aim and the tow is a vessel that hires a tug to be moved and guided. Towage can be provided by any vessel, and it is not necessary to be a towage purpose-built vessel. However, usually towage is performed by a trained crew and a dedicated ship. The efficiency of a tug as such is dependent upon the amount of power which can be transmitted from the tug to the tow through a tow rope (Gold et al., 2003, p. 575). The towage can 41 LEX PORTUS VOL 7 ISS 6 2021 include various services, such as holding, pushing, pulling, moving, escorting, guiding or standing by the hirer’s vessel (Gold et al., 2003, p. 574). The arrangement between tug and tow is properly called towage regardless of whether the tug pulls the tow or pushes it from behind (Robertson et al., 2020, p. 353). In harbor maneuvers, such as the docking or undocking of a large vessel, there may be tugs assigned to push or pull at different positions on the vessel, as necessary. Meanwhile in river systems, the tug usually pushes barges made up into flotillas, some of them greater in length and breadth comparing to largest single vessel afloat (Healy & Sweeney, 1998, p. 253). The tow can be manned or unmanned. In cases where the tow is fully manned and is simply being towed by a tug, the tug has no possession over the tow but only performs pulling, moving, pushing or analogous service to the tow (Rainey, 2018, p. 4) and the tug is seen as a servant of the tow that suggests that the ship under tow will always be liable for the defaults of the tug (Baughen, 2015, p. 271). Meanwhile, if the tow is unmanned and is only an object being pulled, the tug will have physical possession of the tow. The tow can also be manned by a riding crew put on board by the tug so that the tug has physical possession of the tow (Gold et al., 2003, p. 574). Technical development of a towage and new experiences in this sector led to the need to standardize agreements between tugs and tows. Internationally most used are “Towhire” and “Towcon”, standard towage contracts that have been produced under the supervision of the Baltic and International Maritime Council (BIMCO). One of the BIMCO main functions – to support the efforts of the International Maritime Organization (IMO) to harmonize international regulations that form the bedrock of international shipping and help to retain a level playing field (Hoppe, 2017). Its work is carried out taking into consideration changing developments and industry’s experience. Both standard forms have been revised in 2008. “Towhire” and “Towcon” were created for the towage industry either on a lump 42 LEX PORTUS VOL 7 ISS 6 202