What Challenges Are Emerging in Shipping and Maritime Law?
Whether they stem from the continued fallout of the COVID-19 pandemic or from the ongoing Russian invasion of Ukraine, there are several major challenges still to be tackled in the modern landscape of shipping and maritime law. However, the future for the sector may be brighter than first appearances would suggest.
Veteran maritime lawyer Renato Pezoa Huerta offers his thoughts.
To give a brief summary, what are the most prevalent issues facing shipping and maritime law in 2022?
The ’globalisation’ of problems now seems to be the general rule for shipping. The most important of these is undoubtedly the stress caused by the COVID-19 pandemic, which, although it has shown a remarkable recovery of normal life in most countries of the world, is an issue that has a strong impact on shipping. The same is true of the conflict between Russia and Ukraine, which has also caused dilemmas not only in the supply chain and in the safety of ships sailing in the conflict zone, but also in the application and integration of legal rules of maritime law, as well as in the invocation of certain clauses in charter parties and marine insurance contracts.
In accordance with what I have just mentioned, we can also point to the enormous traffic jam that occurred in the Port of Shanghai until June, after its closure as a measure coming from the Asian authority as part of its ‘Zero COVID’ strategy, and which is instrumentalised through the confinement of the population after an outbreak of coronavirus. This has greatly affected Latin America and indeed the whole world. We understand that Shanghai is one of the largest and most important ports for international trade, and the delay in shipping was brutal for our customers and indeed for all ‘mainland’ trade.
Regarding the Russia-Ukraine belligerence, the attacks on the ships of various shipowners is a critical issue. In this regard, I have advised my clients, who are major shipping companies, on very specific legal disputes, such as: will a shipowner be in breach of a charterparty without liability if they refuse to call at a port that is blockaded? On the same point, in the context of charters, is an official declaration of war necessary or is a threat of war sufficient to invoke a war clause? And clearly the biggest problem: can a charterer claim damages from the shipowner if the master of the ship decides to unload in a port other than the one agreed in the charter?
The ’globalisation’ of problems now seems to be the general rule for shipping.
In what ways are a team of legal professionals of multiple nationalities better equipped to face the sector’s challenges?
In my case, I chair the shipping law portfolio of Allievi Larre-Marins & Pezoa, a law firm exclusively dedicated to international trade law. As you can see, shipping law is only one link in the immense supply chain. Thus, all the lawyers who make up this boutique firm are dedicated to various branches of the commercial business. Thus, there is a branch of maritime law, a branch of customs law, a branch of banking law and a branch of international law. In this way, our advice and representation are comprehensive and enable trade players to rely on lawyers in all segments of the supply chain. The firm’s lawyers are the most prominent in their disciplines and in their respective countries.
But what is perhaps most relevant is the fact that all the lawyers reside in different countries and we have offices in the main cities of South America: Santiago de Chile, Buenos Aires, Lima, Asunción, Santos, Caracas, Valparaíso and Huasco Port. Thus, our coverage is total in the Pacific, Atlantic and Caribbean oceans. Together with this, we maintain a wide network of correspondents in Central America, mainly in Panama, and a consolidated team of non-legal professionals, such as accountants, auditors, experts in foreign trade and even a ship’s captain for technical or expert matters. All this consolidates us as a leading law firm in South America, with a huge and powerful presence in all latitudes.
Our way of working is joint and we make use of new information technologies to serve our clients. We hold meetings mainly by telematic means using modern digital platforms, which allows all partners in the various countries to be present in front of the client, and the latter has the convenience of not having to travel from their country of origin to one or more South American cities.
This makes us the only law firm in Latin America to implement a technological system to serve our clients and has been very well accepted by those who trust in our work. In some cases, such as when a maritime claim occurs or when it is necessary to activate a maritime insurance or a specific contractual clause, as in charters, the client does not need to travel to one of our offices and lose the valuable and short time that maritime law provides. The same means maximum experience and convenience in that the client does not have to leave their busy schedules to get in touch with us.
We have also implemented different communication channels to deal with maritime, customs and insurance emergencies, with telephones available 24 hours a day and exclusive e-mails by subject. All these aspects have allowed us to reach a high standard of quality and professionalism, and to position ourselves as a leading law firm in a short period of time.
How do you expect to see the maritime law sector to develop in the latter months of 2022 and beyond?
The overall picture will not be without complexities. However, we are far from an economic slowdown for shipping companies at present, despite disruptions and port congestion. Spot prices have started to decline, although they are still well above pre-pandemic levels. Despite all these circumstances, I believe that we are a long way from a decline in consumer demand that could affect shipping. At the beginning of the pandemic only two shipping companies qualified as large-cap companies, yet as of June this year that number has increased to six. Notwithstanding this, the IMF has warned that onshore, high inflation and the war between Russia and Ukraine are having a material effect that could push the world economy into a complex recession. For now, however, maritime law is sailing smoothly.
Renato Pezoa Huerta, Founding Partner
Avenida Vitacura 2939, Piso 10, Las Condes Santiago de Chile, RM, Chile
Tel: +56 9860 04916
Renato Pezoa Huerta is a Chilean lawyer (LLB Hons) specialising in maritime law. He is the author of several books and scientific legal articles on maritime law and is a professor of maritime law and marine insurance. He is recognised as one of the most important and prominent maritime lawyers in Chile.
Allievi Larre-Marins & Pezoa (ALM&P) is a boutique law firm focused exclusively on international commercial law. With headquarters in Santiago, Buenos Aires and Lima, it is a leading source of expertise for the maritime and transport market across South America and overseas.