AUSTRALIA: An Introduction to Shipping: The Bar

An Outline of Australian Shipping Law 

Background  

Much of the Australian economy depends on sea trade. The Australian mining and resources sector, an essential part of the Australian economy, is almost entirely reliant on export by sea. Indeed, 99% of Australian exports are transported by sea. More than 12,000 vessels are entered on Australian shipping registers and approximately 6,000 foreign-resisted vessels arrive at Australian ports each year. Australian maritime and shipping law is consequently both well developed and essential to the Australian economy.

Key Legislation in Australia 

The Australian Commonwealth Government, as well as the governments of the various states and territories of Australia, have the power to make laws in relation to shipping. However, noting Australia’s federal system, the important caveat is that, by virtue of Australia’s Constitution, the Commonwealth legislation will take precedence in the event of any inconsistency between Commonwealth and State or Territory legislation.

The following are the most important pieces of Commonwealth legislation:

Navigation Act 2012;

Carriage of Goods by Sea Act 1991;

Australian Maritime Safety Authority Act 1990;

Admiralty Act 1988; and

Shipping Registration Act 1981.

Important statutes from the states and territories include:
Marine Act 1981 (NT);

Maritime Services Act 1935 (NSW);

Marine Safety Act 1998 (Qld);

Harbours and Navigation Act 1993 (SA);

Marine and Safety Authority Act 1997 (Tas);

Marine Safety Act 2010 (Vic); and

Western Australian Marine Act 1982 (WA).

Basic Introduction to Australian Shipping Law  

Definitions, registration and ownership  

To attract the effect of the shipping or maritime legislation, the statutory definition of "ship" or "vessel" must first be satisfied. A broad definition of "ship" or "vessel" is given under most of the Commonwealth legislation. For example, under Section 14(1) of the Navigation Act 2012 (Cth) a "vessel" is any kind of vessel used in navigation by water however propelled or moved. Be that as it may, naval vessels are expressly excluded from this definition by virtue of Section 10.

Registration of title is not required for ownership of an Australian ship or a share thereof. However, legislation does govern transferring or transmitting ownership of ships. The Shipping Registration Act 1981 (Cth) represents the principal legislation in this area, stipulating conditions and requirements for registration. A guide to assist in this registration process can be found on the Australian Maritime Safety Authority website, and accessed here: https://www.amsa.gov.au/vessels-operators/ship-registration#collapseArea209.

Choice of Law and Jurisdiction  

Parties to shipping or maritime contracts involving Australia should pay particular attention to choice of law and choice of jurisdiction issues. Because of Australia’s federal system, contractual clauses purporting to confer jurisdiction on "Australian Courts" will generally be invalid. So too will choice of law clauses that reference "the laws of Australia". Rather, such clauses should specify a particular Australian jurisdiction - for example "the laws of Victoria" and the "Courts of Victoria" for effective choice of law and effective choice of jurisdiction clauses respectively. That said, as CMA CGM SA v The Ship "Chou Shan" (2014) 311 ALR 234 confirmed, jurisdiction, once established, will generally be exercised by Australian courts, absent the defendant persuading the relevant Australian court that it is a clearly inappropriate forum for the proceeding. If there are any substantial geographical connections to the relevant forum, Australian courts are inclined to choose to exercise their discretion and hear the matter, almost without exception.

Further note should be made of an aforementioned important piece of Australian shipping legislation - the Carriage of Goods by Sea Act 1991 (Cth) - and its effect on choice of law and jurisdiction agreements. Australian law shall apply to any contract for the export of goods from within Australia to any place outside of Australia, and will do so with mandatory force (Section 11 Carriage of Goods by Sea Act). Any clause purportedly to the contrary is ineffective. Interestingly, the reverse does not apply: cargo contracts whose destination is Australia are not mandatorily subject to Australian law by virtue of Section 11 of that Act. Similarly, and somewhat counterintuitively, shipping contracts involving moving cargo from one Australian port to another Australian port will not have Australian law apply mandatorily.

Safety Regulation  

The Australian Maritime Safety Authority is the chief regulator of marine safety in Australia. Its functions include combating pollution in the marine environment, providing a search and rescue service and providing services upon request to the maritime industry, both commercial and governmental. It has the power to issue maritime orders in the furtherance of its functions, which include safety regulations and which are capable of being the subject of judicial or merits review by the Administrative Appeals Tribunal.

At a high level, safety regulation in Australia mirrors the International Convention for the Safety of Life at Sea 1974. These regulations manifest in either the Navigation Act 2012 (Cth) or alternatively the Marine Safety (Domestic Commercial Vessel) National Laws Act 2012 (Cth). Determining which of these two Acts shall apply to a particular vessel turns on the definitions of "regulated Australian vessel" and "foreign vessel" under the Navigation Act.

Emerging Issues for Australian Shipping Law  

Important cases in 2023  

There have been five important cases in Australia in 2023.

Poralu Marine Australia Pty Ltd v MV Dijksgracht [2023] FCAFC 147 concerned whether contract was concluded by way of fixture recap email and turned on the construction of recap emails where recap provided that terms were otherwise as per carrier's standard form booking note and bill of lading including rider clauses but with English law and London arbitration. The question as to whether the parties intended further terms to be agreed and whether contract was concluded by later return of completed booking note.

Delta Corp Ship Management DMCCO v The Ship "Caledonian Sky" [2023] FCA 1058 concerned the release of a vessel under arrest in the face of caveats against release previously filed. The question was whether release should be delayed to protect interest of caveator and the answer was release of vessel.

GeelongPort Pty Limited v The Ship "Voyager P" [2023] FCA 918 concerned an application for judicial sale of ship pendente lite and to move ship under arrest where a ship was abandoned.

Bank of New Zealand (Security Trustee) v The vessel MY "Island Escape" (No 3) [2023] FCA 541 concerned an action in rem under Section 16 of the Admiralty Act 1988 (Cth) being a claim relating to mortgage of a ship and interest in respect of it under Sections 4(2)(a)(iii) and (d) of the Act, where no appearance was filed by the ship or the relevant person. The application was for summary judgment at an ex parte hearing. Issues of choice of law and whether there was a reasonable possibility of defence to claim and the application for determination of priorities arose.

Brontes Security LLC v "Lihir Chief" (formerly "Charlie B") (No 2) [2023] FCA 515 concerned an application by non-party to restrain party's solicitors from acting and to set aside earlier orders releasing the party from implied undertaking not to disclose information or documents produced under compulsion in the course of arrest proceedings where the party making application did not produce documents subject of order releasing undertaking and where the proceeding was at an end.

Sealanes (1985) Pty Ltd v Vessel MY "Island Escape" [2023] FCA 414 concerned in rem proceedings against defendant ship for a general maritime claim arising from the supply of goods or materials to the ship for its operation or maintenance under a demise charterer and where no appearance was entered.