2019 May - June Highlights: Maritime

IMO FAL Convention Now Requires Mandatory Electronic Information Exchange

The International Maritime Organization (“IMO”) Convention on Facilitation of International Maritime Traffic (the “FAL Convention”) was adopted in 1965 for the purpose of implementing a more streamlined logistics process for the transport of passengers, ships, and cargo in international trade. The FAL Convention’s stated objective was to avoid marine traffic delays, stimulate intergovernmental cooperation, and increase uniformity in the international maritime industry to the extent practicable. The FAL Convention was adopted by maritime Contracting Governments, in part, as a response to increasing local requirements of maritime nations that created a burden on the shipping industry.
http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/Convention-on-Facilitation-of-International-Maritime-Traffic-(FAL).aspx.

The 2016 Amendments to the FAL Convention entered into force on January 1, 2019. The amendments create new definitions for a Cargo Transport Unit (CTU), freight container, clearance, and master. The Amendments include new requirements for the digital exchange of shipping information. Effective April 8, 2019, the FAL Convention now requires Contracting Governments to establish a protocol for an electronic information exchange between ships and ports. The transition period for governmental compliance is no less than 12 months. In addition, the Amendments introduce three additional documents that shore authorities may require of arriving vessels. These documents include (1) security-related information pursuant to SOLAS regulation XI-2/9.2.2; (2) advance cargo information for customs review, and (3) Advanced Notification Forms for Waste Delivery to Port Reception Facilities. http://www.imo.org/en/MediaCentre/PressBriefings/Pages/06-electronic-information-exchange-.aspx.

The FAL Convention in Standard 2.1 contains a list of documents that public port authorities and governments of member states will demand from ships. To that end, the IMO has developed standardized forms for certain categories of documents including (1) IMO General Declaration; (2) Cargo Declaration; (3) Ship’s Stores Declaration; (4) Crew’s Effects Declaration; (5) Crew List—Passenger List; and (6) Dangerous Goods. All Contracting Governments are encouraged to adjust their local laws to comply with the FAL Convention requirements for sharing electronic information.

According to the IMO, the FAL Convention “encourages the use of a Single Window for data” to be provided by ships to local governments. Id. The IMO guidelines for setting up a Single Window system are awaiting final approval. The primary purpose underlying the new protocol is to funnel all critical information that is required by public authorities relating to the arrival, berthing, and departures of ships, as well as all data required to carry cargo and allow the entry and departure of passengers through a single portal. The Single Window requirement is intended to house all necessary information for the international carriage of goods and passengers into one spot, thus avoiding duplication. The Single Window requirement to provide electronic information is an important international step toward simplifying international voyages for the maritime trade.

Supreme Court Considers a Manufacturer’s Duty to Warn in a Maritime Tort Case

The United States Supreme Court, in Air and Liquid Systems Corp., v Roberta DeVries, 586 U.S. ___, 139 S. Ct. 986 (2019) recently considered the scope of a manufacturer’s duty to warn potential product users in a maritime tort case. Specifically, the Supreme Court held that a product manufacturer has a duty to warn ultimate users when (1) the product requires subsequent incorporation of a part; (2) that the manufacturer either knows, or has reason to know that the integrated product is dangerous for its intended use; and (3) the manufacturer has reason to know that the product will present a danger to the ultimate user.

Defendants manufactured pumps, blowers, and turbines (the “equipment”) for three Navy ships. The equipment was fitted with asbestos insulation and asbestos parts in order to function as intended. Once the equipment was installed on the naval ships and operated as intended by the manufacturer, the equipment released asbestos fibers. Two naval veterans who inhaled the asbestos fibers contracted cancer as a result of their exposure and died. The Plaintiffs, decedents’ personal representatives, sued the Defendants, who removed the lawsuit to federal court pursuant to 28 U.S.C. § 1333. Plaintiffs asserted that Defendants, as product manufacturers, negligently failed to warn of the inherent and foreseeable cancer risk from the intended use of their equipment.

The district court granted summary judgment to the Defendants, who argued that there was no duty to warn, when a manufacturers’ product later requires incorporation of a danger part to function as intended. The Third Circuit Court of Appeals reversed the lower court’s decision for Defendants.

The Supreme Court granted certiorari to resolve a split in the circuits concerning the application of the bare-metal defense under maritime law. Specifically, the bare-metal defense provides that a manufacturer “has no duty to control the conduct of a third person as to prevent him from causing harm to another.” The Court carefully weighed the standard applicable to the Defendants, holding that a “rule of mere foreseeability would sweep too broadly” because it would force a manufacturer to warn future users about all possible uses and potential dangers. Moreover, the Court rejected the bare-metal defense at the other end of the spectrum that would have militated in favor of Defendants. Instead, the Court determined that a middle-ground approach was reasonable.

The Court cautioned that the “rule that we adopt here is tightly cabined.” The Court held:

In the maritime tort context, a product manufacturer has a duty to warn when (i) its product requires incorporation of a part, (ii) the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and (iii) the manufacturer has no reason to believe that the product’s users will realize that danger.

Id. Accordingly, the Court was very clear, that the tort rule was limited to maritime context in conjunction with the three pronged factual requirements articulated by the Court.

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