ANNUAL REPORT by njordlaw.com

ANNUAL REPORT Maritime and Transport Law

ANNUAL REPORT

TRENDS 2020 AND 2021 In the Maritime and Transport Team's annual report, we again summarise the legal trends that have been the most focused on in the transport industry in 2020. Also, we look at the trends that we believe will impact on the industry in 2021.

Written by Ulla Fabricius, Attorney at law (H) and Partner at NJORD Law Firm. uf@njordlaw.com

CORONA PANDEMIC AND THE TRANSPORT INDUSTRY 2020 was a year that came to be severely marked by the corona pandemic, which turned our lives upside down. Of course, this also applied to the transport industry. We wrote a lot about the pandemic in relation to the transport industry and summarised some of this in our Quarterly Update in May 2020, which you can reread here: > Quarterly Update May 2020 In June, we also posted news about a new U.S. law on container demurrage and container detention considering the pandemic:

led to significant changes in importing and exporting goods, and many have had to repolish the good old T-documents. In relation to the road transport industry, many have naturally wondered whether cross-border and cabotage will be able to continue – and what about the Mobility Package – what happened to it? We have written some about it below, so keep on reading. Here are some useful links: > Transporting goods between Great Britain and the EU: guidance for hauliers and commercial drivers - GOV.UK (www.gov.uk) > Rules of origin for goods moving between the UK and EU - GOV.UK (www.gov.uk)

> New U.S. law on container demurrage and container detention fees

> Guidance on Brexit (fstyr.dk)

In this Annual Report, we have followed up on the container market situation, where freight rates have risen to new heights due to a shortage of containers and the lack of space onboard the container ships, which also causes delays and accrual of container demurrage and container detention.

COULD THE EU PARLIAMENT AND THE COUNCIL VALIDLY CHANGE THE RULES ON POSTED WORKERS WHICH STRENGTHEN THE RIGHTS OF THE WORKERS?

In NJORD's transport team, we are particularly proud that we assisted with the conclusion of a transport agreement with the Danish authorities on the distribution of the first COVID-19 vaccines in Denmark. You can read more about this in our annual report.

BREXIT Brexit became a reality at the turn of 2020/21 when Great Britain left the EU. This has

This question was referred to the Court of Justice of the European Union, as Hungary and Poland, together with several other Member States, brought an action for annulment against the Parliament and the Council. The reason for the change was a desire to approximate the working and employment conditions of posted workers as much as possible to the conditions applicable to workers employed by companies established in the host Member State. In other words, this is the basis for The

Sector-Specific Posting rules in the Mobility Package.

DANISH REQUIREMENTS FOR COLLECTIVE BARGAINING COSTS AND WAGES

All held their breath and waited excitedly for the judgement, which was delivered on 8 December 2020.

Danish transport companies applying for a haulier permit from 2021 must follow a cost level that does not deviate clearly or significantly from the overall cost level of the collective agreements. The same will apply on 1 July 2021 to those transport companies which already had a haulier permit before 2021

The Court of Justice of the European Union dismissed the claim, as CJEU found that the changes to the rules on posted workers did not contravene the treaty provisions on freedom of movement.

THE MOBILITY PACKAGE IS BEING PHASED IN The amended rules on driving time and rest periods, which include, 1. a new calculation of drivers' weekly rest periods, 2. the prohibition on the regular weekly rest or other rest of more than 45 hours in the vehicle, and 3. a requirement for the driver to return to his place of residence or the transport company's operational centre in the country of establishment at least every four weeks, entered into force on 20 August 2020. The extension of the control period from 28 to 56 days will not enter into force until 31 December 2024, when the new intelligent tachograph must also be installed. The extension of the requirements concerning good repute to be considered by the national authorities in the context of the issue or maintenance of a vehicle permit will not enter into force until 21 February 2022. Similarly, the stricter requirements for the transport companies' link to the country of establishment, the requirement for the return of vehicles to the country of establishment no later than every eight weeks, and the requirement for the 4-day cooling-off period after the end of cabotage will enter into force on 2 February 2022. The sector-specific posting rules applicable to cabotage, cross trade, and the road part of a combined transport will also enter into force on 21 February 2022.

THE JUDGMENT OF THE MARITIME AND COMMERCIAL HIGH COURT IN THE CASE OF THE ROMANIAN DRIVER'S WAGE CLAIM HAS BEEN APPEALED As we wrote in our newsletter on 25 November 2020, the Romanian driver was not successful in his claim for Danish pay. The driver was only successful in a small claim of 1% of the holiday allowance. However, the judgment has been appealed by the driver, as a new judgment from the European Court of Justice on the use of posting rules on mobile labour was published in December 2020. Read more about the new judgment of the CJEU and the importance of the judgment in this Annual Report.

CYBERATTACK We have seen several attacks of varying severity against transport companies. This issue has also spawned provisions in contracts according to which cyberattacks should be considered force majeure, and the insurance market has also begun to adapt this with exceptions in the coverage and provision of separate independent cyber insurance policies. Read more in this Annual Report on the cyber challenges.

THE AVIATION INDUSTRY We have written a lot about the aviation industry, which is no wonder as it has been hit hard by the shutdown because of the pandemic. In this annual report, we have also written about the aviation industry – so read more below.

THE MARITIME AND COMMERCIAL HIGH COURT

THE JUDGMENT IN THE CASE BETWEEN THE ROMANIAN DRIVER AND THE SLOVAK TRANSPORT COMPANY HAS BEEN APPEALED Written by Ulla Fabricius, Attorney at law (H) and Partner at NJORD Law Firm. uf@njordlaw.com

Written by Thomas Ryhl, Attorney at law (H) and Partner at NJORD Law Firm. thr@njordlaw.com

In this annual report, we can now report that the driver has appealed the judgement to the High Court on the basis of a new judgment from the European Court of Justice concerning the posting of workers in the context of the provision of services.

In November 2020, we wrote an update on our website that we had won the case brought by a Romanian driver against a Slovak haulage company. > Read our update on the judgment, which was about whether the Romanian driver could claim Danish wages against his Slovak employer

The judgment in Case C-815/18 was handed down in December 2020 and was referred to the Court of Justice of the European Union in connection with a dispute between, on the one hand, Federatie Nederlandse Vakbeweging, FNV (Dutch Trade Union Confederation), and, on the other hand, Van den Bosch Transporten BV, Van den Transporte GmbH and Silo-Tank Kft. The specific case concerned the application of the Dutch collective labour agreement for freight transport to drivers from Germany and Hungary.

To rule on the question of the application of the Dutch collective agreement, the CJEU had to, among other things, decide whether the Posting of Workers Directive in the context of the provision of services (Directive 96/71) applies to cross-border services in the road transport sector. The CJEU ruled in the judgment that the Posting of Workers Directive in the context of the provision of services applies as a rule to crossborder services in the road transport sector. The CJEU added that the Directive applies in principle to any provision of cross-border services involving the posting of workers. However, the question of whether a worker may be regarded as posted always rests on the facts of the case – and is, therefore, also a specific assessment. In assessing whether a worker is posted, among other things, article 2 of the Posting of Workers Directive must be assessed, according to which, a worker is posted when the person, for a limited period, provides a service in a Member State other than that in which he or she normally carries out her/his work.

Therefore, the starting point is that a person who performs a service in a Member State other than the one in which he or she normally performs his or her work will be considered to be posted within the meaning of the Directive. Conversely, this means that a worker – for instance, a truck driver – who normally works in or mainly from Denmark will not be able to be posted to Denmark at the same time. This was exactly why we were successful in the Copenhagen City Court, where the court rejected the driver's argument that the driver was posted in Denmark. The Copenhagen City Court noted that it is not possible for a worker to be posted to a Member State where the worker in question also normally carries out her/his work. The new judgment of the CJEU, as mentioned above, established that the posting rules might also apply to cross-border services in the road transport sector. That is probably why the case has now been appealed since one might be led to believe that the judgment reflects a broader interpretation of the right to invoke the Posting of Workers Directive. However, it remains the case that a worker must be posted, as described in the Directive, before the worker can invoke the provisions therein relating to, among other things, remuneration under the law in the country in which the worker is posted. It should also be noted that from 21 February 2022, the sector-specific posting rules, which are part of the Mobility Package, will regulate the drivers' conditions, as drivers within the EU will be considered to be posted when performing cross-trade, cabotage, and the road part by of

combined transport in a "host member country". From February 2022, not much will be required before one is considered to be "posted", and a driver, for example, could be "posted" to three different countries within the same month. So, why is the case of the Romanian driver even interesting? Well, it is interesting because wage claims from drivers against their employers are subject to a 5-year statute of limitations in Denmark, for example. Therefore, for several years there will still be claims to be settled in accordance with the legal situation today. If you are interested in knowing more about the posting rules in the Mobility Package, NJORD has previously written several articles about these. The articles can be accessed here: > EU transport ministers agree on the Mobility Package > Mobility Package rejected by the European Parliament > New rules on driving and rest periods have now come into force

TOP 7

MOST READ UPDATES OF THE YEAR Here you will find the most read content of the year. Get updated on the important decisions and analyses – just as a lot of others have! 1.

Coronavirus - is it force majeure?

New rules on driving and rest periods have now come into force

A trailer hire company had in an agreement with a transport company validly disclaimed liability for product damage caused by a rented trailer on a shipment of medicines

Danish focus on the Eurovignette - NOTE!

Flight cancellations: Do passengers always have the right to reimbursement when the air carrier has cancelled the flight due to the COVID-19 pandemic?

12 air carriers have received orders from the Danish Authorities

The travellers right to reimbursement when the air ticket is part of a package tour

COVID-19

STATUS OF THE AVIATION INDUSTRY The year 2020 has been a turbulent year for the aviation industry. There is no doubt that the corona pandemic has hit the aviation industry particularly hard. Also, we have been awaiting the outcome of the Brexit negotiations. Here, we guide you through the biggest news on passenger rights in 2020 and the latest news on the changes Brexit has brought.

Written by Anders Worsøe, Attorney at law (H) and Partner at NJORD Law Firm. awo@njordlaw.com

Written by Johanne Hansted, Attorney at law at NJORD Law Firm. jha@njordlaw.com

BREXIT After Great Britain decided to leave the EU, the period from 31 January 2020 up to and including 31 December 2020 has been a transitional period. During the transitional period, passengers' rights in the case of denied boarding, cancellation, and long delays were set out unchanged in EU Regulation 261/2004 (the Regulation). This meant that airlines based in Great Britain remained under this Regulation during the transitional period. After 1 January 2021, airlines based in Great Britain will no longer be EU airlines. This has implications on passengers' rights. Under the Regulation, EU passenger rights apply: •

• •

When the aircraft flies within the EU, and the airline is European or from a non-EU country When the aircraft lands in the EU from outside the EU, and the airline is European When the aircraft departs from the EU and lands outside the EU, and the airline is European or from a non-EU country

After 1 January 2021, a passenger will no longer be entitled to compensation under the Regulation if the passenger is flying from Great Britain.

PASSENGER RIGHTS DURING THE CORONA PANDEMIC Passengers covered by the Regulation have several rights in the case of denied boarding, cancellation, and long delays. The airlines are obliged to pay compensation, arrange for the rerouting at the earliest opportunity, and provide meals and accommodation if the conditions for this are met. When COVID-19 closed the world in March 2020 and several airlines had to cancel flights due to travel restrictions, the EU Commission was quick to state that the pandemic was an exceptional circumstance and, therefore, passengers were not entitled to compensation under the Regulation. You can read more about this in our newsletter: > No compensation when a flight is cancelled due to COVID-19 Therefore, there is no doubt that passengers are not entitled to compensation if their flights were cancelled because of COVID-19. However, passengers are still entitled to a refund of the price of the flight ticket. However, different rules apply when the flight ticket is part of a package tour.

You can read more about this in our newsletter:

> Reimbursement of the flight ticket when the flight ticket is part of a package tour

> 12 air carriers have received orders from the Danish Authorities

As described above, the Regulation does not apply to all flights to and from Denmark. It is, therefore, important to look at the different rules on when passengers are entitled to a refund because of the airline's cancellation due to COVID-19. You can read more about this in our newsletter: > Do passengers always have the right to reimbursement when the air carrier has cancelled the flight due to the COVID-19 pandemic? To help a hard-hit travel industry, the Danish Parliament adopted several relief packages. Among other things, the relief packages included a guarantee so that the Travel Guarantee Fund could ensure that package tour customers could be refunded the cost of their package tour. However, this was only a loan to the travel providers to help them through the crisis. Unfortunately, several travel providers have gone bankrupt anyway. The bankruptcy of the travel providers has and will affect the sale of air tickets by airlines in the future. You can read more about the two relief packages here: > The Danish Parliament has adopted a relief package for the travel industry > New relief package on the way to a hardpressed travel industry To help air carriers, several of the major European air carriers have been given capital to survive the crisis. But even with the capital added, it has been difficult for air carriers to keep up and refund the airfare for all the cancelled flights. As a result, the Danish Transport, Building and Housing Authority issued orders to 12 air carriers with a deadline to refund the airfare for the cancelled flights to passengers. If this fails, the air carriers may be liable to a fine.

VACCINE-PASSPORT? At the time of writing, the air carriers have still not been able to refund all the airfare for flights cancelled due to COVID-19. And as shutdowns and travel restrictions have been repeatedly extended, there is no prospect of air carriers getting to the bottom of their piles for the time being.

However, there is light at the end of the tunnel as EU Member States have now started vaccinating people. With the prospect of a COVID-19 vaccine passport, hopefully, the aviation industry will soon be back on its wings. We look forward to brighter times for the aviation industry in 2021.

EMPLOYEE NEWS WELCOME

LENE ISHØJ, NEW ASSISTANT ATTORNEY In January, we welcomed Lene Ishøj, who will be an assistant attorney in NJORD's Maritime and Transport Law Team at the office in Copenhagen. Lene graduated as cand.jur. in 2016 and has since worked in the transport industry at ITD (International Transport Denmark), where she primarily worked with transport law.

Transport plays a vital role in society. I have always been fascinated by international trade and infrastructure and how the world depends on transporting goods back and forth. - Lene Ishøj, Assistant attorney

Lene has always known that she wanted to work within the transport industry and when the choice fell on studying law, and the opportunity presented itself with NJORD, she seized the opportunity.

NJORD's Transport Law Team has a reputation for being the most skilled in Denmark, and therefore I had no doubt that I had to apply for a job at NJORD. - Lene Ishøj, Assistant attorney

WHY NJORD? Lene comes from a family, involved in transport operations for generations, so she can contribute with both practical and legal experience. Therefore,

Lene looks forward to diving into the legal work and to specialising even more in the field of transport law. It is with great pleasure that we welcome Lene to the team.

VACCINE DISTRIBUTION DECEMBER 2020

THE FIRST VACCINES WERE DISTRIBUTED IN DK NJORD's Transport Team worked between Christmas and New Year. In the hectic days in the run-up to Christmas, we assisted our client BHS Logistics A/S in getting the transport agreement in place with SSI on the distribution of the first vaccines in Denmark. We are proud that, in this way, we have helped to create the foundation for vaccine distribution in Denmark. - Ulla Fabricius, Attorney at law (H) and Partner

Watch the video where the first vaccines are transported.

NOTE!

RECOVERY OF GERMAN ROAD TOLL On 28 October 2020, the Court of Justice of the European Union ruled in a preliminary ruling on the interpretation of EU law on road toll in a German case between a Polish transport company and the German authorities. The question was whether the German authorities were entitled to include the costs of the national traffic police when calculating the road toll for the use of the German road network by heavy vehicles. The CJEU found that the German authorities had charged too much in toll, as the cost of traffic policing is not considered to be an "infrastructure cost" under the underlying EU Directive No 1999/62, as amended by Directive 2006/38. > Read more about the reasoning of the European Court of Justice in our previous news on this

Written by Claas Thöle, , Attorney at law, Rechtsanwalt, and Partner at NJORD Law Firm. clt@njordlaw.com

Written by Lene Ishøj, Assistant attorney at NJORD Law Firm. lei@njordlaw.com

RECOVERY OF ROAD TOLL Although no judgment has yet been handed down in the German case, the decision of the CJEU is interesting as it states that for several years transport companies have paid too much road toll to use the German road network. Based on the ruling of the CJEU, there is good reason to believe that transport companies will be able to make claims against the German authorities for the part of the road toll that was charged unjustly. According to the CJEU, the unjustified share that would be subject to a possible recovery claim amounts to between 3.8% and 6% of the previous road toll. The ratio of costs to infrastructure and road policing has varied over the years, and when calculating the road toll, this is also based on the vehicles' euro-norm, axles, and weight.

Therefore, the exact recovery claim will depend on the above parameters.

TIME LIMITATION Even if the judgment is new, you still must act quickly if you hope to get reimbursement. Under the German Act on Fees to State Authorities (BGebG), a claim for reimbursement of a fee is barred if it is not claimed before the end of the third calendar year following the year in which the claim has arisen. The reimbursement by the German authorities of overcharged charges such as road toll is under BGebG. This means that partial reimbursement of the toll collected from 2018 onwards can still be requested. For road toll charged in 2017, you need to look at each case to determine whether

it will still be possible to claim a reimbursement – this requires that the claim is not yet barred by time limitation.

REQUIREMENTS OF CARRIERS The transport companies who have paid road toll directly to Toll Collect GmbH and have evidence of the payments will be able to make claims directly against the German authorities in respect of the claims falling within the above limitation period under BGebG.

REQUIREMENTS OF CONTRACTING CARRIERS AND CONSIGNOR Claims by a contracting carrier or consignor against a performing carrier who has a claim for reimbursement against the German authorities will be a claim subject to contract law and terms agreed to between the parties. If it, for instance, has been agreed that the CMR Act applies, the claim may be further limited, as the limitation period under section 41 of the CMR Act is only 1 year and commences from 3 months after the conclusion of the contract of carriage. If the contract is governed by Danish law, the contracting carriers and consignors may be able to apply the suspension rule in the Danish Limitations Act, where it is likely that the contracting carrier or consignor has been unpredictably ignorant of the existence of the claim.

There is a commercial solution to the problem, which, however, presupposes that the parties are cooperative and that it is relatively easy to identify the claims subject to reimbursement, for example, where a performing carrier has solely been performing carriage for one contracting carrier or freight forwarder, on the roads where the toll have been paid to Toll Collect GmbH. Whether a contracting carrier or consignor can make a claim against a performing carrier on the assumption that the performing carrier has indirectly overpaid road toll will, therefore, depend on a concrete assessment of the individual contract of carriage. In such an assessment, one would also have to look at how the freight price is composed and whether the claimant will be enriched as a result of a possible reimbursement if the claimant has passed on the charge of road toll to the next level of circulation.

NJORD’S RECOMMENDATION Until a judgment has been handed down in the German case, some uncertainty remains as to the extent of the claim for reimbursement (%) and the limitation period. However, it is our recommendation that the claim should be made to the German authorities immediately so as to not risk losing part of the reimbursement claim. If you wish to make a claim against a co-contractor, it is also important that you act immediately to suspend any limitation period. If you have any doubts as to whether you have the possibility to claim partial reimbursement of indirect charges from a counterparty, please contact NJORD for an assessment of the company's options for doing so.

COVID-19

CYBER RISKS - A GROWING RISK The entire shipping industry held its breath when Maersk was subjected to a cyberattack back in 2017. An attack that not only left deep tracks but sparked a process in which the focus on cybersecurity and the risks associated with digitisation has become more and more into focus.

Written by Steffen Hebsgaard Muff, Attorney at law (L) and Partner at NJORD Law Firm. shm@njordlaw.com

SIMILARLY, BLUE WATER SHIPPING WAS ALSO SUBJECTED TO A SERIOUS CYBERATTACK

resources, including the latest software and hardware, as well as very highly qualified "personnel".

It would be an exaggeration to claim that Blue Water got away unaffected. Even though the attack as such was averted, the shutting down of systems had a significant impact on the company, which was under attack for a long time.

Unfortunately, with easier and cheaper access to, for example, ransomware and other tools, we should expect to see more and more professional attacks on small and medium-sized companies going forward. An open industry with a significant need to exchange of data with many stakeholders, such as the shipping industry, is particularly exposed.

That is why we are also seeing a trend towards agreement terms related to cyber risks and security becoming more common. Already in 2017, we saw that "cyberattacks" were written in as a force majeure event for which neither party was responsible. Since then, the level of detail has increased significantly. More often nowadays, both customers and insurance require a certain level of safety, certain measures, etc.

Thus, cybersecurity is a matter for everyone in the industry to consider continually and actively.

HOW ARE WE SECURED? HOW ARE WE INSURED?

More far-reaching, we have seen an incipient reluctance on the insurance side to insure against the consequences of cyberattacks in, for example, carrier insurance, where damage caused by computer viruses, among other things, is not covered.

Everyone should first look at whether their technical set-up relating to cybersecurity, backup, etc. is sufficient – how easy is it to get in? Also, the company's policies and guidelines should be reviewed. Sometimes access can be gained merely via a private email in the company inbox.

THERE IS GOOD REASON WHY ALL MARKET PLAYERS HAVE BECOME MORE DILIGENT

THE BEST THING WOULD BE TO COMPLETELY AVOID AN ATTACK

The organisations carrying out cyberattacks are highly professional and have considerable

In the event that one is unfortunate enough to be the victim of an attack, one can safeguard this both by insurance and partly by ensuring

contractually against being liable for delays or damage caused by cyberattacks. A general insurance policy rarely covers all the risks associated with cyberattacks, and it will often be relevant to consider specific cyber insurance. If the insurance policy even exempts damages resulting from cyberattacks, the only option is to seek to limit liability to one's customers accordingly. It will not always be possible as liability sometimes is mandatory by legislation. A disclaimer will typically be relevant for logistics and framework agreements, where the usual reference to NSAB and its network clause must be carefully considered at the same time.

WHAT IF THE ACCIDENT OCCURS AND AN ATTACK COMMENCES - WHAT CAN BE DONE? Again, of course, the most important thing is to first see what can be done to ward off the attack and limit the damage. However, as soon as possible, it is important to contact your insurance company and the trading parties that may be affected by the incident. The insurance company will require notification and, as a rule, you will also have to notify the company as soon as possible if you wish to claim freedom of liability as a result of the incident.

BOOK RELEASE

SIX CHAPTERS OF EU-KARNOV 2020 NJORD has authored a total of six chapters in the latest edition of EU-Karnov 2020 (18th edition), which is now also published in a Norwegian version. NJORD's lawyers have been contributing to EU-Karnov since 2003, but as something new, we have now also been in charge of the chapter on transport.

Written by Ulla Fabricius, Attorney at law (H) and Partner at NJORD Law Firm. uf@njordlaw.com

Written by Thomas Ryhl, Attorney at law (H) and Partner at NJORD Law Firm. thr@njordlaw.com There is a lot going on in the field of transport at the EU level, including the adoption in July 2020 of the new "Mobility Package" with significantly changed rules on all aspects of road freight transport and with new rules and judgments on air carrier safety and consumer protection in the event of cancellations. Therefore, in-depth expert knowledge is required to be the office that will keep all Danish and Norwegian transport lawyers up to date on new regulation and new interpretations. The transport chapter also covers railways, maritime transport, ports, airports, and road safety, etc., and EU rules have great practical implications for a great many businesses and all citizens. We are immensely proud to have been selected for the task, which is handled by Attorney at law (H) and Partner Ulla Fabricius and Attorney at law (H) and Partner Thomas Ryhl, who both have decades of experience in both transport law and EU law, and who are both recognised by Legal500 as "leading individuals" in Denmark and inducted in the "Hall of Fame". In the 2020 edition of EU-Karnov, as in the previous five editions, Thomas Ryhl has also been in charge of the five chapters on health and medical products, on harmonisation, on trans-European networks (telecommunications, transport, and energy), on research and development and space, and on industrial policy.

ORDER If you haven't bought the book yet > It can be ordered here

BREXIT

THE END TO THE FREE MOVEMENT OF CIVIL JUDGMENTS BETWEEN UNITED KINGDOM AND EU MEMBER STATES? On 24 December 2020, the United Kingdom and the EU reached a new trade and cooperation agreement. As a result of the agreement, after 31 December 2020, the United Kingdom will no longer be part of the European cooperation on the recognition and enforcement of judgments in civil and commercial matters. The fact that the United Kingdom has now left this cooperation could create several challenges for individuals and businesses involved in legal proceedings linked to, for example, United Kingdom. In particular, in the field of maritime law, where it is customary to agree on English jurisdiction, the rules of the Danish Merchant Shipping Act will in many cases put an end to such agreements, as a result of the fact that United Kingdom no longer participates in European cooperation known as the Brussels I Regulation (recast).

Written by Christian Schaap, Attorney at law at NJORD Law Firm. csc@njordlaw.com

WHICH RULES ON JURISDICTION NOW APPLY IN THE UNITED KINGDOM Jurisdiction – that is, the question of the country in which a dispute between parties can be brought – is often decisive for the outcome of a case, the costs of bringing, and how long a case takes to be resolved. It is often something that does not have the main focus when entering into agreements or making decisions on carrying out work. However, it has a great deal of focus in the event of a dispute arising from a breached agreement, an injury, or something else. For legal proceedings brought before (or at the latest) 31 December 2020, the well-known EU rules in the of the Brussels I Regulation (recast) applies. However, the Brussels I Regulation (recast) does

not apply to proceedings brought after 31 December 2020. Instead, legal proceedings brought after 31 December 2020 will be subject to a combination of the rules of the so-called Hague Choice of Court Convention and English common law. The Hague Choice of Court Convention applies between the United Kingdom, Gibraltar, EU Member States, Mexico, Montenegro, and Singapore. We refer to our previous brief on the Hague Choice of Court Convention:

> The Hague Choice of Court Convention – why should the transport and shipping industry be pleased? It should be mentioned that the United Kingdom has requested accession to the Lugano Convention. The rules of the Lugano Convention are similar to those laid down in the 1968

Judgment Regulation, the predecessor of the current 2012 Judgment Regulation (recast). If the United Kingdom can accede to the Lugano Convention, the current rules on jurisdiction will remain largely unchanged. It is expected that it will be known whether the United Kingdom will accede to the Lugano Convention in April 2021. What is the difference between the Hague Choice of Court Convention and the Brussels I Regulation (recast)? There are many differences between the two sets of rules. The scope of the Hague Choice of Court Convention is considerably more limited than the Brussels I Regulation (recast). Unlike the Brussels I Regulation (recast), the Hague Choice of Court Convention does not apply, among other things, to: 1.

Disputes concerning passengers and goods

Marine pollution

Towing and salvage in emergencies

General average

Interim legal measures

The Hague Choice of Court Convention applies only to "exclusive jurisdiction agreements". That is, if two parties have agreed that they can choose between bringing an action for a dispute in either country 1 or country 2, then the agreement is not exclusive, and the Convention does not apply. Also, it should be noted that the Convention applies only to exclusive jurisdiction agreements if they were concluded after the Convention entered into force in the country whose courts the jurisdiction agreement points to. The Hague Choice of Court Convention has been in force in the United Kingdom since 1 October 2015, while it has only been in force in Denmark since 1 September 2018. A particular problem may, therefore, arise in the case of disputes covered by English jurisdiction agreements agreed before 1 October 2015. For

such disputes, neither the Jurisdiction Regulation nor the Hague Choice of Court Convention will apply. In cases where the parties disagree on the validity of the English jurisdiction agreement, the validity of the English jurisdiction agreement will, where appropriate, have to be decided by the court of the country in which the case about the dispute in question is brought. Finally, the Hague Choice of Court Convention does not have an equally effective system of recognition and enforcement of judgments delivered as the system found in the Brussels I Regulation (recast). A judgment handed down within the scope of the Brussels I Regulation (recast) will, in general, be considered unreviewed in another EU country. A judgment handed down in Country 1 (Country under the Hague Choice of Court Convention) will not necessarily be considered without review in Country 2 (Also a country under the Hague Choice of Court Convention). This could lead to having to go through administrative procedures before a judgement can be enforced in another country. Such procedures can be time-consuming and be a financial burden.

COMPETING LEGAL PROCEEDINGS? The Brussels I Regulation (recast) is based on a principle called “litis pendens”. In short, if a case is already being handled by a court in another EU state, then another court in the European Union cannot deal with the same case. The Hague Choice of Court Convention applies the same principle. Due to the limited scope of the Hague Choice of Court Convention, the effect of the litis pendens does not materialise in the same way as under the Brussels I Regulation (recast). In the case of cases outside the Hague Choice of Court Convention, there is a risk of competing legal proceedings over the same dispute. For cases not

covered by the Hague Choice of Court Convention and with links to the United Kingdom, but also to another EU country, there is now a risk that the same case could be heard both before an English court and a court in another EU country. This can ultimately lead to conflicting judgments on the same issue, which is inconvenient.

BREXIT’S IMPACT ON MARITIME LAW? Shipping companies, as well as owners of goods, must be prepared to ensure that English jurisdiction agreements will no longer be respected by the mandatory jurisdiction rules of Section 310(1) of the Danish Merchant Shipping Act. The Danish Merchant Shipping Act provides access to Danish jurisdiction in cases relating to the transport of cargo when: 1.

The defendant (typically a freight forwarder or carrier) has his principle place of business in Denmark.

The transport document has been issued in Denmark through a Danish branch or agency.

The goods were delivered to the carrier in Denmark. This even though the carrier must first carry out a pre-transport by, for instance, a truck to a port that is not located in Denmark.

The agreed or actual port of discharge is in Denmark.

However, Section 310(5) contains an exception to Section 310(1) of the Danish Merchant Shipping Act. Under Section 310(5), a carrier can enter into an agreement with a shipper and consignee on a jurisdiction other than Denmark under the Brussels I Regulation (recast) and the Lugano Convention. It is not uncommon for shipping companies and international carriers in their transport documents to refer to English jurisdiction. As a result of England no longer being subject to the Brussels I Regulation (recast), an English

jurisdiction agreement will not be covered by the exception in Section 310(5) of Danish Merchant Shipping Act. England is also not (yet) covered by the Lugano Convention, why the conclusion probably is that the Danish court should disregard the English jurisdiction agreement and declare its jurisdiction to hear the case. To what extent a carrier will be able to bring a competing case in England as a result of the English jurisdiction agreement, only time will tell. This includes whether an English court will have an opinion on whether the carrier's customer has breached the English jurisdiction agreement by bringing an action in Denmark. Some Danish shipping companies refer in their transport documents to English jurisdiction. In the coming months, such jurisdiction agreements are likely to have limited significance in cases with the necessary links with Denmark. For more information on the relationship between Section 310 of the Danish Merchant Shipping Act and the Brussels I Regulation (recast) and English jurisdiction agreements, please refer to the following article on this very subject, which can be found here. > New decision on the scope of the recast Brussels regulation

NJORD LAW FIRM’S COMMENTS Before the Brexit deal is finally ratified by the EU and the United Kingdom, several discussions and negotiations between the EU and the United Kingdom are still underway on areas not covered by the current Brexit deal. However, there is no indication that continued cooperation, such as what we know from the Brussels I Regulation (recast), is on the agenda. Until there is clarity as to whether the United Kingdom accedes to the Lugano Convention, we recommend that consideration is given to the application of English jurisdiction- and conflict-oflaw agreements and, if necessary, seek legal advice in this regard. NJORD Law Firm will continue to follow Brexit developments closely, including the legal challenges arising from the current Brexit deal.

SHIPPING UPDATE

SHORTAGE OF CONTAINERS AND THE LACK OF SPACE ONBOARD THE CONTAINER SHIPS CAUSES DELAYS AND ACCRUAL OF CONTAINER DEMURRAGE AND CONTAINER DETENTION Extremely high demand in the third and fourth quarters of 2020 has meant that freight rates in container markets are historically high. The trend has continued into 2021. This situation does not benefit shippers. In addition to having to pay high cargo rates, shippers also risk facing significant container demurrage and container detention bills. If the shipper has made a time guarantee to the consignee, the shipper also risks being liable for delays towards the consignee, as the container cargo is currently not moving at the usual pace from A to B.

Written by Christian Schaap, Attorney at law at NJORD Law Firm. csc@njordlaw.com

HIGH FREIGHT RATES As the demand for containers is so enormous considering the supply of containers available, these are historically high freight rates at the moment. Despite shutdowns in several countries due to Covid-19, the demand continues, and all ships that can carry containers are working at full capacity. According to some forecasts, demand will fall by May. Whether that will be the case, only time will tell.

INCREASED RISK OF CONTAINER DEMURRAGE AND CONTAINER DETENTION Container demurrage typically relates to the period a loaded container is stored before it is emptied at the port of destination (import demurrage), for example, in cases where containers are not picked up. Upon export, container demurrage (export demurrage) occurs in the event of delays from delivery to the

terminal (gate-in) until the container is loaded on board the ship, for example, because the shipper is delayed in presenting the correct documentation to the shipping company. Container detention typically relates to the period a container is stored after emptying outside the port of destination (import detention), for example, in cases where containers are not returned. Upon export, container detention may occur when a shipper fails to load and deliver the container in a timely manner to the shipping company's terminal (gate-in). The purpose of container demurrage and container detention is to ensure compensation for the use of containers and incentivise the rapid return of containers. Thus, they promote rapid loading and unloading.

Currently, ports around the world are filled with a large number of containers. This is particularly the case in the Far East, from which there is a significant proportion of exports of container cargo. The major ports in the EU and the United States are also filled with containers due to the increased imports of container cargo. Due to the pressure in the ports and the number of containers located there, it is not always possible for the owners to collect their goods within the period agreed with the shipping company. Here there is a risk of being met with a demurrage bill from the shipping company. The pressure on the ports may also make it impossible for more containers to be delivered to the container terminals. Here, the owners of the goods risk a detention bill because they have not delivered/returned a container to the container terminal in time. As far as container demurrage and container detention go, companies should be aware that it is not in all cases that they are liable for paying the detention and demurrage that a shipping company or freight forwarder may charge. You can read more about container demurrage in our previous brief on topics that can be accessed here: > Possible legislation on the way for container demurrage and container detention > New U.S. law on container demurrage and container detention in light of COVID-19

LIABILITY FOR DELAYS In the relationship between a buyer and a seller, it is not uncommon for a specific delivery time to be agreed upon. If the seller does not comply with the agreed delivery time, he will be liable due to the delay under relevant purchasing regulation. Likewise, it may also be agreed in the relationship between a carrier and a shipper (seller or buyer) that goods must be delivered within a given time limit. Here, the carrier risks incurring a delay liability according to relevant transport regulation.

Therefore, during these times, one should be careful about making time promises/guarantees concerning goods to be transported in containers. This especially applies as it is not certain that the seller will be able to continue a delay claim against the carrier. Even if the carrier is liable for the delay, such liability is often limited either by law (Section 280(2) of the Danish Merchant Shipping Act or under the transport agreement.

NJORD LAW FIRM’S COMMENTS NJORD Law Firm follows developments in the container market and stands ready to assist with questions, including container demurrage/detention, liability for delays, etc.

NJORD Law Firm

Maritime and Transport Law Team

CONTACT

ULLA FABRICIUS

THOMAS RYHL

Attorney at law (H), Partner (+45) 77 40 10 12 uf@njordlaw.com

Attorney at law (H), Partner (+45) 77 40 11 58 thr@njordlaw.com

STEFFEN HEBSGAARD MUFF

ANDERS WORSØE

Attorney at law (L), Partner (+45) 77 40 10 17 shm@njordlaw.com

Attorney at law (H), Partner (+45) 77 40 11 45 awo@njordlaw.com

CLAAS THÖLE

CHRISTIAN SCHAAP

Attorney at law, Partner, Rechtsanwalt (+45) 77 40 10 16 clt@njordlaw.com

Attorney at law (+45) 77 40 10 41 csc@njordlaw.com

JOHANNE HANSTED

LENE ISHØJ

Attorney at law (+45) 77 40 10 16 jha@njordlaw.com

Assistant Attorney (+45) 77 40 10 46 lei@njordlaw.com

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