P&I Tips

• Shipping

1.    Maritime Labour Convention, 2006 as applied in Ukraine.
The Maritime Labour Convention, 2006 (MLC) entered into force on 20 August 2013. Ukraine did not ratify the MLC, which means, formally, its standards are not mandatory in Ukraine. However, P&I Clubs and Shipowners have to turn their attention to new developments which are in place since MLC 2006 is in force, as Ukrainian seafarers mostly work on ships flying the flag of the states-members of MLC. Hence, Ukrainian personal injury lawyers and the representatives of trade union may claim Shipowners/ P&I Clubs as per the terms of MLC. 
As stipulated in Art. 2 of MLC: “Each Member shall effectively exercise its jurisdiction and control over ships that fly its flag by establishing a system for ensuring compliance with the requirements of this Convention, including regular inspections, reporting, monitoring and legal proceedings under the applicable laws.” Further, “Each Member shall effectively exercise its jurisdiction and control over seafarer recruitment and placement services, if these are established in its territory”. Moreover, the countries, which ratified the MLC have to implement the obligation of a “watch dog”. That means, they have to “ensure that the ships that fly the flag of any State that has not ratified this Convention do not receive more favorable treatment than the ships that fly the flag of any State that has ratified it”(Art. 7). Basically, the MLC leaves no choice of not referencing to its standards, even in case, the shipowners hire the seafarers, which were recruited through manning agencies of non-contracting state: “Each Member which has ratified this Convention shall require that shipowners of ships that fly its flag, who use seafarer recruitment and placement services based in countries or territories in which this Convention does not apply, ensure, as far as practicable, that those services meet the requirements of this Standard”(Art.9 of MLC). 
However, we should remind, that since 16 February 2010 labor relations of Ukrainian citizens working outside Ukraine are regulated in accordance with the Law of Ukraine “On International Private Law”, which provides  that Ukrainian courts may not unconditionally take claims of Ukrainian seafarers against foreign ship owners to their forum as it would contradict not only to the common rules used in most jurisdictions regulating collective agreements & employment contracts, but to Ukrainian Law as well. So, Owners may well be able to dismiss such claims on grounds of improper venue. 
2.    Recruitment and replacement & Medical certificates. 
The above are two of the main standards, adopted by the MLC, which related to traditional P&I risks in Ukraine. There are number of cases, which were investigated in Ukrainian courts, where the personal injury or illness of the seafarer were caused rather due to his/her long-term disease, then were work-related. But due to proper mounting of the related documents by seafarers, the P&I Clubs had to cover the compensation. Thus, we advice to hire the seafarers, who get the medial certificate from the certified, respectful medical clinics. Under the MLC’ standards, Member should consider requiring seafarer recruitment and placement services, established in its territory, to develop and maintain verifiable operational practices to ensure, that all mandatory certificates and documents submitted for employment are up to date and have not been fraudulently obtained. For example, The American P&I Club requires seafarers originating from Ukraine must comply with the requirements of the American Club PEME Program. 
 In case, if such unpleasant situation occurs, we advise to adhere to constructive approach to decide a case amicably in a reasonable pre-trial manner, especially since the Ukrainian law provides for necessary tools. This can considerably minimize the payments of a P&I Club, taking into account the threat of a vessel’s arrest as a security measure for such claims in Ukraine, and avoid further court trials. 
3.     Shipowners’ liability for sickness, injury or death.
Although such risks are generally covered under the standard P&I coverage this standard refers to the Shipowner’s liability as set out in the national law, the seafarer’s contract of employment or collective agreement. This gives an option to the claimant to seek the maximum amount possible basis most favorable legal ground.  It is noteworthy that the current Ukrainian legislation does not stipulate the contractual compensation in case of death of an employee, except for the payments under the collective agreement. However, MLC stipulates, that shipowners shall provide financial security to assure compensation in the event of the death or long-term disability of seafarers due to an occupational injury, illness or hazard, as set out in national law, the seafarers’ employment agreement or collective agreement. We may state that in this respect the Ukrainian law is rather outdated and does not meet modern requirements. Under Ukrainian law, specifically Civil Code of Ukraine and Law of Ukraine "On Mandatory State Social Insurance of  Industrial Accidents and Occupational Diseases that Caused Disability" the list of the beneficiaries, which may  claim the compensations under the risks stipulated  above, is wider  than P&I Clubs used to operate with. So, preference is to meet with either the crewman or his representatives face to face and negotiate a compromise and secure itself upon further compensation claims of the newly appeared beneficiaries.

Published for Maritime Advocate.

Alexander Chebotarenko

chebotarenko@interlegal.com.ua