1.2 Which bilateral and multilateral instruments on shipping have effect in your jurisdiction?
See answer to question 1.1 above.
1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?
The main body enforcing the applicable laws and regulations would be the Authority of Shipping and Ports, having the authorities of investigating, imposing fines and detaining the vessel. Another related body is the Ministry of Environmental Protection, and the Port Captains of each port.
1.4 What is the regulators’ general approach in regulating the shipping sector?
By primary or subsiduary legislation.
- Registration
2.1 What types of vessels may be registered in your jurisdiction? What requirements and restrictions apply in this regard? Is dual registration permitted?
According to the Israeli Shipping Law (Vessels)- 1960, "any vessel which might be capable of sailing" is qualified for registration. In addition, following permission provided by the Minister of Transportation, even a vessel powered by oars, can also be registered. It is required that more than half of the ownership in the vessel would be either of the State of Israel or of an Israeli citizen or of a company incorporated under Israeli law.
The Israeli registration of vessels takes place before the Registrar at the Authority for Shipping and Ports of the Ministry of Transportation. The registry will include ownership rights., mortgages, liens, etc, as the case may be.
In the matter of MV BADAR (2020) the Haifa Maritime Court held, under a decision accepting an application for attachments in the Israeli registry of the vessel, that, a vessel which is registered under a foreign registry can not be registered in the Israeli registration, unless properly deleted from its former registration.
In addition, a foreign vessel-which is registered in a foreign registry and is under the control of an Israeli citizen or entity, has to be registered in the Israeli registration of vessel as a vessel under an Israeli control.
2.2 What entities may register a vessel in your jurisdiction? What requirements and restrictions apply in this regard?
According to clauses 9 and 10 of the Shipping Regulations (Vessels) (Registration and Marking) 1962, an application for registration of a vessel can be filed by either an Israeli or foreign citizen/entity.
2.3 What body administers the shipping register in your jurisdiction?
Under the Authority of Shipping and Ports of the Ministry of Transportation, the Registrar of vessels.
2.4 What information is included in the shipping register? Is this publicly accessible?
According to clause 109 of the Israeli Shipping Act (Vessels) -1960, the registration books and the certificates provided to the Registrar in connection with the registration of a vessel or it's deletion or in connection with any transaction in the vessels, are open to the public.
2.5 What are the formal and documentary requirements for registration of a vessel? What is the process for registration? What is the effect of registration? What is the effect of deregistration?
The main documentary requirements are: certified copy of the document establishing the application for registration ownership in the vessel (such as bill of sale); deletion certificate for the former registration of the vessel and its approval that the former registration certificate has been returned; a written consent of the Mortgagee for having the vessel registered in the Israeli registration; a marine engineers approval for the vessel registration; any other certificate required under any international convention that Israeli is a party to.
The registration in itself has a declaratory status rather than creates substantive rights, in the meaning that, according to clause 83 of the Israeli Shipping Act (Vessels)-1960, "the registration in the registration books is not a guarantee for a title right", but, a bona-fida buyer of the vessel (or any part of it) which bought the vessel from the person registered as owners in the registry, and the purchasing of the vessel will not be cancelled only because the seller did not have the right to transfer title in the vessel.
2.6 What are the formal and documentary requirements for registration of a shipping mortgage? What is the process for registration? What is the effect of registration? What is the effect of deregistration?
Formally in order to register a shipping mortgage it was required that the mortgage deed itself will be signed in Israel before the registrar, and if signed in a foreign country, it should be signed before a diplomatic or consular representative of the state of Israel.
In the matter of MV Hurriye Ana (2020) the Haifa Maritime Court denied a bank's claim for the enforcement of mortgage which was written in the foreign vessel's registration. The Court held that the validity of the loan agreement was not proven and that no information was provided in relation to the payment schedule agreed with the debtor (which was not the owner) and what was the exact amount of debt which remained. The fact that a mortgage is entered in the vessel's registration is not enough to have it enforced.
The affect of registration of a mortgage is that the Mortgagee would have priority of any debt or other lien regarding the vessel, except for the recognized maritime liens, but not including the lien for "necessaries", which means that the mortgage is ranked before the lien for necessaries. However, if a dispute will arise- either with owners and /or other debtors, the Mortgagee will have to prove he had loaned money to the owners and the amount of the remaining debt under the loan agreement, in addition to the registration of the mortgage.
- Port state control
3.1 Which body is responsible for port state control? What powers does it have?
The Authority for Shipping and Ports of the Ministry of Transportation is a statutory authority within the Ministry of Transport. The Authority supervises the three Israeli ports (Haifa, Ashdod, Eilat), is responsible for marine traffic, licensing and registration of vessels, certification of seaman, supervises the safety of vessels, conducts ports state control, issues notices to mariners and acts as the Israeli representative in the international marine community.
As a member of the International Maritime Organization (IMO) since 1952, Israel conducts its Port State Control Inspection through the Port and Shipping authority.
Under Articles 99 and 100 of the Israeli regulations of Ports Safety (Vessels) and IMO's Code for The Investigation of Marine Casualties and Incidents the Authority conducts investigations of a marine casualty and issues reports. In the matter of Folio No. 67484-03-19 HDI GLOBAL ANTWERP and Others Vs. State of Israel and Owners of the M/V Diana, The Haifa District Court ordered that the Administration will disclose to foreign cargo-interests, the RCC communications which took place between the distressed M/V Diana and the RCC centre at Haifa Port prior to its grounding on 19th Jan 2018, 250 meters from the Haifa Bay shore and which were collected by the Authority while investigating the incident. The Court's reasoning was cargo interests' entitlements to receive information obtained by the Administration regarding their interests (their cargo which was damaged as a result of the grounding) following the Israeli Freedom of Information Act-1998 and the Arbitration Act- 1968, in view of the London Arbitration being conducted between the cargo interests and Owners and having the matter open for further disclosure if so ordered by arbitral awards.
3.2 What penalties may be imposed for breach of the applicable laws and conventions?
The penalties can be either fines, detention and criminal charges, depending on the circumstances of each matter.
3.3 Can decisions of the port state control authority be appealed? If so, what is the process for appeal?
Some of the decisions can be appealed directly to the Haifa Maritime Court. Other matters, such as decisions in relation to the registration of vessels as foreign vessels under a control of an Israeli entity or relating to co shipping permission, can be appealed by an administrative petition which would be filed before the Haifa District Court.
- Marine casualty
4.1 What key domestic and international provisions apply to marine casualties in your jurisdiction, and what specific considerations should be borne in mind with regard to the following?
- Collisions
The international Regulations for Preventing Collisions at Sea, 1972 are adopted into the Israeli Law under the domestic Port Regulations (Preventing Collisions at Sea), 1972.
- Pollution
Israel is a signatory party to the Convention for the Protection of the Mediterranean Sea against Pollution 1978 and re-affirmed its updated version as the Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean, 1995.
In addition, Israel joined MARPOL in 1983 and has re-affirmed Annexes 1, 2, 3 and 5.
- Wreck removal
The law relating to a distressed vessel, wrecks and lost merchandise is the Salvage Fee and Lost Merchandise Order of 1926. Under this order, whoever finds lost merchandise or discovers any wreck must inform the receiver of wrecks at the Authority for Shipping and Ports of the Ministry of Transportation who will publish a notice about the finding of same, serve a copy of the notice on the Lloyd’s agent in Israel or else directly to Lloyd’s offices in London. If the merchandise or the wreck is not claimed within six months, it will be sold by the Receiver of the Wreck and the balance from the sale after deducting salvage fees and expenses will be applied by the Minister of Treasury as part of the national income.
- Salvage
Under the Salvage Fee and Lost Merchandise Order of 1926, Article 19 (1), whoever salvaged a distressed vessel or its cargo is intitled to a "fair fee" which has to be paid by the owner of the vessel or the receiver of the cargo, as the matter may be. Under Article 20 (1) any dispute in relation to the fair (salvage) fee if not settled by an agreement should be brought to arbitration. The Israeli law, under clause 42 (5) of the Shipping Act (Vessels) 1960, or clause 9 of the Admiralty Courts Act 1861 (which also governs the Israeli Admiralty Court’s authority) recognizes that debts arising from salvage (either of the vessel and/or its cargo) and General Average, constitute a maritime lien.
4.2 Which parties may bring a marine casualty claim in your jurisdiction, and against whom?
Compensations for marine casualties and for damages caused by collisions are recognized maritime liens under clauses 41 (6), (7) of the Shipping Act (Vessels-1960). Accordingly claims in rem and arrest applications can be brought for the arrest of the relevant vessel and receiving the compensation payment from its sale.
4.3 What limitation of liability regime applies to marine casualty claims and who may avail of it? What types of claims may be limited?
Israel has adopted the International Convention Relating to the Limitation of Liability of Owners of Sea-Going Ships, Brussels 10 October 1957 and its amending Protocol, Brussels 1979, as part of the Shipping Act (Limitation of Liability of Sea-going Ships), 1965. The 1976 Convention is not adopted by Israeli law but might be considered as a customary law.
According to clause 1 (1) (a), (b), (c) of the Convention, the types of claims that can be limited are claims in respect to loss of life to persons on board the ship and loss of or damage to property on board the ship; or claims in respect to personal injury or loss of or damage to property caused to any other person or property either on land or in waters; or claims in respect of the removal of wreck.
According to clause 1 of the Convention, the person whom may avail itself are the owners of a sea going vessel.
4.4 How is the limitation fund constituted? What requirements and restrictions apply in this regard?
Owners can apply to the Maritime Court for the establishing of a Limitation Found. If the Court is be satisfied with the Owner’s application it will order the establishment of the Limitation fund and will give orders as to the Owner’s deposit and the publishing of notices to Creditors. Creditor’s claims, or participation claims are to be filed by a local creditor within 30 days. If the creditor is a foreign creditor, claims must be filed within 60 days.
4.5 Under what circumstances is the limitation of liability unavailable?
According to Article (1) (4) (a) 9b) of the Convention and clause 3 of the Israeli law, the limitation of liability will not apply to claims for salvage or to claims for contribution in general average, and to claims by the Master or member of crew or by any servant of the owner on board the vessel or by a servant of the master whose duties are connected to the ship and includes claims of the heirs and representatives, if the contract of their service is governed by Israeli law or by any other law not permitting the owners to limit their liability.
4.6 What defences are available to marine operators in the event of a marine casualty claim?
As mentioned above the limitation of liability is available to owners of sea going vessels.
4.7 Which bodies are responsible for investigating and responding to marine casualties? What powers do they have?
As a member of the International Maritime Organisation (IMO) since 1952, Israel conducts its Port State Control Inspections through the Ports and Shipping Authority. Besides regular safety controls, the Authority conducts investigations in matters of grounding and pollution.
Following Chapter 12 of the Ports Regulations (Safety of Navigations), 1982, the Manager of the Authority the is authorised to conduct investigation in relation to any marine accident that took place in Israeli maritime waters. The investigation authorities include the examination of witnesses, collecting documents and evidence, and examination of the place where the event took place. The investigation will be concluded in a report detailing the sequence of events leading to the accident, the investigators’ observations and conclusions in relation to the circumstances and causes of the accident, and recommendations for amending the deficiencies which were observed in relation to the accident. The purpose of the investigations is to learn the circumstances that caused the accident in order to learn the relevant lessons and avoid future accidents.
Under folio no. 67484-03-19, we represented the cargo interests of the cargo carried in M/V Diana, which was grounded offshore of Haifa Bay on 19th January 2018, and applied to receive the documents and evidence collected by the Authority when investigating this marine accident, for the purpose of the arbitration proceedings taking place in London against the owners. In its judgment handed on 10th June 2020, the Haifa District Court, the Honourable Judge Mr. Ron Sokol, held, that although being foreign entities, the cargo interests are entitled under the Israeli Freedom of Information Act 1998, to receive the RCC communications that took place between the vessel and the RCC prior to the grounding which was annexed to the Authorities Report. As the Application was narrowed to these documents at this stage, the Court’s findings leave a path to apply for additional documents and information (including the whole report which was provided with reducted portions) following a future arbitral award in this regard and the Israeli Arbitration Act.
4.8 What reporting requirements apply in relation to marine casualties and what are the consequences of non-compliance?
According to clause 98 (A) of the Ports Regulations (Safety of Navigation), 1982 the owner, agent or master of an Israeli vessel or of a foreign vessel located in Israel, which was the subject of a marine accident, must give an immediate notice to the manager of the Authority of Shipping and Ports. An occurrence of a "marine accident" is wider than the collision or grounding, and, includes for example, also a malfunction with the navigation system of the vessel or any fire in the vessel which required the operation of the central setting out fire system of the vessel and any malfunction which required the ordering of the inspection of the class of the vessel to ensure its sea worthiness condition. A non fulfilment of this duty, would be considered as a felony by the owners and the master which can attract a 6 months' period of imprisonment and a fine of NIS 50,000 (the equivalent of about US $ 17,500.-).
4.9 What remedial measures may be ordered in the event of a marine casualty (eg, wreck removal, clean-up)?
The Authority of Shipping and Ports is authorized to demand, under a notice either handed to the vessels agent or otherwise officially published, to demand any measures and actions required for the safe removal of a grounded vessel or of a sunken wreck, including the demand that the owners will deposit the amount which would be required in the Authority's discretion, to secure the performance of the required actions.
4.10 Who may conduct salvage operations in your jurisdiction and what other requirements and restrictions apply in this regard?
According to the Ports Regulations, 1971 the Authorities to handle marine accidents and fires which take place in the ports are, the captain and manager of the ports and of the Authority of Shipping and Ports.
- Cargo claims
5.1 What key domestic and international provisions apply to cargo claims in your jurisdiction?
Israeli Law adopts the Hague-Visby Rules as part of the Ordinance for the Carriage of Goods by Sea, as amended on 21st January 1992.
5.2 Which parties may bring a cargo claim in your jurisdiction, and against whom?
The shipper or the consignee under the Bill of Lading, or their subrogated insurer can bring a cargo claim against the carrier, which will be governed by the Hague-Visby Rules.
A claim can also be filed by the cargo interest -even if not named in the B/L provided that the booking correspondence will identify it as a party to the contract carriage, or in the alternative, its claim will be a tortious claim (which will also be governed by the Hague Visby Rules (Article IV (1)).
In practice, cargo claims are filed against any who might have been part of the logistic chain, carriers, freight forwarders, sub carriers, warehouse operators, etc. In these matters, the claimant would have to prove (under balance of probabilities) where the damage or loss took place and to prove each of the defendant's liability.
In appeal no 8518/19 the Supreme Court affirmed the decision of the Haifa Maritime Court in civil claim 35583-11-18 relating to the M/V Chrysopigi, that a foreign marine insurer has a title to sue under the insured rights which have been subrogated to him or her, even if the foreign insurer is not listed in the Israeli Insurance Supervisor's list as an insurer active in Israel and subject to the Supervisor's supervision. Under this decision the court has given effect to the Israeli legislator's wording and meaning when excluding marine insurance from the supervision and other liabilities under the Insurance Agreement Act, 1982.
In civil appeal 7779/09 HDI Vs. Orl, the Supreme Court held that the quantities stated in the B/L are prima facia evidence not only towards the owners (who issued the B/L) but also towards the underwriter insuring the cargo in marine insurance policies.
5.3 What limitation of liability regime applies to cargo claims and who may avail of it? What types of claims may be limited? What is the procedure for limiting liability?
The cargo claim is subject to owner's limitation of liability to either 666.67 SDR per package or unit or to 2 SDR per 1 kg of the cargo lost or damaged, according to the greater of the two (Hague-Visby Rules, Article VI (5)(a)));
Also; the claimed damage to the cargo should be as a result of the owner's failure to exercise due diligence at the beginning of the voyage, to make the vessel sea-worthy and have it properly manned and equipped (Hague-Visby Rules Article III (1)(a)-(c)/Article IV (1);
In addition neither the carrier or the vessel will be liable for damage resulting from of perils of the sea or any other cause which not arising from the actual fault or privity of the carrier or without the fault or neglect of the agents or servants of the owners (Hague-Visby Rules Article IV (2) (a)-(q)).
In civil appeal 7802/11 TRANS KA Vs. VITOL ENERGY, the Supreme Court held that the owners of a vessel which called at Haifa Port and later was prohibited by the Libyan authorities from entering a Libyan port due to the Arab boycott on Israel, was exempt - according to Article IV (2) (5) of the Rules ("Restraint of Princes") from paying damages to the charterer of the vessel which chartered it for a carriage between Libya and Turkey.
5.4 Under what circumstances is the limitation of liability unavailable?
As mentioned above, the limitation of liability would be available whenever Article VI (5)(a)) of the Rules is applicable, meaning when the damages or lost cargo would be cargo that was carried in packages and not cargo carried in bulk.
5.5 What defences are available to (a) carriers and (b) shipowners in the event of a cargo claim?
As mentioned above, Limitation of liability and 12 months' time bar period under which , the claimant should file its claim within one year after the date of discharging the cargo or of the date it should have been discharged (Article III 6); Under the Supreme Court’s judgment in folio no. 6260/97 “Polska”, it was held that the wording “unless suit is brought within one year…” of Article III 6 of the Hague-Visby Rules is wide enough to contain a suit which was filed in foreign jurisdiction. Accordingly, a claim filed in Israel 12 months after the delivery date of the goods will not be time-barred if a claim was filed during the 12-month period in a foreign jurisdiction. Recently, in its decision given in folio no. 7195-18, the Supreme Court has overturned the judgments of the two lower instances and held that the phase “suit is brought” is narrowed to a suit filed by an entity who has the right to sue. Therefore, a suit which, if filed within the 12-month period but without any right of standing on behalf of the claimant, will not “break” the time-bar period and, in such case, a claim which will be filed later by a different entity could not rely on the claim which was filed previously without a title to sue and, if filed 12 months after the delivery date, it would be considered as being time-barred
- Passenger claims
6.1 What key domestic and international provisions apply to passenger claims in your jurisdiction?
Israel is not a party to the Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea, 1974. Therefore, passenger’s claims will be governed by general Contract and Tort Law and the general law relating to law and jurisdiction clauses.
6.2 What limitation of liability regime applies to passenger claims and who may avail of it? What types of claims may be limited? What is the procedure for limiting liability?
See clause 6.1 above.
6.3 Under what circumstances is the limitation of liability unavailable?
See cause 6.1 above.
- Ship arrest
7.1 What key domestic and international provisions apply to ship arrest in your jurisdiction?
The Israeli Maritime Court was established during the British Mandate over Palestine-Israel which took place formally between 1922-1948, and in-fact from the year 1917 and until 1948. By a King’s-Order-in-Council dated 2 February 1937 the Supreme Court of Jerusalem was constituted as a Maritime Court under the Colonial Court Admiralty Act, 1890. On the date when the Colonial Court Admiralty Act was enacted, the relevant acts of Admiralty which were in force were the Admiralty Acts of 1840 and 1861 and also the Naval Prize Act of 1864. These continue to apply to the Israeli Haifa Maritime Court’s (being a division of Haifa District Court) jurisdiction (which was granted the maritime jurisdiction formerly held by the Supreme Court) up to this present date.
In addition, the Israeli legislator, when enacting the Israeli Shipping Law (Sea-going Vessels), 1960, in relation to maritime lien, has chosen to follow International Convention for The Unification of Certain rules of Law Relating to Maritime Liens and Mortgages, Brussels 1926.
Accordingly, there are two set of rules governing the Israeli Maritime Court: The English Admiralty Acts of 1840 and 1861 and the Israeli Shipping Law (Sea-going Vessels), 1960, which follows the 1926 Brussels Convention.
7.2 For which types of claims is ship arrest available? What requirements and restrictions apply in this regard?
See clause 7.3 bellow.
7.3 Are maritime liens recognised in your jurisdiction? If so, what claims give rise to maritime liens? What is the difference (if any) between arrest of a ship for a maritime claim and a maritime lien?
According to the Israeli Shipping Law (Sea-going Vessels), 1960 clauses 40-41 (1)-(8) the recognized maritime liens include, inter alia, the following: (1) the costs of the Court’s auction sale of an arrested vessel; (2) port dues of all kind and other payments for such port services in as much as these payments are due either to the state, to another state, authority, or have been paid to them by a third party; (3) the cost of the preservation of an arrested vessel (from the date of its entry to the port and until its sale by the Court); (4) wages; (5) salvage; (6) compensations for death or injuries of passengers; (7) compensations for damages caused as a result of a collision at sea or any other navigation accident, or for damages done by a vessel to port facilities and indemnities for loss or damage to cargo or to passengers’ baggage; and (8) payments due for a supply of necessaries.
Under Israeli law an arrest of the vessel would be to enforce either recognized liens or a mortgage. In fact, the law doesn't enable to arrest a vessel for a maritime claim- but on the other hand the Israeli law provides a wide range of recognized maritime liens.
7.4 Under what circumstances is the arrest of sister ships and associated ships available? What requirements and restrictions apply in this regard?
Israel is not a party neither to International Convention Relating to Arrest at Sea 1952 (Brussels) nor to the International Convention on The Arrest of Ships 1999 (Geneva). In the matter of M/V Huriye Ana (2017) the Haifa Maritime Court held that it has no authority to order a "sister-ship arrest".
In the matter of M/V OSOGOVO (2021) while denying a supplier's arrest application for necessaries supplied to sister-ship vessels of the subject vessel, the Haifa Maritime Court mentioned that it does not deny the possibility that in the suitable matters it might be possible, to extend, under 'judicial legislation, the causes for arrest and to include the possibility of arresting a "sister-ship", but the current matter does not justify discussing in depth the possibilities of developing the maritime law.
In our opinion, it might be possible that by using the legal principles of justifying the lifting of the corporate veil to apply for a sister-ship arrest. However, such matters will be limited only to the existence of circumstances justifying the lifting of the corporate veil and provided the arrest application could provide at least prima-facia evidence in this regard.
7.5 Under what circumstances can bareboat and time-chartered vessels be arrested?
Although under clause 53 of the Israeli Shipping Act (Vessels) -1960, the orders of Part IV of the act -relating to maritime liens "will apply, also on a vessel which is operated by a charterer or other person which is not is owner…", in practice, the Haifa Maritime Court requires personal liability of the owner's as a condition for enforcing the maritime lien.
In the matter of the M/V Ellen Hudig (2004) the Maritime Court denied a maritime lien for “indemnities for loss or damage to baggage” reasoning, that the alleged damage (of additional expenses and freight payments related to the discharge of claimants’ cargo from an arrested vessel as a result of the vessel’s arrest by the crew claiming unpaid wages and owners subsequent appearance before a Belgian Court under bankruptcy proceedings), do not fall under the owner’s personal liability.
Ever since, the Ellen Hudig matter has been cited by the Haifa Maritime Court as authority establishing the need to show owner’s liability in order to have the Court recognize a maritime lien. In the matter of M/V Emmanuel Tomasos (2004) the actual bunker supplier's claim was denied reasoning that only the contractual supplier who contracted with the owners can be a creditor under the necessaries lien. In the matter of the M/V Nissos Rodos (2016) it was held that the local agent which was nominated by the operator of the vessel, and paid the port dues for the 17 calls of the vessel at Haifa Port is not entitled to the maritime lien for “port dues of any kind…been paid by a third party” reasoning that the agent had no agreement with the owners and that there was no personal liability on behalf of the owner to pay the agent, as commercial relations were between the owner and the operator and the operator and the agent, but not directly between the agent and the owner.
In the matter of M/V Captain Hurry (2016), while dismissing a suppliers’ claim due to a lack of owner’s liability, the Haifa Maritime Court mentioned that the maritime liens differ from each other and that, for example, the maritime lien for salvage exists even if the owners are not liable for the circumstances which led the vessel to distress.
Therefore, a path to diversity in relation to the requirement of owner’s liability, might exist but in practice, it seems that arresting a chartered or bare-boat chartered vessel would require owner's liability to the claimed debt itself- especially if the arrest is under the necessaries lien. The mere fact that the vessel is chartered at the date of arrest would not avoid it's arrest- as long as the recognized lien exists.
7.6 What are the formal and documentary requirements for arresting a vessel? What is the procedure and how long does this take? Must a countersecurity be provided? What other costs are incurred?
The main documents required for arresting a vessel would be the documents which constitute the maritime lien. For example, for arresting a vessel for unpaid bunkers, it would be required to present the purchase order, the delivery note, invoice issued and interest calculations, etc. The claim in rem and arrest application are filed electronically with the Court and usually the arrest application is attended to by the Maritime Court within few hours. If the application is filed during week end, the Haifa Maritime Courts judge can be approached though the court's clerk.
The Haifa Maritime Court has continuously held that usually there is no justification to put procedural thresholds before creditors seeking enforcement of their maritime liens and only in exceptional occasions which could be, for example, where the validity of the documents constituting the lien is doubted or when the owners' liability in a claim to enforce a maritime lien for necessaries is questioned, the claimant will be required to deposit counter security for the arrest. Also, the nature and ranking of the lien, would be considered.
In the matter of MV Captain Hurry a deposit of US$ 12,500.- was required as counter security for an arrest securing a claim of US$ 315,763 for bunkers delivery, which was ultimately denied.
Courts fee costs would be 1.25% of the claimed amount, and service costs of serving the claim and arrest documents would be about US$ 500-1,000 -depending on whether a launch boat service is required. Court's fee, attorney's fee and service costs are all claimable under the claim in rem and arrest application.
7.7 What is the procedure to release a ship from arrest and how long does this take? What security must be provided and how is this calculated?
The vessel can be released by providing a security -either a respected Club's Lou, or the deposit of the claimed amount or an or an Israeli bank guarantee, with the Court's treasury. The security amount would be the amount ordered in the arrest order. Owner's can also counter the arrest application itself and/or the arrest amount. After the deposit of the security, the release of the vessel is almost immediately.
7.8 What is the test for wrongful arrest in your jurisdiction?
There is no leading authority relating to the matter of wrongful arrest. Under the general civil law, a party seeking a temporary relief (such as a lien or restraining order) might be liable in tort or in a commitment emerging out of the Court's order to compensate the other party for its damages if the temporary relief is cancelled and if the seeking party acted unreasonably or in malice (Civil Appeal 732/80 Arens Vs. Bait-El). It seems that when deciding on an application or claim for damages for wrongful arrest the Haifa Maritime Court will follow the Evangelismos Tests of 1858 as interpreted By the Court of Appeal of Singapore in the matter of M/V Vasiliy Golovnin (2008).
7.9 Are any alternatives to ship arrest available in your jurisdiction?
According to clause 54 of the Israeli Shipping Act (Vessels) -1960, the builder of the vessel or the one who repairs a vessel are entitled to hold the vessels under the amounts due to them are paid (possessory lien).
Theoretically a vessels can also be attached, is a an immediate security relief under a regular civil claim (either filed before a civil court or in an arbitration). However, ordering such an attachments would require the deposit of securities on behalf of the claimants, and considering the daily costs of detaining a vessel, is seems that attaching a vessel for securing a regular civil claim (as opposed to arresting a vessel for enforcing a recognized maritime lien), would not be practical.
- Judicial sale of a vessel
8.1 What key provisions apply to the judicial sale of vessels in your jurisdiction?
See clause 8.2 bellow.
8.2 What is the procedure for judicial sale of an arrested vessel and how long does this take? What costs are incurred?
If no Notice of Appearance is filed on behalf of the vessel within 7 days after the service of the maritime-claim documents (including a writ of summons) the Court may order the judicial sale of the vessel in order to save maintenance costs, port dues and crew costs. According to the Vice Admiralty Rules, 1883, the court is authorized to order that the vessel will be sold either by public auction or by private contract.
8.3 How are the proceeds of sale distributed?
The priority of distributing the proceeds of the sale is according to the ranking of the liens as listed above with the mortgage ranked before the necessaries-man and with the lien for necessaries at the bottom of the rank:
(1) the costs of the Court’s auction sale of an arrested vessel; (2) port dues of all kind and other payments for such port services as much as these payments are due either to the state, to another state, authority, or have been paid to them by a third party; (3) the cost of the preservation of an arrested vessel (from the date of its entry to the port and until its sale by the Court); (4) wages; (5) salvage; (6) compensations for death or injuries of passengers; (7) compensations for damages caused as a result of a collision at sea or any other navigation accident, or for damages done by a vessel to port facilities and indemnities for loss or damage to cargo or to passengers’ baggage; (8) Mortgages (9) payments due for the supply of necessaries
8.4 What is the legal effect of the judicial sale of a vessel?
The legal effect would be that the maritime lien is transferred to the proceeds of sale, and that the buyer of the vessel, receives the title (ownership) of the vessel, free from any lien, attachment or any other right or claim in the vessel.
- Environmental issues
9.1 What key domestic and international provisions apply to shipping emissions in your jurisdiction?
Israel is a signatory party to the Convention for the Protection of the Mediterranean Sea against Pollution 1978, and re-affirmed its updated version at the "Convention for the Protection of the Marine Environment and the Costal Region of the Mediterranean, 1995". In addition, Israel joined MARPOL in 1983 and has re-affirmed annexes 1,2,3 and 5.
9.2 What key domestic and international provisions apply with regard to the sulphur content of marine fuel in your jurisdiction?
Although already in the year 2016 the Authority for Shipping and Ports has drafted a draft of an intended Port Regulation (Preventing Air Pollution from Vessels), 2016 and issued another updated draft during 2020, these Regulations which would have implemented IMO's Marine Environment Protection Committee's decision dated 26.10.2018, (also known as the "IMO 2020" Rule) have not came into force yet, probably due to the political instability which took place in Israel for the past two years.
As a result, allegedly, currently, there isn't any formal act of domestic legislation which would limit the sulphur contents of fuel oil to not more than 0.50% m/m and currently vessels carrying and using fuel oil which contain sulphur concentration of 3.5%, can call at Israeli ports. In fact it is has been argued by Dr. Eliakim Ben Hakun (consultant to the WHO), that according to his study, most of the vessels calling at the Israeli ports are old vessels equipped with polluting engines and only a minority of the vessels calling at the Israeli ports are new vessels with engines which are environmentally friendly, and that this situation causes air pollution to the surrounding areas of the ports ("Black Sail" by Ari Libsker, https://newmedia.calalist.co.il.)
However, is seems, that after the establishment of a new government in June 2021, the Ministry of Transportation will act for the singing and coming into force of the above- mentioned regulation. When it will come into force, the owners and master of the vessels, would be required to make sure that the contents of sulfur in the fuel oil in the vessels or used for operating it does not exceed 0.50% m/m and if the vessels is operating in the emission control areas (ECAS) (Baltic Sea area, North sea area, North America area, U.S Caribbean Sea area) or if the vessel is at pier for the purpose of loading or discharging or waiting for same, not more than 0.10% m/m.
According to clause 123 (a) of the intended regulations, at the request of the authorized authority of a foreign state, the manager nominated by the authority for shipping and ports could make an examination of a vessel which is not an Israeli vessel while it is calling in a port or terminal in Israel if the manager is convinced from the evidence attached to the application that the vessel has emitted, at any place whatsoever, any materials listed in part B of the regulations (including Sulphur Oxides) not in compliance to the instructions set out in the regulations.
9.3 What key domestic and international provisions apply with regard to ship recycling in your jurisdiction?
There is no specific domestic legislation regulating ship recycling in our Jurisdiction. Relevant provisions in the Hong Kong International convention for the Safe and Environmentally Sound Recycling of Ships (2009) may apply as customary law, or guiding principles.
9.4 What other environmental issues and concerns should shipowners and operators be aware of in your jurisdiction? What best practices should they follow?
According to clause 123 (a) of the intended Port Regulation (Preventing Air Pollution from Vessels), , at the request of the authorized authority of a foreign state, the manager nominated by the authority for shipping and ports could make an examination in a vessel which is not an Israeli vessel while it is calling in a port or terminal in Israel if the manager is convinced from the evidence attached to the application that the vessel has emitted, at any place whatsoever, any materials listed in part B of the regulations (including Sulphur Oxides) not in compliance with the instructions set out in the regulations. Accordingly, shipowners and operators should be aware that the vessel and it's records can be examined by the local authority -even if the vessel is a foreign vessel and that the examination is in consideration of acts which took place out- side Israeli territorial waters.
- Employment issues
10.1 What key domestic and international provisions apply to the health and safety of maritime workers in your jurisdiction?
The qualification requirements, supervision, duties and requirements of and from Israeli seaman are the subject of the Shipping Act (Seaman), 1973. This law doe not regulate directly the health and safety of the maritime workers. Israel has not adopted the Maritime Labour Convention. However, the amount due to a seaman for wages is a recognized maritime lien and the Israeli law considers the labor relations also as contractual relations. Therefore, any entitlement of the seamen either from an international convention or a collective agreement, which can be viewed as governing the labor contract including as an implied term and can be enforced by the Maritime Court when deciding on the amount due to the seaman for wages.
In the matter of M/V Moraz (2021) the Haifa Maritime Courts accepted that the costs of medical treatment provided by a local hospital to a crew member who became sick with covid 19 after he came on board constitute a recognized maritime lien on the vessel according to clause 40-41 (4) of the Shipping Act (Vessels) 1960 –"Payments claimed by the master, crew, and others who served on the vessel, as a result of their employment in the vessels…either according to agreement or for compensation for civil damages, or in any other manner…".
The Haifa Maritime Court held, that, according to the employment agreement of the crew-man, hospitalization and medical treatment were covered by the owners, and therefore by the crew man assigning its rights to the Hospital, the hospital was entitled to arrest the vessel for the hospitalization and medical treatment of the crew-man, which were not paid.
10.2 What other employment issues should shipowners and operators be aware of with regard to maritime workers in your jurisdiction?
Arresting vessel due to a claim in rem and arrest application filed by the crew when the vessel arrives at an Israeli port is one of the common practices of arresting vessels in Israel.
- Disputes
11.1 In which forums are shipping disputes typically heard in your jurisdiction?
All of the Ports of Israel (either Haifa, Ashdod, Eilat and any other terminals) are governed by the Haifa Maritime Court located in the Haifa District Court which has the authorities to judge in-rem claims and ship arrests, ownership and registration disputes and to order on confiscation of vessels according to the Naval Prize Act of 1864.
Other aspects of shipping and maritime Law such as cargo claims or charter-party disputes are considered as commercial civil claims and are brought before either a magistrates court or a district court- depending on the amount claimed and the relevant local jurisdiction. Claims up to NIS 2,500,500.- (equivalent to US$ 775,000.-) are filed before the a magistrate court, claims which exceed this amount are filed before a district court.
Israel has joined the New York Convention on the Recognition and Enforcement of Arbitral Awards. Under the Regulations for the Performing of the New York Convention (Foreign Arbitration), 1978, the District Courts are authorised to enforce a foreign arbitral award, provided that the Applicant will present the Court with a verified copy of the award and of the arbitration agreement. In addition, under Article 5 and Article 6 of the Arbitration Act, 1968, the District Court will order a stay of proceedings where the matter in dispute is subject to an arbitration agreement (or arbitration clause in the contract) and if the arbitration is subject to any international convention of which Israel is a signatory, the proceedings will be stayed according to the rules relating to stay of proceedings which appear in the Convention.
Following clauses 16 (a) and 39 A. of the Israeli Arbitration Act, 1968, a District Court is authorized to order on supportive remedies such as liens and restraining orders in order to secure arbitration proceedings, including proceedings taking place in foreign jurisdictions. The Haifa Maritime Court, situated in the Haifa District Court, exercises this authority and will order the arrests of the vessel even if the claim itself should be determined in arbitration or in a foreign jurisdiction.
Under folio no. 59972-07-19, M/V AQUIS PERLA, M/V MARE ZEN, (2019) The Haifa Maritime Court held that it is authorized to order attachments on assets of the local defendant to secure a London Arbitration in relation to unpaid hire, following the above mentioned provisions of the Israeli Arbitration Act and with no need to enquire if English Arbitration Law does or doesn't allow the attaching of a defendant's assets.
11.2 What issues do such disputes typically involve? How are they typically resolved?
As mentioned above, mainly the claims would be of the nature of enforcement of maritime liens or cargo claims. The claims are typically solved by either proceeding with the case and reaching judgment, or a settlement -either following direct discussions or mediation.
11.3 Have there been any recent cases of note?
Prize:
In the matter of M/V Estelle (2014), reasoning its authorities from the Colonial Courts Act of 1980 and the Naval Prize Act of 1864, the Haifa Maritime Court held that it is authorized to act as a Prize Court and to order the confiscation of vessels attempting to breach the naval blockade imposed on Gaza. In the specific matter of the M/V Estelle the vessel was released because the Israeli Navy did not bring the matter to adjudication promptly. Later, in the matters of M/V Marianne (2016) and the M/V Zaytouna- Oliva (2019) the Maritime Court ordered the confiscation and judicial auction sale of the vessels and ordered that the amount received from the sales will be transferred to the State of Israel.
Ownership: In the matter of M/V Badr (2020), the Haifa Maritime Court held that a vessel registered under a foreign registration cannot be registered under the Israeli registration unless properly deleted from its former registration, even if the new ownership arises from a writ of ownership issued by an Authority. At this stage as an immediate relief, the Court ordered an attachment of the Israeli registration of the vessel and thereafter scheduled the matter for pleading and hearings.
Mortgage: In the matter of Vapi Kredi Banaksi Vs. M/V HUYIYE ANA (2017), after deciding that a sister-ship arrest is not possible under the Israeli maritime law, the Court has denied a Bank's claim to enforce a Mortgage which was registered in the vessel's registration. The Court held that the foreign Bank did prove the validity of the loan agreement and Mortgage according to the Turkish Law which governed the documents, did not enforce the Turkish Execution decision in favor of the Bank according to the requirements of the Israeli Enforcement of Foreign Judgments Act, as no information was provided in relation to the payment schedule agreed with the debtor (which was not the owner) and what was the exact amount of debt remained. In other words, the court has held that the fact that a mortgage is written in the vessels' registration is not enough in order to have it enforced.
Unpaid costs of hospitalization and medical treatment to a crew-man/Covid 19:
In the matter of M/V Moraz (2021) the Haifa Maritime Courts accepted that the costs of medical treatment provided by a local hospital to a crew member who became ill with covid 19 after he came on board constitute a recognized maritime lien on the vessel. according to clause 40-41 (4) of the Shipping Act (Vessels) 1960 –"Payments claimed".
- Trends and predictions
12.1 How would you describe the current shipping landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Located in the strategic meeting point between Europe, Asia and Africa, the Israeli Ports of Haifa and Ashdod ( located on the east shore of the Mediterranean Sea) and Eilat (located on west shore of the Red Sea) fulfil a key roll in Israeli and other related and connected trade, with the potential of playing a more significant role in view of the beginning of the operation of the new "Bay Port" located at Haifa Bay which began to operate in September 2021, and the process of transferring the operation of Haifa and Ashdod Port to private hands, and the opportunities available after the conclusion of the Abraham Accords.
Currently, according to the statistics provided by the Israeli Authority for Shipping and Ports the volume of cargoes both loaded and discharged at all of the Israeli ports during the year 2020 reached a total to 57.453 million tonnes.
According to the records available to January 2020 the number of vessels which were under an Israeli ownership or control was 33 vessels, having a total DWT of 1.833 million tonnes and average age of 12.4 years.
After political stability have been reached in the area, it is expected that the already prepared Port Regulation (Preventing Air Pollution from Vessels), 2016 (updated on 2020) will come into force after completing the legislation procedure. By this, the IMO's Marine Environment Protection Committee's decision dated 26.10.2018, (also known as the "IMO 2020" Rule) will come into force in Israel.
Another Act which is on the edge of completing the legislation procedure is the Israeli "Occupancy Tax" which will able companies dealing with marine carriage of cargos to have their income payment calculated according to the weight of the carrying vessels (measured in tons) and not according to actual payment. This opportunity, will able shipowners and operators both to enjoy lesser income tax payments and to enjoy stability of income tax payments, and to make their own choice of the tax regime which will govern their shipping activities- either the regular or of the "occupancy tax", according to their discretion and their calculations.
Having governmental support such as allowing increased 20% depreciation on vessels for reducing income-tax payments and subsidizing the employment of Israeli crew and officers, the Government of Israel supports the local shipowners in order to preserve and develop the Israeli shipping and vessel ownership.
After political stability have been reached, it is expected that already prepared Port Regulation (Preventing Air Pollution from Vessels), 2016 (updated on 2020) will come into force after completing the legislation procedure.
- Tips and traps
13.1 What are your top tips for shipowners and operators in your jurisdiction and what potential sticking points would you highlight?
The Treaty of Peace, Diplomatic Relations and full normalisation between the United Arab Emirates and the State of Israel, followed by normalization agreements with Bahrain, strengthens the strategic location of Israel and Israeli ports and an increase in more volume of trade and transport between Israel and the Gulf States is expected.
The Haifa Maritime Court has exercised its rights in favour of either a bunker supplier located in Dubai (arresting the MV Huseyn Javid for unpaid bunkers) or a Libyan owner (in attaching the registration of MV BADR) and, of course, after the Abraham Accords have been concluded, the Persian Gulf and other Middle East claimants and interests will find the Haifa Maritime Court and other Israeli Courts to be favourable jurisdictions.
