Concept and legal basis of shipboard representation
Die Shipboard representation designates in the legal context the statutory or contractual power of representation of a person on board a seagoing vessel, particularly in connection with the ship’s master (captain), for certain legal acts during a voyage. It is a significant institution in maritime commercial law and regulates the action and representation powers on board in case of absence, incapacity, or prevention of the ship’s master or other responsible persons. The focus is on safeguarding the interests of the shipowner, the crew, and other stakeholders during the stay of a vessel on the high seas or in foreign ports.
Statutory provisions on shipboard representation
Regulation under German law
Shipboard representation is primarily regulated in Book Five of the German Commercial Code (HGB), the maritime commercial law. The relevant provisions are found in §§ 482 to 487 HGB. They mainly deal with the power of representation of the captain (ship’s master) and its extension in special situations.
Powers of representation of the captain
By law, the captain is the representative of the shipowner with regard to all legal transactions and legal acts connected with the operation of the ship, the carriage of cargo, and the care of persons on board (§ 484 HGB). His powers of representation include, among others:
- the conclusion of sea and freight contracts,
- the purchase of necessary ship supplies,
- entering into contracts concerning repairs to the ship,
- emergency purchases and sales of ship equipment or cargo under special circumstances.
Representation in emergencies
If, during a voyage, the responsible ship’s master is prevented, incapacitated or absent, the power of representation passes to the responsible officer or another designated person on board (§ 485 HGB). This transfer of shipboard representation is primarily aimed at ensuring continued operational capability and protecting the interests of the ship and cargo.
International regulations and conflict of laws
International regulations, such as the international law of the sea (UN Convention on the Law of the Sea), include basic rules on responsibilities on board but as a rule do not address national regulations on shipboard representation in detail. Instead, the design of shipboard representation remains a matter for the respective national maritime commercial law, so that the relevant national provisions, such as the HGB, are decisive.
Scope and limits of shipboard representation
Permissible legal transactions and actions of representation
Legally, shipboard representation covers all necessary measures that must be taken during the voyage or port stay to ensure operational safety and to fulfill the tasks of the vessel. This includes, among other things:
- contracts for the protection of ship, cargo, and persons,
- averting dangers to the ship or cargo,
- information and communication with authorities and third parties.
The power of representation exists exclusively for the duration and purposes of the voyage, until safe arrival in a port where the shipowner can again exercise direct control over the ship and its affairs.
Exceeding the power of representation
Exceeding shipboard representation occurs when representation acts are carried out unnecessarily or outside the statutory authorization. As a rule, liability towards the shipowner may then arise (§ 487 HGB). However, the validity of the underlying transaction with third parties is usually not affected if the power of representation was apparent to them.
Rights and duties in the context of shipboard representation
Primary obligations of the representative
The person entrusted with shipboard representation must in particular
- safeguard the interests of the shipowner and the persons on board with the utmost care,
- follow the instructions of the shipowner as far as possible,
- refrain from all actions beyond ensuring operational safety and the protection of cargo and persons,
- report to the shipowner later without delay and in full on all actions taken.
Liability in case of abuse and breaches of duty
If there are breaches of the duties associated with shipboard representation, the acting person is liable to the shipowner for damages. This liability covers all damages arising from exceeding the powers of attorney or from breaches of duty, provided there is intent or gross negligence.
Significance and practical relevance of shipboard representation
Shipboard representation is a central control and protection instrument in maritime commercial law, which ensures the proper operation of the ship even in unforeseeable situations. It provides legal certainty in international maritime commerce and makes a significant contribution to safeguarding ships’ operational capability regardless of the immediate availability of the shipowner.
Literature
- German Commercial Code (HGB), §§ 482-487
- Munich Commentary on the German Commercial Code
- Schaps, Maritime Commercial Law
Web links
- German Commercial Code – Book Five: Maritime Trade
- Detailed explanations on shipboard representation in maritime commercial law
Frequently Asked Questions
What requirements must be met for legally effective shipboard representation?
For shipboard representation to be legally effective, certain requirements must be fulfilled. On one hand, the power of representation must have been granted explicitly or implicitly (i.e., by conclusive action). This is usually done by the rules of procedure of the board or by a formal resolution of the body. The rules of representation are governed by the respective corporate law (e.g., stock corporation law, limited liability company law, or association law). It must also be ensured that the power of representation has been properly registered in the commercial or association register, if required by law or the articles of association. Furthermore, the representative must not exceed the statutory and constitutional limits – this concerns both the scope of authority and possible restrictions by instructions from the body. In case of defective authorization, representation may be suspended or even void.
What are the legal consequences of defective shipboard representation?
If shipboard representation is defective, for example because power of representation was not granted or not properly granted, the legal acts performed by the representative are generally provisionally invalid. This means that these actions only become effective if the competent body subsequently approves them. Without such approval, significant legal consequences may ensue: contracts can be void, claims for damages may arise against the company or the members of the governing body, and the person acting without proper authority may be held personally liable. In the worst case, this may also lead to the company being held liable towards third parties if the appearance of authority was given (so-called apparent or tolerated authority).
To what extent may shipboard representatives exercise powers?
The scope of the powers of a shipboard representative is governed by statutory provisions, the articles of association, and internal rules of procedure. Typically, shipboard representation covers both judicial and extrajudicial representation of the company or organization. However, restrictions may arise from reservations in the articles of association for certain actions, such as extraordinary transactions (e.g., property transactions, acquisitions of holdings) which require the approval of the supervisory board or the general meeting. Legal or constitutional requirements, such as the four-eyes principle, may also limit the power of representation. If a representative exceeds those limits, the principal is generally not obliged to perform the transaction.
How is liability regulated when power of representation is exceeded?
If a person exceeds their legally granted powers of representation in the context of shipboard representation, they are generally personally liable for the resulting consequences. Under § 179 of the German Civil Code (BGB), a representative without authority is obliged to compensate the counterparty for losses of trust or non-performance. In addition, liability towards the represented company may arise, such as claims for damages due to breach of duty or director’s liability (§ 93 AktG, § 43 GmbHG). Depending on the specific circumstances, criminal responsibility is not excluded, particularly in cases of intentional damage to corporate assets.
What notification obligations exist towards third parties in case of changes in shipboard representation?
Legally, it is mandatory to notify third parties, especially business partners and authorities, of changes in shipboard representation immediately and unambiguously. Under company law, changes in board composition or management must be recorded in the commercial register accordingly (§ 78 AktG, § 35 GmbHG). The change only takes effect towards third parties (publicity effect) when entered in the register. Failure to notify may result in previous powers appearing to persist externally (protection of third-party confidence). Proofs of representation (e.g., signature specimens, register extracts) also have to be kept up to date.
What formal requirements apply for granting or changing shipboard representation?
The appointment or removal of representatives of an organ (e.g., board, managing director) is generally subject to special formal requirements. As a rule, this is bound to resolutions under company law or election processes, the result of which must be documented in minutes and ensured by proper record-keeping. Registration with the commercial or association register is done in writing and in officially certified form. For certain transactions, additional formal requirements may apply, such as notarial certification for property transactions or for amendments to the articles of association. Violations of form may render the power of representation entirely ineffective.
To what extent are internal restrictions on shipboard representation binding on third parties?
Internal restrictions on the power of representation—such as requirements for internal approval or stipulations from the rules of procedure—are generally effective only in the internal relationship between members of the governing body or towards the company itself. Externally, i.e., towards third parties, they typically have no immediate effect, unless the restrictions are explicitly recorded in the commercial register or were known to the business partner. Thus, the law protects the confidence of legal transactions that registered representatives can act freely (apparent authority). A company usually cannot invoke a breach of internal restrictions against bona fide third parties, although the acting representative may still be held liable internally.
