Ms Kiran Khosla
Director

Kiran, an English qualified lawyer (solicitor), is the Principal Legal Director of the International Chamber of Shipping (ICS). ICS is the international trade association and employers’ organisation for merchant shipowners and ship operators. The membership of ICS comprises national shipowners’ associations from 40 countries, and represents all sectors and trades and about 80% of the world fleet. ICS enjoys consultative status with the International Maritime Organization (IMO) and the International Labour Organization (ILO) and has represented the shipping industry in negotiations leading to all the international conventions dealing with safety and liability and compensation for pollution.

Kiran and the ICS Legal department advises the national associations on legal liability, competition and insurance related matters affecting shipping and shipowners generally. The department represent ICS at the IMO Legal Committee and at other UN agencies including UNCITRAL and UNCTAD on legal and insurance issues.

Prior to joining ICS, Kiran worked at a Norwegian P&I Club, heading the Defence team and before that, she was in private practice with a shipping law firm in London working exclusively in shipping litigation, dealing with claims in the London High Court and London arbitration.

International Shipping Finance and Law Review

In recent years the shipping industry, and the seafarers upon which the industry depends, have faced unprecedented challenges. The global COVID-19 pandemic, increasing regulatory pressures, and shifting geopolitical landscapes where commercial shipping is increasingly seen as a target in regional conflicts, have all contributed to a turbulent, and increasingly dangerous, environment for those who work at sea.

These challenges are compounded by increased regional regulation, particularly concerning the environment, and new logistical challenges. While strong regulation is crucial for ensuring safety, certainty and sustainability in international shipping, such regulation should be made at a global level by the International Maritime Organisation, thereby ensuring global rules for a global industry.

The 2024/25 International Shipping Finance & Law Review provides an valuable opportunity to highlight and review these important issues, trends, and challenges facing our shipping and maritime legal communities.

Seafarers: The Human Factor

First and foremost, it is crucial to consider the human factor in international shipping. Seafarers are the backbone of the global maritime industry, yet their well-being is often overlooked. The harsh conditions faced by seafarers during the COVID-19 pandemic which included the crew change crisis, extended contracts resulting in prolonged periods at sea, and the denial of shore leave by governments, all underscored the vulnerabilities of those who work at sea and highlighted once again the need to emphasise the human element when considering maritime law and policy. The International Maritime Organization (IMO) and the International Labour Organization (ILO) have been called upon to provide clearer guidance to ensure the protection of seafarers’ rights – most particularly through the recognition of seafarers as “key workers” with appropriate rights.

Criminalisation of Seafarers

One of the most troubling trends in maritime law is the increasing criminalisation of seafarers. Seafarers by the very nature of their profession, are exposed to multiple jurisdictions during their employment on board a ship. When a large casualty occurs or when illegal narcotics are discovered onboard a ship or within the ship’s cargo, it is not uncommon for some or all of the crew to be detained. The Master is particularly vulnerable to detention. Global drug activity has increased by an estimated 23% between 2011 and 2021, with some 296 million users worldwide, per United Nations Organization on Drugs and Crime (UNODC). Large commercial vessels are frequently targeted, unbeknownst to shipowners and crew, by highly organized criminal cartels and gangs to smuggle drugs across the globe by sea. The international shipping industry is committed to combating the smuggling of drugs concealed on board ships and has invested heavily in preventative measures, including equipment, control procedures and crew training.

ICS fully understands the damage caused to countries by maritime crimes, such as drug smuggling, and the need to suppress and deter this criminal activity, including through the prosecution of offenders using the full force of the criminal law. However, in many cases, seafarers are often wrongly detained for extended periods without trial, simply because drugs have been found on board and before any wrongdoing on the part of the seafarers has been established, with the seafarers being held in challenging conditions while separated from their family and loved ones. In some cases, basic human rights have also been disregarded. This not only undermines the morale of seafarers, often impacting their physical and mental health, but also has a detrimental effect on the recruitment and retention of seafarers, threatening the overall stability of the maritime industry.

In 2023 the ICS, along with some states and other industry organisations, co-sponsored a document that invited the IMO’s Legal Committee to consider the development of Guidelines on fair treatment of seafarers detained on suspicion of committing maritime crimes. ICS was actively involved in the subsequent work to finalise these Guidelines during the 110th and 111th session of the IMO Legal Committee in 2023-2024. These Guidelines were approved by the IMO Legal Committee at its 111th session in April 2024 and are intended to apply whenever a seafarer is detained on suspicion of committing any crime during the course of their employment on board. These Guidelines will be further refined at the meeting of the 3rd Joint IMO-ILO Tripartite Working Group to identify and address seafarers’ issues and the human element (JTWG 3) to be held in Geneva on 26 to 28 November 2024. Although the Guidelines recognise that the sovereignty of individual states must be respected, once finalised it is hoped that these Guidelines will reinforce the need for due process during any investigation into an alleged crime; serve as a reminder that the human rights of any detained seafarers must be respected throughout; and assist in ensuring more balanced and just treatment of seafarers, when detained on suspicion of a crime.

Erosion of Flag State Jurisdiction

There is growing concern about the potential erosion of flag state jurisdiction within the industry. Pursuant to the United Nations Convention on the Law of the Sea 1982 (UNCLOS), the vessel’s flag State has jurisdiction over and the primary responsibility for implementing and enforcing global regulation over ships as are agreed at IMO. However, increasing national and regional regulation, particularly in the context of environmental protection, introducing stricter standards than those agreed at IMO level, not only raises concerns about a fragmented regulatory environment, where shipping companies must comply with multiple, and sometimes conflicting, sets of rules; but it also has the potential to erode the fundamental principles enshrined in UNCLOS of innocent passage in the territorial sea and/or freedom of navigation in the EEZ of a coastal State.

Fraudulent Registration/Fraudulent Registries

In order to ensure that the system of Flag State jurisdiction is not undermined by fraudulent or illicit activity ICS is actively involved in the work of the IMO Legal Committee to address fraudulent registries, the fraudulent registration of ships and the fraudulent use of the IMO identification number schemes. This includes considering the elements of due diligence to be exercised in the process of registration of ships by flag State administrations when involving vessels in the IMO unique company and registered owner identification number scheme. This work will also consider whether a new output to draft on guidelines or best practices on the registration of ships would be desirable.

Supporting a Sustainable Salvage Industry

A healthy and sustainable salvage industry is essential for the safe operation of global shipping. Salvors provide critical services in emergencies, saving lives and preventing environmental disasters and their future viability is important to preserve for the entire shipping industry.

LOF Default Clause

The Lloyds Open Form of Salvage contract (LOF) is an essential contract entered into by shipowners and salvors when a vessel is in need of salvage assistance. For over a century, the LOF has been pivotal in ensuring maritime safety, enabling swift and effective responses to situations where the ship is in danger. It contains provisions designed to rewards salvors for attending vessels in danger and to encourage them to continue to invest in emergency response as well as training and equipment to meet the challenges of new shipbuild technology and the cargoes and fuel on board.

Recent years have seen a decrease in the use of LOF in situations for which it was designed, in favour of other fixed price contracts that require negotiation on price and the salvage service to be provided, This creates a risk of delay which can be dangerous for the safety of the crew and ship and cargo and the environment. In order to promote and support the use of the LOF, the Lloyds Market Association has worked with the ICS over the last 12 months to produce a clause for inclusion in the shipowners’ hull policy to give clarity around the process for contracting for emergency and non-standard tug services. In particular, the clause is designed to clarify that in the event of an emergency, the appropriate contract is the LOF and master and / or owners decision to use LOF to obtain salvage services is supported by their insurers; it further sets out a process for owners to notify hull underwriters of such incidents and take their views as to the appropriate contract to be used when this is practicable and it sets out a procedure for discussion with insurers when dealing with incidents where there is no immediate danger but nonetheless the master/owners perceive that assistance is required.

The overall objective is that this will encourage dialogue between owners and their underwriters and, ultimately, restore confidence in this vital contract, ensuring that it remains a cornerstone of maritime safety for years to come.

Strengthening Legal Frameworks and International Cooperation

As the industry moves forward, it is essential to strike a balance between the needs of seafarers, shipping companies, and the global community. This requires a collaborative approach, with input from all stakeholders, including national governments, international organisations including seafarer organisations, and industry leaders.

A key area of focus should be the strengthening of legal frameworks at global level while ensuring the operational efficiency and environmental sustainability of the shipping industry. Success will depend on global engagement at IMO and ILO and effective implementation and enforcement of any resulting regulation.

International cooperation is crucial. Regional and fragmented regulation, with varying standards across different jurisdictions, creates confusion and can undermine efforts to improve safety and sustainability. A more harmonised approach to regulation, where international standards are consistently applied and enforced, would benefit all parties involved. This would not only improve compliance but also reduce the legal and operational risks faced by shipping companies and seafarers.

Future Outlook

Looking ahead, the shipping industry will continue to face significant challenges as it navigates the complexities of modern global trade. The push towards decarbonisation will require innovative solutions and substantial investment, while the legal landscape will need to evolve to address emerging issues such as cyber security, autonomous vessels, and the impact of climate change on shipping routes and operations.

By prioritising seafarers, strengthening legal frameworks, and fostering international cooperation, the industry can navigate these challenges effectively, ensuring a safer, more sustainable future for global maritime operations. The continued evolution of maritime law and policy will be key in shaping the future of this vital industry, balancing the needs of seafarers, shipping companies, and the global community.