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REBATES and FINES in Egypt: Are Arbitrary Fines and Compensations Which Vessel Owners Are Obliged to Pay In Order To Avoid Delay Refundable?

In many cases, vessels may be subject to navigational hazards during their sea voyages, whether while sailing or transiting a navigational channel or while carrying out loading and discharging operations berthed at ports. As a consequence, fines/compensations are imposed on the vessel for her involvement in such kind of incidents.

There are different types of hazards, including but not limited to damage to berths and fixed objects in the port, damage to buoys, damages to pilots’ tugboats or mooring boats and/or gears, pollution incidents, grounding, damaging parts of coral reefs and other accidents” …

Consequently, the competent authorities involved in the marine field shall impose fines/compensations on the vessel allegedly involved in the accident, pursuant to the port laws, international conventions acceded to as well as the relevant regulations.

The competent authorities shall also impose fines/compensations on vessels that violate navigational rules and guidelines, even in case no damage to third party resulted from such violation.

Indeed, each vessel which caused damage or has breached the applicable laws and regulations shall be bound to pay the fines and compensations imposed by the law, in application of the principle of Supremacy of the law, taking into consideration maintenance of the marine safety and security.

A dispute may arise however when a vessel’s owner denies his vessel’s involvement in an accident which the vessel is accused of committing, or when it is viewed that the fine and/or compensation imposed are exaggerated/ unproportionate with the damage allegedly caused.

In such a case, the owner of the vessel may refuse to pay which may expose the vessel to arrest/detention which upsets the vessel’s schedules and causes a domino effect of losses throughout the vessel’s idleness/detention period, including additional port dues, demurrage etc.

This forces the vessel ’s owners and underwriters to pay these said fines and/or compensations notwithstanding their conviction of their inapplicability or at least overestimation.

The question arises here; is it possible to recover these fines/compensations or part thereof following thorough consideration of their entitlements/applicability?

The answer is yes. As a matter, of fact, the Egyptian Civil Law has organized such disputes by the filing of a lawsuit for “refunding amounts unduly paid, ” pursuant to the provisions of Articles 181 to 187 of the Civil law. In these types of lawsuits, evidence and proof are submitted before the court to substantiate the inaccuracy of the fine/compensation assessment, leading to a demand for full or partial refund of the amounts unduly paid.

Despite the difficulty of these lawsuits and given that the opposing party in those said cases  is predominantly a  governmental body, our firm “Eldib Advocates” has been able to achieve several breakthrough results over the years in such judicial disputes, where both the technical and legal teams of our office have worked side by side in a harmonious and homogeneous manner to present before the court a strong defense supported by evidence and grounds to dismiss the vessel’s owners/masters responsibility for the accidents/ violations against which the fines/compensation subject to the refund claims, have been imposed.

Two recent examples of Eldib Advocates successes in obtaining final court judgement in favor of both the owners are those of the cases pertaining to M/V “MOL PRESENCE” and M/V “MANDARIN TRADER” in which our teams efforts paid off in recovering the compensations previously paid by the owners of both vessels to the Suez Canal Authority against the allegation that buoys were destroyed during the transit of these vessels in the Suez Canal. Upon execution of these judgments, we have succeeded to recover sums exceeding US$ 100,000 in favor of the owners of both vessels.

“Eldib Advocates” are fully prepared to defend the interests of vessel owners and operators who are affected by the imposition of fines by some authorities and for the imposition of compensation for incidents or violations attributed to them – contrary to the truth – or by imposing fines and demanding excessive and unfair compensation. Eldib Advocates team is experienced and geared in handling the refund requests in cases where it is suspected that the imposed fine/compensation which have been paid by the vessel are overestimated –under reserve – against allowing the vessel to sail without delay.

Our aim is to assist in refunding the amounts that exceed a fair and legal estimate of the fine/ compensation, without prejudice to the need to maintain friendly relations with all marine authorities and governmental departments that vessel’s owners and agents deal with in Egypt.