© Springer-Verlag Berlin Heidelberg 2015Jürgen Basedow, Ulrich Magnus and Rüdiger Wolfrum (eds.)The Hamburg Lectures on Maritime Affairs 2011-2013Hamburg Studies on Maritime AffairsInternational Max Planck Research School for Maritime Affairs at the University of Hamburg2810.1007/978-3-642-55104-8_9
Cruise Ship Law
Full Professor of Commercial Law, University of Cádiz, Cádiz, Spain
Juan L. Pulido Begines
I. The Cruise Industry
The cruise industry has become a boom sector in the last decades. Indeed, it is the fastest growing segment of the leisure travel industry and continues to grow.1 This traffic has seen in recent years a dramatic increase in activity, particularly on the European side of the Atlantic. If during the 1980s the core operations of the cruise tourism industry was located almost exclusively in the area of the Caribbean – the American client being the main target – from the 1990s that market began to show signs of saturation, producing a corresponding increase in other geographical areas.2 Nowadays there are cruises to just about any place in the world, although the Caribbean remains the most popular destination.
The outlook of the European cruise market is very favourable, the statistics show that the Caribbean market has peaked, and, on the other hand, that the clients of cruise tourism are no longer almost exclusively Americans, with demand growing in the European customers.3 The European cruise sector in 2010 increased its contribution to Europe’s economies by 3%. Its total expenditure reached a record €35.2 billion, and a further 4% more jobs were created – bringing the total above 300,000.4 The cruise lines themselves employ 50,000 European nationals as officers and ratings on their ships and a further 5,000 in their various headquarters and administrative offices. It is reasonable, therefore, also to project a continued increase in the economic impact of the sector across Europe, especially as Europeans have already shown a clear preference for cruising within Europe.
According to the data of the European Cruise Council,5 Italy took over as the number one cruise destination – not just in Europe but in the world – during 2010. Its 5.4 million passenger visits represented 21% of the total, while Spain (4.9 million) moved up from third to second, and the previous number one, Greece (4.5 million), slipped to third. France (2 million) and Norway (1.8 million) were the other countries to top the million mark, while Portugal, Denmark, Sweden, the UK and Malta completed the top 10.6 Barcelona, is the highest ranking European port (2.65); and Miami the top one in the world (37.17).
This booming business is also affecting other sectors. Thus, many port cities are aspiring to become home port or port of call for cruise ships.7 The number of port-bases is growing steadily, because of the search conducted by tour operators for new lines and improved port facilities, adequate rates, and cities that are attractive to their customers.
In order to capture a share of this succulent market, operators have commissioned the construction of passenger ships ever greater in size and better equipped.8 The sizes of cruise ships are reaching record proportions with the population of crew and passengers equalling many small towns. Their dimension has more than doubled over the last decade alone: in 1990, the average size of vessels intended as cruise ships were 195 meters long, 8,1 meters deep, and having a capacity for 2,800 passengers. Currently sailing in certain areas, there are authentic “floating cities”, between 275 and 300 meters long, that can accommodate up to 5,000 passengers and which are manned by hundreds of people and resembling floating holidays resorts, with recent innovations as balcony cabins and a host of fancy restaurants, ice skating rinks and circus performers, grand public rooms with high ceilings, rich wood panelling, mosaics, marble, chandeliers and Art Deco features.9 That is the case, for example, with the vessel Allure of the Seas, owned by Royal Caribbean, with a capacity of 5,400 passengers and a tonnage of 220,000. And there are still several new units of the same type under construction.10
Besides, the cruise industry today has a good image and enjoys a growing popularity (large ships full of gaming activities on the way to beautiful destinations) that has proven to be very prosperous for the industry. Cruise lines have responded to the consumer demand by offering special interest cruises and options. There are cruises specialised in children, golf, hunting, etc. More recently, cruise lines are moving as well into the business travel sector by offering conferencing facilities and meeting space for conventions in the newer ships, and by offering educational opportunities at sea, such as professional certification and continuing education classes.11
As users increase, economies of scale enable cheaper prices and so a democratisation of the market.12 This also explains in part the industry’s recent growth trend, as consumers get a good value for their money. It has meant that cruising has become affordable to new segments of the population who would previously have found it out of their reach. On the other hand, there is a good relationship between the high quality of the product and the value of the prices, and a very varied offer of products.13
The overall growth of the cruise industry is surprising. The industry continues to grow, counteracting the sinking economy by focusing on slashing prices. In reality, cruise lines are still flourishing while the world economy declines.
The emergence of a strong tourist cruise industry, with its consequent amount of legal transactions, has led to the emergence of new conflicts of interest that require a response from the law. But as always, reality is ahead of legal regulation in this field. For that reason, to address the new needs of the traffic operators have to resort to older instruments whose aim is to regulate related realities or general questions.
The main purpose of this paper is to clarify what are at present the regulations being applied to the traffic of cruise ships. Amid the complex web of legal relationships ordered to carry out that activity, this requires framing the operating parties and the respective contracts that bind them.
Because, in fact, the cruise ship business represents a complex framework. There is no single “tourist cruise contract” but a different set of relationships oriented to the furnishing of tourist cruise services.14 But to achieve this end, several parties must cooperate, implementing different, although interconnected, contractual obligations.
II. Cruise Shipping Law
1. Posing the Problem
With very few exceptions,15 no specific rules have been produced to regulate conflicts of interest arising from legal transactions related to cruise shipping. In fact, we have a plurality of sources that could be applicable.16 That is why it is necessary to specify which and to what extent each of them is pertinent to this subject. This situation creates complex problems in practice in many European jurisdictions, produces litigation and, somehow, perplexity in the consumer.17 It is necessary to define what a cruise trip is in order to determine what law is applicable.
First of all, such traffic might be subject to regulation ordered to similar subjects. In our case, that discipline is clearly that created for carrying passengers by sea. But that could only be possible if we can deem the activity as transport.
On the other hand, the traffic of cruise ships could be included in broader activities, such as tourism law rules and, in particular, package tour travel. And, for these contracts, we have European legislation that could be applicable to the services of cruise ships, if the conceptual requirements of those provisions are met.18
The consequences of applying one or another regulation can be severe regarding the limitation of or the grounds for liability.19 The law to be applied to an injured passenger’s claim can have a dramatic impact on the likelihood of recovering proper damages. For example, the Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea of 1974 (PAL Convention) limits the carrier’s liability for death of or personal injury to a passenger to no more than the applicable amount of Special Drawing Rights as defined therein, and all other limits for damage or loss of personal property. The situation of the passengers would be completely different if the package tour laws are applicable. Also, because of that, there are several different levels of protection for the party contracting with the tour operator, resulting from the different applicable laws.
2. Cruise Shipping and Consumer Protection Law
On a first quick view, cruise ship services could easily be considered as a contract for carriage. Indeed, there is actually a transport involved. But the question is not so easily answered: Are the transport laws applicable? In any case? Under any conditions?
Further thinking drives us to realise that there other sets of rules that might be applicable in this situation: in particular, the discipline of the package tour. The regulatory framework that governs the tourist industry and, in particular, the protection of tourists, is now more complex than ever, as it originates in a multitude of multi-level sources, both autonomous and heteronomous, national and supra-national, all of which interact with each other. We will pay attention here only to the EU law.20
It cannot be said that there is today, in EU legal systems, a contract for cruise trips as a codified and separate entity. Rather, the agreements between the traveller and the provider of cruise services are largely subsumed in the institution of package tour contracts. However, concerning passenger rights in transportation, EU law has extended the traditional borders of consumer law: the role of the client or passenger does not depend on whether he undertakes a trip outside or within his business or profession.21
The main rule governing cruise ships is Council Directive 90/314/EEC of 13 June 1990, which regulates the relationship between travel agencies and tourists.22 This Directive comes within the framework of the laws that protect consumers and users, so specific national and EU legislation on this matter shall also apply to package tour contracts.
If we analyse Article 2.1 of Council Directive 90/314/EEC, we could conclude that cruise ship services could be considered as a package tour. Despite all of the different types of contracts used in practice, the provision of a typical cruise ship service can be framed in the concept of package tour established in the EU Directive, which provides that the term “package” means the pre-arranged combination of at least two of the following:
“transportation, accommodation, other tourist services not ancillary to transport or accommodation and accounting for a significant part of the package. The separate billing of various components of the same package shall not absolve the organizer or retailer from the obligations under this Directive.”
In cruise ship service the three elements mentioned ordinarily concur.23 It is clear that the different services furnished to the tourist must be considered as a whole, not as single services, and as the result of the combination of several services, and thus this whole has a greater value than the total sum of the significance of each separate performance or utility that is included in it.24 Regarding Article 2.1, I think that cruise ship services must be considered, as a rule, as a package tour and, as such, are submitted to the Directive and the corresponding national rules, when EU law is enforceable.25
But this approach is not unquestioned: another construction is possible, because the concept of cruise shipping is not clear at all.26 It could be said, for example, that accommodation and maintenance are, in themselves, services complementary to transport. The concept of a package tour is, indeed, obscure and ambiguous. Following the most common positions, we can identify the relevant elements in the definition of package tour.27 Some of them are positive: a previous coordination task; a minimum plural content; a minimum duration; a global price. But there is also a negative element: the services must not be complementary to carriage or boarding. Contracts having as purpose only to provide transportation services, or just accommodation, are outside the scope of the Directive.
Nevertheless, there are still some ambiguities in the EU Directive that lead to different possible constructions about the concept of package tour. Those doubts have been discussed in some court decisions.28
Any previously unresolved questions were, however, excluded by the judgment of the European Court (Grand Chamber) of 7 December 2010, in the joined cases C-585/08 and C-144/09.29
The dispute between Mr Pammer, who resided in Austria, and Reederei Karl Schlüter, a company established in Germany, concerned a voyage by freighter from Trieste (Italy) to the Far East, organised by that company and which gave rise to a contract between it and Mr Pammer. Mr Pammer booked the voyage through Internationale Frachtschiffreisen Pfeiffer GmbH, a company whose seat is in Germany. The intermediary company, which operates in particular via the internet, described the voyage on its website, indicating that there was a fitness room, an outdoor swimming pool, saloon and video and television access on the vessel. Reference was also made to three double cabins with shower and toilet, to a separate living room with seating, a desk, carpeting and a fridge, and to stopping at ports of call from which excursions into towns could be undertaken.
Mr Pammer refused to embark and sought reimbursement of the sum which he had paid for the voyage on the ground that that description did not, in his view, correspond to the conditions on the vessel. Since Reederei Karl Schlüter reimbursed only a part of that sum, that is to say, roughly EUR 3,500, Mr Pammer claimed payment of the balance, about EUR 5,000, together with interest before an Austrian court of first instance, the Bezirksgericht (District Court) Krems an der Donau.
The Court had to decide whether a “voyage by freighter” constituted package travel for the purposes of Article 15.3 of Regulation nº 44/2001. The Oberste Gerichtshof (Supreme Court) harboured doubts regarding the criteria applicable to the concept of package travel; it observed that the question to be answered was whether the services offered are comparable to a cruise. If the answer was positive, that would justify the conclusion that there was a package and accordingly a contract of transport covered by Section 4 of Chapter II of Regulation nº 44/2001.
Finally, the Court underlined that apart from transport, the voyage by freighter involved, for an inclusive price, accommodation too, and that the voyage was for a period of more than 24 hours. Accordingly, such a service fulfilled the necessary conditions for a package within the meaning of Article 2.1 of Directive 90/314 and fell within the definition set out in Article 15.3 of Regulation nº 44/2001, read in the light of Article 2.1 of the Directive, so that there was a contract of transport at an inclusive price. Therefore, a contract concerning a voyage by freighter, such as that at issue in the main proceedings “is a contract of transport which, for an inclusive price, provides for a combination of travel and accommodation within the meaning of Article 15.3 of Regulation nº 44/2001”.
In spite of the abovementioned ruling, the question of defining the cruise ship contract remains problematic. It has to be tackled in the upcoming review of the Directive. Meanwhile, the industry is proposing to establish an indicative list of the services that should be considered package tours.30
In our case, this might be a proper solution. The cruise industry is very peculiar, staying between “two worlds”: consumer law and maritime law, each one with its own rationale and demands. Therefore, an express pronunciation from the EU legislative body, in order to establish clearly whether cruise services are package services or not, should be welcomed.
The setting of cruise shipping in the field of consumer protection law is a good idea and, when it was established, constituted an authentic revolution of the legal framework of the industry.31 Although it poses still several problematic questions and there is scope to improve the system,32 it offers the consumer an adequate range of protection that is not common in other legal systems. The good example for this is US law,33 where the consumer is broadly unprotected. That is why a well-known American judge, Justice Thomas A. Dickerson, stated:
“A cruise vacation can be a wonderful experience but please don’t have an accident and don’t get sick and pray you received all that the cruise brochure and your travel agent promised otherwise you will discover that your rights and remedies as an aggrieved consumer are governed by antiquated legal principles which favor cruise lines to the detriment of cruise passengers.”34
That situation is possible because cruise lines are still subject in the USA to federal admiralty law, not to state regulatory, tort or consumer protections laws.35 For these reasons several opinions argue in favour of accommodating state consumer protection legislation in the context of general maritime law.36
3. Cruise Shipping and Transport Law
No doubt the current rules on maritime passenger transport will have some impact on the legal regime for cruise ships.37 However, these rules only regulate some aspects of the phenomenon – transport – without addressing other issues of the cruise business that also need regulation.
It seems to be a complex issue to what extent the regime of liability for damage suffered by passengers carried by seagoing vessels is applicable to cruise ships. The answer to this problem depends on the contractual regulation taken by the parties, and especially on the interpretation given to the general rules on package and consumer protection.
Indeed, the uniform rules on the subject could be applicable, in particular the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 (usually known as PAL 1974), which entered into force on 28 April 1987.
However, the application of the Athens Convention meets several limitations. The main obstacle to applying the Convention is the scope of regulation: the PAL Convention is not intended to establish a comprehensive legal regime for travel contracts. It is confined exclusively to contemplating the carrier’s liability and compensation for injury or damage caused as a result of an accident. Therefore it does not address other issues such as the carrier’s liability for breach of the obligation to transport, defective performance of the contract, delay damages, etc. The limited scope of the Convention is in contrast to the uniform law for passengers carried by other means, such as railway or air, such law containing a more comprehensive regulation.
Moreover, its standards are mandatory and are directed at the protection of the passenger. According to the Convention, contract clauses exempting the carrier from liability, decreasing liability limits, shifting the burden of proof or restraining freedom of the passenger to choose the competent court are void, but the nullity of those provision shall not render void the contract of carriage in which they are inserted (Article 18 PAL).
The carrier’s liability to the passenger for death or injury caused during the transport is a result of the security obligation assumed by the carrier. That obligation is ancillary to the principal one, which is to transport the passenger. It is therefore a contractual liability arising from the commitment made by the carrier (to get the passenger to the destination port unscathed), a promise that comes along with the obligation to respond to any frustration of the trip (by the compensation thereof to the traveller for personal injuries suffered).
But its main limitation is its irregular scope of application. The Athens Convention has been amended several times. The most important modification was introduced in 2002. As a result of the last modifying Protocol, a new international instrument was provided for: the agreement states that Articles 1 to 22 of the Convention, as revised in 2002, together with Articles 17 to 25 of the new Protocol and the Annex thereto, shall constitute and be called the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 2002 (PAL/2002).
The Athens Convention was adopted into EU law in 2009, and included as an annex I of Regulation (CE) 292/2009. According to Article 12 (entry into force) it shall apply from the date of the entry into force of the Athens Convention for the Community, and in any case from no later than 31 December 2012. So, from this date on, the Regulation will make PAL/2002 dispositions directly applicable and compulsory in all the Member States.
The main objects of the 2002 Protocol are to introduce compulsory insurance to cover passengers’ injuries sustained on ships and to raise the limits of liability.
Additionally, the former fault-based liability system is replaced by a limited strict liability system for shipping related incidents (shipwreck, collision or stranding of the ship, explosion or fire on the ship, capsizing of the ship or defect of the ship). Apart from that new provisions introduce the requirement that the actual carrier take out compulsory insurance to cover these potential claims. Moreover they provide for the passenger’s right to take direct action against the insurer.
PAL/2002 establishes a two-tier liability system in cases where death of or personal injury to a passenger is caused by a shipping incident. The carrier is liable for the death of or personal injury to the passenger up to the limit of SDR 250,000 per passenger on any individual occasion, unless the carrier proves that the incident resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and unavoidable character; or was wholly caused by an act or omission performed by a third party with the intent of causing the incident.
Therefore, PAL/2002 introduces a regime of strict liability of the carrier for the death of or personal injury of a passenger up to the abovementioned limit (the first tier of liability). If the loss caused by the shipping incident exceeds the limit of SDR 250,000 per passenger on any distinct occasion, the carrier is further liable – up to a limit of SDR 400,000 per passenger on each distinct occasion – unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier (the second tier of liability). For the loss suffered as a result of the death of or personal injury to a passenger not caused by a shipping incident, the carrier is liable if the incident which caused the loss was due to the fault or neglect of the carrier. The burden of proving fault or neglect lies with the claimant. The carrier liability cannot exceed SDR 400,000.
Finally, PAL/2002 includes an “opt-out” clause enabling State Parties to retain or introduce higher limits of liability (or unlimited liability) in the case of carriers who are subject to the jurisdiction of their courts. A State Party, which makes use of this option, is obliged to inform the IMO Secretary General of the limit of liability adopted or of the fact that there is none. The 2002 Protocol requires actual carriers to maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the limits for strict liability under the 2002 Protocol regarding the death of and personal injury to passengers. The limit of the compulsory insurance or other financial security shall not be less than 250,000 SDR per passenger on each distinct occasion. Ships are to be issued with a certificate attesting that insurance or other financial security is in force (a model certificate is attached to the PAL/2002).
4. Recapitulation. Package Tour or Transport?
Somehow, this question is latent, because in the entirety of services provided in every cruise service there is a transport, but not only a transport.38 It has been rightly said that, somehow, cruise shipping involves a “compromise between maritime law and consumer law”.39 Given these characteristics of cruise services, the most important point of the subject we are treating is the question when should transport laws be applied with priority over package tour laws?
In other words, does package travel regulation override the PAL Convention? Since in every cruise service there is a transport, I think that transport law could be applicable to complement EU law on package travel.
On the other hand, the question arises whether the PAL Convention overrides package travel regulations. Put in another way: when should transport laws be applied with priority over package tour laws? In my opinion, the key issue for answering this question is the role of transport in the services. In cruise shipping the transport is ancillary to other services.40 Its primary purpose is the provision of enjoyment and comfort.41 Transport of any kind qualifies as a package component, however insignificant it may be in proportion to the package services as a whole and however ancillary it is to the provision of accommodation.42 And that is so because in cruise shipping the vessel is the destination itself; the passengers may never have to get off board if they do not wish to. But in the carriage of passengers, on the other hand, transport is essential: accommodation and food is ancillary.43 In this contract, the vessel is a means of transport and not a destination itself.
In order not to leave this rule as too abstract, one needs to make a distinction in real life: this issue can be solved if we test whether or not the established itinerary can be changed without major consequences.
In cruise shipping, the itinerary can be changed whenever different circumstances occur. It is an obligation of means, regarding the transport. In fact, the etymology of “cruise”, from the French word “croisier”, means wandering by the seas from one edge to the other, with aims different than transport: discovery, safety, etc. This is clearly stated in the standard cruise voyage charter parties, for example, in CRUISEVOY (cl. 18.b):
“The itinerary described in Annex 1 may be altered or times and dates changed for any cause which the Master in his absolute discretion shall consider to be just and reasonable for the safety and security of the Vessel as well as the comfort and enjoyment of the passengers and, if the circumstances so permit, the itinerary will be revised by the Master in consultation with the Owners and the Charterers.”44
At the same time, what is worth mentioning, the rules of Regulation nº 1177/2010, of 24 November 2010, concerning the rights of passengers when travelling by sea and inland waterway, regarding cancellation or delay are not applicable to cruise services, which usually have open tickets (Article 20.1).45 Of course, this does not mean that the cruise line can arbitrarily change the ship’s itinerary. In cruise shipping, the ship owner can change the itinerary, but the consumer has the right to be taken to an alternative destination, with no increase of the price of the ticket, or, at least, to obtain compensation from the travel agent.46 That remedy is highly variable, depending on the situation of the ship owners and the different jurisdictions; as a rule, conditions offered by US companies are more stringent toward the passenger,47 while the French case law offers a more favourable leaning towards the consumer.48
But in the carriage of passengers, on the other hand, the carrier assumes the obligation to fulfil the transport; he cannot change the port of destination. As a rule, it is an obligation of result that can only be changed in the presence of force majeure.49 This rule is provided for both in national and international laws, as well as in the conditions of ferry boats.
In spite of all the abovementioned, one cannot say that transport law has nothing to do with cruise ship services. To establish its significance, it is necessary to determine the different legal relations that can be involved in the commercialisation of the services.
5. Some Problematic Issues
a) The Commercial Practice
Sometimes, cruise lines try to require passengers to agree on resolving their disputes by mandatory arbitration proceedings. But more frequently, companies tend to exclude the application of EU law by means of mediation clauses, time limitation clauses which require that notice of claims be filed within very short periods, or forum selection clauses, whose enforceability will not be treated here in detail. The latter comprised the classical problem of cruise ship law, even before the various consumer regulations were enforced.50
Mediation clauses are, indeed, broadly forbidden in EU package travel law,51 and even in some national maritime laws, as is the case of France.52 They are, actually, exoneration of liability clauses, and must be treated so.53 The Directive on package travel forbids that possibility (Article 5.1), since it mandatorily imposes certain obligations and responsibilities on the travel agencies, requiring ex lege that they assume such obligations in their own name, regardless of whether they or others actually provide the services. Therefore the mediation clauses that are often included in the general conditions of contracts offered by travel agencies and tour-operators – clauses proclaiming to be only “simple” mediators between the clients and the direct providers of services, must be considered inoperative.
Regarding forum selection clauses, litigation on behalf of cruise passengers can be made especially difficult because of the enforcement of these stipulations. Since most consumers purchase cruise vacations from their local retail travel agent, they expect to be able to file a complaint or commence a lawsuit in their local courts. But this is, however, not always possible when it comes to complaints arising from cruise shipping. The passenger ticket may contain a forum selection clause and a choice-of-law clause, both of which can have a negative impact upon the passenger’s ability to prosecute his claim. A forum selection clause may require that all passenger lawsuits be brought in the local court where the cruise line is headquartered. When faced with prosecuting a claim in a distant forum, some passengers may be discouraged from doing so.54
Forum selection clauses are generally enforceable in most jurisdictions unless the incorporation of the clause would be unreasonable or unjust or was the result of fraud, undue influence or overreaching bargaining power; or the selected forum is so gravely difficult and inconvenient that it will for all practical purposes deprive the passenger of his rights; or its enforcement would contravene a strong public policy of the forum in which the suit is brought.55
In addition to forum selection clauses, passenger tickets may also designate the specific law to be applied in resolving any dispute which may arise. Choice-of-law clauses are generally also enforceable unless the passenger can demonstrate that enforcement would be unreasonable or overreaching.56
It must be stressed, however, that in the cases when the consumer law is applicable, forum selections clauses can be overridden in accord with the terms of the Rome I Regulation (Regulation EC nº 593/2008, of 17 June 2008, on the law applicable to contractual obligations), by which a choice of law made by the parties shall not have the result of depriving the consumer of the protection afforded to him by the mandatory rules of the law of the country in which he has his habitual residence.57 This rule is not applicable to contracts of carriage, but it is expressly stated that this article “shall apply to a contract which, for an inclusive price, provides for a combination of travel and accommodation”. So here we find another example of the severe consequences that can arise from whether or not a contract is qualified as a contract of carriage.
b) The Coming Regulation
Some doubts stem from EU law, in particular Regulation nº 1177/2010 of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) nº 2006/2004 that will be applicable from 18 December 2012.
The main characteristic of this Regulation is that it assimilates cruise to transport, and sets the same discipline for both subjects. In Article 3 (t) we find the first legal concept of cruise service under EU law: “‘cruise’ means a transport service by sea or inland waterway, operated exclusively for the purpose of pleasure or recreation, supplemented by accommodation and other facilities, exceeding two overnight stays on board”.
Similarly Article 3 (m) states that: “‘transport contract’ means a contract of carriage between a carrier and a passenger for the provision of one or more passenger services or cruises”.
Given these two provisions, it must be stated that both the travel agency and the ship owner should be liable to passengers: the first one acting as a contractual carrier (Article 3 d) and the later as an actual or performing carrier (Article 3 h). This interpretation stems from the definition of the ‘carrier’, who is to be understood as “a natural or legal person, other than a tour operator, travel agent or ticket vendor, offering transport by passenger services or cruises to the general public. Moreover according to the new Regulation ‘performing carrier’ means a person, other than the carrier, who actually performs the carriage wholly or partially.”
The nature and scope of that liability is established in Article 5: Where the performance of the obligations under this Regulation has been entrusted to a performing carrier, ticket vendor or any other person, the carrier, travel agent, tour operator or terminal operator who has entrusted such obligations shall nevertheless be liable for the acts and omissions of that performing party, acting within that party’s scope of employment.
This article, in conjunction with the rules of Regulation (EC) nº 392/2009 of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents, means that cruise ship services shall under EU law be submitted to both Regulations previously quoted and to the Athens Convention, in its consolidated text with PAL 2000, when it is applicable.58 According to Article 12 it shall apply from the date of the entry into force of the Athens Convention for the Community and in any case from no later than 31 December 2012.
Notwithstanding the wording of the coming Regulation (nº 1177/2010), the interpretation problems may still arise as the Regulation is supposed to co-exist with the law of package tours. The explanatory memorandum of the Regulation (recital 20) clearly states that
“This Regulation should not affect the rights of passengers established by Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours. This Regulation should not apply in cases where a package tour is cancelled for reasons other than cancellation of the passenger service or the cruise.”
Since the coming situation is far from clear, on 4 August 2011 a question was posed by the European Parliament, regarding in particular the marketing of cruises. The Parliament asked the EU Commission to prepare a written answer on the following issues:
“Directive 90/314/EEC states, in Article 2(1), that ‘package’ travel should be considered to be ‘the pre-arranged combination of not fewer than two of the following when sold or offered for sale at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation: (a) transport; (b) accommodation; (c) other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of the package.’ The ruling by the Court of Justice of the European Union in cases C-585/08 and C-144/09 examines the criteria underpinning the concept of a ‘package’ to determine whether the services offered in these cases are comparable to a cruise, which would justify the conclusion that there is a ‘package’, and stipulates that: ‘[a]s the Court has already held, for a service to qualify as a package within the meaning of Article 2(1) of Directive 90/314, it is enough if, first, it combines tourist services sold at an inclusive price including two of the three services referred to in that provision […] and second, it covers a period of more than 24 hours or includes overnight accommodation.’
In this regard, there can be no doubt that, in addition to transport, the freighter journey to which the ruling refers includes accommodation for an inclusive price and lasts for more than 24 hours. Accordingly, such a service fulfils the necessary conditions to be considered a ‘package’ within the meaning of Article 2(1) of Directive 90/314/EEC and falls within the definition, set out in Article 15(3) of Regulation (EC) No 44/2001, read in the light of Article 2(1) thereof, of a contract of transport at an inclusive price. Regulation (EU) No 1177/2010 defines a cruise as ‘a transport service by sea or inland waterway, operated exclusively for the purpose of pleasure or recreation, supplemented by accommodation and other facilities, exceeding two overnight stays on board’. The regulation adds, in Article 2, that it does not apply to ‘passengers on excursion and sightseeing tours other than cruises’.
Does the Commission consider that the simple fact of marketing a cruise under Regulation (EU) No 1177/2010 must have repercussions on the notion of package travel under Directive 90/314/EEC on package travel, package holidays and package tours, or should it be considered a stand-alone service, within the category of transport services?”
The answer was the following:
“The Commission finds it likely that a cruise that fulfils the requirements of Article 2(1) of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (‘the directive’) would qualify as a ‘package’. In relation to this, the Commission points to the fact that most cruises are sold at an inclusive price and involve a combination of at least transport and accommodation. As highlighted by the Honourable Member, the Court of Justice of the European Union has repeatedly pointed out the criteria that are sufficient for a service to qualify as a package within the meaning of Article 2. The Commission cannot find strong arguments to argue that a cruise should only be considered ‘as a stand-alone service within the category of transport services’ in relation to the definition of a ‘package’. Against this background, the Commission is of the opinion that Regulation (EC) No 1177/2010(3) and its definition of a ‘cruise’ do not have repercussions on the notion of a ‘package’ as defined in Article 2(1) of the directive. However, as the Honourable Member is aware, the competence to interpret EU legislation rests with the Court of Justice of the European Union. The Commission can therefore not give a legally binding answer regarding the interpretation of Article 2(1) of the directive.”
Given an answer of the Commission that does not clarify much of anything, it is up to the Court of Justice of the European Union to resolve the doubts which are still to come.
III. Standard General Conditions
The current law of contract on package tours is largely mandatory. Therefore the scope of the autonomy of the parties is relatively small in comparison to what is common in other commercial contractual arrangements. Nevertheless, also in this area there are contractual documents that comprise standard industry practice and that, as a manifestation of living law, deserve a detailed analysis.59
Moreover, it should be borne in mind that the rules of the Directive are mandatory in all the matters pertaining to consumers rights60; therefore contractual clauses modifying legal rules to the benefit of the consumer are valid.61
It follows that the “tourist package” purchase deed is regulated not only by these general laws but also by the clauses specified in the travel documentation which is given to the customer.62
1. Conditions Used by Travel Agents
Cruise ship operators often use standard terms. The analysis of the primarily used documents in traffic shows that they are very heterogeneous in content. While some are very respectful of the Directive rules, others ignore the mandatory rules protecting the traveller by imposing unfair terms whose validity is more than doubtful. This variety makes it difficult to systematise the content of the policies and present the common general conditions used in their contents.
The standard terms usually include certain pre-conditions to filing suit, such as requiring passengers to notify the cruise line in writing of their intent to assert a claim.
It is also noted that the content of the general conditions used by the travel agency is largely determined by the form under which the cruise ship is operated, that is, by the relations existing between the travel agency and the owner of the vessel. For example, the use of CRUISEVOY makes it necessary to include in the general conditions of the tour operator the relevant provisions of the passenger ticket.
2. The General Conditions Governing Relations Between Travel Agents and Ship Owners: CRUISEVOY 1998
Among the existing standard contract forms, the one promoted by BIMCO is paradigmatic in both content and form.
The CRUISEVOY policy, adopted by the BIMCO Documentary Committee at its meeting in November 1997, is a consequence of the demand of the ship owners in the cruise industry: they asked for a document that meets the needs of operators on both sides of the Atlantic.63
As is usual for BIMCO policies, CRUISEVOY is a very detailed document, purporting to address all aspects of the business. It adopts the common systematics of BIMCO forms. Part I, divided into boxes, identifies in detail the parties, the vessel and the main elements of the contract (price, number of passengers, loading and unloading ports, etc.). Part II contains the general clauses. All variable details pertaining to the particular voyage are to be filled into the boxes of the form. Each box contains a short description of the intended contents and a cross-reference to the relevant clause or clauses in the printed body of Part II.
Additionally, the contract arising from CRUISEVOY can be formed with a series of Annexes which address major business issues that require careful and detailed regulation. For this reason, and certainly to avoid excessive recourse to special conditions or overly broad general clauses, BIMCO suggests that the content of the contract could be complemented with these Annexes, in the way the parties find most appropriate,64 so as to regulate itinerary (Annex I), the distribution of housing (Annex II), catering (Annex III), the payment terms and guarantees (Annex IV), and the model of passenger ticket issued by the owner (Annex V). It is expressly set forth in the policy that Part I (with conditions that may be established) and the Annexes prevail over Part II.
It has to be underlined that the main idea behind this division is that it makes it convenient for the users to do all the filling in and specifying of amendments and special provisions in Part I, leaving the printed text of Part II unaltered. In this context it should be emphasised that a standard contract constitutes an integrated whole and that any changes to one or more of the clauses may upset the intended balance of the contract. This fact should never be lost sight of when attempting to introduce changes or amendments to the standard clauses in Part II, which have been carefully drafted to cover the contractual and legal aspects.65
The itinerary is set quite rigidly in the policy: once fixed by Annex I, the charterer may never modify it in any way, and the ship owner only in justified circumstances, expressly set out in the contract (cl. 18). The policy stresses the character of CRUISEVOY as a voyage charter party. The policy is not appropriate for the use of vessels for a longer period without specified travel itineraries. The BIMCO Documentary Committee considered as a priority the task of preparing a voyage charter party for cruise ships, leaving for later the study and publication of a time charter party for those vessels.66