A key player in Latin American marine claims: Peruvian Maritime Authority

In Peru, the Maritime Authority has the ability to initiate administrative proceedings in relation to any accident that occurs on the territorial waters of Peru in order to determine if there has been a breach of statutory provisions. This covers any accident suffered or caused by any vessel. The decisions made by the Authority – and not a judge in a court of law – could have an impact on insureds and insurers if a claim is presented.

Procedure

When an incident occurs, the Maritime Authority will issue an order starting the proceedings, serve proceedings on the involved parties, and grant an initial term to submit the defense. Subsequently, the Authority will collect witness statements, carry out inspections (if required), order the production of expert evidence (again, if required) and schedule an oral hearing. After the hearing, the Harbour Master, on behalf of the Authority, will issue a decision in first instance.  

If the decisions issued by the Authority are not challenged, they will be binding on the parties involved.

If the Authority’s first instance decision is appealed, it is heard by an administrative court in the second and final instance. If the administrative court’s final appeal decision is challenged, the case is transferred and heard by a judge in judiciary proceedings. 

Scope

The variety and type of case which can be heard and investigated in the administrative proceedings is wide. These can range from an intervention of a vessel with no permission to fish, a sinking of a vessel, a collision between two vessels, and any other loss occurring on the territorial waters of Peru.

Despite the fact that an administrative decision is not issued by the Judiciary, if the case concerns an accident which requires a decision on whether there has been a breach of statutory provisions, the Peruvian Maritime Authority can determine the cause of the incident. This will result in a binding decision for the parties involved.

Impact

There are many ways in which this procedure can impact the insurance market. For example:   

• In a case with only one party involved (for example, the sinking of a vessel), the decision issued by the Authority will rule on the causes of the accident. This could determine if the damages suffered by the insured are covered or not.
• In a case with two parties involved (for example, a collision of two vessels) the Authority will issue a decision on the causes of the collision. This will be relevant to the market for a future recovery through subrogation.

In addition, it is important to note that if there is more than one party involved, as well as establishing the causes of the incident, apportionment of liability or even joint and several liability can be determined by the Authority.

Comment

The insurance market should be aware that if they are covering risks in Peru, there is the real possibility that issues relating to coverage or apportionment of liability could be impacted by a decision handed down by the Maritime Authority, and not by a judge in a court of law.

Related item: Maritime authorities in Latin America - both judge and interested party?

Read other items in Marine Brief - July 2024