| in short |

| the pain in spain |

 

Readers will recall the article in the January edition that dealt with the case of ‘the Erika’ in which the French Court handed down judgment on issues of liability and compensation ordering oil-giant Total to pay a hefty fine for the sinking of the vessel off the French Coast.

 

In yet another high-profile pollution case, a contrasting decision was handed down recently concerning the Prestige fiasco.  In November 2002, oil tanker Prestige foundered in the Bay of Biscay, resulting in a spillage of 77 000 MT of fuel oil into the ocean.  The effects of the spill were most significantly felt by Spain.  As a result the Spanish government has instituted legal proceedings against American Bureau of Shipping (‘ABS’), the vessel’s classification society, to the tune of 1 billion U.S Dollars.

 

However, in a sneaky turn of events, the Spanish government attempted to bring its’ claim against ABS in the home country of ABS, namely the United States of America.  Sneaky is the word of choice here because Spain is a signatory to the International Convention on Civil Liability for Oil Pollution Damage 1992 (‘CLC 92’), which contains limitations to liability and to which any claim brought in the Spanish Courts would be subject and governed by.  The U.S was thus perceived to be a more ‘favourable’ forum in light of the fact that it is not a signatory to CLC 92 and instead has its own oil pollution compensation system, in the form of the Oil Pollution Act of 1990 (OPA 90), with the result that a successful claim against ABS in the US would not be limited either as to the amount or the scope of the claim.

 

The Spanish governments’ claim is primarily based on the allegation that ‘ABS wrongly approved of the vessel being allowed to trade and carry such cargoes and that they were negligent in so doing’…moreover, ‘that ABS owed them a duty of care and that it breached that duty’.   These issues remain to be decided. 

 

In the interim, ABS argued that the U.S Courts were not the correct forum within which to pursue the claim and that the CLC 92 exempted them from liability on the basis that they were an ‘other person’ as defined in Article III (4)(b) of the CLC.

 

This article states that: “No claim for compensation for pollution damage may be made against the owner otherwise than in accordance with this Convention.  Subject to paragraph 5 of this Article, no claim for compensation for pollution damage under this Convention or otherwise may be made against:… (b) the pilot or any other person who, without being a member of the crew, performs services for the ship”.

 

The preliminary issues as raised by ABS were heard in January 2008 before a District Court Judge in the Federal Court in New York.   The decision went in favour of ABS and the court found the correct jurisdiction for the hearing of this claim to be Spain.  Moreover, it was held that ABS indeed constituted ‘any other person’ and the CLC was therefore applicable.   The court stated that ‘Spain, as a signatory to the CLC, is bound by its provisions and therefore, must pursue its claim under that Convention in its own courts … Spain has brought forth no support for the proposition that a United States court can broaden a cause of action under a treaty to which it is not a signatory by exercising jurisdiction of a claim defined by the treaty under circumstances in which the treaty itself precludes litigation by the plaintiff treaty signatory in the United States forum’.

 

This decision has been widely welcomed by those in the industry who believe that international rules and regulations should govern an international industry and particularly that a long-lived and widely accepted pollution compensation convention should not be circumvented. Furthermore, Spain’s behaviour in trying to ignore the CLC to which it has long been a signatory in an attempt to forum shop, has left a bitter taste in the industry’s mouth.

 

This view, coupled with the fact that the Spanish government denied a place of safety for the vessel in her time of distress ordering her back into the Atlantic where she subsequently foundered, has ensured for many that justice has indeed been served.

 

That said, Spain has noted its appeal against the decision and, in the words of GARD, ‘the legal argument looks set to continue for many years’.

 

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