1. The Prestige incident – some important court judgements Shipping and the Law Naples 8 October 2014 Måns Jacobsson Former Director, International Oil Pollution Compensation Funds

2. The Prestige incident Incident on 13 October 2002 Ship broke and sank off Galicia (Spain) Pollution in Spain, Portugal, France and United Kingdom Investigations into the cause of the incident by administrative authorities in Bahamans (flag State) Spain France 1

3. International compensation regime 1992 CLC and Fund Conventions applied to the incident Shipowner’s limitation amount under CLC €22.8 million Shipowner deposited limitation amount with Spanish court Total amount available under 1992 CLC and Fund Conventions €171.5 million Total compensation claims greatly exceeded the amount available 2

4. Court proceedings The incident resulted in court proceedings in Spain France Portugal United States United Kingdom European Court of Human Rights (Strasbourg) 3

5. Court proceedings in Portugal and France Portugal, civil proceedings one claim only (Portuguese Government) settled out of court France, civil proceedings a number of compensation claims in several courts actions of the type normally pursued under the 1992 Civil Liability and Fund Conventions 4

6. Criminal proceedings in Spain Four person stood trial in criminal proceedings before the Criminal Court (Audiencia Provincial) in La Coruña the master the Chief Officer the Chief Engineer (could not be located) the civil servant who had been involved in the decision not to allow the ship to a place of refuge in Spain Under Spanish law compensation claims can be submitted in criminal proceedings Some 2 500 claimants joined in the criminal proceedings (including the Spanish and French Governments) Defendants as regards the compensation claims included shipowner, London Club and the 1992 Fund Trial lasted 10 months Judgement rendered11 years after the incident 5

7. Judgement in the criminal proceedings (November 2013) All defendants were accused of causing damage to the environment found not criminally liable for such damage Master and Chief Engineer they could not have been aware of the bad structural condition of the ship no evidence that the navigation had been imprudent or risky Civil servant his decision, although arguable, was technically informed, professional and reasonable. The master was also accused of disobeying the Spanish authorities during the crisis found guilty and sentenced to nine months in prison A criminal court can only declare civil liability if there has been a criminal offence The disobedience of the master was not the cause of the pollution damage Since no other criminal offence the Court could not rule on any civil liability A number of parties, including the Spanish public prosecutor and Spanish and French Governments, have appealed to the Supreme Court 6

8. Spain and France v the London Club The London Club’s position Club accepted CLC liability, i.e. up to limitation amount (already paid through limitation fund) Claims over limitation amount (non-CLC liability) claimants bound by insurance contract between Club and shipowner contract included Club Rules provided for arbitration in London under English law Club could invoke “pay to be paid” clause Club had no liability since the shipowner had not paid 7

9. Spain and France v London Club (continued) Club played no part in criminal proceedings in Spain Club commenced arbitration proceedings in London seeking a declaration that it had no non-CLC liability to France and Spain Spain and France did not participate in the arbitration proceedings The Arbitration Tribunal held Spain and France were bound by arbitration clause in Club Rules Club’s direct liability to Spain and France was subject to the pay to be paid clause 8

10. Proceedings in High Court of Justice in London London Club sought permission to enforce the arbitration awards Spain and France resisted application arguing Arbitration Tribunal had no jurisdiction they were entitled to State immunity they were not bound by the arbitration clause the subject matter could not be dealt with by arbitration the Court should in any event use its discretion under the Arbitration Act not to grant the Club’s application The High Court did not accept any of these arguments granted the Club’s application to enforce the awards and to have judgements entered in accordance with their terms Spain and France have appealed 9

11. European Court of Human Rights; the facts Master (aged 67 years) arrested on 13 November 2002 The Spanish investigating judge set a bail at €3 million Master requested his release and offered a bail of €60 000, which was refused Master’s appeal rejected On 6 February 2003 London Club lodged a bank guarantee for €3 million, as a one-off spontaneous humanitarian gesture Master released on 7 February 2003 (after 83 days in custody) had to remain in Spain and surrender his passport report to the Spanish police every day In March 2005 master was authorised to return to his home country (Greece) had to report every two weeks at a police station in Greece 10

12. Human Rights Convention Article 5 § 3 reads: Everyone arrested or detained in accordance with the provisions of paragraph (c) of this Article shall ------- be entitled to trial within a reasonable time or to release pending trial. Release may be conditioned by guarantees to appear for trial. 11

13. European Court of Human Rights Master alleged that there had been a breach of art. 5 § 3 because the sum set for the bail was excessive and disproportinate his personal circumstances had not been taken into consideration, e.g. –profession –income –assets –previous convictions –family situation –age 12

14. European Court of Human Rights judgement of chamber Chamber composed of 7 judges unanimously held no breach of art. 5 § 3 –seriousness of the environmental disaster made it reasonable for the national courts to ensure that the master would appear for trial –the amount of bail had been proportionate in view of the seriousness of the offence –master’s particular circumstances had been sufficiently taken into account, –in particular his status as employee of shipowner who had taken out insurance to cover this type of risk 13

15. European Court of Human Rights judgement of Grand Chamber At the master’s request, the case was referred to the Grand Chamber Master argued, inter alia unacceptable to take into account public anger by fixing amount of bail he had not taken out any personal insurance and the London Club had no obligation towards him

16. Grand Chamber’s judgement Grand Chamber composed of 17 judges Held by 10 votes to 7: no breach of Article 5 § 3

17. Grand Chamber’s judgement Majority’s position Account had to be taken of seriousness of the offence impact of disaster on public opinion master’s professional environment (maritime transport of oil) the fact that insurer had paid confirmed that it had been correct to refer to his professional environment bail had to be set so as to ensure master would attend trial reference to only the master’s assets not sufficient master’s personal circumstances had been sufficiently taken into account

18. Grand Chamber minority position Master had been detained for 83 days, a clear violation of art. 5 § 3 Seriousness of offence, environmental consequences, public outcry had not in themselves required detention of master Bail must be set principally by reference to the master’s own assets The amount of bail far beyond master’s means Bail at such an exorbitant level rendered illusory the master’s ability to secure release The master’s personal circumstances had not been taken into account 17

19. Liability of classification societies Recourse actions were taken in the Prestige case against classification societies in the United States and France The 1992 CLC provides No claims for compensation may be made –under the CLC or otherwise –against the pilot or any other person who, without being a member of the crew, performs services for the ship Question: does that provision cover classification societies? 18

20. Liability of classification societies – Erika incident In the Erika case French Court of Cassation considered the liability of RINA classification societies protected in principle by that provision because of RINA’s reckless behaviour could not benefit from that protection the issue of sovereign immunity of classification societies raised, but – if existed – considered to have been waived RINA was held liable for the pollution damage 19

21. Liability of classification societies – Prestige incident In the Prestige case, litigation in the United States Kingdom of Spain v American Bureau of Shipping (ABS) Federal District Court in New York: classification societies covered by the channelling provisions judgement quashed on appeal on procedural grounds 20

22. Liability of classification societies – Prestige incident The Prestige case; litigation in France French State v American Bureau of Shipping (ABS) Court of first instance in Bordeaux ABS entitled to sovereign immunity because it had acted on behalf of the flag State by issuing statutory certificates so the French State’s claim was rejected French State has appealed 1992 Fund has taken recourse action against ABS proceedings have been stayed, pending final outcome of criminal proceedings in Spain and the action by the French State against France 21

23. Final observations Pursuing compensation claims in criminal proceedings very inefficient compensation only granted if defendant caused the damage through a criminal act criminal proceedings take many years The international compensation regime more suitable based on strict liability of shipowner/P&I Club/1992 Fund no need to prove a criminal act complications because the compensation claims by far exceeded the amount available for compensation improved through the creation of Supplementary Fund Claims outside the international regime against insurer difficult to pursue no compulsory insurance pay to be paid principle arbitration clauses Recourse actions very protracted Issue of fair treatment of seafarers 22

24. Prestige incident - pollution on rocky coastline 23