When is the Fund not the Fund? Venezuela’s unsuccessful fishing expedition.

The 1971 IOPC Fund ceased to exist on 31 December 2014. The 1992 IOPC Fund, however, is still going strong. This fact was not lost on the Venezuelan fishermen’s union who lodged a claim in Venezuela in respect of damage sustained as a result of an oil spill in May 1997 from the tanker Plate Princess. In 2009 they obtained a judgment against the shipowner and also against ‘The International Fund for Compensation for Oil Pollution Damage’. In March 2015 Master Eastman made a Registration Order in respect of that judgment.

In Sindicato Unico de Pescadores del Municipio Miranda del Estado Zulia v. IOPC [2015] EWHC 2476 (QB); [2016] 1 Lloyd’s Rep Plus 2, Picken J has set aside the Registration Order. The 1992 Fund was not involved in an incident which occurred at a time when Venezuela, although a signatory to the 1992 Protocol, had yet to ratify, accept, approve or accede to it. The Venezuelan judgment could not be regarded as applying to the 1971 Fund Convention as amended by the 1992 Protocol. Even if the judgment had been against the 1992 Fund, there was no relevant exception to the 1992 Fund’s immunity under art. 5(1) of the International Oil Pollution Compensation Fund 1992 (Immunities and Privileges) Order 1996. The only possible exception, in art. 5(1)(b) “in respect of actions brought against the 1992 Fund in accordance with the provisions of the [1992] Convention” would not apply.

The Commission has spoken. No EU civil liability regime for offshore oil and gas operations.

The 2013 Offshore Safety Directive is the EU’s response to the ‘Deepwater Horizon’ incident in 2010. Although article 4(3) requires Member States to require the licensee to maintain sufficient capacity to meet their financial obligations resulting from liabilities for offshore oil and gas operations, and to put in place compensation procedures, the Directive does not address the question of civil liability in the event of pollution from an offshore installation. This remains to be dealt with by national laws. However, article 39 mandated the Commission to prepare three reports on liability: (1) on the “availability of financial security instruments, and on the handling of compensation claims, where appropriate, accompanied by proposals”; (2) on the “assessment of the effectiveness of the liability regimes in the Union in respect of the damage caused by offshore oil and gas operations”; (3) on “the appropriateness of bringing certain conduct leading to a major accident within the scope of Directive 2008/99/EC of the European Parliament and of the Council of 19 November 2008 on the protection of the environment through criminal law.”

On 14 September 2015 the Commission produced a single report on all three issues COM(2015) 422. It proposes no new EU legislation in these areas. With regard to financial security, although there were currently only two compensation mechanisms in the EEA, namely OPOL and Norway’s Oil Pollution Act 1998, the provisions in art. 4 of the OSD should lead to significant improvements. With regard to civil liability, it was not currently appropriate to broaden liability provisions through EU legislation, noting that in certain cases, the Brussels I and Rome II regulations would prevent differences in national regimes from disadvantaging claimants from other EU Member States. Also the financial security requirements of the OSD might lead some Member States to reappraise their existing liability regimes for offshore accidents. The Commission would be able to conclude on the need for further steps by the time of the OSD’s first implementation report in 2019. With regard to criminal liability, given the transposition deadline for the OSD of 19 July 2015, it was too early properly to assess whether EU criminal law measures were needed for achieving effective levels of offshore safety in the Union

Latest instalment of the Prestige saga — over to Madrid

Nearly 14 years ago the tanker Prestige sank, grievously sullying the coasts of France and Spain. The vessel’s P & I club (London SS) was understandably concerned. But it had taken care in granting cover to make sure that the contract was governed by English law; that its exposure was clearly restricted to CLC limits; that any dispute as to cover was to be arbitrated in London; and that there was a “pay to be paid” provision. There were good reasons for this. Many civil law courts take an impatient view of the English attitude that insurers’ liability is an aspect of the contract to indemnify, preferring the view that the liability is a direct one to the victim. The club rightly wanted to avoid the prospect of a court in an affected country giving large judgments against it on the basis of this civil law doctrine (accompanied, no doubt, by a disdain for such niceties as arbitration clauses and the small print in the P & I cover, not to mention in certain cases a large degree of national amour propre). The point was, of course, that if these were EEA courts, then however cavalier or misguided those judgments were, they would be enforceable under Brussels I or Lugano.

The club were right, in spades. Criminal Spanish proceedings, carrying with them under Spanish law the possibility of civil-law-style partie civile liability, were started. To forestall the giving of an enforceable judgment against it, the club demanded arbitration, got an arbitration award saying that the Spanish and French governments could only enforce the cover subject to the terms of the contract — including the arbitration clause, of course — and then successfully got that award translated into an English judgment (see London SS Mutual v Kingdom of Spain, etc [2015] EWCA Civ 333; [2015] 2 Lloyd’s Rep. 33). In fact the original criminal proceedings failed. But a few days ago the Spanish supreme court (Tribunal Supremo) reversed that decision and gave judgment against the master of the Prestige (he got two years in clink) and, more importantly, directly against the club as a matter of civil liability. The news report is here; the judgment text (unfortunately only in Spanish) here.

With conflicting judgments from London and Madrid we now have the irresistible force meeting the immovable object. One suspects we haven’t heard the last of this saga.

AT