Compensation for the unlawful arrest and detention of the Arctic Sunrise and its crew

Arbitral Tribunal orders the Russian Federation to pay a little under 5,4 million euros to the Netherlands

On 18 July 2017, almost two years after that an Arbitral Tribunal (Tribunal) found that the Russian Federation must compensate the Netherlands following the wrongful arrest of the Arctic Sunrise and its crew, the Tribunal handed down its Award on the issue of compensation.

Background

Before looking at this recent decision in more in depth, the history of the dispute will be laid out. Starting on 18 September 2013, when Greenpeace activists tried to enter the Russian offshore oil platform (the Prirazlomnaya) in order to protest against attempts to begin exploiting oil and gas resources in the Arctic. One day later, the Russian Federation boarded and arrested the Arctic Sunrise and detained its crew. Subsequently, the vessel was brought to the port of Murmansk and the crew was charged with having committed a range of administrative and criminal offences, including acts of terrorism and hooliganism.

The Netherlands initiates Proceedings before an Arbitral Tribunal 

Some two weeks later, on 4 October 2013, The Netherlands, being the flag State of the Arctic Sunrise, started proceedings before an Arbitral Tribunal that was established pursuant to Annex VII of the 1982 Law of the Sea Convention. The Russian Federation refused to participate in the Arbitral proceedings that were initiated by the Netherlands. The position of the Russian Federation was, that this type of dispute was beyond the jurisdiction of an international court or tribunal, due to a declaration it had made at the time of becoming a party to the 1982 Law of the Sea Convention. However, the proceedings went ahead, despite the non-participation of the Russian Federation.

The Netherlands requests Interim Measures from the ITLOS

On 21 October 2013, the Netherlands requested interim measures from the International Tribunal for the Law of the Sea (ITLOS). According to the Netherlands, the Russian Federation had to immediately release the Arctic Sunrise and its crew, after the posting of a bond, upon which they would be free to leave Russian territory as well as any maritime areas under its jurisdiction. ITLOS gave an Order on interim measures on 22 November 2013. Initially, the Russian Federation did not comply with the Order of the ITLOS – eventually, however, the vessel and crew were released in late November 2013. The Russian release of vessel and crew was based on its national laws, the Order of the ITLOS played no decisive role in this, according to the Russian Federation  – as it happened, the effect of the national laws and regulations on which the Russian Federation relied, coincided with what was set out by the ITLOS in its Order containing interim measures.

Arbitral Award on the Merits

One of the main substantive issues on which the Arbitral Tribunal was asked to rule during the merits phase, was the (un)lawfulness of the response of the Russian Federation to the presence of the Arctic Sunrise and its crew. The gist of the argument of the Netherlands was that, as the flag State, it had sole jurisdiction over the ship and the crew on-board during the entirety of this incident (Article 58 of the 1982 Law of the Sea Convention). On 14 August 2015, the Tribunal released its Award on the merits. The Arbitral Tribunal found that the Netherlands had exclusive jurisdiction over the Arctic Sunrise whilst it was operating in the exclusive economic zone of the Russian Federation. This means that the Russian Federation could have only lawfully initiated steps against the vessel that was flagged to the Netherlands and its crew with the latter’s consent. After coming to this conclusion, the Tribunal went on to state that the Netherlands had to be compensated.

Arbitral Award on Compensation

In its recent Award on compensation, the Tribunal set the total amount of compensation owed by the Russian Federation to the Netherlands at a little under 5,4 million euros. This sum was arrived at by adding up the damage that was done to the Arctic Sunrise (EUR 1,695,126.18); compensation related to the unlawful arrest, prosecution and detention of its crew (EUR 600,000); a variety of other damages incurred by the Netherlands, including the failure to release the vessel and crew in a timely manner (EUR 2,461,935.43); costs made by the Netherlands in issuing a bank guarantee (EUR 13,500); and lastly, the Netherlands had to be reimbursed for paying the full amount of deposits required by the Tribunal (EUR 625,000) – meaning that the Russian Federation had to pay the half it owed of the costs that were needed for the proceedings to be initiated. Although the Russian Federation is required under international law to abide by the ruling on compensation, whether it will actually do so remains to be seen.

 

13TH ANNUAL COLLOQUIUM OF THE IISTL — MARITIME LIABILITIES IN A GLOBAL AND REGIONAL CONTEXT

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13th ANNUAL COLLOQUIUM OF THE IISTL

MARITIME LIABILITIES IN A GLOBAL AND REGIONAL CONTEXT

  4-5 SEPTEMBER 2017

The annual gathering, organised by the Institute of International Shipping and Trade Law (IISTL), has now established itself as a regular fixture in the calendar of maritime lawyers. This year’s event will be devoted to Maritime Liabilities in A Regional and Global Context: The EU and Beyond.

 Topics covered will include:

  • Liabilities for ship recycling
  • Wreck removal – Nairobi and beyond
  • National and international oil pollution regimes – an uneasy coexistence
  • Pollution from oil rigs and offshore installations: legal issues arising
  • The boundaries of shipping liability law: what is a ship and why does it matter?
  • Ship arrest – yesterday’s conventions and today’s problems
  • Cyber risks and liabilities for marine sector
  • Smart containers
  • Passenger Liabilities- Life after BREXIT
  • Limitation of liability – new problems
  • Cross-border insolvency and maritime arbitration
  • Direct action against insurers and P & I Clubs
  • Jurisdiction and Choice of law after BREXIT

Speakers and Chairpersons

  • Professor Lia Athanassiou, School of Law, Athens University, Greece
  • Professor Simon Baughen, IISTL, Swansea University, UK
  • Professor Olivier Cachard, University of Lorraine, France
  • Andrew Chamberlain, Partner and Mariner, Holman Fenwick Willan LLP, London, UK
  • Simon Cooper, Partner, Ince & Co LLP, London, UK
  • Professor Marc Huybrechts, University of Antwerp, Belgium
  • Dr Henning Jessen, World Maritime University, Sweden
  • Mr Måns Jacobsson, Former Director of International Oil Pollution Compensation Funds, Sweden
  • Dr Tabetha Kurtz-Shefford, IISTL, Swansea University, UK
  • Associate Professor George Leloudas, IISTL, Swansea University,UK
  • Mr Justice Males, Presiding Judge of the North East Circuit, High Court of England and Wales
  • Peter Macdonald-Eggers QC, 7 King’s Bench Walk, London, UK
  • Associate Professor Theodora Nikaki, IISTL, Swansea University, UK
  • Dr Frank Stevens, Erasmus University, The Netherlands
  • Professor Barış Soyer, Director, IISTL, Swansea University,UK
  • Dr. Jur. Bülent Sözer, Yeditepe University, Turkey
  • Professor Andrew Tettenborn, IISTL, Swansea University, UK
  • Emeritus Professor Rhidian D. Thomas, IISTL, Swansea University, UK

 

Registration, Fees & Accommodation

To register (and book university accommodation) please click the link here: Eventbrite  

  • Fee, inc. materials, dinner & accommodation for 2 nights (3-4 Sept): £440
  • Fee, inc. materials and dinner: £350
  • Fee (for Research Students) inc. materials, dinner & accommodation for 2 nights (3-4 Sept): £265
  • Fee (for Research Students) inc. materials & dinner: £175

 Should you not like to take advantage of our on-campus accommodation, please feel free to make your own arrangements. There are several good hotels in town, notably the Dragon Hotel, tel: 01792 657100, and the Marriott Hotel, tel: 01792 642020. Please note, however, that the organisers cannot take responsibility for booking accommodation off campus.

The closing date for registration is 28 August 2017

Questions & Further Information

Should you have any further queries, please direct your email to: Ms Stella Kounakou 806114@swansea.ac.uk

We looking forward to seeing you at Swansea. 

Professor B. Soyer

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Ship arrest in Singapore

Cases of liability for wrongful arrest in Admiralty are rare: successful claims, which require a showing of malice or gross negligence, even more so. We now have an account of one at the end of last year in Singapore. Bunker suppliers sold bunkers to the (now-very-bankrupt) OW Group; they were passed on paper through other OW companies, one of which fuelled the vessel. It’s elementary law that if A sells to B and B to C, then A has no claim against C: it was also plain to any third-year law student that the suppliers hadn’t a cat in hell’s chance of showing agency in any of the OW companies. Nevertheless, having voluntarily given credit to the uncreditworthy, the suppliers blithely went and arrested the ship in Singapore. Not surprisingly they were held liable in damages. The case is The Xin Chang Shu [2015] SGHC 308. The judgment, worth a look, is here; a useful note on it can be found here.

With thanks to Prof E Macdonald for the tip-off.

AT

Keep right on to the end (of the charter). No constructive redelivery under bareboat charter.

The termination of a demise charter pursuant to the shipowner’s right of withdrawal is a more complex process than with an ordinary time charter. The charterer still has its crew on board the vessel and some time may elapse before the shipowner is able to retake physical possession of the vessel. In the interim charterers may have entered into commitments with bunker suppliers and with cargo owners, pursuant to bills of lading.

In The Chem Orchid Lloyd’s Law Reports , [2014] 1 Lloyd’s Rep. 520, the High Court of Singapore had to decide whether the bareboat charterer, the “relevant person” who would be liable in personam, was the demise charterer when the cause of action arose, so as to found jurisdiction under s.4(4) of the Singapore High Court (Admiralty Jurisdiction) Act, which is in identical terms to s.21(4) of the UK Senior Courts Act 1981. The Assistant Registrar struck out the writs in rem on the grounds that the charter had been terminated prior to the issue of the writs. Accordingly, the vessel could not be arrested in relation to claims arising in the interim between the notice of termination being given and physical redelivery of the vessel to the shipowners.

The decision has now been reversed by Steven Chong J, [2015] 2 Lloyd’s Rep. 666, who held that the charter had not been validly terminated, but even it had, there was no concept of constructive delivery applicable to the termination of bareboat charters which continue until physical redelivery. Therefore, at the time the in rem writs were issued by the bunker suppliers and the cargo claimants, the vessel was still in the possession of the charterers.

On 20 January 2016 the Singapore Court of Appeal held that it had no jurisdiction to hear an appeal from this decision. [2016] SCGA 04.

 

Arrest of Ships

An interesting decision of the Federal Court of Australia in The Sam Hawk [2015] FCA 1005. For the purpose of determining if a claimant has a maritime lien for a contractual claim (here the supply of bunkers), the law of the contract under which the bunkers were supplied controls. The court refused to follow the Privy Council in The Halcyon Isle [1981] AC 221 .

More details at http://www.hfw.com/Arrest-of-the-SAM-HAWK-October-2015

Andrew Tettenborn