February 10 2016
On November 13 2002 the tanker Prestige began listing and leaking oil. Its master and salvors asked the Spanish authorities to grant the vessel refuge in sheltered waters, but this request was refused and the authorities instead ordered the Prestige to proceed into the Atlantic in severe weather.
On November 19 2002, while being towed away from the coast, the Prestige broke in two and sank. It was carrying 76,972 tonnes of heavy fuel oil and a catastrophic spill resulted.
The Corcubion Criminal Court commenced an investigation into the cause of the accident and in 2010 ordered four people to stand trial for criminal and civil liability: the master, the chief officer, the chief engineer and the official who had refused to grant Prestige refuge and instead ordered it back to sea.
On November 13 2013 the La Coruna Court rendered a judgment in the criminal proceedings, acquitting all defendants of criminal offences against the environment.
The master was convicted for disobeying an order from the authorities to cooperate in the towage of the Prestige, but this was not the cause of the damage.
Under Spanish law, an individual or company convicted of a criminal offence will also incur civil liability for the damage caused. Since the disobedience was not the cause of the damage, the court determined that no civil liability arose from the incident and did not award compensation.
Over 2,500 claims – totalling approximately €2.3 billion – were filed in the criminal proceedings.
Several parties appealed the judgment and on January 26 2016 the Supreme Court published an overturning judgment.
The Supreme Court held that the Prestige's master was both criminally and civilly liable for damage to the environment. The court also held that he had acted recklessly, and that he therefore could not limit his liability under the 1992 Civil Liability Convention.
The judgment also declared the vicarious civil liability of the vessel's owner, who similarly could not limit his liability under the Civil Liability Convention because he was found to have acted recklessly with knowledge of the risks.
The protection and indemnity (P&I) club involved, which had deposited the limitation fund (€22,778), was also held directly liable up to the limit of $1 billion established in the insurance cover, not up to the limit established in the Civil Liability Convention. The direct action against the P&I club of those damaged was recognised in the judgment.
The court also declared the strict civil liability of the International Oil Pollution Compensation Fund, in accordance with the terms and amount set out in the 1992 Fund Convention.
The Supreme Court's judgment is controversial and a further appeal by the Prestige's master is likely. If it is upheld, its future enforcement by the claimants seeking compensation will be difficult in practice. While the criminal proceedings in Spain were in progress, the P&I club commenced arbitration proceedings in the United Kingdom to obtain a declaration that claims against it could be brought only on the terms of the club rules, including the 'pay to be paid' condition precedent to the club's liability. An award in the club's favour was rendered and the High Court issued a judgment in the terms of the award finding that the claims did not exist independently of the insurance contract and were therefore subject to its terms.
In light of this, enforcement of the Supreme Court's judgment – if upheld or not appealed – will likely involve a tough legal battle.
For further information on this topic please contact Luis de San Simon at San Simón & Duch by telephone (+34 913 579 298) or email (firstname.lastname@example.org). The San Simón & Duch website can be accessed at www.lsansimon.com.
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Luis de San Simón