ECJ answers Italian court's questions on marine fuel sulphur limits

Facts
Decision

The European Court of Justice (ECJ) recently issued an interesting decision (C-537/11) regarding marine fuel emissions in response to a preliminary question submitted by the Court of Genoa.

Facts

In July 2008 the Genoa Port Authority found the Panamanian-flagged MSC Orchestra to be burning, within the port, marine fuel with a sulphur content exceeding 1.5% by mass. The port authority subsequently issued an administrative penalty against the captain and owner of the vessel. The penalty order was based on the infringement of Articles 295 and 296 of the Environmental Code (Decree-Law 152/2006). These two articles transpose into Italian law EU Directive 1999/32/EC, as amended by EU Directive 2005/33/EC, concerning the maximum sulphur content allowed in marine fuels, which applied at the time.

The captain and owner appealed the order to the Court of Genoa, claiming that the sulphur limits on marine fuels set out in the Marpol Convention and its Annex VI (contained in the 1997 protocol) – 4.5 % by mass outside the emission control area – applied to the vessel. The Italian court stayed the proceedings in order to refer three questions to the ECJ for a preliminary ruling. The three questions concerned the following issues:

• the impact of Annex VI of the Marpol Convention on Article 4(a) of EU Directive 1999/32/EC, bearing in mind the principles of international law that require international agreements to be implemented and interpreted in good faith;
• whether the validity of Article 4(a) of EU Directive 1999/32/EC must be assessed in light of Annex VI of the Marpol Convention while observing international law and the pacta sunt servanda principle (ie, that all agreements are binding), including with regard to provisions encompassing customary rules of general international law; and
• whether a cruise ship satisfies the criterion of 'regular services' (defined in Article 2(3g) of EU Directive 1999/32/EC) and thus falls within the scope of Article 4a(4) of EU Directive 1999/32/EC.

Decision

The ECJ first answered the third question. Article 2(3g) of EU Directive 1999/32/EC defines 'regular service' as:

"a series of passenger ship crossings operated so as to serve traffic between the same two or more ports, or a series of voyages from and to the same port without intermediate calls, either: (i) according a published timetable, or (ii) with crossings so regular or frequently that they constitute a recognisable schedule."

The ECJ ruled that a cruise ship is a passenger ship, as the purpose of the transport is irrelevant. The ECJ also observed that a normal cruise itinerary – such as that of the ship in question – can be considered as operating crossings "between the same two or more ports", as it always involves calling at a minimum of two ports: the port of departure and the port of arrival (even if these two ports coincide). Further, the ECJ stated that even if a cruise ship ends its voyage at the same port from which it departed, this does not alter the rate of sulphur dioxide emitted from the ship.

As for the second question, the ECJ ruled that as the European Union is not a contracting party to the Marpol Convention, it cannot be bound by the convention and the pacta sunt servanda principle therefore did not apply in this case. Further, the ECJ held that the principles derived from the Intertanko decision (C-308/06) cannot be overcome by relying on the principle of cooperation in good faith between the European Union and EU member states (set out in Article 4(3) of the Treaty on European Union).

Finally, in answering the first question, the ECJ held that EU Directive 1999/32/EC cannot be interpreted in light of the Marpol Convention, as it – in particular, its 1997 protocol – does not bind all EU member states.

As obiter dicta, the ECJ concluded by noting that even if the validity of EU Directive 1999/32/EC could have been assessed in light of the Marpol Convention, the directive is compatible with the aims and objectives of Annex VI of the Marpol Convention, as it sets a lower limit on the maximum sulphur content of marine fuels than the convention.

For further information on this topic please contact Marco Manzone at Dardani Studio Legale by telephone (+39 010 576 1816), fax (+39 010 595 7705) or email (marco.manzone@genoachambers.it). The Dardani Studio Legale website can be accessed at www.dardani.it.