A European Union court has upheld a Spanish court ruling that the London P&I Club must meet $1bn in claims related to the 2002 sinking of the tanker Prestige.

La Coruna Provincial Court had earlier ruled the master and the owners of the Prestige are liable in respect of the civil claims, and that the club is directly liable under the Spanish Criminal Code.

There were claims from 200 separate parties amounting to €1.6bn ($1.6bn) of which, under limitation of liability conventions, the London club’s liabilities are capped at $1bn.

The London mutual appealed against enforcement proceedings brought by Spain to the UK High Court in 2019, claiming that it was “manifestly contrary to English public policy”.

The club claims it has no direct liability other than what is permitted by the International Convention on Civil Liability for Oil Pollution Damage.

The UK High Court looked for guidance from the Court of Justice of the EU.

In its ruling this week, the EU court said that a UK court could not block the recognition of the Spanish judgment. The court ruled that such a move would deprive the injured party “of effective compensation for the damage suffered”.

Despite the UK’s January 2020 withdrawal from the EU, the court maintained its jurisdiction — and its judgment can be enforced — because the case was brought before Brexit.

Environmental disaster

The London club was the protection and indemnity insurer of the Bahamas-registered tanker Prestige when it sank off Galicia in northern Spain in November 2002.

The 26-year-old ship was carrying 70,000 tonnes of fuel oil. A spill involving almost all the cargo caused an environmental disaster in the region. It affected hundreds of beaches in Spain, France and Portugal, and impacted the fishing industries.

The legal wrangle between Spain and the insurers of the Prestige has now been running for more than two decades.

Although the ship was insured by the London club, the claim would be met through the International Group of P&I Clubs’ pooled claims and reinsurance scheme.