A $1bn compensation claim from the loss of the tanker Prestige is far from over, the director of the International Oil Pollution Compensation (IOPC) Funds has warned.
The casualty of the 81,500-dwt Prestige (built 1976) will continue to be a difficult, challenging case, Jose Maura says in the IOPC Funds’ annual review.
The $1bn claim, against the London Steam-Ship Owners’ Mutual Insurance Association, arises from judgments by the Spanish Supreme Court and the Audiencia Provincial court in La Coruna.
The widely criticised Spanish rulings do not recognise the right to limit liability under the 1992 Civil Liability Convention (CLC) to SDR 18.9m or €22.8m ($26.8m), but instead set compensation at the maximum extent of protection and indemnity pollution cover of $1bn.
Issues arising from the 2002 loss of the Prestige, which caused extensive pollution to the north-west coast of Spain, remain highly controversial, although Spain is a party to the tanker spill conventions.
Quantification of the claim by the Audiencia Provincial came in November last year and appears to amount to a final court ruling, although the London Club, as P&I insurer on the hook for a huge payout, has not accepted the outcome.
The International Group, which links the London Club and a dozen other P&I clubs, has been joined by the International Chamber of Shipping in calling for a uniform interpretation of the tanker pollution conventions. The group has warned that conflicts between national and international interpretations pose a threat to a compensation system that has worked well for decades.
Maura, a Spanish lawyer who earlier in his career was a Britannia Club claims handler, says the quantification judgment is far in excess of amounts assessed by the IOPC Funds.
“The Fund has appealed the judgment alongside the shipowner’s insurer,” he noted in the annual report. “This very difficult case is far from resolved and will continue to provide the IOPC Funds with challenges in 2018.”
So far, €121m of compensation has been paid out over the spill, with the total amount available under the CLC and Fund tanker pollution conventions running to nearly €172m. But claims of up to €1.6bn have been assessed by the Spanish courts, using criteria quite different from those of the IOPC Funds.
The Spanish courts have taken the view that the London Club is not entitled to benefit from the usual CLC limitation rights, as the Prestige spill involved “reckless” damage to the environment, with a refusal to take part in earlier litigation an exacerbating factor.
This is at odds with most views of how the spill conventions should be interpreted.
“I hope that the IOPC Funds will be able to do even more to reinforce the importance of the compensation regime and the consistent application of the conventions among member states,” Maura wrote.
