As a result of the vote to leave the EU, the UK will cease to be a member of the EU probably around November 2018 after the new prime minister has invoked article 50 and Parliament has repealed the European Communities Act 1972. How will this affect shipping law?
Substantively, not a great deal. English dry shipping is based on common law, and a few key statutes, such as COGSA 1992, and the implementation of international carriage conventions through domestic legislation – such as COGSA 1971 with the Hague-Visby Rules. Nothing European here, so no change.
With wet shipping, the CLC and the Fund are part of our national law through domestic law implementing international conventions. Similarly, the Wreck Removal Convention, the Salvage Convention, and the 1976 Limitation Convention. Again, nothing European here, so plus ca change.
However, procedurally, we are very much affected by European legislation – and this is something we shall return to in a later post. As a starting point, bear in mind the two sources of EU legislation.
- Directives which are implemented by and Act of Parliament. On our leaving the EU it will be up to Parliament to decide whether to repeal or amend the implementing legislation.
- Directives which are implemented as statutory instruments pursuant to s.2 of the European Communities Act 1972. These will cease to be a part of national law once the European Communities Act 1972 has been repealed. If we want to keep them we need to enact them as part of our domestic law.
- Regulations which have direct effect. These will cease to be a part of national law once the European Communities Act 1972 has been repealed. If we want to keep Regulations we need to enact them as part of our domestic law.
The 1971 IOPC Fund ceased to exist on 31 December 2014. The 1992 IOPC Fund, however, is still going strong. This fact was not lost on the Venezuelan fishermen’s union who lodged a claim in Venezuela in respect of damage sustained as a result of an oil spill in May 1997 from the tanker Plate Princess. In 2009 they obtained a judgment against the shipowner and also against ‘The International Fund for Compensation for Oil Pollution Damage’. In March 2015 Master Eastman made a Registration Order in respect of that judgment.
In Sindicato Unico de Pescadores del Municipio Miranda del Estado Zulia v. IOPC  EWHC 2476 (QB);  1 Lloyd’s Rep Plus 2, Picken J has set aside the Registration Order. The 1992 Fund was not involved in an incident which occurred at a time when Venezuela, although a signatory to the 1992 Protocol, had yet to ratify, accept, approve or accede to it. The Venezuelan judgment could not be regarded as applying to the 1971 Fund Convention as amended by the 1992 Protocol. Even if the judgment had been against the 1992 Fund, there was no relevant exception to the 1992 Fund’s immunity under art. 5(1) of the International Oil Pollution Compensation Fund 1992 (Immunities and Privileges) Order 1996. The only possible exception, in art. 5(1)(b) “in respect of actions brought against the 1992 Fund in accordance with the provisions of the  Convention” would not apply.
Nearly 14 years ago the tanker Prestige sank, grievously sullying the coasts of France and Spain. The vessel’s P & I club (London SS) was understandably concerned. But it had taken care in granting cover to make sure that the contract was governed by English law; that its exposure was clearly restricted to CLC limits; that any dispute as to cover was to be arbitrated in London; and that there was a “pay to be paid” provision. There were good reasons for this. Many civil law courts take an impatient view of the English attitude that insurers’ liability is an aspect of the contract to indemnify, preferring the view that the liability is a direct one to the victim. The club rightly wanted to avoid the prospect of a court in an affected country giving large judgments against it on the basis of this civil law doctrine (accompanied, no doubt, by a disdain for such niceties as arbitration clauses and the small print in the P & I cover, not to mention in certain cases a large degree of national amour propre). The point was, of course, that if these were EEA courts, then however cavalier or misguided those judgments were, they would be enforceable under Brussels I or Lugano.
The club were right, in spades. Criminal Spanish proceedings, carrying with them under Spanish law the possibility of civil-law-style partie civile liability, were started. To forestall the giving of an enforceable judgment against it, the club demanded arbitration, got an arbitration award saying that the Spanish and French governments could only enforce the cover subject to the terms of the contract — including the arbitration clause, of course — and then successfully got that award translated into an English judgment (see London SS Mutual v Kingdom of Spain, etc  EWCA Civ 333;  2 Lloyd’s Rep. 33). In fact the original criminal proceedings failed. But a few days ago the Spanish supreme court (Tribunal Supremo) reversed that decision and gave judgment against the master of the Prestige (he got two years in clink) and, more importantly, directly against the club as a matter of civil liability. The news report is here; the judgment text (unfortunately only in Spanish) here.
With conflicting judgments from London and Madrid we now have the irresistible force meeting the immovable object. One suspects we haven’t heard the last of this saga.