CMI Newsletter n° 1 - Comite Maritime International

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 4NEWS ON THE ROTTERDAM RULESThe United Nations Convention on the InternationalCarriage of Goods Wholly or Partly by Sea has beenratified by Spain on 19 January 2011 and by theRepublic of Congo on 30 April 2012. The futureratification of the Convention has been rec om -mended to the respective Governments by theDanish Maritime Law Committee and by theNorwegian Maritime Law Commission. In its reportthe Norwegian Maritime Law Commission rec om -mends that ratification takes place when the UnitedStates or the larger EU States ratify.The report is available in the Commission’s website(http://www.regjeringen.no/pages/37760933/PDFS/NOU201220120010000DDDPDFS.pdf) and a sum -mary in English follows:The Maritime Law Commission recommends thatNorway should ratify the Rotterdam Rules in order tosecure and promote a uniform legal regulation ofcarriage of goods internationally. The Commissionrecommends that ratification takes place when USA orthe larger EU States ratify.The recommendation on ratification is also an approvalof the rules of the Convention. The mandatorycharacter of rules of this kind has, however, not beenimportant to the Commission’s evaluation of the rules.The Commission does not recommend that Norwayadopts the chapters of the Convention on jurisdictionand arbitration. The chapter on arbitration should betreated in the same way as the chapter on jurisdiction,and it is not likely that the EU States will adopt thechapter on jurisdiction. Norway should then not optfor a different solution than that of the EU States.Instead, the Commission recommends that the currentScandinavian rules on jurisdiction and arbitration inthe Maritime Code should be retained, with a mend -ments inspired by the Rotterdam Rules. The LuganoConvention (and the corresponding EU Rules) willalso in the future take precedence.The Rules of the Convention are to be implemented inChapter 13 of the Norwegian Maritime Code, but notnecessarily in the same order as in the Conventionitself. The individual articles will however be easilyrecognizable.Rules of the existing Maritime Code that are notirreconcilable with the Convention are fit into thisstructure. This applies to rules such as the rules onfreight on a quantum meruit basis if the carriage is notcompleted and some rules on the effect of breach ofcontract not covered by the Convention.The relation between the Maritime Code Chapter 13on carriage of goods and chapter 14 on chartering hasbeen reviewed by the Commission. It is proposed thatChapter 14 hereinafter only shall deal with therelationship between the ship owner and the charterer,while all other relations should be dealt with in Chapter13.A special area of concern has been multimodaltransports. The Rotterdam Rules regulate such trans -ports, but only if they include an international seavoyage. It has then been important to create clarity inrelation to other transport conventions.The recommendation of the Commission is that thetransport conventions should be construed restrictively,in line with recent continental European cases, so thatissues of contradictions or overlapping scopes do notarise. Hence, in relation to many contracts there willbe no mandatory rules. The Commission considers thisto be acceptable, in line with its policy view onmandatory rules. However, when no mandatory set ofrules apply, one of the transport regimes should apply asgap-filling law, and it should primarily be for thecommercial parties to clarify which one.The Commission recommends that, as a starting point,one and only one set of rules should apply to any onetransport. The same set of rules should also apply tosubcarriers, to avoid the incentive for a claimant to suethe subcarrier in a direct action. The Rotterdam Rulesonly offer such protection of subcarriers in the maritimepart of the transport.The recommendations of the Commission in respect ofmultimodal transport have not been implemented inthe proposed draft legislation, but are intended asrecommendations contained in the travaux pré -paratoires. In Norwegian law, courts will usuallyfollow such recommendations.The Maritime Law Commission recommends thatnegotiable transport documents – bills of lading intoday’s terminology – shall only be negotiable in thesense that they are transferable. The rules on purchasein good faith are proposed to be abolished as redundant.This means that a pledge in a document cannot beexecuted by sole transfer of the document. The rules oncargo misdescription are not affected by this, but are onthe contrary extended so that they will apply even toother types of documents than those to which the rulescurrently apply.The reforms of the national rules on negotiability leadto uniformity in the legal framework for electronictransport records and paper documentation. TheCommission also recommends that the word ‘doc -ument’ should be used in respect of electronic transportrecords. There is also a proposal for a legal basis tocreate statutory instruments on electronic signatures.The Commission proposes that liability for mis -description of cargo in the Rotterdam Rules, whichmimics the liability for cargo damage in the same wayas section 299 of the current Maritime Code, should besupplemented by rules on liability for losses incurredby relying on the correctness of descriptions of the4

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 5document (cf. section 300 of the current MaritimeCode). Such liability is, as a starting point, subject tolimitation under the Rotterdam Rules, as correct cargodescription is a duty under the Convention. However,the Commission proposes a separate duty for the carrierto prevent losses from occurring in this context.Breaches of this duty will not be subject to thelimitation of liability under the Convention.The Rotterdam Rules do not include provisions thatthe transport should be planned and carried out with aview to reducing emission of greenhouse gasses. TheCommission proposes a rule of interpretation in thisrespect, and also a rule to the effect that slow steamingfor environmental reasons as a starting point should beallowed.Even if the Rotterdam Rules do not allow reservations,there are in a few cases openings for national variationsin the implementation of the rules. The Maritime LawCommission has, i.a., recommended:– The rule in Article 12(3) that the carrier can beexempted from liability for the first and the lastterminal period should not be implemented innational law, in line with clear statements in thetravaux préparatoires of the Convention thatnational law could be more restrictive than theConvention in this way.– Section 285 of the current Maritime Code, whichprovides that the carrier – on certain conditions –can be exempted from liability in respect of certainlegs of the transport, should be retained as far as thefirst and the last leg of the transport is concerned.Likewise, this has a basis in clear statements in thetravaux préparatoires.– A special, national, limitation regime in favor of theshipper is not to be established, albeit theConvention apparently would allow such nationalrules.– The rules on time limitation of actions of the Con -vention should be supplemented by the Limitationof Claims Act where appropriate.In line with the current legislation the proposal is thatthe international rules shall be applied also to domestictransports. The Commission proposes that the systemof uniform limits of liability for domestic transportsshould be maintained. This means that a special limit ofliability of 19 SDRs pr. kg. should continue to apply tocargo damage in domestic transports, while theRotterdam Rules as implemented in the Maritime Codeshall otherwise apply. In respect of the limit of liabilityfor delay, the limit of the Rotterdam Rules is higherthan those applying to other modes of transport. Hence,special rules for domestic transports are not required inthe Maritime Code. It is proposed that the limits ofliability for delay in other modes of transport shall beincreased to the level of the Rotterdam Rules as far asdomestic transports are concerned.NEWS FROM INTERGOVERNMENTAL AND INTERNATIONAL ORGANIZATIONSNEWS FROM IMLICONFERMENT BY IMLI ON THE CMI OF THE AWARD FOR MERITORIOUSCONTRIBUTION TOWARDS THE PROGRESSIVE DEVELOPMENTSAND CODIFICATION OF INTERNATIONAL LAWMotivationWHEREAS THE IMO INTERNATIONAL MARITIME LAWINSTITUTE RECOGNIZESThe merits ofTHE COMITÉ MARITIME INTERNATIONALWhich, formally established in 1897, is the oldestinternational organization dedicated to the unificationof maritime law;Which is composed of National Maritime LawAssociations from around the world whosemembership includes highly qualified personsinvolved in maritime activities and specialists inmaritime law, thereby ensuring the representation ofthe principal legal systems of the world;Which was created with the object of contributing byall appropriate means and activities to theharmonization and unification of maritime law in allits aspects;Which, through numerous model laws, rules,guidelines and draft conventions, has spearheaded theprocess of harmonization of many aspects of maritimelaw;Which thereby contributed directly and in ameaningful manner towards the progressive de vel -opment and codification of international maritimelaw;5

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 6the IMO International Maritime Law InstituteacclaimsTHE COMITÉ MARITIME INTERNATIONALA most deserving candidate for the Award forMeritorious Contribution towards the ProgressiveDevelopment and Codification of InternationalMaritime Law.Now, therefore, by virtue of the powers vested by theStatute under which the IMO International MaritimeLaw Institute is established, the said Award is beingconferred on the Comité Maritime International.On this 5 day of May of the year two thousand andtwelve.PROFESSOR DAVID J. ATTARDDirectorThe award was received by the President of the CMI,Karl-Johan Gombrii, on 5 May 2012 during aceremony shown in picture below: Mr. Gombrii is tothe left and Professor Attard to the right.NEWS FROM IMOREPORT OF THE LEGAL COMMITTEE HELD IN LONDON, 16-20 APRIL 2012The Spring meetings of the IMO Legal Committeetook place at the IMO Building in London, and asusual the CMI was represented by Patrick Griggs andRichard Shaw.This was the second session under the Chairmanshipof Mr Kofi Mbiah of Ghana. Those who had placedhigh hopes in this IMLI graduate, who has been aregular representative of his country for several years,were not dis ap point ed.The principal matters discussed were an increase inthe limits of liability under the 1996 Convention onLimitation of Liability for Maritime Claims (LLMC),implementation of the HNS Convention, Piracy, andPollution from Offshore Exploration and Ex ploi -tation Activity.Limitation of Liability – Increased LimitsWhen the 1976 LLMC Convention was revised by the1996 Protocol, an important addition to the legalprovisions was contained in Article 8, whichintroduced the “tacit acceptance procedure” to allowfor amendment of the limits of liability by a simplifiedprocess without the need for a protocol adopted by adiplomatic conference. This procedure was firstintroduced into the SOLAS Convention as a meansof keeping its technical provisions in line with thechanging needs of the shipping industry.This procedure has since been incorporated intoother conventions such as the Convention on theInternational Regulations for Preventing Collisions at6

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 7Sea, 1972, the International Convention for thePrevention of Pollution from Ships, 1973 andSOLAS 1974.Instead of requiring that an amendment shall enterinto force after being incorporated into a protocolaccepted by, for example, two thirds of the Parties,the “tacit acceptance” procedure provides that anamendment shall enter into force at a particular timeunless before that date, objections to the amendmentare received from a specified number of StatesParties.Following the grounding of the “Pacific Adventurer”off Queensland in March 2009, the costs incurred incleaning up the pollution by her bunker oilsubstantially exceeded the then applicable limit ofliability of the vessel under LLMC 1996. TheGovernment of Australia initiated consultations atthe IMO for the increase of the limitation figuresunder the tacit acceptance procedure. Support wasinitially slow in coming, but eventually half of theStates Parties (as required by Article 8.1) to the 1996Protocol joined in requesting amendment, and thematter was submitted to the Legal Committee at thissession.The debate produced a number of surprises, andrevealed some weaknesses in the working of the tacitamendment procedure and the drafting of Article 8.The first was the uncertainty as to which States Partiescould participate in the discussion of the proposedamendment. Was the decision on the proposedincrease to be made by the Legal Committee as awhole, or was it limited to the States who were partiesto the 1996 LLMC Convention? Paragraph 2 ofArticle 8 provides that “any amendment … shall besubmitted to the Legal Committee of the Organizationfor consideration ...”, but paragraph 8.3 provides: “AllContracting States to the Convention as amended by thisProtocol, whether or not Members of the Organization,shall be entitled to participate in the proceedings of theLegal Committee for the consideration and adoption ofamendments.”The Chairman, encouraged by the advice of the CMIdelegates and others, concluded that it was for theLegal Committee as a whole to decide the question.He ruled that the voting provisions in paragraph 4 ofArticle 8 (which restrict the right to vote toContracting States) applied only if the LegalCommittee could not achieve consensus. Happily itdid not prove necessary to take a vote, and theamendments to the limitation figures were adoptedby consensus.The second debate concerned the amount by whichthe limitation figures should be increased, and thefactors to be taken into account in arriving at theamended amounts.Paragraph 5 of Article 8 reads:“When acting on a proposal to amend the limits, theLegal Committee shall take into account theexperience of incidents and, in particular, theamount of damage resulting therefrom, changes inthe monetary values and the effect of the proposedamendment on the cost of insurance.”The Australian Delegation put forward a series ofpapers addressing these factors, including a detailedstudy by KPMG, the international firm of accountants,of changes in monetary values which had affected thereal value of the 1996 LLMC limits. They thereforeargued for the maximum possible increase of thefigures by 147%, which was the effect of adopting anincrease of 6% per annum on a compound basis from1996 to 2012. They argued that, since any increaseadopted at this meeting would only come into effect(by virtue of paragraphs 7 and 8 of Article 8) in 2015,this should also be taken into account.A more cautious approach was shown by the JapaneseDelegation in their submission. This focussed on thechanges in monetary values during the periodfrom1996 to 2010, and concluded that the figuresshould not be increased by more than 45% equivalentto an annual increase of 2.5% compound.The debate was a long and rich one with manydifferent perspectives being put forward. Somedelegations argued that there should be no increaseat all, while a significant number of delegationssupported the Australian arguments for the maximumpossible increase. Many of those delegationsreminded the Committee of the substantial cost ofcleaning bunker spills, which are still subject toLLMC limits under the 2001 Bunker PollutionConvention, now in force.The CMI delegation did not take the floor, since thefinal decision was really a political one, but CMI hadmade a significant contribution to the debate in theform of a document placed before the LegalCommittee in 2010 (LEG97/8/4), which underlinedthe fact that the concept of limited liability, which hasnever been in question, requires that the limitationlevels should be significantly below the amount of thelargest incidents, otherwise the benefit of limitationto the ship owning community would be illusory. TheCMI paper was referred to by several delegations.The history of the limitation conventionsdemonstrates clearly the concept that limitation ofliability should apply to all foreseeable claims, exceptthose expressly excluded by the conventions. The“stand alone” limitation funds created to cover oilpollution damage, and, when that convention comesinto force, pollution by HNS, are exceptions to thegeneral rule.At the conclusion of the debate it was clear that theview of most delegations favoured the Japaneseapproach, although it was considered that some7

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 8allowance should be made to take account forincreases between 2010 and 2012, which had not beenfactored into their calculations. A pro rata increasewas therefore applied, taking the figure of 45% to51% and this was finally accepted by all delegations.It was also accepted by all that changes after 2012should not be taken into account at this stage,although this did not exclude the possibility of suchincreases being considered in a future increase of thelimitation figures.A formal resolution was therefore adopted on 19 thApril 2012 which has annexed to it the increasedfigures to be applied to Article 3 of the 1996 LLMCwith effect from 19 th April 2015, provided that onequarter of Contracting States have not notified theSecretary-General in the meantime that they do notaccept these amendments.The new figures will be:In respect of claims for loss of life or personal injury,the reference to:– “2 million Units of Account” shall read “3.02million Units of Account”;– “800 Units of Account” shall read “1,208 Units ofAccount”;– “600 Units of Account” shall read “906 Units ofAccount”;- “400 Units of Account” shall read “604 Units ofAccount”;In respect of any other claims, the reference to:– “1 million Units of Account” shall read “1.51million Units of Account”;– “400 Units of Account” shall read “604 Units ofAccount”;– “300 Units of Account” shall read “453 Units ofAccount”;– “200 Units of Account” shall read “302 Units ofAccount”;Unfortunately that did not mark the end of thedebate. A final discussion revealed that due to anoversight, the Australian proposal had not referredto the limitation provisions applicable in contractingstates which are not members of the InternationalMonetary Fund, in which the provisions of Article8.2 of the 1976 LLMC Convention and Article 5 ofthe 1996 Protocol fix the limits by reference to GoldFrancs. It transpired that of the 45 Contracting Statesto the 1996 LLMC Convention, only one fits thiscategory. Nevertheless a separate tacit acceptanceprocedure will have to be put in train to apply theincrease to that state, and to any other states outsidethe IMF which may subsequently ratify the 1996LLMC Convention.The tacit acceptance procedure has been describedas one of the jewels in the crown of the IMO, but thedebates in the Legal committee over the increase ofLLMC limits have revealed several flaws in thisparticular jewel. Fortunately the spirit of consensus inthe Legal Committee and the wise guidance of its newChairman enabled the 1996 figures to be brought upto date.However further study is required to ensure that theflaws which were revealed during the debates in April2012 are not allowed to prejudice simplifiedprocedures for revision of other conventions. A“model” article for use in future conventions wouldbe a worthy topic for further work, since there is a riskthat such final clauses including tacit amendmentprocedures may be adopted without precise analysisby tired delegates at the end of a diplomatic con -ference.Hazardous and Noxious Substances (“HNS”)The 2010 Protocol to the 1996 Convention onCompensation for Pollution Damage by Hazardousand Noxious Substances Transported by Sea hasremoved several obstacles to the entry into force ofthe original 1996 HNS Convention, in its amendedform. The amended Convention has now been signedby eight states, and several other states have it in theirlegislative programme. The Legal Committee wasinformed of the various measures currently in handto assist with the bringing the HNS Convention intofull force and effect.The IMO website has a section dedicated to the HNSConvention on which can be found a number ofuseful documents, including a consolidated text of the1996 Convention as amended by the 2010 Protocol,and an overview of the amended convention.The representative of the IOPC Fund outlined themeasures which are in hand in advance of entry ontoforce, including a searchable list of hazardous andnoxious substances covered by the 2010 Conventionand a revised contributing cargo calculator. Themeeting acknowledged that it was practical to situatethe office of the HNS Fund in London and to sharethe services of the IOPC Fund Secretariat, although afinal decision on these matters can only be taken bythe first Assembly of the HNS Fund after theConvention has entered into force.A special website has been set up by the IOPC FundSecretariat to deal exclusively with HNS Conventionmatters.The website address is www.hnsconvention.orgIn the meantime preparatory work is in hand at intergovernmentallevel, and the report of a SpecialConsultative Meeting of nine of the states likely tobecome States Parties to the HNS Fund which washeld in Rotterdam in June 2011 was placed before theLegal Committee.8

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 9PiracyThis topic remains high on the public agenda, andthe Legal Committee received a report on latestdevelopments. Noteworthy were the meetings ofWorking Group 2 which deals with legal aspects, andthe most topical subject at present which is the useof Private Maritime Security Companies (PMSC’s)providing armed guards (PCASP).The Secretariat reported that it had started work ona database of court decisions related to piracy off thecoast of Somalia, but while doing so it had learnedthat a similar database is maintained by the UnitedNations Interregional Crime and Justice ResearchInstitute at http://www.unicri.it/maritimepiracy. Itwas agreed that the two agencies would share theirresources, and member States were requested tosubmit relevant information to IMO or UNICRI.The Committee was informed that the GISISdatabase on the IMO website also contains in for -mation and statistics relating to aspects such as thenumber of pirates captured, dates of release ofhijacked ships and brief descriptions of pirate attacks.Pollution from Offshore ActivitiesThis topic was dealt with under “any other business”,since it does not lie within the objects of the IMO asset out in its governing convention, or within thepurview of Strategic Direction 7.2, which is confinedto “shipping”.The debate in the Legal Committee had a lookingglassatmosphere, with some delegations, notablyBrazil, arguing that the Legal Committee should notbe considering this subject at all, while others arguedthat this was an important and topical subject raisingcurrent issues of international law, and that the IMOwas the obvious agency to address this subject.Conspicuous by its absence from the paper submittedby the delegation of Brazil was any reference to article235 of UNCLOS, which provides, inter alia:2. States shall ensure that recourse is available inaccordance with their legal systems for prompt andadequate compensation or other relief in respect ofdamage caused by pollution of the marineenvironment by natural or juridical persons undertheir jurisdiction.3. With the objective of assuring prompt andadequate compensation in respect of all damagecaused by pollution of the marine environment,States shall cooperate in the implementation ofexisting international law and the furtherdevelopment of international law relating toresponsibility and liability for the assessment of andcompensation for damage and the settlement ofrelated disputes, as well as, where appropriate,development of criteria and procedures for paymentof adequate compensation, such as compulsoryinsurance or compensation funds.At the conclusion of the discussion the Chairmanobserved that the IMO Council had asked the LegalCommittee to re-examine its proposed revision ofStrategic Direction no 7.2 but had not imposed a timelimit within which it should respond. The informalCorrespondence Group led by Indonesia wouldtherefore continue its work on the subject. Severaldelegations questioned whether pollution fromoffshore activity was within the definition of“shipping” and thus within the powers of the IMO,but none of them suggested another UN agencywhich would be more appropriate to deal with thistopical subject.There was much discussion of the meaning of theIMO’s strategic direction no 7.2, but the paragraphof the Legal Committee Report dealing with this is amasterpiece of doublespeak . It reads:“The Committee agreed that, in order to have aproper basis to organise discussion of the issuesrelating to transboundary damage from offshoreactivities it was necessary to follow applicableprocedures. In this regard, a delegation making aproposal which falls outside the scope of the currentStrategic Plan should be invited to submit it to theCouncil in accordance with paragraph 8.7.3 of theGuidelines on the application of the Strategic Planand the High Level Action Plan (resolutionA.1013(26)), and in accordance with paragraph4.12.3 of the Committee’s Guidelines on theorganization and method of work (documentLEG.1/Circ.6).”Meanwhile deep water drilling continues further andfurther offshore with corresponding increase in therisk of damage to the marine environment. Therecommendations of the US and Australian Enquiriesinto the Macondo and Montara casualties are ignored.The arguments in favour of the IMO doing nothingare about as persuasive as those in favour of installinga man with a red flag in front of every motor vehicle.The good news is that there was a widespreadacceptance of the need to continue the debate, andthe Indonesian delegation will continue its work withthe informal consultative group, whose email addressis in offshore discussion imoleg@yahoogroups.com.The Committee agreed to inform the Council that itwished to analyse further the liability and com pen -sation issues connected with transboundary pollutiondamage resulting from offshore oil exploration andexploitation activities, with the aim of developing9

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 10guidance to assist states interested in pursuingbilateral or regional arrangements, without revisingStrategic Direction 7.2.The Committee recognised that bilateral and regionalarrangements were the most appropriate way toaddress this matter, although it considered that therewas no compelling need to develop an internationalconvention on this subject.That certainly came as a disappointment, but not asurprise, to this author, but demonstrated the LegalCommittee’s skill at addressing and managingdifficult questions, which it has achieved since thedays of the “Torrey Canyon”.RICHARD SHAW *NEWS FROM IOPC FUNDREPORT OF THE MEETINGS HELD IN LONDON, 24-27 APRIL 2012The spring meetings of the Governing Bodies of theIOPC Funds took place at the IMO Building from24 th to 27 th April 2012.A full record of decisions is available on the Funds’website at www.iopcfunds.org/documentservices andthis report will be confined to matters of generalinterest.“Plate Princess”This incident, which occurred in Puerto Miranda,Venezuela in March 1997, continues to be a matter ofconcern. Despite the fact that contemporary recordsindicate that only 3.2 tonnes of crude oil were spilt,the Courts of Venezuela have condemned the Master,Owner and the 1971 Fund to pay a total of £59.2million towards losses quantified by court experts at£113 million.The case has a number of exceptional features, and afull summary of them is set out in documentIOPC/APR12/3/2/Rev.1 which is on the IOPC Fundwebsite. However the most notable recentdevelopments are:– in May 2006 the 1971 Fund AdministrativeCouncil decided that the claims were time barred;– in March 2011 the 1971 Fund AdministrativeCouncil decided that in any event the judgmentsof the Venezuelan Courts had been obtained onthe basis of fraudulent documents, and that dueprocess of law had not been accorded to thedefendants, and therefore the judgments were notenforceable against the 1971 Fund by reason ofArticle X of 1969 CLC and Article 8 of the 1971Fund Convention;– in October 2011 the FETRAPESCA fishermans’union requested the Maritime Court of FirstInstance to withdraw its claim, but the Courtrejected this request;– on 12 th March 2012 the Director of the IOPCFunds received a communication from theVenezuelan Embassy in London requesting thatthe final judgment of the Venezuelan Court dated21 st November 2011 be notified to the StatesParties to the 1992 Fund for the purpose ofexpediting immediate payment of compensationto Venezuelan nationals.The latest developments were discussed at somelength at the meeting, and the case for immediatepayment was argued at even greater length by thedelegate of Venezuela.However the Administrative Council of the 1971Fund declined to authorise payment, and authorisedthe Director to continue to monitor the outcome ofthe legal actions in Venezuela.“Volgoneft 139”This case in Russia continues to drag its feet, despitea genuine wish by the Fund to settle claims. Thereasons have been given in our previous reports.The principal obstacle now appears to be the failureof the Russian Government to implement the increasein the amount of the limit of the shipowner’s liabilityunder the CLC which came into effect in November2003.The Insurance cover of the “Volgoneft 139” forpollution damage at the time of this incident wastherefore 3 million SDR (RUB 116.3 million) whichis 1.51 million SDR below the amount required by theamended 1992 CLC Convention, and this “insurancegap” has proved a difficult sticking point in thenegotiations.All the Russian claims arising from this incident havenow been assessed at a total of RUB 337.6 million,equivalent to £7.3 million, but none can be paid untilthe insurance gap problem has been resolved.* CMI Observer Delegate.10

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 11“Hibei Spirit”This very large claim in Korea moves steadily towardsfinal settlement, despite the total number ofindividual claims exceeding 28,850.Close cooperation between the Fund, the Skuld Pand I Club and the Government of Korea has madethis possible. The level of payments by the Fundremains at 35% of assessed clam amounts, with theGovernment of Korea settling the balance under theprovisions of a special law.A new development has been the implementation ofa new technique for settling small non-fishery claimswhere the claimant has not been in a position toproduce documentary proof of loss. This technique isstill in the trial stage, but has enabled a further 584claimants to receive compensation.The recourse action brought against Samsung in thePeoples Republic of China has now been concluded,with a recovery of US$ 10 million shared between theClub and the Fund.Claims in NigeriaTwo incidents were reported to the meeting involvingpollution incidents in Nigeria, but in both cases thefacts remain very uncertain. Both incidents happenedin 2009, and the possibility remains that they may betime barred under Article 6 of the 1992 FundConvention.However a substantial delegation from Nigeriaparticipated in the discussions, and it is hoped thatthis may enable these cases to be settled.Working Group on Interim Payments to PollutionVictimsThis topic has proved a difficult one to resolve. Therecan be no doubt that the object of the CLC and Fundsystem is to ensure that victims of oil pollution fromtankers receive prompt payment of compensation.However the very structure of the system, based onlimited liability of the ship owner and Fundrespectively, means that when the total of theapproved claims exceeds the total of the ship owner’sCLC limit and the maximum available from theIOPC Fund, the calculation of the proportion of eachclaim which can be paid can only be made when allclaims are known and assessed. That in turn rendersthe making of interim payments before that timemathematically impossible.Hitherto the problem has been solved in the smallnumber of cases in which it arose by arranging for theship owner and his P and I Club to pay the fullamount of the assessed proportion of each claim,until the full amount of the ship’s CLC limit ofliability has been reached. The Fund then takes overand continues settlement of both the ship owner’sproportion and the Funds proportion of each claimat the level of payment fixed jointly by the Fund. Eachpayment, whether by the Club or the Fund, isspecifically approved by both of them, and at the endof the case a reconciliation is carried out and abalancing payment made to ensure that each pays theappropriate amount according to the Conventions.However this solution has not proved possible toapply in cases where the ship owner has been obligedto pay his limitation find into court.If that happens, as in the case of the “Prestige”, theFund has paid its proportion to each clamant (theFund Convention does not require the Fund toconstitute a limitation fund in court) leaving thevictims to wait for the Court-appointed administratorto distribute the funds in court. In no case has thatresulted in a payment which could be considered“prompt”.In an attempt to resolve this dilemma the In -ternational Group of P and I Clubs and the 1992Fund Secretariat commissioned a study of theproblem by Mr Mans Jacobsson, formerly Director ofthe Fund, and Mr Richard Shaw, the CMI observerdelegate. Their report was tabled at a session of theworking group considering this topic under theChairmanship of Mr Volker Schofisch of Germany,and is available on the Funds website as documentIOPC/APR12/10/1.It is evident that no solution of this problem ispossible without amendment of both the CLC andFund Conventions, unless the Funds and the Inter -national Group can reach agreement on aMem orandum of Understanding recording theexisting practice.An Assembly Resolution formally approving the termsof the MOU may assist in persuading a judge chargedwith administering a CLC Limitation Fund to takedue note of the practice, and to give effect to it in thedistribution of the Limitation Fund.The Study revealed a paragraph, of which manydelegates were unaware, in Article 18.7 of the 1971and 1992 Fund Conventions, with refers to the needfor interim compensation payments (there referred toas “provisional payments”) to be paid “as promptlyas possible”.This paragraph clearly gives express authority underthe Conventions for the making of prompt interimpayments, and thus to the constructive interpretationof the convention provisions in a way which enablesthis to be achieved.Further negotiations continue between the Funds andthe International Group on the wording of anappropriate Memorandum of Understanding, and it isto be hoped that agreement on this will be achievedbefore the next meeting of the Working Group.11

CMI News 2012-1_1 2012 18/06/12 16.22 Pagina 12Definition of “ship” for the purpose of the FundConventionFollowing the debate on the Opinion by ProfessorLowe of the University of Oxford on this difficultquestion, referred to in our previous report andavailable on the IOPC Fund document serviceswebsite at IOPC/OCT11/4/4, the discussioncontinued at a session of the working group on thistopic under the Chairmanship of Ms Birgit SollingOlsen.The next formal meetings of the IOPC Fundgoverning bodies will take place on 15-19 October2012, with an additional session, if required, on 9-13July 2012.RICHARD SHAW ** CMI Observer Delegate.12