Tankers carrying more than 2,000 t of persistent oil as cargo are required to maintain insurance as per CLC 92. This is to ensure that adequate compensation can be provided for oil pollution damage caused by spills. If, however at the time of the incident a vessel that was capable of carrying oil in excess of 2,000 t but was actually carrying less than that amount, then would CLC 92 still be applicable? In The Alfa 1 [2021] the insurers were arguing that in such a scenario there was no room for application of CLC 92 and no direct action can be brought against them.
The vessel sank in Elefsina Bay in Greece after striking a wreck. Owners appointed EPE for clean-up operations. Vessel’s blue card was issued by Aigaion Insurance. EPE carried out the operations as directed by the owners and local port authority. The insurers refused to pay EPE (approx. €15m). As per them the insurance covered cases only where ship was actually carrying oil in quantity greater than 2,000 t. The case was now being heard by the Supreme Court in Greece after the lower courts had decided in favour of EPE.
The court said that CLC 92 extends to all tankers capable of carrying oil as cargo in excess of 2,000 t, "regardless" of how much cargo they actually might carry on different sea voyages. There were multiple reasons for such:
- The definition of a ‘ship’ in the CLC 92 confirms this and it was also the intention of the drafters of the convention. Any other reading of the text would make its implementation a cumbersome process.
- A ship’s carrying capacity constitutes a better and a more stable criteria compared to cargo actually carried that can vary as it depends on the commercial contracts.
- Authorities issue CLC 92 certificates, the validity of which depends on the blue card which in turn is dependent on the cargo carrying capacity and not on actual carriage or a commercial contract for such cargo.
- Affected third parties should not be required to prove how much oil the vessel was actually carrying to bring direct action against the insurers, else another layer of complexity would be introduced which was never the intention of CLC 92.
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