DG Shipping crosses swords with polluter

The Directorate General of Shipping and ‘polluter’ MT Dawn Kancheepuram are at loggerheads over the applicability of international Civil Liability Convention (CLC), 1992, for the payment of compensati

Workers still have plenty of cleaning to do with regard to the oil spill | express

CHENNAI: The Directorate General of Shipping and ‘polluter’ MT Dawn Kancheepuram are at loggerheads over the applicability of international Civil Liability Convention (CLC), 1992, for the payment of compensation. Hence, the matter is likely to be placed before the Admiralty (Jurisdiction and Settlement of Maritime Claims) of Madras High Court.

The 1992 CLC governs the liability of shipowners for oil pollution damage. Under this convention, the registered shipowner has strict liability for pollution caused by the escape or discharge of persistent oil from his ship. This means he is liable even in the absence of fault on his part.

Documents available with Express reveal that the P&I Insurer of MT Dawn Kancheepuram has written multiple letters to DG Shipping on non-applicability of the CLC. It is argued that the CLC would not apply to any claim brought against MT Dawn Kancheepuram since the vessel was not carrying persistent hydrocarbon oil cargo in bulk.

In response, DG Shipping has expressed its disagreement and says the vessel can’t escape the liability since the environmental damage caused was due to persistent oil as evidenced from the oil sludge recovered from the coast of Tamil Nadu.

“The P&I Insurer of MT Dawn Kancheepuram regarding the non-applicability of the CLC has not been reflected by amendments to the convention, as it does not appear to have universal acceptance. Also, no case-law has been cited (from any jurisdiction) in the world by the P&I Insurers to substantiate their contention,” DG Shipping said, adding if a consensus is not reached, a decision would be taken by Admiralty jurisdiction of the High Court.

Also, the polluter’s insurer has indicated a limitation amount of Special Drawing Rights (SDR) 11.86 million under the Convention on “Limitation of Liability for Maritime Claims”. After serious meetings initiated by DG Shipping, the insurer has agreed ‘without prejudice’ to the view that the higher limits of about SDR 17.91 million could possibly apply. SDR is the unit of account for the International Monetary Fund and not a currency per se.

What is 1992 CLC?

• The Civil Liability Convention, 1992, governs the liability of ship owners for oil pollution damage.
• Under this convention, the registered shipowner has strict liability for pollution damage caused by the escape or discharge of persistent oil from his ship. This means that he is liable even in the absence of fault The vessel owner is exempted from liability only if he proves that the damage resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or the damage was wholly caused by an act or omission done with the intent to cause damage by a third party, or the damage was wholly caused by the negligence or other wrongful act of any government.

Scope of Admiralty jurisdiction

• Only last year, the Union government enacted the Admiralty (Jurisdiction and Settlement of Maritime Claims) and repealed the five archaic admiralty statutes.
• Admiralty jurisdiction is issued to high courts located in the coastal States of India and this jurisdiction extends up to territorial waters.
• The jurisdiction is extendable, by a central government notification, up to the exclusive economic zone or any other maritime zone of India or islands constituting part of the territory
• of the country.
• It applies to every vessel irrespective of place of residence or domicile of the owner.
• The liability in respect of selected maritime claims on a vessel passes on to its new owners by way of maritime liens subject to a stipulated time limit.