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5 Jan 2018
UK P&I insurer facing $1bn total limit loss from Prestige spill
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The London Steam-Ship Owners’ Mutual Insurance Association, also known as the London Club, is facing a $1bn damages claim following a Spanish court order yesterday (15 November) in relation to the tanker Prestige sinking and oil spill in 2002.

The Coruna-court order was the latest legal chapter in a long-running saga which, in a controversial appeal court ruling in January 2016, found the P&I club would be liable for its full limit, despite the International Maritime Organization’s CLC convention, which would otherwise limit its liability.

That court also found that the Master of the vessel was liable for an environmental crime, while the state official – who was responsible for the decision to deny the Prestige access to a place of refuge – was cleared of wrongdoing.

And, yesterday, a Spanish court ruled that the regional government of Galicia should be compensated Eur1.8bn and neighbouring France Eur61mn for the spill, thereby exhausting the coverage.

The P&I club has a $1bn limit under its policy and the court said this should be paid in full with the remainder paid by the owner, Mare Shipping, and the International Oil Pollution Compensation Funds, a grouping of two inter-governmental organisations that provide damages and compensation from spills.

The Prestige tanker ran into trouble in November 2002, eventually breaking in two after six days and sinking off the coast of Galicia. The accident saw 63,000 tonnes of oil spill into the sea.

In a statement after the latest ruling, the club said: “The London Club remain concerned at the direction that the Spanish Court has taken generally, including in respect of the international CLC Convention.

“The London Club look forward to clarification of – and the opportunity to study – the findings in more detail before making further comment.”

Shipowners’ marine liability insurance is dominated by the mutualised Protection & Indemnity (P&I) clubs that operate out of London and other maritime insurance centres. Thirteen of these clubs group together – through the International Group – to buy one of the industry’s largest reinsurance XoL treaties at around $3bn, in a programme traditionally led by XL Catlin

 

source: mailchi.mp

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