The Shipping Industry takes its Case to the European Court of Justice

January 2007

The European Court of Justice (the ECJ) now has before it an important case concerning the EU Ship Source Pollution Directive (35/2005). The Directive seeks to criminalise accidental pollution. The case is significant not just for the shipping industry but also to clarify European Union (EU) and European Economic Area (EEA) Member States’ obligations. It examines the inter-relationship between an international regime established by treaties and contrasting legislation emanating from the EU. The Directive, which was hastily drawn up following the Prestige incident, is very broad in its scope. It applies irrespective of flag and its provisions apply not just within States' territorial seas but also within their Exclusive Economic Zones (EEZ) and on the High Seas.

 A broad coalition of interests within the shipping industry is seeking clarification by the ECJ in Luxembourg as to the legality of the Ship Source Pollution Directive. The shipping industry submits that it goes beyond the provisions laid down in MARPOL and UNCLOS, which they say establish a uniform regime. The Directive seeks to criminalise pollution when caused with intent, recklessness or with serious negligence. This last test of culpability, it is submitted, does not satisfy the EU requirement of legal certainty. There is concern that if the consequences of the pollution are serious, then the degree of fault will also be taken to be serious.

 The coalition of shipping interests is led by INTERTANKO, joined by INTERCARGO, the Greek Shipping Cooperation Committee, the International Salvage Union and Lloyd’s Register. All these claimants are very concerned about the Directive and the increased exposure to criminal liability for their members. Seafarers and salvors, who are in the front line in the event of any casualty, are particularly concerned and do not wish to be exposed to ill-defined legislation that may be used “in the heat of the moment” as a means to satisfy the public’s demand for accountability and retribution.

 The case was brought before the ECJ upon the reference of the English High Court of Justice following the judgment of Mr Justice Hodge on 30 June 2006. The ECJ is the only body that can rule on the legality of EU legislation. Cases are not lightly referred to the ECJ. The claimants had to show that their case was “well founded”. The court interpreted this as meaning that the claimants had “a reasonable prospect of success”. The High Court referred four key questions to the ECJ for preliminary ruling. Meanwhile the proceedings before the High Court were stayed. The questions referred to the ECJ were:

 (1) Whether it is lawful for the EU to impose criminal liability in respect of discharges from foreign flag ships on the high seas or in the Exclusive Economic Zone, and to limit MARPOL defences in such cases.

(2) Whether it is lawful for the EU to exclude MARPOL defences for discharges in the territorial sea.

(3) Whether the imposition of criminal liability for discharges caused by "serious negligence" hampers the right of innocent passage.

(4) Whether the standard of liability in the Directive of "serious negligence" satisfies the requirement of legal certainty.

The law as regards matters of criminal law must not only be clear but crystal clear. The test of serious negligence gives rise to concern. Its ambiguity may well lead national courts seeking to apply the test to look to the consequences of the act(s) and, if they are serious, they may hold the negligence to have been serious. A major oil pollution incident is one of the most highly politically charged events and the reaction of the public is often one of outrage. Due to the Directive there is increased possibility that individuals may be held to be criminally liable.

It must be emphasised that the shipping industry does not in any way condone illegal acts causing pollution to the marine environment. But accidents can happen and whilst adequate compensation should be available, it should not follow as a matter of course that someone should be criminally liable.

The shipping industry provides an efficient and environmentally friendly transportation solution for the global economy. Its seafarers often work in demanding circumstances and their dedication to duty is rarely recognised sufficiently. Creating an uncertain criminal liability regime will do nothing to ensure adequate retention levels or encourage recruitment of professional mariners.

The claimants have now filed their written submissions before the ECJ. EU and EEA Member States have also had the opportunity to file written observations before the ECJ. It is understood that the Governments of Greece, Cyprus and Malta have done so in support of the claimants’ case.

Given that Member States must implement the Directive by 1 April 2007 it was recognised by the High Court that the case should be considered expeditiously by the ECJ. Despite these proceedings the Directive has not been in anyway suspended. Member States must comply with the deadline set to bring their own laws into line with the Directive.

Now that written observations have been submitted the Judge Rapporteur will draw up a preliminary report which will be discussed at a general meeting of the Judges and Advocates General. This will be followed by an assignment of the case for the formation of the Court, the size and chamber of which is decided by the Registrar and possibly by intervention of Member States. In effect this decides the number of judges who will sit on the panel (the maximum number being 13). A date will then be fixed for an oral hearing. Whilst it is hoped that this will take place during 2007 it is not certain. After the hearing an Opinion is produced by the Advocate General assigned to the case. There is no scope for the parties to make additional representations after seeing the Opinion, which may or may not be adopted by the court as the basis for its decision. The decision of the ECJ will be final - there is no procedure for appeal.

This case has generated a great deal of interest from legal commentators in many jurisdictions. The traditional legal order is being challenged. The shipping industry, as a truly international industry, is governed by a complex web of laws. Pre-eminent are the international treaties that have been carefully negotiated. These provide the backbone to the legal order. The role of the International Maritime Organization (IMO) is pivotal, the IMO treaties are widely ratified and accepted, none more so than MARPOL which is a truly global framework for the industry. Where national or regional laws are implemented it is vital that they do not contradict binding treaty law that so many States have also submitted to.

There is an analogy with a previous case brought by the shipping industry. In that case INTERTANKO lead a challenge to certain regulations concerning equipment and manning of tankers enacted by the State of Washington in the U.S. (INTERTANKO v. Governor Locke). It was argued that these were pre-empted by U.S. federal laws. The case was ultimately decided by the U.S. Supreme Court in 2000, which ruled unanimously in favour of the shipping industry. That decision has become the bedrock of U.S. jurisprudence on issues as to pre-emption by Federal laws. That decision helped to reduce the proliferation of laws enacted by U.S. coastal States. Such an issue is once again before the U.S. courts this time concerning the State of Massachusetts and their Oil Spill Prevention Act of 2004. The District Court held in favour of the Shipping industry ruling that the law was pre-empted by federal law. The State of Massachusetts has filed an appeal and the matter is now before the U.S. Court of Appeals for the First Circuit.

It is hoped that the decision of the ECJ will provide clarity in the law, provide guidance on the bounds of the EU’s competence and confirm the pre-eminence of international law as laid down in treaties. The court’s decision is awaited with great interest from commentators, States and the shipping industry.

We are grateful to John C. Fawcett-Ellis, General Counsel, INTERTANKO for this article. 

For further information see: www.intertanko.com