Detain the Ship For Legal Claims – Maritime Expert
By Sulochana Ramiah Mohan
As an apparent oil slick has been observed lately, after a continuous mission of preventing a major environmental disaster caused by the fire on the ‘MT New Diamond’, Sri Lankan authorities are filing a lawsuit, under the nation’s law, against the crude oil carrier, which departed from Mina Al Ahmadi, Kuwait on August 23, 2020 and caught fire in its engine room on September 3 while on its way to Paradip Harbour, East of India, to reach as scheduled on September 5.
The breach of safety within ships can happen unfortunately, and there were famous cases being recorded in history as devastating tragedies.
This is the first time a tanker caught fire in Sri Lankan waters.
An in-depth legal framework is being prepared on how to handle the now-defunct ship that is idling in the Exclusive Economic Zone carrying approximately 200,000 tons of oil and the Sri Lanka Navy, Air Force held a combined operation with the Indian Coast Guard, Indian Navy and the Air force to douse the fire and oil spill so that no major harm is caused to the marine environment.
What Sri Lanka should probe is whether we can detain the ship and whether we can get the oil out of the ship and transfer it to another tanker and also get the ship to the Sri Lankan coast to proceed with legal action to claim compensation. Also whether the owner of the ship could pay the expenses spent on preventive measures taken and supported by the Sri Lankan agencies.
Sri Lanka’s laws are in place to tackle such sea-based tragedies but the compensation package is less compared to international standards. Our law states a specific limitation for liability but since it’s only a preventive measure we can work with that limitation, however, if there is pollution caused to the marine environment it can be coupled with the preventive measure claim.
Around two years ago, the former government amended the pollution prevention Act, increasing the liability limits, etc., but it was not tabled as a Cabinet proposal.
Thwart the fire
It was an expensive mission that was conducted in the last two weeks until last Thursday to thwart the fire on the ship spreading but it’s now not a matter to send off the vessel salvage claim or transfer the oil tanks to another vessel, prior to sending the tanker away because there are many aspects to be probed as to whether the fire erupted because the boiler burst due to the fire in the engine room.
On September 3, a fire broke out in the engine room of the vessel at about 07.45 local time (SLST), when the ship was about 65km(40 miles) East of Sri Lanka in the Sangaman Kanda Point close to Ampara in the Eastern Province. The ship was chartered for the voyage by the Indian Oil Corporation when the fire erupted.
Sri Lanka needs to establish a valid salvage claim under maritime law, the claimant must prove the following: the salvage was needed because of a marine peril; the claimant’s service was rendered voluntarily and not because of an existing duty or contract; and the claimant’s service contributed to the success of the salvage in whole or in part notes a maritime expert and Law of the Sea, Dr Dan Malika Gunasekera, Attorney-at-Law and LLM (Utrecht) PhD (Hamburg) and former Executive Director, Ceylon Shipping Corporation.
He said we should detain the ship as the government has incurred expenditure in the salvage operation where Sri Lanka has performed a statutory salvage and not a contractual salvage, which means before the commencement of the salvage operations there is a contract between the rescuer and the owner of the cargo or vessel for a fixed remuneration irrespective of the recovery,” he explained to Ceylon Today.
The statutory salvage is when the country in the vicinity takes charge to avert deaths and damage caused by fire and thwarting the oil spill.
The statutory claim also adds up the concept of No Cure No Pay, where the salvor will not be able to obtain his cost if he cannot save the ship. In this particular fire, it does not apply. Sri Lanka’s statutory duty was to avert the damage. The cost incurred is only possible when the ship is detained in Sri Lankan waters, he pointed out.
“If India, in this situation takes the claim as they also took part in salvage operations, the owner of the ship will deposit the cash in India which will lead to a long process of claiming compensation hence the vessel should be detained,” he said.
Some of the points the Indian maritime experts point are:
The VLCC (Very Large Crude Carrier) which caught fire off SL Coast yet in the Exclusive Economic Zone (EEZ) and the tanker could not be towed to Sri Lankan port as it is too big. Also, it is noted that the oil has to be pumped out in offshore stations in the sea called Single Buoy Mooring (SBM).
Also, the ship’s engine has been shut down so the only option is to tow the VLCC to Paradip where the oil refinery is.
The ship owner is Greek and it’s a large established company that handles large shipments and such companies could only do the towing.
The ship owner provided ship on Time Charter and the crew.
The boiler fire in the engine room is not uncommon.
Insurance covered by ship owner will be ones who will address claims.
A ship can be arrested if it’s within the 12 nautical miles of Sri Lanka however, this accident occurred in the Exclusive Economic Zone hence we can claim based on the Admiralty Jurisdiction Act, Dr Gunasekera noted.
There is a provision in the Marine Environment Protection Authority (MEPA) Act which says any preventive measures taken within the EEZ are claimable.
Before speculating whether the fire which erupted in the boiler room of the vessel was an accident or whether it was a fault of the ship or a human error due to negligence, is an aspect that has to be checked in detail noted the maritime expert who runs a maritime law firm in Sri Lanka.
The ship that goes to the sea must be seaworthy and there are three measures of seaworthiness, Dr Gunasekera explained.
Firstly, he pointed out that there should be technical seaworthiness. It involves relating to the vessel’s design, condition of her hull and machinery and her stability. The second element is voyage worthiness as to whether the ship is fit for the voyage to have the proper charts and the crew onboard has the competency. The ship is usually classed unlike the Nippon NHK or NK but in the shipping field, many take this classification without proper surveying. So we need to know whether there was a proper survey and a proper classification of the ship.
Thirdly, it’s about cargo worthiness. As this is an oil vessel, it must make sure whether the equipment could carry oil tanks.
What has to be also noted is that as the fire occurred on the ship, whether there was pollution to the waters. Our marine pollution prevention Act in line with international convention related to this type of tanker oil pollution called the Convention of Civil Liability for oil pollution damage Act of 1969 amended by the protocol of 1992. The MEPA aptly says whenever there is oil pollution damage or preventive measures taking place either within the territorial sea which is 12 nautical miles or within the EEZ which is 200 nautical miles if we experience pollution damage or we have taken a preventive measure to avert pollution damage all those liabilities can be channelled to the owner of the vessel.
The ship at the time of the incident was at 35 nautical miles away now towed to more than 40 nautical miles and still in the EEZ of Sri Lanka.
There is also a law called Intervention Convention, where incidents like this occurs in international waters. The economic zone is also identified as international waters but not purely international waters like the high seas and the high sea is out of the jurisdiction and cannot deal with any incidents such as this. But as it is the EEZ, we do have certain sovereign rights and jurisdictional rights. The oil tanker was on the voyage on the EEZ to East India so there is no question of an innocent passage he added.
If the Government let the ship be towed out of EEZ it can be crucial in claiming the financial damage and the Attorney General’s Department direction to tow the ship away to international waters was crucial too.
It’s now a double edge and we can see the advantage and the disadvantage of keeping the ship in the EEZ said Dr. Gunasekera because the oil slick should not continue.
The MEPA is acting on the direction of the Attorney General. They should know the gravity of this action when there is a massive cost incurred in preventing mayhem in the sea. Through the Protection and indemnity insurance, we can claim however it has to be studied further how to go forward.
Although it’s mandatory by virtue of international Convention on Intervention for the countries nearby should assist in a fire or lifesaving mission in the sea, in this case, there is a claim he explained.
To take the matter to Court but, if the vessel is not in the territorial waters to be arrested, we can detain the captain and the crew until the matter is solved. We have the right to detain it.
As there is an oil slick as well, compensation could be coupled to this. We need to have a hold to get the owner to Courts and the Admiralty Law is that when the ship is arrested the owner has to deposit the claim prepared by the statutory salvors, the Navy and the other government agencies that were involved in the mission.
How can the technical worthiness of the ship be tested after the damage? You have to get down the ship surveyor to probe the cause of the fire, was it a human error or a latent defect. We will have to hire an international company to do the proper claim. If it’s a human error the question arises whether the crew was voyage worthy.
The critical point here is if the insurer finds out that the ship was not seaworthy they may not pay the owner, hence we cannot wait till the insurance company clears this matter for the owner.
Annually, the ship is classified and issued with certificates by marine surveyors again to see whether the ship is technically checked on sea worthiness and some can forge these certificates and get a class for their ship he noted.
If the ship is towed to international water we can be duped.
“We have to see the possibility of getting the ship to our coast if there is no leakage. We have to make sure there is no oil leak and no leak will occur as well. We need to eliminate the danger and the risk and then arrest if possible,” he said.
The rescue mission is to cool the oil and possibly have a ship to transfer the oil.
It’s the right time also to call the international community including the international maritime organisation to support us financially to get the technical capability to conduct such operations as well. There are ways and means even to hire the equipment to get huge tankers to the country to help remove the oil from the damaged ship. This preparation is to avert future accidents such as this.
The next time there can be a worse scenario and it’s time for Sri Lanka to be prepared. We are the maritime hub and most of the maritime transport occurs in the southern sea belt of Sri Lanka so we should have such facilities.
Sri Lanka Navy Spokesman: Captain Indika de Silva
The ship is in the EEZ and on Friday morning it was towed 45 nautical miles on the East coast.
Oil patches are visible in the sea and the MEPA is taking legal action regarding this matter. Director-General Merchant Shipping is handling the legal aspect and seeking the Attorney General’s department’s intervention.
Former Indian navy spokesman: Captain D.K. Sharma
The legal matter is highly complex as the owner of the ship is in Greece, the ship is registered in Panama, the charterer is India and the oil belongs to Indian Oil Company. Also, now that there is an oil slick there is environmental damage to Lankan waters. However, the best is to keep observing the situation and to watch for another 72 hours or so whether there is any ignition. It’s a huge tanker and a continuous search on the technical part of the ship has to go on. Also, the best is to transfer the oil to smaller ships and reduce the weight on the oil tanker. The process is long because there needs to be an early booking for smaller ships to load oil. At this point, the salvors on board the ship decide on the best that could be done.
Also, such huge oil shipment does not operate without seaworthiness being tested, he stressed. The best thing is to move the ship out of Sri Lankan waters without further polluting the water. However, the damage claim from the ship owner through insurance could take years, he added.
General Manager MEPA, environmentalist Dr P.B. Terney Pradeep Kumara told Ceylon Today that while the Government supported dousing the fire on the tanker along with the Indian Coast Guards and others, the oil slick has to be tackled now.
The ship has to be towed to international waters. He also emphasised that the MEPA on the day the ship caught fire had lodged a Police complaint at the Thirukkovil Police Station in Ampara and were planning to get compensation for the vessel from the owners- a Greek company, Porto Emporios Shipping Inc, Piraeus, Greece. He said the legal arm that is preparing to sue the ship owners are working on the legality involved in the mission of rescue operation and the oil slick.
He noted that compensation amounting to approximately Rs 15 million is to prevent the fire and saving the marine environment of the country.
The ship is in the Exclusive Economic Zone, hence they are liable to be detained and pay compensation.
“We are studying the legality involved and how additional damages could be claimed,” he added. The Attorney General’s Department was of the view that ship be towed to international waters however, whether to detain it or tow it was still at the discussion stage Dr Kumara said.