LONDON STEAM SHIP OWNERS MUTUAL INSURANCE ASSOCIATION LTD V THE KINGDOM OF SPAIN AND ANOTHER (THE PRESTIGE) (NO 2)

[2015] EWCA Civ 333, Court of Appeal, Lord Justice Moore-Bick, Lord Justice Patten and Lord Justice Tomlinson, 1 April 2015

Arbitration - Claim against P&I Club in Spain by Spanish and French authorities - Club obtaining arbitral award in England declaring its non-liability - Whether award should be enforced - Whether state immunity prevented enforcement - Arbitration Act 1996, section 66 - State Immunity Act 1978, section 2, 3 and 9

On 13 November 2002 the vessel M/T Prestige suffered storm damage, and on 19 November 2002 she broke in two and sank. As a result the there was substantial oil pollution on Atlantic coasts of Cantabria and Galicia, spreading up to the Western part of France. Criminal proceedings were brought in Spain against the master, chief officer and chief engineer, and in June 2010 civil proceedings were brought against the owners and their P&I Club by the State Administration of Spain, the Spanish Public Prosecutor and two autonomous Spanish territorial entities. The sum sought was €4.3 billion. At about the same time, the Republic of France and a number of local French government entities and organisations joined the Spanish criminal proceedings against the Club, seeking approximately €67.5 million. In 2005 civil proceedings were commenced against the Club in Bordeaux. The Club accepted that it was strictly liable for oil pollution damage under the CLC Convention for up to €22,777,986. As for the rest, the Club relied upon its rules whereby claims had to be brought in arbitration and were in any event subject to a "pay to be paid" clause so that the Club was liable only once the owners had made payment. The Club thus refused to participate in the Spanish action and instead sought declaratory relief in London arbitration to the effect that it was not liable. Neither Spain nor France participated. The arbitrator obtained declarations and sought to enforce them under section 66 of the Arbitration Act 1996. The Court of Appeal, dismissing an appeal from the judgment of Hamblen J, held that the awards should be enforced.