The dispute about how much who and shall pay for the oil pollution of the seaport of St. Petersburg continues. The St. Petersburg company has seized 58 million rubles from the ship owner and the insurer for pollution of the water area of the port of St. Petersburg with bunker fuel, but the court of cassation overturned this judgement and remanded the case for a new trial.

19 June 2019 in the port of St. Petersburg the oil spilled from the foreign vessel LOZA. At that time, the case did not receive wide publicity in the media, but in court, as it turned out, all this time there was a heated debate about how much the cleaning of the port water area from fuel oil actually cost.

The fuel oil spill occurred during the bunkering of the vessel. The master of the vessel reported about it to the port authorities. On the same day, representatives of the port administration inspected the vessel and the spill site, and the shipowner hired “Sea Ecology” LLC to clean up the water area.

On the ninth day after the spill, the port administration decided to additionally involve its contractors under the state contract – “Kontur SPb” LLC. They started working on June 28 and cleaned the water area until September 2019.

According to the port administration, the reason for such a long cleanup is the unknown exact amount of spilled fuel, a large number of ships in the water area, difficult meteorological conditions, due to which the water level was constantly changing, and fuel oil was deposited on the walls of the berths. According to the port, some part of the fuel oil could even settle to the bottom of the water area.

Subsequently, the port administration assigned to the contractor their right to claim compensation for liquidation of the oil spill. However, the ship owner and the insurer, immediately requested an information about the reasonableness and validity of such measures.

The shipowner’s liability for oil spills was insured by one of the world’s most reputable insurers – the mutual insurance club (P&I) – The Standard Club. P&I clubs have a high reputation in the insurance and maritime transportation market, there could be no doubts about the payment by the insurer for the cleaning of the water area. But neither the administration, nor “Kontur SPb” LLC decided not to risk it and first arrested the ship, and then filed a lawsuit in court, without waiting for the completion of the cleaning work.

m/v LOZA was nevertheless released in July in exchange for an independent guarantee (letter of undertaking) issued by the club and an advance payment to “Kontur” in the amount of 36 million rubles. But it seems that the agreement between the port and the shipowner ended there.

Following global oil spill response practices, the ship owner and insurer hired independent technicians to oversee the cleanup, as well as a specialist from the international organization ITOPF (a non-profit organization that helps in oil spill response worldwide). ITOPF expert Angela Pinzon (PhD) flew to Russia with express purpose of observing the progress of cleaning up the water area, discussisng technical issues of liquidation with “Kontur SPb” LLC and “Sea Ecology” LLC and receiving reports on the progress of liquidation.

Apparently, “Sea Ecology” LLC and the international expert managed to find a common language – the company’s expenses were paid by the shipowner and the insurer without legal proceedings.

But the ITOPF expert had a lot of questions to “Kontur SPb” LLC. ”Kontur” estimated the cost of their work at 103 million rubles, although in the agreement with the port administration, the cleaning of the same area could not exceed 9 million rubles. The ITOPF expert confirmed only 6 million rubles out of the 103 million rubles declared by “Kontur”. She also asked for additional documents for another 20 million rubles.

“Kontur SPb” LL also submitted to the court a report of a specialist, who considered that the company applied the correct technologies and declared even less work performed than it should have, and, with rare exceptions, calculated the calculations correctly.

The court of first instance independently, without resorting to an expert examination, made a conclusion about what expenses for oil spill response can be considered reasonable, and satisfied the requirements of “Kontur SPb” LLC almost in full. The decision was upheld by the appellate instance.

Besides the question “how much to pay?” (there is the term “costs of reasonable measures...” in legislation), another question turned out to be controversial in the case – “who should pay?”.

Referring to the norms of the Merchant Shipping Code of Russia on the possibility of involving the ship owner as a “co-defendant” in the claim against the insurer, the Claimant filed a claim against the ship owner and the insurer to recover losses from them jointly. The courts of first and appellate instance upheld the Claimant’s position.

On January 21, 2021, the Arbitrazh (Commercial) Court of the North-Western District issued a ruling, under which the judgement of the courts of first and second instance were canceled and the case on recognizing the ship owner and the insurer jointly and severally liable for losses caused by the spill of bunker fuel in the seaport of St. Petersburg was sent to new consideration in a different judicial composition.

The court of cassation did not agree with the position of the lower instances regarding joint liability, indicating that the co-defendant does not always bear joint responsibility. The lack of joint liability between the insurer and the insured, in a number of cases, was noted by the Supreme Court of Russia.

The court of cassation also indicated that the issues put before the court on the costs of oil spill response require special technical knowledge and recommended that the issue of appointing a forensic examination is to be discussed.

At the time of publication of this issue, the first hearing of the re-trial is scheduled for February 24, 2021. Read more about this case in the review below, on p. 77–80. ■