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Industry coalition statement on ECJ ruling on EU SSP Directive

3 June 2008

           

Court of Justice of the European Communities

 

Case C-308/06

 

The Queen on the application of

INTERTANKO

INTERCARGO

The Greek Shipping Cooperation Committee

Lloyd’s Register

The International Salvage Union

v.

 The Secretary of State for Transport


European Court rules that the validity of the EU Directive 2005/35/EU on ship source pollution cannot be assessed by reference to the international conventions MARPOL 73/78 and UNCLOS 1982 – this leaves open the door for other legal fora to rule on how the Directive is to be interpreted consistently with these conventions
 

On 3 June 2008 the European Court of Justice (ECJ) delivered judgment in case C-308/06 concerning the validity of EU Directive 2005/35/EC on Ship Source Pollution (the Directive). The claimants in the case are a coalition of shipping industry interests comprising INTERTANKO, INTERCARGO, the Greek Shipping Cooperation Committee, Lloyd’s Register and the International Salvage Union.

 

The coalition of applicants challenged the Directive in the English High Court as being inconsistent with, and contrary to, the internationally harmonised rules on the same issue contained in MARPOL 73/78 and UNCLOS 1982.

 

The English High Court agreed that the coalition’s arguments were well founded and requested the ECJ to make a preliminary ruling on the following issues:

 

(1) Whether the EU can impose criminal liability for discharges from foreign flag ships on the high seas or in the Exclusive Economic Zone independently of MARPOL, thereby limiting MARPOL defences.

(2) Whether the EU can legislate for discharges in territorial seas otherwise than in accordance with MARPOL, again limiting MARPOL defences and expanding parties who may be liable.

(3) Whether the standard of criminal liability for discharges resulting from “serious negligence" breaches the right of innocent passage.

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

 

The Grand Chamber of the ECJ, comprising thirteen judges, heard oral argument on 25 September 2007. 

 

In its judgment issued today it has ruled that the validity of the Directive cannot be assessed by reference to MARPOL or the Law of the Sea Convention (UNCLOS).   It has upheld the Commission’s argument that as the Community itself (unlike its member States) is not a party to MARPOL, it is not bound by the Convention.  The Court has taken the view that although the Community is a party to UNCLOS, that Convention does not give individuals rights or freedoms on which they can rely against States.   

 

The Court has also held that the use of the term "serious negligence" does not infringe the requirement of certainty in Community legislation.  In reaching this conclusion it gave guidance on the interpretation of the phrase, holding that it can refer only to a patent breach of a duty of care.

 

Comment

 

The effect of the judgment can be summarised thus:

 

1. The main provisions of the Directive remain valid;

 

2. The criminal liability regime for pollution remains undecided because the Court expressly held that the provisions had to be interpreted taking account of MARPOL 73/78. No guidance was given by the Court to national courts quite how this is to be done. Potentially the effect of the judgment is that the scope of criminal liability for accidental pollution may be broader than the international regime.

 

3. What is also significant is the general approach taken by the Court to the broader principle raised, namely, the relationship between international law laid down in treaties and community law. The Court has taken the view that UNCLOS regulates issues between states and not individuals and therefore cannot be applied to test the validity of the Directive.

 

4. The restrictive view of the status of UNCLOS as limited to States is unfortunate given the universal recognition of UNCLOS as relevant to determine not only the rights but also the obligations of users of the seas.

 

5. On the issue of validity of the Directive no effect is given to the fact that the Directive was specifically designed to harmonise implementation of MARPOL within the EU.

 

In making this judgment the Court has departed from the detailed opinion of Advocate General Kokott, who had concluded that the validity of the Directive could and should be tested by reference to UNCLOS and MARPOL, and that the Directive exceeded the Community's powers in international law unless "serious negligence" was construed to have different meanings inside and outside territorial waters.  This would have entailed treating "serious negligence" as adding nothing to the MARPOL test of intent or recklessness, contrary to what the framers of Directive clearly intended.

 

Observers of the proceedings have waited with interest to see whether the Court would accept this novel way of rescuing the Directive from the conclusion that it was contrary to international law.  In the event it has not done so, but the Court has concluded that UNCLOS does not confer rights capable of being relied upon by parties other than States.

 

The Court’s judgment is relatively short and leaves open the question of whether the approach taken by Advocate General Kokott can or should be followed.

 

The ruling will add to existing concerns about the relationship between Community legislation and international maritime regulations.  EU Member States continue to enjoy the benefits of being parties to MARPOL but the judgment also permits them to act unilaterally, provided that they act collectively.  It remains to be seen how tolerant the rest of the international community will be of such a stance.

 

The judgment confirms the coalition’s anxieties as to the implications of the Directive for the maritime industry. Furthermore, the judgment has not given effect to the significant common ground between the coalition, the EU Commission, the United Kingdom and many other Member States that the validity of the Directive was to be assessed by reference to UNCLOS.

 

In any event significant questions remain as to how the High Court in London will react to this judgment in the light of the lack guidance as to how to interpret the Directive in accordance with international law.

 

Although there is no possibility of an appeal there are the options for States to commence proceedings before International Tribunal for the Law of the Sea or indeed the International Court of Justice.

 

Reactions from the coalition

 

INTERTANKO

 

“These proceedings were brought to uphold the principle of the shipping industry being regulated on a global basis with regulations that are legally certain and capable of uniform application. Furthermore, they were brought to ensure the fair treatment of seafarers and others engaged in the shipping industry. We are very concerned at the Court’s ruling and its implications for the shipping industry. We wish to thank our legal team for so thoroughly preparing and presenting the coalition’s case.”

Chairman, INTERTANKO, Nick Fistes

 

INTERCARGO

 

“We have concerns as to the implications of this ruling and the standing of international conventions.”

Chairman, INTERCARGO, Nicky Pappadakis

 

The Greek Shipping Co-operation Committee

"The effects of this possibly far reaching judgment must now be given serious thought, primarily by those non European Union States whose MARPOL and UNCLOS treaty rights are being prejudiced.”
Chairman, Greek Shipping Co-operation Committee, Epaminondas Embiricos 

Lloyd’s Register

 

"I am extremely disappointed that in coming to this judgment, the European Court of Justice seems to have lost sight of the fact that Europe is a part of a global community, and that global industries, such as the maritime industry, need uniformity of approach to ensure that the environment remains safe.  This judgment will have serious repercussions for the safe operation of ships."

Chairman, Lloyd’s Register Group, David Moorhouse

 

International Salvage Union

 

“The marine salvage industry is the first line of defence when dealing with maritime casualties where there is actual or potential pollution, so the Members of ISU will be very concerned with the outcome of these proceedings before the European Court of Justice.”

Secretary General, International Salvage Union, Mike Lacey

 

The Coalition’s solicitors (Ince & Co)

 

The ruling appears to mean that if there are concerns about the compatibility of a Community instrument with international maritime law, these cannot be tested in the European Court and can be examined only if flag States outside the Community refer them to other international tribunals.

Colin de la Rue, partner, Ince & Co, London

 

For further information on behalf of the coalition please refer to:

Bill Box, Communications Manager, INTERTANKO
bill.box@intertanko.com   tel. + 44 20 7977 7023

Enquiries relating to legal aspects of the Court’s judgment should be addressed to:

Colin de la Rue of the coalition’s solicitors, Messrs Ince & Co  colin.delarue@incelaw.com    tel. + 44 20 7623 2011

John Fawcett-Ellis, Legal Advisor, INTERTANKO
john.fawcett-ellis@intertanko.com    tel. + 47 9209 5999

Michele White, Legal Counsel, INTERTANKO
michele.white@intertanko.com    tel. + 44 20 7977 7038

Click HERE to download the background briefing