On 10 September 2017, the Greek-flagged tanker Agia Zoni II sank while anchored at Piraeus port. The vessel was carrying 2,200 mt of fuel oil and 370 mt of gas oil. Some 500 mt of oil leaked. After the incident, the vessel's insurance company submitted a declaration of limitation of liability in accordance with art 7 of the CLC 1992, and a limitation fund was constituted.

In 2021, the claimant initiated civil proceedings against the IOPC Fund without first submitting its claims to the limitation fund. The claimant was a beachfront company which claimed business suspension costs, clean-up costs, rent reductions, and losses of profits. The IOPC Fund had already paid the claimant for clean-up costs.

The Multimember Court of First Instance of Piraeus, Shipping Division, decided that after the constitution of the limitation fund the claimant had no right to initiate any claim directly against the IOPC Fund, and the fact that it chose not to participate in the collective compensation proceedings against the limitation fund did not constitute a legal basis for the relevant civil action. The claimant appealed to the Three Member Court of Appeal of Piraeus.

Held: The appeal is dismissed.

The claimant argued as follows:

1. the Court of First Instance mistakenly found that it had to first activate the provisions of the CLC 1992 by participating in the collective proceedings against the limitation fund, whereas announcing its claim to the liquidator and proceedings against the IOPC Fund were parallel proceedings;
2. from the constitution of the limitation fund and the table of beneficiaries it was proven that the shipowner was not economically able to meet its obligations. For that reason the IOPC Fund had already paid the claimant EUR 135,964.47. But the rest of its claim has not been recognised, and it is clear that the three and six-year limitation periods will run out before the completion of proceedings before the liquidator in respect of the limitation fund constituted by the shipowner;
3. the appealed decision contains contradictory reasoning, in that it states that part of the claimant's damages claim, namely EUR 104,906.65 relating to clean-up costs, has been paid, but then considers that the IOPC Fund, which thus admitted the existence of its liability, was not liable for this;
4. the essence of the provisions of the Fund Convention 1992 is the idea that the financial consequences of damage resulting from pollution caused by the escape or discharge of petroleum products carried by ships should be borne, not only by the shipowner involved in the harmful event, but also by those who benefit from the transport of petroleum products. The IOPC Fund acts in a complementary manner to the CLC 1992, and is exempted from the obligation to compensate only in the limited cases provided for in art 4.2 of the Fund Convention 1992. In any event, the IOPC Fund can be subrogated into its rights it after payment and by way of recourse apply to be placed in the table of the limitation fund;
5. the Court of First Instance wrongly held that the claimant was not entitled to turn to the IOPC Fund for compensation, on the basis that the Fund's liability arises only once the shipowner's liability is exhausted, and that the claimant has no right to do so because it chose not to participate in the collective proceedings against the limitation fund.

    

The Court of Appeal held that art 4 of the Fund Convention 1992 provides that additional compensation is paid by the IOPC Fund where claimants do not receive full compensation on the basis of the CLC 1992. This may occur in the following cases: a) the damage exceeds the shipowner's liability under CLC 1992; b) the shipowner is not liable under the CLC 1992 because of the reason which caused the damage; or c) the shipowner is not financially able to meet his obligations under CLC 1992 in full and the insurance is insufficient to satisfy valid claims for compensation. It is considered that the last case occurs when the victim could not be fully satisfied with the amount of compensation which is foreseen by the CLC 1992 after taking every logical measure in accordance to the judicial protection provided to it.

This leads to the conclusion that for the claimant to turn to the IOPC Fund, it first has to participate in the collective proceedings which commence with the constitution of a limitation fund by the shipowner. Although this is not explicitly provided for in the CLC 1992 or in the national laws which ratified the CLC 1992 and the Fund Convention 1992 in Greece, a contrary interpretation would violate the general principle of equal treatment of claimants who are in the same position.

Therefore the claimant's individual action on the ground that its claim against the IOPC Fund is subject to a special three-year and, under certain conditions, six-year limitation period, which run in parallel with the collective procedure for the examination of claims and the drafting of the table for their compensation, and are not interrupted nor prolonged in accordance to arts 285 and 286 of the new Code of Private Maritime Law of Greece (CMPL), is not permitted, because a different interpretation would relieve the claimant from its obligation to comply with the parallel collective proceedings. For this reason, art 251 of the new CMPL, which is in force as from 1 May 2023, provides that if a limitation fund is constituted, a civil proceeding against the IOPC Fund in accordance with art 7 of the Fund Convention 1992 is rejected as unacceptable if a claim has not been submitted to the liquidator (art 251.1 of the new CMPL), and if a claim has been submitted to the liquidator, the court which is examining the civil proceeding against the IOPC Fund in accordance with art 7 of the Fund Convention 1992 postpones the issuance of final judgment until the final table of distribution is made (art 251.2 of the new CMPL).

After the constitution of a limitation fund which corresponds to the provisions of art 5 of the CLC 1992, the claimant should have first submitted its claim for it to be examined by the liquidator and included in the table of claims. The Court of First Instance correctly interpreted the law. The arguments to the contrary set out in the grounds of appeal must be rejected as unfounded.