This was a recourse of cassation against the decision of the first instance Court in criminal proceedings arising from the sinking and oil spill of the tanker Prestige: see The Prestige (CMI1140). The Court acquitted the master and first engineer of the ship, and the general director of Merchant Marine of Spain, of crimes against the environment, damage to protected natural areas, and criminal damage, only convicting the master for the crime of disobedience. Consequently, no civil liability was declared and the Court refrained from distributing the limitation fund deposited by the P&I Club following the International Convention on Civil Liability for Oil Pollution Damage 1992 (CLC 1992), to which Spain is a party. The lower Court also stated that the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 (Fund Convention 1992) was applicable in assessing civil liability. The Spanish and French States and local governments and municipalities, some private and public entities and associations recurred in cassation before the Tribunal Supremo/Supreme Court (SC) seeking the reversal of the decision. The claimants demanded the accuseds' conviction and an order for civil liability compensation from the master, Mare Shipping Inc (the shipowner), the London Steamship Owners Mutual Insurance Association (the P&I Club), and the IOPC Fund.

Held: The SC reversed the decision partially, convicting the master of an aggravated crime of damage to protected natural areas, and affirming the acquittal of the other two accused. The SC also declared the unlimited civil liability of the master and the shipowner; the liability of the P&I Club up to the amount of USD 1 billion; and of the IOCP Fund up to the limits set in the Fund Convention.

The SC stated that, according to the provisions of the Penal Code (PC), the crime alleged entails three elements. The first is an act of 'directly or indirectly carrying out any of the polluting activities'. Although, in principle, the literal meaning of the wording suggests the need for active conduct, it also covers commission by omission. Hence, it encompasses any human action that results in a pollution discharge directly or indirectly. Indirect releases include acts, which, although not resulting in a direct release, include previous conduct that would necessarily lead to a discharge. The second element is the violation of a non-criminal rule establishing general protection to the environment. The third is that the act represents a serious danger to a legally protected asset. There is no need to prove the existence of actual damage for the commission of the offence. Conduct is punishable when either committed intentionally or with serious negligence. It has been held that persons also act with intent when they know the risks generated by their actions and do not take any step to avoid them. Pollution by discharge does not require specific construction of intent, but general intent, ie having knowledge of the typical elements and the decision to implement them.

The SC observed that reg 11 (now reg 4 of Annex I) of the MARPOL Convention states that the accidental discharge resulting from damage of the ship equipment is not considered illegal 'provided that all reasonable precautions have been taken, after the occurrence of the damage or discovery of the discharge, to prevent or minimize the discharge; and except if the owner or master acted either with intent to cause damage or recklessly, and with the knowledge that damage would probably result'. In interpreting this international rule, the interpretative criteria that inform local and European law must be considered. Hence, discharges caused by serious culpability are also prohibited and liable to give rise to the imposition of penalties of an administrative or criminal character. The Spanish Port State and Merchant Marine Act also contains many administrative offences, including the negligent dumping of waste or other substances from ships into the sea. The provisions of the PC require the creation of grave danger to the legally protected asset. The mere fact of carrying 76,972 mt of heavy fuel oil generates risk to the sea and the entire marine environment. If the carriage is undertaken by a 26 year-old ship, in a defective state of conservation, overloaded, with an antiquated towing arrangement, in a voyage that was found hazardous, through waters that are not calm and in adverse conditions, it is obvious that this risk not only existed, but that its magnitude was more than serious. It was not only a serious risk, but it materialised into one of the most severe ecological disasters in recent times. Risk and result are not equivalent concepts, as the first requires an ex ante prediction, which in this case allowed the consolidation of the prediction concerning its existence and magnitude. The prediction was confirmed with the materialisation of a catastrophe of such dimensions that led to an aggravated offence.

The question, then, was whether the master generated an unlawful or prohibited risk, or, as the lower Court decision stated, it remained within the limits of the acceptable risk, at least to the degree required by the criminal offence of which he was accused. The lower Court concluded that the apparent state of the ship was not indicative of its structural defects and the fault that produced the wreck was neither predictable, nor had the master noticed it. The SC also referred to two other factual findings of the lower Court decision. On the adverse weather, the SC pointed out that new technologies allow the forecasting of weather conditions in advance with a high degree of certainty that enables shipping to react to them, so that it cannot be considered an unforeseeable risk. The SC disagreed with the lower Court's conclusion on the ship’s overloading, noting that the existing defects of the vessel, and the excess of weight inherent to the excess of draft, had an impact on its structure and manoeuvrability. This excess of draft constituted an infringement of the International Load Lines Convention. Although the master did not know about the dire condition of the vessel, he was responsible for ensuring the adequacy of the ship's equipment at the time of sailing, ensuring that it had adequate safety margins, undertaking essential repairs, and checking the weight of the cargo. All these are the master's obligations, according to the Code of Commerce (CCom). The decision that he made after the incident to let seawater into the ballast tanks to correct the list overloaded the ship to the point that made its structures collapse, and his refusal to proceed immediately with towage operations contributed to the increased risk of pollution and the ecological disaster. Therefore, the master’s actions increased the risk permitted in his activity as captain and did not neutralise the threat that others helped to create, which amounted to a breach of his objective duty of care. It is correct that his behaviour was not the only relevant element in the occurrence and control of the spill, but the other persons who had an obligation to maintain and check the vessel’s seaworthiness were not charged. That does not prevent a decision on the outcome, as their acts occurred before the accused's behaviour added to the risk created by them. As the PC requires, the master’s negligence, in this case, was serious, in the magnitude of the breach of his duty of care, and in the importance of the legally protected asset. Hence, according to the facts analysed and the case law, the SC allowed the reversal of the acquittal judgment and convicted the master of an aggravated crime.

Regarding civil liability, the claimants alleged that the lower Court failed in applying the CLC 1992 and the Fund Convention 1992. As the master was held criminally liable for a crime against the environment, the PC makes him also civilly liable to repair the damage and pay compensation for material and non-material damage. Subsidiarily, it also makes its shipowner, its P&I Club, and the IOPC Fund liable. The claimants contended that, as the liability arises from a criminal offence, the limits established in these Conventions are not applicable. The SC stated that the most recent case law had found that, except in cases of specific conflict with a particular provision of the PC, the scope and content of the civil liability derived from criminal offences must be consistent with the applicable civil laws. The relevant provisions of the PC also refer to compensation for damages and losses resulting from criminal acts to the laws that govern the matter in question.

The CLC 1992 establishes a limit on liability or rather a limit on the debt in respect of restitution. It provides for a channeling principle that assigns liability exclusively to the shipowner (art 3.1). It satisfies the purpose of concentrating liability in an identified, or at least identifiable, person, through the ship's registration, without prejudice to the claim against the person liable, namely the shipping company owner. The limited liability is based on the tonnage of the ship multiplied by units of account up to a maximum limit that cannot be exceeded (art 5.1). To apply this limitation, the owner must deposit in the court the equivalent sum (art 5.3). The liability set in this Convention is strict and of a mandatory character that seeks to satisfy the 'polluter pays' principle, and has an exclusive and exclusionary nature, meaning that no other method for claiming compensation is allowed. Only the shipowner is held liable, excluding other parties such as servants or agents of the owner or members of the crew (art 3.4). However, this exclusionary character has an exception when the damage resulted from their personal acts or omissions committed 'with the intent to cause damage, or recklessly and with knowledge that such damage would probably result'. In commercial law, the expression 'recklessly and with knowledge that such damage would probably result' must be interpreted so as to achieve consistency with the system of which it is a part. In this case, it provides criminal sanctions for intentional acts and those displaying the highest form of negligence. The term 'recklessly' used in the Convention leads us semantically to a negligent act, defined by a modal adverb meaning 'in a reckless manner', and reckless is defined as 'excessively negligent leading into danger'. It differs from intentional behaviour. It is described in our laws as the most serious manifestation of culpable behaviour, which the case law of this Court has equated to the term 'serious' stated in the PC. The Court has defined this term as that which 'has always required the breach of the most basic rules of caution or diligence required in a given activity', or that requires 'total and absolute disregard for the most basic standards of foresight and care'. To the reckless behavior, the CLC 1992 adds another condition: 'with knowledge that such damage would probably result'. This is consistent with the notion of negligent crime in the variant of conscious culpability, which is when the danger is foreseen as possible, and it is trusted that it will not materialise. This construction is consistent with local and European law, particularly the judgment of the Court of Justice of the European Union CJEU/2008/123 of 12 June 2008, which held that the concept of 'serious negligence' is a lawful parameter to determine when a discharge must be considered prohibited. Applying this criterion, the master was found guilty of criminal negligence which has been qualified as serious, and justifies the conclusion that he caused this damage 'recklessly and with knowledge that damage would probably result'. Therefore, these circumstances exclude the exemption of liability stated in the CLC 1992, and his civil liability must be apportioned for the total damages caused.

The claimants sought the registered shipowner's subsidiary liability based on a local rule establishing civil liability for natural or legal persons engaged in any kind of industry or trade for offences committed by their employees or agents, representatives or managers in the performance of their duties or services. This rule requires a relationship of dependency between the offender and the principal, and that the offender acted within the function of his or her office. These two criteria for subsidiary liability apply to this case. The case law of the SC had extended this type of liability to not only choosing and supervising the offender, but also to anyone who profits from activities that can generate a risk to others. They must answer for the eventual negative consequences of a civil nature concerning third parties who suffer loss. The case law had also established that the principles of presumption of innocence and in dubio pro reo are not relevant for the determination of civil liability and can be applied flexibly. The master committed a crime in the exercise of his duties on The Prestige. His contract of employment was with Universe Maritime, which could not be summoned in the proceedings. Still, it did so as the agent of Mare Shipping, which combines the positions of the shipowner, shipping company, and manager, although the administration or management of the ship was assigned to Universe Maritime based on a management contract. The owners can limit liability under the CLC 1992 unless it is proven that the damage was caused by their personal act or omission, committed 'with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result' (arts 5.1 and 5.2). The lower Court decision determined that the casualty resulted from a structural fault of the ship. Although that was not noticed by the master and crew, that did not mean the shipowner and the shipping company did not know about it. In fact, the information available supported that the ship's condition was not unknown. The ship was sailing with the relevant certifications from the classification society, but neither the shipowner nor the shipping company was released from liability for defective maintenance and repair. They even knew that companies such as REPSOL and BP had declassified the ship, and that its access to specific ports was limited. The ship was in a very precarious condition and with significant operational defects which were known to the owner. However, it was decided to undertake the voyage, a decision that demonstrates the utmost lack of care considering the foreseeable weather conditions of the route, the vessel's compromised structure and the polluting potential of the cargo. Hence, it was clear for the SC that the civil negligence of Mare Shipping Inc was of a degree that amounted to having acted recklessly, with conscious and deliberate disregard of the serious risk involved in the action, and that justified setting aside its right to limitation of liability.

The claimants also requested that the insurer be convicted up to the limit of the policy taken out by Universe Maritime. Article 7 of the CLC 1992 establishes the obligation of shipowners to cover their liability up to the limit set in the Convention. Accordingly, the P&I Club deposited the corresponding fund. The CLC 1992 entitled the insurer to limit liability to the amount of the fund without any exception. The evidence proved the existence of a policy with a higher amount. The insurer decided not to appear in the proceedings although it was summoned. However, its absence does not impede determining its conviction, as it voluntarily and without a cause declined to defend itself. The insurer must assume the consequences of its lack of diligence. The local law assigns liability to the insurer in certain circumstances up to the limits of legally or contractually established compensation. The provision distinguishes between liability established by law, and that agreed contractually. The first, in this case, is that limited, without the possibility of increase, by the CLC 1992, corresponding to the fund constituted. The second is the additional contracted limit to cover civil liabilities, among other things, for the possibility that the limit established in the Convention is subject to an exception. The report of proven facts showed that Universe Maritime, acting in representation of the owner, Mare Shipping Inc, insured for liability for oil pollution with the P&I Club up to the limit of USD 1 billion. The P&I Club insured the risk of liability generated by damages caused to third parties. According to art 76 of the Spanish Insurance Contract Act, the third parties affected have a direct cause of action against the insurer for the compensation claimed. A direct action of the victims against the P&I Club was dismissed by a judgment of 3 July 2003 of this Court based on the London arbitration clause. But in this case, the insurer refused to appear and submit this or any other defence. The action of constituting the fund, as provided by the CLC 1992, goes beyond the traditional model of the P&I insurance. It did not limit itself to reimbursing the insured for the payment it had made, but made the payment itself in response to the direct action of the victims. This is a matter of civil liability resulting from a criminal action occurring in areas subject to the Spanish courts' jurisdiction. Hence, the insurer was held to have civil liability. This was a direct liability as the damages were the consequence of the insured ship's operation. Civil liability insurance is both a means of protecting the insured’s assets and an instrument to safeguard the rights of the victims, especially resulting from crimes in which individual and collective interests are affected. Therefore, the SC declared the direct liability of the P&I Club up to the limit of USD 1 billion.

Regarding claims under the Fund Convention 1992, the SC stated that the Convention applies when the compensation under the CLC 1992 is insufficient (art 2.1). The Convention establishes a series of exceptions to the Fund's obligation to pay compensation in arts 4.2 and 4.3, but they do not apply in this case. According to art 4.1, the IOPC Fund is only obligated to pay compensation up to the limits established in the Convention, which is established in relation to the maximum fixed in the CLC 1992 for the incident in question, so that the aggregated amount does not exceed 135 million units of accounts. The limit rises to 200 million units of account with respect to any incident 'occurring during any period when there are three parties of this Convention in respect of which the combined relevant quantity of contributing oil received by a person in the territories of such Parties, during the preceding calendar year, equaled or exceeded 600 million tons'. This is an objective legal and limited liability intended for the proportional distribution among all the victims (art 4.5) and must be fixed following the rules governing it. Hence, the liability of the IOPC Fund is fixed in accordance with limits stated in the Convention. The scope of its mandatory liability will be determined by the legislation governing it. It does not mean that damage will be excluded from the compensation which does not exactly coincide with what the Convention regulating it envisages as the subject of compensation, nor that the quantification of the compensation that is fixed, aimed at the full reparation of the damages caused, will be constrained to its 'Claims Manual'. This document might be taken, however, as guidance by the lower Court to fix compensation. The amount of compensation must be determined in the execution of the judgment and subject to the examination of the evidence by the sentencing Court and in an adversarial proceeding. The assessment and quantification of damages was later decided by the lower Court: see The Prestige (CMI1142).