On 12 December 1999, the oil tanker Erika sank 35 nautical miles south west of Pointe de Penmarc’h (Finistère, France) spilling part of its cargo and oil from its bunkers which caused pollution of the Atlantic coast of France. Total International Ltd had a contract with the Italian company ENEL to supply heavy fuel oil intended to be used for electricity production. In order to carry out the contract, Total Raffinage Distribution, now Total France SA, sold the heavy fuel oil to Total International Ltd who had chartered the Erika to carry the fuel oil from Dunkirk, France to Milazzo, Italy.

On 9 June 2000, Commune de Mesquer unsuccessfully brought proceedings against the Total group of companies (Total) in the Commercial Court of Sainte-Navaire seeking a ruling that Total be held liable for the consequences of the cleaning and anti-pollution measures, namely damage caused by the waste spread on the territory of the municipality, and be ordered jointly and severally to pay the costs incurred by the municipality for EUR 69,232.42.

Commune de Mesquer appealed to the Court of Appeal, Rennes. On 13 February 2002, the Court of Appeal confirmed the decision at first instance, taking the view that the heavy fuel oil did not in this case constitute waste but was a combustible material for energy production manufactured for a specific use. However, the Court accepted that the heavy fuel oil thus spilled and mixed with water and sand formed waste, but nevertheless considered that there was no provision under which Total could be held liable, since they could not be regarded as producers or holders of that waste. Commune de Mesquer appealed to the Cour de Cassation (Court of Cassation).

Since it considered that the case raised a serious problem of interpretation of Directive 75/442, the Cour de Cassation decided to stay the proceedings and refer the following questions to the Court of Justice of the European Communities for a preliminary ruling on the following questions:

1. Can heavy fuel oil, as the product of a refining process, meeting the user's specifications and intended by the producer to be sold as a combustible fuel, and referred to in [Directive 68/414] be treated as waste within the meaning of art 1 of [Directive 75/442] as ... codified by [Directive 2006/12]?
2. Does a cargo of heavy fuel oil, transported by a ship and accidentally spilled into the sea, constitute either in itself or on account of being mixed with water and sediment waste falling within category Q4 in Annex I to [Directive 2006/12]?
3. If the first question is answered in the negative and the second in the affirmative, can the producer of the heavy fuel oil (Total Raffinage Distribution) and/or the seller and carrier (Total International Ltd) be regarded as the producer and/or holder of waste within the meaning of arts 1(b) and (c) of [Directive 2006/12] and for the purposes of applying art 15 of that Directive, even though at the time of the accident which transformed it into waste the product was being transported by a third party?'

Total submitted that a preliminary ruling must be declared inadmissible as the Commune de Mesquer had received compensation for the oil pollution as provided by the Fund Convention 1992.

Held: A preliminary ruling is admissible.

The International Convention on Civil Liability for Oil Pollution Damage adopted at Brussels on 29 November 1969, as amended by the Protocol signed in London on 27 November 1992 (CLC 92), governs the liability of shipowners for damage caused by spills of persistent oil from oil tankers. It introduces the principle of strict liability on their part, limited to an amount calculated by reference to the tonnage of the ship, and establishes a system of compulsory liability insurance.

Under art 2.a, CLC 92 applies to pollution damage caused in the territory, including the territorial sea, of a Contracting State, and in the exclusive economic zone of a Contracting State established in accordance with international law or, as the case may be, in an area beyond and adjacent to the territorial sea of that State determined by that State in accordance with maritime law and extending not more than 200 nautical miles from the baselines from which the breadth of its territorial sea is measured.

Under art 3.4, 'no claim for compensation for pollution damage under this Convention or otherwise may be made against ... any charterer (howsoever described, including a bareboat charterer), manager or operator of the ship ... unless the damage resulted from their personal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result'.

The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage adopted at Brussels on 18 December 1971, as amended by the Protocol signed in London on 27 November 1992 (Fund Convention 92) complements the CLC 92 by establishing a system for compensating victims.

The International Oil Pollution Compensation Fund (the Fund), which is financed by contributions from the oil industry, can cover up to 135 million SDRs (special drawing rights) for an incident before 2003. Under art 4 of the Fund Convention 92, victims may bring claims for compensation before the courts of the Contracting State where the damage has been caused, in particular where the CLC 92 does not provide for any liability for the damage in question or where the shipowner is insolvent or released from liability under the CLC 92.

The Protocol of 2003 to the Fund Convention 92 establishes an international supplementary fund for compensation for oil pollution damage, to be named 'The International Oil Pollution Compensation Supplementary Fund, 2003', which together with the Fund, makes it possible to cover up to 750 million SDRs in respect of any one incident after 1 November 2003.

Documents provided to the Court show that the Commune de Mesquer did receive payments from the Fund, made following the claim for compensation it brought against inter alia the owner of the Erika and the Fund. Those payments were the subject of settlements by which the Commune de Mesquer expressly agreed not to bring any actions or proceedings, on pain of having to repay the sums paid.

It is apparent that the Cour de Cassation had that information before it, but nonetheless did not consider that the dispute in the main proceedings had ceased or that the Commune de Mesquer had lost its legal interest in bringing proceedings, and did not decide not to refer its questions to the Court for a preliminary ruling. In those circumstances the questions put by the Cour de Cassation must be answered.

The answer to the first question must therefore be that a substance such as that at issue in the main proceedings, namely heavy fuel oil sold as a combustible fuel, does not constitute waste within the meaning of Directive 75/442, where it is exploited or marketed on economically advantageous terms and is capable of actually being used as a fuel without requiring prior processing.

The answer to the second question must be that hydrocarbons accidentally spilled at sea following a shipwreck, mixed with water and sediment and drifting along the coast of a Member State until being washed up on that coast, constitute waste within the meaning of art 1(a) of Directive 75/442, where they are no longer capable of being exploited or marketed without prior processing.

The answer to the third question is that, for the purposes of applying art 15 of Directive 75/442 to the accidental spillage of hydrocarbons at sea causing pollution of the coastline of a Member State, the national court may regard the seller of those hydrocarbons and charterer of the ship carrying them as a producer of that waste within the meaning of art 1.b of Directive 75/442, and thereby as a 'previous holder', if that court, in the light of the elements which it alone is in a position to assess, reaches the conclusion that that seller-charterer contributed to the risk that the pollution caused by the shipwreck would occur, in particular if he failed to take measures to prevent such an incident, such as measures concerning the choice of ship.

If it happens that the cost of disposing of the waste produced by an accidental spillage of hydrocarbons at sea is not borne by the Fund, or cannot be borne because the ceiling for compensation for that accident has been reached, and that, in accordance with the limitations and/or exemptions of liability laid down, the national law of a Member State, including the law derived from international agreements, prevents that cost from being borne by the shipowner and/or the charterer, even though they are to be regarded as 'holders' within the meaning of art 1.c of Directive 75/442, such a national law will then, in order to ensure that art 15 of that Directive is correctly transposed, have to make provision for that cost to be borne by the producer of the product from which the waste thus spread came. In accordance with the 'polluter pays' principle, however, such a producer cannot be liable to bear that cost unless it has contributed by its conduct to the risk that the pollution caused by the shipwreck will occur.