This may sound like a rather pointless question. Maximum is just maximum, right? However, the ruling of the Rotterdam District Court on October 25 last (ECLI:NL:RBROT:2023:9936) shows that there are some issues with this. It’s like this.
Limitation of liability
On June 23, 2018, an oil spill occurred after the tanker “Bow Jubail” collided with a jetty in Rotterdam. Under the CLC Treaty 1992 (International Convention on Civil Liability for Oil Pollution Damage), the “Bow Jubail” may limit its liability in such a case to a total amount of approximately €20 million. For this purpose, the “Bow Jubail” must submit a request for funding to the Rotterdam District Court.
For this case, it is important to know that “Bow Jubail” and its creditors did not agree on the extent of liability for a long time after 2018. The “Bow Jubail” was initially of the opinion that not the CLC limit should be taken as a starting point, but the lower limits from the LLMC treaty. This other important maritime treaty regulates liability in many cases not covered by the CLC, for example the leakage of bunker oil from ships that are not oil tankers.
In order to ultimately arrive at an amount of €20 million, five years of litigation took place all the way to the Supreme Court. This means that five years have passed since the oil spill and the possible fund raising. And of course inflation set in over those five years. This means that that €20 million is worth less today than it was worth in 2018.
Now, in most cases, such a problem can simply be repaired by charging interest on top of the total restriction amount, in this case €20 million. This is regulated in the Netherlands with the so-called statutory interest. The question that the Rotterdam District Court had to answer was therefore whether or not the “Bow Jubail” in this case owed statutory interest over the five years between the oil spill and the day of the fund.
Gap in the treaty
The Court looked to the CLC treaty for the answer to this question, but came to the conclusion that that treaty does not regulate any legal interest over the period between the incident and the day of settlement. The “Bow Jubail” used this as an argument not to add statutory interest to its limited liability.
Moreover, she stated, the CLC Treaty speaks quite clearly about a maximum liability of €20 million. From the adjective “maximum” it can be deduced that no statutory interest is owed on top of that €20 million, according to “Bow Jubail”. Otherwise, that maximum liability would not be the maximum at all.
In contrast, the Court stated that the CLC Treaty does not explicitly exclude this interest. There is therefore a gap in the treaty. The question is whether Dutch law, in particular the Oil Tanker Liability Act (Waot), may fill this gap. After all, Article 9(2) of the Waot refers to provisions from the Code of Civil Procedure, where Article 642c(2)(a) and (b) stipulate that statutory interest is indeed due.
The Court states that it is beyond dispute that the CLC fund position is governed by Dutch procedural law. This is simply made clear by the reference in the Waot to the Code of Civil Procedure. This is also the case with the fund structure according to the LLMC treaty. Finally, the CMI has adopted so-called guidelines from which the same conclusion follows.
This leads the Court to the conclusion that interest is indeed due on the maximum liability of €20 million. Especially because the Waot does not explicitly exclude this provision, which the Waot does with regard to other provisions of the Code of Civil Procedure (such as Article 642e Rv).
A final reason to charge statutory interest over the period between the oil spill and the day of the fund has to do with the following. If that interest were not due, the oil tanker would otherwise have an interest in depositing funds as late as possible. After all, the total liability amount would become less and less valuable over time.
Conclusion
The October 25 ruling of the Rotterdam District Court shows that the literal text of a treaty, although important, is not always decisive in answering important legal questions. The Court has various interpretation techniques at its disposal to ultimately find out what the (international) legislator intended.
For the sake of completeness, it should be added that the “Bow Jubail” can still appeal against this decision. This would cause even more delays in paying out the final claim amount. Only time will tell whether the creditors of the “Bow Jubail” cheered too early.
