Authors: Harsh Mahaseth and Niharika Goel*
When the MV X-Press Pearl cargo ship owned by a Singapore-based company caught fire near the Colombo harbour of Sri Lanka, it caused the worst catastrophe of the decade. While the coordination amongst the involved countries stood disturbed, it posed a conundrum regarding who shall be held liable for the damages involved.
The Singaporean ship set sail from Malaysia, entering service in February of 2021. However, while returning from its third journey from Qatar to Malaysia, it sunk off the coast of Sri Lanka, near the Colombo harbor, after it caught fire. The crew was attempting to tow the vessel into deeper waters when the mishappening took place. Navy Media spokesman Captain Indika de Silva said,
“The towing the ship to the deeper seas was abandoned as the stern of the ship sank to the sea bed while it was being towed 500 to 600 m westward.”
This vessel was ablaze at the Sri-Lanka’s shoreline for thirteen days. By late June, only four months after it had first headed out, the desolated transport was sitting 70 feet underneath the Indian Ocean. The spread of pellets and nurdles, surprisingly found in the gills and paunches of dead fishes, is predicted to reach the Indian coastline, Maldives, Madagascar, Thailand and Indonesia owing to the currents caused by the cyclone Yaas. Other controversial elements, including synthetic compounds like nitric corrosive, sodium dioxide, copper, and lead would also not take long to enter the human circulatory systems because of the wide utilization of fish in the concerned area.
Being a vessel registered to the flag of Singapore, manufactured by a company in China, insured by a company in the United Kingdom, enroute via India to Malaysia from Saudi Arabia, creating a catastrophe at Sri Lanka builds a jurisdictional conundrum. The crew was aware of the corrosive, toxic and flammable liquid, nitric acid when it was loaded in Dubai. Adding to the complexity, they were also denied permission by Qatar and India to dock the ship which resulted in a longer than usual route. Despite such lack of cooperation between the concerned nations, along with limited offshore capacities, the vessel progressed into Sri Lankan waters with its controversial cargo onboard.
Under United Nations Convention of the Law of the Sea, the limit of territorial sea of a State extends to 12 nautical miles from the baseline under Article 3, the Contiguous Zone extends to 24 nautical miles from the baseline under Article 33 and the breadth of Exclusive Economic Zone (EEZ) extends to 200 nautical miles from the baseline from which the breadth of the territorial sea is measured under Article 57. Location of the sinking ship or ship wreck has been within the territorial sea lesser than 12 nautical miles from the shore of Sri Lanka. Further, the commonly accepted polluter pays principle states that those who produce the pollution shall bear the cost to reduce, if not eliminate, the environmental damage caused by such catastrophe. The owner of the company and the flagged country is Singapore which thus, will be equally liable.
Article 235 and Article 192 of the United Nations Convention on the Law of the Sea (UNCLOS), 1982 creates general obligations on the state to protect the marine environment, to which Sri Lanka is a signatory. Article 220(6) when read with Article 211(6) of UNCLOS provides states the power to enact laws for damages and institute proceedings, in cases with evidence of a violation by a vessel causing damage or threat of damage to economic zone. While, lacunae present in the legal remedies pertaining to damages caused by hazardous noxious substances is abridged by the Hazardous and Noxious Substance (HNS) Convention and the 2010 protocol by a two-tier compensation regime but the convention is still pending ratification by the required number of states and thus has not come into force yet. To bridge the gap in the provisions regarding matters concerning hazardous substance, the definition of a harmful substance under Section 2(2) of the MARPOL Convention, provides to mean any substance which, if introduced into the sea, is liable to create hazards to human health, to harm living resources and marine life, to damage amenities or to interfere with other legitimate uses of the sea, and includes any substance subject to control by the Convention.
Part VIII (Prevention of Pollution – Criminal Liability) and Part IX (Prevention of Pollution – Civil Liability) of the Sri Lanka’s Marine Pollution Prevention Act, 2008 enumerate civil and criminal liability in the MV X Press Pearl case. Section 26(a) of the Act will impose criminal liability on the owner, master, or agent of the ship charging fine up to Rs. 4 Million (not exceeding Rs. 14 Million) if any oil, harmful substance, or pollutant is discharged into the territorial borders of Sri Lanka, and civil liability under Section 34 provides for unlimited recovery of any damages caused by the pollutant, costs of measures taken for the purpose of reducing/removing such pollutant from the territorial waters of Sri Lanka.
Ship owners register their vessel in a country other than that of the ship owners to avoid stringent taxes under the business practice termed Flag of convenience (FOC). For such flag states, the United Nations Convention on the Law of the Sea, 1982 (UNCLOS) enforces responsibilities ensuring that the vessels comply with the rules and standards of the registered state jurisdiction including periodic inspections of the vessels, and prohibition of vessels from flying their flags in cases of non-compliance. Keeping in consideration the cargo onboard, the Hague Visby Rules obligates a contract of carriage evidenced by the bill of lading which would invariably provide for application of. For an owner to exclude any liability under the Hague Visby Rules, they need to establish and prove that they exercised due diligence in the beginning of the voyage (Article III (1)) and they had taken continuous care of the cargo under their responsibility (Article III (2)).
The flag state, Singapore also stands liable under Article 3 of the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunker Convention), 2001 which provides for strict liability of the owner under three heads of pollution damage. Damage caused in Singapore by the contamination, entire costs and expenses incurred in establishing reasonable measures to reduce the damage, and any additional damages caused to Singapore due to any such measures will also be recovered. In conclusion, the owner of the ship will not only be liable to pay for the damages caused but also for costs incurred in the restoration of such damages. As Article 3 provides for strict liability of the owner, there are limited defences available for the owner namely act of war or inevitable phenonmenon, a third party not an employee or agent of the owner, negligent act of government in exercising functions of navigations aids were the cause of discharge by the vessel. However, a strict liability arises imposed on the vessel owner and their insurers for the costs of any preventive or recovery measures. While the Convention for Limitation of Liability for Maritime Claims (LLMC), 1976 administers compensation amount to be paid by ship owners in such cases, the subsequently amended LLMC agreed in 1996 (the 1996 Protocol) subsequently increases the cap for compensation in direct proportion to the gross tonnage of the vessel with no prescribed defences available. The matter can also be subjected to an ad hoc arbitration agreement after due consent of the parties involved, which is preferable in claims of contracts of carriage for a more flexible and confidential settlement of the dispute.
The Centre for Environmental Justice has filed charges against the Sri Lankan Government, as well as the shipping company involved with the situation alleged that the ship-owners already knew about the concerned acid leak, and asked for both civil and criminal action with the crew being taken into custody. The vessel’s operator, X-Press Feeders paid an initial payment of $3.6 million against the $300 million USD sought to the Sri Lankan Government.
*Niharika Goel is a final-year law student who is also working as a research assistant to Assistant Professor Harsh Mahaseth.