Spain is being sued by the insurers of the tanker Prestige, which sank in 2002, for allegedly breaching a court decision that found the underwriters were not liable for over €1bn in damages.

The Spanish state is pursuing several civil claims in Spain against the London P&I Club over the insurance policy it provided to the Prestige's owners.

The 1976-built tanker broke in two and sank off Galicia while under tow, spilling more than 70,000 tonnes of crude oil that caused an environmental disaster on Spanish and French beaches.

The club claims the legal action in Spain constitutes a breach of the arbitration award it received in England in 2013.

The award held that the London P&I Club was not liable to the Spanish state for the spill, a decision that was later upheld by the English Court of Appeal.

The award also ruled that further claims must be pursued only through arbitration in London.

A judge has granted the London P&I Club permission to serve its claim against Spain outside of the English jurisdiction.

Legal action in Spain

The Spanish state, however, has continued to pursue the civil and criminal proceedings it has brought in Spain, according to the London P&I Club's particulars of claim, dated 12 February but only recently made public.

Spanish courts issued two judgments in November and December 2018 that ruled the Club owes Spain €1.4bn in compensation for the Prestige spill.

“The Club understands that the Spanish state is now seeking to enforce those judgments against the Club in England," according to the Club's claim.

The Spanish judgment awards, however, are subject to the global limit of $1bn (€898.7m) per the vessel's original contract of insurance, the claim states.

Pay to be paid

The London P&I Club is seeking a declaration from the English court that Spain must pay it damages of up to €1.44bn plus interest and costs if the Club is ordered to pay damages in any foreign court that upholds the Spanish rulings.

The insurer claims the parties are bound by the 'pay to be paid' clause in the tanker's original contract of insurance.

The P&I Club is also suing for an additional £1.65m in damages or equivalent compensation plus interest to recover its costs in the court proceedings so far.

Criminal proceedings in Spain have also been launched against the tanker's captain, chief officer and chief engineer.

The Prestige's master, Captain Apostolos Mangouras, was held liable for the sinking by the Spanish court and sentenced to two years in prison, a decision that was upheld by Spain's Supreme Court in December.

The Spanish state has filed its own claim in the English courts against the London P&I Club. The court documents are not yet available publicly.

Damage from the Prestige spill has been valued at around €4.3bn, but there was a €22.8m limit of liability under the 1992 Civil Liability Convention (CLC), as TradeWinds has reported.