Legal Alerts/3 Jul 2014

Legal Alert – Ship Owners Beware: It Pays to Be a Stickler for Formalities

The Supreme Court of Finland recently ruled on a case, where the Finnish Border Guard had imposed an oil discharge fee on the owner of a ship which had discharged oil in the waters of the Finnish exclusive economic zone. In order to avoid the oil discharge fee, the ship owner should have indicated that the operator was the liable party when formally asked to comment on the case by the Border Guard and not waited until the case had been brought before court.

Under the Finnish Act on Environmental Protection in Maritime Transport, an oil discharge fee is to be imposed on a ship owner, whose vessel discharges oil in the waters of the Finnish exclusive economic zone. The ship owner may avoid liability if it can prove that a manager, operator or bareboat charterer had been operating the ship in the owner’s stead.    The ship owner waited until the matter had proceeded to court to try and establish that the oil discharge fee should have been imposed on the vessel’s operator and not the owner as the Border Guard had become well aware of the operator’s identity during the interrogation of the ship’s captain and crew. However, the ship owner did not invoke the operator’s primary liability for the fee until proceedings in the Court of Appeal.   The Supreme Court ruled that the mere knowledge of the operator’s identity did not oblige the Border Guard to impose the oil discharge fee on the operator on its own initiative. Instead the Supreme Court held that the ship’s owner should have invoked the operator’s liability when given the opportunity to comment on the investigation by the the Border Guard. The opportunity to comment had been addressed to an attorney who had been representing both the ship owner and the operator. The Supreme Court highlighted the necessity of efficacy in imposing oil discharge fees.   Although the outcome of the case was not very surprising, it did provide a valuable reminder that sticking to formalities provides a strong foundation for a successful outcome to a case.   Attorneys at law Borenius offers a comprehensive array of services in shipping, transport and related insurance law. The firm is a leading service provider in Finland for this specialized field including international ship finance and shipbuilding and the practice covers all major areas of shipping law.

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