What is a ship? The Policy of the International Fund for Compensation for Oil Pollution Damage: the effect of the Greek Supreme Court judgment in the Slops case

Abstract

The international compensation regime for oil pollution damage established by the CLC 1992 and the 1992 Fund Convention covers damages caused by discharge of oil from a ship. The definition of a ship under the Conventions has been interpreted by the 1992 Fund as to include floating storage units (FSUs) and floating production storage and offloading units (FPSOs) only when they carry oil as cargo on a voyage to or from a port or a terminal, outside the oil field in which they normally operate. Accordingly, the 1992 Fund rejected claims arising from Slops incident, a spill from a waste oil reception facility, formerly a tanker, which remained permanently anchored with its engine being deactivated. However, the Greek Supreme Court in its decision from June 2006 held that Slops falls within the definition of a ‘ship’ under 1992 CLC/Fund Convention. The judgment raises important issues for the functioning of the international compensation system.