Liability and Compensation Regime for Oil Pollution Damage under International Conventions

Abstract: Before the twentieth century, there was little concern with ship-source oil pollution at sea. Increase of shipping activities and in particular happening of disasters, the most important of which is the Torrey Canyon, alerted the thinking of legislators as to seriousness of the problem of marine pollution. The result of their efforts in private law domain was creating the Civil Liability Convention at the first stage which provides liability and compensation regime for oil pollution at sea. Later on, the second tier of the regime was provided by adoption of the Fund Convention which was designed to link closely with the CLC, to and its purpose is to pay compensation to victims of oil pollution damage at sea in cases where the amounts recoverable under the CLC are inadequate. The final step to provide a comprehensive compensation regime was taken by adoption of Bunkers Convention whose purpose is to ensure that adequate compensation is available to the victims of damages caused by oil spills from bunkers. The CLC is considered as a revolutionary regime comparing with the traditional remedy of common law of torts by imposing strict liability and compulsory insurance on the shipowners. Since such regime was rather successful in proving compensation to victims, the Fund Convention and Bunkers Convention follow the patterns of the CLC in many aspects. The insurance industry and in particular the P&I Clubs have an effective role in achieving a comprehensive regime aimed by the international conventions. Hence, this thesis examines the main features of the concerning conventions as well as the role of P&I Clubs in providing the compensation regime.