UK Supreme Court Rules in Favor of London P&I Club in Prestige Case
Cubierto por 3 fuentesPublicado
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The UK Supreme Court ruled on October 28, 2026 in favor of the London P&I Club, in what could mark the end of a 24-year legal battle over the costs of the Prestige oil tanker spill, which devastated the coasts of Spain and France.
Origin of the dispute
The dispute originated from compensation claims filed by Spain and France following the sinking of the Prestige. Under Spanish law, both countries sued the vessel's insurer directly and obtained a favorable ruling in March 2019. However, the ship's P&I insurance contract required that disputes be resolved through arbitration in London under English law, and the Club argued that the proceedings brought by Spain and France breached that clause. The case also involved a "pay to be paid" clause, under which the insurer's liability depended on the shipowner first paying the compensation, a condition that a prior arbitration had determined had not been met.
The ruling
Lord Leggatt and Lord Burrows ruled unanimously in favor of the London Steam-Ship Owners' Mutual Insurance Association, overturning a previous Court of Appeal decision that had rejected the monetary awards granted through arbitration. The court determined that the obligation to arbitrate was contractual rather than equitable in nature, meaning its breach could give rise to common law damages, and upheld the arbitrators' awards as compensation for breach of contract. With this outcome, the Club avoided a claim that, according to Lloyd's List, amounted to $1 billion.
The original spill
The Prestige sank off the Spanish coast in November 2002 after sustaining damage during a storm, spilling crude oil into the Bay of Biscay and causing extensive pollution along the Spanish and French coasts that affected local fishing and tourism. The incident also prompted the ban on single-hull tankers.
Repercussions
The ruling comes as Spain is in the midst of a general election campaign, and it is not expected to be well received in Madrid, since Spain's Supreme Court had previously determined that the London P&I Club should bear the costs. According to Lloyd's List, the decision could also prompt lawmakers to revisit the debate on liability limitation in shipping, an issue already brought into focus by the incident involving the containership Dali at the Baltimore bridge.
