The English Court does not apply the doctrine of the CJEU which confirmed the possibility of recognising the Spanish conviction in the Prestige case in England.

The environmental tragedy of the M/T Prestige initiated a long-running legal dispute between the insurer of the M/T Prestige (The London Steam-Ship Owners’ Mutual Insurance Association Limited, hereinafter “the Club”) and Spain, through two different proceedings in two Member States at the time, the United Kingdom and Spain.

This article is based on Spain’s application to the UK courts in 2019 under Article 33 of “Regulation 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters” to recognise and enforce the Spanish court’s judgment. This decision was the Enforcement Order of 1 March 2019 of the Provincial Court of A Coruña enforcing its previous judgment, confirmed in cassation by the SC on 19 December 2018. It condemned the Master, the owners of the Prestige and the Club against the Spanish State and more than 200 other parties. As far as the Club was concerned, up to the contractual limit of USD 1 billion on the basis of the insurance policy.

The High Court of Justice Business and Property Courts of England and Wales Commercial Court (hereinafter High Court KBD) granted that application in May 2019, which was ultimately appealed by the Club on the basis of two main arguments under art. 34 of Regulation No 44/2001: (i) argument of incompatibility with the English judgment (ii) recognition of the Spanish judgment would be contrary to English public policy principles for violation of the res judicata rule.

At this procedural stage, the High Court KBD referred a question to the CJEU for a preliminary ruling, in relation to the interpretation of Regulation 44/2001, as to whether the recognition and enforcement in the UK of the sentence imposed in Spain could be refused, due to the existence in the UK of an award and a subsequent judgment upholding it, the effects of which were irreconcilable with the Spanish judgment.

The CJEU ruled on 20 June 2022 that a judgment given by a court of one Member State (UK) on the terms of an arbitral award cannot prevent the recognition, in that Member State, of a decision given by a court of another Member State (Spain), where provisions or objectives of Regulation 44/2001 have been contravened.

Therefore, the English courts had indeed to recognise and enforce the said Order of Enforcement of the AP de A Coruña, since the arbitration award on the terms of which the English judgment was rendered would have infringed certain provisions of Regulation No 44/2001, namely (i) the effect of the arbitration clause inserted in an insurance contract since, according to the CJEU’s own case law, an agreement conferring jurisdiction concluded between an insurer and a policyholder cannot bind the person injured by the insured damage and (ii) the rules of lis pendens since, when the arbitration award was entered into, the insured person cannot be bound by the arbitration award, an agreement conferring jurisdiction concluded between an insurer and a policyholder cannot bind the person injured by the insured damage and (ii) the rules of lis pendens since when the arbitration proceedings were brought in the UK (16 January 2012), proceedings between the Spanish State and the Club were already pending before the Spanish courts. Therefore, in accordance with Article 27 of Regulation 44/2001, the English courts should have suspended the proceedings ex officio until the Spanish courts had declared themselves to have jurisdiction and, if they did so, as was the case, they should have declined jurisdiction in favour of the Spanish courts.

Following the preliminary ruling, the High Court KBD decided on 06 October 2023 on the appeal lodged by the Club:

i). That they were irreconcilable judgments, given that the English judgment declared that under the “pay to be paid” clause, as the shipowners had not paid any amount, the Club was not liable to Spain and the Spanish judgment maintains that the Club is liable to Spain. These positions cannot coexist and therefore, both judgments are irreconcilable and thus, in accordance with art. 34 of Regulation 44/2001, the Spanish judgment can neither be recognised nor enforced in England.

ii). The English judgment in line with the arbitral award is res judicata and as Regulation 44/2001 excludes arbitration from its regulation, the existence of potentially inconsistent decisions and lack of coordination with future arbitral awards is assumed by the Regulation. Furthermore, it understood that since the Regulation does not apply to arbitration, the English court’s decision to ratify the arbitral award did not alter the provisions of the European Regulation.

It also considers that the CJEU, in its ruling on the question referred for a preliminary ruling, exceeded the scope of the questions referred for a preliminary ruling, and purported to apply the law to the facts, which is outside its competence (reserved to the Member States). Considering that the CJEU had exceeded its powers, the High Court KBD considered that it was not bound by its decision.

In conclusion, we must remember that the interpretation issued by the CJEU is binding on the court that asked the question for a preliminary ruling, which may not, under any circumstances, depart from it or ignore it, either on its own initiative or because it is instructed to do so by a hierarchically superior court, and that in the future, this interpretation of the CJEU will be the one that will be applied in the EU. However, the English judgment may be seen as opening a small door to legal uncertainty if it allows a Member State to unilaterally consider that the CJEU has exceeded its powers and that its decision is therefore not binding on it, without prejudice to any liability it may incur for breach of Community law.

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Once again, the special edition of “Transporte XXI” on Ports of Spain, in this case in its April 2023 version, collaborated with our office by publishing the article “Automated Ports” prepared by our colleague from Bilbao, Irantzu Sedano.

Irantzu’s article shows how the continuous advances in technology are having a major influence on the automation of ships, as well as on the automation of the ports in which they work. It is a fact that autonomous navigation brings as a direct and main consequence the need for autonomous berths and moorings in ports, thus forcing ports to focus their efforts on this new reality that is getting closer and closer to us, and which undoubtedly cannot be ignored.

This is why most Spanish ports are already automated in many of their functions; in other words, they use advanced technologies to improve efficiency and productivity in their operations, be they loading and unloading, transport and storage of goods, access to the port, etc. Automation reduces operating costs, optimises space, improves the safety of operations, as well as it allows the handling of large volumes of cargo and the reduction of waiting times for ships and lorries in the port.

However, this scenario also poses many legislative challenges, which will have to be tackled prudently and tenaciously to ensure safe and sustainable development of this new maritime reality:

Much of the pre-existing regulation is not adequate to deal with issues related to port automation and needs to be updated or even new specific regulations developed. These include: (i) the pre-existing and traditional security regulations such as ISPS (International Ship and Port Facilities Security), which have been updated to take into account the risks of port and ship automation, cyber security and data protection, etc.; (ii) the IMO recommendations; (iii) ISO standards establishing a framework for information security management; (iv) SAE J3016 standards relating to vehicle automation levels, which have been adapted for use on ships; (v) SNAME (Society of Naval Architects and Marine Engineers) guidelines.

The development of a legal framework should define the liability regime in case of accidents or damage in the context of autonomous systems.

Privacy and data protection regulation is required, in terms of respect for privacy rights and protection of shared personal data.

Modernisation and adaptation of existing workplaces must take place. Automation will undoubtedly reduce the need for human intervention, and it will be necessary to regulate the retraining and relocation of workers whose functions have been automated. Therefore, automation and robotisation will have to coexist with the human factor, provided that adequate measures are put in place to ensure safety, redistribution of tasks and adaptation of the workforce.

The cybersecurity of operations will have to be guaranteed by establishing regulations to always ensure the security of autonomous systems and data protection. It is a reality that malware attacks on automated maritime infrastructures have increased due to this new way of working that has been implemented.

Not only will all operators and competent authorities have to implement state-of-the-art security protocols and systems, but the cyber insurance phenomenon will have to coexist with this new reality, as at the end of the day this will be the only way to transfer the risk of possible cyber security incidents to a third party that will cover us for this eventuality.

In conclusion, as has been the case so far, but now even more so, it will be important that national and international regulatory authorities, the maritime and port industry, and the other actors in the sector, work together to develop an updated legal and regulatory framework adapted to the new realities of the port sector and maritime navigation.

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