King & Wood Mallesons SJ Berwin has successfully brought a claim for damages on behalf of Panama1 before the International Tribunal for the Law of the Sea (the Tribunal) in a dispute with Guinea-Bissau over the arrest and seizure of the Panamanian oil tanker, the Virginia G. The Virginia G was arrested in August 2009 by the coastal authorities of Guinea-Bissau for supplying foreign fishing vessels with fuel (“bunkering”) in Guinea-Bissau’s exclusive economic zone without authorisation. The vessel was arrested and held for 14 months, and the valuable cargo of gas oil was confiscated.

The Tribunal found that Guinea-Bissau exceeded its exclusive economic zone enforcement entitlements under the 1982 United Nations Convention on the Law of the Sea (the Convention) by exceeding what was necessary and proportionate in the circumstances, and that Guinea-Bissau further violated the Convention by preventing Panama, as the flag state, from intervening at the outset.

Guinea-Bissau’s preliminary objections to the admissibility of the claims, and its counter-claim, were entirely rejected, the Tribunal having found that there existed a genuine link between the Panama Registry and the Virginia G; that Panama could bring a claim (in the context of diplomatic protection) for the benefit of all interests in the vessel, irrespective of the nationality; and that the rule of exhaustion of local remedies (by the vessel owners) did not apply as the injury was being claimed by the flag State.

ITLOS awarded Panama reparation for damages in the form of compensation with interest, representing the losses relating to the value of the confiscated gas oil and the damage to the ship over the 14-month detention.

It has been 20 years since the Tribunal was established, and twenty-two cases have been submitted to date. The main matters dealt with by the Tribunal are the prompt release of vessels and crews; coastal State jurisdiction in its maritime zones; freedom of navigation; hot pursuit; marine environment; flags of convenience; and conservation of fish stocks.

The Virginia G was only the third case brought by an injured flag State on behalf of its nationals (in accordance with the notion of diplomatic protection) seeking reparation for damages caused by a coastal State in the exercise of its rights under the Convention.

The eminent, albeit seldom utilised, Tribunal has sent an unequivocal message: that whilst a coastal State may well be entitled to regulate certain activity within its waters, care must be taken so as not to exceed that which is necessary and proportionate under the Convention.

The Tribunal’s findings in the Virginia G open a clear path for reparation claims against coastal States that cause disproportionate damage or losses when exercising their rights under the Convention against foreign vessels operating within their maritime boundaries.

The 1982 United Nations Convention on the Law of the Sea

Recognizing the desirability of establishing through this Convention, with due regard for the sovereignty of all States, a legal order for the seas and oceans which will facilitate international communication, and will promote the peaceful uses of the seas and oceans, the equitable andefficient utilization of their resources, the conservation of their living resources, and the study, protection and preservation of the marine environment”

Fourth recital to the Convention

The Convention (with a current membership of 166 State parties and the EU) establishes a comprehensive legal framework to regulate all ocean space, its use and resources. It is, in essence, a constitutional framework which regulates human activity over, on, in and under the oceans. Many of its provisions reflect customary international law.

The Convention contains, among other things, provisions relating to the territorial sea, the contiguous zone, the continental shelf, the exclusive economic zone and the high seas. It also provides for the protection and preservation of the marine environment, for marine scientific research and for the development and transfer of marine technology.

A most important part of the Convention concerns the exploration for and exploitation of the resources of the seabed, ocean floor and subsoil, beyond the limits of national jurisdiction. The Convention declares this as “the Area” and its resources as “the common heritage of mankind”.

Diplomatic Protection

It is an elementary principle of international law that a State is entitled to protect its subjects, when injured by acts contrary to international law committed by another State, from whom they have been unable to obtain satisfaction through the ordinary channels. By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own rights – its right to ensure, in theperson of its subjects, respect for the rules

of international law.” [1]

This discretionary espousal consists of the invocation by a State, through diplomatic action or other means of peaceful settlement, of the responsibility of another State for an injury caused by an internationally wrongful act of that State to a natural or legal person who is a national of the former State with a view to the implementation of such responsibility. [2]

The International Tribunal for the Law of the Sea – dispute resolution under the Convention [3]

The Convention provides four alternative means for the settlement of disputes: the International Tribunal for the Law of the Sea, the International Court of Justice, an arbitral tribunal (constituted under Annex VII of the Convention), and a special arbitral tribunal (constituted under Annex VIII of the Convention). A State party is free to choose one or more of these means by a written declaration to be deposited with the Secretary-General of the United Nations.

The Tribunal is an independent, specialized judicial body (based in Hamburg, Germany) which has jurisdiction to deal with disputes (“contentious jurisdiction”) and legal questions (“advisory jurisdiction”) involving the interpretation and application of the Convention. Its jurisdiction includes all matters specifically provided for in any other agreement which confers jurisdiction. The Tribunal applies the Convention and other rules of international law.

Twenty-one judges are elected to the Tribunal from among persons enjoying the highest reputation for fairness and integrity and of recognised competence in the field of the law of the sea.

As a rule, the jurisdiction of the Tribunalis mandatory in cases of prompt release of vessels and crews (article 292 of the Convention) and of provisional measures pending the constitution of an arbitral tribunal (article 290(5) of the Convention).

Expenses of the Tribunal are borne by the State parties to the Convention through the budget of the Tribunal. State parties are not required to pay any additional amount if they are party to cases before the Tribunal. Non-State parties would be required to pay a fee fixed by the Tribunal. Additional expenses (such as interpreters for languages other than English and French – the Tribunal’s official languages) are borne by the State parties.

A preliminary check-list when considering whether a case can be brought under the Convention:

  • Which are the State parties involved (e.g. the coastal State and the State of registry of the vessel), and are they State parties to the Convention?
  • Have any of the States made a declaration/reservation in relation to the dispute settlement procedure?
  • In which maritime zone(s) did the events occur and unfold?
  • Do the circumstances of the case fallwithin the scope of the Convention?
  • Consult counsel who are experienced in public international law of the sea.

Note:

[i] The Mavrommatis Palestine Concessions Case, P.C.I.J., Series A, No.17.

[ii] Draft Articles on Diplomatic Protection 2006.

[iii] For more general information, visit http://www.itlos. org/index.php?id=8&L=0