The Malta Independent 19 January 2020, Sunday

International tribunal orders African island nation to pay millions to Malta over ship arrest

Kevin Schembri Orland Tuesday, 7 January 2020, 10:07 Last update: about 11 days ago

An international tribunal has ordered the African island nation São Tomé and Príncipe to pay millions to Malta over the arrest of a Maltese-flagged fuel ship back in 2013.

The award was issued by The Permanent Court of Arbitration - an intergovernmental organization located at The Hague - on 18 December.

These proceedings concerned the arrest by São Tomé of a Maltese flagged vessel – the Duzgit Integrity – on 15 March 2013, when it attempted to undertake a ship-to-ship cargo transfer in São Tomé’s archipelagic waters, and the subsequent measures taken by São Tomé in relation to the vessel, its master, cargo, owner and charterer.

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Those measures included: the detention of the vessel and its master after 15 March 2013; the court-ordered imprisonment of the master and a € 5,000,000 fine against (jointly) the master, owner and charterer of the vessel; the court-ordered confiscation of the vessel and its cargo; a €28,875 fine levied by São Tomé’s Port and Maritime Institute (“IMAP”); and a customs fine of more than €1,000,000 levied by São Tomé’s Customs Directorate General.

Back in September 2016 the Tribunal had issued a press statement on the original proceedings. “The Tribunal found that the Duzgit Integrity did not have the prior authorization that was required under São Tomé’s domestic law to undertake the intended ship-to-ship transfer. The Tribunal also considered that the master of the Duzgit Integrity had indicated repeatedly his willingness to move to outside São Tomé’s territorial sea to make the transfer. The Tribunal noted that, under international law, enforcement measures taken by a coastal State in response to activity within its archipelagic waters are subject to the requirement of reasonableness, which encompasses the general principles of necessity and proportionality. The Tribunal found, unanimously, that the measures taken by São Tomé on 15 March 2013 – detaining the vessel, requesting the master to come onshore to explain the circumstances, and imposing the IMAP fine – fell well within the exercise by São Tomé of its law enforcement jurisdiction. “

“The Tribunal found, by majority, however, that the other penalties imposed by São Tomé – the prolonged detention of the master and vessel, the monetary sanctions, and the confiscation of the entire cargo – when considered together, could not be regarded as proportional when considering the original offence or the interest of ensuring respect for São Tomé’s sovereignty. The Tribunal found, by majority, that the disproportionality was such that it rendered the cumulative effect of the sanctions incompatible with the responsibilities of a State exercising sovereignty on the basis of relevant Convention. Consequently, the Tribunal held, by majority, that Malta was entitled to claim reparation regarding certain heads of claim.”

The Permanent Court of Arbitration said that following the issuance of the Tribunal’s September 2016 Award, the proceedings were temporarily suspended while the Parties pursued settlement negotiations, which were ultimately unsuccessful. “In its present Award on Reparation, the Tribunal scrutinized Malta’s claim for reparation and orders São Tomé to pay compensation in respect of certain of Malta’s heads of claim.”

Compensation was ordered to be paid to Malta as the reparation was then decided on in December 2019. Among other things, the amount ordered to be paid included compensation for the loss of hire of the Duzgit Integrity, as well as compensation for its cargo, compensation for certain fees and more.

One judge on the tribunal disagreed with the majority’s decision and appended a dissenting opinion. Her dissenting opinion read that “the majority has awarded large sums of compensation to Malta under eight heads of claim plus reimbursement for Sao Tome’s share of the cost for the final phase of the proceedings and plus interest… This totals to USD 12,581,038.95, €315,134.16 and GBP 177,509.46.” The dissenting judge disagreed with the decision.

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