After the sinking of the Alfa I, the Greek State brought a claim against the shipowner and insurer for EUR 222,482.65 as remuneration for expenses incurred in employing its personnel, deploying its waterborne, land, and airborne resources, as well as equipment for containing and cleaning up pollution. The insurance company was proclaimed insolvent. The Greek State lodged its claims with the insurance liquidator. Its claims were included in a table of accepted claims, but according to the insurance liquidator, the sum to which it was entitled was null. The Greek State initiated proceedings for interim relief, and the Shipping Division of the One-Member Court of First Instance of Piraeus held that the State should receive the amount of its claim from the liquidated insurance company.

The insurance liquidator appealed, arguing: 1) the notice of the claim was not definite enough; 2) there had been an incorrect interpretation and application of the CLC 1992; 3) the estimation of the evidence regarding its decision on the insurance company's obligations was insufficient; and 4) the estimation of the evidence regarding the level of expenditure of the State was insufficient.

Held: The appeal is declined.

The Court of Appeal reviewed the submitted documents proving the claim of the Greek State and found them to be adequate, and its claim to be sufficiently defined. The Court proceeded to interpret arts 1, 1.1, 1.5, 3.1, 3.4, 5, 7.1, 7.2, 7.8, 7.10, and 7.11 of the CLC 1992.

The Court of Appeal concluded that the CLC 1992 refers to two different types of ships, adapting constructional criteria. That is to say, there are vessels which are: a) carrying oil as cargo in bulk, ie tankers; and b) capable of carrying oil and other cargoes, ie mixed cargo vessels. The latter are covered by the CLC 1992 only when they actually carry oil as cargo, whereas the former are covered independently, whether or not they are carrying oil, and are covered in the case of an oil spill either if the oil was carried in bulk as cargo or in bunkers as bunker oil.

Further, the CLC 1992 establishes the shipowner's objective liability, which entails liability for risk arising from the carriage of oil in tankers as an expression of the polluter pays principle. The shipowner's liability is also exclusive, as the relevant compensation claims can only be brought against it under art 3.4.of the CLC 1992. However, there is a quantitative limitation of liability based on the tonnage of the ship under art 5 of the CLC 1992. The shipowner is obligated to have liability insurance up to the amount corresponding to this limit of liability.

To ensure the effectiveness of insurance cover, art 7.8 of the CLC 1992 provides for direct recourse of third party victims against the insurer, if the prerequisite of an insurance contract is met, which means that the liability of the insurer cannot be established without an insurance contract. When the competent authorities issue a unconditional certificate, based on the so-called 'blue card' issued by the insurance company proving the coverage of the insured shipowner, this means that the obligatory insurance contract of art 7.1 was concluded, which allows for direct recourse against the insurer by third party victims.

The reasoning behind the differentiation between mixed cargo vessels and tankers was that the former category at the time of the negotiations of the CLC 1992 occasionally transported small quantities of oil. That is why the limitation of 2,000 mt of carried oil cargo was established. By contrast, in the case of tankers, the obligatory insurance of the shipowners for civil liability applies to every tanker of which the transferring capacity is over 2,000 mt oil in bulk, because the definition of the vessel in the CLC 1992 covers all tankers capable to transfer cargo oil in bulk, regardless of the actual transfer. Therefore, insurance is related to the capability of the vessel to transfer more than 2,000 mt. Otherwise, the danger from oil spill from the tankers sailing on ballast not carrying oil would not be covered, despite the fact that they constitute ships according to the CLC 1992 definition.

Also, the issuance of a certificate by the competent authorities is based on the existence of insurance coverage for a certain period of time, which coverage is provided on the basis of the transportation capability of the tanker, which is a stable criterion, and not on its actual volume of carried oil cargo, since it is occasional and unstable criterion. Furthermore, art 7.11 of the CLC 1992 requires any vessel, independently of its flag, when entering or exiting a national port or territorial sea, and when that vessel is actually carrying 2,000 mt of oil, and is not registered in a member State to the CLC 1992, to have insurance cover, in order to avoid the distortion of competition from the vessels of non-member States, thus making insurance obligatory for any vessel since it is operating in a member State: see Aigaion Insurance Co SA v Environmental Protection Engineering SA, Supreme Court, Decision 784/2021 (CMI1548).

The Court of Appeal rejected the insurance liquidator's objection that art 7 of the CLC was not applicable in this case because as per arts 7.11 and 1.5 of the CLC 1992 the vessel should have been carrying actually more than 2,000 mt of oil during the voyage when it sank in order for the insurance company to be liable, and at that the relevant time the vessel was carrying only 1,181.77 mt of oil. Since the shipowner insured the vessel for civil liability and the Central Port of Piraeus issued an insurance certificate under art 7.2 of the CLC 1992 based on the blue card issued by the insurance company, the consequent right of the Greek State to direct recourse against the insurance company is based on art 7.8 of the CLC 1992.

The Court of Appeal ordered the correction of the list of beneficiaries of insurance claims drawn up by the liquidator for the State's claim of EUR 222,482.65 plus legal interest.