This case arose out of the grounding of the oil tanker Braer. The International Oil Pollution Compensation Fund (the defendant) was established according to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (the Fund Convention 1971). The Merchant Shipping Act 1974 (UK) (the 1974 Act) implemented the Fund Convention 1971. It entitled the defendant to limit its liability to a specific sum calculated in accordance with the 1974 Act. That sum constituted the limitation fund available for the satisfaction of claims prestable [ie payable] by the defendant in accordance with the 1974 Act.

Framgord Ltd (the plaintiff) was one of many claimants who brought actions against the owner of the Braer, Braer Corp, and its insurer, Skuld, for compensation under the Merchant Shipping (Oil Pollution) Act 1971 (UK) for damage caused by the oil pollution. The plaintiff claimed compensation for loss of profits in its marketing of Shetland farmed salmon and for loss of profits that would have been earned by a joint venture planned by itself and Kinloch Damph Ltd.

It was agreed that following the oil pollution incident the defendant disbursed a substantial sum by way of provisional payments of compensation to numerous claimants in Shetland. The 1974 Act did not expressly provide for the making of such payments. However, art 18.7 of the Fund Convention 1971 did. The purpose of the plaintiff's action was to have the amount of the provisional payments excluded from the calculation of the limitation fund available to meet those claims that were judicially constituted.

The defendant claimed that the plaintiff's action should be dismissed for two reasons. First, the Court had no jurisdiction over the present action. Second, the plaintiff had neither title nor interest to pursue the present action. The defendant also enrolled a motion 'to sist [ie stay] the cause pending determination of the action by the pursuers against Braer Corp and others'. In support of the motion, the defendant argued that unless and until the plaintiff established that it had a valid claim against Braer Corp and Skuld, it was questionable whether the plaintiff had any interest in the present action.

Held: The defendant's motion is granted.

It is reasonable to conclude that the cases against Braer Corp and Skuld should be progressed expeditiously and that the present question, if it should remain contentious between the parties, should be decided after the relevancy of the plaintiff's action against Braer Corp and Skuld has been finally determined.