This case arose from a collision between the Ellington, owned by Ellington Shipping Pte Ltd (Ellington), and the EL Zorro, owned by Dominion Glory SA (Dominion), in the waters of Jiaxing, China, which resulted in a leak of oil carried by the EL Zorro. The plaintiffs, Jiaxing Municipal Bureau of Natural Resources and Planning, Jiaxing Municipal Bureau of Ecology and Environment, and Jiaxing Municipal Bureau of Agriculture and Rural Affairs, asserted maritime claims for marine ecological damage, damage to fishery resources, and investigation and assessment expenses. They sought confirmation of their claims against Dominion, and further claimed maritime liens over both the EL Zorro and the Ellington. In earlier proceedings concerning collision liability, it had been held that the Ellington bore primary liability of 85%, while the EL Zorro bore secondary liability of 15%. Meanwhile, Dominion had established a limitation fund for oil pollution damage pursuant to the CLC 1992 (the Convention), while Ellington had established a general maritime limitation fund under the Maritime Code of the PRC (Maritime Code).

Held: Judgment mainly for the plaintiffs, excluded some abstract losses calculated by modelling, and maritime lien claims dismissed. 

Although the case involved foreign-related factors, the Court held that it had jurisdiction because the accident occurred in Chinese waters. As the PRC is a State Party to the Convention, and the leaked substance was persistent oil, the Convention should apply. Issues not covered by the Convention should then be governed by Chinese law. 

As to the liability of the polluting vessel, the EL Zorro, the Court directly relied on art 3.1 of the Convention, which provides that: 'Except as provided in paragraphs 2 and 3 of this Article, the owner of a ship at the time of an incident, or where the incident consists of a series of occurrences, at the time of the first such occurrence, shall be liable for any pollution damage caused by the ship as a result of the incident.' On that basis, the Court stated that the shipowner under the Convention refers to the registered owner. Dominion was the registered owner of the EL Zorro, and none of the defences listed in arts 3.2 or 3.3 of the Convention applied. It was therefore liable in full for the pollution damage and interest arising from the oil spill from the EL Zorro.

As to the liability of the non-polluting vessel, the Ellington, the Court first distinguished the present case from The CMA CGM Florida (2018) Zuigaofa Minzai No 368 (The CMA CGM Florida). Although both cases concerned oil pollution damage following a collision, the legal bases were different. The present case involved the leakage of persistent oil from a tanker, and was governed by the Convention. By contrast, The CMA CGM Florida concerned the leakage of bunker oil, and the applicable legal framework was not the same. The Court accordingly held that whether the non-polluting vessel should be liable to pollution victims in this case had to be determined under the Convention and domestic rules, rather than by simply applying the approach adopted in The CMA CGM Florida.

The Court considered that the Convention establishes a specialised oil pollution compensation regime centred on the owner of the polluting vessel. By contrast, art 6 of the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 corresponds to the general maritime limitation regime, while art 208.2 of the Maritime Code excludes 'claims for oil pollution damage under the International Convention on Civil Liability for Oil Pollution Damage to which the People's Republic of China is a party' from that regime. The Court also referred to art 3.b of the LLMC 1976, confirming that such oil pollution claims should not be dealt with through general maritime limitation. It therefore held that imposing direct liability on the non-polluting vessel under the Convention would create difficulties in insurance and limitation, and would undermine the Convention's compensation mechanism.

The Court held that oil pollution liability should rest with the polluting vessel. The Court reinforced this conclusion by reference to existing Chinese judicial practice. As to maritime liens, the Court held that Dominion had obtained valid oil pollution liability insurance and had established a limitation fund. The plaintiffs therefore had no legal basis for further asserting maritime liens over the EL Zorro, and that claim was dismissed. The maritime lien claim over the Ellington was also dismissed.