This case concerned the decree of limitation of liability issued by the Designated Judge (DJ) in the Tribunal of Genoa at the request of the shipowner, Venha Maritime Ltd, and its P&I Club, The United Kingdom Mutual Steamship Assurance Association (Bermuda) Ltd, after the oil spill from the Haven: see International Oil Pollution Compensation Fund v Comune di Varazze (CMI 2095). The State claimed compensation for pollution damage caused by the oil spill. The International Oil Pollution Compensation Fund (the IOPCF) argued that most claims concerning the pollution damage caused by the sinking of the Haven were time-barred under art 6.1 of the Fund Convention 1971.

Held: The Court dismissed the IOPCF's defences and upheld the claims of the State.

The Court specified the scope of its powers and the nature of the procedure of limitation of liability for pollution damage, emphasising that this procedure only partially corresponds to that of limitation of liability of the shipowner under the Italian Code of Navigation, which originated from the law of insolvency. The Court also stressed the differences between the procedure of limitation of the shipowner's liability and that of insolvency.

The Court recalled that when the procedure of limitation of liability is instituted due to an oil pollution event, there is a heavy burden of proof for the claimants, as it is impossible to provide documentary evidence.

Moreover, the Court recalled that the assessment of the DJ concerns the existence and quantification of the claims for pollution damage, following the pattern of provisional measures. The decisions of the DJ concerning the admissibility of the claims constitute recommendations to balance the parties' interests.

Concerning the time bar, the Court recalled that art 6.1 of the Fund Convention 1971 provides for a six-year time bar, reduced to three years where no action is addressed to the IOPCF or the shipowner. The Court noted that the IOPCF received notices from some of the claimants before the time bar had expired, and that the IOPCF voluntarily intervened in the proceedings and actively participated in the phase of the proceedings regarding the determination of the amount to be compensated. Thus, as the IOPCF is a party to the dispute, the claims of compensation addressed to the shipowner were also to be referred to the IOPCF under art 2.1.a of the Fund Convention 1971, which provides that it is the role of the IOPCF to ensure compensation for pollution damage in the event that the protection provided by the Civil Liability Convention 1969 (the CLC 1969) turns out to be insufficient.

The Court highlighted that the State must intervene to prevent and limit environmental damage, notably to the sea and the coast, and protect public security and health. The costs of the activities performed by the State Administration were to be compensated.

The Court noted that the claimants, who acted to limit the pollution damage under an agreement with the State and asked for compensation from the shipowner, were not entitled to receive this compensation. The Court also observed that arts 1.7 and 1.8 of the CLC 1969, including the costs of preventive measures taken by any person in respect of 'pollution damage', were irrelevant here.

Furthermore, the Court considered the costs of the preventive measures adopted by the State to prevent and reduce the damage. Notably, the Court analysed the requirement of 'reasonableness' introduced by the CLC 1969 as the compensation limit for this type of damage. The Court noted that this criterion implies a general duty not to aggravate the damage, and that the damage that a claimant could have avoided using ordinary diligence cannot be compensated. The Court also highlighted that pollution damage, particularly to the marine environment, must be paid for under the Italian Constitution and Italian law.

In conclusion, the Court recalled the regime provided by the CLC 1969 and the Fund Convention 1971 and the notion of 'pollution damage'. The Court also pointed out art 1.6 of the CLC 1969, which defines pollution damage as 'loss or damage caused outside the ship carrying oil by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur, and includes the costs of preventive measures and further loss or damage caused by preventive measures'. The Court highlighted the causal link between the pollution damage and the oil spill from the ship. Under the CLC 1969 and the Fund Convention 1971, pollution damage must be compensated. Articles 1.1 and 2.1.a of the Fund Convention 1971 aim to ensure compensation for pollution damage to the extent that protection afforded by the CLC 1969 is inadequate. The Court also stressed that the shipowner's liability is strict but within certain limits of value, and that, if the pollution damage is caused by its fault, the shipowner loses the right to enjoy limitation of liability under arts 5.1 and 5.2 of the CLC 1969.