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The PRESTIGE – Spain v. ABS, final round

US Court of Appeals rules in favour of ABS.

The article “The PRESTIGE – Spain v. ABS, round II”, which appeared in Gard News issue No. 200, reported that the government of Spain’s efforts to recover more than USD 1 billion in compensatory damages as well as punitive damages from the American Bureau of Shipping (ABS), stemming from the November 2002 oil spill and sinking of the PRESTIGE off the coast of Spain, were dealt a blow by the summary dismissal of its case against ABS by a federal district court in New York1 and that Spain had filed an appeal from that decision to the Second Circuit Court of Appeals in New York. Spain claimed that ABS acted recklessly in certifying the seaworthiness of the vessel and therefore was responsible for the PRESTIGE incident and alleged violations of Spanish law and breach of a duty of care under US law.

On 29th August 2012 the Second Circuit Court of Appeals ruled in favour of ABS.2

In its decision the court was careful to limit its ruling to the facts of the case, restricting its precedential value.  It considered all evidence offered by Spain and found a lack of proof that ABS and its subsidiaries recklessly breached any duty of care that may have been owed to Spain through any inaction or action taken in the US. If the Court of Appeals had found that Spain’s evidence established recklessness on the part of ABS, it then would have to address the issue of whether a duty of care was owed to coastal nations under US law, but under the circumstances it did not have to do that.

This decision is just the last in a series of cases in which US courts have been reluctant to find liability on the part of classification societies.  As noted in a previous issue of Gard News,3 the societies’ surveys and certificate system are essential to maritime commerce. The imposition of unreasonable liabilities that could increase the costs incurred by such societies could have a chilling effect on the industry.

Footnotes
1Reino de Espana v. Am. Bureau of Shipping, 2010 U.S. Dist. LEXIS 78403, (S.D.N.Y. August 3, 2010).
2Reino de España v. ABS, No. 10-3518 (2d Cir. Aug. 29, 2012).
3 See article “US law – Liability of classification societies for negligent misrepresentation” in Gard News issue No. 173.

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