Esso

An interesting pollution case which arose under the TOVALOP regime was the Esso Bernicia (1988). It illustrates some of the problems that can arise in respect of oil spillages and clean up measures and the consequence thereof. The case also shows some of the problems imposed by basic concepts in English law, particularly the concept of ‘pure economic’ loss. Claim for pure economic loss (where the financial loss is not parasitic upon some physical damage) is difficult, if not impossible to claim in English law, due to reasons of policy. It is important to remember that legal concepts are not contained in ‘boxes’ and that when looking at a subject such as oil pollution and the special rules relating to this subject, one should not forget that other legal concepts may also apply to an oil pollution situation. In any one real situation in court or in arbitration, whilst the main issue in hand may be one of, say, oil pollution, or salvage, it is quite likely that at least some basic Common Law principles of law will additionally apply. In the Esso Bernicia (in the late 1970s) an Esso tanker in ballast, collided with the jetty at the Sullom Voe terminal in the Shetlands, and 1,174 tons of bunker oil escaped. This did no good to the sheep grazing on the foreshore, and BP the operator of the terminal spent considerable sums trying to clear up the mess. Esso, having paid some £500,000 to crofters for the sheep and over £3½ million pounds to BP, now brought suit for these sums, as well as for £170,000 plus, in respect of loss to itself (lost bunker oil, repair to the vessel, consequential loss). The defender was Hall, Russell, an Aberdeen firm which had designed and built the Stanechakker, one of the three tugs which were helping to berth the Esso Bernicia when the blow-out of a coupling started a fire and caused the tug to abandon its efforts with the aforementioned results.