Owners of the Hebei Spirit and insurers, Assuranceforeningen Skuld, and the IOPC Fund started recourse proceedings against Samsung Heavy Industries, SHI, in the Ningbo Maritime Court, China, for claims, costs, and losses totalling some $400 million. The claim arises from the 11,000 tonnes oil spill caused when a massive Samsung owned and operated crane barge broke free from the Samsung operated towing tugs and a tow line broke and struck the anchored Very Large Crude Carrier tanker, Hebei Spirit, on 7the December 2007.

Hebei Spirit, 146 848 gross tonnes, laden with 209,000 tonnes of crude oil, was struck by the crane barge Samsung No 1, while at anchor about five miles off Taean on the west coast of South Korea. About 10,500 tonnes of crude oil escaped into the sea from the Hebei Spirit and much of South Korea’s western coast was affected to varying degrees.

The 1992 Fund and the shipowner’s insurer, the Skuld P&I Club, have established a claims office in Seoul to handle of claims for compensation and to help claimants.

South Korea is a Party to the 1992 Civil Liability and Fund Conventions and compensation is available to any individual, business, private organisation or public body which has suffered pollution damage as a result of the Hebei Spirit incident. The total amount of compensation available under these conventions is US$304 million, of which $134 million is available from the shipowner’s insurer, the Skuld P&I Club, under the 1992 Civil Liability Convention, and up to $169 million from the 1992 Fund. The total amount of the losses arising from the spill is currently estimated at US$411-437 million and it is almost certain that the full amount of compensation available under the conventions will be paid. Costs for significant amounts will also be incurred.

Investigations into the cause of the incident so far indicate that negligence by the crane barge and the three towing tugs was the substantive cause of the collision and that there are grounds to deny the owner of the crane barge, Samsung Heavy Industries, SHI, the right to limit its liability for the incident. In conjunction with the Hebei Spirit’s owner and its insurer, Skuld P&I Club, the 1992 Fund, in order to protect its interests, has commenced recourse proceedings against SHI in the Ningbo Maritime Court, China. The total amount claimed by the 1992 Fund is some $200 million, which is in addition to a claim for some $200 million by the owner and Skuld P&I Club.