Exclusive economic zone--fishing--regulation of bunkering--confiscation of vessels--judicial review of penalties--nationality of ships--genuine link--flag state claims for losses by foreign nationals--exhaustion of local remedies--influence of practice on treaty interpretation
The M/V "Virginia G" (Panama/Guinea-Bissau). Case No. 19. 53 ILM 1164 (2014). International Tribunal for the Law of the Sea, April 14, 2014.
On August 21, 2009, the Panamanian-flagged tanker Virginia G was arrested by Guinea-Bissau in its exclusive economic zone (EEZ) for unlawfully bunkering (refueling) foreign vessels fishing there. Several days later, the Virginia G and the gas oil (diesel) on board were confiscated by the government. Subsequent provisional measures orders of the Regional Court of Bissau suspended the confiscation at the request of the owner. Nevertheless, the Guinea-Bissau authorities had the gas oil removed from the ship. The government's decision to release the ship more than a year after its arrest followed "the persistent request by the Embassy of Spain for its release" and took into consideration, among other things, Guinea-Bissau's "friendship and cooperation with the Kingdom of Spain in the field of fisheries, knowing that although the vessel has a Panamanian flag, it belongs to a Spanish company" (paras. 82, 140).
In its judgment of April 14, 2014, (1) the International Tribunal for the Law of the Sea (ITLOS or Tribunal) concluded that, under the United Nations Convention on the Law of the Sea (Convention), (2) the bunkering of vessels fishing in the EEZ is subject to regulation by the coastal state, and that confiscation of a vessel and its cargo is a permissible penalty for violation of the coastal state's fisheries regulations in the EEZ, but that confiscation was not "necessary to ensure compliance" with those regulations in the circumstances of this case (para. 269). Damages were awarded for the confiscation of the gas oil and for the cost of repairs to the ship, but not for lost profits during the ship's detention, the largest element of the damages claimed.
Panama originally submitted the dispute to arbitration under Annex VII to the Convention. In its letter of June 3, 2011, notifying Guinea-Bissau of the submission, Panama also raised the possibility of "resolving the dispute contentiously, yet in a less costly manner" pursuant to an agreement to submit it "to ITLOS through an exchange of letters" (para. 2). Guinea-Bissau agreed to the transfer to ITLOS, "whose jurisdiction in this case Guinea-Bissau accepts fully," and Panama notified the Tribunal of the special agreement on July 4, 2011 (paras. 3, 5). (3) The Tribunal upheld the contention of Guinea-Bissau that it retained the right to make counterclaims and to interpose objections to the admissibility of Panama's claims (paras. 24, 101). There were no objections to jurisdiction under Article 297 of the Convention or otherwise. (4)
The objection to admissibility on grounds of the absence of a genuine link between Panama and the ship was rejected unanimously (para. 452(3)). The Tribunal reaffirmed its prior conclusion that the purpose of the genuine link requirement "is to secure more effective implementation of the duties of the flag State, and not to establish criteria by reference to which the validity of the registration of ships in a flag State may be challenged by other States" (para. 112). (5) The Tribunal also declared that the "meaning of 'genuine link'" is the requirement for the flag state under Article 94 of the Convention to "exercise effective jurisdiction and control over th[e] ship in order to ensure that it operates in accordance with generally accepted international regulations, procedures and practices" (para. 113). (6)
Having examined the information before it and finding no reason to question Panama's exercise of effective jurisdiction and control over the ship, the Tribunal decided that a genuine link existed at the time of the incident (paras. 114,117,325). The Tribunal took note of Article 91(1) of the Convention, which does not impose "any limitations on the nationality of ship-owners or crew" as regards the right of a state to grant its nationality to ships (para. 323), and unanimously concluded that Guinea-Bissau had violated Article 73(4) of the Convention "by failing to notify Panama, as the flag State, of the detention and arrest of the M/V Virginia G and subsequent actions taken against the vessel and its cargo" (paras. 328, 452(11)).
The judgment also rejected the objection to the admissibility of Panama's claims on the grounds that "the owner of the vessel and the crew are not nationals of Panama" (paras. 129, 452(4)). Relying on its prior decision to similar effect, (7) the Tribunal found that "the M/V Virginia G, its crew and cargo on board as well as its owner and every person involved or interested in its operations are to be treated as an entity linked to the flag State" (para. 127). It therefore held that "Panama is entitled to bring claims in respect of alleged violations of its rights under the Convention which resulted in damages to these persons or entities" whether or not they...