UK · UKSCCourt order
UK Supreme Court backs insurer against Spain and France in Prestige oil spill arbitration case
The UK Supreme Court unanimously allowed the London Steam-Ship Owners' Mutual Insurance Association's appeal against Spain and France in the Prestige oil spill dispute. It held that a third party suing in breach of an arbitration clause under the conditional benefit principle breaches a contractual obligation, so the remedy is common law damages rather than equitable compensation. The arbitrators' monetary awards were upheld on that corrected basis.
Order (UK Supreme Court) → · Law Society Gazette
Key points
- The court unanimously allowed the insurer club's appeal against Spain and France.UK Supreme CourtLaw Society Gazette
- A third party bound by an arbitration clause under the conditional benefit principle owes a contractual, not equitable, duty to arbitrate.UK Supreme Court
- The appropriate remedy for breach is common law damages, not equitable compensation.UK Supreme CourtLaw Society Gazette
- The Court of Appeal had held in 2024 that arbitrators could not award equitable compensation against the states.Law Society Gazette
- Lord Leggatt and Lord Burrows gave the lead judgment; the case stems from the 2002 Prestige tanker sinking off Spain.UK Supreme CourtLaw Society Gazette