Nordisk Circular
May 2022

MV HARRIER – Gulating Court of Appeal (Norway) upholds the district court’s prison sentencing in landmark scrapping case

Background
Back in 2020, a Norwegian shipowner was convicted and sentenced to six months in prison for violating the Norwegian Act Concerning Protection Against Pollution and Concerning Waste (the “Pollution Act”) which incorporates the EU Waste Shipment Regulation (NO 1013/2006). The shipowner appealed the case, and the Gulating Court of Appeal has now published their judgment, upholding the decision from the Sunnhordaland District Court.

The case concerned the attempted export of the Vessel, “Harrier” (former “Tide Carrier” and “Eide Carrier”) that had been lying on the Norwegian west coast for more than 10 years whilst the owner sought employment for her. The Vessel was eventually sold and taken over by the cash buyers whilst still in Norwegian waters. Shortly after commencing her voyage from Norway, the Vessel suffered a main engine breakdown and needed to be salvaged just south of Stavanger, Norway[1].

Upon the examination of documentation found onboard the Vessel following the salvage operations, Norwegian authorities believed the Vessel was heading to Gadani, Pakistan for beaching and scrapping in violation of the Pollution Act.  Criminal proceedings were brought against the shipowner for facilitating and providing assistance to the Buyers of the Vessel, in order to arrange for the export from Norwegian waters.

Under the Pollution Act any export of waste to any non-EU or non-OECD countries is prohibited. The Key questions for the Court of Appeal to answer were (i) whether an operating vessel could be regarded as waste and (ii) what level of assistance may be subject to criminal liability.

Court of Appeal’s Finding
The Court of Appeal upheld the District Court’s decision.   Of interest are the Court’s comments on page 19 of the judgment, which state that as the Buyers were recycling the Vessel, it was waste even before the Vessel was exported from Norway.  As part of the analysis of what constitutes “waste”, the Court held that it is of no relevance whether the Vessel could sail under its own power or not.  The Court also said that the fact that relevant provisions of the Waste Shipment Regulation are complicated, underscores the importance of anyone considering recycling a Vessel to seek legal advice to ensure that they have a correct understanding of the relevant provision(s).

In terms of what level of assistance may be subject to criminal liability, two of the seven judges dissented as they did not find it proven that the shipowner had provided sufficient assistance to amount to criminal liability. The majority, i.e., the five judges, found the shipowner had provided sufficient assistance by virtue of being the person in charge at the selling company, which included instructing his employees to provide extensive assistance in order for the Vessel to reach an operative condition to sail. Examples that the Court relied on included moving the Vessel from a layup state, as well as assisting in certification and testing of equipment. The Court held that although the assistance provided by the shipowner himself and his employees was not decisive for the Vessel’s ability to leave, the majority found that the assistance provided was closely connected to the attempt to illegally export the Vessel.

It is worth noting that the Court states the prison sentence would most likely have been longer had the shipowner retained ownership and had attempted to export it himself. The Court also states that it will not make much difference whether a vessel is sold through a third party or sold directly to the relevant recycling facilities.

The two dissenting judges agreed with the majority that the Buyers had received substantial assistance in reactivating the Vessel, but did not find it proven that the shipowner himself carried out the assistance or instructed anyone else to carry out the assistance.

Summary Observations
The judgment is in line with the current understanding of when a vessel may be regarded as waste. Perhaps just as interesting are the comments about what may amount to aiding in an attempt, whether successful or unsuccessful, to export a vessel that is regarded as waste from Norway to a country outside the EU or the OECD.

The decision is still subject to appeal.

For any questions related to recycling of vessels, please contact the Nordisk Recycling Team:

Olav Eriksen (oeriksen@nordisk.no)
Mats E. Sæther (msaether@nordisk.no)
Ola Granhus Mediås (omedias@nordisk.no)

[1] The Buyers were fined seven million NOK for attempted export of the Vessel in violation of the Pollution Act, a fine which has been accepted by the Buyers. The Buyers that they made a “commercial decision” to pay the fine rather than challenge it in the Norwegian Court System, but that they disputed that the decision to issue the fine was correct.

Written by Ola Granhus Mediås.

In this issue

  1. MV HARRIER – Gulating Court of Appeal (Norway) upholds the district court’s prison sentencing in landmark scrapping case
  2. SCMA (Singapore Chamber of Maritime Arbitration) Rules – New 4th Edition: A snapshot of key changes
  3. Update on sanctions following Ukraine conflict

Written by:

Ola Granhus Mediås

Ola Granhus Mediås

Lawyer

+47 915 80 550

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