European Disputes
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In November 2002, the sinking of the MV ‘Prestige’ oil tanker, carrying 70,000 mt of fuel oil, and the resulting oil spill created one of the biggest environmental disasters in Spanish history. Since then, it has been the subject of a series of highly contested and legally significant insurance disputes between the Kingdom of Spain and the London Steam-ship Owners’ Mutual Insurance Association Ltd, the protection and indemnity club allegedly liable to compensate Spain for the spill (the “Club”).

Twenty years on from the accident, the Prestige continues to impact English and European law. Most recently, in London Steam-Ship Owners’ Mutual Insurance Association Ltd v The Kingdom of Spain (M/T “PRESTIGE” No 5) [2022] EWCA Civ 238, the Court of Appeal confirmed, by unanimous decision, that references made by the Judge at first instance to the Court of Justice of the European Union (“CJEU”) for a preliminary ruling can be set aside on appeal, as a matter of national law. In the Prestige litigation, the Judge announced his decision to make the referral on 18 December 2022, just before the Brexit deadline and, although new references to the CJEU can no longer be made post-Brexit, the 2022 judgment remains a legally significant development and may be considered by other parties subject to a reference.

For background, the insurance contract at the heart of this dispute required claims to be resolved by arbitration in London. The Club commenced arbitral proceedings against Spain in 2012 and, in 2013, obtained an award confirming that it was not liable to Spain. Following a challenge to the award by Spain, which the High Court dismissed, the Club also obtained the High Court’s permission to enforce the award. In parallel, the Kingdom of Spain issued a civil claim in Spain and was awarded compensation of €1.5 billion against the Prestige’s captain and the Club by the Spanish Supreme Court in 2019. It subsequently applied successfully for the Spanish judgment to be registered as a High Court judgment.

The Club appealed to the High Court, arguing that recognition should be refused. Judgment was handed down on 21 December 2020, shortly before the end of the implementation period of the United Kingdom’s exit from the EU. In that judgment, Butcher J referred three questions relating to the proper interpretation of Regulation (EU) No 44/2001 (the Brussels I Regulation, and the legislation under which the Spanish judgment could be registered in England) to the CJEU for a preliminary ruling. The reference was made pursuant to Article 267 of the Treaty on the Functioning of the European Union (“TFEU”).

Article 267 TFEU states that a court may make a reference to the CJEU “if it considers that a decision on the question is necessary to enable it to give judgment.” In reliance on this, the Club appealed the reference on the basis that it was not necessary to enable the Judge to give judgment. The Court of Appeal unanimously agreed, holding that: (i) the Judge did not have discretion to make a reference to the CJEU; and (ii) references can be set aside on appeal as a matter of national law (applying the CJEU authority of Cartesio Oktato es Szolgaltato bt (Case 210/06) [2009] Ch 354), and, on that basis, the Court set aside the Judge’s order referring the questions to the CJEU. However, as under EU law only a referring court has jurisdiction to set aside or withdraw a reference, the Court of Appeal has asked Butcher J to consider whether he should do so in light of the 2022 judgment. This point remains yet to be determined.