What are the exclusions and limitations under the International Convention on Civil Liability for Oil Pollution Damage?

The International Convention on Civil Liability for Oil Pollution Damage (the “ICLC”) is an international treaty that was adopted in 1969 in response to the emergence of oil tanker accidents, which can cause oil pollution and economic damage to the environment and local communities. It sets out the legal requirements for compensation for damages caused by oil pollution. Under the ICLC, parties may exclude or limit their civil liability for damages caused by oil pollution. However, there are specific exclusions and limitations that they must take into consideration when doing so. Firstly, the total amount of compensation that a party may exclude or limit must not exceed 370 million Special Drawing Rights. This amount was set upon adoption of the ICLC and is subject to adjustment. Secondly, the liability of any party is limited to the cost of preventive measures taken, such as cleanup costs and damage to natural resources, up to an amount equivalent to the total compensation that may be excluded or limited. Thirdly, no party shall be liable for loss of profit or for loss of use resulting from the damage caused and for any further damages beyond that amount. Fourthly, the ICLC also allows for the exclusion or limitation of liability for compensation for damages caused by force majeure. Force majeure means an unforeseeable event that could not be prevented. Due to the complexity of the issues at stake, parties should seek legal advice before excluding or limiting their liability under the ICLC. It is important to understand what is covered and not covered by the ICLC as this can help protect parties from potential liability and loss of income.

What are the exclusions and limitations under the International Convention on Civil Liability for Oil Pollution Damage?

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