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Arrest of Iranian oil tanker off Gibraltar faces potential legal wrangle

THE legality of the seizure of 300,579-dwt crude tanker Grace 1 by the Royal Navy off Gibraltar depends on what she was carrying and the identity of the consignee, according to lawyers, reports London's Lloyd's List

Arrest of Iranian oil tanker off Gibraltar faces potential legal wrangle

THE legality of the seizure of 300,579-dwt crude tanker Grace 1 by the Royal Navy off Gibraltar depends on what she was carrying and the identity of the consignee, according to lawyers, reports London's Lloyd's List

10 July 2019 - 19:00

THE legality of the seizure of 300,579-dwt crude tanker Grace 1 by the Royal Navy off Gibraltar depends on what she was carrying and the identity of the consignee, according to lawyers, reports London's Lloyd's List.

The VLCC was captured after loading in mid-April a two million barrel cargo in Iran that was believed to be destined for Syria.



Iran has asserted that seizure of the ship is illegal. Gibraltar has 72 hours from the arrest to make applications to the Supreme Court to continue its detention.



Michael Volikas and Keith Rowbory of Ince said the action was ordered by the Port Authority of Gibraltar in conjunction with the Royal Gibraltar Police, though the actual arrest was carried out by Royal Marines.



Gibraltar has been granted permission to prolong the detention of the Grace 1 for a further 14 days. In retaliation, an Iranian official said a British vessel should be seized.



Crucially, the detention itself was performed under European Union restrictive measures intended for Syria and not Iran.



Shipping barrister James Turner QC highlighted that while the import into the EU of Syrian oil has been banned since 2012 by Council Regulation 36/2012, the export of oil to Syria is not.



However, the same regulation bans the provision of 'economic resources' to named individuals and entities listed in Annex II, and that term would definitely include an oil cargo.



The key point is the claim that the ship's cargo is destined for the Baniyas refinery, which was added to Annex II in 2014.



The 2012 Regulation applies throughout the European Union, including on 'any ship under the jurisdiction of a member state'.



Mr Turner said: 'If - as appears to be the case - the ship was in Gibraltar waters when it was seized by the local authorities, assisted by Royal Marines, then this would appear to be a conventional enforcement action, permissible under EU law.



'That said, I have also seen speculation that this was a fuel oil cargo, rather than crude. If that is right and if it was not in fact consigned to a banned individual or entity, then the legality of the seizure may be open to debate.'



4 Pump Court commercial barrister James Watthey predicts that there will be a number of charter party disputes since all standard contracts contain an off-hire clause, which states the circumstances under which the payment of hire is suspended.


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