Determining MT Sanchi’s compensation

Months have passed since the collision between the oil tanker MT Sanchi and the cargo ship MV CF Crystal in China jurisdiction waters. At present, the plan for cleaning up the oil remaining on board the tanker has yet to be finalized, the pollution clean up work has not yet finished and the reason for the collision is still under investigation. The PRC Ministry of Transport said this collision is the first collision and fire involving a tanker carrying natural-gas condensate in shipping history. The accident resulted in the sinking of the MT Sanchi, and the spillage of the natural-gas condensate and fuel oil carried by the tanker.

As there is a possibility that the natural-gas condensate will be determined to be a “non-persistent” oil, pursuant to China’s legal system for oil pollution damage liability, the damages that the owner of the MT Sanchi will be required to bear for the oil pollution damage will become complicated.

The Ministry of Transport says that at the time of the collision the MT Sanchi was carrying 113,000 tons of natural-gas condensate, which exploded and spilled. The fuel oil on the tanker also spilled. According to preliminary monitoring results, the spill has had a certain impact on the ecological environment of the territorial waters where the accident occurred. At the time that it sank, the MT Sanchi still had incompletely burnt natural-gas condensate and a certain quantity of fuel oil on board which will have a major damage impact on the marine environment. The owner of the MT Sanchi will face such oil spill damage claims as pollution clean-up expenses, marine natural resource and ecological environment damage, and residual oil removal expenses.

Victoria Wei is a partner at V&T Law Firm. She can be contacted on +86 21 5081 9193 or by email at victoria.wei@vtlaw.cn