1992 Fund makes final reimbursement in Hebei Spirit case
The 1992 Fund has made a final reimbursement to the Skuld P&I Club in respect of the Hebei Spirit incident, which took place in December 2007, heavily polluting the west coast of the Republic of Korea and leading to over 128 000 claims for compensation being submitted.
The total compensation payable for the Hebei Spirit incident under the 1992 Conventions (SDR 203 million) was fixed by the 1992 Fund’s Executive Committee in March 2008 at KRW 321.6 billion. The 1992 Civil Liability Convention (1992 CLC) limitation amount (SDR 89.77 million) was fixed by the Limitation Court at KRW 139.4 billion in November 2018.
The insurer of the ship, the Skuld P&I Club, paid KRW 186.8 billion in compensation for this incident and the 1992 Fund made payments totalling KRW 134.8 billion to the Government of the Republic of Korea in subrogation of the compensation paid.
The KRW 186.8 billion payments by Skuld Club were made prior to the decision of the Limitation Court, using an exchange rate from November 2008. This resulted in an overpayment by the Skuld Club of about KRW 47.4 billion. The 1992 Fund, therefore, reimbursed the Club for the overpayment through two equal advance payments of KRW 22 billion, in 2017 and 2019, reserving the balance of KRW 3.4 billion to be paid after all legal proceedings were finalised.
Since all legal proceedings related to the Hebei Spirit incident were finalised in November 2019, the 1992 Fund has now paid the balance of KRW 3.4 billion to the Skuld Club and therefore, all overpayments have now been reimbursed. A final reconciliation of costs is underway and further adjustments to the payments may still be made. However, it is likely that the 1992 Fund will be in a position to close this landmark case within the coming year.
Background information regarding the incident can be found under the incident section and the latest developments will be reported to the next session of the 1992 Fund Executive Committee in document IOPC/NOV20/3/4, which is due to be published on 27 July 2020.