The sinking of the oil tanker Prestige in November 2002 caused a massive oil spill that extensively affected the Spanish and French coasts.
Following lengthy criminal proceedings, the Spanish Supreme Court awarded substantial compensation for the damage caused, with the vessel’s Protection and Indemnity (P&I) insurance bearing limited liability of US$1 billion, in accordance with the cover limit deemed applicable by said Court. The insurance contract, entered into with The London Steam-Ship Owners’ Mutual Insurance Association Limited (the Club), was governed by English law and contained a clause providing for arbitration in London, which is characteristic of P&I insurance.
The Kingdom of Spain sought enforcement of the Supreme Court’s judgment in the United Kingdom. France took similar action.
Very recently, the Supreme Court of the United Kingdom, by judgment of 28 October 2026 ([2026] UKSC 36), handed down a ruling of extraordinary importance for maritime insurance law and, in particular, for P&I clubs.
The central legal issue was to determine whether Spain and France, despite not being original parties to the insurance contract, were bound by the arbitration clause contained therein when bringing their direct actions against the Club.
The British Supreme Court answers in the affirmative, applying the principle that anyone seeking to benefit from the rights arising from a contract must also accept the conditions governing the exercise of those rights, including, in this case, the arbitration clause. Consequently, it finds that Spain and France were obliged to submit their claims against the Club to the arbitration agreed in London, and that bringing their actions against the Club in another jurisdiction constituted a breach of that obligation. The judgement even acknowledges that such a breach may give rise to contractual liability for damages.
It should be noted that the English judgment, logically, does not set aside the judgment previously handed down by the Spanish Supreme Court—which the Kingdom of Spain has sought to enforce—but rather confirms the effectiveness of the arbitration and compensation mechanisms established to protect the Club against the consequences of a breach of the arbitration clause.
The ruling contains other legal considerations of considerable interest which merit closer analysis. For the time being, it is worth highlighting its significance for international marine insurance, as it significantly reinforces the effectiveness of arbitration clauses governed by English law in P&I insurance contracts and confirms that those bringing direct actions against insurers cannot invoke rights arising from the cover without regard to the contractual conditions governing them.
It also represents a fresh and severe legal setback for the Kingdom of Spain in the protracted international litigation arising from the Prestige incident. This setback comes on top of the one previously suffered before the US courts, where Spain was also unable to succeed with its claim against the oil tanker’s classification society.
More than two decades after the sinking, the Prestige case continues to produce court rulings of enormous significance for international maritime law and highlights, once again, the extraordinary legal complexity that can accompany major maritime accidents.
Will the English judgement of 26 October mark the end, or will we see further developments in this case, which seems never-ending?