Recently, advised by King & Wood Mallesons (KWM), the case where hundreds of Shandong fishermen (the "plaintiffs") sued China National Offshore Oil Corporation (CNOOC) and ConocoPhillips China Inc. (COPC) for compensation for the fishery damages associated with the Penglai 19-3 oil spill was concluded. Through several hearings, Qiangdao Maritime Court (the Court) decided that the plaintiffs' evidence was insufficient to prove that the oil spill was relevant to the alleged fishery damages and did not support their claims. Eventually, the Court rejected all claims of the plaintiffs. None of the 263 plaintiffs appealed during the term for appealing, and the judgments have entered into force.
In June 2016, Penglai 19-3 oilfield, jointly explored by CNOOC and COPC suffered a major oil spill accident on platforms B and C, causing a large area of marine pollution in Bohai Sea. It attracted great attention from domestic and international society, and the State Council set up a joint investigation team to look into the matter. On 21 June 2012, the joint investigation team published the Investigation Report on Penglai 19-3 Oil Spill Accident, which clarified the cause, liabilities and the damages caused by the accident. In April 2012, COPC and CNOOC reached the Indemnification Agreement of Marine Ecological Damages with the State Oceanic Administration (SOA) and the Indemnification Agreement of Fishery Damages with the Ministry of Agriculture (MOA). In addition, the two companies paid damages of RMB 1.683 billion and 1.35 billion to SOA and MOA respectively. The money was supposed to be used to indemnify the losses caused by the accident, and relevant government authorities are responsible for implementing the compensation plan for the victims. Shandong fishermen, however, were excluded from the compensation, as determined by government authorities. Then, hundreds of Shandong fishermen brought claims to the Court, which raised concerns from domestic and foreign media. Among the 263 cases submitted for hearing, 165 of which required both COPC and CNOOC to undertake the liability for damage, 98 were against COPC. KWM was instructed by CNOOC, representing the client in handling all cases and appeared in court.
The case involved sensitive social issues of marine environmental protection and severe pollution caused by the accident, received intensive attention from media and has great social influence. Moreover, the case was highly specialized and complex. Meanwhile, the lawsuit involved hundreds of fishing households, and the judgment would have strong impact on every one of their interests. Therefore, the Court was prudent during the hearing and cautious about the judgment. During the hearing, both parties submitted large amount of evidence, and engaged in intensive debate of legal issues such as the burden of proof in environmental tort. KWM, as CNOOC's counsel, with vast amount of evidence, demonstrated that the oil spill did not cause damages on fisheries in offshore area where the plaintiffs reside, and contended that the plaintiffs failed to prove the relevance between the oil spill accident and the alleged losses. Eventually, KWM helped the client in obtaining an overall success on the case.
The project was led by partner Edward Ma.
