Last month UK’s National Grid Plc and Dutch power transmission operator Tennet Holding BV announced they are developing a plan to link the two countries’ power markets via giant wind farms at sea. In addition, the network managers explained that they want to use underwater cables to connect as much as 4 gigawatts of offshore wind farms to the power grids of the UK and the Netherlands. This message puts the North Sea in the spotlights as a ‘battle ground of conflicting interests’. Questions relating to a fair distribution of exploration space and use of the North Sea become even more urgent and so are the various issues surrounding damage caused to offshore installations and constructions and the connected (subsea) infrastructure.

Especially damage to marine subsea cables, whether caused by trawling fishing vessels, dragging anchors, subsea mining or dredging activity has been a recurring issue in our law firm’s daily practice. In this newsletter, we will focus on the submarine cable situation in the North Sea and on the issues surrounding submarine cable damage from a Dutch (law) perspective, including a landmark decision from the Amsterdam Court of Appeal that will be welcomed by the owners of fishing vessels and their underwriters in particular.

The North Sea – a battle ground for competing interests

In the North Sea, the issue of submarine cable damage is particularly relevant. The myriad of stakeholders utilizing the (natural) resources in the North Sea mean that space is limited and congestion is increasing. Add to this that various areas are designated for specific use, such as offshore wind farms, oil and gas extraction, shipping routes, military exercise zones or protected marine areas, it will come as no surprise that the pressure on the North Sea, its resources and stakeholders is increasing.

The fishing industry in particular is feeling the pressure as fishing grounds are being infringed upon more and more. One of the contributing factors thereto are the networks of marine subsea cables that can be found in the North Sea. The North Sea has one of the greatest densities of subsea marine cables in the world. These cables serve a variety of purposes and form a tight-knit patchwork.
The increasing number of cases regarding cable damage we have become aware of recently suggests that marine subsea cables can be particularly susceptible to damage. Cable owners are quick to apportion blame and claim their loss from the party they deem is responsible. Most commonly, such claims are addressed to owners of fishing vessels as the cable owners suspect them of damaging cables with their trawling gear. Generally, liability is not acknowledged by the fishing vessels and their underwriters. If the cable owner nevertheless persists with their claim, litigation is unfortunately unavoidable. One of the main questions arising in such disputes is whether the cable owners are justified in claiming their loss from the owner of the fishing vessel. We will briefly focus on some of the issues confronting cable owners and the owners of fishing vessels in such cases below.

Issues confronting cable owners and vessel owners

Although subsea marine cable owners are generally quick to realize that their cable may be damaged due to a variety of high tech monitoring systems, the identity of the culprit is not always apparent. Although modern positioning systems such as AIS and GPS can be of assistance, there can be a considerable margin of error in the accuracy. This inaccuracy, and often also the lack of sufficient and complete data, sometimes lead to a ‘buck shot’ approach, where cable owners and legal representatives hold everyone who was even remotely in the area liable for the damage to the cables.

Vessel owners on the other hand are regularly faced with inaccuracies in the geographical location of the cables. When laid, the cables are marked on nautical charts such as the British Admiralty Charts. Such charts are used by mariners in determining where they can safely navigate and work on the North Sea. However, over the years, their location may alter, due to the ever shifting and changeable nature of the North Sea. Cable owners and operators more often than not seek to inform the industry through their own websites and newsletters and appear to overlook the possibility of issuing Notices to Mariners.

The above issues are regularly part of the debate in proceedings before the Dutch courts, which has led to the court providing some very helpful guidance. Such guidance was provided by the Court of Appeal of Amsterdam in a judgment that assists stakeholders in clarifying their legal position in a congesting North Sea.

The MORGENSTER case

The judgment in the MORGENSTER case, which justifies the denomination of a ‘landmark case’ related to the owner of a North Sea marine subsea telecommunications cable and the registered owners of the fishing trawler MORGENSTER regarding liability for alleged damage to the cable.
During a periodical (standard) automated status check of the marine subsea cable, a loss of signal was detected. Following this, the cable owner held the owners of the MORGENSTER liable, arguing that the trawler had been fishing in the vicinity of the cable at the time of the loss of signal. Further, no other vessels would have been nearby, which would allegedly point to the fact that only the MORGENSTER could have caused the damage. On the other hand, the owners of the MORGENSTER, contested that they were not liable. They argued, inter alia, that other vessels were also at the relevant coordinates at the relevant moment in time. They also stated that the vessel’s trawling gear, utilizing a device called a ‘pulse wing’, hovers over the seabed, and uses a weak electrical current to stimulate the fish that are under the seabed and therefore could not have caused the damage.

As a matter of Dutch law, the liability for damage to submarine cable is a tortuous liability. If a cable is damaged by the fishing gear of a trawler, articles 8:540-546 of the Civil Code (CC) are applicable. According to article 8:544 of the CC, if the damage is caused by the fault of one single vessel, the owner of the vessel at fault must repair the damage. Pursuant to article 8:546 CC, however, there are no legal assumptions of fault with respect to liability for collision. That said, a vessel that has come into contact with a duly and properly illuminated, fixed or fastened object, other than a ship, is liable for the damage unless it is evidenced that the collision was not caused by a fault of the ship. In November 2001, the Supreme Court determined that there is fault of the vessel if the damage is a consequence of a) a fault of a person for whom the owner of the vessel is liable; b) a fault of a person who performs work for the vessel or cargo and this fault is committed while working; c) the realization of a special danger for persons or objects caused by the vessel not meeting the requirements that were to be expected in the given circumstances.

The court of first instance ruled in the cable owner’s favour and held that it was sufficiently established that the cable damage was caused by the fishing gear of the trawler. In addition, the court found the trawler owners to be liable for the damage since it could not be established that the contact of the fishing gear with the cable was not caused by a fault of the ship - especially since the owners should have been aware of the location of the cable as shown on nautical charts.
The Court of Appeal however disagreed. It reversed the judgment of the court of first instance and determined that it could not be established that the trawler was the only vessel in the vicinity of the cable at the given time and location of the break. It could therefore not be excluded that another vessel may have caused the damage. Also, based on the design of the fishing gear and on various expert reports, it further held that it did not follow that the cable damage was caused by penetration on the part of the vessel’s trawling equipment. Although the court considered that the cable break could have been caused partly as a consequence of contact with the pulse wing – for example if the cable was already damaged – it also considered this to be unlikely. It therefore held that it could not be established that the cable damage was caused by the fishing gear touching the cable.

Moreover, the Court of Appeal also considered the question of whether the vessel would be at fault as provided for in art. 8:544 of the CC if the cable damage had been a consequence of the pulse wing merely touching the cable. The court held that the fault of the vessel could not be established given that the vessel was equipped with advanced fishing gear and had a modern safety system. In addition, no official Notices to Mariners had been issued regarding the cable and no mistakes had been made by the crew on board the vessel. Therefore, the owners were deemed to have taken every reasonable measure to prevent cable damage.

The Court of Appeal also held that there was no obligation on the owners to check a specific website containing information about the subsea cable. Therefore, even if the cable was damaged by the fishing gear, there was no fault on the part of the vessel. Hence, the owners could not be held liable for the damage, and in so ruling the court of appeal completely overturned the decision of the court of first instance, as well as a 1983 Court of Appeal ruling. In the 1983 ruling it was held that good seamanship implies an obligation for the fishermen to lift their nets every time they cross a subsea cable. In the MORGENSTER Appeal Court decision however it was held that it is not prohibited to trawl over subsea cables and that one cannot expect a fishing vessel to lift its nets every single time a subsea cable is crossed. The risk that a subsea cable sustained damage as a result thereof, should not be for the account of owner of the fishing vessel as it would unfairly expose fishermen to potential significant claims from cable owners and operators, according to the Appeal Court. The judgment by the Dutch Court of Appeal is therefore a welcome reprieve for the owners of fishing vessels and their underwriters.

So, who picks up the bill?

The increasing use of the North Sea has resulted in a myriad of stakeholders, including the fishing and submarine cable industry, that primarily have an interest in furthering their own agenda and cause. The Amsterdam Court of Appeal was therefore very correct in its observation the North Sea has, in recent years, become somewhat of a battleground for these competing interests. Although the case law from Dutch courts discussed above appears to suggest that cable owners should bear their own damage when a cable is damaged and fishing vessels escape unscathed, operating under that assumption would however be a mistake. This decision has not concluded the debate. Several cases are still pending before the Dutch courts wherein owners of subsea cables seek to convince the courts to ignore the judgment in the MORGENSTER case and impose a stricter duty of care on fishermen. With the construction of even more wind farms and connected infrastructure, the debate on this topic will become even more urgent. The ball therefore appears to be in the court of legislators of coastal states to develop a legal framework that takes into account the competing interests on the North Sea. A balance should be found, with both fishing vessels and cable owners demonstrating a certain duty of care and taking precautionary measures in order to prevent submarine cable damage.

Robert Hoepel and Iris Regtien

¹ Hof Amsterdam 24 April 2018, S&S 2018/88 (MORGENSTER)

² Dutch Supreme Court November 2001, S&S 2002/35 (CASUELE/DE TOEKOMST).