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Marine Insurance
Saturday, August 1, 1992
No appeal

US oil giant Amoco has decided not to appeal against the US court order that it must pay US $200m to the French government and communities affected by the massive oil spill caused by the 1978 stranding of the 233 690 dwt VLCC Amoco Cadiz. Amoco’s decision could bring an end to the 14-year saga.
One major outstanding issue is whether the US oil major will seek redress from the tanker’s Spanish builder, Astilleros Espanoles SA (AESA). Lawyers for the French authorities have said Amoco must pay the full amount and then claim compensation from AESA.
Following years of litigation, on January 24 this year a three-judge panel of the 7th US Circuit court of Appeals in Chicago ruled that Amoco should pay $200m in compensation. Under the court’s ruling, Amoco must also pay the owner of the oil, Shell, about $30m.
Amoco Cadiz was on voyage from Kharg Island to Rotterdam via Lyme Bay when she experienced steering gear failure in severe weather conditions in March1978. She went aground off Brittany with a cargo of 223 000 tonnes of Iranian crude oil and broke up where she lay. The resultant oil spill was over six times greater than the 1989 Exxon Valdez disaster with 68m gallons of Iranian crude being deposited into the sea to foul over 100 miles of coastline rich in wildlife.
Amoco Cadiz had an insured hull and machinery value of $12m, while the loss of the cargo cost Shell $20m. The bill from civil companies and the Army for cleaning up operations was FFr340m, while another FFr160m was made in damage payments.

Copyright © Insurance Times and Investments® Vol:5.8 1st August, 1992
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