Sub-sea cable damage claims – a legal perspective

In the International Union of Marine Insurance (IUMI) Eye Newsletter March 2018 edition, Mike McLachlan of LOC considered the technical and practical implications of sub-sea cable damage claims. In this briefing, Nicholas Kazaz of HFW, considers the legal implications of such claims.

First published in the IUMI EyeNewsletter June 2018, by Nicholas Kazaz, HFW associate and IUMI Professional Partner.

Increasing number of high value cable damage claims caused by vessels’ anchors and fishing gear

Recent years have seen an increasingnumber of claims for cable breaks, which often involve complex issues of lawand practice, as well as conflicts of law. The increase is unsurprising withover 400 subsea telecoms cables and 30 subsea interconnector power cables inservice, and an increasing number of such cables connecting offshore wind turbinesto shore. The claims most often arise from damage caused by vessels’ anchorsand fishing gear.

The quantum of cable damage claims isinvariably high, with for example damage repairs for power cables costinganywhere between £6m to £10m, in addition to substantial claims forconsequential losses. Furthermore, it is reported that subsea cablefailures account for 77 per cent of the total global cost of offshore windfarm losses.

Investigation and legal claims process

Following a cable break, the firststep is to gather evidence forensically, including video footage from RemotelyOperated Vehicles (ROVs), data from real-time signal monitoring ashore, andvessel tracking data (Automatic Identification System (AIS) and VesselMonitoring System (VMS) data).

The next step is then to considerwhere, as a cable operator, to bring that claim. Claims for damages to subseacables are usually heard by the Admiralty Court. Whether the Court will havejurisdiction will depend on multiple considerations relating to matters ofprivate international law.

If the Court does have jurisdiction(or jurisdiction is founded there) it is important to consider tonnagelimitation which entitles shipowners and other interested individuals to limittheir liability to a fixed amount calculated on the vessel’s gross tonnage,which will apply unless the cable operator overcomes the very high thresholdfor breaking limits.

Cable operators will be entitled toarrest the guilty vessel to secure their claim, until a limitation fund hasbeen constituted. In practice, the vessel’s P&I insurers will often put upa letter of undertaking to avoid arrest.

To establish liability, a cableoperator must prove that the shipowner was negligent, and the followingelements must also be present:

• The cable was damaged by mechanical means.
• The vessel had actual or constructive notice of the position of the cable (e.g. from charts).
• The vessel was at the cable fault location at the approximate time of the fault.
• The vessel was engaged in an activity capable of causing the damage.
• No other vessel was in the same area at the approximate time of the fault.

Those who deliberately or negligently damage cables may also face criminal prosecution, but such prosecutions are understood to be a rare occurrence.
 

Should you have any questions, please do not hesitate to contact the author of this briefing:

Nicholas Kazaz
Associate, London
T +44 (0)20 7264 8136
E nicholas.kazaz@hfw.com