SPAIN’S $1bn Prestige lawsuit against American Bureau of Shipping was dismissed today, on grounds that Spain’s pursuit of the case in the US is precluded by the Civil Liability Convention to which the country and flag state Bahamas are signatories.

In a 12-page ruling, US district judge Laura Taylor Swain of the US District Court for the Southern District of New York granted ABS’ motion for a summary dismissal of the case, saying her court lacked the jurisdiction necessary to adjudicate Spain’s damage claims.

Spain’s legal team could not be reached for comment immediately. However, sources closely familiar with the case indicated that an appeal is highly likely.

Spain is expected to stand by its assertion that since the US is not a signatory to the CLC it has no obligation to adhere to its provisions, and use the Amoco Cadiz case – which is not referred to in Judge Swain’s ruling – in support of its argument.

ABS’ Stewart Wade said: “This is a tremendous decision not just for ABS but for all classification societies, since it recognises them as a ‘person’ under the CLC and affords them all protections under it.”

Spain’s lawsuit sought to hold ABS accountable for losses suffered because of the Prestige oil spill. Spain has striven to establish wrongful conduct by ABS in connection with the society’s classing the Prestige and inspection services performed on the ship.

ABS, in direct response, argued that the disaster could have been averted but for Spain’s handling of the matter.

Meanwhile, however, ABS’ motion for summary judgement under the International Convention on Civil Liability for Oil Pollution Damage, or the CLC, was lurking in the background, as discovery in Spain’s lawsuit continued over the past few years.

While the matter was expected to come to trial in 2008, ABS’ stance invoking the CLC remained in limbo – to wit, ABS’ claim that as the deemed agent of the Prestige owner, ABS enjoys immunity from all damages arising out of Spain’s lawsuit and should be allowed to avail itself of the CLC limits just as a shipowner would.

ABS’ motion before Judge Swain argued, on the one hand, that Spain could not prove reckless conduct to meet the standard required by the CLC; and on the other, that only a CLC-signatory forum would be the appropriate venue to rule on Spain’s pollution damage claims.

Judge Swain’s ruling today cites CLC Article III(4), which precludes legal action against shipowners’ agents or third parties unless they can be shown to have acted “recklessly and with knowledge that damage would result”.

The Judge says CLC Article IX(1) restricts actions for compensation to the courts of contracting states.

Judge Swain ruled today: “The undisputed factual record, even when read in light most favourable to Spain, clearly indicates that ABS is a person who, without being a member of the crew, performed services for the Prestige within the meaning of CLC Article III(4).”

The ruling further went on: “The US is not a signatory to the CLC, and the pollution damage is not alleged to have affected US territory.”

Spain’s principal argument against dismissal of its case under the CLC has been that since the US is not a signatory, it is not bound to respect CLC provisions.

The judge rejected this argument, on grounds that Spain has brought forth no support for the proposition that a US court can broaden a case under a treaty to which it is not a signatory, when the treaty itself precludes litigation in a US forum.