OVERVIEW OF THE DISPUTE
6. The arbitration concerns the Parties' disagreement as to the lawfulness of São Tomé's conduct in respect of the M/T Duzgit Integrity (the "Duzgit Integrity"), a Maltese flagged vessel, as well as its Master, crew, owner and charterer. During the early hours of 15 March 2013, the Duzgit Integrity entered the archipelagic waters of São Tomé in order to conduct a scheduled ship-to-ship cargo transfer with the M/T Marida Melissa (the "Marida Melissa"), a fuel oil tanker registered in the Marshall Islands. Subsequently, during March and April 2013, São Tomé interrogated, detained, prosecuted, and imprisoned the Masters of the two vessels. The Duzgit Integrity was seized and its oil cargo was confiscated and discharged. In October 2013, while negotiations between Malta and São Tomé were taking place, the Masters were released from prison. Upon the conclusion of a settlement agreement between DS Tankers Limited ("DS Tankers")--a Maltese company and the owner of the Duzgit Integrity--and São Tomé (the "Settlement Agreement"), the Duzgit Integrity was released on 25 November 2013.
7. On 22 October 2013, Malta filed a Notice of Arbitration pursuant to Article 287 and Article 1 of Annex VII the United Nations Convention on the Law of the Sea (the "Convention") with regard to the above-described dispute.
8. In the earlier phase of the proceedings, Malta submitted that São Tomé, by taking the measures described above against the Duzgit Integrity, violated its obligations under the Convention and customary international law.
9. On 5 September 2016, the Tribunal rendered an award deciding matters of jurisdiction and admissibility and the merits of Malta's claims (the "Award on Jurisdiction and the Merits"), with Judge Kateka disagreeing with the majority on certain points through a dissenting opinion (the "Dissenting Opinion"). The operative part the Award on Jurisdiction and the Merits provides, at paragraph 342, as follows:
In light of the foregoing, the Tribunal:
- DECIDES, unanimously, that it has jurisdiction over the present dispute;
- DECIDES, unanimously, that Malta's claims are admissible;
- FINDS, by majority, that São Tomé violated Article 49(3) of the Convention;
- FINDS, by majority, that Malta is entitled to proceed to claim reparation in respect of the heads of claim listed at paragraph 333 in a further phase of these proceedings;
- ORDERS, unanimously, that the Tribunal's expenses shall be borne in equal shares by the Parties pursuant to Article 7 of the Convention;
- ORDERS, unanimously, that the Parties shall bear their own legal costs;
- DISMISSES, unanimously, all other claims. Duzgit Integrity Arbitration (Malta v. São Tomé and Príncipe) Award on Reparation
10. The Tribunal also determined in its award that, while the Settlement Agreement was not relevant to the question of the admissibility of Malta's claims as they pertain to DS Tankers, 1 "[t]he Settlement Agreement may be relevant to a later phase of these proceedings as concerns the quantification of any damages suffered by DS Tankers".
11. In the present Award, the Tribunal will determine all questions concerning quantum, compensation, and interest which were not decided in the Award on Jurisdiction and the Merits, in accordance with paragraph 342(d) of that award.
221. In light of the foregoing, the Tribunal decides, by majority, that São Tomé shall pay to Malta the
(a) USD 2,077,900.57 as compensation for the loss of hire of the Duzgit Integrity;
(b) USD 6,898,638.86 as compensation for the value of the cargo of the Duzgit Integrity;
(c) USD 625,000.00 as compensation for the amount paid by DS Tankers pursuant to the settlement agreement for the use of the Duzgit Integrity's cargo as bunkers;
(d) EUR 108,170.01 as compensation for the fees and expenses of DS Tankers' port agent;
(e) EUR 76,586.56 and GBP 54,860.40 as compensation for legal expenses related to the detention of the Duzgit Integrity, other than in respect of the present proceedings;
(f) EUR 10,150.00 as compensation for classification expenses;
(g) EUR 5,085.93 and GBP 87,914.90 as compensation for the cost of repairs to the Duzgit Integrity necessitated by the detention of the vessel;
(h) USD 175,000.00 as compensation for non-material damage to the Master and crew, according to the breakdown set out at paragraph 185 of this Award;
(i) EUR 82,500.00 as reimbursement for São Tomé's share of the costs of the final phase of these proceedings, borne by Malta in the first instance.
(j) USD 2,804,499.52, EUR 37,727.59, and GBP 34,734.16 as pre-Award interest on the amounts awarded in paragraphs (a) through (g) above;
(k) Post-Award interest on the foregoing amounts, beginning three months from the date of this Award and running until the date of effective payment at the following rates:
- For the amounts in paragraphs (a), (b), (c), and (j) above denominated in U.S. dollars: the rate applicable to U.S. treasury bills with a remaining maturity of one year, plus 3.4 percent, compounded annually;
- For the amounts in paragraphs (d), (e), (f), (g), and (j) above denominated in Euros: the rate applicable to German federal securities with a remaining maturity of one year, plus 3.4 percent, compounded annually;
- For the amounts in paragraphs (e), (g), and (j) above denominated in Pounds sterling: the rate applicable to the government bonds of the United Kingdom of Great Britain and Northern Ireland with a remaining maturity of one year, plus 3.4 percent, compounded annually;
- For the amounts in paragraphs (h) and (i) above: 2 percent, compounded annually;