On June 1, 1978, there came into force a revised voluntary scheme to deal with compensation for the victims of oil pollution hazards. This scheme is the result of some three years’ research by the oil companies and the clubs and some 18 months active negotiations. In brief, with the approval of the clubs, tanker owner members of the International Tanker Owners Pollution Federation Limited (“the Federation”) have agreed to an amended version of the Tovalop Agreement, originally concluded in 1969, so that the revised agreement shall, with certain modifications, mirror the Civil Liability Convention.1 At the same time, the members of “The Oil Companies Institute for Marine Pollution Compensation Limited” (“Cristal”) have agreed to amend the Cristal contract so that, in relation to Cristal cargoes, it provides for compensation in all material respects similar to that proposed by the International Fund Convention,2 which has not yet come into force.

The arrangements, which have led to this revised scheme, have not been without their critics and the purpose of this article is not merely to outline the history and effect of the new scheme, but also to indicate why, in the writer’s opinion, the scheme should be given at least a qualified approval and a fair trial.

The story begins back in October, 1975, when a sub-committee of the Federation was set up to examine the future of Tovalop, following the coming into force earlier that year of the Civil Liability Convention (C.L.C.). The sub-committee reported some 12 months later and, while there was general unanimity that Tovalop in its then form should be gradually phased out, following the application of C.L.C., there was less agreement as to whether it should be replaced by a further agreement and, if so, what form this agreement should take. There was substantial support on the subcommittee for the argument that tanker owner’s commitment to prompt voluntary spill clean-up and containment through the then Tovalop Agreement was valuable and that this commitment at the least should be maintained. There was also a majority of the sub-committee in favour of recasting Tovalop so that it would provide coverage comparable with that of C.L.C.

The clubs’ initial reaction to this latter proposal was less than lukewarm. In particular, it was felt that to offer C.L.C. on a voluntary basis to those countries who had not taken the trouble or formed the wish to accede to the Convention, was giving such countries a windfall of the rights offered by the Convention, without their being required formally to assume the burdens, such as the uniform certification procedure. There was also understandable disquiet about how such a voluntary scheme could be administered. After all, art. V of C.L.C. lays down a method whereby an owner potentially liable under the Convention may limit his liability by setting up a fund with the court or other competent authority of the contracting State concerned. How were all the claimants to be compelled to come in and prove against the one fund? The Convention provides in art. VI that where an owner, after an incident, has constituted a fund in accordance with art. V and is entitled to limit his liability, no