Only the relevancy of the pleadings was at issue before the
House, but the following facts were admitted by the parties.
The Esso Bernicia, a tanker owned by Esso, was damaged
while mooring in Sullom Voe I in the Shetland Islands. The
accident occurred when a tug (The Stanechakker), which had
a towing line secured to the stern of The Esso Bernicia,
leaked hydraulic oil which caught fire, and the towing line had
to be cast off. The Esso Bernicia, no longer under the
full control of the other two tugs, came into contact with a
number of dolphins, and as a result of damage sustained, there
was a considerable spillage of oil. The accident was caused (it
was alleged) by the negligence of the defendants (who had
designed and built the tug). However, there was a pilot aboard The
Esso Bernicia, and Hall Russell claimed that the employers of
the pilot should be liable.
Esso made payments to B.P. (operators of the terminal), and
crofters whose sheep were affected by the pollution, under the
TOVALOP scheme (Tanker Owners Voluntary Agreement concerning
Liability for Oil Pollution). They sued Hall Russell, claiming
reimbursement of these payments, and also the value of bunker oil
lost and the cost of repairs to the tanker. A claim was also made
against the Shetland Islands Council, claiming that they were
vicariously liable for the default of their pilot.
The House was concerned only to consider the relevancy of
pleadings made, the facts not having been proved.
Neither defendant was liable for the loss incurred under
TOVALOP. Hall Russell were liable in negligence (if proved) only
for the physical loss of bunker oil, and the cost of repairs to