After the superyacht Parsifal III crashed into Carrot Shoal and spilled some 30 tonnes of lead-shot ballast onto the reef, the crew allegedly took the boat to St. Thomas without reporting the incident to Virgin Islands authorities.
Only after government launched an investigation did the captain report the January 2013 spill — nearly two months after it happened, according to a recent High Court judgment.
Now, five years and a lot of legal manoeuvring later, Parsifal III’s lawyers have managed to avoid more than $1 million-worth of potential liability resulting from that grounding.
They did not, however, do this by proving the boat didn’t actually hit the reef or that the environmental damage was limited.
Instead, they relied on a technicality, challenging the constitutionality of a provision in one of the territory’s maritime laws that had paved the way for increased liability limits. In the process, they sparked the nullification of a section of a law used to adopt more than 100 pieces of United Kingdom maritime legislation.
Now, instead of shelling out the roughly $1.5 million government had hoped to collect, the company that owns the yacht — called Partnerselskabet Parsifal, which is Danish for Parsifal Partnership — has been made to pay only about $250,000, according to the case’s judgment.
That figure does not even cover the costs of government’s partial clean-up effort conducted after the incident.
The legal wrangling may not be over, however: Government has filed an appeal that is currently pending, according to Maya Barry, a Crown counsel in the Attorney General’s Chambers who was one of government’s representatives in the case.
Incident background
Carrot Shoal lies just off the southern tip of Peter Island and was a thriving reef at the time of Parsifal III’s alleged grounding.
The company that owns the 176.5-foot sailing superyacht has two 50-percent shareholders: wealthy Danish businessmen Kim Vibe Petersen and Rene Sindlev. Danish press reports indicate the boat has been chartered out to a ritzy clientele that sometimes included the country’s royal family, though the vessel’s managing company — Camper and Nicholsons International — now lists it as being up for sale for €18.9 million.
Mr. Petersen, an entrepreneur who invented a coffee-and-cappuccino-brewing machine used in restaurants and hotels around the world, is currently the yacht’s “responsible administrator,” according to Mr. Sindlev.
Mr. Petersen’s company, Scanomat, makes a point to advertise its products’ environmental friendliness.
Mr. Sindlev also likes to play up his green image: One of the founders of Pandora, a large international jewellery manufacturer and retailer, the Danish businessman stressed in an e-mail to the Beacon that he is environmentally conscious and likes to “fight for a cleaner planet in many ways.”
Pandora’s website also highlights the company’s efforts to minimise its environmental footprint.
English-translated financial documents from Partnerselskabet Parsifal indicate that Mr. Vibe-Petersen is also on the partnership’s board of directors.
Stalled clean-up
After the Parsifal III slammed into the reef in January 2013, the yacht allegedly fled the scene without reporting the incident. It went to St. Thomas for repairs, where witnesses reported it to this territory’s Conservation and Fisheries Department, according to the court judgment.
Government spent more than $300,000 on cleaning the reef in the following two years, but only about two thirds of the lead was removed because the territory eventually stopped funding the project, a salvager said at the time.
CFD officials could not be reached for comment regarding whether any additional cleanups had happened since.
Dr. Shannon Gore, a marine biologist and the managing director of the Association of Reef Keepers, wrote a report on the damage to Carrot Shoal in the months after Parsifal III grounded.
“Aside from large broken fragments of rock from the impact of the keel, a large area of benthic species — corals, algae, sponge, invertebrates, etc. — were destroyed from being smothered by either rock fragments or lead,” she wrote in an e-mail that was circulated in the yachting community after the incident. “The worst potential environmental impacts, [however], come from the long-term effects of lead shot in the marine environment.”
Though there is not much scientific data about the long-term effects of lead shot in a marine ecosystem, all measurable effects are adverse, according to Dr. Gore.
The amount of lead shot spilled on Carrot Shoal was “globally unprecedented,” she added, and the long-term spread of it throughout the surrounding ecosystem could present problems for fisheries and seabird populations.
Responses
Mr. Vibe-Petersen did not respond to multiple requests for comment regarding his recent court victory or about whether he felt any remorse for the environmental damage the boat allegedly did to Carrot Shoal.
Mr. Sindlev, however, vouched for the Parsifal III’s response to the incident.
“I was informed as a shareholder about the accident shortly after it happened. I understood we took immediate action and the insurance company likewise,” he wrote in an e-mail to the Beacon, adding, “Parsifal 3 never neglected the responsibility neither took a passive role in helping to clean up. Divers [were sent] to hover and clean the waisted [sic] area immediately.”
His remarks, however, clash with the story presented in the court case’s judgment, which states that the boat captain reported the incident only after government launched an investigation, waiting for nearly two months after Parsifal III ran aground.
Asked about this disparity, Mr. Sindlev claimed he was “totally unaware” of those details. The Pandora founder also said he didn’t know the company’s legal team had even sued the VI government until after the fact.
His partnership with Mr. Petersen was “not happy,” he explained, and a separate legal disagreement had wedged a distance between the two of them. As a result, Ms. Sindlev said, he has not been aboard the Parsifal III in four years.
Still, he noted his belief that the company should pay its fair share for the environmental damage. What that number is, however, is best decided by the insurance company and the courts, Mr. Sindlev explained.
“I don’t know what the amount is. It’s beyond my education and competence to answer that,” he said, adding, “It’s pure speculation whether I think I would pay an additional amount [to what the court ordered].”
One of Partnerselskabet Parsifal’s lawyers, Harneys Counsel Hazel-Ann Hannaway, declined to comment on the case. The other, Gilbert Peterson, a Trinidad resident, could not be reached.
Legal history
About six months after the incident, in July 2013, Parsifal III lawyers filed a claim to limit their clients’ liability under section 396 of the VI Merchant Shipping Act, 2001.
For a ship of Parsifal III’s size, the act sets the liability limit for an incident not involving loss of life or personal injury at 167,000 Special Drawing Rights — roughly $250,000 by conversion rates at the time, according to the judgment.
However, that liability limit had been changed in 2005 when then-governor Tom Macan made the Merchant Shipping (Adoption of United Kingdom Enactments) Order, 2005.
The 2005 order based the new limit on UK statutory law: For a ship of Parsifal III’s size, it became one million Special Drawing Rights, which would have raised the vessel’s liability to about $1.5 million.
In 2014, to combat that increase, Parsifal III’s lawyers challenged the constitutionality of the measure allowing for the 2005 order.
Case arguments
Section 464 of the VI Merchant Shipping Act, 2001 allows the governor, acting with the advice of Cabinet in conjunction with the UK secretary of state for transport, to enact any related UK legislation, even if it amends or modifies other parts of the Merchant Shipping Act or previously adopted UK enactments.
This happened on a large scale in 2005, when Mr. Macan enacted the Merchant Shipping Order, which adopted more than 100 pieces of UK maritime legislation at once.
Among those laws was UK Statutory Instrument 1998 No. 1258, which allowed for the increase in liability limits.
Appearing before High Court Justice Vicki Ann Ellis in December 2016, Parsifal III’s lawyers attempted to prove that the Shipping Act’s section 464 violated the VI’s Constitution, undermining the territory’s separation of powers.
The lawyers argued that only the legislature should have the power to write legislation, and that section 464 unconstitutionally delegated that ability to the executive branch of the VI government.
Attorney General Baba Aziz countered that it was legislators who originally passed the Shipping Act, which included section 464, and that they could repeal it at any time.
Because they had not done so, he argued, they had given approval to all subsequent legislation passed under the auspices of section 464, like the Merchant Shipping Order.
Judgment
Ms. Ellis ultimately sided with Partnerselskabet Parsifal’s legal team.
Section 464 of the Shipping Act, she explained, not only allowed the governor to enact any existing related UK laws but also future pieces of UK merchant- shipping legislation — a decision that she described as an inappropriate abdication of legislative authority.
“In the absence of an affirmative or negative resolution procedure the legislature cannot anticipate or establish what [enactments] or amendments would be carried out or whether they would be of a sweeping policy-changing character or whether they would be suitable in all the circumstances,” she wrote. “In the Court’s judgment, it could successfully be argued that the BVI legislature had surrendered its essential function in favour of the executive.”
The justice’s January judgment voided section 464 and allowed Partnerselskabet Parsifal to limit its liability based on the former system set out in the VI Merchant Shipping Act, 2001.
Legal ripple
The case’s judgment could have had a legal ripple effect that delegitimised all the 100-plus pieces of UK legislation enacted using section 464 of the Shipping Act had House of Assembly lawmakers not made the decision to validate them last year.
Gutting those laws would have had serious consequences, according to officials in the industry.
“The Marine Shipping Order, 2005 is the backbone of legislation from which we do all our enforcement,” Captain Raman Bala, acting director of the VI Shipping Registry, told the Beacon in 2016, adding, “We need those laws.”
The legislation was also instrumental in drawing new marine opportunities to the territory, playing a “crucial role” in securing Category One status from the UK’s Red Ensign Group, according to Bill Bailey, the owner of the VI-based Caribbean Marine Surveyors Ltd.
The REG is a collection of British shipping registries, and jurisdictions it classifies with Category One status are permitted to register ships of unlimited tonnage and type.
Following the passage of the Marine Shipping Order, the VI became a Category One member in June 2008.
Merchant mariners need not fear, however: HOA members passed the Validation (Merchant Shipping (Adoption of United Kingdom Enactments) Order 2005) Act in March 2017, putting their stamp of approval on that bundle of laws and immunising them from Ms. Ellis’s judgment against the attorney general.
The AG’s Chambers pushed for the legislation after the December 2016 hearing as an insurance policy in case they lost the case, according to Ms. Barry.
Section 464 itself, however, remains void, and any subsequent adoptions of UK maritime legislation will need some form of approval from the HOA or have to come directly from England.
In addition to Ms. Barry and Mr. Aziz, government was also represented in the Parsifal III case by Vareen Vanterpool.