Hamburg court to ship work away from City

The newly-established international maritime tribunal has settled its first case - amid claims UK shipping law firms are missing out on a potentially huge chunk of business.

The International Tribunal for the Law of the Sea was set up under a UN treaty in Hamburg after the German government pledged millions to invest in its development, including the building of a new courthouse.

Back in 1996, when the tribunal was first mooted, lawyers accused the British government of failing to give financial support to a London-based court.

Now the court has heard its first case - and one of the law firms to benefit was a little-known German firm up against City firm Stephenson Harwood. The only UK counsel involved was barrister Richard Plender QC.

Plender claims that the tribunal's location will result in a "substantial benefit" for German companies - law firms, insurers and other shipping-related businesses".

"At the moment it doesn't have a huge caseload, but the same can be said of the European courts in Luxembourg and Strasbourg when they opened," Plender says.

"If it develops into a busy international court as they have done, obviously German firms will be at a great advantage over UK firms."

The first tribunal case was sparked by an incident in October 1997, when two Guinean gunboats attacked and seized a vessel, the tanker Saiga, flying the island of Saint Vincent and the Grenadines flag.

"It is quite significant that Guinea chose to be instructed not by a big multinational firm from the UK or US but by a relatively small specialist German shipping firm assisted by German professors," says Plender.

The placing of the court is also surprising, says Plender, because of the UK's unrivalled reputation in shipping law and that the International Maritime Organisation and other maritime organisations are all already based in London.

The tribunal has ordered the Guinean government to pay more than $2.1m in compensation to Saint Vincent and the Grenadines for its actions, which violated the United Nations Convention on the Law of the Sea.

The Guinean authorities had accused the Saiga of illegally supplying bunker oil to fishing vessels in Guinean waters.