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Is it advisable to make submarine cable damage claims?


Submarine Cable Damage
Submarine Cables

Yes, indeed. This straightforward question involves reflection on whether a submarine cable owner has any scope for action when its network is disrupted due to the activity of a fishing vessel or merchant ship that has negligently damaged one of its submarine cables.


One option is to remain passive and let the author of the damage be a potential recidivist in the future. Another option is to investigate the causes of the cable fault, identify the author and immediately alert local authorities so that they can proceed with the arrest of the suspected ship.


The second option is primarily aimed at recovering the costs incurred in repairing the damaged cable and, in the long term, it also reduces the risk that maritime operators in the affected area face similar events in the future.


Compensatory damages


With the increase in fuel costs for cable maintenance ships, repair costs are higher. Other factors also play a role, such as the availability of these vessels and even the hurricane season. In addition, sometimes cable owners must wait months until they can afford to repair a shunt fault at a reasonable competitive price.


Therefore, to justify a claim for damage compensation, which may amount to $1-3 million, these types of damages should be properly documented to the insurance companies of the shipping industry (P&Is) and eventually to a local court. In some cases, even the restoration costs exceeded the actual repair costs.


Furthermore, the argumentation should have an excellent understanding of cable repair operations and the importance of the submarine cable in the landing countries, so as to persuade naval authorities to collaborate with the investigations and find the authors of the cable fault. A common mistake is framing these outages as private business incidents of telecommunications companies when they clearly affect or potentially disrupt the digital sovereignty of a country or an entire region, and also other stakeholders such as the financial sector.


Of course, this option has complexities, hazards and uncertainty as to whether the costs incurred in the repair will be recovered. However, this short-term monetary objective should not overlook the long-term strategy of the owner of a 25-year undersea asset, which is to send a clear message to the shipping/fishing industry that it should better control its activity in the area.


Dissuasive effect


The dissuasive effect is the key issue for carriers/OTTs when protecting their subsea assets. The role of the insurance companies of the shipping industry (P&Is) in controlling their own customers is crucial. Otherwise, they would continue paying the cable owners for the misbehavior of their customers (merchant ships/fishing vessels).


Nearly 70% of cable faults are due to reckless human activity that could be avoided. A trawler ship pursuing a highly profitable shoal, a merchant ship dragging its anchor on the seabed are just examples of a captain’s negligent behavior when they know that submarine cables clearly marked in the nautical charts are nearby . Unfortunately, this casuistry seems to increase in parallel with the growth of maritime traffic.

In March 2021, the International Cable Protection Committee (ICPC) issued its latest recommendation (19-1) titled “Preparatory Actions for Civil Claims Development for Cable Damage”. This recommendation intends to help cable owners to obtain compensation damages in these scenarios, combining the savoir faire of Telecommunication and Maritime law with litigation expertise for both arenas.


Other international organizations have already raised the alarms to secure the integrity of subsea networks.


Critical infrastructure plans


In several countries these initiatives are changing the regulatory framework for installing and operating a submarine cable. This trend is upward.


However, policymakers forget to tackle the abovementioned risks, which are prevalent in the subsea telecommunication industry. Most of these new national security plans rely on the role of the cable owner as the first line of defense against reckless fishermen, but clearly fail to help telecommunication companies to effectively identify the authors of a cable cut.


Of course, it would be unreasonable to require developing countries’ navies to adopt in such critical infrastructure plans a 24/7 air or naval surveillance.


In such plans, we propose that governments commit to inform the affected cable owner, within 24 hours of an outage, which vessels were near the damaged cable at the specific time, based on information from AIS/VMS and other tracking systems (i.e., radars).


This fast-track procedure should also include the possibility to rapidly aboard the ship to obtain various evidence, such as logbooks, reports and testimonies of deck officers on duty.


The rest of the steps, such as the arrest of the ship, could be carried out as usual by the affected cable owner. This approach, apart from increasing the likelihood of obtaining damage compensation, will also increase the effectiveness of the dissuasive effect, which would be now seriously weighted by the P&Is.


With these basic measures, we believe that the telecommunication industry will have some additional pragmatic tools to ensure that the long arm of the law also reaches the seas.


Due diligence


Before any damage compensation is awarded, it is important to keep in mind that any owner of a submarine cable must comply with national regulations and be prepared to be challenged in court on these issues. If licenses, permits and concessions are in order, there is a better chance of expediting these negotiations or legal proceedings against ship owners and their P&Is.


Accordingly, telecommunications companies should be very well acquainted with the various maritime planning initiatives underway where their submarine cables are laid. While these plans are intended to protect the marine environment where submarine cables are innocuous, they also protect a country's sovereignty, prevent seabed congestion and ensure the safety of the vessels.


Conclusions


The vast majority of submarine cable faults can be prevented with further education and a good response from the affected cable owners. Damage claims against the authors of cable faults is a key tool to increase the dissuasive effect and avoid further accidents.


Therefore, governments should be consistent with their critical infrastructure plans and actively collaborate with cable owners in identifying suspect vessels to preserve their own digital sovereignty.


 

Andrés Fígoli is an experienced international commercial dispute resolution lawyer at Fígoli Consulting. Mr. Fígoli graduated in 2002 from the Law School of the University of the Republic (Uruguay), holds a Master of Laws (LLM) from Northwestern University, and has worked on submarine cable cases for almost 21 years in a major wholesale telecommunication company. He also served as Director and Member of the Executive Committee of the International Cable Protection Committee (2015-2023).



This article was first published in SubTel Forum Magazine #129 – Finance & Legal, March 2023.

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