Asset Protection by Subsea Cable Operator Companies: Virgin Media v Whelan Revisited

The seminal case of Virgin Media Ltd. v. Joseph Whelan is a key English authority on private cable operator companies’ ability to sue on submarine cable damage that occurred in an exclusive economic zone (EEZ). In the case, the defendant’s fish vessel damaged a telecommunication company’s undersea cable during scallop trawling in the Irish Sea. The damage took place outside of the UK’s territorial waters, but within their EEZ. The cable operator sued in tort. Within territorial waters, a national court has jurisdiction to address damage to cables. How about cable damage in EEZs?

An EEZ is legally defined by the United Nations Convention on the Law of the Sea (UNCLOS) as ‘an area beyond and adjacent to the territorial sea’, where the coastal state enjoys certain ‘exclusive’ rights, such as the right of access to natural resources (Articles 56, 60 UNCLOS). The UNCLOS only precludes criminal jurisdiction (Article 97), but is silent on civil jurisdiction.

The English High Court held that ‘the coastal state will only have jurisdiction where the damage occurring within the EEZ arises out of a particular activity over which the Coastal State has sovereignty or an exclusive right to perform under UNCLOS’. The Court gave the example where a collision in the EEZ between a vessel and an oil station trespassed the exclusive right to exploit natural resources (oil) in the EEZ.

However, the right to lay cables in the EEZ is not exclusive. Article 79 and 112 of UNCLOS provide that ‘all states’ have the right to do so and does not use wording such as ‘exclusive right’ or ‘sovereign right’ like Article 60 does.

The unsatisfactory lack of civil accountability

On the one hand, an entity has the legal right to lay cables in a jurisdiction’s EEZ. On the other hand, it has no right to protect them through civil discourse in that jurisdiction. This legal position is particularly unsatisfactory given the rising risk posed to cables due to accidents and also geopolitics. My paper ‘Gaps in Accountability for Submarine Cable Protection: Inadequacies in the Current Legal Framework’ revisits this case. I argue that the English Court should not have held that the right to lay cables under UNCLOS Articles 79 and 112 is non-exclusive.

In particular, I argue that the Court has not considered Article 79(5), which states that ‘States shall have due regard to cables or pipelines already in position’. Article 79(5) requires states to avoid causing damage to existing cables when laying their own and should not compromise others’ ability to repair existing cables.  Arguably, existing cables enjoy an exclusive right, in the sense that once they occupy the EEZ, they are protected from undue interference from subsequent cable-laying parties.

Legally, there is a highly analogous ‘first in time, first in right’ doctrine of prior appropriation. This is applicable to UNCLOS Article 79(5) where subsequent cable-laying parties have to duly consider the prior cables.  Thus, the view that just because ‘all states’ are free to lay cables makes the right non-exclusive is unpersuasive. It misses the rights-competing/exclusive element between cable-laying parties under Article 79(5).

The more compelling legal view

The Permanent Court of Arbitration (PCA)—presided over by Judge Golitsyn, the former President of the International Tribunal for the Law of the Sea—offered a completely different understanding of ‘sovereign right’ (to avoid confusion, ‘sovereign right’ is used synonymously with ‘exclusive right’ in Virgin Media).

The PCA in The ‘Enrica Lexie’ Incident (Italy v. India) remarked at [954] that ‘…the sovereign rights enjoyed by [a coastal state] in its exclusive economic zone are not unlimited but must be balanced against the rights and duties of other States. This is confirmed by the obligation on the coastal State in Article 56, paragraph 2, of the Convention to have due regard to the rights and duties of other States and the applicability of Article 110 of the Convention’.

This vitally indicates that the narrow interpretation by Virgin Media is not the only view. Virgin Media’s reasoning rests on the logic that ‘all states’ (as used in Articles 79, 112 UNCLOS) can lay cables, so the right would not be exclusive. But under the PCA’s more compelling understanding, an exclusive right does not mean complete exclusion or sovereignty, but obviously would still have to be ‘balanced against the rights and duties of other States’. Therefore, the existence of competing rights in EEZ (in terms of laying cables) does not defeat the exclusivity of such a first-in-time right. Accordingly, an asset damage claim could be made.

The full paper can be accessed here.

Kwan Yat-Cheung is an Honorary Fellow at the Asian Institute of International Financial Law, University of Hong Kong.