Merchant Shipping Act 1995

265 Compensation in connection with invalid prohibition notices

(1) If on a reference under section 264 relating to a prohibition notice—

(a) the arbitrator decides that any reason or matter did not constitute a valid basis for the inspector’s opinion, and

(b) it appears to him that there were no reasonable grounds for the inspector to form that opinion,

the arbitrator may, subject to subsection (3) below, award the person on whom the notice was served such compensation in respect of any loss suffered by him in consequence of the service of the notice as the arbitrator thinks fit.

(2) If on any such reference the arbitrator decides that any direction included in the notice was unreasonable, the arbitrator may, subject to subsection (3) below, award the person on whom the notice was served such compensation in respect of any loss suffered by him in consequence of the direction as the arbitrator thinks fit.

(3) An arbitrator shall not award any compensation under subsection (1) or (2) above in the case of any prohibition notice unless—

(a) it appears to him that the direction given in pursuance of section 262(3)(d) contained any such requirement as is mentioned in subparagraph (ii) of that provision; or

(b) it appears to him that—

(i) the inspector was of the opinion that there would be such a risk of injury or pollution as is referred to in the notice if the ship went to sea, and

(ii) the effect of the direction given in pursuance of section 262(3)(d) was to prohibit the departure of the ship unless the matters, or (as the case may be) the matters and contraventions, referred to in the direction were remedied.

(4) Any compensation awarded under this section shall be payable by the Secretary of State.

(5) In the application of this section to Scotland any reference to an arbitrator shall be construed as a reference to an arbiter.