ABSTRACT
With the rapid development of the shipping industry and crude oil transportation, there is a growing risk of oil leakage. The legal framework for direct action against the insurer for oil pollution liability established by the International Convention on Civil Liability for Oil Pollution Damage (CLC 1992) can secure full compensation to the victims of oil pollution damage. The aim of this chapter is to analyse legal issues arising from the direct action framework in connection with the oil pollution damage compensation in China. This chapter considers whether the insurance of oil pollution damage constitutes mandatory liability insurance in China, followed by a discussion of the existing problems of the direct action framework and analysis of the status quo, including relevant legislation and its significance. The defences available to the insurer against oil pollution liability claims, the litigation status of the shipowner and the form of assumed liability between the shipowner and the insurer are examined.
