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12.—(1) If on a reference under regulation 11 relating to a detention notice:
(a)the arbitrator decides that the owner has proved that any matter did not constitute a valid basis for the inspector’s opinion; and
(b)it appears to him that the owner has proved that there were no reasonable grounds for the inspector to form that opinion;
the arbitrator shall award the owner of the ship such compensation in respect of any loss suffered in consequence of the detention of the ship as the arbitrator thinks fit.
(2) Any compensation awarded under this regulation shall be payable by the Secretary of State.
(3) In the application of this regulation to Scotland any reference to an arbitrator shall be construed as a reference to an arbiter.
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