The owners of a ship fined a record sum for polluting Bermuda's waters in an oil spill have had the penalty reduced from $40,000 to $15,000 on appeal.

Senior Magistrate Will Francis had fined Capt. Bengt Magnusson in September after the Atlantic Forest leaked what is believed to be hundreds of gallons of oil and an oil mixture into Five Fathom Hole, near St. David's Head, on March 2.

Mr. Francis said the fine should be a deterrent to captains and shipping owners to warn them that they had to be extra vigilant in Bermuda because the Island's delicate coral environment is so vital to the tourist economy.

Trevor Moniz, the lawyer for Capt. Magnusson and the ship's owners -- New Orleans-based LCI Holdings Inc., argued at a Supreme Court appeal yesterday that the fine was excessive.

Mr. Moniz pointed out that a fine of $30,000 imposed in May on the captain of the Pascale Delmas was reduced to $7,500 on appeal.

The case of the Atlantic Forest was less serious because the oil was blown away from the Island and no clean-up operation was required, he said.

Mr. Moniz asked Chief Justice Austin Ward, sitting as an appellant judge, to slash the fine to $7,500, but was unsuccessful.

The reduced fine of $15,000 still equals the record penalty for pollution of Bermuda's seas -- which was imposed in 1976 on the captain of the SS Statendam for discharging oil into Hamilton Harbour.

Mr. Moniz said his clients did not have an office in Bermuda but had submitted to the jurisdiction and had pleaded guilty to the offence under the 1971 Prevention of Oil Pollution Act.

Mr. Moniz said his clients were "as helpful as could be and there was no risk to Bermuda because the winds were blowing the oil away''.

"It was an unfortunate occurrence, but there was no clean-up operation and there was no risk,'' he said.

He added that Mr. Justice Ward had considered the degree of negligence, the amount of pollution, clean-up costs, the attitude of the offenders, and the background to the case.

He said the Chief Justice had reduced the fine in view of all these factors.

Mr. Moniz told The Royal Gazette : "My clients are satisfied with the reduction. We had argued that the reduction should be to $7,500, but the Chief Justice didn't go with us all the way.''