MSC ruled free of liability as Flaminia case continues

New York-based maritime legal firm Lyons & Flood have notified that after a two-week bench trial a US District Court (Judge Katherine B Forrest presiding) has determined that Mediterranean Shipping Co (MSC) was entirely free from liability in the case of container ship MSC Flaminia (IMO 9225615) and further that MSC was entitled to full indemnity from the party at fault for causing the explosion and fire: Deltech Corporation, the manufacturer of a chemical cargo known as divinylbenzene (DVB), and Stolt-Nielsen USA, Inc. / Stolt Tank Containers BV, the non-vessel operating common carrier (NVOCC) that booked the DVB shipments with MSC.

On July 14th 2012, as the Flaminia was in the mid-Atlantic travelling from New Orleans to Antwerp, a gas vapour cloud, which looked like smoke, began emerging from one of her holds.

The crew, fatally but reasonably, assumed that it was smoke from a container fire and released CO2 to suppress it. A seven-man team went forward to prepare firehouses alongside the hatch, at which point an explosion killed three crewmembers and severely injured two more. The vessel was damaged and thousands of containers were destroyed.

It was noted that this was one of the few reported US decisions explicitly awarding indemnity to a carrier based on a shipper’s breach of the terms in the contract of carriage. The decision supports the enforceability and utility of certain form clauses commonly inserted into contracts of carriage.

The Court also put the burden of communicating information concerning dangerous goods on shippers, rather than requiring carriers to discern such information from prior shipments.

The Court noted that the large number of cargo containers and diverse types of cargo made it unreasonable to expect that a carrier could undertake a research project with regard to any particular container.”

Lyons & Flood said that the decision could prove quite helpful to carriers and vessel interests (and their P&I Clubs) in defending and/or prosecuting claims relating to similar casualties in the future.

It also said that the Court’s decision provided helpful guidance and clarity to shippers and their agents about the type and degree of information that was required to be provided to ocean carriers at the time of booking.

Finally, the Court confirmed that the Dangerous Goods Declaration form was the most appropriate means to convey such information and/or warnings to ocean carriers.

This was phase 2 of the ruling from the judge, who stated in September (IMN, September 19th 2018 provides other coverage of the judge’s Phase 2 ruling) that, due to the complexity of the issues to be decided, that the trial would be run in phases. Phase 1 determined the cause of the explosion while phase 2 is determining the responsibilities. Phase 3 will follow if an upcoming mediation process does not resolve the remaining damage issues.

The court said that “as the Court finds that only Deltech and Stolt Tank Containers BV bear responsibility, many legal arguments simply do not matter”.

Areas where MSC was freed from liability included tort claims brought by NSB Niederelbe Schiffahrtsgesellschaft MBH & Co. KG (the ship manager of the vessel), Deltech and Stolt, a general average claim brought by Conti (the owner of the vessel), negligence, indemnity and contribution claims brought by NSB,

The case remains ongoing with respect to the determination of the extent of damages recoverable by MSC and the other vessel interests. The decision is published by Westlaw .The Lyons & Flood trial team consisted of Edward Flood, Jon Werner, John Foster, and Martin West.

James Edwin Ryan, Dougherty, Ryan, Giuffra, Zambito & Hession, New York, NY, for M/V MSC FLAMINIA