Safe berths, charters and occupiers’ liability in the US

An otherwise unremarkable, but bitterly fought, safe berth / occupiers’ liability case from the Eastern District of Pennsylvania a few weeks ago. A tanker, the Athos I, was owned by Frescati, time-chartered to a tanker pool Star, and voyage-chartered by them to Citgo, an oil company, to carry a crude oil cargo from Venezuela to its own facility at Paulsboro, NJ (opposite Philadelphia). On the way in to the berth she hit an abandoned anchor, was holed, and oil escaped costing tens of millions to clean up. Could Frescati sue Citgo, the voyage (sub)charterers, for repair costs to the vessel (which actually they scrapped) plus the other costs incurred? Yes. The safe berth warranty was broken by Citgo. Interestingly the courts had earlier held that this enured to the benefit of Frescati, disponent owner under the time charter to Star, as a third-party beneficiary (In re Frescati Shipping Co Ltd, 718 F.3d 184, 200 (3d Cir. 2013): something lawyers in England might care to bear in mind, especially where a mesne charterer is bankrupt). In addition there was an occupiers’ liability claim against Citgo for negligence, which also succeeded, the court making it clear that there could be a pro-active duty to check for hidden hazards using things like sonar side-scans. Frescati recovered the clean-up costs they had paid, plus the repair costs, even though no repairs had in fact been done (the vessel having been scrapped); the latter point confirming that the rule as repair costs is much the same both sides of the Atlantic.

See In re Petition of Frescati Shipping Co Ltd, Civil Action Nos. 05-cv-305 (JHS), 08-cv-2898 (JHS), ED Pa, 25 July, 2016.

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One thought on “Safe berths, charters and occupiers’ liability in the US

  1. Pingback: Safe berths, charters and occupiers’ liability in the US – Inno TankBulk

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