The Ninth Circuit recently held that punitive damages are available to seafarers who sustain injuries from unseaworthy conditions under the general maritime law. In doing so, it rejected a previous Fifth Circuit decision. The decision appears to suggest that if an owner knows of the unseaworthiness but does nothing, it is immune from punitive damages; yet, if an owner knows nothing, it may still be subject to punitive damages if the unseaworthy condition is sufficiently egregious in the opinion of the court.
The US Court of Appeals for the Fifth Circuit recently jettisoned the six-factor, fact-intensive Davis & Sons test for maritime contracts in favour of a "simpler, more straightforward test consistent with the Supreme Court's decision in Norfolk Southern Railway Co. v. Kirby". The decision will affect contractual indemnity provisions in offshore drilling contracts.
The US Court of Appeals for the Eleventh Circuit recently reinforced the availability of a maritime attachment as a means of obtaining security for a foreign arbitration. However, in so doing, the court highlighted that a maritime attachment must include an element of obtaining jurisdiction and may not be used solely to obtain security from a party already subject to the court's jurisdiction.
The US Court of Appeals for the Fifth Circuit recently ruled that the responsible party for an oil spill may obtain contribution for purely economic damages from another tortfeasor under the Oil Pollution Act 1990 irrespective of the general maritime law's economic loss rule. This decision provides some comfort to statutorily designated responsible parties that are held strictly liable in the first instance for significant costs relating to clean-up, remediation and third-party damages resulting from an oil spill.
Over the years, a number of US Customs and Border Control (CBP) rulings have addressed the ability of foreign-flagged vessels to conduct certain activities relating to the offshore energy industry. CBP recently issued a notice of proposed modifications and revocations of its prior letter rulings relating to these activities, which would require them to be conducted by qualified vessels with coastwise endorsements under the Jones Act regulations.
Different insurance issues can arise depending on whether the insured owns and operates vessels, demise or time charters vessels or provides employees to work on vessels that it does not own, operate or charter. As complete coverage cannot be taken for granted, it is important for an insured to ensure that it fully details its marine-related operations to its broker and has appropriate coverage for personal injury claims arising from its maritime operations.
In a recent bareboat charter case, Malin International Ship Repair & Drydocks, Inc performed work for Oceanografia, for which the balance on its unpaid invoices was outstanding. Malin thus attached the fuel bunkers on board the vessel. Oceanografia argued that it did not own the fuel bunkers because the purchase price had not been paid; but the court held that the agreement to purchase the fuel, together with possession, was sufficient to allow for attachment.
In a recent case involving a product liability action against the retailer of a recreational boat, the defendant successfully disputed the allegations of negligence, strict liability, breach of contract and breach of warranty, as well as a claim under the Magnuson-Moss Warranty Act. The defence presented a much more streamlined case than the plaintiffs, which included relying on extensive cross-examination of the plaintiffs' witnesses in order to highlight the holes in their case.
In a recent case involving multiple courts and actions, Jewel Owner Ltd and International Shipping Partners secured a victory before the US Court of Appeals for the Eleventh Circuit. Not only did Jewel win its liability case, it also protected its settlement funds in another matter regarding a Rule B attachment and was awarded attorney's fees for doing so.
Norwegian Cruise Line recently secured a legally significant opinion in a Jones Act lawsuit brought by a US crew member. The opinion has been widely reported and heavily cited, as the case is the first to involve a cruise line defendant in a Louisiana court. Further, it comes at a time when the applicability of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards to US crew members is on appeal to the US Court of Appeals for the Eleventh Circuit.
Despite numerous attempts to resolve its salvage contract dispute with Pico, Mammoet Salvage Americas (MSA) was forced to commence arbitration proceedings pursuant to the terms of the contract. After more than 18 months of proceedings and several weeks of hearings, the arbitration panel recently awarded MSA over $28 million for Pico's breach of the clear language found in the contract and the addendum negotiated by the parties.
US courts continue to rule against physical fuel suppliers in the ongoing saga following the financial collapse of OW Bunker & Trading A/S. Separate courts in three leading maritime judicial circuits recently ruled that physical bunker suppliers contracted by OW Bunker to provide fuel to vessels were not entitled to maritime liens against the vessels. More decisions on this issue are expected at both the district and appellate court levels.
The shipping industry has made great strides in improving safety through improved training programmes, safety policies and safety programmes. However, in creating such programmes, it is important to consider the situation from the employees' perspective and avoid incentivising unwanted behaviours. Encouraging the reporting of incidents, illnesses or near misses for all events can create a culture of reporting that will make incident reporting second nature.
Even the safest and most careful companies will have an accident aboard one of their vessels where an employee gets hurt. When this happens, there is a real possibility that an employee could file a lawsuit against the company. The effective management and outcome of the case lies in preparing for litigation. In particular, when litigating a Jones Act personal injury claim, proper planning can help to turn the tide in your favour.
The collapse of OW Bunker A/S and its worldwide subsidiaries left a multitude of creditors seeking other methods of collecting payment for fuel ordered on credit by OW Bunker and delivered to numerous vessels. The US District Court for the Eastern District of Louisiana recently ruled that a fuel supplier that had contracted with OW Bunker to provide fuel to a vessel was not entitled to a maritime lien against this vessel.
In the past, most companies involved in the marine industry were specialised. However, the industry has changed and there are now fewer companies in the market, with each company often working in multiple areas. The efficiencies gained by service expansion have made the provision of marine services easier. However, as companies move beyond traditional business models, there are numerous pitfalls to avoid.
When an accident occurs on a vessel, an investigation is necessary to determine what happened, how it happened and how it can be prevented from happening in the future. A company can create a safer workplace while reducing its claim exposure by developing a plan to ensure that the documents generated during the investigative process are helpful in preventing a future accident while preserving its ability to defend a claim against an injured party.
Oil spills are a risk regardless of how safe and well trained your crew is. The federal government has developed a plan for responding to spill incidents and it is important to have a company plan that provides a response procedure that allows the government to be notified, manages the company's response to the incident and allows the government and the company to work together to minimise the effect of the spill.
Shipping companies attempt to minimise risk in a number of ways. However, despite best attempts to minimise exposure, 'acts of God' may occur that are beyond their control and that could cause damage for which they may be responsible. Nevertheless, some advance planning and an analysis of hurricane procedures could protect shipping companies from future liability.
The US District Court for the Southern District of Texas has ruled in a case arising from the disappearance of the ENSCO 74 during Hurricane Ike in 2008. The owners and operators of a ship which allided with the missing rig sued ENSCO for damages. The judge ruled that ENSCO had made a full good-faith search for the ENSCO 74, and thus was not negligent in failing to locate the ENSCO 74 or liable in damages to the ship interests.