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Shippers’ Law: Taking the heat for MSC Flaminia fire

Federal judge finds chemical manufacturer and NVOCC liable, not the shipowner or liner company.

   In litigation growing out of the 2012 explosion and fire aboard the containership MSC Flaminia, which left three crewmen dead and thousands of containers destroyed, a federal judge found the manufacturer of the chemical and the manufacturer’s NVOCC liable for the accident, not the shipowner or the liner company, Mediterranean Shipping Co.
   Judge Katherine B. Forrest of the Southern District of New York wrote that she “specifically finds that the fire aboard the Flaminia was not caused by the design or neglect of the owner.”
   She noted, “Many of the original claims have been resolved, including those alleging wrongful death and bodily injury. The remaining claims are based on theories of negligence, statutory violations and breaches of contractual obligations.”
   For those claims, Forrest split the trial into three phases. Phase I, concluded last year, determined the cause of the accident was a runaway chemical reaction — auto-polymerization of cargo consisting of 80 percent grade divinylbenze (DVB80) stowed in one of ship’s holds. DVB is a chemical used for the synthesis of ion-exchange resins, an important component of water purifiers.
   While there was what Forrest called a “thicket of claims, cross claims and counterclaims asserted by an array of parties” in the litigation, her Phase II decision found Deltech Corp., the manufacturer of the DVB, and its NVOCC, Stolt Tank Containers B.V., responsible for the accident. As a result, she said many of the legal arguments presented during the trial “simply do not matter.” (In Re M/V MSC Flaminia. S.D.N.Y. No. 12-cv-8892. Sept. 10.)
   Forrest said a “Phase III” trial will follow if an upcoming mediation process does not resolve the remaining damage issues.
   Deltech made what Forrest said was a “fateful choice” to ship three tank containers filled with DVB out of New Orleans instead of a more northeastern port that would have resulted in a shorter voyage and that the chemical was stored under hot sun at a terminal in New Orleans for 10 days, then loaded into a hold adjacent to heated containers filled with another chemical, diphenylamine (DPA).
   That heat “was a substantial contributing factor to the auto-polymerization,” she said.
   To the extent proportionality is relevant to later damage calculations, she assigned Deltech’s portion of liability as 55 percent of the total and Stolt’s 45 percent.
   She found “Stolt possessed extensive information regarding the heat- sensitive nature of the DVB, yet it failed to pass information to the ocean carrier, MSC, in an effective manner regarding the dangers of heat exposure.”
   The court also said Stolt was “responsible for arranging loading of the DVB earlier than it should have and arranging for the container being transported to a terminal in New Orleans “even though it had a reasonable basis to anticipate that the tanks would sit stagnant for a number of days. Stolt’s actions were a significant contributor to the conditions that allowed for additional heating of the DVB and thus the conditions that led to auto-polymerization.”
   The decision comes at a time when there is increasing concern about fires on containerships.
   In September, Sean Dalton, chairman of the cargo committee of the International Union of Marine Insurance, said, “Containership fires and the increasing occurrence of misdeclared cargoes is a worrying trend.”
   He pointed to the fire onboard Maersk Honam in March that resulted in the death of five crew members as “the most recent example of this issue and the loss is likely to generate the largest general average claim in history.” In a general average claim, shippers or their insurers are asked to contribute to the cost of saving a ship and its cargo.
   “As vessels continue to grow larger, the accumulation of cargo values coupled with the increasing risk of onboard fires needs to be addressed urgently by all stakeholders,” IUMI noted.
   Last year, IUMI said it supported a proposal presented by the German Insurance Association GDV “that sets out an improved concept for firefighting facilities on board a containership.”
   “We believe a new technical solution is needed to improve current firefighting practice on container vessels, particularly as these ships are continuing to grow in size,” said Uwe-Peter Schieder of GDVs marine and loss prevention unit. “We suggest creating individual fire compartments below deck to prevent fire from spreading. These compartments would be fitted with fixed carbon dioxide and water-based firefighting systems. Boundary structures would also be fitted above deck to align with the water-cooled bulkheads below and also fitted with fixed fire-fighting systems. In addition, we also recommend the installation of enhanced fire detection systems.”
   Just last week Maersk implemented new stowage guidelines for dangerous goods. It said even though all cargo aboard Maersk Honam was accepted and stowed as per the requirements of the International Maritime Dangerous Goods Code, the fire had showed a need for stowage of dangerous goods to be reviewed in order to optimally protect crew, cargo, environment and vessels.
   Forrest said a number of parties asserted tort claims in the Flaminia litigation based on theories including general negligence, negligent failure to warn and strict liability against other companies.
   In her opinion she found:
   • BDP, which acted as Stolt’s documentation department, was not at fault. “It is true that BDP was under a contractual obligation to Stolt to ensure certain information was contained on the master bill of lading instructions and that it failed to do so. However, the evidence at trial established that this breach did not contribute to the loss; it led to no damage.”
   • Although MSC possessed substantial information regarding the heat- sensitive nature of DVB, it said it lacked sufficient information that the tank containers “not only contained a heat-sensitive product but — very importantly — had already been exposed to conditions that transformed them into ticking time bombs.” She noted there is a specific, industry-accepted manner of conveying necessary information regarding safe handling of dangerous goods: a dangerous goods declaration, but said Stolt did not effectively utilize them.
   • Chemtura, with its DPA chemical shipment adjacent to the DVB, “acted entirely appropriately” and “bears no responsibility for any losses.” Its chemical was delivered in good condition, and while its containers were a contributing heat source to the auto-polymerization, its cargo was properly labeled.
   • Conti, the shipowner, provided a seaworthy vessel.
   • NSB, the vessel operator, “had appropriately trained crew” and the ship had an adequate CO2 fire suppression system. When the polymerization of the DVB resulted in a white, smoky cloud of gas being emitted, the decisions made by the crew were appropriate.
   While Forrest had previously found crew activity on the ship more likely than not created a spark that ignited the explosion, she did not assign fault for that act.

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.