UK insurer International Transport Intermediaries Club (ITIC) has revealed how a naval architect and a shipbuilder came under legal fire over the design and construction of an offshore oil and gas ship.
The dispute arose when the 24-metre newbuilding faced considerable operational limitations that were attributed to unexpected vibration issues in its rudders, leading to hull stress and subsequent structural cracking.
ITIC said that despite the designer’s best efforts to solve the problem, and the shipowner and shipyard’s collaboration to rectify the causes through various modifications, no significant reduction in vibration was achieved.
Further investigation suggested cavitation was to blame, due to the original propeller designs.
Cavitation is the formation of bubbles from a nearby moving blade, such as the propeller, which results in the pitting of the rudder and/or blades’ surface.
Despite the naval architect’s proposal to change the propellers, which was covered by ITIC, the modifications only marginally decreased the vibrations and the vessel still failed to meet its intended speed and performance specifications, the insurer explained.
Third-party experts then concluded that the most likely cause of the problem was the insufficient clearance between the propellers’ tips and the vessel, which resulted from the original design.
However, the experts also recommended replacing the rudders and correcting the rudder support structure, which was found not to have been constructed according to the naval architect’s design, ITIC said.
The shipowner took legal action against both the designer and the shipyard.
The unnamed company sought damages for rectification costs, loss of earnings, a drop in the vessel’s value and other related expenses.
The claim totalled $5m.
Mediation and settlement
Following a long legal process that involved challenges in obtaining expert evidence to support the claim, all parties opted for mediation.
Due to limited personal funds and policy coverage limits, the naval architect agreed to a settlement contribution of $400,000, indemnified by ITIC, the insurer said.
Mark Brattman, claims director at ITIC, said: “The agreement reached between the parties involved in the dispute not only resolved the matter at hand but also emphasised the intricate interdependencies involved in maritime design and construction.”
“It highlights the significance of conducting a thorough design review, and, where possible, making sure the builders adhere to the design specifications,” he added.
Brattman argued it is important for the designer to have insurance coverage in place to manage the risks that come with maritime design.
