Norwegian shipping group Stolt-Nielsen could be facing a bill of $155m after losing an appeal relating to the fire on the MSC Flaminia in 2012.
The US Court of Appeals affirmed by two to one “in all material respects” the ruling on liability from 2018 made by the US District Court for the Southern District of New York, the company said.
The 6,732-teu container ship (built 2001) suffered a blaze while crossing the Atlantic.
Stolt Tank Containers had 29 tank containers on the vessel, three of which were stowed in cargo hold number four, where the fire began.
Louisiana chemical company Deltech had allegedly produced the cargoes of divinylbenzene (DVB) that sparked an explosion that killed three crew members.
Stolt Tank Containers has been found 45% liable for the accident, together with Deltech, which bears 55% liability.
“The company is disappointed by the decision of the Court of Appeals upholding the lower court’s 2018 decision,” Stolt-Nielsen said.
The group is currently assessing the legal and financial implications of the court’s decision, and noted this included a dissenting opinion.
Further appeals may be made, the group added.
The potential liability is still being assessed, but Stolt-Nielsen will make a provision of $155m in its second quarter results due on 6 July.
Net of tax, this will wipe $115m off the bottom line.
Cash is in place
“The company has liquidity in place to fund its potential liability and remains in a financially strong position,” Stolt-Nielsen said.
In 2013, the vessel interests, including owner Conti and operator MSC Mediterranean Shipping Company, filed counter and cross-claims against Stolt Tank Containers and shipper Deltech.
They alleged that the tank containers were the cause of the fire and that Stolt Tank Containers did not adequately warn of the inherently dangerous nature of the cargo.
In December, operator MSC launched a new appeals court fight after losing a separate judgment for $132m plus interest over the explosion.
The Swiss liner group’s lawyers said they filed the challenge in the Fifth Circuit Court of Appeals in New Orleans.
MSC is challenging a 15 December judgment by US district judge Carl Barbier in favour of the ship’s owner.
Barbier awarded Conti a multi-currency judgment that adds up to $154m plus 5% compounding annual interest, but net of nearly $22.4m in payments that Geneva-based MSC has already made.
TradeWinds reported in April 2022 that Conti had filed the New Orleans federal lawsuit against the liner operator, seeking payment of multiple arbitration awards over the MSC Flaminia blast. The company claimed that MSC had refused to pay $200m, including interest.
With interest added in, MSC has paid at least $30m of the sum, according to court filings.
