New MSC Flaminia litigation offers window into secret London fight over explosion

A new lawsuit against Mediterranean Shipping Co (MSC) in New Orleans has unveiled details of an arbitration fight in London that found the liner giant liable to an affiliate of shipowner Conti over the MSC Flaminia explosion.

A series of decisions by a three-arbitrator panel found that MSC, which had the container ship on charter at the time of the July 2012 incident, was not negligent in shipping the cargo of hazardous divinylbenzene (DVB) that sparked the blast.

Remember the MSC Flaminia case? It's still happening nine years after container ship blast

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But, the arbitrators found the Swiss liner operator still violated its time-charter contract with Conti 11 Container Schiffahrts, the affiliate of Germany’s Conti that owned the vessel.

That is because MSC failed to give the shipowner full information about the hazardous characteristics of the chemical “such that owners did not consent to such shipment with knowledge of the dangerous nature and character of the cargo”, the arbitrators wrote in a partial award in March 2021.

That was an “effective cause of the explosion”, they ruled.

MSC has rejected claims that it is liable to Conti, and said it expects that toutstanding matters in the battle will be resolved in English courts.

“MSC expects outstanding matters to be resolved in English courts in accordance with the procedural timetable agreed to by the vessel’s owners and any further sums adjudged by those courts to be owing to the owners will be paid in a timely manner.”

According to documents filed in the lawsuit, the owner and charterer of the 6,732-teu MSC Flaminia (built 2001) took the first steps towards arbitration in the month following the incident by appointing arbitrators David Steel and Stephen Hofmeyr to the tribunal.

Barrister Julia Dias ultimately filled out the panel as its chair.

London maritime arbitration is typically subject to strict secrecy, but the full text of the panel’s awards was filed as part of Conti’s lawsuit to confirm them in the US.

Their awards were handed over a period of several months in 2021, with a final judgment in July, finding MSC liable to Conti 11 for the equivalent of nearly $156m in damages, plus interest.

The arbitrators did not find Conti 11 faultless, concluding that problems with the fire suppression system should have been spotted.

“Pipework of the vessel’s CO₂ system had been incorrectly installed and this should have been detected by a reasonably diligent technician during the periodic scheduled inspections of the system,” the arbitrators found.

That was not a cause of the incident, they found.

The arbitration did not involve other parties in the dispute in New York, where a federal judge found chemical company Deltech and the tank containers unit of Oslo-listed Stolt-Nielsen liable for the MSC Flaminia explosion.