Stolt-Nielsen and chemicals manufacturer Deltech bear full legal responsibility for the fatal July 2012 fire aboard a Mediterranean Shipping Co containership that has resulted in estimated $280m liability, a US federal judge ruled Monday.
Deltech was found 55% liable for the incident and Oslo-listed Stolt 45% in a 122-page ruling by US District Judge Katherine Forrest, of the court for the Southern District of New York.
Three other parties in the bitter legal fight have been cleared of any liability in the fire aboard the MSC Flaminia, which killed three crew members and crippled the ship.
These include the charterer, Swiss liner giant Mediterranean Shipping Co; the vessel’s owner, Germany’s Conti; and technical manager NSB Niederelbe.
The long-running trial may now proceed to a third phase if an upcoming mediation process does not resolve remaining damage issues, the decision indicates.
"We are pleased with the results and we look forward to establishing our damages in phase three," said Eugene O'Connor, a lawyer with Montgomery McCracken representing Conti and NSB.
Ed Flood, a partner with New York law firm Lyons & Flood representing MSC, was also happy with the decision.
"We believe we've been completely vindicated by the decision, which puts the blame squarely on Deltech and Stolt," he told TradeWinds.
Forrest’s ruling may come as somewhat of a surprise given that her November findings as to the fire’s cause led some legal observers to suggest liability was likely to be spread among the five parties.
But the judge instead came down hard on Louisiana-based Deltech, which manufactured the cargo — the chemical divinylbenzene (DVB) — and Stolt Nielsen’s Stolt Tanker Containers, which booked the voyage aboard MSC Flaminia and trucked the DVB to New Orleans Terminal.
“Most importantly, contrary to their own safety protocols developed after prior polymerisation incidents that determined that shipping DVB out of New Orleans should be avoided in warmer months, Deltech booked the shipment of DVB80 out of New Orleans for late June,” Forrest wrote.
“This fateful decision was the result of—at the very least—a combination of a considered decision at the highest levels of Deltech and managerial errors that followed.”
Compounding the problem was Deltech’s decision to have containers holding the DVB “filled several days earlier than necessary, resulting in the containers sitting stagnant in the hot New Orleans sun.”
DVB is a monomer that, when exposed to heat, can become a polymer in a violent chemical reaction.
“These two decisions most directly led to the auto-polymerisation,” Forrest found.
“While it is true that other factors contributed, these decisions were by far the most critical. Deltech therefore bears significant responsibility for the losses flowing from the explosion.”
As for Stolt, it “possessed extensive information” regarding the heat sensitivity of the DVB, yet failed to pass along to MSC such information about the contents to be carried in three cargo tanks, the court found.
Stolt also was found responsible for arranging loading of the DVB into containers “earlier than it should have,” and arranging for their transport to the terminal, “even though it had a reasonable basis to anticipate that the tanks would sit stagnant for a number of days.”
In conclusion, Forrest found that “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-polymerisation.”
