The M/V MSC FLAMINIA – Explosion, Fire, General Average, Limitation, and nearly four years past…

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On July 14, 2012, the container ship MSC FLAMINIA suffered a catastrophic explosion and fire, while in the middle of the Atlantic, during a voyage from Charleston, S.C. to Antwerp, Belgium.  Three crew members were killed, the vessel suffered massive structural damage, and a substantial number of the container cargos on board were lost or severely damaged.

Given the severity of the situation, General Average was declared and a salvor was engaged  to extinguish the fire and rescue the ship.  On September 10, 2012, the  vessel was towed  into Wilhelmshaven, Germany for redelivery to her owner.  Remaining sound cargo was discharged in Germany and the vessel was eventually towed to Romania for inspection by fire experts and repairs.

Cargo claims were filed in the United States as early as August 20, 2012.  On December 7, 2012, the Plaintiffs Conti 11 Container Schiffahrts-GMBH & Co. KG MSC “FLAMINIA” (“Conti”), as owner, and NSB Niederelbe Schiffahrtsgesellschaft MBH & Co. KG (“NSB”), as technical manager and operator, of the MSC FLAMINIA, filed a Complaint for Exoneration From or Limitation of Liability pursuant to 46 U.S.C. § 183, et seq. (the U.S. Limitation Act).  Traditionally, the owner of a vessel is entitled to assert limitation under this Act. Managers who exercise dominion over a vessel, like NSB, are also entitled to limit.  Evidence of dominion can include the managing and operation of the vessel, employment of the crew, maintaining the vessel, etc.  See, e.g., Dicks v. U.S., 671 F.2d 724 (2d Cir. 1982).

The resulting limitation proceeding consolidated the existing actions filed by certain cargo interests.  Subsequently, the various cargo claimants, NVOCCs, and the estate of the Chief Officer, who died as a result of injuries sustained during the explosion, filed claims in the limitation action.  In response, Plaintiffs Conti and NSB denied liability and invoked several defenses in addition to exoneration and/or limitation under the above mentioned statute, including the Fire Statute, and US Carriage of Goods by Sea Act’s (“COGSA”) fire defense and package limitation. Conti also asserted claims of its own, including the cost to repair the massive damage to its vessel, loss of profits during the two years it took to complete these repairs and General Average contributions from the cargo interests that were saved. In all, numerous parties are involved, respectively represented by 25 law firms, and the aggregate claims of these parties total over $260 million.

The investigation and the US limitation action

The investigation of the cause of the explosion and fire on board the MSC FLAMINIA remains on-going.  However, an initial investigation has led Plaintiffs and MSC to believe that a particular dangerous chemical cargo, i.e., Divinylbenzene (“DVB”), might be responsible.  Accordingly, the vessel interests, the balance of the cargo interests, the balance of the NVOCCs, and the estate and survivors of the Chief Officer have alleged claims in tort (and, when applicable, in contract) against Deltech Corporation, Stolt Tank Containers BV, et al., and other parties, on the alleged basis that the manufacturer, owner, and shipper failed to properly warn about, and safeguard, this chemical cargo.

Stolt, Deltech, and the other related parties have denied any liability with respect to these allegations.  Deltech and Stolt have asserted cross-claims and/or counterclaims against NSB/Conti and MSC alleging inter alia that they failed to properly handle and stow dangerous cargo and failed to follow Deltech’s instruction to stow its cargo of DVB on deck, away from heat sources. They also allege that the ship was unseaworthy and the officers and crew incompetent to prevent the explosion and fire. The vessel interests deny these allegations.  Other theories have also been advanced against other cargoes and they continue to be the subject of both fact and expert discovery.

The US Limitation Action was bifurcated – liability and damages will be tried separately.  The parties have produced hundreds of thousands of documents and taken over 90 depositions in the US and abroad. Fact discovery on the liability phase of the case is nearly finished. Expert reports on liability are scheduled to be exchanged on April 29, 2016 and rebuttal expert reports on June 30. Thereafter, liability expert depositions are to be completed by the end of 2016.

Although it started with a single dramatic event on the high seas, discovery over the course of the past few years has revealed the true complexity and inter-relations between many different parties. Yet, as pretrial discovery of the liability phase of the case will be completed by the end of 2016, the resulting trial should take place sometime in 2017.

Eugene J. O’Connor, Timothy Semenoro, and Robert E. O’Connor of Montgomery, McCracken, Walker & Rhoads, LLP represent Conti 11 and NSB, the owners and operators of the M/V MSC FLAMINIA.