Spotlight - Court Decisions

Welcome to the Maritime Spotlight. Here you'll find hundreds of pages of information on current and recent developments, port security, government compliance, legislation and court decisions. You can access links to industry resources and organizations and archived materials on maritime matters, as well. 


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EU Court of Justice – anti-suit injunction invalid within EU

The European Court of Justice (ECJ) ruled that a court in one Member State is without authority to order a party to litigation in that court not to commence court proceedings or to cease those proceedings in another Member State on the ground that they are contrary to an arbitration agreement. In the instant case, a dispute arose following an allision by a tanker owned by defendant with a dock owned by plaintiff. Suit was brought by plaintiff in a court in Italy. Defendant then obtained an anti-suit injunction from a court in London, based on a clause in a charterparty that provided for arbitration of disputes in London. The ECJ held that under EU regulations, no Member State has authority to obstruct the jurisdiction of a court of another Member State.

Allianz SpA v. West Tankers Inc., Case C-185/07 (ECJ, 10 February 2009).

Carmack Amendment applies to shipments under through bill of lading

The US Court of Appeals for the Ninth Circuit ruled that the Carmack Amendment applies to goods shipped from overseas to an inland location in the United States under a through bill of lading covering both the oceanic and the rail portions of the transport. In the instant case, the goods were damaged when the train on which they were being carried derailed. When the shippers filed claims, defendants asserted that the dispute had to be litigated, if at all, in Tokyo as provided in the through bill of lading, which had incorporated the Carriage of Goods at Sea Act (COGSA). The shippers contended that the liberal forum selection provision of COGSA did not apply; rather, venue was restricted by the Carmack Amendment. The district court granted carriers’ motion to dismiss and the shippers appealed. Recognizing a split in the circuits, the appellate court reversed, holding that the Carmack Amendment applied in this case. The matter was remanded to the district court to determine whether there had been compliance with the applicable provisions of the Carmack Amendment. Note: This issue may now be ripe for the US Supreme Court.

Regal-Beloit v. Kawasaki Kisen Kaisha, No. 06-56831 (9th Cir., February 4, 2009).

COGSA limitation of action provision extinguishes maritime lien

Over a vigorous dissent, the US Court of Appeals for the Third Circuit ruled that running of the one-year time-for-suit provision for cargo damage claims provided for in the Carriage of Goods at Sea Act (COGSA) extinguishes the related maritime lien on the vessel. In late 1992, plaintiff chartered a tanker to deliver two petroleum products. The charter party incorporated COGSA. During discharge, it was discovered that the two cargoes had become cross-contaminated while on the tanker. Defendant ship owner sought arbitration of the dispute in early 1993. Plaintiff did not present its claim, which was brought only against the ship owner in personam, to the arbitration panel until 1995, at which time defendant asserted that the claim was barred by the one-year limit in COGSA. Plaintiff subsequently discovered that the ship had been sold. Plaintiff had the ship arrested, asserting an in rem claim. The new owner, on behalf of the ship, moved to vacate the arrest warrant. When the motion was denied, the new owner appealed. The major issue was whether the arrest based on the in rem claim against the ship related back to the original arbitration. The court held that there was no relation back and that the in rem claim was controlled by COGSA. The dissent contended that the new in rem action related back to the original claim and arbitration.

Petroleos Mexicanos Refinacion v. M/T King A, No. 07-3402 (3rd Cir., January 27, 2009).

Kirby comes ashore

The US Court of Appeals for the Eleventh Circuit ruled that the Supreme Court’s 2004 decision in Norfolk Southern Railway Co. v. Kirby that a cargo owner’s recovery against a carrier is limited by the liability limitation to which the intermediary and the carrier agreed applies equally to non-maritime cases. The Kirby decision began with the statement: "This is a maritime case about a train wreck." In the instant case, plaintiff shipper contracted with defendant common carrier for shipment by truck of various loads of communications equipment. The master contract notified the shipper that third party carriers might limit their liability for loss and provided shipper with an opportunity to request excess valuation coverage. The contract and manifest between defendant common carrier and a third-party trucking company provided that liability would be limited to $200,000 per truckload unless excess liability was specifically requested and paid for in advance. No such election and payment were made. The truck and cargo were stolen en route. Plaintiff’s claim for full recovery was denied and litigation ensued. The court held that Kirby applies to land-based transportation contracts and that the Carmack Amendment requires only that the shipper be provided with a reasonable opportunity to choose between two or more levels of liability.

Werner Enterprises v. Westwind Maritime International, No. 07-15488 (11th Cir., January 12, 2009).

Bill introduced re homeland security grants

Representative Weiner (D-NY) introduced the

Homeland Security Transparency Act of 2009 (H.R. 625) to amend the Homeland Security Act of 2002 to direct the Secretary of Homeland Security to require, as a condition of receiving a homeland security grant, that a grant recipient submit reports on each expenditure made using grant funds. (1/21/09).

Bill introduced to fund transportation infrastructure projects

Senator Wyden (D-OR) introduced the

Build America Bonds Act of 2009 (S. 238) to provide $50,000,000,000 in new transportation infrastructure funding through bonding to empower States and local governments to complete significant infrastructure projects across all modes of transportation, including roads, bridges, rail and transit systems, ports, and inland waterways, and for other purposes. (1/14/09).

Bill introduced to improve the LHWCA compensation system

Senator Isakson (R-GA) introduced the

Longshore and Harbor Workers’ Compensation Act Amendments of 2009 (S. 236) to amend the Longshore and Harbor Workers' Compensation Act to improve the compensation system, and for other purposes. (1/14/09).

Court upholds conviction for failure to properly “maintain” ORB

The US Court of Appeals for the Second Circuit upheld the conviction of a vessel operator for failure to properly maintain an oil record book (ORB) while the vessel was within the navigable waters of the United States. In the instant case, the defendant was convicted at a jury trial for, among other things, having on board while in US waters an ORB with entries known to be materially inaccurate. Evidence showed that members of the crew, at the direction of the chief engineer, had discharged oily waste water directly into the ocean while the vessel was at sea and that the chief engineer had made entries in the ORB that did not reflect such improper discharge. On appeal, defendant argued that it could only be convicted for a violation of the Act to Prevent Pollution from Ships (APPS) if the ORB entries had been made while the vessel was in US waters (which was not the case here). The appellate court rejected that argument, finding that a violation of APPS occurs when the vessel enters US waters with an ORB that contains knowingly inaccurate entries.

United States v. Ionia Management S.A., No. 07-5801-cr (2nd Cir., January 20, 2009). Note: This court has adopted the rationale espoused by the Fifth Circuit in the recent case of United States v. Jho. While not condoning the use of magic pipes, personally, I consider both decisions to be flawed because I believe that there should be a requirement in the elements of the offense that the ORB be presented to a Coast Guard boarding officer or other government official before the offense can be said to have occurred. MARPOL regulations require only that full and complete entries be made in the ORB of all oil transfers and that the ORB be kept on board for examination by government officials. The purpose of APPS is to allow US officials to enforce MARPOL, not to create new offenses.

Interpretation of situs and employee provisions of LHWCA

Over a vigorous dissent, the US Court of Appeals for the Fifth Circuit ruled that an individual injured while repairing a saltwater disposal pump on a fixed oil and gas production platform located in state territorial waters is a maritime employee for purposes of the Longshore and Harbor Workers’ Compensation Act (LHWCA). The living quarters were on the platform, but the petitioner also performed duties related to an adjacent sunken barge used for oil storage and shipment. The court held that, for the purposes of the LHWCA, the docking facility on the barge qualified as a maritime situs and that the petitioner was a land-based maritime employee because he assisted in the cargo loading process.

Coastal Production Services Inc. v. Hudson, No. 06-60766 (5th Cir., January 14, 2009).

Assignment of tort claims disfavored

The US Court of Appeals for the Fifth Circuit ruled that, under general maritime law, assignment of tort claims from the injured party to one tortfeasor permitting the settling defendant to proceed against a co-tortfeasor is invalid. In the instant case, plaintiff’s vessel allided with and damaged a dock. The dock owner asserted a claim against the vessel owner, who contended that the allision was due to the disruption of its vessel’s VHF communications with attending tugs by the improper use of radios on nearby defendant’s vessel. Plaintiff notified defendant of the dock owner’s claim, but did not include defendant in the settlement negotiations with the dock owner. As part of that settlement, plaintiff received an assignment of the dock owner’s potential claim against defendant. Plaintiff then brought suit against defendant for damages to plaintiff’s vessel and for the damage to the dock. Following defendant’s motion for partial summary judgment, the trial court dismissed the claim for damages to the dock. Plaintiff appealed. The appellate court affirmed, holding that contribution claims between a settling defendant and a co-tortfeasor are prohibited.

Ondimar Transportes Maritimos v. Beatty Street Properties, Inc., No. 0820079 (5th Cir., January 9, 2009).