Dive Brief:

• The owner and the manager of the ship that slammed into Francis Scott Key bridge in Baltimore last week filed a petition in U.S. District Court in Maryland to limit their liability for the accident to $43.7 million — the amount the ship is said to be worth right after the collision plus the revenue it was to receive for the cargo it was hauling.
• “The Casualty was not due to any fault, neglect, or want of care on the part of Petitioners, the Vessel, or any persons or entities for whose acts Petitioners may be responsible,” the companies said in the filing.
• Owner Grace Ocean and manager Synergy Marine, both based in Singapore, are filing under the Limitation of Liability Act, a Civil War-era law that was enacted to help shield shipping companies from ruinous damages for accidents at sea.

Dive Insight:

Cost of the accident, at one of the busiest global shipping ports in the United States, is expected to be as high as $4 billion to salvage the ship, clean up the debris, replace the bridge and compensate for the loss of life and disruption of business that resulted.

President Biden has said the federal government will cover costs to get the bridge rebuilt, but years of legal battles are expected to sort out which parties will ultimately foot the bill. 

The ship, Dali, is insured for up to $3.1 billion by the Britannia P&I club, a protection and indemnity club, which in turn has reinsurance from some 80 reinsurance companies in a fund managed by Axa. 

Insurance specialists were expecting the owner to petition under the 150-year-old law, which is similar to the law that was evoked to limit liability after the Titanic sank in 1912.  

“This is the first step in the process,” James Mercante, a New York City-based attorney experienced in maritime law, told Yahoo! News. “Although it’s a humongous case with a very unusual set of circumstances, I don’t think it’s going to be that complicated in legal terms…. All aspects of the law are very clear here, so I think the thing that will take the time here is the facts. What exactly went wrong? What could have been done?”

In the petition, the owner and manager calculate the cost of Dali to be about $90 million, from which they subtracted $28 million for repairs and $19.5 million for salvage costs, resulting in a $42.5 million valuation immediately after the collision. They calculated the revenue the ship was to receive for its cargo at roughly $1.2 million, generating their estimated liability of $43.7 million.  

“The value in the Interim Stipulation is expected to be substantially less than the amount that has been or will be claimed for any losses or damages arising out of the Casualty,” the owner and manager say in the filing.