The British appeal court has upheld a judge’s decision that the Mediterranean Shipping Company (MSC) is liable for approximately $200 million in damages for a fire that occurred on board the MSC Flaminia Container ship in 2012. The fire and explosion happened in the middle of the Atlantic during a voyage from Charleston, South Carolina, to Antwerp, resulting in the deaths of three crew members, the loss of containers, and extensive damage to the ship. The explosion was caused by the autopolymerization of a chemical called DVB in tank containers that had been shipped from New Orleans.
The ship was salvaged and repaired at great expense to owner Conti, who sought to recover rental fees and losses incurred from the accident from charterer MSC. Arbitrators in 2021 determined that the ship remained leased throughout the ordeal and held MSC liable, awarding Conti approximately $200 million in damages. MSC attempted to limit its liability under the Maritime Claims Limitation Convention 1976, but a judge ruled that their claims did not fall within the scope of the Convention.
The Court of Appeal agreed with Conti’s argument that the claims outlined in Article 2 of the Convention should not include claims by an owner against a charterer for damages suffered by the owner himself. This ruling is expected to have a significant impact on the maritime industry, clarifying the limitation of liability under the 1976 Convention and its applicability to claims between shipowners and charterers in catastrophic incidents at sea.