Safe berth warranty to be considered by US Supreme Court
Overview
BIMCO, Intertanko and Intercargo have filed an Amicus Curiae brief in a case currently before the US Supreme Court. The case raises key issues for the shipping industry, since the verdict will establish who is responsible for the safety of a visiting ship to a berth.
In 2013, the US Court of Appeals for the Third Circuit decided that the ship and its owner were implied beneficiaries of the safe berth warranty in a contract between a charterer and a terminal owner. The named port exception did not apply to hazards that are unknown to the parties. The case was then remanded to the District Court to determine if CITGO, which was both the charterers and the owners of the terminal, had in fact breached the warranty.
Judgement was handed down in 2016, concluding that CITGO breached the safe berth warranty and its duty to maintain a safe approach, as they had failed to periodically scan the approach to search for any hazards to navigation. The owner was held to be entitled to all damages caused by the incident. A further appeal followed in which the District Court’s finding on breach of contract was upheld, while the negligence claim against CITGO was overturned.
The US Supreme Court decided to review the case on 22 April 2019.
“The issues to be considered by the Supreme Court are essential as they concern interpretation of the safe berth warranty and, more generally, the balance of duties and responsibilities for a visiting ship and the terminal,” said Søren Larsen, Deputy Secretary General of BIMCO, adding:
“The safe berth clause is commonly understood to be an absolute warranty. It would have serious consequences for the industry if, instead, it were to be considered a due diligence obligation – not only for widely used standard forms and their interpretation - but also for the underlying insurance arrangements. This is why we have joined the case as amici.”
The case before the US Supreme Court is between CITGO Asphalt Refining Company, CITGO Petroleum Corporation and CITGO East Coast Oil Corporation (Petitioners); and Frescati Shipping Company Ltd. (Owners), Tsakos Shipping and Trading SA (Managers), and the United States (collectively the Respondents).
An Amicus Curiae is literally a ‘friend of the court’ who is not a party to the lawsuit but may present arguments and advice to the court. This often concerns the effect a decision may have on a broader audience, in this case, members of the three shipping associations.
The verdict is expected in the first half of 2020.
Feedback or a question about this information?
Posted:
20 December 2019
VPS Bunker Alerts
Veritas Petroleum Services (VPS) publish regular Bunker Alerts based entirely on fuel samples and have kindly permitted BIMCO’s Members to access this information.
The Bunker Alerts are not intended to be an evaluation of overall bunker quality in the port or area concerned, but usually highlight a specific parameter within the fuel which has raised a quality issue.
Latest ice reports for members
Latest piracy reports
Latest industry releasable threats
Related publication
Ship Management Contracts
The handy guide contains explanatory notes to all of BIMCO’s current standard ship management contracts.
Related training
Charter Party Workshop Online
- Online, Online
- 27 January, 2025
The Charter Party Workshop (Masterclass) Online is a series of 10 online sessions and combines a range of lecturers on voyage and time chartering with sessions ...
ELSEWHERE ON BIMCO
Contracts & Clauses
All of BIMCO's most widely used contracts and clauses as well as advice on managing charters and business partners.
Learn about your cargo
For general guidance and information on cargo-related queries.
BIMCO Publications
Want to buy or download a BIMCO publication? Use the link to get access to the ballast water management guide, the ship master’s security manual and many other publications.
About a new business partner
We can help members check new business partners. We also help to recover millions of USD (undisputed) funds every year.
