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A Legal Perspective - Lawsuit Stemming from Hitting a Submerged Anchor

July 19, 2017

Boaters don’t usually have anything good to say about running aground or hitting underwater objects. At best, such affairs could result in bruised egos when they take place before an audience. At worst, a catastrophic grounding could result in sinking or serious damage to propellers, shafting, and other underwater gear.
The outcome of these things depends largely on the nature of the bottom and speed of the vessel. In the aftermath of a grounding, the state of the tide and whether fuel tanks are topped off will have a significant impact on how the story ends. Such factors can determine whether a weekend outing is cheerfully resumed after 15 minutes of assistance from a commercial towing company, or whether a barge-mounted crane is needed and a boat is out of commission for the remainder of the season.
As long as no one is hurt, such events might simply be chalked up as unpleasant experiences. But when it happens on a large scale, the damages can run into the hundreds of millions. And that was the case when a 748-foot tanker struck an unknown, abandoned ship anchor on the bottom of the Delaware River on its approach to docking at a refinery in New Jersey.
Unfortunately, the anchor holed the bottom of the single-hulled tanker. This resulted in the spillage of approximately 264,000 gallons of crude oil. An extensive clean-up effort was undertaken. The cost of that clean-up resulted in litigation, which is how the matter found itself before a federal court in Pennsylvania.
Although the court’s decision here is relatively recent, the underlying events date back more than a decade, showing that this was a long, protracted matter. Shortly after noon on November 26, 2004, the tanker reached the entrance to Delaware Bay. It was completing the last leg of a voyage from Puerto Miranda, Venezuela. A pilot boarded and brought the ship to a point close to the refinery’s entrance. At around 8:30 that evening, a new pilot boarded for the final docking.
The tide was low and less than an hour away from its lowest point. The refinery’s dock is located on a jetty on the New Jersey side of the Delaware River. A federal anchorage separates the channel from the refinery’s berthing area.  However, the anchorage is not controlled by the refinery. It is maintained by government agencies, with the Army Corps of Engineers performing depth surveys to assess the need for dredging.
At around 9:00 that evening, the pilot was maneuvering the ship through the federal anchorage. That’s when the ship took on a heavy list and oil was seen in the Delaware River. The culprit in the holing, a nine-ton anchor measuring almost seven feet in length, was recovered but its owner was never identified.
In the legal battle that followed, interests for the vessel, the refinery, and the U.S. Government confronted the issue of how liability would be apportioned for the damages, or in other words, how blame would be decided. The shipping interests asserted $143 million in clean-up costs. The U.S. Government reimbursed the shipping interests close to $88 million under the Oil Pollution Act of 1990.
The shipping interests went after the refinery for breach of the safe berth warranty contained in the contract for chartering the ship. There are actually more than three entities in this dynamic. I’m sacrificing some technical accuracy by not identifying each and every party in the interest of simplifying the opposing camps. The court documents are lengthy and go into considerable detail about the legal relationships between parties, as well as providing insight about the approaches to Delaware Bay, Cape Henlopen and Cape May, marine pilotage, shipboard fore and aft trim, and hydrographic surveys.
Ultimately, after 70 days of testimony, the court awarded the shipping interests $55,497,375.95 for breach of warranty and negligence claims, determining that the refinery interests had a duty to exercise reasonable diligence in maintaining a safe approach to their berthing facilities. Ultimately, the lengthy litigation outlived the vessel, which had since been scrapped. All that remains of it is a section of hull with two jagged holes which sits in a shed in Baltimore, Maryland.
As we enter another Fourth of July weekend, I wish readers an enjoyable boating season, free of groundings and other mishaps. Best wishes for a happy and safe summer!

Reference: In re Petition of Frescati Shipping Company, Ltd., as the Owner of the M/T Athos I, and Tsakos Shipping & Trading, S.A., as Manager of the M/T Athos I, for Exoneration from or Limitation of Liability, Civil Action No. 05-cv-305 (JHS) & United States of America v. Citgo Asphalt Refining Company, et al; Civil Action No. 08-cv-2898 (JHS) United States District Court for the Eastern District of Pennsylvania.

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