Judge orders USD99.5 million compensation over Athos I spill

PHILADELPHIA (Nov. 30, 2004) The Athos I, a 750-foot Cyprus flagged vessel, lists eight degrees on November 28, 2004 in the Delaware River. An estimated 30,000 gallons of crude oil was spilled on Friday night resulting in a unifed effort to contain and minimaze the damage to the environment. USCG photo by PO Mike Lutz.

A Philadelphia judge has ordered an asphalt refinery to pay about USD100 million in damages to two Greek shipping companies and the US government over the 2004 Athos I oil spill.

In a 25 July ruling, US federal district court judge Joel Slomsky found Citgo Asphalt Refining and related companies liable for USD55.5 million in damages to Frescati Shipping and Tsakos Shipping & Trading, the owner and manager respectively of the tanker Athos I, which spilled about 264,000 gallons of heavy crude oil into the Delaware River after colliding with a rogue ship’s anchor partially buried in the river bottom.

Citgo was also ordered to reimburse the US government USD44 million it had paid to the shipping companies from the Oil Spill Liability Trust fund.

The ruling marked the culmination of 12 years of litigation and “the devoted commitment of an army of lawyers and experts from the government and the private sector” to uncover the incident’s cause and who was liable, Slomsky noted in his opinion.

The accident occurred after a six-day voyage from Venezuela as the 60,880 dwt, 1983-built vessel approached Citgo’s dock in Paulsboro, New Jersey, with a load of heavy crude. The uncharted 9-tonne anchor ripped holes in the tanker’s ballast and cargo tanks, resulting in a spill that affected some 450 km of shoreline. Cleanup costs and natural resources and third-party claims totalled about USD300 million.

A Pennsylvania district court ruled in 2011 that Citgo had not been obligated to survey the approach to the berth and rejected a damages claim from Frescati Shipping, which was seeking USD180 million to reimburse cleanup costs.

But the US Court of Appeals for the Third Circuit ruled in May 2013 that Frescati were beneficiaries of the safe berth warranty contained in the Citgo voyage charter so could seek damages. The ruling in effect shifted the burden of liability from shipowners to terminal operators when contracting on a safe place to load or unload vessels, according to a lawyer commenting at the time.

The upper court also determined in 2013 that the terminal owner had an obligation to use due diligence in its duty of care to the visiting ship, and that the anchor involved in the accident lay in the ship’s immediate approach to its berth.

However, the appeals court was prevented from making a final determination of liability based upon the facts in the case “due to the failure of the original district court judge to issue specific findings of fact on both the liability and damages despite evidence heard during 41 days of trial”, according to a statement by a Frescati representative.

The Third Circuit consequently remanded the case to a new district court judge – Slomsky – “with instructions to make factual findings in accordance” with the appeals court’s decisions on the issues of law, the shipowner representative explained.

Citgo had attempted to get the US Supreme Court to overturn the Third Circuit’s ruling, claiming in its petition that it had no control over the federal waters where Athos I collided with the abandoned anchor.

According to Law360, an online court filing aggregator, Citgo had asked the Supreme Court to consider “whether a wharf owner’s duty to provide a safe approach for a vessel extended to federal waters and whether a safe berth provision in a voyage contract is a guarantee of safety”. The high court denied Citgo’s petition in 2014 without comment.

 

Source: fairplay.ihs

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