UK Court Upholds Decision Against MSC Stemming from 2012 MSC Flaminia Fire

A UK Court of Appeals has upheld a judge’s decision on a case stemming from the 2012 fire on board the MSC Flaminia containership, in which Mediterranean Shipping Company (MSC) was found liable for approximately $200 million in damages.

The MSC Flaminia suffered an explosion and fire in 2012 while in the mid-Atlantic on a voyage from Charleston, South Carolina, to Antwerp, resulting in the deaths of three crew members, the loss of hundreds of containers, and extensive damage caused to the ship. The explosion was traced back to the auto-polymerization of the contents of one or more tank containers loaded with a chemical known as DVB, which had been shipped from New Orleans.

The ship was salvaged and repaired at significant cost to the owners, Conti, who brought claims against the charterers, MSC, seeking to recover hire fees for the period the ship was out of service under the charter and to recoup losses incurred due to the casualty. In 2021, arbitrators determined that the ship remained on hire throughout the ordeal and that MSC bore liability for the incident, awarding damages to Conti of around US $200 million.

MSC sought to limit its liability for claims arising from the casualty under the 1976 Convention on Limitation of Liability for Maritime Claims, however a judge held that MSC was not entitled to limit its liability because Conti’s claims were not within the scope of any of the paragraphs of Article 2 of the Convention.

The Court of Appeal accepted Conti’s narrower submission that the claims referred to in Article 2 must be interpreted to exclude claims by an owner against a charterer to recover losses suffered by the owner itself.

The ruling is expected to have significant implications for those involved in shipping litigation and their insurers, as it clarifies the scope of liability limitation under the 1976 Convention and its applicability to claims between shipowners and charterers in cases of catastrophic maritime incidents.

A link to the full judgment can be found here.

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