The US Court of Appeals has affirmed by two to one, in all material respects the ruling on liability from 2018 by the US District Court for the Southern District of New York regarding the 2012 incident on board the MSC Flaminia, as Stolt-Nielsen revealed today.
Stolt-Nielsen with a portfolio in three global bulk-liquid and chemicals logistics businesses Stolt Tankers, Stolthaven Terminals and Stolt Tank Containers Stolt Sea Farm and various investments, said today that Stolt Tank Containers BV has been found at fault together with Deltech for 45% and 55%, respectively.
“The company is disappointed by the decision of the Court of Appeals upholding the lower courts 2018 decision. The company is currently assessing the legal and financial implications of the Courts decision, which included a dissenting opinion, and is considering further appeals and mitigations,” Stolt-Nielsen said in a statement.
The potential liability for the full award is being assessed. Stolt-Nielsen said the “company will record a loss provision related to the ruling in its second quarter financials, due to be reported on July 6, 2023, of $155 million, which net of tax will impact the companys net profit for the quarter by approximately $115 million.”
Stolt-Nielsen added that the company has liquidity in place to fund its potential liability and remains in a financially strong position.
As reported in its annual reports, the ruling concerns the incident that took place on July 14, 2012, during which a fire broke out in cargo hold number four aboard the MSC Flaminia during the ships crossing of the Atlantic Ocean.
During the crews attempt to extinguish the fire, an explosion occurred.
Stolt Tank Containers had 29 tank containers onboard the ship, three of which were stowed in cargo hold number four. On May 29, 2013, the vessel interests, namely the owner, manager and operator filed counter and crossclaims against Stolt Tank Containers and Deltech, the shipper of the three tank containers stowed in cargo hold number 4, alleging that these tank containers were the cause of the fire and that Stolt Tank Containers did not adequately warn of the inherently dangerous nature of the cargo.
“The Phase 2 trial was completed in August 2018. The US District Court for the Southern District of New York delivered a judgment on September 10, 2018, which held the Group jointly and severally liable with Deltech for the incident,” as Stolt-Nielsen adds.