Legal

Reed Smith: Legal ramifications of Baltimore Bridge collision

Lawsuit raises legal and factual issues, including as to the owners’ and managers’ knowledge of the condition of Singapore-registered vessel “Dali” vessel, says lawyers Han Deng and Alice Colarossi.

Published

6 months ago

September 27, 2024

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MPA: Singapore-registered ship in Baltimore bridge crash passed previous foreign port state inspections

Law firm Reed Smith on Thursday (26 September) shared comments of its transportation lawyers Han Deng and Alice Colarossi on the Baltimore bridge collision incident involving Singapore-registered vessel “Dali” in March:

Several claims have been filed against the owners and managers of the cargo ship in the aftermath of the incident, including (among others), on September 18, 2024, a USD 100 million claim by the U.S. Department of Justice, which alleged that the collapse was caused by the “outrageous, grossly negligent, willful, wanton, and reckless” conduct of the owners and operators, who they allege sent out an unseaworthy and poorly maintained vessel with a history of equipment failures to navigate a critical waterway.

The government opposes the petition that was filed by the owners and managers of the vessel to limit their liability to approximately USD 44 million under the U.S. Limitation of Liability Act—a U.S. statute dating back to 1851 that allows ship owners to limit their total liability to the value of the vessel and pending freight after major incidents (while the Convention on Limitation of Liability for Maritime Claims does not apply in the United States).

The lawsuit raises a number of legal and factual issues, including as to the owners’ and managers’ knowledge of the condition of the vessel, and the circumstances and causes of the incident.

At the Port of Baltimore, ships are typically required to have a harbor pilot on board when navigating through the harbor and approaching or leaving the port. This is a common rule in many U.S. ports to ensure safe passage through waterways, such as crowded harbors or narrow canals.

It requires tugs to assist ships in and out the port but does not mandatorily require extended escorts into the port’s channel or further into the bay. Tug escorts are only required in Baltimore for specific cargo types like oil or liquid natural gas, and for docking and undocking operations of larger ships with limited maneuverability.

Harbor pilots or the ship’s operator can request extra tug services if and when they have safety concerns. Two harbor pilots were temporarily in charge of navigating the DALI on her exit from the Port of Baltimore.

Two tugboats also initially guided the ship out of the dock and then left the ship when she was safely inside the channel 20 minutes before the collapse. Minutes before hitting one of the bridge supports, the pilot called for tug assist, but it was too late.

The incident raises questions about safety measures for large ships passing under bridges, including whether additional tugboat escorts could prevent such accidents. Some have advocated for new regulations requiring tug escorts, changing protocols for tug escorts or standardizing escort rules across ports.

The rules currently vary depending on the port and state, and there are currently no harmonized tug escort requirements at the U.S. federal level, except in certain safety zones and for certain tankers. This could change. Note that there are no confirmed new regulations requiring towboat escorts for ships leaving the Port of Baltimore as a result of the collapse.

Implementing such new regulations could introduce complications, such as delays and additional costs. Further insights may emerge from ongoing investigations, including a report from the National Transportation Safety Board, which could address the feasibility and potential benefits of towboat escorts in preventing similar incidents.

Photo credit: Baltimore County Fire Department
Published: 27 September, 2024

Sanctions

US OFAC sanctions first Chinese teapot refinery and oil tankers over Iranian links

Shandong Shouguang Luqing Petrochemical and its chief executive officer were added to OFAC’s sanctions list for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil.

Published

8 hours ago

March 24, 2025

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The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Thursday (20 March) sanctioned a “teapot” oil refinery and its chief executive officer for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil, including from vessels linked to Ansarallah, commonly known as the Houthis, and the Iranian Ministry of Defense of Armed Forces Logistics (MODAFL).

Shandong Shouguang Luqing Petrochemical Co., Ltd (Luqing Petrochemical), a teapot refinery in Shandong Province, has purchased millions of barrels of Iranian oil worth approximately half a billion dollars.

Luqing Petrochemical received Iranian oil transported by shadow fleet vessels, some of which have been sanctioned for their role transporting Iranian petroleum linked to the Houthis and MODAFL, including the MEHLE (IMO: 9191711) and the KOHANA (IMO: 9254082). In mid-2022, Luqing Petrochemical was identified as a buyer of Iranian oil associated with the Iranian military and Iranian military forces.

Luqing Petrochemical is being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. PRC national Wang Xueqing serves as the chief executive officer and legal representative of Luqing Petrochemical, and is being concurrently designated pursuant to E.O. 13902 for having acted or purported to act for or on behalf of, directly or indirectly, Luqing Petrochemical.

“Teapot refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror,” said Secretary of the Treasury Scott Bessent.

“The United States is committed to cutting off the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear program.”

OFAC additionally imposed sanctions on 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, comprising part of Iran’s “shadow fleet” of tankers supplying teapot refineries like Luqing Petrochemical.

Iranian crude oil is transported to teapot refineries via a “shadow fleet” of vessels that usually engage in deceptive shipping practices, including automatic identification system (AIS) manipulation.

OFAC sanctioned eight vessels that constitute part of this fleet, including the Comoros-flagged NATALINA 7 (IMO: 9310147), Panama-flagged CATALINA 7 (IMO: 9310159), AURORA RILEY (IMO: 9181649), and VIOLA (IMO: 9254915), San Marino-flagged MONTROSE (IMO: 9281695), Barbados-flagged VOLANS (IMO: 9422988) and BRAVA LAKE (IMO: 9232876), and the currently unflagged TITAN (IMO: 9293741).

Photo credit: tommao wang on Unsplash
Published: 24 March, 2025

Vessel Arrest

Malaysia: MMEA detains Singapore-flagged bulker for illegal anchoring in Perak

“Queen Harmony”, operated by an Egyptian captain along with one Russian, two Ukrainians and 17 Filipino crew members, was detained about 13 nautical miles northwest of Pulau Jarak.

Published

4 days ago

March 20, 2025

Admin

Malaysia: MMEA detains Singapore-flagged bulker for illegal anchoring in Perak

Perak Malaysian Maritime Enforcement Agency (MMEA) on Tuesday (18 March) detained a Singapore-flagged bulk carrier for anchoring without permission about 13 nautical miles northwest of Pulau Jarak at 3.30pm on 17 March.

Perak MMEA director Maritime Capt Mohamad Shukri Khotob said the vessel, Queen Harmony, was operated by an Egyptian captain along with one Russian, two Ukrainians and 17 Filipino crew members.

Further investigation found that the ship failed to present any documents for permission to anchor and did not report their arrival in Malaysian waters.

The case is being investigated under the Merchant Shipping Ordinance 1952, which carries a fine of not more than MYR 100,000 or a jail term of not more than two years, or both, for anchoring without permission. It is also being investigated for the offence of failing to report its arrival, which carries a fine of up to MYR 5,000.

Two crew members of the ship were taken to the Perak State Maritime Headquarters for further investigation.

Photo credit: Malaysian Maritime Enforcement Agency
Published: 20 March, 2025

Winding up

Singapore: Final meetings scheduled for Flores Shipping and related companies

Other companies involved in the matter are Lombok Shipping and PACC Banda; meetings will be held at 600 North Bridge Road, #05-01 Parkview Square, Singapore 188778.

Published

1 week ago

March 17, 2025

Admin

The final meetings of members of Flores Shipping Pte Ltd and related companies, have been scheduled to take place on 14 April, according to the company’s liquidators on a notice posted on Friday (14 March) on the Government Gazette.

The other companies involved in the matter are Lombok Shipping Pte Ltd and PACC Banda Pte Ltd.

The meetings will be held at 600 North Bridge Road, #05-01 Parkview Square, Singapore 188778 at the following times:

Flores Shipping: 9am
Lombok Shipping: 9.30am
PACC Banda: 10am

The meetings will be held the purpose of having an account laid before the members showing the manner in which the winding up has been conducted and the property of the company disposed of and of hearing any explanation that may be given by the liquidators.

The details of the liquidators are as follows:

Victor Goh
Khor Boon Hong
Marie Lee
Joint Liquidators
C/o Baker Tilly
600 North Bridge Road
#05-01 Parkview Square
Singapore 188778

Note: Pursuant to Section 181 of the Companies Act 1967, a member entitled to attend and vote at this meeting is entitled to appoint another person or persons as his/her proxy to attend and vote in his/her stead. Proxies to be used at the meeting must be lodged at the Office of the Liquidators not later than 48 hours before the meeting.

Photo credit: Benjamin-child
Published: 17 March, 2025