![]() The court found that the clause imposed an express-warranty obligation upon CARCO to provide a safe berth, which CARCO breached, despite any diligence it exercised.ĭespite the fact that the ASBATANKVOY safe-berth language does not use the word “warranty,” the Supreme Court held that CARCO’s “acknowledged duty is absolute,” that a “safe berth” “means a berth ‘free from harm or risk’” and “the berth must allow the vessel to come and go ‘always’ safely afloat: That means afloat ‘at all time’ and ‘in any event.’” The Court noted that “t is well settled as a matter of maritime contracts that ‘tatements of fact contained in a charter party agreement relating to some material matter are called warranties,’ regardless of the label ascribed in the charter party.” Nevertheless, the Court noted that parties are free to contract to limit the application of such language. The Third Circuit held that Frescati was an implied third-party beneficiary of the sub-charterparty’s safe-berth clause, which permitted Frescati and the United states, as subrogee, to pursue breach of contract claims against CARCO. Both asserted that CARCO breached the safe-berth warranty in the sub-charterparty. The United States also sought recourse against CARCO for monies paid out by the Fund. Frescati sought recourse against CARCO for clean-up costs not reimbursed by the Oil Spill Liability Trust Fund (“Fund”), which is administered by the National Pollution Funds Center run by the U.S. OPA permits the RP to recover by way of contribution or indemnity against any third parties who may be responsible for causing the spill in whole or in part. Under the Oil Pollution Act of 1990, Frescati was named the Responsible Party (“RP”) for this spill and required to undertake clean-up operations. ATHOS I was approximately 900 feet away from the berth when it struck the anchor. Voyage Charter) charter form and said: “he vessel shall load and discharge at any safe place or wharf … which shall be designated and procured by the Charterer, provided the Vessel can proceed thereto, lie at, and depart therefrom always safely afloat.” The sub-charterparty also required CARGO to direct the vessel to a “safe berth” along the U.S. The sub-charterparty included safe-berth language derived from the ASBATANKVOY (the Association of Ship Brokers & Agents (USA) Inc. (CARCO) sub-chartered the vessel from tanker operator Star Tankers, who chartered the vessel from Frescati Shipping Company (“Frescati”). In 2004, the tanker ATHOS I spilled 264,000 gallons of heavy Venezuela crude oil in the Delaware River after it struck a nine-ton anchor as it transited to Citgo’s asphalt refinery in Paulsboro, New Jersey. The Second Circuit held that the words “safe berth, always afloat” impose a strict-liability warranty while the Fifth Circuit held that a safe-berth clause only imposed upon the charterer a duty of due diligence to select a safe berth. Frescati Shipping Co., Ltd. (“ATHOS I”), the federal circuit courts differed in their interpretation of whether certain language in a charterparty constituted a safe-berth warranty. ![]() Supreme Court’s decision in CITGO Asphalt Refining Co.
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