The "Anangel Endeavour"

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DMC/SandT/04/17
Complaint of Murmansk Shipping as Owner and Manager of the M/V Ivan Susanin, for Exoneration from or Limitation of Liability – The "Anangel Endeavour"
United States District Court, Eastern District of Lousiana, Hon. Sarah S. Vance, Docket No. 00-2354, June 18, 2001
LIMITATION OF LIABILITY: MARITIME ATTACHMENT: COLLISION: BILL OF LADING: BOTH-TO-BLAME CLAUSE: INDEMNITY: CONTINGENT CLAIMS Summary
The Court denied cargo claimants’ motion to vacate a maritime attachment because there was a question of fact as to whether the Both-to-Blame collision clause in the bill of lading was applicable and could give rise to an indemnity claim against the cargo claimants. Such a contingent claim was sufficient grounds for the attachment. Since the cargo claimants presented no exigent circumstances requiring a return of the attached funds, maintaining the attachment would not be inequitable.

DMC Rating Category: Confirmed

This case notes is contributed by Alan M. Weigel, an attorney with Healy & Baillie, LLP of New York. Healy & Baillie are the International Contributors to the website for the USA

Facts
On August 6, 2000, the m/v "Anangel Endeavour" collided with the m/v "Ivan Susanin" south of the entrance to the Southwest Pass of the Mississippi River. At the time, the "Anangel Endeavour" was carrying corn owned by two poultry companies and their interested underwriters ("cargo claimants"). As a result of the collision, Anangel Endeavour Compania Naviera, S.A. ("Anangel"), the owners of the "Anangel Endeavour", abandoned the voyage and instructed the cargo claimants to collect their remaining onboard cargo. The cargo claimants discharged the corn from holds 1,3,4, and 5 into ten barges for salvage, leaving corn in the number 2 cargo hold.

Murmansk Shipping Co. ("Murmansk") initiated a limitation of liability proceeding as owner of the "Ivan Susanin". In this proceeding, Anangel filed a claim for damages and an answer to Murmansk’s complaint. The cargo claimants also filed a claim against Murmansk. Anangel also filed its own complaint seeking exoneration or limitation of its liability and sought an order attaching the discharged cargo pursuant to Supplemental Admiralty Rule B(1) of the Federal Rules of Civil Procedure. In support of its motion for an order of attachment, Anangel alleged that cargo claimants had wrongfully abandoned and refused to discharge the cargo left behind in the number 2 hold and that the cargo claimants might be liable to Anangel for indemnity as a result of the both-to-blame clause in the bill of lading. Under a both-to-blame clause, cargo claimants bear the cost of damage to cargo resulting from a collision when both ships are at fault, to the extent that the cargo claim is paid by the carrying ship to the non-carrying ship. Thus in this case, Anangel alleged that the both-to-blame clause required the cargo claimants to indemnify Anangel, regardless of fault, against any liability it must pay to Murmansk for cargo claims.

By agreement of the parties, the attached cargo was sold and the funds from the sale held in escrow. Murmansk and the cargo claimants filed claims in Anagel’s limitation proceeding. The court consolidated the limitation proceedings into a single action. The cargo interests then moved for an order vacating (setting aside) the attachment, alleging that Anangel had no indemnity claim against it under the both-to-blame clause.

Issues
The cargo claimants disputed whether the both-to-blame clause applied to the collision in question. The clause began with a preamble making it applicable if "the liability for any collision . . . fails to be determined in accordance with the laws of the United States of America." [emphasis added] The cargo claimants relied on the use of the word "fails" to support their argument that the clause only applied when United States law does not. Accordingly, the cargo claimants argued that because the collision occurred in the territorial waters of the United States, the clause was not applicable. However, Anangel presented evidence that the use of the word "fails" was a mis-print and that the correct word should have been "falls."

The cargo claimants also argued that Anangel’s claim was premature because it was based on indemnity, and their liability was contingent on Anangel’s liability to Murmansk, which had yet to be established.

Judgment
On the first issue, the court held that determination of the meaning and scope of the bill of lading clauses involved questions of fact that could not be resolved in the context of a motion to vacate an attachment.

On the second issue, the Court found that contingent claims are a permissible basis on which to maintain a maritime attachment. Since the cargo claimants could be liable to Anangel if the both-to-blame clause were enforced, and since the cargo claimants presented no exigent circumstances requiring the return of the attached funds, the court found it equitable to maintain the attachment.

The Court therefore denied the cargo claimants’ motion to vacate the attachment of the discharged cargo because Anangel had demonstrated reasonable grounds for the attachment, by virtue of the possibility that the both-to-blame clause could be enforced which, if it were, would give rise to an indemnity claim against the cargo claimants.

Comments
This case supports the proposition that a contingent liability is often sufficient to maintain a maritime attachment. It also serves as a reminder that even pre-printed forms may not always be free from errors and misprints.

^1. The decision does not identify the form of the bill of lading.

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