Major Maritime Arbitration Victory

A major maritime arbitration victory was recently won in the US against the vessel BIRUINTA, her owners, operators and underwriters. The case stemmed from the BIRUINTA’s steering gear breakdown in a fierce gale during a winter North American crossing from Scotland to Canada while carrying approximately 1 million barrels of oil. The vessel was ultimately salvaged and towed back to Rotterdam, and demands were made by the owners of the ship for the cargo interests to pay cargo’s share of the salvage costs and General Average expenses.

The arbitration became extremely technical in regard to the following issues: the cause of the steering gear breakdown; whether the vessel was seaworthy at the commencement of the voyage; and whether the owners had exercised due diligence in this regard. The arbitrators found in favour of the cargo interests on all issues and they were successful in claiming back all sums already paid out in connection with the incident, and avoiding any further payments. Further, there was a major award of costs in favour of the cargo interests, a relatively infrequent occurrence to such an extent in maritime arbritrations in the US.

Vincent M. Prager (shipping and insurance) of Stikeman Elliott’s Montreal office, together with Richard Webber from Hill Rivkins & Hayden LLP in New York and with the assistance of Nick Spillane of Brisset Bishop in Montreal, together represented the cargo interests. Representing the vessel, her owners, operators and underwriters was William France from the New York firm of Healy & Baillie, LLP.