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US wins US$100M settlement in Baltimore bridge salvage
The owner and operator of Dali, the neo-Panamax container ship that destroyed the Francis Scott Key Bridge in Baltimore earlier this year have reached a settlement in a US Department of Justice (DoJ) lawsuit
The US Department of Justice has agreed a settlement that will see the US federal government recoup US$102M in costs incurred for its work to clear debris and restore access to a major shipping channel leading to the US port of Baltimore, Maryland.
In September, the US DoJ filed a civil lawsuit filed against the Singapore-based owner Grace Ocean Pvt Ltd and technical manager Synergy Marine of the large container ship, Dali, that struck and caused the collapse of Baltimore’s Francis Scott Key bridge. The lawsuit cited reckless conduct and negligence on the part of the vessel’s owners and operators while claiming for US$102M in costs incurred. Dali was under charter to AP Moller-Maersk at the time.
"This resolution ensures the costs of the federal government’s cleanup efforts in the Fort McHenry Channel are borne by Grace Ocean and Synergy and not the American taxpayer. This is a tremendous outcome that fully compensates the United States for the costs it incurred in responding to this disaster and holds the owner and operator of Dali accountable. The prompt resolution of this matter also avoids the expense associated with litigating this complex case for potentially years,” DoJ Principal Deputy Assistant Attorney General Brian M Boynton said.
"The settlement monies will go to the US Treasury and to the budgets of several federal agencies directly affected by the allision or involved in the response," the DoJ said.
Despite not imposing punitive damages, the settlement does not prevent punitive damages from being levied against Dali’s owners and operators.
"It is important to highlight the Federal Government’s claim was unique and significantly different from other claims, as it fell outside the usual limitation of liability framework. Grace Ocean and Synergy are prepared to vigorously defend themselves in the limitation of liability proceedings pending before the Federal Court in Baltimore and to establish that they were not responsible for the incident," operator Synergy Marine Group posted in a joint statement with shipowner Grace Ocean.
"The settlement strictly covers costs related to clearing the channel, which we would have been responsible for in any case, and is not indicative of any liability, which we expressly reject for the incident that led to the collapse of the Francis Scott Key Bridge. No punitive damages have been imposed as part of this settlement. In accordance with the settlement, the United States has dismissed its claim," the companies said.
Dali allision and response
In the early hours of 26 March, Dali left the Port of Baltimore bound for Sri Lanka, when it lost power while navigating through the Fort McHenry Channel. The ship was able to broadcast a mayday call and briefly regained power, it ultimately suffered a full power outage before striking the Francis Scott Key bridge. The major interstate highway bridge collapsed seconds later, killing six construction workers who were on the bridge.
The wreck of Dali and the remnants of the bridge obstructed the navigable channel and brought all shipping into and out of the Port of Baltimore to a standstill.
The United States led the response efforts of dozens of federal, state, and local agencies to remove about 50,000 tons of steel, concrete, and asphalt from the channel and from Dali, which remained trapped under a section of bridge for an extended period. The Fort McHenry Channel was cleared by June 10, and the Port of Baltimore was once again open for commercial navigation.
Dali was removed from Baltimore and moved to Norfolk, Virginia, for repairs in late June. As of 19 September, it had left Norfolk and travelled in ballast for Ningbo, China, reportedly to undergo further repair.
US Attorney General Merrick Garland has said the DoJ will seek accountability for the bridge’s destruction, loss of life and disruption to commercial activity.
Potential liability and further claims
The US DoJ has stressed that its claim did not include any damages for the reconstruction of the Francis Scott Key Bridge, but there are billions of dollars in claims being processed in relation to the vessel’s allision and bridge collapse.
The DoJ noted, “The settlement does not include any damages for the reconstruction of the Francis Scott Key Bridge. The State of Maryland built, owned, maintained, and operated the bridge, and attorneys on the state’s behalf filed their own claim for those damages.”
Grace Ocean and Synergy Marine initiated legal action seeking to limit their liability to US$43.7M, the value of the container ship Dali, using a federal law dating back to 1851. But, if the allision is found by investigators to have been caused in any part by negligence or unseaworthiness of Dali, the owners and managers will not be protected under the 175-year-old limitation of liability act.
The DOJ’s lawsuit specifically alleged negligence on behalf of the ship’s owner and operator, accusing them of doing nothing to mitigate problems on board the vessel that could have contributed to the ship losing power.
“The owner and operator of Dali were well aware of vibration issues on the vessel that could cause a power outage. But instead of taking necessary precautions, they did the opposite,” said Principal Deputy Associate Attorney General Benjamin Mizer.
“Out of negligence, mismanagement, and, at times, a desire to cut costs, they configured the ship’s electrical and mechanical systems in a way that prevented those systems from being able to quickly restore propulsion and steering after a power outage. As a result, when Dali lost power, a cascading set of failures led to disaster.”
In May, a US National Transportation Safety Board (NTSB) report found the first blackout on board Dali during the ship’s port stay in Baltimore occurred during maintenance on a scrubber system, and the second blackout was linked to low fuel pressure in a backup generator.
In a follow-up report in June, its second preliminary report, the NTSB said its investigators have removed a terminal block and two sections of associated ’control wiring’ from the 9,962-TEU box ship Dali’s electrical system after witnessing "an interruption in the control circuit for HR1’s undervoltage release" while on board the vessel.
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