Baltimore bridge accident: 1851 law may force Dali’s cargo owners to share the salvage cost
The obscure maritime law on limited liability was first invoked by Titanic owner
A fallout of the March 26 maritime accident when a container vessel Dali collided with and brought down Baltimore’s Francis Scott Key Bridge could be the resurrection of an obscure 1851 maritime law on limited liability. Coupled with the General Average declaration, this aims to limit the claims by cargo owners and others. The law was first invoked by the owner of the Titanic after it sank in 1912, to limit its liability exposure.
Dali was bound for Colombo, and onward to Yantian, China. It held 4,679 containers, including many transit boxes for India.
The ship’s owner, Singapore-based Grace Ocean Private Ltd, has issued the General Average Declaration as the salvage cost is expected to be huge. This means the owners of the cargo will have
A US Coast Guard search and rescue helicopter flies over the Dali cargo vessel, which crashed into the Francis Scott Key Bridge causing it to collapse in Baltimore (file photo)
to bear the cost of the cargo to cover some of the salvage cost. The General Average Declaration, introduced in 1890 and amended in 1994, is declared by a vessel owner when there is an extraordinary peril to the vessel needing the jettisoning of some cargo.
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A general marine insurance covers this peril, said J Krishnan of Chennai-based S Natesa Iyer Logistics LLP, a
freight forwarder. Maersk’s partner MSC said in a statement that it was unclear when and where the vessel may be berthed and discharged, but the General Average Declaration signalled that the owners foresee an expensive salvage operation and expect all parties to pitch in.
Richards Hogg Lindley (RHL), London, which has been appointed the General Average Adjuster, notified its intention to keep all containers under its control until security arrangements are made with the average adjusters, both for General Average and salvage. Meanwhile, Grace Ocean (owner) and Synergy Marine Pte Ltd (manager of the ship) have filed a petition in the US District Court of Maryland Northern Division for exoneration from, or limitation of, liability.
In the case of the Baltimore incident, the buyer would have an exposure to contribute to General Average/salvage, said M Jagannath, a Singapore-based arbitrator, mediator and claims adjuster. “It is important that parties review the risks involved in their trade and take appropriate insurance cover to deal with their exposures. Otherwise, they may face a rude surprise whenever something like the Dali incident at Baltimore or the Ever Given grounding at Suez Canal occurs,” he added.