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ANTILLES S.S. CO. v. MEMBERS OF AM. HULL INS. SYND

May 24, 1982

ANTILLES STEAMSHIP COMPANY, LTD., Plaintiff,
v.
The MEMBERS OF the AMERICAN HULL INSURANCE SYNDICATE, et al., Defendants



The opinion of the court was delivered by: CONNER

OPINION AND ORDER

Plaintiff Antilles Steamship Company, Ltd. ("Antilles") brought this action seeking to recover under a contract of marine insurance for damage to its vessel, the Alchemist. The case was tried by the Court without a jury and by consent of Antilles and defendants, 62 insurance companies, the trial was limited to the question of liability. The following opinion constitutes the Court's findings of fact and conclusions of law pursuant to Rule 52, F.R.Civ.P.

Background

 Prior to trial, the parties submitted a stipulation in which they agreed on most of the relevant facts. Accordingly, only limited evidence was presented at trial and the following factual recitation is derived largely from the parties' stipulation.

 Antilles, a Liberian corporation, is the owner and operator of the T/V Alchemist and is engaged in business as an ocean carrier of chemicals. The Alchemist is a tank vessel with 34 tanks designed for the carriage of liquid chemicals. During the relevant period, the Alchemist was managed and operated by the Steuber Company. In September of 1975, James Kingston ("Kingston") was a marine superintendent for Steuber.

 Defendants are 62 insurance companies, both foreign and domestic, engaged in the business of underwriting marine insurance. The American Hull Insurance Syndicate ("the Syndicate") consisted at all relevant times of 53 insurance companies organized to insure ocean-going vessels. On or about September 14, 1975, Antilles and defendants entered into two contracts of marine insurance. Antilles is an assured on the policies, which provide coverage against loss or damage to the hull and machinery of the Alchemist. Both contracts are essentially the same, with the first (Plaintiff's Exhibit 13) being with the Syndicate and the second (Plaintiff's Exhibit 14) being with the remaining defendants. The non-Syndicate defendants contracted in their policy to "follow the leading Underwriter (the Syndicate) in all or any settlements or agreements pertaining to losses and/or claims, including legal proceedings, and in the settlement thereof, ...." The relevant portion of the policies states that "this insurance also covers loss of or damage to the vessel directly caused by the following ... Explosions on shipboard or elsewhere; ...." Lines 80, 81, 84 of Plaintiff's Ex. 13, 14.

 Seventy per cent of the risk was insured in the American market with defendants; the remaining thirty per cent was underwritten in London. The English policy contained clauses identical to those at issue here.

 Pursuant to a contract of affreightment between Antilles and Union Carbide Corporation, on September 12, 1975, the Alchemist loaded liquid chemicals for carriage from Taft, Louisiana to Antwerp, Belgium. One of the cargos placed on board was 202.22 tons of glacial acrylic acid ("GAA"), which was loaded in its monomer state into No. 6 starboard wing tank aft ("No. 6 SWA"). The Alchemist was also carrying a shipment of ethylene norbonene ("ENB"), which was stored in No. 6 starboard wing tank forward ("No. 6 SWF"). Both No. 6 SWA and No. 6 SWF are stainless steel, and they share a common wall.

 GAA is a pure form of acrylic acid which, in its monomer state, looks and flows like water. When polymerized, however, GAA is a solid. The only chemical characteristic of ENB that is relevant to this lawsuit is its extremely noxious odor.

 On September 16, 1975, while the Alchemist was at sea and the insurance policy in effect, the GAA explosively polymerized. The cause of the explosion has never been determined, but the result was extensive damage to the ship. The tank walls of No. 6 SWA bulged and the common wall between No. 6 SWA and No. 6 SWF ruptured. Seams opened in the tank walls of No. 6 SWA, thus allowing cargo to escape into the cofferdam, the space between the cargo tanks and the skin of the ship. The skin of the ship in the vicinity of No. 6 SWA bulged.

 In order to reduce the tremendous heat being produced by the explosive polymerization of the GAA, the ship's personnel pumped seawater into the cofferdam. Because No. 6 SWA had ruptured, the GAA, ENB and seawater intermingled in No. 6 SWA, No. 6 SWF and the cofferdam.

 Despite the explosion, the Alchemist continued its voyage to Antwerp where it discharged all of its cargos except the GAA and ENB. The public authorities in Antwerp forbade any attempt to unload the commingled GAA, ENB and seawater because of the extremely noxious and penetrating odor emanating from the damaged tanks. While the ship was in Antwerp, numerous meetings were held to discuss possible ways of repairing the vessel. These meetings were attended by various surveyors and representatives of Union Carbide as well as Kingston, who was responsible for getting the Alchemist ready to enter the shipyard.

 Kingston testified at trial that Antilles unsuccessfully explored the possibilities of repairing the vessel without piecemeal removal of the polymer and liquid. Union Carbide was unable to suggest a solvent for the polymer. Removal of the entire affected area was rejected since such a procedure would have required cutting through good tanks and portions of the deck and because no welding or burning could be done on the ship. Moreover, disposal of the polymer presented problems. Antilles also was faced with continuing noxious odor from the ENB. Finally, Antilles contracted with Booy Support ("Booy") to clean the tanks and the cofferdam and do everything else necessary to prepare the Alchemist for entry into a repair yard.

 Accordingly, the Alchemist proceeded to the Booy tanker cleaning facility near Rotterdam. Work began on October 21, 1975 with the removal from the cofferdam, No. 6 SWA and No. 6 SWF of a brownish, liquid mixture consisting of GAA, ENB, seawater and lumps of polymer. Work then proceeded on No. 6 SWF, which contained approximately 11/2 feet of semi-solid polymer at the bottom of the tank. Most of this material could be removed by high pressure ...


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