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IN RE KRETA SHIPPING

December 23, 1997

In the Matter of the Complaint of KRETA SHIPPING, S.A., as owner of M/V AMPHION for Exoneration from or Limitation of Liability.


The opinion of the court was delivered by: PECK

REPORT AND RECOMMENDATION

 ANDREW J. PECK, United States Magistrate Judge:

 To the Honorable Kimba M. Wood, United States District Judge:

 This admiralty action arises from the abandonment of the vessel M/V AMPHION during a storm and resulting cargo damage. The issue before the Court on this motion is whether the AMPHION's sub-charterer, defendant Combined Atlantic Carriers, GmbH ("COMBAC"), may seek indemnity from the AMPHION's owner, plaintiff Kreta Shipping, S.A., for actions brought against COMBAC in Belgium and Germany that are still pending with no finding of liability as of yet. In the alternative, COMBAC asks for permission to amend its pleadings to include a declaratory judgment claim seeking a declaration that COMBAC has a right to indemnity from Kreta upon a finding of liability in the foreign actions. Kreta argues that German and Belgian law does not provide for an indemnity action and, therefore, that COMBAC's indemnity claim must be dismissed. COMBAC argues that federal maritime law, not German or Belgian law, applies and that, under federal maritime law, COMBAC has a right of indemnity against Kreta which is now ripe.

 For the reasons set forth below, the Court finds that German and Belgian law, the law which applies to the underlying claims, is applicable to COMBAC's indemnity claim, and therefore recommends that COMBAC's indemnity claim be dismissed with prejudice.

 FACTS

 This case arises out of the abandonment of the cargo vessel M/V AMPHION during a storm. (Cplt. P 3; COMBAC Am. Claim PP 3, 5.) Kreta, a Liberian corporation that owns the AMPHION, chartered the AMPHION to Metafret, S.A. pursuant to a time-charter *fn1" ; the AMPHION was being operated under that time charter at the time of the voyage which is the subject of this limitation action. (Cplt. P 2; COMBAC Am. Claim P 3; Lyons Dec. P 10; 6/11/97 Thuysen Letter Ex. B: Metafret Time-Charter; Kreta Reply Br. at 5.) On December 21, 1995, Medafret sub-chartered the vessel to COMBAC, a German corporation, pursuant to a time charter. (COMBAC Am. Claim P 2; Lyons Dec. P 9; 6/11/97 Thuysen Letter Ex. A: COMBAC time-charter; Kreta Rely Br. at 5.) Under this sub-charter, COMBAC arranged to transport steel cargo for various cargo interests from Antwerp, Belgium and Brake, Germany to ports along the eastern coast of the United States. (Cplt. P 4; COMBAC Am. Claim P 4; Kreta Reply Br. at 5.) COMBAC's agents issued bills of lading for the cargo, using a form prepared by COMBAC and signing the bills "for the Master." (Burnett Aff. Ex. 1: Bill of Lading; Kreta Reply Br. at 5; Kreta 6/5/97 Letter to the Court at 1-2.)

 The AMPHION set sail with its steel cargo on December 31, 1995. (Cplt. P 4; COMBAC Am. Claim P 4; see 1/3/97 Tr. at 4.) During the voyage, the AMPHION was damaged by a storm. (Cplt. P 5; COMBAC Am. Claim P 5; see 1/3/97 Tr. at 4.) The crew abandoned the AMPHION on January 11, 1996. (Cplt. P 5; COMBAC Am. Claim P 5; see 1/3/97 Tr. at 5.) The AMPHION was later salvaged and repaired in Halifax and completed its voyage. (Cplt. P 7; COMBAC Am. Claim P 6; Burnett Aff. Ex. 2; see 1/3/97 Tr. at 5.) Various cargo claimants allege that the AMPHION's steel cargo was damaged by exposure to seawater.

 Kreta commenced the instant proceeding, pursuant to the Shipowner's Limitation of Liability Act, 45 U.S.C. ยง 181 et seq. Kreta's complaint seeks exoneration from or limitation of liability for all loss or damage occurring on the voyage. (Cplt. P 14.) COMBAC and various cargo interests have filed claims in the limitation action for damages arising from this incident. (See Lyons Dec. P 2.) Certain cargo interests also commenced separate actions in this Court which were consolidated with this limitation action. (Lyons Dec. P 2.) Four other lawsuits arising from this incident are pending against, inter alia, COMBAC in Belgium and Germany. (Kreta 3(g) PP 2, 3; Singleton Aff. PP 4, 5; COMBAC Am. claim P 7; Lyons Dec. P 3 & Exs. A, B.) COMBAC has incurred legal fees in defending the foreign actions. (Lyons Dec. Ex. A: Roosendaal Dec. P 6; Lyons Dec. Ex. B: Strube Dec. P 6.) *fn2"

 The present motion addresses whether COMBAC presently may maintain an indemnity action here against Kreta for liability that COMBAC may face in the foreign proceedings, as well as legal costs incurred in defending those proceedings, or may amend its claim to seek a declaratory judgment that COMBAC would be entitled to indemnity from Kreta should COMBAC be found liable in the foreign proceedings.

 ANALYSIS

 Kreta argues that COMBAC does not have an indemnity right under German and Belgian law, which Kreta argues is the applicable law since the underlying claims upon which COMBAC seeks indemnity are governed by German and Belgian law. COMBAC argues that federal maritime law, not German and Belgian law, applies. Since the outcome of this motion depends on which law applies, the Court must decide a maritime choice of law issue: Whether the law which applies to the claims underlying a noncontractual indemnity claim necessarily applies to the indemnity claim as well, or if the traditional Lauritzen factors must be examined.

 In Lauritzen v. Larsen, 345 U.S. 571, 73 S. Ct. 921, 97 L. Ed. 1254 (1953), the Supreme Court set forth the choice of law analysis for maritime torts, which involves a review of a number of factors. *fn3" Lauritzen 's analysis also extends to maritime contracts. See, e.g., State Trading Corp. of India, Ltd. v. Assuranceforeningen Skuld, 921 F.2d 409, 416 (2d Cir. 1990) ("Lauritzen dealt with choice of law in a maritime personal injury action under the Jones Act; however, its broad choice of law principles are not limited to maritime torts, but 'were intended to guide courts in the application of maritime law generally.' . . . Lauritzen 's approach to choice of law issues is relevant in addressing matters involving maritime contracts.").

 COMBAC argues that Lauritzen 's choice of law analysis applies to its noncontractual indemnity claims. (COMBAC 8/22/97 letter at 2-5.) However, neither Lauritzen nor the cases applying Lauritzen to which COMBAC cites (Id. at 2 & n.3) involve noncontractual indemnity claims. See Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 90 S. Ct. 1731, 26 L. Ed. 2d 252 (1970) (injury to seaman); Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S. Ct. 468, 3 L. Ed. 2d 368 (1959) (injury to seaman); Sundance Cruises Corp. v. American Bureau of Shipping, 7 F.3d 1077 (2d Cir. 1993) (contract to inspect ship), cert. denied, 511 U.S. 1018, 114 S. Ct. 1399, 128 L. Ed. 2d 72 (1994); State Trading Corp. of India, Ltd. v. Assuranceforeningen, 921 F.2d 409 ...


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