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IN THE MATTER RATIONIS ENTERPRISES

July 9, 2004.

In the Matter of the Complaint of: RATIONIS ENTERPRISES, INC. OF PANAMA, as Owner, and MEDITERRANEAN SHIPPING CO. S.A. OF GENEVA, as Bareboat Charterer of the MSC CARLA for Exoneration from or Limitation of Liability.


The opinion of the court was delivered by: RICHARD OWEN, Senior District Judge

OPINION AND ORDER

On November 24, 1997, the MSC Carla, a fully-loaded 900 foot containership, was on a voyage from LeHavre to Boston following a recent month-long dry-docking with a "Special 25 Year" Survey by Lloyd's Register at which time over 100 men did a lot of work on the vessel and Lloyds' issued a clean certificate of class.

  The first days of the voyage were uneventful. The Carla had loaded cargo at various ports such as Hamburg, Bremerhaven and left LeHavre for Boston on November 21. The vessel was properly loaded and its stability was satisfactory. Captain Giuseppe Siviero, an experienced master, described the Carla as being in good to optimum condition. On November 24, however, weather conditions began deteriorating and wind speed increased steadily until by 4 o'clock that afternoon wind from the west reached force 10 or 11 on the Beaufort Scale, approximately 55 to 72 miles per hour, with wave heights of 11 to 12 meters. The vessel's heading was 250 degrees with seas coming at its starboard bow at an approximately 20 to 40 degree angle and swells from a previous storm coming at its port bow from a southwesterly direction. Thus, approaching from different directions, the storm waves were confused. At 6 o'clock, the vessel suddenly rolled heavily — about 25 degrees — several times and then steadied somewhat. These several rolls, in addition to tossing and breaking all the dishes in the crew dining room, caused all three engines — the major center one and two side engines — to stop running because of lack of oil pressure. The engineer was shortly able to get the center engine going and the Carla continued on its 250 degree course but at minimal speed.

  Shortly after regaining power on its central engine, the Carla encountered the first of at least two large, steep waves. Captain Siviero (through an interpreter) testified as to what happed thereafter:
Q. Now what happens after 1830 hours?
* * *
  A. Well, of course the first thing we did was we tried to put a little bit of order because of everything having been thrown all over the place, and to try to put the situation, the conditions was they were prior to that incident of rolling. And of course the engineer below was trying to get the two side engines started again. As we were adjusting and increasing the pitch, of course we were gaining a little bit more speed. . . . six maybe seven knots, because it's only one engine. We started climbing a wave, and you could see that the bow light kept coming up and up and up and up, and I could see that the ship was going up this wave.

  Q. And then what happened?

  A. So I was trying to judge how big this wave was by the inclination of the ship, and I noticed that the bow light was lower than where one would expect it to be in relationship to the pitch of the ship. (Tr. 122-23).

 
* * * Then as we started going down the other side of this wave, . . . the ship made a very strange motion as if it had wanted to screw itself into the wave . . . I heard a very sharp hit, impact, and of course the noise had been carried through the hull, but a very sharp staccato noise, and then going up this second wave, and I noticed that there was something absolutely wrong. As a matter of fact my first officer, I noticed that the bow was going down. The ship was going up, the bow was going down, and the first officer was saying we've broken apart, we've broken apart and I was able to see. I immediately ran out to the wing on the observation wing and what I noticed is that this part, the bow was actually separating itself to port, away from the rest of the ship. And we broke apart. (Tr. 123-24).
* * *
Q. When did it break?
  A. On the first wave. Here is hogging started, to crack here. When it go down, the big shock break, go up again, split. (Tr. 130).

  * * *

  Q. What happened after that?

  A. The wave passed, the impact passed also, went away, of course. When we went — so, there was the impact. The impact stopped. The wave passed over us*fn1 but we started going up that wave and that's when the ship broke. That's when it separated, split. (Tr. 129).

  * * *

  Q. In your opinion, captain, based on being up on the bridge on November 24th at approximately 1830 hours, at what point did the ship begin to break in half in events, over the series of waves that he has just talked about?

  A. I would say that the ship started breaking apart on top of the first wave. . . . That's when I believe that the cracking started.

  Q. Captain, exactly why do you think it cracked at that particular moment, at the top of the first wave?

  A. Because we saw that the bow light had started to lower itself relative to the position where it should have been, and the line of containers, the surface of containers was not in line with the containers aft of them. They had shifted as though they had shifted position, because they were lower. (Tr. 124).

  * * * The hull of the Carla broke apart roughly in a complete circle at or just in front of the welding at the back of a 15 meter elongation section defendant Hyundai Corporation ("HC"), had built and inserted in its mid section in front of the bridge some 13 years earlier. The front half of the vessel moved to port and fortunately the captain was able to turn the stern half of the vessel (with the rudders) to starboard and thus avoided hitting the separated forebody. The front half, over 5 days, slowly filled up with water and sank. The stern half was towed to Los Palmas Island, the cargo unloaded, then towed to Gijon, Spain, where it was scrapped.

  Going back those 13 years to February 20, 1984, HC, involved in the ship building services, entered into a ship elongation contract with the then-owner of the vessel, Brostrom Shipping Co., Ltd., under which HC, identified as the "contractor," undertook to lengthen the NIHON, as the Carla was then named, by adding approximately 15 meters length in its middle in accordance with its plans and specifications annexed to the contract. Bostrom was to pay HC some $2,000,000 for the work with liquidated damages under the contract of $25,000/a day for failure to deliver the vessel by the 25th day delivery date.

  HC obtained the builders' risk insurance. HC did not perform the work but delegated it to its shipyard, specifically Hyundai Mipo Dockyard ("HMD"). HMD fabricated the new midbody section in its shipyard in Ulsan, Korea. It cut the vessel in half, put in the new midbody which was then joined by welding to the old aftbody and forebody. In addition to the work on the NIHON, HMD was more or less simultaneously doing three other lengthening projects for the group of which Brostrom was a member, and as to one, the M/V JUTLANDIA, HMD's work on that vessel overlapped with its work on the NIHON by approximately twenty days. Consequently, from the trial testimony, it appears that the many labor demands on HMD were causing the JUTLANDIA to be nine days behind delivery schedule and the NIHON (now named Carla) three days behind schedule. To avoid or minimize liquidated damages under the contract, HMD contracted with quite a number of outside welders to supplement HMD's welding staff but their quality, as I conclude here, had disastrous consequences thirteen years later.

  Six months after the NIHON's delivery, it was discovered that all 76 butt welds to the doubler straps on the deck of the Carla were deficient and HMD acknowledged to officials at Lloyd's Register in early June of 1985 that the outside welders brought in had done a poor job. The doubler straps referred to, three on each side of the deck for much of its length, to be made continuous, were to be welded between each section with what is called full penetration welds. This requirement, imposed by Lloyd's Register, was to provide adequate deck strength especially across the newly-installed midsection. Normally, it appears HMD's welders did their work in the shop which would have made it easy to do a two-sided transverse butt weld bottom to top. Instead, here, HMD elected to install the doublers plate by plate onto the deck. As a result, the welders not being able to come up from the underside, failed to do "full penetration welds" which obviously markedly weakened the straps which were there to strengthen the deck while the vessel would be bending and turning in waves.*fn2 It also appears that for the 60 HMD welders Lloyd's Register had only one hull surveyor present and he did not have the ability to observe every weld. One of HMD's top vice-presidents acknowledged that HMD's quality assurance department did not radiograph all of the welds to ensure they were of good quality. Instead it appears HMD decided to only perform random radiographic inspections which did not catch a number of faulty welds. How many were missed and unexplained is not clear. This, in addition to the new doubler joints not being staggered relative to the joints of the plates of old body part, made it even weaker (see, infra).

  Also, a substantial number of design and construction flaws were concentrated in a relatively small area. The most significant of these was a cavity of an undetermined number of inches in length and irregular in shape where there should have been solid welding where the deck and the starboard topside joined at the rear of the inserted section. This should never have existed. And not only did the cavity increase the stresses in that area but welding irregularities — high and low points of welding material inside the cavity — also created additional points of stress.*fn3

  Next there was a 7 mm gap from a misalignment of a sheer strake plate and the deck plate at one point. This misalignment was purportedly compensated for by the welders filling the gap with welding material but which, according to engineering testimony in fact increased stresses at that point. Further, as mentioned above, in a number of places there was a failure to have the doubler welds "bridge" the erection joint weld. In homely terms, this is like a bricklayer building a brick wall by putting one brick one exactly on top of another without alternating the bricks. In some cases there was insufficient beveling on the deck plate, meaning the HMD workers beveled at a 25 degree angle from the vertical where drawings specified 45 degrees, which made it impossible for welders thereafter to fully insert a welding tool into the crevice for a full penetration weld. Many butt welds also contained slag which weakened their ability to bear loads that they were designed to carry.

  Joseph Winer testified as an expert for the plaintiffs' interests and was personally involved in supervising the lengthening of a number of vessels over the years. He went aboard the Carla's aft section the moment it was towed to Los Palmas immediately after the break-up in December 1997 and visited it later four times over a one year period in Gijon, Spain. He concluded that quality assurance was lacking and that the inspection practices and procedures were inferior which permitted defective welds to go uncorrected. He faulted HMD's planning, particularly as to the design and construction of the deck doublers.

  Winer, after being very specific about the defects in the workmanship by HMD's welders, testified that from the observations and measurements he made aboard the vessel the ship failed on deck, and the fracture ran ...


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