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IN RE OTAL INVESTMENTS LTD.

July 8, 2005.

In re OTAL INVESTMENTS LTD., as Owner of the M/V KARIBA, for Exoneration from or Limitation of Liability. OTAL INVESTMENTS LTD., Third-Party Plaintiff,
v.
CAPITAL BANK PUBLIC LTD. CO., ACTINOR CAR CARRIER I AS, WILH. WILHELMSEN ASA, WALLENIUS WILHELMSEN LINES, CLARY SHIPPING PTE. LTD., MST MINERALIEN SCHIFFAHRT SPEDITION UND TRANSPORT GMBH, & MINERAL SHIPPING CO. PRIVATE LTD., Third-Party Defendants. AUGUSTA ASSICURAZIONI S.p.A., Plaintiff, v. WALLENIUS WILHELMSEN LINES AS, et al., Defendants. ZURICH INSURANCE CO., et al., Plaintiffs, v. M/V TRICOLOR, et al., Defendants.



The opinion of the court was delivered by: HAROLD BAER, JR., District Judge

OPINION & ORDER

This civil action (consolidated on August 27, 2004, by consent of the parties) has been brought before the Court on a motion in limine and a motion to dismiss an in rem claim by Third-Party Defendants Clary Shipping Pte. Ltd., MST Mineralien Schiffahrt Spedition und Transport GmbH, Mineral Shipping Co. Private Ltd. (collectively "Clary Interests").*fn1 For the reasons set forth below, the Clary Interests' motions are both DENIED.

I.BACKGROUND

  On December 14, 2002, the M/V Kariba, the M/V Tricolor, and the M/V Clary were navigating through dense fog in the international waters of the Dover Straits in the English Channel. As the M/V Tricolor overtook the M/V Kariba, the two ships collided, both vessels sustained damages and the M/V Tricolor subsequently sank with the loss of its cargo.

  On December 20, 2002, Plaintiff and Third-Party Plaintiff, Otal Investments Ltd. ("Otal"), owner of the M/V Kariba, brought an action against the M/V Clary for its alleged involvement in the collision. In connection with that action brought in the Netherlands, Otal attached the M/V Clary in Rotterdam. A limitation of liability fund was established following which the Rotterdam court released the M/V Clary from the attachment, without providing Otal with any direct security for its claim. Otal subsequently filed a claim against the limitation of liability fund, as did other parties and now the claims exceed the amount of the fund of $95,000,000 U.S.D. (ninety-five million U.S.D.).

  On June 12, 2003, Otal filed a complaint in this Court for exoneration of or a limitation of liability with respect to claims against it that arose from the collision. Originally, Otal sought contribution from the M/V Tricolor and the M/V Clary for any amounts it might be required to pay for loss or damage to cargo carried on the M/V Tricolor. Otal did not make a claim at that time for hull and machinery damages or for lost income allegedly suffered by the M/V Kariba as a result of the collision. Those claims were later filed against the M/V Clary in the Southern District of Georgia in October 2004.

  On January 29, 2004, Otal filed a motion seeking partial summary judgment and asked for a ruling from this Court that in the event the Court determines that any fault on the part of the M/V Kariba caused or contributed to the collision with the M/V Tricolor, that the rule of proportionate fault spelled out in Article 4 of the Brussels Collision Convention of 1910 apply to any claims filed against Otal. On August 6, 2004, this Court endorsed a stipulation between the parties (including the various Cargo Claimants) that stated that "Article 4 of the Brussels Collision Convention of 1910 applies to this action" and "that liability, if any, for claims before this Court between and among cargo interests, Otal, the Tricolor Interests and/or Clary Interests shall be determined in accordance with the 1910 Collision Convention." (Consent Order of Partial Summary Judgment, Aug. 6, 2004, Dckt. #68.) The parties later submitted an Amended Stipulation that the Court endorsed that stated inter alia that the parties agreed that "liability, if any, for claims before this court . . . shall be determined in accordance with the 1910 Collision Convention." (Amended Stipulation and Order of Dismissal, Dec. 9, 2004, Dckt. # 90.)

  On October 23, 2004, Otal filed a complaint in the District Court for the Southern District of Georgia, just prior to the M/V Clary's arrival in that port, asserting claims for collision damage to the M/V Kariba and lost income against the M/V Clary. To avoid tying up the M/V Clary in port, the West of England Ship Owners' Mutual Insurance Association ("WOE") provided Otal with a letter of undertaking as security for Otal's in rem claim in the amount of $1.65 million. The WOE letter of undertaking provides for jurisdiction over Otal's in rem claim in this Court and is conditioned on the right of Clary Interests to dispute it. As a consequence of this undertaking, Otal dismissed its claim in Georgia without prejudice and this Court granted Otal leave to amend its Third-Party Complaint against Clary Interests and the M/V Clary, in rem.

  Now, Clary Interests seek to dismiss the in rem claim in this Court as duplicative of the claim filed in Rotterdam, and Clary Interests also seek a declaratory judgment with respect to whether only Article 4 of the Brussels Collision Convention of 1910 applies to this matter.

  II.DISCUSSION

  A. Applicability of the 1910 Brussels Collision Convention

  The Clary Interests seek a declaratory judgment with regard to the two stipulations signed by all parties. The first stipulation, a Consent Order of Partial Summary Judgment, concluded "Article 4 of the Brussels Collision Convention of 1910 applies to this action" and dismissed Otal's claims for contribution against Tricolor and Clary Interests. The Amended Stipulation and Order of Dismissal reaffirmed that "liability if any, for claims before this court between and among cargo interests, Otal, the Tricolor Interests and/or the Clary Interests, shall be determined in accordance with the 1910 Collision Convention."

  Generally, United States courts will apply the 1910 Collision convention when a collision occurs in international waters between vessels that fly flags of signatory states. See, e.g., Seiricki Kisen Kaisha and Dragon Navigation, S.A. v. Stena Freighter, 629 F. Supp. 1374 (S.D.N.Y. 1986). In this case, there were four months of negotiations between the parties before they seemingly reached agreement on this issue. The Clary Interests claim the intent of the parties was to apply the entire 1910 Brussels Collision Convention, but Otal, on behalf of itself as well as Tricolor Interests and Cargo Claimants, argues that the intent of the parties was to agree only that Article 4 of the Collision Convention (the rule of proportionate fault)*fn2 should apply to this matter. Both sides contend that the language in the stipulations is clear and unambiguous and dictates a result in their favor. This is because both Article 4 and the title of the Convention are expressly mentioned as applicable.

  Otal argues that Clary Interests' only concern during negotiations was that Otal stipulate to the dismissal of Otal's claims for contribution, and that this claim was rendered moot by the Consent Order of Partial Summary Judgment. Also, at one point in the negotiations, counsel for the Cargo Claimants proposed a draft that deleted mention of Article 4, but the proposal was rejected by Otal and the Tricolor parties and the reference to Article 4 was restored. Clary Interests claim to have been left out of some of these negotiations including the draft circulated by Cargo Claimants, but does not claim to have been left in the dark about the issue of how the stipulation would apply to Clary Interests. Indeed Clary Interests must have known this was an issue because the application of Article 4 was part of the motion originally filed by Otal and that motion was expressly referred to and granted as part of both stipulations. This, ...


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