Carbotrade SpA v. Bureau Veritas

901 F. Supp. 737, 1995 WL 617322
CourtDistrict Court, S.D. New York
DecidedOctober 19, 1995
DocketNo. 92 Civ. 1459 (JGK)
StatusPublished
Cited by4 cases

This text of 901 F. Supp. 737 (Carbotrade SpA v. Bureau Veritas) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carbotrade SpA v. Bureau Veritas, 901 F. Supp. 737, 1995 WL 617322 (S.D.N.Y. 1995).

Opinion

OPINION AND ORDER

KOELTL, District Judge.

This admiralty action arises from the loss of cargo that occurred when the vessel MTV “STAR OF ALEXANDRIA” (“STAR OF ALEXANDRIA” or the “vessel”) sank during its April 1989 voyage across the Atlantic. The plaintiff Carbotrade SpA (“Carbotrade”), who had chartered the vessel from her owners, brings this action on its own behalf and as an assignee of Essex Cement Co. (“Essex”), the subcharterer of the vessel and owner of her cargo, seeking damages for the cargo lost as a result of the sinking. The plaintiff alleges that the defendant and third-party plaintiff Bureau Veritas (“B.V.”), a classification society, is hable for this loss because B.V. negligently endorsed the vessel’s certificate of classification. The plaintiff contends that B.V. failed to detect or failed to act upon perceivable defects in the vessel, and that this failure was the proximate cause of the vessel’s sinking. B.V. now moves for summary judgment pursuant to Fed.R.Civ.P. 56(e) on the basis that it owed no legal duty to the plaintiff, and that even if B.V. did have such a duty, the plaintiff neither actually nor reasonably relied on B.V.’s classification of the vessel. For the reasons explained below, the defendant’s motion is granted.

I.

The STAR OF ALEXANDRIA was a British flag bulk carrier registered in the United Kingdom (“U.K.”) dependency of Gibraltar. Kende Aff., Exh. 13 (Certificate of British Registry). The vessel broke in two amidships and sank on April 17, 1989 in international waters while on a voyage from Eleusi-us, Greece, to Newark, New Jersey. Its owner was Caribene Investments, Ltd. (“Caribene”), a corporation organized under the laws of Gibraltar. Id.; Exh. 2 (Tisdale 5/26/92 Aff.) at ¶ 6. Pursuant to a charter dated February 28, 1989 (“head charter”), Caribene chartered the STAR OF ALEXANDRIA to the plaintiff Carbotrade, an Italian corporation with its principal place of business in Italy. Tisdale Aff., Exh. 10 (“head charter”); Kende Aff., Exh. 1 (First Amended Complaint) at ¶2. On the same day, Carbotrade subchartered the vessel to Essex, a New Jersey partnership and affiliate of the third-party defendant Titan Cement Company (“Titan”), a Greek corporation and owner of the cement cargo aboard the STAR OF ALEXANDRIA when it sank. Tisdale Aff., Exh. 7 (voyage subcharter); Tisdale Aff., Exh. 1 (Tsanglis Dep.); Kende Aff., Exh. 22 (Essex-Titan Term Cement Supply Agreement); Kende Aff., Exh. 25 (Bill of Lading). Essex is not a party to this action. Carbotrade’s insurer, The Standard of London, has settled with Essex for $1.25 million and currently owns Essex’s claim to causes of action to recover damages for the lost cargo. Kende Aff., Exh. 38A (Ravano Dep.). Essex is to receive a portion of any recovery Carbotrade obtains from any third-party actions connected to the sinking of the STAR OF ALEXANDRIA. Kende Aff., Exh. 29 (settlement, release, and assignment agreement between Carbotrade and Essex).

In this action, Carbotrade sues the classification society Bureau Veritas (“B.V.”), a French corporation with its principal place of business in France and offices in ports throughout the world, including New York. Kende Aff., Exh. 6 (Godefroi Decl.) at ¶¶ 2, 4. B.V. promulgates standards for the quality and integrity of ocean-going vessels to determine their conformity with B.V.’s published standards by “classing” vessels in accordance with its rules. Id. at ¶ 3. All of B.V.’s agreements to class a vessel are entered into with the vessel’s owner and are approved by personnel in B.V.’s headquarters in Courbe-voie, France. Id. at ¶ 4. B.V. classes vessels for terms of three to five years, depending upon the vessel’s age. Tisdale Aff., Exh. 18 (B.V.’s “Rules and Regulations for the Classification of Steel Ships 1988”), Art. 2-12.1. During the term, B.V. conducts surveys “for the maintenance, renewal or confirmation of their class.” Id., Art. 2-11.1. After a survey, the B.V. surveyor issues a classification certificate or endorses the classification certificate with a visa reflecting the survey. Id., Art. 2-11.1. The certificate and visas represent “the only authentic information about the class of the ship; they may be made [740]*740available by the Owner to all interested parties.” Id., Art. 2-11.1. In addition, a ship’s classification is valid only if the vessel is “loaded and operated in a proper manner by competent and qualified crew or operating personnel according to the environmental, loading operating and other criteria on which classification is based.” Id., Art. 1-12.2.23. Here, the STAR OF ALEXANDRIA, a Gibraltar-registered vessel, was subject to U.K. manning laws. Kende Aff., Exh. 28 (Holmes Decl.) at ¶¶7-11.

Under the head charter, the owner of the STAR OF ALEXANDRIA warranted to the plaintiff that the owner would maintain the vessel in class. Tisdale Aff., Exh. 10. B.V. was not a party to this charter. The charter also provided that Carbotrade’s surveyor and master would conduct an on-hire survey “for the purpose of ascertaining the vessel’s condition,” and that “[b]efore Notice of Readiness is tendered at loading port, the vessel is to be inspected and passed by Charterer’s surveyor.” Id.1 The charterer had the option of cancelling the charter up to the day of the vessel’s readiness. Id. If anything prevented “the full working of the vessel,” Car-botrade could cease paying the daily hire for the vessel until the situation was corrected. Id. In addition, the charter provided that any dispute between Caribene and Carbo-trade would be settled through arbitration in London. Id.

Unlike the head charter, the subcharter between Carbotrade and Essex contained no express provision that the owner would maintain the vessel’s class. See Tisdale Aff., Exh. 2 (Fjeldberg Dep.) (noting that subcharter does not mention vessel’s classification). The plaintiff contends, however, that one of the clauses of the subcharter, which stated that the ship was “warranted tight, staunch, and strong, and in every way fitted for the voyage,” implied a guarantee that the ship would be in class. Tisdale Aff., Exh. 7; Exh. 2 (Fjeldberg Dep.). Like the head charter, the subeharter required that before the Notice of Readiness to load cargo was tendered, the vessel was to be inspected and passed by the charterer’s surveyor. Tisdale Aff., Exh. 7. This surveyor could fail the vessel for inspection if he found repairs were necessary, and if the vessel did not pass inspection within 48 hours of the surveyor’s first inspection, the charterers had the option to cancel the charter party. Tisdale Aff., Exh. 7; Kende Aff., Exh. 34 (Fjeldberg Dep.). In addition, the subcharter provided that any disputes between Carbotrade and Essex would be settled through arbitration in New York. Tis-dale Aff., Exh. 7.

Beginning in 1985, B.V. conducted various surveys of the STAR OF ALEXANDRIA. Kende Aff., Exh. 10 (classification certificates); Exh. 6 (Godefroi Decl.) at ¶8. The last inspection of the ship before it sank took place from March 6, 1989 to March 28, 1989. Kende Aff., Exh. 6 (Godefroi Decl.) at ¶ 8. At this time, B.V. issued two certificates required by international convention: a load-line certificate, which concerns the method of loading cargo, and a safety equipment certificate. Id.; Kende Aff., Exh. 10 (classification certificates). In addition, B.V.

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901 F. Supp. 737, 1995 WL 617322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carbotrade-spa-v-bureau-veritas-nysd-1995.