Stolt-Nielsen’s $155m payment stands as MSC Flaminia appeal is unsuccessful
Stolt-Nielsen to pay $155m over MSC Flaminia incident as appeal fails
A US Court of Appeals has affirmed all of Stolt-Nielsen’s liability from a 2018 ruling regarding the 2012 incident on board the MSC Flaminia.
Stolt-Nielsen said that the Court of Appeals affirmed the decision by the US District Court for the Southern District of New York to uphold the initial ruling by two to one.
Namely, Stolt Tank Containers has been found at fault together with Deltech for 45% and 55%, respectively.
“The company is disappointed by the decision of the Court of Appeals upholding the lower court’s 2018 decision. The company is currently assessing the legal and financial implications of the Court’s decision, which included a dissenting opinion and is considering further appeals and mitigations,” Stolt-Nielsen said in a press release.
The potential liability for the full award is being assessed. Stolt-Nielsen will record a loss provision related to the ruling in its second quarter financials, due to be reported on July 6, of $155m. Net tax will impact the company’s net profit for the quarter by approximately $115m.
Stolt-Nielsen added that it had liquidity in place to fund its potential liability and remains in a financially strong position.
The ruling concerns the incident that took place on July 14, 2012, during which a fire broke out in cargo hold number four aboard the MSC Flaminia during the ship’s crossing of the Atlantic Ocean. An explosion occurred during the crew’s attempt to extinguish the fire.
Stolt Tank Containers had 29 tank containers onboard the ship, three of which were stowed in cargo hold number 4. It was alleged that these tank containers were the cause of the fire and that Stolt Tank Containers did not adequately warn of the inherently dangerous nature of the cargo.
The Phase 2 trial was completed in August 2018. The US District Court for the Southern District of New York delivered a judgment on September 10, 2018, which held Stolt-Nielsen and Deltech jointly and severally liable for the incident.
