US v. Ultramar Shipping Co., Inc., No. 85 Civ. 4549 (CLB).

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Writing for the Court: Chester Hooper, Glenn R. Jones, Haight, Gardner, Poor & Havens, New York City, for defendants
• Citation: 1988 AMC 527,685 F. Supp. 887
• Parties: UNITED STATES of America, Plaintiff, v. ULTRAMAR SHIPPING CO., INC., Aries Marine Shipping Co., and Bankers Trust Co., and the S.S. ULTRAMAR, her Engines, Tackle, Boilers and Appurtenances, Defendants.
• Docket Number: No. 85 Civ. 4549 (CLB).
• Decision Date: 11 January 1988

685 F. Supp. 887
1988 AMC 527

UNITED STATES of America, Plaintiff,
v.
ULTRAMAR SHIPPING CO., INC., Aries Marine Shipping Co., and Bankers Trust Co., and the S.S. ULTRAMAR, her Engines, Tackle, Boilers and Appurtenances, Defendants.

No. 85 Civ. 4549 (CLB).

United States District Court, S.D. New York.

September 1, 1987.

Supplemental Findings and Conclusions January 11, 1988.

685 F. Supp. 888

COPYRIGHT MATERIAL OMITTED

685 F. Supp. 889

Janis G. Schulmeister, David P. Howe, Dept. of Justice, Civil Div., Torts Branch, New York City, for plaintiff

Chester Hooper, Glenn R. Jones, Haight, Gardner, Poor & Havens, New York City, for defendants.

FINDINGS AND CONCLUSIONS

"Someday on the Ganges I'll meet you once more And I'll kiss you and caress you Where the waters kiss the silent shore."

From "Moonlight on the Ganges", words by Chester Wallace, music by Sherman Meyers, c. 1926 Campbell Connelly Ltd.

BRIEANT, Chief Judge.

In the moonlight on the morning of June 14, 1984, on the Ganges Delta, the M.V. CHERRY LAJU ran aground, capsized and sank. One seaman perished. Her cargo of wheat, sent by the United States to the people of Bangladesh through the voluntary relief agency CARE ("Cooperative for American Relief Everywhere"), was lost. The United States, as assignee for CARE, brought this action to recover for that loss, estimated at $1,144,388.77.

The Court has subject matter jurisdiction under 28 U.S.C. §§ 1333 and 1345, and has jurisdiction over the defendants. The action was tried to the Court on March 27, March 31 and April 1, 1987, and post-trial memoranda were submitted on August 3, 1987. While our trial record is illuminated largely by moonlight on the Ganges, the following constitutes the findings and conclusions of the Court.

The Shipment

In February 1984, pursuant to Title II of the Agricultural Trade Development and Assistance Act of 1954, 7 U.S.C. §§ 1721-1727, the United States donated to CARE 7,021 metric tons of bulk wheat for shipment to Bangladesh as foreign aid. The cargo was consigned from United States West Coast ports to Chittagong and Chalna, both ports in Bangladesh, aboard the

685 F. Supp. 890

S.S. ULTRAMAR, an American flag bulk cargo ship, pursuant to a Contract of Affreightment dated March 26, 1987. The ULTRAMAR was crewed by defendant Aries Marine Shipping Co. and operated by defendant Ultramar Shipping Co., Inc., under a bareboat charter from the owner/trustee defendant Bankers Trust Co. (these vessel interests are referred to collectively as "Ultramar Shipping"). Upon arrival in Bangladesh, foreseeably unable, because of her size and draft, to navigate the Pusur River passage to Chalna, and also unable to reach the wharfs at Chittagong, the S.S. ULTRAMAR transferred its cargo to six smaller ships, among them the M.V. CHERRY LAJU

Defendants do not contest that they are liable for the loss of 9 tons of wheat which were damaged aboard the S.S. Ultramar and another vessel. However, defendants claim the benefit of the exemption from liability provided in the Carriage of Goods by Sea Act (COGSA), 46 U.S.C.App. § 1303, as to the remaining 7012 tons lost aboard the CHERRY LAJU.

The Contract of Affreightment here was executed on behalf of CARE by its broker Wm. H. Muller Shipping Corporation and on behalf of Ultramar Shipping by its Vice President, Captain Jack Ostromogilisky. The pertinent portions of the Contract of Affreightment provide:

"CARGO: ... Wheat in Bulk

VESSEL: Ultramar ...

* * * * * *

DISCHARGE PORTS: Chittagong and/or Chalna

* * * * * *

FREIGHT RATE: U.S. $65.83 per M.T. metric tons ... Full berth terms, both ends ...

* * * * * *

OTHER CONDITIONS: ... If offloading by hand becomes necessary, the vessel owners and/or their agents are responsible for providing labor ...

Cargo to be delivered at discharging ports as per bills of lading....

Any lightening to reach safe draft and berth at discharge ports, to be for owners' account....

Discharge costs from lighters for owners' account."

The grain was lifted by the ULTRAMAR at Portland, Oregon, at Vancouver, Washington, and at Tacoma, Washington, on April 16, 23, and 30, 1984, respectively. The vessel issued three clean on board Bills of Lading for a total of 163,334,263 net pounds of grain. The Bills of Lading state that the cargo was "in apparent good order and condition" and that it was to be delivered to the "Port of Chittagong and/or Chalna." The Bills of Lading incorporated COGSA, 46 U.S.C.App. §§ 1301-15 and applied the well known terms of "Lighterage Clause No. 26 of the `Centrocon' form of charter-party." This lighterage clause provides:

"Insufficient Water at Discharging Port. Should the Steamer be ordered to discharge at a place to which there is not sufficient water for her to get the first tide after arrival without lightening, and lie always afloat, lay days are to count from 48 hours after her arrival at a safe anchorage for similar vessels bound for such place and any lighterage incurred to enable her to reach the place of discharge is to be at the expense of the Receiver of the Cargo, any custom of the port or place to the contrary notwithstanding, but time occupied in proceeding from the anchorage to the port of discharge is not to count."

The Contract of Affreightment and Bills of Lading establish that the parties contemplated that, except for lighterage, the transportation of the cargo was to be accomplished solely by the Ultramar. If the Ultramar was compelled to discharge before reaching the place of discharge at the ports of destination, the cargo could be delivered by lighters at the expense of Ultramar Shipping. No mention is made of any other form of multimodal transport. The documents do not distinguish between delivery to Chittagong or to Chalna.

It was clear to the participants that lighterage would be required to discharge the

685 F. Supp. 891

wheat at Chalna. That port is located on the Pusur River, some 66 miles from the delta of the Ganges and the controlling depth for the port was 24.7 feet. The ULTRAMAR had a draft of more than 45 feet on departure from Tacoma

The Voyage

The Ultramar sailed from Tacoma for Bangladesh on May 1, 1984 and arrived at an anchorage off Bangladesh on May 26, 1984. Due to her length of 896 feet and her maximum loaded draft of 45 feet eleven inches, the ULTRAMAR could not enter the arms of the Ganges leading to Chittagong or Chalna. Thus, as permitted by the Contract of Affreightment, the ULTRAMAR anchored in the Bay of Bengal and transferred her cargo to smaller vessels to effect delivery to Chittagong and Chalna.

For this operation, defendants hired the CHERRY LAJU and five other vessels under a "Lightering and Bagging/Discharge Agreement" dated May 27, 1984, between Ultramar Shipping and Bengal Shipping Line, Ltd. Neither the United States nor CARE was a party to that agreement. The other lighters hired were the PENTA-Y, the BENGAL STAR, the HIGH SEA PRIDE, the REUNION, and the INDIAN GLORY. The CHERRY LAJU was to deliver grain to the port of Chalna, a journey which entailed navigating a narrow river channel and crossing a sand bar.

The "Lightering and Bagging/Discharge Agreement" between Ultramar Shipping and Bengal Shipping provided in relevant part:

"The Contractor Bengal Shipping agrees, at his own risk and expense to perform the lightering and bagging/discharging obligations of carrier Ultramar Shipping.... Contractors shall have the benefit of carrier's right under the said Booking Note and Bill(s) of Lading and shall be bound by all Carrier's obligations only so far as such mutual rights and obligations pertain solely to the lightering and Bagging/Discharging at the designated port(s)/berth(s) and delivery of the cargo to consignee from the lightening vessels...." (Ex. P).

The CHERRY LAJU was a sea going general cargo vessel of Singapore registry. Because her capacity plan was lost, the Court relies on the capacity plan of the sister ship SVEND MAERSK. Although plaintiff has demonstrated some inconsistency between the SVEND MAERSK diagrams and statements regarding the tonnage and draft of the CHERRY LAJU, the testimony at trial established by a preponderance of the evidence that the SVEND MAERSK plan is an accurate representation of the dimensions and specifics of the CHERRY LAJU at the time she performed the transfer operation. (Boyle, Tr. 272-276).

The CHERRY LAJU was not fitted to carry bulk grain according to International Regulations. As a lighter she was not bound by those regulations. However, the Court notes the relevance of the requirements of the International Convention for the Safety of Life at Sea (SOLAS) to which the United States, Bangladesh and Singapore are signatories. (Ex. 23, 30, 30A). The SOLAS Conventions

"represent a uniform set of internationally recognized navigational rules and thus they have the status of general maritime law. Indeed, Professors Gilmore and Black have noted that `the more competent ship officers have most of the rules substantially committed to memory.' G. Gilmore & C. Black, The Law of Admiralty 489 (2d Ed.1979)."

Alkmeon Naviera, S.A. v. M/V Marina L, 633 F.2d 789, 793 (9th Cir.1980).

The pertinent guidelines of the SOLAS Conventions of 1960 and 1974 require that bulk grain in partly filled compartments be trimmed level and be held down by strapping, lashing, or overstowing with bagged grain or other suitable cargo, that filled compartments be fitted with shifting boards or "saucers," and that throughout the voyage the ship maintain a certain level of stability as determined by a special formula, discussed below.

The CHERRY LAJU loaded alongside the ULTRAMAR by "vacuvator" hose under the supervision of Captain Muhammed E. Sobhan of Bengal Shipping, acting on

685 F. Supp. 892

behalf of the defendants. (Ex. P and NN). The master of the CHERRY LAJU, Captain Fermin F. Guerrero, had never carried grain before. The loading left a void space of at least 18 inches on the top of the cargo. (Boyle,...