Canada: No Liability for Extended Detention

The Federal Court of Appeals (FCA) of Canada ruled that the government is not liable for the extended detention of a ship based on an allegedly negligent port state control (PSC) inspection. In the instant case, a Canadian PSC boarding officer determined after a somewhat cursory inspection that certain frames on the foreign ship were excessively wasted and must be replaced before the ship could depart port. The trial court determined that the detention was not in accordance with requirements of the SOLAS Convention and the Tokyo MOU. Damages were awarded in the amount of C$4,344,859.47, plus prejudgment interest in the amount of C$1,624,212.75. The Government of Canada appealed. The FCA ruled that the trial court did not grant sufficient deference to the decisions of the federal agency charged with administering the PSC program. While the period of detention of the ship (April 5-August 13, 1997) was found to be excessive, the FCA ruled that the actions of the agency were not so egregious as to justify payment of damages. Canada v. Berhad, 2005 FCA 267 (HK Law)