Loss of MSC Carla Shakes Ship Repairers

Friday, August 06, 2004
The 2,400-teu containership MSC Carla, which was originally built in Sweden in 1972, broke in two during storms in the Atlantic during November 1997. The vessel was lengthened by South Korea’s Hyundai Mipo Dockyard (HMD) during 1984, the original contract being signed by Hyundai Corp and subsequently sub-contracted to HMD. At that time the owner was Sweden’s Brostrom. A US court has ruled that the loss ship was a result of deficiencies in work carried out at HMD during the lengthening operation. The North of England Protecting & Indemnity Association could recover $20m from HMD and Hyundai Corp (HMD’s owning company) after claiming that work was negligent, in breach of warranty, or otherwise gave rise to a product liability claim. HMD and Hyundai Corp have not yet decided whether to appeal this significant judgment – there is a 30 day period during which the companies can appeal. The key judgment is that HMD, which at that time had a very full order book including general repair contracts and other lengthening projects, hired sub-contracted welders to enable the contract to be completed on time and therefore the yard avoiding costly penalty clauses. Lloyd’s Register (LR) was the Classification Society involved, and there are possibilities that LR will also face court on this particular case. Part of the judgment was that no-one individual or organization would have been able to detect the fault at the time the ship left the shipyard. Hyundai has put forward some other reasons for the loss – including in-appropriate routing, overloading and flawed hatch covers. All these have been rejected. The judgment is seen as landmark case in determining how US courts will view the product liability of shipyards.
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