Delta Towing Wins Out in Legal Tussle

Press Release
Tuesday, January 15, 2013

LeBlanc Bland P.L.L.C. announces important Fifth Circuit Maritime Ruling: decision addresses enforceability of liquidated damages provision.

An important Fifth Circuit decision in a dispute over the enforceability of a liquidated damages provision -- here, triggered by breaches of a non-compete clause in the sale of two vessels -- constitutes only the third time the Fifth Circuit has addressed this enforceability issue under maritime law.

The decision was handed down last week in the case of International Marine, L.L.C. and International Offshore Services, L.L.C. versus Delta Towing L.L.C., where the Fifth Circuit found in favor of the seller, Delta, and upheld the enforceability of the liquidated damages provision.

In 2006, Delta sold two tugboats to International under the provision that International would not charter out the vessels without giving Delta the opportunity to charter them first. If Delta declined, International was required to pay Delta 10% of the total charter. The vessel sales agreement also provided that liquidated damages would be assessed per occurrence if the non-compete clause was breached.

Two years later, Delta discovered breaches of the non-compete clause and subsequently made demands for payment of the liquidated damages. Eventually, claims were brought in the Eastern District of Louisiana, where the district court issued a midstream ruling in Delta’s favor on the enforceability of the liquidated damages provision. The issue of enforceability was certified for appeal, then an appeal was filed by International. The Fifth Circuit has now ruled in favor of Delta, finding that the liquidated damages provision satisfied the Fifth Circuit test requiring that the liquidated damages amount was reasonably related to the potential damages anticipated by the parties.

The decision is important in maritime law. Actual damages in non-compete agreements are inherently difficult to prove; thus, parties to such agreements typically agree to a liquidated damages provision that they should be able to rely upon being enforced.

Law firm LeBlanc Bland P.L.L.C. serves clients spanning the Gulf Coast, the nation and the world through its offices in Houston, Texas and New Orleans.

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

European Court Ups Standards for River Dredging

The European Court of Justice (ECJ) ruled on Wednesday that damage to water quality must be considered when authorities approve river dredging to expand ports,

Union Vows More Channel Tunnel Disruption

Ferry workers will disrupt traffic through the sub-sea Channel tunnel between France and Britain for 48 hours from midday on Thursday, a union official said. "We

Statoil to Suspend Saipem Rig Contract

Norwegian oil major Statoil said on Wednesday it will suspend a rig contract with Italy's Saipem due to overcapacity in its rig portfolio. The suspension of

Workboats

Yanmar Diesel Engines for Fast New Crew Tender

The expansion of the number of wind turbines out at sea near the northern Dutch coast was reason enough for Ubels Offshore to expand its fleet with a fifth ship last year.

The Hour of Power: Hybrid Marine Technology and Green Ports

In 2015 two significant developments are going to make many operators, owners and builders of professional vessels consider hybrid marine power. Firstly the new emissions laws in ports,

Sanamar Launches 3 Tugs from New Yard

Sanmar’s new custom-built, general purpose shipyard at Altinova, Turkey, has launched three 60-metric-ton bollard pull tugs on the same day, less than five months since work first started at the yard.

Ship Sales

Samsung Bags $4.7bn Order for 3 FLNG from Shell Gas

South Korean shipbuilder Samsung Heavy Industries Co. as won a 5.2 trillion won (US$4.7 billion) order to build three floating liquefied natural gas (FLNG) facilities, reports Yonhap.

Esben Poulsson, New President for Singapore Shipping Association

The Singapore Shipping Association (SSA) has named Asian shipping veteran Esben Poulsson as its new president, succeeding Evergreen’s Patrick Phoon.    “I am

DryShips Sells Six Aframax Tankers

Dry bulk and petroleum cargo shipper DryShips Inc., through its majority owned subsidiary, Ocean Rig UDW Inc. of offshore contract drilling oil services, announced

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Offshore Oil Pod Propulsion Port Authority Salvage Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2470 sec (4 req/sec)