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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

Navios Maritime Posts 2Q Profit

Navios Maritime Midstream Partners LP (NAP) has reported second-quarter earnings of $5.9 million.   It says revenue for three month period ended June 30, 2016 increased by $4.

Safety and Preparation on the Brownwater Radar

Weather Channel Forecasters are predicting a “near-average” hurricane season for 2016, but warn that an average season does not mean businesses and residents shouldn’t prepare for the worst.

China, Russia Navies to hold S. China Sea Drills

China and Russia will hold "routine" naval drills in the South China Sea in September, China's defence ministry spokesman Yang Yujun told a news conference on Thursday.

Workboats

A Sea Change in Waterjet Technology

Longtime waterjet propulsion equipment provider NAMJet introduces key advancements for the workboat sector. Back in 2011, when boat builder Birdon went looking

ATB Design Comes of Age

The emerging trend of marrying the design of an articulated tug and barge (ATB) to a particular propulsion system to maximize efficiencies of that system has, of late,

Safety and Preparation on the Brownwater Radar

Weather Channel Forecasters are predicting a “near-average” hurricane season for 2016, but warn that an average season does not mean businesses and residents shouldn’t prepare for the worst.

Ship Sales

India Govt, Cochin Shipyard Pact on FY17 Growth Targets

Cochin Shipyard Limited (CSL) has entered into a Memorandum of Understanding (MoU)  with the government of India for the ongoing fiscal under which targets agreed

Buy and Sell Vessels from a Mobile Device

The maritime software development company SDSD are launching a new web based VSnP - Vessel Sale and Purchase module, enabling Sale and Purchase brokers to buy and

VesselValue.com: $28.4B Worth of Ships Delivered to Date

As the calendar now indicates we have passed the half year mark on 2016, VesselValue.com offers insight on the number and value of all the 2016 built vessels that

 
 
Maritime Careers / Shipboard Positions Maritime Security Naval Architecture Navigation Port Authority Salvage Ship Simulators 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: 0.0030 sec (333 req/sec)