Tsakos and UK P&I Club gain victory for shipowners in the US Supreme Court.

On Monday 30th March 2020, the United States Supreme Court found in favour of the Owner of a Tsakos managed ship, when the court held that the safe port clause in the industry’s ASBATANKVOY form constitutes a warranty of safety, in long standing litigation funded by the UK P&I Club in response to an accident involving the tanker ATHOS I in the Delaware River on 26 November 2004. In consequence of Monday’s court decision, damages in the sum of approximately $75 million will be reimbursed by the voyage charterer, CITGO, and shared between the ship’s owner, the UK Club, and benefitting the International Group’s Pooling system and Reinsuring Underwriters.

The court decision brings US law into alignment with the long standing position in English law, namely that this clause represents a warranty of safety to call at the load and/or discharge port nominated by the charterer. Following the expenditure of costs incurred in response to this pollution related accident, the total recovery due to the UK Club, on its own behalf and for the IG Pool and Reinsuring Underwriters, is estimated to reach a record breaking sum of $160 million.    

The many years of effort, which have culminated in the above decision,  underscore our confidence in the rule of law while  the Supreme Court’s decision underlines the importance and significance of safe, well respected, understood and applied marine navigation practices, which have, for decades, safeguarded human life at sea, the protection and preservation of the marine environment as well as property. 

At this time of unprecedented global challenges to health and welfare of humanity, it is wholly proper and appropriate once again to thank the many men and women  of the US Coast Guard and other governmental agencies, private contractors and individual workers as well as the Master, Officers  and crew of the Tsakos-managed tanker, who, from the very beginning of the incident, participated and contributed efficiently and effectively to the cleaning up operation from the spilled oil, whilst safeguarding the safety of all involved in the operation to protect and preserve the local environment. The aftermath to the ATHOS I incident highlights the constructive professional cooperation demonstrated by the privately owned shipping industry, the ship’s liability insurer - the UK P&I Club, and federal government services at the highest level with a beneficial outcome for the community and the environment.

A copy of the press release is available in full here.

Staff Author