In re Frescati Shipping Co. Ltd.
United States Court of Appeals for the Third Circuit
718 F.3d 184, 2013 AMC 1521 (2013)
- Written by Carolyn Strutton, JD
Facts
The Athos I was a single-hulled oil tanker owned by Frescati Shipping Co. Ltd. (Frescati) (plaintiff). The ship was chartered into a tanker pool by Star Tankers and then subsequently subchartered by CARCO (defendant), a conglomerate of affiliated Citgo oil companies. CARCO entered into the subcharter for the Athos I to transport crude oil from Venezuela to CARCO’s asphalt refinery in New Jersey. The Athos I was traveling in the Delaware River, about 900 feet away from its intended berth, when it struck an abandoned ship anchor on the river bottom. The collision ripped a hole in the Athos I’s hull, and approximately 263,000 gallons of crude oil spilled into the river. An expensive but successful clean-up effort followed. Frescati eventually brought a claim against CARCO seeking reimbursement for portions of the clean-up expense. Frescati claimed that CARCO had violated the safe-berth warranty that was included in CARCO’s subcharter agreement with Star Tankers. The district court held that Frescati was not a third-party beneficiary of the agreement between CARCO and Star Tankers and therefore could not sue for a breach of that contract. The district court also determined as an alternative holding that the safe-berth clause had not been breached because the clause only imposed a duty of due diligence on CARCO. Frescati appealed.
Rule of Law
Issue
Holding and Reasoning (Ambro, J.)
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