Commentary: Dangerous goods documentation

A recent opinion and order stemming from the litigation resulting from the 2012 explosion and fire aboard an MSC containership highlighted the roles of intermediaries and documentation in the transport of dangerous goods.

   A recent opinion and order stemming from the litigation resulting from the 2012 explosion and fire aboard the containership MSC Flaminia highlighted the roles of intermediaries and documentation in the transport of dangerous goods.
   In the primary action, how and why the explosion occurred, how it was handled, and who should be liable for any monetary loss are all being litigated.
   An opinion issued in January considered the request of an intermediary, BDP International Inc., for dismissal of negligence and contract claims asserted against it by a chemical shipper, Deltech, and another intermediary, Stolt Tank Containers. (In re M/V MSC Flaminia. SDNY. 12-CV-8892. Jan. 18.)
   Norway’s Stolt Nielsen Ltd., through its tank container, parcel tanker, and terminal arms, and Philadelphia-based BDP International are chemical transportation companies. In 1999, they entered into a logistics alliance agreement, saying they would each serve different but complementary roles.
   The U.S. District Court judge hearing that motion concluded there were triable issues of fact with regard to a breach of contract claim brought by Stolt, but that there were none with regard to the causation element of the negligence claims.
   BDP’s motion for summary judgment was granted in part and denied in part.
   Deltech was the shipper of record for three containers of divinylbenzene (DVB), which the judge said some parties argued was a cause of the explosion. The company hired Stolt as an NVOCC, which arranged the transportation of the DVB from Louisiana to Belgium aboard the MSC Flaminia.
   Pursuant to the company’s contractual relationship with Stolt, BDP was involved in the creation of the DVB bill of lading. Deltech asserted that it was a third-party beneficiary of that contract.
   Deltech and Stolt both alleged BDP “failed to ensure that proper stowage instructions for the DVB were included on the sea waybill.”
   The court found, however, that the negligence-based claims brought by Stolt and Deltech fail for the same reason. “There is no triable issue of fact with regard to causation,” it said. “That is, even if this court were to f ind triable issues with regard to the existence of a duty of care and breach of that duty, there is no triable issue that such breach was causally related to the casualty aboard the vessel.”
   If dangerous cargoes are being transported, the law requires a Dangerous Goods Declaration (DGD) to be prepared, and a dangerous goods manager at MSC testified the DGD “is the most important document in the whole transport world.”
   He said MSC considers all dangerous goods to be heat sensitive when it stows cargo. While a warning that a particular cargo was heat sensitive would raise a special concern for him, he testified that special stowage instructions nonetheless would not be required.
   The procedure for dangerous cargo would require the placement of a container “in between” the cargo and any potential heat source regardless of whether MSC had received notice that it is heat sensitive, unless the cargo was stored in a closed container, which provides sufficient segregation.
   The court said this testimony, along with a declaration about MSC’s dangerous, chemical and critical cargo handling procedures, “demonstrate no material factual difference between Deltech and MSC’s policies regarding the storage of heat-sensitive cargo.”
   A documentation coordinator for BDP testified that “if there was a particular stowage instruction on a customer’s shipping instruction, it would be manually entered into BDP’s system,” and then the draft bill of lading would be sent to MSC. “Neither she nor anyone else at BDP to her knowledge had any role in preparing the DGD, and she did not receive a copy of the DGD,” according to her testimony.
   The initial shipping instructions from Deltech’s freight forwarder, Panalpina, stated the cargo should stored above deck for temperature monitoring and not be stowed near heat sources. The coordinator said she input those instructions into the BDP system and that they were included on the form she sent to MSC. When MSC sent back a master bill of lading, she failed to notice that the stowage instructions were not included.
   Even so, the court said, “Neither Stolt nor Deltech have raised a triable issue of fact as to whether BDP’s failure to ensure that the special stowage instructions were included on the master bill of lading was a cause of the Flaminia casualty.”
   The ruling noted MSC’s director of safety, compliance and security testified that the carrier’s hazardous group does not have the bill of lading when it is reviewing and checking cargo, and it stows hazardous goods “in accordance with the requirements of the [relevant statutory code] based on the class and UN number provided by the shipper,” not the bill of lading.
   “Even if BDP had a duty to ensure that the heat-related stowage instructions were included on the master bill of lading, on the undisputed facts, its failure to do so made no difference in how the DVB cargo was stored on board the Flaminia,” the court said.
   As to the contract claims, the court said the contract between Stolt and BDP was governed by NewYork state law. Stolt argued it was deprived of a defense it might have “vis-à-vis other parties in the main action.”
   Given that the lack of heat warning was not causally related to the casualty, the court said “it is frankly unclear how Stolt could expect a defense based on such instructions therein to be successful,” but the lack of the instructions on the bill of lading “has provided parties with arguments that they otherwise would not have had in this litigation…Under such circumstances, the court finds that Stolt has sufficient support for damages relating to the breach to allow the claim to proceed to trial.”