5 ms·

TLDR of the logic behind that sum for anyone else who wondered like I did: They claim the ship's value before the crash as $90M, and that estimated costs for s

by swores 3y ago

TLDR of the logic behind that sum for anyone else who wondered like I did: They claim the ship's value before the crash as $90M, and that estimated costs for salvage and repairs to the ship are $19.5M and $28M respectively, leaving the value of the ship now at $42.5M (points 15-17 in the main document). They then add the value of pending freight ($1.17M): "Petitioners offer an Interim Stipulation of Value in the amount of $43,670,000 (i.e., sound value of the vessel plus pending freight less repair costs and salvage costs)." and mention that they'll file updated numbers once salvage and repair costs are confirmed rather than estimates. IANAL nor in the US, so I'm curious whether this is standard law to be able to limit your liability to the (post-crash) value of the ship and the only thing in question is how the numbers end up, or if it's a long-shot hope that the companies' lawyers figured they might as well try asking for in case a judge feels friendly?

michaelt 3y ago
> IANAL nor in the US, so I'm curious whether this is standard law to be able to limit your liability to the (post-crash) value of the ship 46 USC 30523: General limit of liability [1] "In General.-Except as provided in section 30524 of this title, the liability of the owner of a vessel for any claim, debt, or liability described in subsection (b) shall not exceed the value of the vessel and pending freight. [...] liabilities subject to limitation under subsection (a) are those arising from [...] any loss, damage, or injury by collision" Of course, this is kinda what limited liability is - even if the law didn't say that, the owners of a $90M ship could simply set up a limited company that just owned that one ship and had no other assets, and simply declare bankruptcy if liabilities exceeded the value of the ship. [1] https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&req=granuleid%3AUSC-prelim-title46-section30523&num=0&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0Ni1zZWN0aW9uMzA1MDE%3D%7C%7C%7C0%7Cfalse%7Cprelim https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&...
- Timshel 3y ago
  I was wondering how isolated the ownership was and the NYT reports that Grace Ocean Pte Ltd own 55 ships (according to Equasis). So not as much as I expected.
- unyttigfjelltol 3y ago
  It happened in a port so it's a very solvable cost-sharing problem: if you have an unprotected bridge, don't let big ships near it without posting a special bond or making a special commitment to protect the bridge above this liability.
proteal 3y ago
An answer like this would need to refer to the policy provisions to really know, but I'm willing to bet the ship should is valued at Replacement Cost. Replacement Cost varies depending on the term of the policy, but the goal of the definition is to get the policyholder back to where they were before the accident (technical term is to indemnify the casualty). This definition typically looks like this: "We will pay the cost to replace a like kind and quality boat OR we will pay the cost to get your damaged boat back to operational state, whichever is cheaper for us." My guess is that the book value of the boat is $90M (what you would get if you sold the boat on the open market, representative of the present value of the asset's economic returns), but to actually build/repair that boat is cheaper. Insurance companies don't want to pay the book value because they aren't getting an economic return on the boat.
- swores 3y ago
  You're talking about how to value the boat owner making an insurance claim (if their policy does indeed match your assumption), whereas I was talking about (and the court filing is about) a different equation which calculates what the current value of the boat is. But I'd also hazard a guess that their insurance policy does not cover this accident for some reason - because if they know their insurance policy is about to turn the boat back to its $90M value then surely this court filing claiming its new lower valuation estimates would be fraud? Edit - actually the document does talk a bit about insurance on pages 10-11, but I don't think I understand it in the context of their claim lowering the value of the boat: "NOW, THEREFORE, in consideration of the premises, Stipulator, The Britania Steam Ship Insurance Association Europe, an entity organized under the laws of England and Wales, hereby undertakes in the sum of $43,671,000, with interest at the rate of 6% per annum thereon from April 1, 2024, that if judgment is awarded against either or both Petitioners, such judgment may be entered against both Petitioner(s) and Stipulator for the amount not exceeding the aforesaid sum and interest. Stipulator, The Britannia Steam Ship Insurance Association Europe, hereby submits itself to the jurisdiction of this Court in connection with this Stipulation and agrees to abide by all orders and decrees of the Court, intermediate or final, and to pay the amount awarded by the final judgment or decree rendered by this Court. If the final judgement or decree is appealed, Stipulator agrees to pay up to the principal amount of this undertaking, with interest at the rate of 6% per annum, unless Petitioner(s) pay such judgment or decree or, in the meantime, the amount or value of Owner's interest in the Vessel and its pending freight in connection with the voyage shall have been paid into Court by Petitioner(s) or a subsequent approved Stipulation for Value thereof shall have been given, in which case this Stipulation shall be void."

by swores 3y ago

michaelt 3y ago

> IANAL nor in the US, so I'm curious whether this is standard law to be able to limit your liability to the (post-crash) value of the ship 46 USC 30523: General limit of liability [1] "In General.-Except as provided in section 30524 of this title, the liability of the owner of a vessel for any claim, debt, or liability described in subsection (b) shall not exceed the value of the vessel and pending freight. [...] liabilities subject to limitation under subsection (a) are those arising from [...] any loss, damage, or injury by collision" Of course, this is kinda what limited liability is - even if the law didn't say that, the owners of a $90M ship could simply set up a limited company that just owned that one ship and had no other assets, and simply declare bankruptcy if liabilities exceeded the value of the ship. [1] https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&req=granuleid%3AUSC-prelim-title46-section30523&num=0&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0Ni1zZWN0aW9uMzA1MDE%3D%7C%7C%7C0%7Cfalse%7Cprelim https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&...

Timshel 3y ago
I was wondering how isolated the ownership was and the NYT reports that Grace Ocean Pte Ltd own 55 ships (according to Equasis). So not as much as I expected.
unyttigfjelltol 3y ago
It happened in a port so it's a very solvable cost-sharing problem: if you have an unprotected bridge, don't let big ships near it without posting a special bond or making a special commitment to protect the bridge above this liability.

proteal 3y ago

An answer like this would need to refer to the policy provisions to really know, but I'm willing to bet the ship should is valued at Replacement Cost. Replacement Cost varies depending on the term of the policy, but the goal of the definition is to get the policyholder back to where they were before the accident (technical term is to indemnify the casualty). This definition typically looks like this: "We will pay the cost to replace a like kind and quality boat OR we will pay the cost to get your damaged boat back to operational state, whichever is cheaper for us." My guess is that the book value of the boat is $90M (what you would get if you sold the boat on the open market, representative of the present value of the asset's economic returns), but to actually build/repair that boat is cheaper. Insurance companies don't want to pay the book value because they aren't getting an economic return on the boat.

swores 3y ago
You're talking about how to value the boat owner making an insurance claim (if their policy does indeed match your assumption), whereas I was talking about (and the court filing is about) a different equation which calculates what the current value of the boat is. But I'd also hazard a guess that their insurance policy does not cover this accident for some reason - because if they know their insurance policy is about to turn the boat back to its $90M value then surely this court filing claiming its new lower valuation estimates would be fraud? Edit - actually the document does talk a bit about insurance on pages 10-11, but I don't think I understand it in the context of their claim lowering the value of the boat: "NOW, THEREFORE, in consideration of the premises, Stipulator, The Britania Steam Ship Insurance Association Europe, an entity organized under the laws of England and Wales, hereby undertakes in the sum of $43,671,000, with interest at the rate of 6% per annum thereon from April 1, 2024, that if judgment is awarded against either or both Petitioners, such judgment may be entered against both Petitioner(s) and Stipulator for the amount not exceeding the aforesaid sum and interest. Stipulator, The Britannia Steam Ship Insurance Association Europe, hereby submits itself to the jurisdiction of this Court in connection with this Stipulation and agrees to abide by all orders and decrees of the Court, intermediate or final, and to pay the amount awarded by the final judgment or decree rendered by this Court. If the final judgement or decree is appealed, Stipulator agrees to pay up to the principal amount of this undertaking, with interest at the rate of 6% per annum, unless Petitioner(s) pay such judgment or decree or, in the meantime, the amount or value of Owner's interest in the Vessel and its pending freight in connection with the voyage shall have been paid into Court by Petitioner(s) or a subsequent approved Stipulation for Value thereof shall have been given, in which case this Stipulation shall be void."