The U.S. Supreme Court on March 30th issued its decision in Citgo Asphalt Refining Co. (‘Carco’), et al. v. Frescati Shipping Co., Ltd. et al. (the ‘Athos I’ case), affirming the Third Circuit Court of Appeals holding that CARCO as sub-charterer was responsible, via the ‘safe berth’ clause in its sub-charter, to the vessel owner to indemnify for all of the costs of a major pollution cleanup.  The case is a cautionary tale of the wording of clauses which may apply to a party that is in the ‘chain’ of charter parties but was not an actual signatory to the contract containing the clause in question.

The case also illustrates the high costs of pollution cases in the United States and the commensurate lengthy litigation that can ensue.  Our US lawyer and pollution expert, Frank Gonynor, discusses the specifics of the ‘Athos I’ decision and, since most charter parties incorporate English law, we asked Adrian Moylan, an English Solicitor, to comment as well.