Seatrade-Maritime: Dali’s owners in $2.25bn settlement with Maryland for Key Bridge disaster

Published by Seatrade-Maritime

In a further chapter in the saga of the Dali Francis Scott Key Bridge strike the State of Maryland has reached a $2.25 billion settlement with the vessel’s owner Grace Ocean and operator Synergy Marine.

The settlement comes against the backdrop of legal proceedings in front of a Federal judge that are set to begin in early June concerning limitation of shipowner liability in the event of accidents.

The Francis Scott Key Bridge, which will be rebuilt in the coming years, is owned by the Maryland Transportation Authority (MDTA). The announcement of the settlement came at the same time as the filing of criminal charges against the vessel operator.

Numerous legal actions are still anticipated, with $2.25 billion deal being one piece of a much larger puzzle. The State of Maryland is still intending to follow up on claims against the vessel’s builder Hyundai Heavy Industries (HHI). 

Anthony Brown, the Maryland Attorney General, said in a prepared statement: “This $2.25 billion settlement reflects the full measure of accountability we were able to secure from the vessel interests — and our pursuit of justice is not finished. We will continue to press our claims against the shipbuilder whose fault helped bring this bridge down”. Earlier this year, in April, the State had received a $350 million payout, in turn, to be subrogated to the vessel owners, under a policy that it had in place, through a company tied to insurer Chubb.

The Congressional representative for the district the includes Baltimore US Rep. Johnny Olszewski, had said in a statement: “By avoiding the uncertainty and delay of a lengthy trial, these funds can be put to work sooner to support the recovery and reconstruction effort… At the same time, this process is far from over. The state intends to continue pursuing damages from the ship’s builder, Hyundai Heavy Industries, which the National Transportation Safety Board also identified as bearing responsibility.”

At the time of the earlier $350 million settlement, James Mercante, Admiralty lawyer with New York based Gallo Vitucci Klar LLP, had explained in a video posted by Baltimore news outlet WBAL, said: “I would think that the reason decided to settle this claim is because it’s a fixed claim. The vessel owners insurance, I think wisely decided to settle because it’s a quantifiable amount- a fixed amount”.

Looking towards the then future- at events now unfolding, Mercante continued: “We don’t know if the State’s claim is $2 billion…$3 billion…business interruption…so let’s knock out the ones that are easy…and that’s what they did.” The Dali is entered into Brittania, a member of the International Group of P&I Clubs.

Limitations of shipowner liability have figured into the Dali legal maneuverings; they are the subject of the upcoming  June hearing. 

An article by lawyers Squire Patton Boggs, refers back to old legislation restricting owner liabilities, but ties it to ongoing political developments on Capitol Hill: “When enacted in 1851, the purpose of the Limitation Act was to encourage shipbuilding and investment in the maritime industry. One hundred seventy-five years later, the intent of the Limitation Act is reflected in the pending SHIPS for America Act and Executive Order No. 14269, Restoring American’s Maritime Dominance. While the Limitation Act may be amended in the future, it is unlikely to be repealed.”

Meantime, the course ahead will be lengthy, and expensive; recent estimates show the cost of replacing the downed bridge increasing above previous estimates. In commentary from Minorcan Mullet, a Baltimore based social media outlet covering maritime matters, the narrator said: “The cost of the Key Bridge [replacement] has now climbed to between $8 billion – $9 billion.”