Ship Owner Utilizes 19th-Century Law to Mitigate Liability After Baltimore Bridge Collision

Grace Ocean, the Singapore-based owner of the container ship Dali, faces a legal storm following the vessel’s collision with the Francis Scott Key Bridge in Baltimore, an incident that disrupted the eastern U.S. transport network and presumed the loss of six lives. Despite potential multi-directional lawsuits, including from the bridge’s owner and the victims’ families, the ship owner might find refuge in a maritime law from 1851, famously invoked by the Titanic’s owner, to limit financial liability.

This law could reduce the owner’s payout to the value of the ship post-accident plus the freight earnings, potentially shrinking the financial obligation to tens of millions, significantly less than the full damages claims. This approach, while rare, is not unheard of in maritime disasters, where ship collisions and resultant damages and injuries are a known risk.

Insurance, particularly from the International Group of Protection and Indemnity Clubs, which covers a significant portion of global sea cargo, will play a crucial role in addressing the legal challenges ahead. Proving negligence or mechanical failure will be pivotal in insurance claims. Notably, Maersk, under whose charter the Dali operated, may escape liability, having had no crew on board, with the ship operated by another company.

The incident also opens the door for victims to seek damages under the U.S. Constitution, although past cases suggest businesses claiming economic losses from such events often face hurdles in securing monetary damages unless physical injury occurred. Meanwhile, the Maryland Transportation Authority may attempt to keep the Dali under arrest in the U.S. to ensure compensation for damages, indicating the ship and its owners are set for an extended legal battle.