CITGO Asphalt Ref. Co. v. Frescati Shipping Co.

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Contract Law
  • Date Filed: March 30, 2020
  • Case #: 18-565
  • Judge(s)/Court Below: SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS, C. J., and GINSBURG, BREYER, KAGAN, GORSUCH, and KAVANAUGH, JJ., joined. THOMAS, J., filed a dissenting opinion, in which ALITO, J., joined.
  • Full Text Opinion

"Safe-berth" clauses in maritime contracts, depending on the language, embody a warranty of safety, imposing liability for unsafe berth regardless of the care taken by the charterer in choosing a berth.

Following a collision between a tanker and a nine-ton anchor, Respondents and United States covered the costs of cleanup. Respondents sought to recover those costs from Petitioners who chartered the tanker for the specific journey. Respondents alleged Petitioner breached a safe berth clause in the parties’ contract which required Petitioner to select a safe berth for the tanker to load and unload. Respondent argued the safe-berth clause is a warranty of safety and thus imposed liability if an unsafe berth was chosen. The Third Circuit Court of Appeals found that the safe-berth clause contained an express warranty of safety not subject to a standard of diligence by Petitioner. The Supreme Court granted certiorari to decide whether the safe-berth clause imposed a duty of diligence, as held by the Fifth Circuit, or established a warranty of safety, as held by the Second Circuit. The Supreme Court focused on the plain language of the clause, finding that it plainly imposed a duty on the charterer in choosing a safe berth. The clause required the charterer to select a berth and it must be safe, thus the duty is absolute. Choosing an unsafe berth constitutes breach, imposing liability on the charterer. AFFIRMED.

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