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Dispute Resolution Keyed to Menkel-Meadow, 3rd Ed.
Cape Flattery Ltd. v. Titan Maritime LLC
Citation:
647 F.3d 914 (2011)Facts
On February 2, 2005, the M/V Cape Flattery ran aground on a submerged coral reef off Barbers Point, Oahu, Hawaii. The U.S. Coast Guard issued a Notice of Federal Interest and activated Unified Command to respond to the threat of potential oil discharge. Under federal law, Cape Flattery, as the vessel’s owner, was liable for the cost of removing the vessel and any resulting environmental damage. Cape Flattery entered into an agreement with Titan Maritime to salvage the vessel. The agreement contained an arbitration clause stating that “[a]ny dispute arising under this Agreement shall be settled by arbitration in London, England, in accordance with the English Arbitration Act 1996 and any amendments thereto, English law and practice to apply.” Titan successfully removed the vessel, but in the process, serious damage was inflicted on the coral reef. The U.S. government informed Cape Flattery that it would likely be liable for damages exceeding $15 million. Cape Flattery then filed a complaint against Titan seeking indemnity and/or contribution, alleging that Titan’s gross negligence in using submerged tow lines caused the damage to the reef.
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