Welcome to our selection of admiralty and maritime law updates from May 2026. It was an eventful month across the industry, headlined by the determination on the lawfulness of the M/T Heroic Idun’s detention by Equatorial Guinea, the settlement between the State of Maryland and the owner and operator of the M/V Dali following its allision with the Francis Scott Key Bridge, and the U.S. Supreme Court’s ruling against the cruise lines in the case concerning their use of property confiscated by the Cuban Government. Let’s dive in.
No Specific Challenge to Delegation Clause—Arbitration Compelled
Hill v. Jackson Offshore Holdings, L.L.C., 175 F.4th 324 (5th Cir. 2026)
An injured seaman entered into a written agreement with the vessel owners under which he would receive supplemental benefits in exchange for his agreement to arbitrate any claims against them. The agreement also contained a delegation clause stating that “any dispute relating to the validity, interpretation, or application of this Agreement shall be submitted to the arbitrator for resolution.”
The seaman later sued the vessel owners in federal district court, alleging negligence and seeking to invalidate “the Agreement, including its arbitration provisions,” on several grounds, including fraud and financial duress. The vessel owners moved to compel arbitration, arguing that the delegation clause required arbitration of the seaman’s arguments on fraud and duress, and that the severability principle compelled arbitration because the seaman challenged the agreement as a whole rather than the delegation clause specifically.
The U.S. Court of Appeals for the Fifth Circuit held that arbitration must be compelled. Relying on the U.S. Supreme Court’s decision in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), the Fifth Circuit explained that unless a party specifically challenges the delegation clause, courts must treat it as valid and compel arbitration. Here, the seaman sought to invalidate “the Agreement, including its arbitration provisions,” yet the Fifth Circuit found no challenge specifically directed at the delegation clause.
Takeaway: The way a challenge is framed can determine who decides the dispute—a court or an arbitrator. A broadly framed challenge to the validity of the contract and its “arbitration provisions” may not be sufficient to specifically challenge the delegation clause.
Read the court’s opinion here.
Transportation Brokers Can Be Liable for Negligently Hiring Motor Carriers
Montgomery v. Caribe Transport II, LLC, No. 24-1238, 2026 WL 1336188 (U.S. May 14, 2026)
A motorist was severely and permanently injured when his tractor-trailer was struck by a truck on an Illinois highway. He sued the truck driver, the driver’s employer, and the transportation broker that arranged the shipment, alleging, among other things, that the broker negligently hired the motor carrier and its driver.
The U.S. Supreme Court held that such state-law negligent hiring claims are not preempted by the Federal Aviation Administration Authorization Act (FAAAA). The Court explained that, even if the FAAAA’s preemption provision would otherwise apply, the statute’s safety exception preserves these claims. Specifically, the exception provides that the FAAAA “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” Because a broker’s duty to exercise reasonable care in selecting a motor carrier is “with respect to motor vehicles” (i.e., concerns motor vehicles), the motorist’s negligent hiring claim falls within the safety exception and may proceed under state law.
Takeaway: This is not a maritime law case, but it matters across the wider transportation and logistics industry. The ruling may prompt transportation brokers to reconsider their carrier selection process. Importantly, as Justice Kavanaugh noted in his concurring opinion, “the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents.” He explained that “brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies.” Accordingly, a defense to negligent hiring claims is available and will turn on tort principles under applicable state law.
Read the court’s opinion here.
U.S. Supreme Court Opened the Door to Cruise Lines’ Potential Multi-Million-Dollar Liability for Using the Port of Havana—But Were They Held Liable?
Havana Docks Corp. v. Royal Caribbean Cruises, Ltd., No. 24-983, 2026 WL 1423365 (U.S. May 21, 2026)
Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, provides that any person who “traffics” in property confiscated by the Cuban Government on or after January 1, 1959, is liable to any U.S. national who “owns the claim” to that property. “Trafficking” includes knowingly and intentionally using such property without authorization from the U.S. claimant.
Havana Docks, a U.S. company, held a time-limited concession over the Port of Havana scheduled to expire in 2004, but it was terminated prematurely in 1960 after Cuban forces led by Fidel Castro took control of the docks and expelled Havana Docks’ agents from the port.
In 2019, Havana Docks sued four cruise lines—Royal Caribbean Cruises, Norwegian Cruise Line Holdings, Carnival Corporation, and MSC Cruises—alleging that their use of the docks to embark and disembark paying passengers constituted “trafficking” in property which was confiscated by the Cuban Government and to which Havana Docks “owns the claim.”
The U.S. Supreme Court held that the elements of a claim under Title III of the Helms-Burton Act were satisfied. Specifically, Havana Docks established that the cruise lines used confiscated property in which it held a property interest and to which it owns a claim. The fact that the concession would have expired in 2004, before the cruise lines’ alleged wrongdoing occurred, did not, in the Court’s view, defeat Havana Docks’ claim. The decision, however, does not resolve the case. The case was remanded to the Eleventh Circuit to consider the cruise lines’ defenses and determine liability.
Takeaway: The decision has significant implications for U.S. businesses whose operations involved property confiscated by the Cuban Government. It is not necessary that the U.S. claimant ever held ownership of the property; a time-limited interest may also suffice. According to Justice Thomas, the use of property “tainted by a past confiscation” may give rise to a claim by any U.S. national “who had any interest in the tainted property” and “owns the claim” to that property.
Read the court’s opinion here.
FMC Collects $1.9 Million Civil Penalty from Maersk
On May 26, 2026, the Federal Maritime Commission (FMC) announced a compromise agreement recovering $1,900,000 in civil penalties from Maersk A/S, a vessel-operating common carrier (VOCC) headquartered in Copenhagen, Denmark. The agreement resolved allegations that Maersk violated the Shipping Act by assessing detention charges pursuant to its service contract and tariffs against third parties who had not consented to be bound by the terms of Maersk’s bills of lading, service contracts, or tariffs.
Maersk did not admit any violation but agreed to terminate the practice, amend its U.S. tariff rules to limit the definition of “merchant” under its bills of lading to shippers, consignees, and persons with a beneficial interest in the cargo as defined in 46 C.F.R. § 515.2(b), and provide refunds and waivers to affected parties.
Takeaway: This case illustrates the FMC’s authority to enforce compliance with 46 U.S.C. § 41102(c), which requires common carriers “to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.” The FMC’s rule codified at 46 C.F.R. § 541 interprets what constitutes just and reasonable practices on invoicing and charges related to the use of marine terminal space or shipping containers. Some provisions of this rule have been the subject of judicial review. For example, in World Shipping Council v. Federal Maritime Commission, 152 F.4th 215 (D.C. Cir. 2025), the court set aside 46 C.F.R. § 541.4, which limited the parties that could be billed for demurrage or detention to contracting shippers or consignees, on the grounds that the FMC failed to explain the exclusion of motor carriers from that list.
Read the news here.
State of Maryland Reaches $2.25 Billion Settlement with Owner and Operator of the M/V Dali
On May 12, 2026, the Attorney General of Maryland announced that the State of Maryland had reached a $2.25 billion settlement with Grace Ocean Private Limited and Synergy Marine Pte Ltd., the owner and operator of the M/V Dali. The settlement resolves the State’s claims arising from the vessel’s allision with the Francis Scott Key Bridge on March 26, 2024.
Note: The settlement does not resolve the State’s claims against the shipbuilder, Hyundai Heavy Industries. In its final report issued in November 2025, the National Transportation Safety Board (NTSB) found Hyundai Heavy Industries at fault in causing the loss of power that led to the allision. The State intends to pursue those claims.
Read the news here.
ITLOS Special Chamber Finds Equatorial Guinea Violated UNCLOS in M/T Heroic Idun Detention
The M/T “Heroic Idun” (No. 2) Case (Marshall Islands/Equatorial Guinea), Judgment of May 27, 2026 (ITLOS)
On May 27, 2026, the Special Chamber of the International Tribunal for the Law of the Sea ruled on a dispute arising from the detention of the M/T Heroic Idun, a large crude carrier that flied the flag of the Marshall Islands and carried a Master and a 25-member crew, by Equatorial Guinea.
On August 7, 2022, the vessel arrived near an offshore terminal in Nigeria’s exclusive economic zone to load crude oil but lacked the required authorizations. When it was approached by a Nigerian Navy vessel whose automatic identification system was switched off, the crew—unable to identify the ship and fearing it could be a pirate vessel posing as the navy—declined to follow it and moved further offshore, ultimately sailing into the exclusive economic zone of São Tomé and Príncipe.
On August 12, 2022, acting on requests from Nigeria, an Equatoguinean naval vessel intercepted the vessel in São Tomé’s exclusive economic zone, ordered it to stop, and escorted it to Equatorial Guinea, where the vessel and its crew were detained—15 of the crew, including the Master, taken to a guarded facility ashore in Malabo and the remaining 11 held aboard the vessel under armed guard. Equatorial Guinea fined the Master (paid as €2,000,132 by the owners), facilitated Nigerian interviews of the crew, and handed the vessel and crew over to Nigeria on November 11, 2022. They were released on May 27, 2023, following a plea bargain.
The Marshall Islands initiated arbitral proceedings against Equatorial Guinea, which the parties agreed to transfer to the Special Chamber of the International Tribunal for the Law of the Sea.
On the merits, the Chamber found a range of violations by Equatorial Guinea, including that, by intercepting and apprehending the M/T Heroic Idun and its crew in the exclusive economic zone of São Tomé and Príncipe, it violated articles 87(1) (freedom of navigation), 90 (the right of every State to sail ships flying its flag) and 92(1) (exclusive flag-State jurisdiction) of the United Nations Convention on the Law of the Sea.
The Chamber rejected the defense that the interception, arrest, and detention of the vessel had been carried out to repress piracy. It found that the messages from Nigeria—describing a supertanker suspected of loading crude oil without approval, illegal fuel supply operation, or crude oil theft—disclosed no act of violence, detention, or depredation against another ship, and held the correspondence from Nigeria did not provide “adequate grounds” for the interception and diversion of the M/T Heroic Idun under article 101(a).
Read the judgment here.
Court of Appeal Clarifies the Sanctions-Risk Threshold in Charterparty “Reasonable Judgment” Clauses
Tonzip Maritime (Singapore) PTE Ltd v 2 Rivers PTE Ltd [2026] EWCA Civ 641
The dispute arose when the owners of the MV CATALAN SEA refused an order to load a cargo of crude oil to be shipped by the Russian oil company Neftisa, relying on the sanctions clause in the charterparty (an amended ExxonMobil VOY2005 form) permitting them to refuse to comply with an order “which in the reasonable judgment of the Owners is prohibited by sanctions or will expose the Owners, the vessel or its managers, crew, the vessel’s insurers or reinsurers to sanctions.” The owners’ concern was that Neftisa was associated with Mikhail Gutseriev, sanctioned by the EU in June 2021 and the UK in August 2021, who had reportedly transferred his beneficial ownership of Neftisa to his brother while retaining a 7% share. The owners refused to load the Neftisa cargo. In response, the charterers purported to cancel the charterparty. The owners treated this purported cancellation as a renunciation of the charterparty and terminated it for repudiatory breach.
The dispute centered on the meaning of the phrase “expose … to sanctions” in the sanctions clause: whether the owners had to show that compliance with the charterers’ orders would “more likely than not” breach sanctions, or whether it was sufficient for the owners to reach a “reasonable judgment” that compliance with the charterers’ orders would give rise to a real risk of liability for sanctions.
Foxton LJ (with Coulson and Zacaroli LJJ concurring) agreed with the lower court that a “reasonable judgment” of a real risk was sufficient. He justified this conclusion by reference to the commercial context in which the owners must make their assessment, noting that the owners are typically less well-informed than the charterers as to the factual circumstances relevant to the potential application of sanctions, that sanctions-related facts are often not in the public domain, that sanctions laws are broadly framed and complex, and that the owners must make their assessment quickly.
The Court of Appeal, however, disagreed with the lower court’s conclusion that the owners’ judgment was not a “reasonable judgment” and therefore allowed the appeal. The Court noted that Mr. Gutseriev previously held a majority, high-value interest in Neftisa, which was transferred to his half-brother and long-time business partner following his EU sanctions designation (inferentially in response to those sanctions). The lack of evidence on consideration and the family nature of the transfer raised a real risk of non-arm’s length dealing. Additionally, there was a report describing the company as “associated to sanctioned individual.” Based on the totality of the evidence, the Court concluded that it was reasonable for the owners to view compliance with the charterers’ order as creating a real risk of sanctions liability.
Read the judgment here.
This concludes this month’s selection of admiralty and maritime law updates. Thank you for reading, and see you next month! ⛵
The information provided in this article is intended for informational purposes only and does not constitute legal advice. It should not be relied upon or applied without consulting an attorney to address your specific circumstances. Please note that this article was published on the date indicated and may not reflect subsequent changes in the law.
