Suez Canal Diversions: Who Bears the Costs When Ships Reroute Around the Cape of Good Hope?
Ocean carriers may need to divert from the planned route due to circumstances such as military conflict in a particular region. Diversions like this may create significant additional costs for the carrier. Can these costs be recovered from cargo interests, or must they be borne by the carrier? There is no bright-line rule. Courts have long dealt with such situations, with some cases dating back to the Suez Crisis of 1956. One such example is Transatlantic Financing Corporation v. United States, 363 F.2d 312 (D.C. Cir. 1966).
In re Genesis Marine, LLC: The Complexities Behind the Six-Month Deadline to File a Limitation Action
The Genesis case serves as a reminder to shipowners of the “reasonable possibility” standard. If the shipowner receives written notice indicating a “reasonable possibility” of a claim and damages exceeding the value of the vessel, the shipowner has six months to file a limitation action in federal court.