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IN RE CORPORATION

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


January 28, 1976

IN RE: Complaint of Lidoriki Maritime Corporation, owner of the Tank Vessel ELIAS, Eletson Maritime Corporation, alleged owner of the Tank Vessel ELIAS, and Gregory B. Hadjieleftheriadis, alleged owner of the Tank Vessel ELIAS, for exoneration from and limitation of liability

The opinion of the court was delivered by: HIGGINBOTHAM, JR.

In this maritime action, where the owners and/or alleged owners of the tank vessel ELIAS *fn1" seek exoneration from and limitation of liability, certain injury claimants have moved this Court to attach the proceeds of hull insurance on the tank vessel ELIAS and to add those proceeds to the limitation fund. *fn2" The claimants argue that the shipowner is a Panamanian corporation, that Panamanian law applies, and that under the applicable Panamanian law the limitation fund includes the proceeds of hull insurance. While the vessel owner does not deny that it is a Panamanian corporation, it nevertheless contends that the applicable Panamanian law has not been pleaded or proven in this case and that, in any event, statutes governing limitation of liability are procedural so that the law of the forum, rather than the law of Panama, applies. After consideration of the briefs and memoranda of law submitted by the parties and after hearing argument and re-argument on the issue, I have concluded, for reasons that will hereinafter appear and on the basis of the present record, that the motion of the injury claimants must be denied.

 During re-argument of this issue, counsel for the injury claimants substantially narrowed the scope of this Court's inquiry when he conceded that his client's case stands or falls on the applicability of Petition of Chadade Steamship Co., 266 F. Supp. 517 (S.D. Fla. 1967). See N.T., December 19, 1975, at 2-3. Unfortunately for the injury claimants, their case falls. As I read Chadade, it does not support their position in the instant matter.

 The Chadade case arose out of the burning and sinking on the high seas of a Panamanian cruise ship, the Yarmouth Castle, on November 13, 1965. Less than a month later, the shipowner filed a limitation petition alleging that it was a Panamanian corporation, and that the Yarmouth Castle was registered under the laws of Panama and flew a Panamanian flag. In the course of the limitation proceeding, a court-appointed "Proctors' Committee" sought a determination from the court that the substantive law of Panama fixed both the valuation of the vessel and the stipulation and security required of the shipowner. The parties agreed that Panamanian law governed the limitation proceeding and that under Panamanian law hull insurance proceeds were part of the patrimony of the vessel. The parties differed, however, on whether that patrimony included protection and indemnity insurance as well. The court accepted the interpretation of Panamanian law offered by the Proctors' Committee's expert witness and held that protection and indemnity insurance was indeed a part of the res, or patrimony, of the Yarmouth Castle. The court noted that "this definition of the res as prescribed by Panamanian law should be applicable to a vessel owned, registered and navigated under the laws of Panama." 266 F. Supp. at 522. Earlier, the court, citing numerous cases, had pointed out that "on the high seas the law of the flag of a vessel generally governs not only criminal conduct but also the substantive rights of crew, passengers and the shipowner in civil causes of action arising thereon." Id. at 519.

 The facts of the instant case are significantly different from those in Chadade. The ELIAS was a Greek registered tank vessel. It flew a Greek flag. Its home port was Piraeus, Greece. While the shipowner, Lidoriki Maritime Corporation, is a Panamanian corporation, its principal place of business was Piraeus, Greece. Finally, the explosions and fires that destroyed the ELIAS occurred not on the high seas but within the territorial waters of the United States. See generally my opinion on another aspect of this proceeding. 404 F. Supp. 1402 (E.D. Pa. 1975), Slip Opinion at 1-3.

  Given these substantial factual differences, it is evident that the injury claimants' reliance on Chadade is misplaced. There is, in the first place, a substantial question about whether Panamanian law and its definition of the res of the ELIAS should apply at all in this proceeding. To be sure, the ELIAS was Panamanian-owned, but that was the vessel's sole contact with Panama and its laws. Moreover, the rationale of the Chadade case itself, where the flag of the vessel was obviously central to the court's decision, suggests that the law of Greece should control, since the ELIAS was registered and navigated under the laws of that nation, not of Panama. See 266 F. Supp. at 519, 522. I need not, and do not, decide whether Greek law should govern this aspect of this proceeding. It suffices to say that, in light of the present record, it would be obviously premature for this court to hold that the interpretation of Panamanian law set forth in Chadade should control my decision on the instant issue. Accordingly, the injury claimants' motion that the shipowner deposit a new stipulation and bond with the Clerk of this Court will be denied. An appropriate order will be entered.

 BY THE COURT:

 A. Leon Higginbotham Jr. / J.

 DATED: January 28, 1976

 ORDER

 AND NOW, this 28th of January, 1976, after consideration of the Motion of certain injury claimants that the shipowner Deposit with the Clerk of this Court a new Stipulation and Bond, it is hereby ORDERED and DECREED that, on the basis of the present record, said Motion is DENIED.

 BY THE COURT:

 A. Leon Higginbotham / J.

 DATED: January 28, 1976

 ORDER

 AND NOW, this 28th of January, 1976, after consideration of the Motion of certain injury claimants that the shipowner Deposit with the Clerk of this Court a new Stipulation and Bond, it is hereby ORDERED and DECREED that, on the basis of the present record, said Motion is DENIED.

 BY THE COURT:

 A. Leon Higginbotham / J.


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