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September 19, 1984

Complaint of SUN SCHIFFAHRTS G.m.b.H. & CO., K.G. Owner of the Motor Tanker SOUTHERN SUN, and SUN OVERSEAS TRANSPORT, LTD., as Bareboat Charterer, for Exoneration from and Limitation of Liability

The opinion of the court was delivered by: SHAPIRO




 Petitioners, Sun Schiffahrts, G.m.b.H. & Co., K.G., German owners of the motor tanker Southern Sun, a Liberian flag vessel, and Sun Overseas Transport, Ltd., a Liberian corporation (owned by a Delaware Corporation) (collectively "Sun"), brought this action as bareboat charterer for exoneration from and limitation of liability pursuant to 46 U.S.C. ยง 183 et seq. The tanker, chartered by Sun Oil Corporation of Pennsylvania, was carrying Libyan crude oil purchased by Sun Oil Trading Co. from the National Oil Company of Libya ("NOC") and delivered at Es Zueitina, Libya; it washed aground in a violent storm while attempting to unmoor from an off-shore oil terminal located at Es Zueitina. Defendant Occidental of Libya, Inc. ("Oxy"), a Delaware Corporation, operator of the terminal and co-owner together with NOC as transferee of the Government of Libya, filed a claim against Sun for alleged damage to its equipment and facility. Sun counterclaimed against Oxy for damage to the Southern Sun and its cargo.

 The trial has been trifurcated. Phase I considered these issues: a) choice of law; and b) the validity and meaning of a document called a Tanker Loading Advice ("TLA") proffered by Oxy as a condition to berthing at the terminal and signed on behalf of Sun. Oxy claims the TLA not only prevents Sun from recovering damages for Oxy's negligence but also allows Oxy to recover damages from Sun, even if caused by Oxy's culpable conduct; after determining the validity and construction of the TLA as to exemption from liability and indemnification the issues of comparative negligence of the parties and amount of damages remain to be tried.

 For the reasons stated below, the court finds that: a) the law of Libya determines the validity and meaning of the TLA; b) the TLA is a valid contract; c) the provision that its terms and conditions are construed in accordance with English law is a valid choice of law; d) by the terms of the TLA, Paragraphs 2 and 3 exempt Oxy from liability; and e) Paragraph 4 cannot be construed to require Sun to indemnify Oxy for Oxy's negligence. Therefore, on the trial of liability in Phase II Sun will be denied recovery for any damage resulting from the advice or assistance of the Mooring Master or the services of mooring launches, personnel or furnishing of gear under his supervision and control. Whether Sun or Oxy recovers from the other must now be determined by trial of the issue of the comparative negligence of the parties in causing their loss or damage. The trial of Phase III on the amount of loss or damage and the applicability of the Limitation of Liability Act will follow.


 1. Petitioner Sun Schiffahrts G.m.b.H. & Co., K.G., a German partnership (consisting of a corporation serving as a general partner, Sun Schiffahrts, G.m.b.H., and Sun Schiffahrts, K.G., a partnership of individual citizens), at all material times owned the oil tanker Southern Sun. Both Sun Schiffahrts, G.m.b.H. and Sun Schiffahrts, K.G. were formed and registered under the laws of Germany.

 2. Petitioner Sun Overseas Transport, Ltd. is a Liberian registered corporation. Sun Overseas Transport, Ltd. was owned at all material times by Marine Investment Company of Delaware, a Delaware corporation, which in turn was wholly owned by Sun Company, Inc., a Pennsylvania corporation. Sun Company, Inc. produces and markets refined petroleum products, including Sunoco gasoline.

 3. On January 29, 1971 Sun Overseas Transport, Ltd. entered into a contract entitled "Time Charter Contract" with Sun Schiffahrts G.m.b.H. & Co., K.G. for the use of the Southern Sun which was still under construction in Bilbao, Spain.

 4. Defendant Occidental of Libya ("Oxy") is a corporation registered under the laws of the State of Delaware, with its principal place of business and base of operations in Libya.

 5. At all material times Oxy owned a 49% interest in a tanker terminal at Es Zueitina, Libya; the National Oil Company of Libya ("NOC"), as transferee of the Government of Libya owned a 51% interest, following nationalization in 1973. Oxy operated the terminal.

 6. Oxy is a subsidiary of both Occidental Petroleum Corporation and Occidental Oil and Gas Corporation, both of which are incorporated in the United States and maintain offices within the United States.

 7. All physical assets of Oxy were located in Libya during the relevant time period.

 8. Sun Oil Trading, Ltd., is a Bermuda company and a wholly owned subsidiary of Sun Company, Inc.

 9. Sun Oil Trading, Ltd. acquires foreign crude oil to supply Sun Company, Inc.'s domestic United States refineries.

 10. In June, 1975, Sun Oil Trading, Ltd. entered into a three-year contract with NOC to purchase 15,000 barrels a day of crude oil from Libyan oil fields.

 11. Sun Oil Transport, Ltd., sold all of this crude oil to Sun Oil Corporation of Pennsylvania, a wholly owned subsidiary of Sun Company, Inc., both of which are Pennsylvania corporations.

 12. Sun Oil Corporation of Pennsylvania chartered the Southern Sun to supply its refineries, principally those in Puerto Rico and Marcus Hook, Pennsylvania. As charterer, Sun Oil Corporation of Pennsylvania nominated the Southern Sun to load approximately 240,000 barrels of crude oil purchased from NOC by Sun Oil Trading, Ltd. during the period November 18, 1976 to November 22, 1976.

 13. The Southern Sun arrived at the port of Es Zueitina on November 18, 1976.

 14. Prior to berthing, a Mooring Master, Captain Smith, boarded the Southern Sun.

 15. Captain Smith was an employee of Oxy at all relevant times.

 16. Upon boarding Captain Smith presented a Tanker Loading Advice ("TLA") letter, a form prepared by Oxy, to the Master of the Southern Sun, Captain Bertacca, and requested that it be signed.

 17. Captain Bertacca signed that he accepted and agreed to the TLA; the text of this document was as follows:




The Master


M.V. Southern Sun


Zueitine, ...


Dear Sir:


The bearer of this letter is our Mooring Master. Your vessel has been scheduled to moor in Bravo berth at 0730 hrs. on 22/11/76 subject to such vessel being ready in all respects to fulfil (sic) the requirements laid down in "OCCIDENTAL OF LIBYA INC., PORT INFORMATION AND RULES". (sic) Notice of readiness will be accepted in accordance with the aforesaid rules. You agree that such tanker, its equipment, machinery, lines and gear are in the necessary condition to properly perform loading services required.


The services of the Mooring Master are provided upon the express understanding and condition that when any Mooring Master furnished by OCCIDENTAL goes on board a tanker for the purpose of assisting such tanker he becomes for such purpose the servant of the Owner or Charterer of the tanker, and OCCIDENTAL shall not be liable for any damage or injury resulting from the advice or assistance given or for any action taken by such Mooring Master while aboard or in the vicinity of the assisted tanker.


Similarly, the services of the mooring launches and mooring personnel and the furnishing of hosing-up gear are under the supervision and control of the Mooring Master, and OCCIDENTAL skall [sic] not be liable for any damage or injury resulting from the performance of these additional services or furnishing of equipment during the period in which they are utilized by your vessel.


The users of any premises or property of Occidental [sic] shall indemnify and/or hold harmless OCCIDENTAL, its parent, any subsidiary, and/or affiliated companies for/from any and all claims, expenses, costs, causes of action, liabilities, losses or damages of any nature whatsoever arising out of and during the period the premises and/or property is used, from whatsoever cause, including any damage caused to OCCIDENTAL's premises or property by the above named vessel.


OCCIDENTAL in no way warrants that the premises, property, machinery, equipment or gear made available to the user is devoid of defects or that it is fit for the service to which it is put.


The terms and conditions of this Loading Advice shall be construed in accordance with English Law.


Kindly acknowledge receipt of this letter by signing and dating a copy of this Tanker Loading Advice and returning it to the Mooring Master.

  ACCEPTED AND AGREED TO: /s/ Bertacca 22/11/76 /s/ Luis Ruiz Master (Date) Marine Superintent Capt. LUIS RUIZ


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