Ping An Property & Casualty Insurance Company of China Ltd. Ningbo Branch et al. v. Ningbo Zhenhai Ship Repair Yard et al.

Abstract

An explosion occurred aboard a vessel while it was docked in the Defendant’s ship repair yard, and an oil spill followed. The explosion was caused by unauthorized and negligent repair work done by the repair yard workers and the crew of the vessel. The Plaintiff insurers paid the resulting pollution claims and sued the Defendant seeking reimbursement. The court held that the Plaintiff-insurers had a lawful claim for reimbursement from the repair yard and that the repair yard would bear 60% of the liability for compensation of the cleanup costs, with the vessel bearing the remainder of the liability. The court also held that the second Defendant, the investor of the repair yard, should be personally liable for whatever portion of the debt that the repair yard could not pay.