remainder eventually made it to its destination.
Sealift now has filed suit to recover its expenses associated
with chartering the Catherine L. Sealift claims that these
expenses were "special charges" that Armenia is required to pay
under paragraph 29 of the charter. In particular, Sealift
requests to be reimbursed $370,501.03 for chartering the
Catherine L. and $63,000 for leasing the vacuvators used to
transfer the wheat from the Inger to the Catherine L.
Sealift admits that it was responsible under the general terms
of the charter for the expenses related to the transportation of
the wheat to the Armenian border. See Deposition of John J.
Raggio, Def.'s Motion for Summ. J., Exh 1 at 67-68; Deposition
of Ragnar Meyer-Knutsen, Def.'s Motion for Summ. J., Exh. 7 at
33-36, 116-17. See also Government of Armenia Charter Party,
Pl.'s Motion for Summ. J., Exh. 4 ¶ 10 ("Contractor to deliver
cargo in rail cars through Bill(s) of Lading to final
destination (Airum, Armenia) at Owner's time, risk and
expense"). Sealift therefore only could recover its expenses if
some provision of the charter shifted the responsibility for the
cost of storing the wheat on the Catherine L. to Armenia.
Sealift claims that paragraph 29 of the charter in general, and
the clause stating that Armenia shall pay "special charges
incurred with respect to the goods" in particular, shifted the
The parties disagree regarding the meaning of the term
"special charges." Armenia contends that "special charges" are
expenses incurred in order to protect cargo from a "general
average event." A general average event is an event creating a
peril that threatens the entire voyage. See THOMAS J.
SCHOENBAUM, ADMIRALTY AND MARITIME LAW 351 (2d. ed. 1994).
Sealift, on the other hand, distinguishes "special charges" from
a "general average event" or "general average loss," arguing
that "special charges" are expenses incurred by the shipowner to
protect the cargo from loss or destruction, while "general
average charges" are expenses incurred to protect both the
ship and the cargo. See Orient Mid-East Lines, Inc. v. A
Shipment of Rice, 496 F.2d 1032, 1038 (5th Cir. 1974) ("General
average concepts apply only to action taken for the common
safety when the ship and its cargo are in peril"); Eagle
Terminal Tankers, Inc. v. Insurance Co. of U.S.S.R.,
(Ingosstrakh), Ltd., 489 F. Supp. 920, 923 (S.D.N.Y. 1980),
rev'd on other grounds, 637 F.2d 890 (2d Cir. 1981) (same).
Although it appears that Sealift is correct that "special
charges" have a meaning apart from a "general average event,"
the differences between the parties' definitions does not
further Sealift's argument because the Catherine L. expenses do
not satisfy even Sealift's definition of "special
charges."*fn4 While Sealift argues that "special charges" are
expenses incurred by the shipowner to protect the cargo from
loss or destruction, Sealift does not provide any
indication of how the transfer of the wheat from the Inger to
the Catherine L. protected "the cargo from loss or destruction."
Sealift has pointed the Court to a number of cases in which the
threat of an ongoing war necessitated "special charges" to
protect the cargo. In every case cited by Sealift, however, the
action taken by the ship owner actually removed the cargo from
danger, specifically the danger of confiscation. See, e.g., The
Styria v. Morgan, 186 U.S. 1, 22 S.Ct. 731, 46 L.Ed. 1027
(1901) (captain landed and warehoused cargo rather than exposing
it to danger of confiscation at sea); The Wildwood,
133 F.2d 765 (9th Cir. 1943) (master abandoned voyage and returned cargo
to shipper rather than exposing it to danger of confiscation at
sea); Nobel's Explosives Co. v. Jenkins & Co., 2 Q.B. 326
(Q.B. 1896) (England) (captain landed and warehoused dynamite
rather than expose it to danger of confiscation at sea).*fn5
The facts of this case are quite different. Sealift describes
the volatile situation in Poti at length, apparently arguing by
implication that the cargo on the Inger was threatened by the
conflict. Even assuming the danger was real, however, Sealift
took no action to remove the cargo from the danger of
confiscation or any other perceived danger. If the wheat on the
Inger was threatened off the coast of Poti, it was equally
threatened on the Catherine L. By transferring the wheat to the
Catherine L., Sealift put the wheat in precisely the same
situation that it had been in on the Inger — on a ship, in port.
In fact, Sealift's only statement of its reasons for
transferring the wheat does not reflect a need or desire to
protect the cargo; rather Sealift "readily admits that it stored
the cargo on the Catherine L. in order to free up the Inger for
new charters." Pl.'s Motion for Summ. J. at 35. The expenses
incurred by Sealift to transfer and store the wheat on the
Catherine L. therefore were not for the purposes of protecting
"the cargo from loss or destruction" and thus were not "special
charges" under any interpretation of that term. As no other
provision of the charter shifts the responsibility to Armenia
for the expenses of chartering the Catherine L. as an
alternative place to store the wheat until the rail lines
reopened, Sealift cannot recover those expenses. Armenia's
motion for summary judgment therefore will be granted.
An Order and Judgment consistent with this Opinion is entered
this same day.