## Facts

- A liquefied-petroleum-gas tanker operated continuously in the spot market on consecutive voyage charters and was effectively never idle.
- The tanker was struck and damaged in a Mississippi River collision with barges owned by Gulfgate.
- Repairs caused 6.6 days of downtime (off-hire) for the tanker.
- The owner sought collision damages including (1) detention damages for lost profits during downtime, (2) travel costs for a naval architect’s second inspection, and (3) prejudgment interest at a Louisiana statutory rate.
- The district court awarded detention damages of $144,909.86, denied the naval-architect travel expenses as unnecessary, and set prejudgment interest at the federal rate in 28 U.S.C. § 1961.

## Issues

1. Whether a continuously employed spot-market vessel may recover detention damages for repair time without proving the loss of a specific charter.
2. Whether travel expenses for a naval architect’s second inspection were necessary collision-related damages.
3. Whether prejudgment interest in a federal admiralty collision case should apply a state statutory rate or the federal rate under 28 U.S.C. § 1961.

## Decision

- The Fifth Circuit affirmed the judgment in full.
- It upheld the detention-damages award, holding that lost profits could be shown with reasonable certainty through evidence of continuous profitable employment and average net daily earnings, even without a missed identified charter.
- It affirmed denial of the naval-architect travel expenses because the district court did not clearly err in finding them unnecessary.
- It affirmed the use of the federal rate under 28 U.S.C. § 1961 for prejudgment interest as within the district court’s discretion under federal admiralty law.

## Legal Principles

- Admiralty collision damages aim to restore the injured party to the position it would have occupied absent the collision, including loss-of-use damages when proven with reasonable certainty.
- For a vessel trading continuously in the spot market, detention damages may be calculated using average net profits for the detention period, with appropriate deductions for expenses that would have been incurred (including repositioning or “deadheading” time), without requiring proof of a specific lost charter.
- Claimed collision-related expenditures are recoverable only if reasonably incurred and necessary; appellate review of necessity determinations is for clear error.
- Prejudgment interest is ordinarily part of full compensation in admiralty, and the rate is governed by federal law; use of the 28 U.S.C. § 1961 rate is permissible absent special circumstances.

## Conclusion

The Fifth Circuit held that a continuously employed spot-market vessel may recover reasonably certain detention damages based on average net earnings without identifying a lost charter, and it affirmed the district court’s factual determination rejecting nonnecessary inspection travel costs and its discretionary use of the federal § 1961 rate for prejudgment interest.


In re Gulfgate Marine Transp. Co., 10 F.3d 1190 (5th Cir. 1994)