## Facts

- The M/V TREBIZOND, owned by Orduna S.A. and Transglobal Maritime Corp. (“Orduna”), was loading grain at a Mississippi River facility operated by Zen-Noh Grain Corp. (“Zen-Noh”).
- In March 1984, a steel loading arm fell from the grain elevator onto the vessel’s deck, damaging the ship and delaying departure.
- Orduna sued: (1) Zen-Noh (terminal owner/operator), (2) Euro-Frachtkontor G.m.b.H. (“Euro”) (voyage charterer), (3) F P Engineers, Inc. (“F P”) (tower designer), and (4) Buhler-Miag, Inc. (“Buhler”) (loading arm manufacturer), followed by cross-claims among defendants.
- After a bench trial in admiralty, the district court:
  - Held Zen-Noh and F P jointly and severally liable to Orduna and apportioned fault one-third to Zen-Noh and two-thirds to F P.
  - Awarded $378,528.75 in damages but denied prejudgment interest (interest ran only from judgment).
  - Held Euro liable to Orduna under a safe-berth clause but granted Euro full indemnity from Zen-Noh and F P.
  - Found Buhler not liable.
- Multiple parties appealed, challenging liability findings, the effect of Zen-Noh’s dock tariff exculpatory clause, causation, the safe-berth clause, apportionment, damages, and prejudgment interest.

## Issues

1. Whether Zen-Noh was negligent in inspecting and maintaining the elevator/loading arm.
2. Whether an exculpatory clause in Zen-Noh’s dock tariff barred or limited Zen-Noh’s liability to the vessel.
3. Whether F P’s tower design defects were a proximate cause of the loading arm’s collapse.
4. Whether the charter party’s safe-berth clause imposed strict liability on Euro absent negligence.
5. Whether the district court erred in denying prejudgment interest and in calculating detention (loss-of-use) damages.

## Decision

- The Fifth Circuit affirmed Zen-Noh’s liability, holding the negligence finding for inadequate inspection/maintenance was not clearly erroneous.
- The court affirmed F P’s liability and proximate-cause finding, rejecting the argument that an unforeseeable shock overload, rather than defective design, caused the failure.
- The court held Zen-Noh’s dock tariff exculpatory clause unenforceable against Orduna because the record did not establish meaningful notice and assent sufficient to relieve Zen-Noh of liability for its negligence.
- The court reversed the judgment against Euro, holding the safe-berth clause required due diligence rather than imposing strict liability; because Euro was not negligent and lacked knowledge of the defects, it was not liable.
- The court remanded to correct the detention-damage computation and to award prejudgment interest to Orduna.

## Legal Principles

- A terminal operator owes vessels a duty of reasonable care in maintaining and inspecting loading equipment used in berth operations.
- Exculpatory provisions in terminal tariffs are strictly construed and will not be enforced against vessel interests absent clear proof of informed notice and assent, particularly when used to avoid liability for the terminal’s own negligence.
- In admiralty, prejudgment interest is generally awarded as part of full compensation; denial requires “peculiar circumstances,” not merely case complexity.
- A standard safe-berth clause may be construed as imposing a due-diligence obligation rather than an absolute warranty of safety; without negligence or knowledge of hazards, a charterer is not liable solely because an accident occurred at the berth.
- Comparative fault allocations in admiralty are reviewed deferentially and will be upheld when supported by the evidentiary record.

## Conclusion

The Fifth Circuit left primary responsibility with the terminal operator and the design engineer for the loading-arm collapse, declined to enforce a tariff-based attempt to disclaim terminal negligence, rejected strict charterer liability under a safe-berth clause absent fault, and required correction of detention damages and an award of prejudgment interest to fully compensate the shipowner.


Orduna, S.A. v. Zen-Noh Grain Corp., 913 F.2d 1149 (5th Cir. 1990)