## Facts

- Sundance Cruises Corporation and SCI Cruises, Inc. owned the cruise vessel SUNDANCER, a converted passenger ferry operating under the Bahamian flag.
- American Bureau of Shipping (ABS), a ship-classification society, reviewed design and surveyed the vessel and issued classification and safety certificates on its own behalf and on behalf of the Bahamas.
- ABS issued certificates stating compliance with applicable international safety standards and ABS rules.
- The SUNDANCER struck an underwater rock off British Columbia and sank; Sundance conceded the grounding resulted from navigational error.
- Sundance alleged the vessel would not have sunk absent ABS’s failures to detect compromised watertight integrity, including holes in a bulkhead and missing valves in a greywater piping system.
- Sundance asserted contract and tort claims, including negligence, gross negligence, negligent misrepresentation, breach of contract, and breach of an implied warranty of workmanlike performance.
- ABS argued Bahamian law applied and conferred statutory immunity for good-faith acts performed as an appointed surveyor for the Bahamian government.

## Issues

1. Whether maritime choice-of-law principles required application of Bahamian law as the law of the flag to claims against a classification society that issued statutory certificates for a Bahamian-flag vessel.
2. Whether, under the Bahamian Merchant Shipping Act 1976, ABS was immune from civil liability for good-faith conduct in performing statutory surveys and issuing related certificates.
3. Whether Sundance produced sufficient evidence of proximate causation and legally cognizable damages attributable to ABS’s alleged certification errors to survive summary judgment.

## Decision

- The Second Circuit affirmed summary judgment for ABS.
- The court held Bahamian law governed because the dispute concerned seaworthiness and statutory certification of a Bahamian-flag vessel, and the Bahamas had a strong regulatory interest.
- The court held the Bahamian Merchant Shipping Act provided immunity to appointed agents, including ABS, for good-faith acts in executing statutory survey and certification functions, and Sundance failed to raise a triable issue of bad faith.
- As an independent basis, the court affirmed that Sundance failed to present evidence that ABS’s alleged omissions caused or materially contributed to the sinking or otherwise resulted in provable damages.

## Legal Principles

- In maritime disputes closely tied to a vessel’s seaworthiness and governmental certification, the law of the flag carries substantial weight in choice-of-law analysis.
- A flag-state statute may immunize a classification society acting as the state’s appointed surveyor from private civil suits for good-faith performance of statutory inspection and certification functions.
- A plaintiff opposing summary judgment must produce evidence supporting proximate causation and damages; allegations of inspection error, without competent proof of causal contribution to the loss, are insufficient.

## Conclusion

The Second Circuit applied Bahamian law to claims arising from certification of a Bahamian-flag vessel, held ABS immune under Bahamian statutory good-faith immunity for appointed surveyors, and further concluded Sundance failed to prove causation and damages attributable to ABS’s alleged certification failures.


Sundance Cruises Corp. v. Am. Bureau of Shipping, 7 F.3d 1077 (2d Cir. 1993)