Mediterranean Shipping Company (MSC) has maintained its innocence whilst it has agreed to enter into a settlement agreement with Amplify Energy Corp. and its affiliated entities following the 2021 Orange County Oil Spill.
The provisions of the settlement agreement, which have not yet been finalised, will include recognition that MSC and other parties have not admitted to any liability, preserving their rights to defend the case against Amplify’s insurers.
Despite this, the shipping line reportedly intends to move past the incident.
The settlement agreement will require all participating parties to withdraw pending appeals, requests, and motions before the courts.
It will further mandate that both Amplify and MSC release all claims of any kind prior to the agreement of settlement in relation to issues arising from the 2021 Orange County Oil Spill.
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MSC will continue to demonstrate in the remaining legal proceedings with Amplify’s insurers that its ship was not responsible for the oil spill.
The Orange County oil spill occurred on 2 October 2021, off the coast of Huntington Beach in Southern California.
A pipeline operated by Amplify Energy Corporation leaked an estimated 25,000 gallons of crude oil into the ocean, causing significant environmental damage and affecting local marine wildlife.
On 16 October 2021, the Coast Guard and National Transportation Safety Board marine casualty investigators boarded boxship, MSC DANIT, at the Port of Long Beach. Parties of interest, including MSC, the ship owner Dordellas Finance Corporation, and others were designated in the investigation.
The experts concluded that the MSC DANIT was not responsible for the oil spill as the vessel maneuvered safely, and that Amplify simply failed to properly maintain and inspect the pipeline.
The MSC DANIT was communicating with the US Coast Guard and authorities in the Port of Los Angeles/Long Beach on the date when claimants allege the pipeline was first damaged some nine months prior to the oil spill.
Experts have further concluded that it was reasonable for the MSC DANIT to believe it had not been involved in a marine casualty reportable to the Coast Guard.
MSC maintains that the responsibility for the October 2021 oil spill lies with Amplify, who pled guilty to criminal negligence for its role in the incident.
Amplify took insufficient measures to protect the pipeline which was under its management and control despite becoming aware of increased marine traffic and associated risks in 2020, according to MSC.
Amplify further exacerbated the situation by failing to properly respond to eight separate leak detection alarms on the day of the rupture, thus multiplying the environmental pollution released, reported MSC.
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MSC reports that Amplify’s decision to plead guilty to criminal negligence for this preventable oil spill further corroborates expert findings that Amplify failed to take reasonable steps to prevent the accident.
This settlement is worth $45 million, and MSC has agreed to jointly fund this sum for claimants related to the 2021 Orange County pipeline oil spill.
This statements come less than a month after the Federal Maritime Commission (FMC) called on MSC to justify a congestion surcharge levied against a US business.