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What is a 'dead ship' in the context of ship scrapping?

If a claim arises while a ship is being broken for scrap can limitation of liability be relied upon by owners? This novel question arose in The Viking [2020]. As the US Court of Appeals put it - decision hinged on whether it was a dead ship or a vessel at the time of accident. So, at what point does a ship ceases to be the very thing it was meant to be?

An oceangoing tanker barge unit was being broken up. While the workers were cutting a pipeline that previously contained gasoline, a spark ignited a pocket of vapors, causing an explosion that killed a worker. His family sued for damages. Owner & yard filed for limitation. As per them the cuts in hull were minor & preparatory only, and that she still retained the characteristics of a vessel.

As per court the yard’s subjective intent to dismantle her for scrap was insufficient to render it a dead ship. It depended on whether at the time of accident it had been withdrawn from navigation, which meant her physical characteristics had to be looked at. Photographs indicated that a large portion of the bow had been cut off leaving a large gaping hole which extended below the waterline. The court said that a reasonable observer would see her as a dead ship. She was no longer a vessel ready to transport persons or cargo.

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