CITGO Asphalt Refining Co. v. Frescati Shipping Co.

This landmark admiralty case originated from the 2004 Athos I oil spill on the Delaware River. The tanker, owned by Frescati Shipping Co. and chartered by CITGO Asphalt Refining Co., struck a submerged anchor while approaching a CITGO terminal, releasing thousands of barrels of crude oil. Frescati paid the extensive cleanup costs and sought indemnification under the voyage charter party's safe-berth clause. CITGO argued it was only obligated to exercise due diligence in selecting the berth. The United States Supreme Court granted certiorari to settle a division among the circuit courts of appeals. In a 7-2 decision delivered on March 30, 2020, the Court interpreted the clause as an absolute warranty of safety, making CITGO strictly liable for the resulting damages regardless of fault. The judgment resolved decades of uncertainty in maritime contract law.

The U.S. Supreme Court affirmed the lower court, holding that the safe-berth clause constitutes an unqualified warranty of safety. CITGO Asphalt Refining Co. was held strictly liable and ordered to indemnify Frescati Shipping Co. for the full cost of the oil spill cleanup.

Whether a standard safe-berth clause in a maritime voyage charter party imposes an absolute warranty of safety, rendering the charterer strictly liable for damages, or merely a duty of due diligence to select a safe berth.

The decision provides crucial clarity for the global shipping and petroleum industries by firmly placing liability for berth safety on charterers. It significantly influences risk assessment, contract drafting, and marine insurance underwriting, reinforcing a uniform federal maritime rule that promotes predictable allocation of multi-million-dollar environmental cleanup obligations.