Page 19: of Marine News Magazine (December 2010)

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www.marinelink.com MN 19 found the appellate court to have wrongly decided that the case fell within the ambit of the Southwestern

Sugar decision, which it explained was only meant to give the ICC an opportunity to rule on an exculpato- ry clause that was part of a tariff filed with the ICC. The appellate court’s judgment was, therefore, reversed.

As for the Supreme Court, the Bisso

Doctrine is still the law. Of course, that has not stopped efforts by towage operators and their legal counsel to find alternatives to exculpatory claus- es to achieve similar results, and some of their efforts have found favor in various federal courts of appeal and federal district courts. In the early and mid-1970s several appellate court decisions found language in towing contracts that required each party to fully insure its own vessel with a waiv- er of subrogation against the other party, and to name the other party as an additional insured, i.e. “mutual benefit of insurance” provisions, not to be exculpatory clauses of the type invalidated in Bisso and Dixilyn. One of the earliest of these “mutual bene- fit of insurance” decisions was the subject of a petition for certiorari made to the Supreme Court. That is a process required for cases that the

Supreme Court is not, as a matter of either party’s right, required to hear, but one of the parties nonetheless wants it to do so. In that case, certio- rari was denied, so the issue of mutu- al benefit of insurance clauses in towage contracts was not addressed on its merits by the Supreme Court.

A mutual benefit of insurance clause has been upheld by an appellate court even where the barge owner failed to procure the waiver of subrogation or to name the tug as an additional insured (Twenty Grand Offshore.

Inc. v. West India Carriers, Inc). Such a clause has also been implied by an appellate court to exist in a U.S.

Government towing contract con- taining an agreement that the tug owner would not be liable for damage to the barge customarily covered by insurance, and in which the tug owner had agreed not to insure or to include in the towage price any charge for insurance covering loss to

Government property. That court held not only that the fear of over- reaching by tug owners did not apply

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