Dali owners invoke historic maritime law to offset salvage costs following the Key Bridge Collapse

BALTIMORE -- As salvage operations continue at the Francis Scott Key Bridge collapse site, the owners of the massive cargo ship that struck the bridge have invoked a centuries-old maritime law requiring cargo owners to contribute to the costs of salvaging the ship and its cargo.

The declaration, known as a general average declaration, comes into play following significant maritime incidents to help recoup high recovery expenses. Maersk, the Danish shipping giant, issued the order, according to Mediterranean Shipping Company.

Allen Black, a maritime attorney at Mills Black LLP, explained the implications of the declaration.

"The classic general average expense is salvage, which is what we are seeing here in Baltimore. Before that vessel and move and the cargo can carry on its way, the bridge must be removed from on top of it and the vessel must be towed back to a dock," Allen said.

By making this declaration, the Dali's owners, Singapore-based Grace Ocean Private Ltd., are attempting to spread out the voluntary damage costs. In this case, it pertains to costs associated with refloating the Dali, which remains stuck with sections of the fallen bridge draped across its damaged bow, as well as any voluntary damaged cargo. This does not include any costs to re-build the bridge or any cost of lost cargo when the bridge fell onto the ship on March 26.

"By declaring general average, it gives the ship owner the chance to get financial security either in the form of an insurance guarantee or a bond posted by the cargo owners," Black said.

Right now, about 4,000 cargo containers are on board and more than 100 have been removed thus far. Once the ship is refloated, it will return to the Port of Baltimore. A third-party adjuster will evaluate the ship and cargo to determine what the cargo companies owe. 

"That's a maritime expert who will come in and do that discernment between what's a sacrifice, what's just damage, what are the valid expenses," Black added. "

The Biden administration pledged federal dollars to rebuild the bridge and re-open the shipping channel. During the President's visit to Baltimore earlier this month, Senator Ben Cardin made this promise.

"We will hold everyone responsible for the damages they've caused and the insurance proceeds, etc. That will help our taxpayers," Sen. Cardin said.

The Dali's owners also filed a petition in federal court to limit their legal liability to the value of the ship. This is happening as several federal investigations continue to determine what caused this tragedy to happen.

"I expect we are going to see a mass of claims that come in that arose as a result of the allision between the vessel and the bridge," Black said.

There could also be challenges to the general average declaration made by the third-party adjuster. This would also play out in court, making it a "legal storm".

"Hypothetically, they [cargo companies] could say it was due to unseaworthiness and therefore they are not required to pay general average. I think all that is going to come together in a large case in the district court of Baltimore," Black added.

This legal process is just starting as salvage and recovery efforts continue the Patapsco, as crews work to refloat the ship and find the bodies of the victims.

Six members of a roadwork crew plunged to their deaths in the collapse. Attorneys for some of their families and a survivor pledged to challenge that petition and hold the companies accountable.

The Dali departed Baltimore's port early on March 26 laden with cargo destined for Sri Lanka. It lost power before reaching open water and struck one of the supports for Francis Scott Key Bridge, causing the span to collapse into the Patapsco River. Police rushed to stop bridge traffic after a last-minute mayday call from the ship's pilot, but couldn't save the roadwork crew. Two of the victims are still unaccounted for.

Both the FBI and the National Transportation Safety Board are conducting investigations into what led to the disaster.

The Associated Press contributed to this article.