Injury At Sea And Indemnification: Who Pays?

Transferring from the deck of your boat to an offshore platform in the Gulf of Mexico to begin your day’s work should not be a terrifying experience. While the transfer involves getting into the personnel basket that transfers you onto the platform and little else, the process itself is not as simple as one plain act. Tragically, this simple transfer does not always occur as planned. A recent case highlights importnat legal principles associated with this scenario.

In Channette v. Neches Gulf Marine, Inc. and Seneca Resources Corporation, injured seaman Michael Channette was being transferred from the M/V GOLIAD, operated by Neches Gulf Marine, to an offshore platform operated and owned by Seneca Resources. When the transfer went wrong and Channette was injured, Neches Gulf Marine sought indemnity from Seneca Resources. Indemnification is “The act of making another “whole” by paying any loss another might suffer. This usually arises from a clause in a contract where a party agrees to pay for any losses which arise or have arisen.”

In this case, this is exactly what Neches Gulf Marine asserted – that Seneca Resources was contractually obligated to indemnify them. Unfortunately for Neches Gulf Marine, the district court granted a summary judgment motion for Seneca Resources, thus ruling they had no duty to indemnify Neches Gulf Marine.

On appeal, the United States Court of Appeal for the Fifth Circuit noted that a maritime contract “should be read as whole, and a court should not look beyond the written language of the contract to determine the intent of the parties unless the disputed language is ambiguous.” This is important because it essentially asserts that a maritime contract is an entire integrated agreement and nothing else other than the contract is binding.

When this comes up, many parties attempt to bring in an often confusing principle in contract law called the Parole Evidence Rule. The Parole Evidence Rule is used when one party tries to bring in evidence of prior agreements not found inside the “four corners” of the contract. Although Neches Gulf Marine attempted to use Parole Evidence during the appeal to show that Seneca Resources had a duty to indemnify, the Fifth Circuit held that since the contracts introduced were unambiguous on their face, Neches Gulf Marine would not be allowed to introduce Parole Evidence. The court held that the first contract put forth by Neches Gulf Marine was clear and unambiguous in its expiration before Channette’s injury and held that the second contract asserted by Neches Gulf Marine clearly and unambiguously failed to identify Neches Gulf Marine as a party that could lead to a duty to indemnify by Seneca Resources. The words expressed in the contract were deemed to be the only thing binding on the parties.

While the transfer from personnel basket to platform is a complicated one, it is not the only maritime process that can go awry. Accidents at sea happen all too often and workers in this dangerous field of offshore activity should know their rights in the event of an incident or injury on the job.

This case highlights the importance of knowing what you are getting into in a given contract and the need to make sure you understand the boilerplate language inside many complex maritime contracts. Here at Berniard Law Firm, we understand how important critical language can be in maritime contracts, and we have the experience to navigate the complicated waters involved in indemnification agreements in a maritime context.