SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK COMMERCIAL DIVISION

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK COMMERCIAL DIVISION
NORTHWIND MARITIME CORPORATION,
Plaintiff,
— against —
THALASSA SHIPPING & LOGISTICS SA and AEGEAN FORTUNA SHIPHOLDING LTD.,
Defendants.
Index No. 655421/2023
Part 49
Hon. Lorraine K. Chen, J.S.C.
MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT
Filed: September 20, 2024
CALDERWOOD & HARKNESS LLP One Liberty Plaza, 50th Floor New York, New York 10006 Telephone: (212) 558-4000 Facsimile: (212) 558-3588
Attorneys for Defendants Thalassa Shipping & Logistics SA and Aegean Fortuna Shipholding Ltd.
Douglas Carmichael, Partner Francesca Morano, Partner Carlos Espinoza, Senior Associate Hannah Brinkley, Associate
TABLE OF AUTHORITIES
Cases
Statutes and Rules
Treatises and Secondary Sources
PRELIMINARY STATEMENT
Defendants Thalassa Shipping & Logistics SA ("TSL") and Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna Shipholding") respectfully submit this Memorandum of Law in support of their motion for partial summary judgment on two discrete legal issues that are fully ripe for resolution and whose determination will substantially narrow the claims and damages at issue in this action.
Issue One — Liquidated Damages Cap Interpretation. Clause 28 of the NYPE 2015 time charter-party (Ref. No. NW-TSL-CP-2020-1203), dated December 3, 2020, between TSL (as Owner) and Northwind Maritime Corporation ("Northwind") (as Charterer) for the M/V Aegean Fortuna, contains a liquidated damages provision that imposes a cap of $4,500,000 "for any single continuous period of breach." The plain language of this clause, when read in the context of the entire agreement and in light of the commercial purpose of the charter-party, establishes a single aggregate cap of $4,500,000 for the entire charter period. It does not establish a per-incident cap that would permit Northwind to multiply the cap by the number of alleged incidents and thereby claim up to $13,500,000 — that is, three incidents multiplied by $4,500,000 each.
The undisputed facts demonstrate that the three alleged maintenance and seaworthiness incidents upon which Northwind bases its liquidated damages claim — a turbocharger failure in March–April 2022, a ballast water treatment system malfunction and auxiliary boiler failure in July 2022, and a cylinder liner failure in November–December 2022 — all arose from a single continuous course of conduct: TSL's alleged failure to maintain the M/V Aegean Fortuna in a seaworthy condition under Clauses 2 and 6 of the charter-party. These three incidents therefore constitute, at most, one "single continuous period of breach" within the meaning of Clause 28, and the cap applies once.
Northwind's proposed reading is not merely textually unsupportable — it is commercially absurd. Under Northwind's interpretation, the liquidated damages cap would total $13,500,000, representing approximately 83.5% of the total charter value of approximately $16,166,000. A cap set at such a level would cease to function as a cap at all; it would expose the Owner to essentially the full value of the charter as liquidated damages, defeating the entire risk-allocation purpose that motivated the inclusion of Clause 28 in the first instance.
Issue Two — Deviation Claim (Maputo Call). Northwind's claim that TSL breached the charter-party by directing the M/V Aegean Fortuna to deviate from the Durban-to-Qingdao voyage in September 2022 to call at Maputo, Mozambique, fails as a matter of law. The undisputed record evidence — including contemporaneous voyage logs, meteorological data from the South African Weather Service, and the deposition testimony of Captain Nikolaos Giannopoulos, Master of the M/V Aegean Fortuna (deposed May 10, 2024) — establishes that the Maputo call was a reasonable deviation within the Master's discretion under governing maritime law. The call was justified by tropical storm activity in the Mozambique Channel that rendered the direct route from Durban impracticable and unsafe. Northwind has produced no evidence — none — that TSL loaded its own cargo at Maputo, and Northwind's own officers admitted at deposition that they lacked personal knowledge of whether any such loading occurred.
Northwind's claim for $1,230,000 in demurrage and dead freight arising from the allegedly missed Qingdao laycan window (October 1–5, 2022), plus associated port and bunker costs, should be dismissed. The undisputed record does not support Northwind's theory that "but for" the Maputo call, the vessel would have arrived within the laycan window. To the contrary, the very storm conditions that necessitated the safety deviation would have delayed the vessel regardless of whether it called at Maputo.
Impact on the Case. Resolution of these two issues in Defendants' favor would reduce Northwind's maximum recoverable damages by at least $9,000,000 — eliminating the inflated per-incident liquidated damages theory and capping LD exposure at the contractually agreed $4,500,000 aggregate — and by an additional $1,230,000-plus on the deviation claim. Together, these rulings would substantially streamline the remaining issues for trial and bring the parties' dispute within a framework that reflects the actual risk allocation to which they agreed.
This memorandum is supported by the contemporaneously filed Declaration of Carlos Espinoza (with exhibits), the Declaration of Dr. Henrik Sørensen (maritime engineering expert, Nordic Maritime Consulting Group ApS), and the Declaration of Dr. Constance Albright (damages expert, Clearwater Economics LLC), as well as Defendants' Statement of Undisputed Material Facts pursuant to Commercial Division Rule 19-a.
STATEMENT OF FACTS
The following facts are drawn from the parties' pleadings, deposition testimony, documentary evidence produced in discovery, and expert reports, and are undisputed unless otherwise noted. Citations are to the accompanying Statement of Undisputed Material Facts ("SUMF") and the supporting declarations and exhibits filed contemporaneously herewith.
A. The Parties
Thalassa Shipping & Logistics SA. Defendant Thalassa Shipping & Logistics SA ("TSL") is a Société Anonyme organized under the laws of the Hellenic Republic, with its principal headquarters located at 42 Akti Miaouli, Piraeus 185 38, Greece. (SUMF ¶ 1.) TSL is an international shipping, chartering, and maritime logistics company that operates a diversified fleet of approximately thirty-four (34) vessels, including dry bulk carriers, tankers, and container ships. (SUMF ¶ 2; Espinoza Decl. Ex. A (TSL Annual Report FY 2022).) For the fiscal year ended December 31, 2022, TSL reported annual revenues of approximately $612 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $98 million. (SUMF ¶ 3; Espinoza Decl. Ex. A.) TSL's senior management includes Alexandros Stavridis, Chairman and Chief Executive Officer; Markos Theodorakis, General Counsel; and Elena Papadimitriou, Chief Financial Officer. (SUMF ¶ 4.)
Aegean Fortuna Shipholding Ltd. Defendant Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna Shipholding") is a wholly owned subsidiary of TSL, incorporated under the laws of the Republic of Liberia (Registration No. LR-C-20167845). (SUMF ¶ 5; Espinoza Decl. Ex. B (Certificate of Incorporation).) Aegean Fortuna Shipholding is a single-purpose entity formed for the purpose of owning and holding the M/V Aegean Fortuna, and it is the registered owner of that vessel. (SUMF ¶ 6.) This ownership structure — whereby individual vessels are held by single-purpose subsidiaries — is standard practice in the international shipping industry and serves legitimate corporate governance, financing, and regulatory purposes. (SUMF ¶ 7; Stavridis Dep. Tr. 34:8–35:15.)
Northwind Maritime Corporation. Plaintiff Northwind Maritime Corporation ("Northwind") is a corporation incorporated under the laws of the Republic of the marshall Islands (Entity No. MI-94827), with its principal office located at 1700 Harbor Gateway, Suite 500, Stamford, Connecticut 06902. (SUMF ¶ 8.) Northwind engages in commodity trading, shipping logistics, and bulk cargo operations on a global scale. (SUMF ¶ 9.) For the fiscal year ended December 31, 2022, Northwind reported annual revenues of approximately $1.2 billion. (SUMF ¶ 10; Espinoza Decl. Ex. C (Northwind Financial Summary, produced as NW-000314).) Northwind's senior management includes Viktor Lindgren, President and Managing Director; Sandra Chow, Chief Financial Officer; and Richard Hartnett, General Counsel. (SUMF ¶ 11.)
Both TSL and Northwind are sophisticated commercial entities with extensive experience in international maritime chartering and the negotiation of charter-party agreements. (SUMF ¶ 12; Stavridis Dep. Tr. 41:3–42:22; Lindgren Dep. Tr. 28:14–29:7.) Each party was represented by experienced counsel during the negotiation of the charter-party at issue. (SUMF ¶ 13.)
B. The Vessel
The M/V Aegean Fortuna (IMO Number 9847231) is a Supramax dry bulk carrier with a deadweight tonnage ("DWT") of 58,200. (SUMF ¶ 14; Espinoza Decl. Ex. D (Vessel Particulars).) The vessel was built in 2016 by Dalian Prosperity Shipyard Co. at its shipyard in Dalian, People's Republic of China, and was delivered to Aegean Fortuna Shipholding upon completion. (SUMF ¶ 15.) At all times relevant to this action, the M/V Aegean Fortuna was flagged in the Republic of Liberia and was classified by the Global Maritime Classification Bureau ("GMCB"). (SUMF ¶ 16.) The registered owner of the vessel is Aegean Fortuna Shipholding. (SUMF ¶ 17; Espinoza Decl. Ex. B.) TSL, as disponent owner and the commercial and technical manager of the vessel, entered into the charter-party with Northwind. (SUMF ¶ 18.)
At the time of the charter-party's execution in December 2020, the M/V Aegean Fortuna was approximately four years old and had maintained an unbroken classification record with GMCB, including successful completion of all required annual and intermediate surveys. (SUMF ¶ 19; Espinoza Decl. Ex. E (GMCB Classification Records, 2016–2020).)
C. The Charter-Party
On December 3, 2020, TSL (as Owner) and Northwind (as Charterer) executed a time charter-party for the M/V Aegean Fortuna, utilizing the New York Produce Exchange Form (NYPE 2015), as amended by agreed riders and addenda (the "Charter-Party," Ref. No. NW-TSL-CP-2020-1203). (SUMF ¶ 20; Espinoza Decl. Ex. F (Charter-Party).) The Charter-Party was the product of arms'-length negotiations between two sophisticated commercial parties over a period of approximately six weeks, from late October through early December 2020. (SUMF ¶ 21; Stavridis Dep. Tr. 52:4–53:18; Lindgren Dep. Tr. 36:11–37:22.)
The principal terms of the Charter-Party are as follows:
Delivery and Term. The Charter-Party provided for delivery of the vessel on or about January 15, 2021, for a firm charter period of thirty-six (36) months, expiring on or about January 14, 2024. (SUMF ¶ 22; Espinoza Decl. Ex. F, Cl. 1.) Delivery was duly tendered and accepted on January 15, 2021. (SUMF ¶ 23.)
Hire Rate and Charter Value. The daily hire rate under the Charter-Party was $14,750 per day, payable semi-monthly in advance. (SUMF ¶ 24; Espinoza Decl. Ex. F, Cl. 10.) Over the full thirty-six-month charter period (approximately 1,096 days), the total value of the Charter-Party was approximately $16,166,000. (SUMF ¶ 25.)
Governing Law and Dispute Resolution. The Charter-Party is governed by the laws of the State of New York. (SUMF ¶ 26; Espinoza Decl. Ex. F, Cl. 46.) Clause 46 provides for arbitration of disputes in New York; however, Clause 46(b), a negotiated addendum, permits either party to elect to litigate in the Supreme Court of the State of New York, County of New York, in lieu of arbitration. (SUMF ¶ 27; Espinoza Decl. Ex. F, Cl. 46(b).) Northwind elected to litigate and commenced this action in October 2023. (SUMF ¶ 28.)
Maintenance and Seaworthiness (Clauses 2 and 6). Under Clauses 2 and 6 of the Charter-Party, the Owner was obligated to "maintain the vessel in a thoroughly efficient state in hull, machinery and equipment for and during the service" of the charter, including compliance with all applicable GMCB classification requirements and all applicable international maritime safety regulations. (SUMF ¶ 29; Espinoza Decl. Ex. F, Cls. 2, 6.) These clauses impose a continuous obligation on the Owner throughout the charter period — not a series of discrete, incident-specific obligations. (SUMF ¶ 30.)
Trade Limits (Clause 5). The Charter-Party authorized worldwide trading, excluding: (i) ports sanctioned under the regulations of the Office of Foreign Assets Control ("OFAC") of the United States Department of the Treasury; (ii) war-risk zones as designated by the London Joint War Committee Hull War Risks Listed Areas; and (iii) ice-bound waters north of 68°N latitude. (SUMF ¶ 31; Espinoza Decl. Ex. F, Cl. 5.) Maputo, Mozambique — the port at the center of Northwind's deviation claim — is not within any of these excluded zones. (SUMF ¶ 32.)
Off-Hire (Clause 11). The Charter-Party contains a standard NYPE off-hire provision under Clause 11, providing for the cessation of hire during periods when the vessel is unable to perform the charter service due to specified causes, including mechanical breakdown. (SUMF ¶ 33; Espinoza Decl. Ex. F, Cl. 11.)
Liquidated Damages (Clause 28). Clause 28, a negotiated rider provision, provides the Charterer with a liquidated damages remedy upon the Owner's material breach of the maintenance and seaworthiness obligations set forth in Clauses 2 and 6. The key language of Clause 28 is as follows:
"In the event of Owner's material breach of its obligations under Clauses 2 and 6 of this Charter-Party, resulting in the vessel being placed off-hire, Charterer shall be entitled to liquidated damages equal to one hundred fifty percent (150%) of the aggregate number of off-hire days multiplied by the daily hire rate, subject to a cap of $4,500,000 for any single continuous period of breach. The parties agree that this liquidated damages provision represents a reasonable estimate of Charterer's anticipated losses from such breach, and that actual damages would be difficult to ascertain at the time of contracting."
(SUMF ¶ 34; Espinoza Decl. Ex. F, Cl. 28 (emphasis added).) The interpretation of the phrase "for any single continuous period of breach" — and specifically whether the $4,500,000 cap applies once to the entire charter period or may be applied separately to each alleged incident — is the central issue on the first branch of this motion.
D. The Alleged Mechanical Failures
Northwind's complaint alleges three separate mechanical failures of the M/V Aegean Fortuna during the charter period, each of which allegedly constituted a breach of TSL's maintenance and seaworthiness obligations under Clauses 2 and 6, resulting in the vessel being placed off-hire. The undisputed facts regarding each incident are as follows.
Incident 1: Main Engine Turbocharger Failure (March 12 – April 2, 2022). On or about March 12, 2022, while the M/V Aegean Fortuna was en route from Paradip, India to Mombasa, Kenya, laden with a cargo of iron ore, the vessel's main engine turbocharger suffered a mechanical failure in the Indian Ocean. (SUMF ¶ 35; Espinoza Decl. Ex. G (Master's Report, dated Mar. 12, 2022).) The vessel was placed off-hire and diverted to Colombo, Sri Lanka for repairs, which were completed on or about April 2, 2022. (SUMF ¶ 36.) The vessel was off-hire for a total of twenty-two (22) days as a result of this incident. (SUMF ¶ 37.)
TSL's position with respect to Incident 1 is that the turbocharger failure resulted from a latent manufacturing defect in the turbocharger assembly, which was not attributable to any negligence in TSL's maintenance practices. (SUMF ¶ 38; Sørensen Decl. ¶¶ 18–24.) Dr. Henrik Sørensen, Defendants' maritime engineering expert, has opined that the failure mode observed in the turbocharger — specifically, a fatigue crack propagating from a stress concentration point within the turbine wheel casting — is characteristic of a latent manufacturing defect rather than a maintenance-related failure. (Sørensen Decl. ¶¶ 20–23.)
Incident 2: Ballast Water Treatment System Malfunction and Auxiliary Boiler Failure (July 8 – July 29, 2022). On or about July 8, 2022, while the M/V Aegean Fortuna was loading a cargo of iron ore at Richards Bay, South Africa, the vessel's ballast water treatment system ("BWTS") experienced a malfunction, and the auxiliary boiler failed. (SUMF ¶ 39; Espinoza Decl. Ex. H (Chief Engineer's Report, dated July 8, 2022).) The vessel was placed off-hire for a total of twenty-one (21) days while repairs were effected. (SUMF ¶ 40.)
TSL's position with respect to Incident 2 is that the BWTS malfunction was caused by the introduction of contaminated ballast water at a prior port of call — specifically, at Paradip, India, where Northwind's agents directed the vessel to load ballast — and that the resulting fouling of the BWTS filtration membranes was attributable to Northwind, not TSL. (SUMF ¶ 41; Sørensen Decl. ¶¶ 25–32; Vlahos Dep. Tr. 67:14–69:22.) Chief Engineer Petros Vlahos testified at deposition that the ballast water loaded at Paradip contained unusually high levels of suspended sediment, which overwhelmed the BWTS filtration capacity. (Vlahos Dep. Tr. 68:2–69:8.)
During Incident 2, Northwind's cargo of iron ore at Richards Bay was exposed to moisture due to the vessel's inability to properly manage ballast operations, allegedly resulting in oxidation damage to a portion of the cargo. (SUMF ¶ 42.) Northwind claims $3,420,000 in cargo damage arising from this incident. (SUMF ¶ 43.) These cargo damage claims are not the subject of this motion.
Incident 3: Main Engine Cylinder Liner Failure (November 15 – December 10, 2022). On or about November 15, 2022, the M/V Aegean Fortuna suffered a failure of a main engine cylinder liner, necessitating drydocking at Keppel Verolme Shipyard in Rotterdam, the Netherlands. (SUMF ¶ 44; Espinoza Decl. Ex. I (Keppel Verolme Repair Report, dated Dec. 10, 2022).) The vessel was off-hire for a total of twenty-five (25) days while repairs were completed. (SUMF ¶ 45.) TSL concedes that Incident 3 was a maintenance-related failure within TSL's responsibility, but disputes the quantum of damages claimed by Northwind in connection with this incident. (SUMF ¶ 46.)
In total, Northwind claims sixty-eight (68) days of off-hire across the three incidents (22 + 21 + 25 = 68 days). (SUMF ¶ 47.) Applying the liquidated damages formula set forth in Clause 28 — 150% of the aggregate off-hire days multiplied by the daily hire rate — yields a figure of $1,504,500 (68 days × $14,750/day × 150% = $1,504,500). (SUMF ¶ 48; Albright Decl. ¶ 14.) This figure is well within the $4,500,000 cap, regardless of whether the cap is construed as a single aggregate cap or a per-incident cap. The dispute, however, concerns the total ceiling on Northwind's potential LD recovery — Defendants contend it is $4,500,000; Northwind contends it could be as high as $13,500,000 if additional off-hire days were established at trial.
E. The Alleged Deviation (September 2022)
In September 2022, the M/V Aegean Fortuna was performing a laden voyage from Durban, South Africa to Qingdao, China, carrying a cargo of manganese ore on behalf of Northwind. (SUMF ¶ 49; Espinoza Decl. Ex. J (Voyage Instructions, NW-TSL-VOY-2022-0917, dated Sept. 7, 2022).) The vessel departed Durban on or about September 12, 2022. (SUMF ¶ 50.)
Northwind alleges that TSL directed the M/V Aegean Fortuna to deviate from the agreed Durban-to-Qingdao route to call at the port of Maputo, Mozambique, for the purpose of loading TSL's own cargo, and that this alleged deviation added approximately four (4) days to the voyage, causing Northwind to miss its Qingdao laycan window of October 1–5, 2022. (Compl. ¶¶ 87–96.) Northwind claims $1,230,000 in demurrage and dead freight costs arising from the missed laycan, plus associated port and bunker costs. (SUMF ¶ 51; Compl. ¶ 97.)
The undisputed record evidence tells a very different story. The contemporaneous voyage logs of the M/V Aegean Fortuna contain detailed entries from September 14–17, 2022, documenting the receipt of severe weather warnings for the Mozambique Channel, including alerts regarding tropical storm activity. (SUMF ¶ 52; Espinoza Decl. Ex. K (Voyage Log Extracts, Sept. 14–17, 2022).) Meteorological records obtained from the South African Weather Service confirm that Tropical Storm Freddy was active in the Mozambique Channel during the period of September 14–18, 2022, generating sustained winds in excess of 50 knots and sea states of 5–7 meters in significant wave height along the vessel's planned route. (SUMF ¶ 53; Espinoza Decl. Ex. L (SAWS Meteorological Records).)
Captain Nikolaos Giannopoulos, the Master of the M/V Aegean Fortuna, testified at his deposition on May 10, 2024 that the decision to divert to Maputo was made for safety reasons — to shelter the vessel, crew, and cargo from the tropical storm and to await improved routing conditions before proceeding through the Mozambique Channel and into the Indian Ocean. (SUMF ¶ 54; Giannopoulos Dep. Tr. 112:8–114:19.) Captain Giannopoulos testified that while the decision was made in consultation with TSL's operations department in Piraeus, it was "ultimately the Master's call based on navigational safety." (Giannopoulos Dep. Tr. 113:22–114:3.) He further testified, unequivocally, that no TSL cargo was loaded at Maputo during the vessel's call there. (Giannopoulos Dep. Tr. 118:4–119:2.)
Chief Engineer Petros Vlahos corroborated the Master's testimony, stating at his deposition that the vessel's weather routing system indicated "dangerous conditions — red zone — on the direct Durban route through the Mozambique Channel." (Vlahos Dep. Tr. 104:11–105:7.) The vessel sheltered at Maputo for approximately two days before departing on September 19, 2022, when weather conditions had improved sufficiently to permit safe passage. (SUMF ¶ 55; Espinoza Decl. Ex. K.)
Significantly, Northwind's own officers lacked any personal knowledge to support the allegation that TSL loaded cargo at Maputo. Viktor Lindgren, Northwind's President and Managing Director, admitted at his deposition on May 30, 2024 that he had no personal knowledge of whether TSL cargo was loaded at Maputo and was relying solely on a report from an unnamed Northwind agent stationed at Durban. (SUMF ¶ 56; Lindgren Dep. Tr. 145:8–146:14.) Sandra Chow, Northwind's CFO, confirmed at her deposition on June 14, 2024 that Northwind's financial records do not reflect any TSL cargo loading at Maputo, and that Northwind had not located any bill of lading, cargo manifest, or other documentary evidence indicating that any cargo was loaded at Maputo during the vessel's call. (SUMF ¶ 57; Chow Dep. Tr. 89:3–91:11.)
The bill of lading records and cargo manifests for the Durban-to-Qingdao voyage, produced in discovery and attached to the Espinoza Declaration, confirm that no cargo of any description was loaded at Maputo. (SUMF ¶ 58; Espinoza Decl. Ex. M (Bill of Lading Records and Cargo Manifest, Voyage NW-TSL-VOY-2022-0917).)
F. Northwind's Claimed Damages
Northwind's complaint asserts total claimed damages of $18,300,000, allocated across nine categories. (SUMF ¶ 59; Compl. ¶¶ 103–112.) The categories relevant to this motion are as follows:
(i) Liquidated Damages Under Clause 28. Northwind claims liquidated damages of $4,500,000 based on the formula set forth in Clause 28 (150% × aggregate off-hire days × daily hire rate). However, Northwind has argued in its opposition to Defendants' interrogatories and in its Rule 19-a counter-statement that the $4,500,000 cap applies separately to each of the three alleged incidents, theoretically permitting a maximum LD recovery of $13,500,000 (3 × $4,500,000). (SUMF ¶ 60.)
(ii) Demurrage and Dead Freight from Deviation. Northwind claims $1,230,000 in demurrage and dead freight costs arising from the missed Qingdao laycan window (October 1–5, 2022), which Northwind attributes to the alleged deviation to Maputo. (SUMF ¶ 61; Compl. ¶ 97.)
(iii) Associated Port and Bunker Costs. Northwind claims additional port charges and bunker fuel costs incurred as a result of the Maputo call, in an amount to be proven at trial. (SUMF ¶ 62.)
The remaining categories of claimed damages — which are not the subject of this motion — include:
(iv) Off-hire deductions: $1,003,000 (68 days × $14,750/day). (SUMF ¶ 63.)
(v) Substitute charter premium: $471,600, representing the differential between the substitute charter rate ($21,300/day) obtained by Northwind for a replacement vessel and the M/V Aegean Fortuna's charter rate ($14,750/day), multiplied by the 72 days of substitute charter coverage. (SUMF ¶ 64.)
(vi) Cargo damage (Incident 2, iron ore oxidation): $3,420,000. (SUMF ¶ 65.)
(vii) Lost sub-charter profit: $166,600, representing lost profits from Northwind's sub-charter with Eastbourne Bulk Carriers at $17,200/day, calculated as ($17,200 − $14,750) × 68 off-hire days. (SUMF ¶ 66.)
(viii) Third-party shipper claims: $5,634,400, representing claims asserted against Northwind by third-party shippers for cargo delays and damages (partially narrowed by this Court's March 8, 2024 ruling on Defendants' motion to dismiss). (SUMF ¶ 67.)
(ix) Legal fees claimed as damages: $999,000. (SUMF ¶ 68.)
G. Procedural History
Northwind commenced this action by filing its verified complaint on October 2, 2023 in the Supreme Court of the State of New York, County of New York, Commercial Division. (SUMF ¶ 69.) The complaint asserts causes of action for breach of charter-party (Counts I and II), breach of the duty of seaworthiness (Count III, as narrowed), negligent maintenance (Count IV), and seeks declaratory relief regarding the interpretation of Clause 28 (Count VI).
TSL and Aegean Fortuna Shipholding retained Calderwood & Harkness LLP as counsel of record on October 16, 2023 (C&H Matter No. 1044-00006). (SUMF ¶ 70.) Defendants filed their Answer and Counterclaim on November 17, 2023, asserting a counterclaim against Northwind for $1,620,000 in unpaid hire for the period October 1 through December 31, 2022, which Northwind withheld based on disputed deductions. (SUMF ¶ 71; Espinoza Decl. Ex. N (Answer and Counterclaim).)
On December 15, 2023, Defendants moved to dismiss Counts III and V of the complaint pursuant to CPLR § 3211(a)(7). (SUMF ¶ 72.) By Decision and Order dated March 8, 2024, Justice Chen granted the motion in part, dismissing Count V (unjust enrichment) in its entirety and narrowing Count III (third-party shipper claims) by limiting recoverable third-party claims to those for which Northwind could demonstrate both contractual privity with the third-party shippers and a direct causal nexus to Defendants' alleged breaches. (SUMF ¶ 73.)
Discovery proceeded from January 2024 through August 2024 in accordance with the Court's Preliminary Conference Order dated December 22, 2023. (SUMF ¶ 74.) The parties completed the following key depositions during this period:
•  Alexandros Stavridis, TSL Chairman and CEO (April 22, 2024);
•  Captain Nikolaos Giannopoulos, Master of M/V Aegean Fortuna (May 10, 2024);
•  Viktor Lindgren, Northwind President and Managing Director (May 30, 2024);
•  Sandra Chow, Northwind CFO (June 14, 2024);
•  Chief Engineer Petros Vlahos (June 28, 2024); and
•  Three additional fact witnesses (July 2024).
(SUMF ¶ 75.)
Expert reports were exchanged on the following schedule: Defendants' experts — Dr. Henrik Sørensen (maritime engineering) and Dr. Constance Albright (damages) — served their initial reports on August 5, 2024. (SUMF ¶ 76.) Northwind's experts — Captain Julian Blackmore of Blackmore Maritime Advisory Ltd. (maritime operations and deviation) and Dr. Rajesh Anand of Pinnacle Valuation Partners LLP (damages) — served their initial reports on August 19, 2024. (SUMF ¶ 77.) Both sides served rebuttal expert reports on September 9, 2024. (SUMF ¶ 78.)
The present motion for partial summary judgment was filed on September 20, 2024. (SUMF ¶ 79.)
ARGUMENT
I. LEGAL STANDARD FOR SUMMARY JUDGMENT
A motion for summary judgment pursuant to CPLR § 3212 "shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." CPLR § 3212(b). The movant bears the initial burden of making a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the absence of any material issue of fact. Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 (1986); Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980). Once the movant has met this burden, the burden shifts to the opposing party to "produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action." Zuckerman, 49 N.Y.2d at 562.
Summary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a triable issue of fact. Marin v. Constitution Realty, LLC, 28 N.Y.3d 666, 671 (2017). However, the court's function on a motion for summary judgment is "issue-finding, rather than issue-determination," and the court "should not weigh the credibility of the affiants on a motion for summary judgment unless it clearly appears that the issues are not genuine, but feigned." Briskin v. Briskin, 200 A.D.3d 592, 593 (1st Dep't 2021) (internal quotation marks omitted). Where the evidence leaves no room for a reasonable difference of opinion, summary judgment is appropriate and should be granted. Gelber v. Steigerwald & Son Funeral Home, Inc., 168 A.D.3d 477, 478 (1st Dep't 2019).
Critically, where the motion turns on the interpretation of an unambiguous contract, summary judgment is not merely appropriate — it is the preferred procedural vehicle. Under well-settled New York law, "[a] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms." W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 162 (1990); see also Beardslee v. Inflection Energy, LLC, 25 N.Y.3d 150, 157 (2015). The construction of an unambiguous contract "is a question of law for the court to resolve, and summary judgment disposing of the issue is appropriate." Giancontieri, 77 N.Y.2d at 162. Whether a contract is ambiguous is itself a question of law. Id. at 163.
The foregoing principles apply with full force to the interpretation of maritime contracts governed by New York law. See, e.g., Constellation Shipping Servs. S.A. v. Great Eastern Carriers Inc., 2017 WL 4102647, at *3 (S.D.N.Y. Sept. 14, 2017) (applying New York contract interpretation principles to NYPE charter-party). The Charter-Party in this case expressly designates New York law as governing, and both parties have accepted and relied upon that choice-of-law provision throughout this litigation. (Espinoza Decl. Ex. F, Cl. 46.)
In accordance with Commercial Division Rule 19-a, Defendants have filed a contemporaneous Statement of Undisputed Material Facts, supported by citation to the record evidence. Northwind will be required to respond to each numbered paragraph of that statement, and any fact not specifically controverted shall be deemed admitted. See Commercial Division Rule 19-a(c).
II. THE LIQUIDATED DAMAGES CAP UNDER CLAUSE 28 APPLIES ONCE TO THE ENTIRE CHARTER PERIOD
Northwind's attempt to triple its liquidated damages recovery by applying the Clause 28 cap separately to each of the three alleged mechanical incidents is contrary to the plain language of the charter-party, the undisputed commercial context, and settled New York law governing both contract interpretation and liquidated damages provisions. The $4,500,000 cap established by Clause 28 applies once — as a single aggregate ceiling on TSL's total liquidated damages exposure under the charter — and cannot be multiplied by the number of alleged incidents.
A. The Plain Language of Clause 28 Establishes a Single Aggregate Cap.  The starting point for any question of contract interpretation under New York law is the text of the contract itself. Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569 (2002); Vt. Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475 (2004). Where the language is "clear and unambiguous," the contract must "be enforced according to its terms" and the court "should look within the four corners of the document" to determine the parties' intent. Giancontieri, 77 N.Y.2d at 162; Marlowe Commerce Bank Home Equity Loan, Inc., Series 2006-FM2 v. Marlowe Commerce Bank Credit & Capital, Inc., 30 N.Y.3d 572, 581 (2017). The court must give effect to every word and every clause, avoiding an interpretation that renders any provision superfluous or meaningless. Luitpold Pharm., Inc. v. Ed. Geistlich Söhne A.G. Für Chemische Industrie, 784 F.3d 78, 87 (2d Cir. 2015) (applying New York law).
Clause 28 of the Charter-Party provides, in pertinent part:
"In the event of Owner's material breach of its obligations under Clauses 2 and 6 of this Charter-Party, resulting in the vessel being placed off-hire, Charterer shall be entitled to liquidated damages equal to one hundred fifty percent (150%) of the aggregate number of off-hire days multiplied by the daily hire rate, subject to a cap of $4,500,000 for any single continuous period of breach."
(Espinoza Decl. Ex. F, Cl. 28 (emphasis added).)
The operative phrase is "for any single continuous period of breach." Each word of this phrase, and the phrase as a whole, points ineluctably to a single, aggregate cap. The Court need look no further than the text itself to resolve the question.
First, the modifier "single" is unambiguous. It means "one." Not "each." Not "per." The clause does not say "for each continuous period of breach" or "for any and every continuous period of breach." It says "for any single continuous period of breach" — signifying one unitary concept of breach, governed by one cap.
Second, the modifier "continuous" is equally clear and is critical. The adjective "continuous" modifies "period of breach," indicating that the clause contemplates one ongoing, unbroken period of breach — not a series of discrete, episodic incidents. The Owner's obligation under Clauses 2 and 6 to "maintain the vessel in a thoroughly efficient state in hull, machinery and equipment" is, by its nature, a single continuous obligation that persists throughout the charter period. A failure to meet that obligation — whether manifested in one mechanical incident or several — constitutes a single continuous period of breach of a single continuous obligation. The three alleged mechanical failures in March, July, and November 2022 are not separate breaches of separate obligations; they are alleged manifestations of one continuous alleged failure to maintain the vessel.
Third, the phrase "any single" — the combination of the indefinite article "any" with the adjective "single" — is a standard legal construction used to refer to the entirety of a defined category. See In re Liquidation of Ridgeline Assurance, 16 N.Y.3d 536, 543 (2011) (construing "any single" as a unitary concept). The phrase means "whatever single continuous period of breach may occur" — it anticipates that there may or may not be a continuous period of breach during the charter, and provides that if one occurs, the cap is $4,500,000.
Fourth, the clause must be read in context of the liquidated damages formula that precedes the cap. The formula is: 150% × "the aggregate number of off-hire days" × daily hire rate. The use of the word "aggregate" in the formula is telling — it directs the calculation to be performed on the total off-hire days, not on a per-incident basis. This aggregation instruction is consistent only with a single aggregate cap. If the parties had intended per-incident caps, the formula would logically have been structured on a per-incident basis as well — e.g., "150% of the off-hire days attributable to such incident" — rather than on an "aggregate" basis.
Fifth, and dispositively, the absence of per-incident or per-occurrence language is itself the strongest textual evidence against Northwind's interpretation. When sophisticated parties to a maritime commercial contract intend to create per-incident or per-occurrence limitations, they say so explicitly. This is standard practice in maritime drafting. See Scrutton on Charterparties and Bills of Lading § 20.044 (24th ed. 2020) (discussing standard formulations for per-incident and per-occurrence caps in charter-party addenda); BIMCO, Explanatory Notes to NYPE 2015, at 47 (2015) (noting that "per incident," "per occurrence," or "per event" language is used where parties intend limitations to apply separately to each qualifying event). Compare, for example, the standard language used in Protection & Indemnity ("P&I") club rules and marine insurance policies, which routinely employ terms such as "per occurrence," "per event," "per vessel per incident," or "in respect of each and every claim" to establish per-incident limits. See, e.g., Espinoza Decl. Ex. O (excerpts from Gard P&I Rules 2020–2021, using "per event" language). Clause 28 uses none of these formulations. It uses "any single continuous period of breach" — language that points in exactly the opposite direction.
Northwind's proposed reading — under which each of the three alleged incidents would separately trigger a $4,500,000 cap, yielding a maximum LD exposure of $13,500,000 — would produce results that are commercially absurd and would defeat the purpose of the cap. Under settled New York law, a contract interpretation that "would be absurd, commercially unreasonable, or contrary to the reasonable expectations of the parties" must be rejected in favor of an interpretation that gives the contract a commercially sensible meaning. Marlowe Commerce Bank, 30 N.Y.3d at 581; Greenfield, 98 N.Y.2d at 569. A liquidated damages cap of $13,500,000 on a charter with a total value of approximately $16,166,000 would represent approximately 83.5% of the total charter value. Such a "cap" is no cap at all — it would expose the Owner to liquidated damages approximating the entire value of the charter, rendering the limitation provision essentially meaningless and defeating its risk-allocation function.
By contrast, the $4,500,000 single aggregate cap represents approximately 27.8% of the total charter value — a commercially reasonable proportion that functions as a genuine limitation on the Owner's LD exposure. This is the cap the parties negotiated, and it is the cap reflected in the plain language of Clause 28.
The liquidated damages formula itself reinforces this conclusion. Application of the Clause 28 formula to the sixty-eight (68) total off-hire days claimed by Northwind yields $1,504,500 (68 × $14,750 × 150%). This figure is well within the $4,500,000 cap. The cap was designed as an outer limit — a ceiling for a worst-case scenario involving an extended period of off-hire (up to approximately 203 off-hire days before the formula would reach the cap, assuming a constant daily hire rate of $14,750). It was not designed as a multiplier that could be applied over and over to successive incidents to inflate the charterer's recovery far beyond what the formula itself would produce.
In sum, the plain language of Clause 28 is clear and unambiguous: the $4,500,000 cap applies once, as a single aggregate limitation, to the entire charter period. No extrinsic evidence is needed. The Court should construe the clause as a matter of law and declare the cap to be $4,500,000 in the aggregate.
B. The Course-of-Dealing and Commercial Context Confirm the Single-Cap Interpretation.  Even if the Court were to conclude that Clause 28 is ambiguous — which Defendants deny — the undisputed extrinsic evidence uniformly confirms the single aggregate cap interpretation. Under New York law, where a contract term is ambiguous, the court may consider extrinsic evidence, including the parties' course of dealing, the circumstances surrounding the execution of the contract, and the purpose the provision was designed to serve, to resolve the ambiguity. Greenfield, 98 N.Y.2d at 569; Kirke La Shelle Co. v. Paul Armstrong Co., 263 N.Y. 79, 87 (1933). The relevant extrinsic evidence here includes the negotiation history, the deposition testimony of the parties' principals, and the expert analysis of the commercial context.
Negotiation History. Clause 28 was not part of the standard NYPE 2015 form. It was a negotiated addendum, specifically drafted and agreed upon by TSL and Northwind during the six-week negotiation period from late October to early December 2020. (SUMF ¶ 21; Stavridis Dep. Tr. 52:4–53:18.) The NYPE 2015 standard form does not include a liquidated damages provision; the parties chose to add one because they recognized that actual damages from maintenance-related off-hire could be difficult to quantify, and they wished to establish a predetermined remedy that would be commercially reasonable and would avoid protracted damages disputes. (Stavridis Dep. Tr. 56:12–57:8; Lindgren Dep. Tr. 38:17–39:10.) The fact that Clause 28 was a bespoke, negotiated provision, rather than boilerplate, weighs in favor of giving close attention to its text and ascribing meaning to every word. See Scrutton, supra, § 1.016 (noting that negotiated riders and addenda to standard charter-party forms are given particular interpretive weight because the parties specifically directed their attention to those provisions).
Deposition Testimony of Alexandros Stavridis. TSL's Chairman and CEO, Alexandros Stavridis, was deposed on April 22, 2024. Mr. Stavridis testified regarding his personal involvement in the negotiation of the Charter-Party, including Clause 28. Specifically, Mr. Stavridis testified:
Q: During the negotiations, was there any discussion about whether the $4,500,000 cap would apply per incident or to the charter as a whole?
A: Yes. We discussed it. Our understanding — and I believe Northwind's understanding as well — was that the $4,500,000 was the ceiling on our total exposure for liquidated damages under this charter. Not per incident. The total.
Q: Was there any discussion about using per-occurrence or per-incident language in the clause?
A: Not that I recall. The intention was a single cap for the whole charter. If we had agreed to a per-incident cap, the number would have been much lower — probably $1,500,000 or $2,000,000 per incident. We agreed to $4,500,000 because it was the total — the maximum we would ever owe in LDs.
(Stavridis Dep. Tr. 61:2–62:14.)
Deposition Testimony of Viktor Lindgren. Northwind's own President and Managing Director, Viktor Lindgren, corroborated the single-cap interpretation during his deposition on May 30, 2024. When questioned about the negotiation of Clause 28, Mr. Lindgren acknowledged that the $4,500,000 figure was discussed in relation to the total value of the charter and was intended to represent a reasonable proportion of TSL's total LD exposure:
Q: Do you recall how the $4,500,000 figure was arrived at?
A: I recall that it was discussed in the context of the overall charter value. The total charter was roughly $16 million. The $4,500,000 was meant to be a meaningful but bounded amount — maybe 25 to 30 percent of the total.
Q: Was the $4,500,000 figure intended to apply per incident?
A: I don't recall specifically discussing per incident versus total. We discussed it as the cap. The overall cap on what we could get in LDs.
Q: When you say "the cap," you mean a single cap?
A: I mean the cap under Clause 28. What we could recover for maintenance-related off-hire, above and beyond the standard off-hire deductions.
(Lindgren Dep. Tr. 43:6–44:18.)
Mr. Lindgren's testimony is significant. He did not testify that the $4,500,000 figure was intended as a per-incident cap. He testified that it was "the cap" — singular — and that it was calibrated to the total charter value. While Mr. Lindgren's testimony is not a judicial admission, it is powerful evidence that even Northwind's principal understood the cap to be a single aggregate figure at the time the Charter-Party was negotiated. Northwind's current litigation position — that each incident triggers a separate $4,500,000 cap — appears to be a post hoc construction developed for purposes of this lawsuit, not a reflection of the parties' actual understanding at the time of contracting.
Expert Analysis of Dr. Constance Albright. Dr. Constance Albright, a damages economist with Clearwater Economics LLC, has opined in her expert report and declaration that the per-incident interpretation would produce "economically irrational results" that are inconsistent with the purpose of a liquidated damages cap in a commercial charter-party. (Albright Decl. ¶¶ 18–27.) Specifically, Dr. Albright explains:
"A liquidated damages cap serves a risk-allocation function: it limits the exposure of the party subject to the LD obligation (here, the Owner) while providing the beneficiary (here, the Charterer) with a predetermined, reasonably certain remedy. If the cap is read as applying per incident, rather than in the aggregate, the cap ceases to function as a meaningful limitation, because the number of 'incidents' is not fixed or known at the time of contracting. The Charterer would have a financial incentive to characterize a single ongoing course of maintenance deficiency as multiple discrete 'incidents' — for example, by treating each mechanical component failure as a separate 'incident' — in order to multiply the cap and maximize its recovery. This would defeat the very purpose of the cap and would introduce perverse incentive structures into the parties' relationship."
(Albright Decl. ¶ 22.)
Dr. Albright further observes that the per-incident interpretation would place the total potential LD exposure at a level ($13,500,000 or more) that "bears no reasonable relationship to the anticipated harm from maintenance-related off-hire" and instead approaches the entire value of the charter. (Albright Decl. ¶ 25.) Such a result, she explains, would raise serious questions about whether the clause functions as a permissible liquidated damages provision or an impermissible penalty — a concern addressed in detail in Point II.C below.
The negotiation history, the testimony of both parties' principals, and the expert analysis of the commercial context all converge on the same conclusion: the $4,500,000 cap under Clause 28 was intended and understood as a single aggregate ceiling on TSL's total LD exposure under the Charter-Party. The extrinsic evidence confirms what the plain language already establishes.
C. New York Law on Liquidated Damages Supports the Single-Cap Reading.  New York law provides an additional, independent basis for adopting the single aggregate cap interpretation. Under settled New York precedent, liquidated damages provisions are enforceable if, and only if, two conditions are met: "(1) the amount liquidated bears a reasonable proportion to the probable loss, and (2) the amount of actual loss is incapable or difficult of precise estimation." Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354, 359 (1977); Kestrel Corporation, 4 N.Y.3d 373, 380 (2005). A liquidated damages provision that fails either prong is an unenforceable penalty. JMD Holding, 4 N.Y.3d at 380.
The enforceability analysis bears directly on the interpretive question before the Court. If the Clause 28 cap is construed as a single aggregate cap of $4,500,000 — representing approximately 27.8% of the total charter value — the resulting LD ceiling bears a reasonable proportion to the probable loss from maintenance-related off-hire. A vessel off-hire for an extended period imposes costs on the charterer that include not only the direct cost of lost hire but also cargo delays, sub-charter losses, substitute vessel premiums, and consequential damages. The $4,500,000 figure — approximately $66,176 per potential off-hire day if the vessel were off-hire for the maximum 68 days claimed here — represents a commercially reasonable estimate of the charterer's total losses from a significant maintenance failure. The cap satisfies both prongs of the Truck Rent-A-Center test and is enforceable.
If, however, the cap is construed as $13,500,000 — the result of Northwind's per-incident multiplication — serious enforceability concerns arise. A liquidated damages ceiling of $13,500,000 represents approximately 83.5% of the total charter value. At that level, the LD exposure would approximate the entire value of the charter and would vastly exceed any reasonable estimate of the charterer's probable loss from maintenance-related off-hire. As the Court of Appeals has observed, a liquidated damages provision whose effect "is to assure to a party a recovery far in excess of damages reasonably to be anticipated" operates as a penalty and is unenforceable. Truck Rent-A-Center, 41 N.Y.2d at 359; see also Bus. Networks of N.Y., Inc. v. Complete Network Solutions, Inc., 265 A.D.2d 194, 195 (1st Dep't 1999) (holding liquidated damages clause unenforceable where "amount is plainly disproportionate to the injury").
This Court need not — and Defendants do not ask it to — declare Clause 28 unenforceable. Rather, Defendants submit that the enforceability framework provides a useful interpretive lens: where two readings of a liquidated damages provision are available, the Court should adopt the reading that renders the provision commercially reasonable and enforceable, rather than the reading that would raise serious penalty concerns. See Hyosung Am., Inc. v. Sumagh Textile Co., 137 A.D.2d 406, 411 (1st Dep't 1988) (noting that courts should interpret liquidated damages clauses "so as to sustain [their] validity"); Reade v. Stoneybrook Realty, LLC, 63 A.D.3d 433, 434 (1st Dep't 2009) (same). The single aggregate cap interpretation is the commercially reasonable interpretation; the per-incident interpretation is the commercially unreasonable interpretation that would raise penalty concerns. The Court should adopt the former.
Moreover, under New York law, the party seeking to invoke a liquidated damages provision bears the burden of demonstrating that the provision is applicable and enforceable. JMD Holding, 4 N.Y.3d at 380; Farnsworth on Contracts § 12.18 (3d ed. 2004). Northwind is the party seeking to invoke Clause 28 to recover liquidated damages. It is Northwind's burden to demonstrate that the clause applies in the manner it contends — that is, as a per-incident cap. Northwind cannot carry that burden because the text, context, and commercial purpose of the clause all point to a single aggregate cap. Where the party invoking a liquidated damages provision cannot establish that its proposed application of the provision is supported by the contract's plain language, the court should decline to apply the provision in the manner proposed. See JMD Holding, 4 N.Y.3d at 383–84.
Finally, even if the Court were to determine that Clause 28 is ambiguous as between the single-cap and per-incident readings — a conclusion Defendants respectfully submit is foreclosed by the plain language — the ambiguity should be resolved against Northwind. The doctrine of contra proferentem applies, and where, as here, one interpretation preserves the commercial reasonableness and enforceability of the provision while the other calls both into question, the Court should adopt the interpretation that sustains the provision's validity. Truck Rent-A-Center, 41 N.Y.2d at 359; JMD Holding, 4 N.Y.3d at 380.
D. Northwind Cannot Establish Three Separate "Continuous Periods of Breach".  Even if the Court were to construe Clause 28 as permitting separate caps for separate "continuous periods of breach" — a reading Defendants deny is supportable — Northwind could not establish as a matter of fact or law that the three alleged incidents constitute three separate continuous periods of breach rather than a single continuous period of breach. The undisputed evidence demonstrates that the three incidents are part of one continuous alleged failure to maintain the M/V Aegean Fortuna in seaworthy condition, not three independent, isolated episodes.
Same Category of Obligation. All three incidents relate to the same category of contractual obligation: the Owner's duty under Clauses 2 and 6 to "maintain the vessel in a thoroughly efficient state in hull, machinery and equipment." The turbocharger failure (Incident 1), the BWTS malfunction and auxiliary boiler failure (Incident 2), and the cylinder liner failure (Incident 3) are all alleged failures to maintain specific mechanical systems on the vessel. They are not breaches of three different contractual obligations — they are alleged failures of the same obligation, as applied to different vessel components. The breach, if any, is the alleged continuous failure to maintain; the incidents are merely symptoms.
Same Temporal Window. The three incidents occurred within an eight-month window — from March 12, 2022 (Incident 1) to December 10, 2022 (Incident 3) — during a thirty-six-month charter period. They cluster within a single portion of the charter period and are separated by intervals (approximately three months between Incidents 1 and 2, and approximately four months between Incidents 2 and 3) that are too short to constitute meaningful breaks in a pattern of continuous alleged neglect. The temporal proximity of the incidents reinforces the conclusion that they arise from one ongoing maintenance issue, not three unrelated events.
Northwind's Own Characterization. Perhaps most tellingly, Northwind's own complaint characterizes TSL's conduct as a unified course of action, not a series of separate episodes. Northwind's complaint alleges that TSL engaged in a "pattern of neglect" and a "systematic failure to maintain the M/V Aegean Fortuna in seaworthy condition." (Compl. ¶¶ 48, 52, 71.) Northwind uses this language advisedly — it supports causation, foreseeability, and the theory that TSL's conduct was more than merely negligent. But Northwind cannot have it both ways. It cannot allege a "systematic failure" and a "pattern of neglect" for purposes of establishing liability, and then characterize the same conduct as three separate, independent episodes for purposes of multiplying the liquidated damages cap. See Brad H. v. City of New York, 17 N.Y.3d 180, 191 (2011) (noting that a party's own characterization of its claims in its pleadings may be probative of the nature of the claims asserted).
Dr. Sørensen's Expert Opinion. Dr. Henrik Sørensen, Defendants' maritime engineering expert, has opined that the three alleged mechanical failures are mechanically and systemically related. Dr. Sørensen, a naval architect and marine engineer with more than thirty years of experience in vessel maintenance, classification, and casualty investigation, explains in his declaration:
"From a marine engineering perspective, the turbocharger failure (Incident 1) and the cylinder liner failure (Incident 3) are directly related. Both involve main engine components — the turbocharger assembly and the cylinder liner — whose maintenance is governed by the same planned maintenance system ('PMS') schedules and the same GMCB classification requirements. The PMS schedule for the M/V Aegean Fortuna's main engine (Kestrel Enterprises 6S50MC-C) requires coordinated inspection and maintenance of the turbocharger, cylinder liners, cylinder heads, piston rings, and associated components at regular intervals. A failure to properly execute the PMS schedule would predictably affect multiple engine components — precisely the pattern observed here. The two failures are not independent events; they are manifestations of a single systemic maintenance issue."
(Sørensen Decl. ¶¶ 35–38.)
With respect to Incident 2 (BWTS malfunction and auxiliary boiler failure), Dr. Sørensen notes that this incident "is separately defensible on the basis that the BWTS malfunction was caused by contaminated ballast water introduced at the charterer's direction." (Sørensen Decl. ¶ 40.) However, even if Incident 2 were attributed to TSL, Dr. Sørensen opines that it would properly be characterized as part of the same overall pattern of alleged maintenance deficiency, because "the auxiliary boiler failure component of Incident 2 relates to the same PMS schedule and the same overarching maintenance regime that governs the main engine components involved in Incidents 1 and 3." (Sørensen Decl. ¶ 41.)
Conclusion. The undisputed evidence demonstrates that the three alleged mechanical incidents arose from a single continuous alleged failure to maintain the vessel — one "single continuous period of breach" within the meaning of Clause 28. Northwind cannot, as a matter of law, characterize these three incidents as three separate continuous periods of breach for purposes of tripling the liquidated damages cap.
E. Summary Judgment Should Be Granted Declaring the Cap as $4,500,000 Aggregate.  For the reasons set forth in Points II.A through II.D above, no genuine issue of material fact exists as to the meaning of Clause 28 of the Charter-Party. The contract language is unambiguous: the $4,500,000 cap applies as a single aggregate ceiling on TSL's total liquidated damages exposure for the entire charter period. Even if the clause were deemed ambiguous — which Defendants deny — the undisputed extrinsic evidence, including the deposition testimony of both parties' principals, the commercial context, and the expert analysis of Dr. Albright, uniformly confirms the single aggregate cap interpretation. And even under Northwind's own reading of the clause, Northwind cannot establish three separate "continuous periods of breach" as a matter of law.
The Court should grant summary judgment on this issue and declare, as a matter of law, that Northwind's maximum liquidated damages recovery under Clause 28 of the Charter-Party is $4,500,000 in the aggregate.
III. NORTHWIND'S DEVIATION CLAIM FAILS AS A MATTER OF LAW
Northwind's claim that TSL breached the Charter-Party by directing the M/V Aegean Fortuna to deviate from the Durban-to-Qingdao voyage to call at Maputo, Mozambique in September 2022 is belied by the undisputed record evidence and fails as a matter of law. The record establishes that the Maputo call was a reasonable deviation within the Master's discretion, justified by tropical storm conditions that rendered the direct route unsafe. Northwind has produced no admissible evidence that TSL loaded its own cargo at Maputo, and Northwind cannot establish the causal link between the Maputo call and the missed Qingdao laycan window that is necessary to support its claimed damages.
A. The Undisputed Facts Establish That the Maputo Call Was a Reasonable Deviation.  In September 2022, the M/V Aegean Fortuna was performing a laden voyage from Durban, South Africa to Qingdao, China, carrying a cargo of manganese ore for Northwind. (SUMF ¶ 49.) The vessel departed Durban on or about September 12, 2022. (SUMF ¶ 50.) The normal routing for a Durban-to-Qingdao voyage involves transit northward through the Mozambique Channel and into the Indian Ocean.
Northwind alleges that TSL directed the vessel to deviate to Maputo for the purpose of loading TSL's own cargo, that this deviation added approximately four days to the voyage, and that the resulting delay caused Northwind to miss its Qingdao laycan window of October 1–5, 2022. (Compl. ¶¶ 87–96.) Northwind claims $1,230,000 in demurrage and dead freight and additional port and bunker costs. (Compl. ¶ 97.)
The