Cover the losses of the ship and the ship cargo

Reference no: EM131768458

Question: Big Shipping Lines is a transoceanic freight company incorporated in Country Z. To avoid potential liability from shipping crude oil from the Persian Gulf to Europe in the antiquated single-hull ships that it owns, it set up 14 different companies (including the Small Shipping Co.) and transferred ownership of one ship to each of them. Each company then purchased insurance to cover the losses of the ship and the ship's cargo, but nothing else. The SS Small, which belonged to the Small Shipping Co., negligently ran aground on a shoal in the eastern Mediterranean Sea, spilling its entire load of some 5 million barrels of crude oil. The oil has washed ashore in Greece, Turkey, Cyprus, Syria, Lebanon, Israel, Egypt, and Libya. Each of these countries has brought suit in Country Z against the Small Shipping Co., its sister companies, and Big Shipping Lines. The sister companies and Big Shipping Lines have asked the court to dismiss the complaints against them. They contend that the Small Shipping Co. is a separate company and is solely liable for its own torts. How should the court rule? Discuss.

Reference no: EM131768458

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