Italian shipbuilding and engineering group, Fincantieri is suing a US supplier after allegedly suffering more than $100 mill in damages from ‘fraudulently’ certified ship insulation panels.
According to a claim filed in Ohio, US last month, New York-listed Owens Corning’s Helsinki-based subsidiary, Paroc, sold “fraudulently represented and inherently unsafe” products to the Italian group, which were fitted on several ships, according to an article in the UK’s Financial Times (FT).
These included MSC Cruises’ luxury cruise ship, ‘Explora 1’, whose 2023 maiden voyage was delayed, due to the hazard.
Fincantieri was forced to stop ship deliveries after Owens Corning and Paroc recalled the faulty panels “to prevent potentially serious injury or death resulting from the sale and use of a defective and unsafe line of stonewool insulation products.”
In 2023, the FT reported that the launch of MSC’s 248 m long luxury cruise ship, ‘Explora 1’, had been delayed at the 11th hour, due to faulty fire-resistant panels fitted to the vessel, as well as to 45 other ships operated by several other cruise lines.
Paroc’s insulation panels were designed to resist flames for 60 mins, as required by EU law, but news that the panels had lost their safety certification following a retest sent shock waves across the industry.
Fincantieri claimed that Paroc had initially obtained the safety certificates “under false pretences by submitting altered materials for testing that had been manipulated to better meet the testing requirements,” despite the products being different from those which were actually being manufactured for sale.
Tests carried out by Danish maritime authorities in 2023, following a complaint lodged by another panel manufacturer, caused Paroc to lose its safety certificate after it emerged the panels did not meet the standards and could only resist flames for 45 mins.
Following the delayed delivery of the MSC vessel, Fincantieri found another 10 of its ships, including several military units, some of which were already in service, were fitted with the faulty insulation panels.
Their replacements caused delivery delays and penalty payments, Fincantieri said in the complaint.
Delivery of the ‘Explora I’, which had been set for 29th June 2023, was postponed for 21 days, while delivery of her sistership ‘Explora II’ was also postponed, according to the shipbuilder’s claim, resulting in significant costs and damages to the Fincantieri.
The delay also led to the shipyard postponing the delivery of a third cruise ship, resulting in further financial penalties.
“In addition to causing over $100 mill in economic damages, the product safety recall has caused Fincantieri to bear the brunt of considerable harm to its reputation and goodwill in the industry making headlines in the ‘Financial Times’ and elsewhere after launches of new cruise ships that had already been booked [by customers] had to be delayed,” the shipbuilder claimed.
It was also alleged that Owens Corning did not tell shipbuilders to put remedies in place for the faulty products fitted on dozens of ships already in service, in spite of the outcome of an independent risk assessment it had commissioned, which highlighted the “high risk for safety on board the ships.”
Fincantieri declined to comment to the FT on the case, while Owens Corning said it was aware of the legal matter involving Paroc, but would not comment on pending litigation.
