MSC Shipmanagement Limited pled guilty and was sentenced in the U.S. District Court for the District of South Carolina for charges arising from the June 2024 M/V MSC MICHIGAN VII “runaway ship” incident during its outbound transit from Charleston Harbor. The company was sentenced to pay a $6 million criminal fine and to serve a four (4) year term of probation.  The two-count Information charged a failure to immediately report a hazardous condition, in violation of 46 U.S.C. § 70036(b)(1) and 33 C.F.R. § 160.216(a), and obstruction of an agency proceeding, in violation of 18 U.S.C. § 1505. The underlying hazardous condition, as charged, related to a problem with the ship’s main engine governor linkage that required the ship’s engineers to manually manipulate it to achieve the engine speed orders signaled from the bridge telegraph during maneuvering.

The failure-to-report charge is notable because the specific condition underlying the runaway—the disconnection of the linkage rod from the governor—was not alleged as a known defect that could have been reported before the vessel got underway and appears to have developed during the outbound transit.  In addition, the Information fails to charge anyone senior to the Chief Engineer, whether onboard or ashore, with awareness of the hazardous condition. Specifically, the Information locates all knowledge and reporting responsibility at the engineering-department level.  Notably, individuals in the engineering department, including but not limited to the Chief Engineer, are not among the persons—i.e. the owner, agent, master, operator, or person in charge—on whom 33 C.F.R. § 160.216 expressly places a duty to report, yet the prosecution effectively imposes the immediate-reporting obligation on him as the senior officer aware of the condition.

Consequently, the charge in this matter now, perhaps unfairly, puts a company’s statutory obligation for immediate reporting directly on an officer, who may be actively engaged in managing an unfolding shipboard crisis or casualty. This convergence of operational crisis management and regulatory duty represents a heightened willingness by the U.S. Coast Guard and Department of Justice to impose liability for conditions unknown to shoreside management.

At present, and even though more than two (2) years have elapsed since the incident, the National Transportation Safety Board’s investigation (DCA24FM044) remains pending, and neither the NTSB nor the U.S. Coast Guard have issued final public findings. This sequence stands in contrast to the M/V DALI bridge allision, where the NTSB adopted its final report and probable-cause determination in late 2025, months before the Department of Justice announced criminal charges against the vessel’s owner and operator in 2026.

The prosecution and sentence announced by the Department of Justice is a compelling reminder of the importance of the immediate reporting of hazardous conditions aboard vessels operating in U.S. waters and reflects a heightened reporting obligation under the Ports and Waterways Safety Act: the duty to notify the nearest Coast Guard Sector Office exists as soon as a responsible officer becomes aware of the condition. A failure to do so can (and does) carry criminal consequences. Vessel operators and their officers are well advised to treat the immediate-reporting requirement as an operational priority rather than a post-incident formality.

For more information concerning the Ports and Waterways Safety Act and marine casualty reporting obligations to the US authorities, please contact us at: info@chaloslaw.com