Full opinion text
OPINION TENNEY, District Judge. In February 1987, the M/V TUXPAN mysteriously disappeared with her crew of twenty-seven and cargo worth $22 million. She had departed from Bremen, Germany, on February 16, 1987, to travel across the North Atlantic for her destination, Vera Cruz, Mexico. However, sometime between February 24 and February 28, the ship disappeared leaving no wreckage, debris, or survivors. The owner of the TUX-PAN, Tecomar, S.A. (“Tecomar”) petitions this court to limit its liability pursuant to 46 U.S.C.App. §§ 181 et seq. (1988) (“Limitation Act”). The cargo claimants (“Claimants”) subsequently filed claims against Tecomar pursuant to the United States Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C. §§ 1300 et seq. (1982), and the International Convention for the Unification of Certain Rules Relating to Bills of Lading at Brussels on August 25, 1924 (“The Hague Rules”), and their 1968 amendments (“The Visby Amendments”), as interpreted by the laws of Germany and Belgium. For the reasons set forth below, Tecomar’s petition to limit its liability pursuant to the Limitation Act is denied, as are its claims for package limitation under the Hague Rules and Visby Amendments. Claimants’ claims are allowed subject to future adjudication as to exact amounts and except to the extent they are subject to a package limitation under COGSA, 46 U.S. C.App. §§ 1300 et seq. The following, including those additional facts set forth in the Discussion, constitutes the court’s findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a). FINDINGS OF FACT A. The Parties 1. The TUXPAN was owned by Teco-mar, a corporation which was created in 1971 under the laws of Mexico and whose principal place of business is in Mexico City, Mexico. Pretrial Order, Joint Undisputed Facts MI 1, 21 [hereinafter PTO]. 2. Claimants are comprised of 137 entities asserting 107 claims against Tecomar for damages in the aggregate amount of $22,229,583.27. Id. at 2 (“Relief Prayed”). (a) Corporate and Operational Structure of Tecomar 3. Tecomar was, and still is, managed and controlled by the “Council of Presidents,” which establishes the general policies of the company and gives specific management directions to the heads of the various operational and administrative departments within the corporation. Id. Ml 25-26. 4. The day-to-day operations of Teco-mar are handled by various departments within the organization, such as the Operations Department, the Technical Department, the Administrative Department, and the Insurance Department. Id. ¶ 26. (b) Structure of Tecomar’s Technical Department 5. The Technical Department is responsible for the maintenance and repair of Tecomar’s vessels. Id. ¶ 32. The functions and procedures of this department are described in the company’s “Operations Manual.” Id. ¶ 27. 6. The Technical Department is headed by the Technical Director who has complete authority over the maintenance of all Teco-mar vessels, including the power to revise vessel schedules in order to facilitate repairs. Id. If 41. The Technical Director also has plenary authority to dry-dock the vessels, if he believes the repairs are necessary for the safety of the vessel and its crew. See id. 7. The Technical Director reports to three vice-presidents, namely, Herman Stoldt, Carlos Viveros, and Helmut Muller. Id. ¶¶ 27, 40. The Director reports to Stoldt with respect to financial matters, to Muller regarding operations, and to Vive-ros regarding day-to-day technical matters, discipline and order of crew members, and union activities. Id. 1139. 8. The Captains of the Tecomar vessels and their Chief Engineers report directly to the Technical Director. Id. 1129. The day-to-day functions of the Technical Department are performed by the port engineer section, which is responsible for vessel maintenance and repair of Tecomar vessels when they are in Mexican ports. Id. 11 ¶ 28, 33. 9. The Technical Department coordinates with the Operations Department regarding cargo operations, the maintenance of Tecomar’s vessels, and the scheduling of the vessels in light of the maintenance or repairs that are required. Id. ¶ 31. 10. The Technical Department also coordinates with the Insurance Department regarding claims relating to Tecomar’s vessels or their operations. Id. II30. The Insurance Department reports directly to the Council of Presidents. Id. 11. Tecomar’s broker for hull and machinery insurance, as well as for Protection and Indemnity (“P & I”) insurance, was and continues to be the Fred S. James Company, Inc. of New York. Id. ¶ 39. 12. Since the mid 1970s, three individuals have held the position of Technical Director: Captain Jesus Morales (“Captain Morales”) (mid 1970s until October 1985); Captain Luis Perez Hernandez (“Captain Perez”) (October 1985 to December 1985); and Rafael Lopez Ruiseco (“Lopez”) (from December 1985 to date). Id. II42. 13. From late 1980 through early 1985, Lopez served as Deputy Technical Manager. Id. 1143. Lopez’s duties in this position involved assisting Captain Morales in maintaining and repairing the hull and machinery of Tecomar’s vessels. Id. 1144. During the construction of the TUXPAN, Lopez acted as one of Tecomar’s representatives. Id. 1145. For one voyage in 1982, Lopez sailed aboard the TUXPAN as chief engineer. Id. ¶ 46. In early 1985, Lopez left the employ of Tecomar, but was rehired as Tecomar’s Technical Director when Captain Morales’ tenure ended in late 1985. Id. 1143. (c) Operation of Tecomar Vessels 14. Many of Tecomar’s policies regarding the operations of its vessels have been memorialized in two manuals: (1) “Captain’s Instructions, Part A and B” (“the Captain’s Manual”), and (2) “Staff Functions and Procedures” (“the Lopez Manual”). 15. One of Tecomar’s policies requires that its vessels at sea report their noon positions on a daily basis. Id. ¶ 58. These reports provide the following information: the number of the telex message, the day and time the message was sent, the latitude and longitude of the vessel, the vessel’s course and speed, the wind according to the Beaufort scale and the sea state according to the Douglas scale, the fuel consumption, the engine revolutions per minute, and the vessel’s estimated time of arrival (“ETA”) at its next port of call. Id. ¶ 59. 16. It is also Tecomar’s policy to require its captains to obtain weather reports on a regular and timely basis, and to inform the Technical Department of the daily wind and sea conditions. Id. II115. Furthermore, Tecomar requires that the Technical Director be notified immediately of any emergency arising onboard a Tecomar vessel. Id. II 60. 17. Since 1982, Tecomar and its vessels have participated in the United States Coast Guard’s “Automated Mutual Assistance Vessel Rescue” system (“AMVER”). Id. ¶ 70. Pursuant to the rules of AMVER, Tecomar vessels are requested to report their position, ETA, speed, and last encountered weather conditions directly to AM-VER every forty-eight hours. Id. B. The Vessel 18. The TUXPAN was a registered vessel of the Republic of Mexico, flying the Mexican flag, whose home port was Tux-pan, Mexico. Id. The ship was built in Germany by the shipyard of J.J. Sietas GmbH (“Sietas”) between June 1981 and May 1982. Id. 11 3. In May 1982, the TUX-PAN was delivered by Sietas with a one year warranty. See id. 1111 3, 18. 19. Tecomar employed the following entities to assist in maintaining the TUXPAN: the engine manufacturer, Krupp Mak Mas-chinenbau GmbH (“MAK”) to make any engine repairs in Bremen and Antwerp; the firm of Peter Donjak (“Donjak”) to make any repairs to the hull or structural parts in Europe; and the shipyards of Sie-tas, A.G. Weser, and Motorenwerke Brem-erhaven GmbH (“MWB”) for other miscellaneous repairs. Id. HIT 35, 37. (a) Design & Construction 20. Throughout the designing and building of the TUXPAN, Tecomar employed the firm of Peter Gast (“Gast”) as a supervising consultant. Id. H 12. Gast was affiliated with a naval architectural firm, Euro-luk, which also supervised construction of the TUXPAN on behalf of Tecomar. Id. II13. Tecomar’s Technical Director and Deputy Technical Manager reviewed and discussed the building specifications with the consultants from Gast. Id. ¶ 16. 21. Gast stationed three of its employees at the Sietas shipyard to supervise the TUXPAN’s construction. Id. ¶ 14. In addition, several members of Tecomar’s Technical Department frequently traveled to the Sietas shipyard during the ship’s construction, and spent the last month of this period aboard the vessel. Id. 1115. 22. Both the TUXPAN and its sister ship, the M/V TUMILCO, were designed, built, and certified as ocean-going vessels for worldwide trading service. Tr. 1104; J.Exh. 3. The two ships were designed with virtually identical specifications, and were built for Tecomar at the same time, for the same trade routes, and with the same materials. J. Exh. 3. 23. The customary trade route for both ships was between Mexico (Vera Cruz and Tuxpan) and Northern Europe (Antwerp and Bremen) via the United States (Houston, Texas). PTO 11 67. A round-trip voyage at the TUXPAN’s normal speed of 15.5 to 16 knots took approximately forty-two days. Id. ¶¶ 68, 69. 24. The winter season for the North Atlantic along this trade route is from November 1 to March 31. J. Exh. 730. 25. When designing an ocean-going vessel for worldwide service, the customary practice of ship designers is to anticipate voyages through geographical regions which will expose the vessel to the greatest structural forces. See J.Exh. 1327 at 7, 10, 32. Within the shipping industry, it is commonly known that a vessel will experience the heaviest weather — and thus be subjected to the greatest physical forces — during the winter season in the North Atlantic. J.Exh. 1327 at 7, 10; Tr. 334-36, 381-82, 1369-76, 91-92. One of the most severe weather phenomena of the winter North Atlantic is what is called a “meteorological bomb.” Such bombs often produce significant wave heights of thirty to forty feet. Tr. 1367-76, 395; Cl. Exh. E. Thus, when designing a vessel to traverse the winter North Atlantic, naval architects take into account the probability that the vessel will encounter significant wave heights of this magnitude. Tr. 2006-07. 26. The TUXPAN was designed and built for the carriage of cargo packed in containers. PTO 113. The ship had three cargo holds, each with the capacity of approximately 8,350 gross tons and 4,520 net registered tons. Id. 114. 27. The overall length of the ship was approximately 437 feet, the molded depth approximately thirty-seven feet, and the breadth approximately sixty-six feet. Id. 28. The main engine, built by MAK, was a medium speed diesel engine, capable of producing 8,160 brake horsepower. Id. HU 8, 9. During the TUXPAN’s construction, Tecomar requested Sietas to convert some of the ballast tanks into fuel tanks, thereby enabling the ship to carry more fuel rather than taking on fuel in European ports. Id. 1117. 29. The hatchcover system for the TUXPAN was designed and built by MacGregor-Navire (“MacGregor”). Id. mo. 30. The TUXPAN was designed and built as a vessel called a “Type 114.” Id. 11 5. All Type 114 vessels were classed by the German classification society, German-ischer Lloyd (“GL”). Id. ¶ 6. GL classified the TUXPAN as a “100 A4E containership” with an “MC E Aut” (fully automatic engine room). Id. 31. As a Type 114 vessel, the TUXPAN was an open ship with extremely large hatch openings, thus making it more susceptible to torsional and transverse stresses. See Tr. 1890, 2454-60; Cl.Exh. Z. 32. The design of the Type 114 vessel is almost identical to that of its predecessor, the Type 113. Tr. 2482. The Type 114, however, is longer than the Type 113, and thus, is generally subject to higher levels of stress. Tr. 1896-97, 2461. 33. Prior to the creation of the Type 114 series, GL recommended several design modifications for the Type 113 series in order to reduce the stress levels on Type 113 ships. See J.Exh. 350. However, even though both series were almost identical, Tecomar did not incorporate any of the modifications suggested for the Type 113 into the design of the TUXPAN. Tr. 2461-62. In addition, Tecomar introduced a new tanktop arrangement on the TUX-PAN, which included two 90 degree discontinuities in place of the Type 113’s design of gradually sloped tanktops. Tr. 2473-74; see also Tr. 2492-94. 34. In spite of Tecomar’s decision not to modify the TUXPAN’s design so as to incorporate the changes suggested for the Type 113, and its decision to change the ship’s tanktop arrangement, GL certified the TUXPAN as a vessel for unrestricted ocean voyage. PTO H109; J.Exh. 1222. (b) Equipment 35. In order to obtain weather reports, the TUXPAN was equipped with a weather facsimile receiver and printer, and a telex machine. PTO H 110. The reports — issued every four hours — contained updated information about the wind, wave and weather developments in the area, as well as the conditions along the anticipated route of the vessel. Id. ¶ 111. 36. The TUXPAN was equipped with three barometers and a barograph, enabling the crew to obtain the current barometric pressure and the history of the barometric pressure over a particular period of time. Id. ¶¶[ 111, 112. The ship also had an anemometer that measured wind speed and direction. Id. H 113. 37. The TUXPAN had a radio, telephone, and telegraph, all of which enabled its captain and officers to communicate with Tecomar, the Coast Guard, and other vessels within a large geographical area. See id. ¶ 114. Communications between the TUXPAN and Tecomar were sent through Radio Mexico and other radio stations around the world. Tr. 1098-1104. 38. The TUXPAN received weather reports from the United States National Weather Service (“the Weather Service”). The Weather Service broadcasts wind and wave conditions every six hours (at 0400, 1000, 1600 and 2200 hours Greenwich Mean Time (“GMT”)). Id. Í1121. Each broadcast contains “synopses” describing the observed wind and waves that existed approximately four hours before the scheduled time of the broadcast. Id. II122, Tr. 1360. In addition, each broadcast contains a forecast of the conditions to be expected approximately 36 hours after the observations were made. PTO ¶ 123. 39. Weather is also described by weather reporting vessels, including the United States Coast Guard (“Coast Guard”), and the Global Spectral Ocean-Wave Model (“GSOWM”). Tr. 199-200. In addition, a NASA satellite orbiting the Earth (“GEO-SAT”) records actual wave heights. Id. The wave heights reported and forecasted by all of these sources are significant wave heights. PTO ¶¶ 124-126. Among these three sources — ship reports, GSOWM, and GEOSAT — ship reports are considered the least accurate and GEOSAT the most accurate. Tr. 299-302, 1348, 1390-93. 40. The radio station onboard the TUX-PAN was operated by the ship’s radio officer for at least fourteen hours per day, usually between the hours of 0800 and 2200, local time. Id. ¶ 107. The radio officer routinely received weather information via telex, facsimile, voice radio, radio telephone, and morse code, which he in turn relayed to the ship’s Master, who was responsible for evaluating all weather reports and forecasts. Id. ¶1¶ 108, 109, 118. Based on his evaluation of these reports and other relevant information, the Master determined the course and navigation of the ship. Id. at II120. (c) Previously Experienced Weather 41. Prior to the winter of 1987, both the TUXPAN and the TUMILCO had experienced winds of at least Force 11 on the Beaufort scale and sea conditions of at least Force 8 on the Douglas scale. See Tr. 1270-75. 42. On five separate voyages, the TUX-PAN encountered winds of Beaufort Force 9-12 and seas of Douglas Force 7-8. J. Exhs. 948, 962, 965, 1000. 43. From May 1982 through July 1987, the TUMILCO experienced at least three incidents of sea states of Douglas Force 8 and two incidents of sea states of Douglas Force 9. J. Exhs. 731, 738, 739, 756, 757. On one occasion, while crossing the North Atlantic in January 1984, the TUMILCO experienced hurricane force winds (Beaufort Force 12) and “mountainous” seas of up to 66 feet (Douglas Force 9) for at least 12 hours. J.Exhs. 756, 731; Tr. 1275-76, 2387-89. (d) Crack History 44. Both the TUXPAN and TUMILCO exhibited crack problems in their tanktops, wing tanks, deck plating and hatch covers almost immediately after they were delivered to Tecomar. Many of these cracks appeared at the same time and in the same location on both ships. Tr. 2343-44, 1597; Cl.Exhs. Al, A2, A5. 45. Over the course of its five year lifetime, the TUXPAN sustained approximately 118 cracks to its tanktops, wing tanks, bulkheads, shell plating, deck plating and hatch covers. Tr. 2332-34, 2341, 2344-45; Cl.Exhs. Al, A2. During the same period, the TUMILCO sustained approximately 65 to 85 cracks in its tanktops, wing tanks, ballast tanks, bulkheads, shell plating, deck plating and hatch covers. Tr. 2342-44, 2347-48; Cl.Exh. A5. Many of the cracks sustained by both vessels were discovered after the entrance of water and fuel oil into their cargo holds and engine rooms while the vessels were at sea. Tr. 1571-86, 1600-33, 787-788; Cl.Exhs. Bl, B6, Al, A2, A5; J. Exhs. 33, 100, 101, 108, 775.1, 776, 847. 46. The rules of GL require that a shipowner report cracks and other defects to GL’s surveyors. J.Exh. 913 at § 2, 114.4. GL has the facilities and expertise to determine the cause of a particular crack, whether it is serious, whether the repairs made or contemplated are proper, and whether certain phenomena (e.g., the same cracks appearing on a sister ship) require additional investigation. Tr. 810-11, 813-14, 865, 871, 902-03. Furthermore, GL provides surveyors who regularly inspect reported cracks and supervise their repair. Tr. 657-59, 663, 671, 814, 865, 873-75, 902-03; see J.Exhs. 869, 913 at § 3, 112.1. 47. If a shipowner fails to abide by GL’s rules, GL has the authority to temporarily suspend the vessel’s regularly scheduled service, or to permanently withdraw the vessel’s classification certificate. See J.Exh. 913 at § 2, II 4.5, J.Exh. 1330 at 56-58; Tr. 656, 870, 1084-87. Without a classification certificate, a shipowner cannot obtain insurance for the vessel, and thus, the vessel loses all commercial value. J. Exh. 1330 at 56-58; Tr. 1084-87. 48. GL also requires a shipowner to obtain class renewals every four to five years by submitting its ship for “special” and “continual” surveys. Tr. 615-16. The special survey is performed only at the end of the period when the ship is due for class renewal, while the continual surveys are performed throughout the classification period. Tr. 616. On the TUXPAN, the engine received continual surveys, while the hull was subject to the special survey system. Id. 49. The International Convention for the Safety of Life at Sea (“SOLAS”), which Mexico ratified in 1983, also requires that a shipowner report any defects or repairs made on the ship to its surveyor or other maritime authority. Ch. 1, Part B, Regs. 7(b)(ii), 11(c); Tr. 2799-2800. 50. In March 1983 — approximately ten days after Sietas delivered the TUXPAN to Tecomar and while the ship was at sea— the crew discovered cracked weldings between the bulkhead of the watertight engine room and cargo hold # 3, located at a seam where the bulkhead met the top of the fuel tanks. Tr. 1571-72; J.Exh. 100. 51. Tecomar discovered these cracked weldings immediately after their occurrence in May 1982, but — contrary to the rules of GL — did not report them until April 1983. Tr. 1573-74, 866; J.Exh. 101. Furthermore, after inspecting the ship during its dry dock in April, GL discovered another defective welding in the portside fuel tank # 1, and concluded that the cause of the cracks was poor workmanship by Sietas. Tr. 1573-74; J.Exh. 101. Despite GL’s conclusion, however, Tecomar did not inspect or investigate the condition of the remaining welds on the ship. Tr. 1574-75. 52. During the construction of the TUX-PAN and TUMILCO, Gast advised Teco-mar on several occasions about Sietas’ poor workmanship. J.Exhs. 520-22. Moreover, before construction had commenced, Lloyd’s Register informed Tecomar that Sietas’ proposed design did not meet the minimum requirements for that classification society. See Tr. 2054-57; J.Exhs. 320, 321, 322. 53. In September 1983, during an inspection of heavy weather damage to the TUXPAN’s bow area, Tecomar’s Technical Department discovered that four brackets had not been built into the vessel, even though they appeared in the original drawings. Tr. 1563-65,1575; J.Exh. 329 at 4-5. Despite this departure from the original construction drawings, Tecomar made no investigation to discover the possibility of other discrepencies between the drawings and the vessel as delivered. Tr. 1563— 65; J.Exhs. 329, 869, 893, 894. 54. Contrary to GL’s rules and regulations, Tecomar failed to inform GL that these brackets were missing, that the vessel’s drawings did not conform to its actual construction, and that the vessel had sustained structural damage as a result of heavy weather. Tr. 1564-65, 671-72; J.Exh. 329, 913 at § 2, ¶ 4.4. 55. In September 1984, the TUXPAN’s crew discovered a crack in the weld of one of the ship’s wing tanks. J.Exh. 33; Tr. 1575-76. Although this crack was repaired, the ship’s crew reported on November 30, 1984, that it had reopened. J. Exh. 108; Tr. 1578-80. 56. On December 1, 1984, the crew discovered that a crack in hold # 2 had caused five inches of water to accumulate inside. J.Exh. 847; Tr. 1580-81. On December 6, 1984, another crack — approximately six inches long — was found in the tanktop of that same hold. J.Exh. 775.1; Tr. 1583-1584. Furthermore, that same day, three arc-shaped cracks — each five to six inches long — were found at three different frames. J.Exh. 776; Tr. 1583-85. 57. In September and December 1984, Tecomar’s Technical Director, Lopez, attempted to ascertain the cause of the cracks in the area of the tanktop by investigating the TUXPAN’s double bottom tanks. Tr. 1665-66. In doing so, Lopez observed that the stiffeners below each lashing point were incorrectly placed, thereby causing the containers which sat on the lashing points to crack the tank-tops. Tr. 1666-67; see also J.Exh. 317. Lopez concluded that in order to solve the cracking problem, additional stiffeners needed to be placed under the tanktop areas. Tr. 1666-67; J.Exh. 317. 58. Despite Lopez’s conclusions, Teco-mar did not attempt to repair the cracks created by the misaligned stiffeners on the TUXPAN, even though the ship proceeded to dry dock in July 1985. See Tr. 1675-87; J.Exhs. 45, 49, 56. 59. GL requires shipowners to report any defects or damages in a vessel’s double bottom area (including tanktops, wing tanks, bulkheads and main deck areas, hatch covers, coaming and closure systems). Tr. 1093-95; J.Exh. 913 at § 2, 114.4, at § 3, II 2.1. Lopez, however, did not report to GL or consult with any other naval architects about these cracks. Tr. 1674-75. 60. In August 1985, Tecomar observed an excessive number of cracks in the TUX-PAN’s hatch covers, and in the covers' stoppers, swing seals and hinges. J.Exh. 356.1 (characterizing these cracks as “not a normal damage”). Shortly thereafter, Tec-omar learned from the manufacturer, MacGregor, that the cracks were caused by the overflexibility of the ship. J.Exhs. 356.1, 227; Tr. 1649-52, 2546. 61. Between 1985 and 1986, both the TUXPAN and the TUMILCO exhibited approximately 100 cracks. Cl.Exhs. Al, A2, A5; J.Exhs. 327, 515, 760, 761. In addition, many of these cracks began to propagate. J.Exhs. 317, 748, 778, 789, 794. 62. In 1986, the TUXPAN sustained at least fifty-two cracks in its wing tanks, tanktops and shell plating, some of which permitted water and oil to enter the vessel’s holds. Cl.Exhs. Al, A2. 63. In March 1986, Tecomar partially repaired cracks in the TUMILCO’s double bottom ballast tanks # 1, # 2, and # 5, and discovered a crack in a frame corresponding to the starboard wing tank. J.Exh. 867; Tr. 1691-92. Although a GL surveyor came to inspect the ship on March 20, he was not shown any of these cracked tanks, and was not informed that Tecomar had made its own repairs. Tr. 1693-94; see J.Exh. 867. Instead, Tecomar directed the GL inspector to test other tanks which had never exhibited any cracks, knowing that these tanks would easily pass the survey. See Tr. 1693-94. 64. On March 31, 1986, Tecomar discovered cracks on the TUXPAN’s tanktops to holds #2 and #3. Tr. 1695-96; J.Exh. 797. 65. Three days later, on April 3, 1986, a GL surveyor came to inspect the TUXPAN in Vera Cruz. J. Exh. 327; Tr. 1696-97. Midway through the inspection, however, the surveyor told Tecomar that he would have to finish the following day. J.Exh. 327; Tr. 1698. That evening, Tecomar suddenly altered the ship’s schedule: instead of remaining in Vera Cruz as was planned, the ship was ordered to travel to Tuxpan, where Tecomar attempted to repair the cracks that had been reported on March 31. J.Exh. 327; Tr. 1698-99. However, when the GL surveyor returned to complete his inspection on April 6, Tecomar did not tell him that the ship had just spent two days in Tuxpan for the purpose of repairing cracks on the tank tops. Tr. 1699. Furthermore, Tecomar also failed to inform GL of the misaligned stiffeners which Lopez had discovered in late 1984. Tr. 1678-79; see Findings of Fact 1157-58. Based on this limited information, GL issued a one-year extension for the TUXPAN's class renewal until April 1987. Tr. 1678, 615-19; J.Exhs. 294, 299, 327; see also J.Exh. 913 § 3, ¶ 2.1. 66. Tecomar attempted to repair cracks on the TUMILCO in a similar fashion, i.e., two days before the ship’s scheduled inspection on April 30, 1986. Tr. 1700-03; J.Exh. 896.1. Knowing that the inspection would include the ship’s hatchcovers and tanktops, Tecomar worked through the night of April 28 to weld the cracks in the double bottom tanks # 1 and # 2. Tr. 1700-03; J.Exhs. 769, 868, 896.1. Tecomar did not inform the GL inspector of these repairs, and since the cargo was loaded before April 30, he could inspect only some of the vessel’s tanktops. See Tr. 1700-04; J.Exhs. 769. 67. On September 5, 1986, the TUX-PAN’s Captain reported to Tecomar that several welds had come loose in the inside area of the ship’s bow panel after having encountered seas of Douglas Force 7-8. J.Exh. 230; Tr. 1705. Tecomar, however, made no attempt to investigate the cause of the loosening or the effect which it might have had on the structural integrity of the ship. Tr. 1546. 68. On October 2, 1986, Tecomar advised Donjak of the damage sustained to the TUXPAN’s forecastle deck, shell plating, and various internal stiffeners, and requested an estimate as to the cost and time for the repairs. Tr. 1705-06; J. Exh. 41.1. Donjak responded by advising Teco-mar that he would require thirty-six to forty-eight hours to complete the requested repairs. Tr. 757, 1706-07; J. Exh. 231. Tecomar, however, advised Donjak that because of the vessel’s schedule, the ship could spare only twelve to fourteen hours for the work. Tr. 757-58, 1707; J. Exh. 232. 69. After Donjak performed the repairs which could be made within fourteen hours, Tecomar called the GL surveyor at Bremen to inspect the work. See Tr. 805-07. However, when GL inspected the ship, Tecomar did not inform the GL surveyor of the loose welds and distorted shell plating stiffeners under the foredeck. Tr. 801, 805-07. 70. On November 18, 1986 — in anticipation of an inspection by GL — Tecomar’s Technical Department sent a message to the TUMILCO’s master requesting information with respect to the condition of the vessel’s ballast water tanks. Tr. 1708-09; J.Exh. 761. In response, the TUMILCO’s master advised the Technical Department that the double bottom tank # 1 could not be checked because of the cargo that was stowed on top, and that the portside double bottom tank # 4 “could be entered if the crack were repaired.” J. Exh. 760; Tr. 1709-10. The captain also told Tecomar that he suspected a crack in the double bottom ballast tank #5. J.Exh. 760; Tr. 1710. After Lopez received this information, he gave the following instruction to Port Engineer Castro: It is not advisable that GL see that we are making repairs on tank tops. The inspections should be done when we call the inspector only to carry out tests and that no repairs are being made. J.Exh. 761; Tr. 1710-11. Thus, although Lopez knew that Tecomar was required to report all repairs made on the ship, he again attempted to conceal cracks and repairs on the TUMILCO’s tank tops. See Tr. 1084-87, 1093-95, 1127, 1712; J.Exh. 913 at § 2, 114.4, at § 3, ¶ 2.1. 71. On January 25, 1987, the TUX-PAN’s Captain reported that cracks in the hatch cover stoppers in holds # 2 and # 3 still needed repair. J.Exh. 812; Tr. 1664— 65. Thus, less than a month before the TUXPAN’s last voyage, the cracking problem in these parts had not been remedied. Tr. 1660; see also Tr. 1653-54; 1664. 72. On February 17, 1987 — the day after the TUXPAN left Bremen on its last voyage — Tecomar sent a telex to the ship requesting the Chief Engineer to confirm the exact location of an existing crack in the tanktop of the portside double bottom tank # 4. Tr. 1264-67; J.Exh. 177. 73. Despite the fact that both the TUX-PAN and the TUMILCO were experiencing the same cracking phenomena with their hatches, Tecomar did not report any of the cracks in the hatch covers, hinges, stoppers or swing seals to GL. Tr. 1660, 887-889; Cl.Exhs. Al, A2, A5. Furthermore, Teco-mar never informed GL of MacGregor’s conclusion that these cracks were caused by the overflexibility of the ship. Tr. 1660; see also Tr. 1653-54; 1664. (e) Engine Problems 74. Eighteen months after delivery of both the TUXPAN and the TUMILCO (in September 1983 and November 1983, respectively), Tecomar learned of several engine problems from one of its consultants, Arnesen, Christensen & Co. (“Arnesen”). J.Exh. 278. In addition, from April 1984 until November 1986, both vessels experienced chronic problems with the seawater and fresh water cooling systems for their main and auxiliary engines. Tr. 1128; J. Exhs. 970, 972, 21. 75. The engine problems experienced by the TUXPAN caused her crew to frequently stop its main engine while at sea. Cl. Exh. Y. Over the course of the TUXPAN’s lifetime, its main engine was stopped at sea 108 times, with each stop lasting at least one hour. Id. (i) Cylinder Heads and Liners 76. During the TUXPAN’s last four months — from October 1986 to February 1987 — the ship’s cylinder heads and liners were continually leaking gas, thereby causing the seat of the cylinder head to erode. J.Exhs. 25, 116; see also Tr. 1118, 1644-45. On several occasions, this problem forced the Captain and Chief Engineer to stop the vessel’s main engine while at sea. J.Exhs. 237, 1004, 1005; Cl. Exh. Y. 77. In October 1986, the TUXPAN’s crew had to stop the ship’s engine because of a problem with the turbo blower. J. Exhs. 1002, 11. As a result, the ship was adrift for approximately eight hours. J. Exhs. 1002, 11. Although these events occurred on October 21, the TUXPAN did not relay them to Teeomar until October 22, when the crew sent a telex stating that the ship had been adrift for eight hours. See J.Exhs. 1002, 11. 78. On November 17, 1986, the TUX-PAN’s Chief Engineer informed Teeomar that during some bad weather, the ship’s cylinder head # 5 had “leaked through its copper gasket again,” even though “[the] same cylinder head and liner has been machined by MAK twice.” J. Exh. 14; see also Tr. 1115-16. 79. On November 24, 1986 — seven days after discovering the leak from cylinder # 5 — the Chief Engineer found that the seat of that cylinder had substantially eroded to the minimum allowable height. Tr. 1143; J.Exhs. 23, 24. 80. In December 1986, the TUXPAN’s main engine had to be stopped because of a gas leak from the head and liner of cylinder # 3 through to the cylinder’s seats. See Tr. 1148-52; J. Exh. 24. 81. On December 23, 1986, while the vessel was at sea, the head of cylinder # 1 had to be removed, disassembled and replaced with the spare cylinder head (which had previously been removed from cylinder # 4). Tr. 1153-55; J.Exh. 25. In order to perform the work, the main engine was stopped for the entire period, thus putting the vessel adrift for approximately nine hours. Tr. 1153-55, 1158; J.Exhs. 236, 1005. As in October 1986, the TUXPAN did not communicate with Teeomar about this problem until the next day — December 24 — when the crew sent a telex stating that the ship had been adrift for nine hours. 82. On December 29, 1986, Teeomar informed MAK that the TUXPAN would arrive in Bremen on January 4, 1987, and requested that MAK repair the seat of cylinder # 1, the liner and seat of cylinder # 3, and the liner and seat of the spare cylinder. Tr. 1170-73; J.Exhs. 50, 26.1. 83. On January 4, 1987, MAK completely overhauled the spare cylinder head (which was later put into cylinder # 3) and the head of cylinder # 1, cleaned cylinder # 5, and inspected cylinder # 2. Tr. 1181— 93; J.Exhs. 26.2, 57.1. 84. Cylinder heads on a ship like the TUXPAN normally need overhauling every 5,000 hours (approximately seven months of use), and the cylinder pistons require overhauling every 8,000 hours (approximately twelve months of use). Tr. 1191. 85. On February 2, 1987 — during the TUXPAN’s second to last voyage — the vessel suffered a breakdown in the North Atlantic, at which time the main engine was stopped and the ship was adrift for five hours. Tr. 1218-20; J.Exh. 237. As had happened on two previous occasions, the ship did not communicate with Teeomar about this matter until eight hours after the fact. See J. Exh. 237. The cause of the engine stoppage was a gas leak in cylinder # 3, one of the cylinders which had been completely overhauled in January, 1987. Id.; Findings of Fact 11 83. Upon completing the repair, however, the Chief Engineer was unable to restart the main engine because the starting air distributor had come loose and the starting air pistons had been “badly damaged.” Tr. 1218-19; J.Exh. 237. 86. On February 4, 1987, the Chief Engineer advised Lopez that upon the vessel’s expected arrival in Bremen on February 15, the seats of three cylinder heads and two cylinder liners needed to be sent ashore to be machined in the workshop. J.Exh. 238; Tr. 1220-22, 1227. These cylinders were # 2 and # 3 — the same ones that had been inspected and overhauled on the vessel’s prior stop at Bremen one month earlier. See Findings of Fact ¶ 83. 87. Prior to the TUXPAN’s arrival in Bremen on February 15, Tecomar’s Technical Department contacted MAK to ascertain how long the required repairs would take. Tr. 1222; J.Exhs. 69, 73. In response, MAK informed Teeomar that the work would require eighteen to twenty hours to be done properly. Tr. 1222-26; 1228-30; J.Exhs. 72, 75. 88. Tecomar, however, advised MAK and Sietas that because of “cargo compromises” the vessel would remain in Bremen for only twelve to fourteen hours. See J. Exhs. 72, 240, 312; Tr. 1222-26, 1248-49. Due to the brevity of this stop, therefore, Tecomar only permitted one of the cylinder liner seats to be taken ashore for repairs, and requested that the remaining liner seats be machined on the vessel using a portable grinding tool. Tr. 1222-30; J. Exh. 312. 89. MAK immediately responded and told Tecomar that the use of the requested portable grinding tool was not a proper method for making the necessary repairs, and that such a method would stop the leaking only for a short time. J. Exh. 72; see also Tr. 1739-41. Furthermore, there is no evidence that any of these repairs were actually made onboard the ship with the portable grinding tool or by any other method. Tr. 1249-56, 1754-1768; Cl. Exh. L. 90. During the TUXPAN’s stay in Bremen, Tecomar permitted MAK to machine only the cylinder heads of the spare cylinder and of cylinder # 3. Tr. 1226-27. The TUXPAN, therefore, commenced its last voyage with unrepaired liner seats of cylinders # 2 and # 3, and to the head of cylinder # 2. Tr. 1226-28, 1247-56, 1264-1266; J. Exhs. 71, 177; Cl. Exh. L. In fact, the day after the TUXPAN left Bremen (February 17, 1987), Tecomar sent a telex to the ship, suggesting that the ship’s next dry-docking include “work on the main engine liner seats and cylinder heads that still need to be repaired.” J. Exh. 177; Tr. 1264-67. 91. At no time were any of the problems with the cylinders reported to GL, even though its rules required a shipowner to do so. Tr. 1124-28,1157; J. Exhs. 515, 913 at § 2, ¶ 4.4. (ii) Engine Foundation 92. On December 26, 1986, the TUX-PAN’s crew discovered six cracks in the ship’s engine foundation plate, and observed that one of the bolts holding down the engine foundation was “completely loose.” Tr. 1159-60, 1162-63; J. Exh. 252. The TUXPAN’s Chief Engineer informed Tecomar in his report to the Technical Department that the “socket wrench,” which was necessary to retighten the bolts, was not onboard, and that “lately maintenance hasn’t been carried out.” J. Exh. 252; Tr. 1160-62. 93. Lopez then sent a telex to Sietas on December 29, 1986, requesting that Sietas permanently repair the engine foundation cracks during the TUXPAN’s stop at Bremen, scheduled for January 4, 1987. J. Exh. 64; Tr. 1163-64. That same day, Sietas advised Lopez that these repairs would take approximately eight days. J. Tr. Exh. 239. 94. On December 30, 1986, Lopez sent a telex to the owner of Tecomar, informing him of the cracks in the engine foundation. J. Exh. 65; Tr. 1169-70. In this telex, Lopez also stated that he did not expect to change the ship’s itinerary, and thus, “we should get an idea of the time and repairs necessary for the next dry docking.” See id. 95. On December 31, 1986, Lopez decided that the TUXPAN’s itinerary would not permit her to remain out of service for the eight days estimated by Sietas, and thus, Sietas should perform only provisional repairs during the ship’s stop at Bremen on January 4. See J. Exh. 53; Tr. 1167-69. 96. On January 4, 1987, six different cracks were discovered in the TUXPAN’s engine foundation after being examined in Bremen by representatives from Sietas, GL, and Tecomar. PTO HU 92, 93. On the same day, Tecomar had the engine foundation bolts retightened. Tr. 1196. 97. On January 9, 1987, a meeting was held at the offices of Sietas in Hamburg, Germany, to discuss the presence of the engine foundation cracks. PTO ¶ 94. This meeting was attended by representatives of Sietas, GL, and Tecomar. Id. At the conclusion of the meeting, Tecomar was instructed by GL to inspect the engine foundation after every trans-Atlantic voyage, and to notify GL if any of the cracks lengthened or if additional cracks developed. Id. ¶1¶ 95, 96. 98. On January 21, 1987, Tecomar received a telex from Halls Ship Supply Co., indicating that the particular torque wrench that was needed to tighten the TUXPAN’s engine foundation bolts was not available and would not be available for another thirty days. J. Exh. 262; Tr. 1196-97. 99. On January 25, 1987 (twenty-one days after the bolts had been tightened in Bremen), the bolts needed to be retight-ened while the ship was in Houston. J. Exh. 273; Tr. 1197. To facilitate this, Tec-omar brought a torque wrench on board, but the wrench broke while being used. J. Exh. 273; Tr. 1197-98. 100. By January 27, 1987 — the date on which the TUXPAN arrived in Vera Cruz— the engine foundation bolts had loosened and turned approximately sixty degrees, each bolt losing at least 50% of its required tension. J. Exhs. 55, 61; Tr. 2308. To remedy this problem, the crew had to re-tighten the bolts with a socket wrench that did not have a torque indicator and was not the type of wrench recommended by the engine manufacturer for this kind of job. See J. Exhs. 55, 61; Tr. 1201-02, 2654-57. On that same day, the crew discovered that some steel chocks located between the engine foundation and the engine block had moved from their original positions, indicating that the engine had moved on its base plate. J. Exh. 61; Cl. Exhs. FF, GG; Tr. 1199-1200. 101. On February 11, 1987, Sietas responded to Tecomar’s request by informing Lopez that the inspection and retightening of all the foundation bolts would take approximately eighteen hours. J. Exhs. 61, 239; Tr. 1207-11. 102. Since the TUXPAN was scheduled to remain in Bremen on February 14 for only twelve to fourteen hours, Lopez delayed all the repairs for the main engine and its foundations bolts and chocks until the vessel’s next scheduled call in Bremen in March 1987. J. Exh. 240; Tr. 1212-15. Thus, Tecomar did not attempt to tighten the foundation bolts while the TUXPAN was in Bremen, and no torque wrench was on board when the ship commenced its last voyage. See J. Exhs. 240, 262. 103. On February 10, 1987, Teeomar requested the TUXPAN’s crew to inspect the condition of one of the cracks in the engine foundation (at frame # 26 starboard) because that crack had exhibited some propagation. J. Exh. 274; Tr. 1235. 104. During a GL inspection of the vessel at Bremen on February 14, 1987, Lopez notified the GL inspector of an additional crack in the engine welding (between frames # 30 and # 31), but did not mention the propogation of the original cracks. J. Exh. 275; Tr. 1236-38. Lopez’s failure to report the propogation violated GL’s rules and regulations, as well as the direction given to Lopez by the GL surveyors in the January 9 meeting in Hamburg. J. Exh. 913 at § 2, II 4.4, at § 1, ¶ 1.1. (iii) Seawater Cooling System 105. From January 1985 through February 1987, both the TUXPAN and the TUMILCO exhibited recurring problems with their seawater cooling systems. J. Exh. 49.1; Tr. 1128-33, 761. A breakdown in the seawater cooling system can cause the engine to overheat, which — if not immediately repaired — can ultimately lead to a loss of power resulting in a blackout. See Tr. 1820-22, 761-63. 106. On October 17, 1986, Donjak reported to Teeomar that he was able to punch fifteen millimeter holes in the pipes of the cooling system, and that additional repairs to the cooling system were necessary. J. Exh. 235; Tr. 766-67. 107. On November 18, 1986, Tecomar’s Technical Department sent a telex to Sietas requesting assistance in the installation of two new pipes for the sea water cooling system during the TUXPAN’s next stop in Bremen. J. Exh. 21; Tr. 1128-29. These pipes, however, were not repaired or replaced prior to the commencement of the TUXPAN’s last voyage, thus making the vessel susceptible to a blackout. Tr. 1128-33, 2696-97; J. Exh. 21. C. Last Voyage of the TUXPAN 108. On February 16, 1987, after completing the discharge and loading operations in the port of Bremen, the TUXPAN embarked for Veracruz, Mexico, giving an ETA of March 2. PTO Till 72, 83; J. Exh. 97. 109. Before sailing from Bremen, the ship was loaded with 551 TEUs, weighing a total of approximately 6,727 metric tons. PTO MI 73, 75. In accordance with the stowage plan, the cargo occupied 100% of available below-deck container space and 83% of the available on-deck container space. Id. ¶ 74. 110. The ship’s metacentric height (“GM”) was sufficiently stable for the intended voyage. Id. ¶ 80. 111. Upon sailing from Bremen on February 16, the ship reported having 851 tons of heavy fuel, 121 tons of diesel fuel, and 2,458 tons of ballast water on board. Id. HU 77, 78. During its call at Antwerp on February 13, the vessel loaded an additional 400 tons of heavy fuel. Id. 1176. 112. During the course of the voyage to Vera Cruz, the TUXPAN sent daily noon position reports in compliance with Teco-mar’s established procedures. Id. 1181; see Findings of Fact MI 14-17. 113. On February 22, an extra-tropical cyclone developed off the east coast of the United States and moved in a northeasterly direction across the Atlantic ocean. Tr. 1357, 391-92. That same day, the captain of the TUXPAN changed the ship’s ETA in Vera Cruz from March 2 to March 3. PTO ¶ 83. 114. By 1200 on February 23, the barometric pressure had dropped twenty-six millibars within twenty-four hours, thereby qualifying the storm as a meteorological bomb. Tr. at 1360, 1365; J. Exh. 535, Pet. Exh. 6H. 115. The storm was accompanied by two different wind shifts, the first of which reached the TUXPAN on the morning of February 24 between 0900 and 1200. See Tr. 320-21; 1380-83, 1386, 1410, 1504; Cl. Exh. O. During this three-hour period, the ship experienced winds of fifty-three knots and a confused sea state. Tr. 1385-86, 1446, 1460. Sometime between 1200 and 1400, the storm’s secondary wind shift passed the TUXPAN followed by more regular and unidirectional waves. Tr. 1387-89, 1444, 1462, 1469-71, 1506-07. 116. At approximately 1200 on February 24, the center of the storm was located at forty degrees north latitude, fifty-three degrees west longitude. J. Exh. 708 (telex sent at 1632, February 24 from CCGD to DISNET Weather; telex sent at 1638, February 24, from NOAA to all ships). 117. At 1530 on February 24, the TUX-PAN sent its noon report to Tecomar from the location of thirty-five degrees north latitude, forty-nine degrees west longitude. Tr. 1506; J. Exh. 87. The report stated that it was experiencing westerly winds of Beaufort Force 11 (fifty-six to sixty-three knots) and a westerly sea state of Douglas Force 8 (significant wave heights of thirty to forty-five feet). Tr. 1377; J. Exhs. 87, 545; PTO at ¶ 84. The ship also reported that it was navigating “with very bad weather and engine at moderate speed,” and that it had reduced its speed from 13.5 knots to 4.7 knots. J. Exh. 87; PTO 11 84. 118. Because the TUXPAN had encountered similar weather conditions many times in the past, the weather reported in the ship’s 1530 report did not cause Teco-mar great concern. J. Exhs. 87, 1335 at 184-85; see Tr. 1271. 119. On February 24, an eastward bound ship — the SELKIRK SETTLER — reported its 1500 location at approximately 200 miles west of the TUXPAN’s 1530 position. Tr. 1381, 296; Cl. Exh. O; J. Exhs. 589, 590. The storm had hit the SELKIRK SETTLER shortly after 0600 that morning. Tr. 294. The ship experienced the worst of the storm between 1130 and 1300, during which it encountered a maximum wind speed of fifty knots (Beaufort Force 10) and heavy swells. Tr. 134, 156, 1383; J. Exh. 545. The only damage sustained by the SELKIRK SETTLER was the destruction of its water-sensitive cargo, which comprised only one-quarter of one percent of its total cargo. Tr. 181. 120. At 1310, the SELKIRK SETTLER received an “SOS” from the BALSA 24, a ship that was within ten miles of the storm’s center. Tr. 149; J. Exhs. 97, 708 at 3-4. However, the SELKIRK SETTLER did not receive any communication from the TUXPAN. Tr. 297. The crew of the BALSA 24 eventually abandoned ship at approximately thirty-nine degrees north latitude, fifty-three degrees west longitude — approximately 300 miles north of the TUXPAN’s 1530 position. See J. Exhs. 97, 708 at 3-4, 727 at 3. 121. At 1600 on February 24, a westward bound ship — the EXPORT PATRIOT — was located closer to the storm’s center than the SELKIRK SETTLER, and was approximately 230 miles to the northwest of the TUXPAN’s 1530 position. Tr. 54-55, 296; Pet. Exhs. 652, 1289, 589; Cl. Exhs. CIO, Cll. Between 0400 and 1300, the EXPORT PATRIOT had encountered the worst of the storm, consisting of Beaufort Force 11 winds and a significant wave height of forty to fifty feet. Tr. 77-79, 1382; Pet. Exh 652; Cl. Exhs. CIO, Cll. Because of these weather conditions, the ship had been in constant communication with the Coast Guard, and had told with the Coast Guard that the absence of any message was equivalent to an “SOS.” See Tr. 67-70. By 1300, the worst conditions had abated and the barometer started to rise, and by 1800, the vessel reported significant wave heights of only twenty-five feet. Tr. 73, 107; Pet. Exh. 652; Cl. Exhs. CIO, Cll. Although the weather caused windows of the ship’s wheelhouse to shatter, there was very little damage on the stern area the vessel, and its cargo was unaffected. Tr. 60-61, 109, 111. 122. The EXPORT PATRIOT, like the SELKIRK SETTLER, received an “SOS” from the BALSA 24, but never received any message from or in regard to the TUX-PAN. See Tr. 70-71. 123. Also at 1600 on February 24, the MINERAL HOBOKEN — located approximately 230 miles due north of the TUX-PAN’s 1530 position — reported winds of Beaufort Force 12 accompanied by “huge seas.” J. Exh. 690. Like the SELKIRK SETTLER and the EXPORT PATRIOT, the MINERAL HOBOKEN did not receive any message from or regarding the TUXPAN. Id. 124. By 1800 on February 24, the center of the storm had moved directly east to approximately forty degrees north latitude, forty-seven degrees west longitude — approximately 200 miles north of the TUX-PAN’s 1530 position. Pet. Exh. 708 (telex sent at 2255, February 24, from NO A A to all ships). By midnight, and into the morning of February 25, the storm had moved approximately 600 miles to the northeast of the TUXPAN’s 1530 position. See Pet. Exhs. 5C-F; Cl. Exh. C8; J. Exh. 87; Tr. 1474-76, 339. N 125. Between 2328 and 2340, GEOSAT recorded significant wave heights of up to nineteen feet in the area of the TUXPAN’s 1530 position, and up to twenty-nine feet in the area extending 200 miles to the east of that location. Tr. 352-54, 1413-14; J. Exh. 630; Pl.Exhs. 5D, 5E; Cl.Exh. C8. The highest significant wave height reported by any vessel on February 24 within a radius of 200 miles of the TUXPAN’s 1530 position was approximately forty feet, while the majority of the significant wave heights reported by these vessels reached only twenty feet. Tr. 2349-51, 2354-61; Cl.Exhs. C8, CIO. 126. Of approximately 200 ships within the area of the storm, only one — the BALSA 24 — did not survive. See Tr. 584, 2357-58; J.Exhs. 97, 652, 653, 654, 655, 690; Cl.Exhs. C7, C8, CIO, Cll. 127. Subsequent to the TUXPAN’s 1530 report, Tecomar sent seven telexes to the ship. J.Exhs. 178-85, 219-21; Tr. 1267. 128. The first telex was sent by Lopez at 1304 (local Mexico City time) on February 24. J.Exh. 178; Tr. 1280,1284. In this telex, Lopez stated that he was aware of the fact that the fuel acquired by the TUX-PAN in Antwerp, Belgium on February 14 was having “negative effects” on its main engine. Tr. 1280, 1284; J. Exh. 178. 129. Lopez sent three more telexes on February 26. J. Exhs. 180, 181, 182. In the first of these, Lopez requested the vessel to advise Tecomar of the best possible ETA for the ports of Veracruz and Tuxpan, Mexico. J.Exh. 180. Lopez also authorized the chief engineer to operate the ship at the highest speed in order to make up for the time lost during the storm, “and this way, satisfy the cargo shippers who are pressing us more each day.” Id. In the second telex — sent approximately one hour after the first — Lopez requested the captain to confirm the workshifts of the helmsmen and to send him a list of the specific days ’ on which the helmsmen earned overtime wages. J. Exhs. 181; Tr. 1318-21. Approximately one-half hour later, Lopez sent a third telex requesting an estimation of the draft which the TUXPAN would have after unloading cargo in Veracruz and whether it would be necessary to rearrange the cargo in order to reduce the ship’s draft. J.Exh. 182. 130. On February 27, three more telexes were sent by Tecomar to the ship. J.Exhs. 183,184, 185. The first advised the Captain of current exchange rates between the United States dollars and Mexican pesos. J.Exh. 183. The second requested the Captain to “get in touch with these offices by telephone,” or to call Lopez or Hernandez at home. J.Exh. 184. In the third telex, Lopez set forth a detailed accounting of the expenses and net pay for every crew member during the month of February. J.Exh. 185; Tr. 1049, 1346,1325-26. These computations as to net pay, however, were based on information which Lopez had requested in a telex sent to the ship the previous day, i.e., on the Captain’s confirmation of the crew’s workshifts and overtime. See J.Exh. 181. Given this fact, it is clear that Lopez was communicating with the TUXPAN as late as February 27. 131. When a shipowner has not heard from its vessel for more than twenty-four hours, the customary practice in the shipping industry is to immediately contact the local maritime authorities. See PTO M 58-59, 70-71. 132. Tecomar maintains that the TUX-PAN’s 1530 report on February 24 was the last time it had heard from the ship. Tr. 1270-96. For the following reasons, however, the court finds this to be highly unlikely. None of the telexes sent by Lopez after February 24 contains an inquiry as to the ship’s location or condition, even though he knew that Tecomar vessels must report their positions every twenty-four hours, and that the TUXPAN had recently experienced heavy weather. J. Exhs. 178, 180-85; Tr. 1270-96, 1304-06, 1318, 1314-15, 1323-25. Furthermore, within the three-day period from February 24-27, Lopez did not attempt to contact the Coast Guard or any other maritime authorities, even though he knew that that this was the customary practice of a prudent shipowner, and that through Tecomar’s participation in the AMVER program, these authorities could have helped obtain information regarding the TUXPAN. Tr. 1297-98. 133. The mundane content and tone of the telexes sent between February 24 and 27 coupled with Teeomar’s failure to notify the maritime authorities during this period, indicate that Tecomar was communicating with the TUXPAN after February 24. Moreover, according to an official report issued by the Mexican government, discussed infra, Tecomar received two telexes from the TUXPAN on February 26 and 27. J.Exhs. 92, 97 at 2. 134. In light of all of these circumstances, the court concludes that Tecomar was communicating with the TUXPAN as late as February 27. Based on the evidence before the court, however, it is impossible to ascertain when, where, and under what conditions the TUXPAN sank. D. Post-voyage Investigation 135. On the morning of February 28, Lopez informed the President of Tecomar, Peter Harmsen, that he had been unable to communicate with the vessel for four days. PTO ¶ 24; Tr. 1053, 1328-29. 136. That same day, Tecomar contacted the Coast Guard and the Mexican Maritime Authorities to report the TUXPAN as missing. PTO ¶ 98; J.Exhs. 90 at 3, 1336 at 82, 101. 137. On March 4, Tecomar’s Marine Manager, Captain Perez, and Port Engineer Luis Castro met with the Coast Guard in New York to provide assistance in the search for the TUXPAN. PTO at If 87; Tr. 1057; J.Exhs. 1335 at 317, 1336 at 121-33, 119, 727, 90 at 103-05. To establish the geographical scope of the search, the Coast Guard used the information it received from Tecomar, e.g., that the 1530 telex on February 24 was the TUXPAN’s last report. See J.Exh. 1336 at 160-61; Tr. 447-48. The exact area of the search was determined by a computer model based on calculations of weather, drift, and currents. Tr. 447-48, 138. On March 4, the Coast Guard dispatched airplanes to search for the TUX-PAN. See J.Exh. 90. During the five-day period from March 3-8, the Coast Guard and the United States Navy searched 19,-000 square miles of the North Atlantic, but found no trace of the ship. See J.Exh. 90. 139. Subsequently, Tecomar chartered the M/V HEICON to conduct its own search for the TUXPAN. See Tr. 1341; J.Exh. 1336 at 57. On March 8, Tecomar directed the HEICON to look for the TUX-PAN in an area which was over 100 miles south of the TUXPAN’s customary route. Tr. 1341; J.Exhs. 1336 at 157; see also J.Exhs. 92, 729. 140. On March 10, the HEICON discovered a container, numbered ICSU 358412-3, at a location approximately 170 miles southeast of the TUXPAN’s 1530 position. J.Exh. 93; Pet. Exh. 16. The container was positively identified as having been leased to Tecomar and loaded on the TUX-PAN at Antwerp before its last voyage. J.Exhs. 92, 93, 94. 141. Other than this container, no flotsam was discovered in the vicinity of the TUXPAN’s last reported position. Tr. 488-89. Furthermore, none of the ship’s lifesaving equipment was ever sighted, and no bodies were ever found. Tr. 488-96. 142. On March 10, the Director of the Mexican Merchant Marine commenced an investigation to determine the facts and circumstances relating to the disappearance of the TUXPAN. PTO ¶ 99. On the same day, the Mexican Maritime Authorities subpoenaed Tecomar to appear before their representatives on March 16 and present any evidence surrounding the ship’s disappearance. Id. If 100. 143. In compliance with the subpoena, Viveros appeared on March 16 before a panel of Mexican Maritime Authorities in Mexico City and presented certain records regarding the disappearance of the TUX-PAN. Id. at M! 102, 105; J.Exh. 1335 at 336-37. Viveros, however, did not inform authorities of the TUXPAN’s crack history or engine problems. See J.Exhs. 92, 222. 144. The official minutes that were taken at this meeting formed the basis of the official investigative report — the “ACTA” —issued by the Mexican Maritime authorities on April 6. J.Exh. 1335 at 337-38, 348-49. Viveros and the others present at the meeting not only signed the ACTA, but also reviewed and initialed each individual page. J.Exh. 1335 at 337-39; J.Exh. 97 at 2, 4. 145. Based on the files that Viveros turned over to the Mexican Maritime Authorities, the ACTA contains a list of all the telexes sent from the TUXPAN to Tecomar during the vessel’s last voyage. J.Exh. 97 at 2; J.Exh. 1335 at 340-44, 372. Interestingly, this list includes telexes sent from the TUXPAN on February 26 and 27, even though no such telexes were ever produced by Tecomar. J.Exh. 97 at 2; J.Exh. 1335 at 340-44, 372. 146. The ACTA concludes that the sinking of the TUXPAN was caused by the storm of February 24. PTO at if 106; J.Exhs. 92, 222. This conclusion, however, was based on the data supplied by Teco-mar, which did not include the TUXPAN’s crack history, its engine breakdowns, and the problems with its seawater cooling system. See J.Exh. 2, 92, 222; see also J.Exh. 1335 at 376-77. DISCUSSION A. Jurisdiction The court has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1333. B. Applicable Law Tecomar’s liability for the TUX-PAN’s lost cargo is governed by COGSA, 46 U.S.C.App. §§ 1300 et seq., and the Hague-Visby Rules. The cargo that was bound for the United States is governed by COGSA, while the cargo that was bound for Mexico is governed by the Hague-Visby Rules as adopted and interpreted by the country in which the cargo was loaded. PTO at 100 (“Agreed upon Issues of Law”). Thus, the cargo that was loaded in Germany is governed by the Hague-Visby Rules as adopted and interpreted by the Federal Republic of Germany, and the cargo that was loaded in Belgium is governed by the Hague-Visby Rules as adopted and interpreted by Belgium. Id.; Tr. 2798-99. Any overall limitation of Tecomar’s liability is governed by the Limitation Act, 46 U.S.C.App. §§ 181-89. C. Burdens of Proof Under COGSA, the burden is on the cargo claimants to establish a prima facie case by showing that the cargo was lost or damaged while in the custody of the carrier. 46 U.S.C.App. § 1303; Gaemint Food, Inc. v. Lloyd Brasileiro Companhia de Navegacao, 647 F.2d 347, 351-52 (2d Cir.1981). Since Tecomar has conceded that it received the cargo in good order and condition, and that it failed to deliver the cargo to the owners and consignees, Claimants have met this burden. Pet. Post-trial Brief at 107. Since Claimants’ have established their prima facie case, the burden shifts to Tecomar to establish its defenses by showing that the cause of damage falls within one of COGSA’s exceptions set forth in 46 U.S.C.App. § 1304(