The owners of a massive merchant vessel that collided with the warship Fitzgerald in 2017, drowning seven sailors, have agreed to pay the U.S. government nearly $27 million as part of a settlement agreement.

The two-page deal, obtained by Navy Times, states that is it’s governed by Japanese law.

Both the Fitzgerald and the Philippine-flagged ACX Crystal were transiting busy sea lanes off Japan before the 1:30 a.m. collision on June 17, 2017, when the container vessel struck the guided-missile destroyer’s starboard side.

The agreement states that the owners, Olympic Steamship Company, S.A., Panama, will pay about 2.9 billion Japanese yen to the U.S. government to settle potential claims because of their role in the maritime disaster.

That translates to roughly $26.7 million.

As is common in these agreements, the settlement notes that the deal is not an admission of “any liability, negligence, breach of duty, or wrongdoing” by the parties.

Navy officials declined comment on the settlement, referring questions to the U.S. Justice Department, which signed the agreement.

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Justice officials did not immediately respond to requests for comment.

Attorneys with the Japan-based law firm Yoshida and Partners, which signed the agreement on behalf of the Crystal’s owners, did not respond to requests for comment Friday.

The Navy has largely stayed quiet in its publicly released reports and statements when it comes to the Crystal’s culpability in the collision.

But in a November 2017 official account of the collision, a Navy report states during the 30 minutes before the crash, “neither FITZGERALD nor CRYSTAL took such action to reduce the risk of collision until approximately one minute prior to the collision.”

“Collisions at sea are rare and the relative performance and fault of the vessels involved is an open admiralty law issue,” that report states. “The Navy is not concerned about the mistakes made by CRYSTAL. Instead, the Navy is focused on the performance of its ships and what we could have done differently to avoid these mishaps.”

An internal Navy investigation into the collision, known as a “dual-purpose investigation,” has not been made public because Navy officials say it was created in part to prepare for potential litigation.

But that probe cites failures by the Crystal’s second officer as one of the root causes of the collision.

The merchant vessel was on autopilot “until just prior to impact,” the report states, and the Crystal did not sound at least five short blasts or make any attempt to hail the warship via radio.

“Prior to the collision, CRYSTAL watchstanders came out of autopilot and initiated a turn to starboard, too late to have adequate effect,” the report states. “Audio recordings from CRYSTAL’s Bridge reveal what is most likely the sound of a signal light being used to get FTZ’ attention just minutes before the collision. FTZ watchstanders did not recall seeing this signal light.”

The unidentified second officer “failed to maintain a proper lookout so as to make a full appraisal of the risk of collision” with the Fitzgerald, according to the report.

The Crystal officer “failed to determine if a risk of collision with FTZ existed by using all available means,” according to the report, and “he failed to appreciate, by radar or visual observation, that FTZ was on a constant bearing with a decreasing range, which observation would have led him to deem risk of collision to exist.”

It also states the officer “failed to take action to avoid collision once it became apparent that action by FTZ alone would not avoid the collision.”

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“In addition, the Second Officer failed to follow CRYSTAL’s Standing Orders by failing to call the Master when FTZ’s CPA was within one nautical mile and failing to take frequent and accurate compass bearings of FTZ to detect the risk of collision,” according to the internal Navy investigation.

Whether the settlement money will actually go to Fitz repairs remains unclear but it’s a small sum compared to what the Navy is paying to mend the 25-year-old warship.

The Navy has awarded roughly $533 million in contracts and modifications for repair and modernization of the ship since September 2017, according to Pentagon contract listings.

“That’s a lot of money and it’s not a lot of money,” Lawrence Brennan, a retired Navy captain and attorney who teaches admiralty and maritime law at Fordham Law School, said of the settlement amount.

“The really tough questions are the injury and death claims being asserted against Crystal by the deceased and survivors,” he said.

It remains unclear whether any claims have been filed by the families of the seven sailors who drowned in the collision.

Darrold Martin, the father of Xavier Martin, one of the sailors who died, said Friday he had been in touch with an attorney but was not sure if any litigation had been filed on the behalf of the families.

An attorney representing Fitz victims and their families, David M. Schloss — a partner in the Washington, D.C. firm of Koonz, McKenney, Johnson, DePaolis and Lightfoot — told Navy Times that he’s pleased the vessel’s owner and charterer “recognized their obligation to compensate the Navy for the property damage they caused.”

“While no amount of money is sufficient to compensate the families of the seven brave sailors who gave their lives in the service of their country, or those Fitzgerald crewmen who continue to suffer from the devastating physical and emotional injuries associated with this collision, we are nevertheless hopeful that this settlement indicates that those same parties, along with the time charterer, NYK (Nippon Yusen Kabushiki Kaisha), will see fit to live up to their legal and moral obligations to fully compensate those whose lives have been so tragically impacted,” said Schloss in a written statement.

"Plain and simple, this collision was a preventable tragedy, and we intend to pursue all legal remedies both in Japan and here in the United States against the three parties responsible for the negligent conduct of the Crystal. "

Geoff is the editor of Navy Times, but he still loves writing stories. He covered Iraq and Afghanistan extensively and was a reporter at the Chicago Tribune. He welcomes any and all kinds of tips at geoffz@militarytimes.com.

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