Fincantieri, one of the world’s largest shipbuilding groups, is suing a manufacturer of marine fireproof insulation materials, accusing it of fraud and false statements, saying it has caused more than US$100 million in economic losses and reputational damage involving three cruise ships and eight naval ships.
Specifically, Fincantieri accused Paroc Group, a subsidiary of Owens Corning, of obtaining safety certification by “fraudulent means” through “submitting tampered materials for testing,” and conspired to maintain this fraudulent behavior and sell defective products with safety hazards. It further believed that this fraud involved multiple coordinated falsifications of test materials.
In 2018, Paroc Group was acquired by Owens Corning and launched a new series of stone wool insulation products called Navis. The series focuses on lightweight and fireproof features and is claimed to be suitable for steel decks and bulkheads in ships.
Based on relevant certifications and the supplier’s repeated assurances of material integrity, Fincantieri began selecting Navis products in 2019 for cruise and naval ship projects that meet the A-60 fire integrity standard. According to the International Convention for the Safety of Life at Sea (SOLAS), A-60 is the highest level of fireproof insulation, requiring it to prevent heat transfer for at least 60 minutes. This material is typically used in r steel bulkheads (such as galleys or casings) to prevent the spread of heat and fire on board.
However, in 2023, Owens Corning Paroc’s competitors reported that after testing some of the Navis series products, they found that some products “did not actually meet the fire integrity standards for class A-60 products.” Subsequently, the competitors filed a complaint.
In April 2023, the Danish Institute for Fire and Safety Technology conducted independent testing on the Navis series of products, confirming that they did not meet standards. The Navis series was recalled in May, but Fincantieri claimed in its lawsuit that the equipment supplier “did not recommend or instruct any remedial measures to be taken on vessels already in service.” Production of the Navis series of products ceased on May 31, 2024.
According to Fincantieri, a total of 11 ships use Navis series products, including the Discovery Princess cruise ship, which was delivered and entered into service with Princess Cruises, a subsidiary of Carnival Corporation, in March 2022, as well as the luxury cruise ships Explora I and Explora II, which are part of the Explora Journeys brand under Mediterranean Cruises. The remaining 8 ships (including 2 under construction) are all military ships.
Due to the use of substandard materials, the delivery of the “Explora I” cruise ship was delayed by 21 days due to the need to replace defective products, and the “Explora II” and Princess Cruises’ “Sun Princess” were also subsequently delayed.
Fincantieri stated that material defects have caused losses of over US$100 million, including direct costs for investigations, repairs, and rectification of affected vessels, as well as increasing construction costs and other expenses such as penalties for delayed delivery.
Currently, Fincantieri has filed a lawsuit with the U.S. District Court for the District of Ohio, where Owens Corning is headquartered. As a leading company in the building materials industry, Owens Corning was involved in litigation related to the use of stone wool in shipbuilding materials for more than 20 years before filing for bankruptcy and settling the related lawsuits in 2000.