Chapter 6
Carriage of Goods and the Liability of Air and Sea Carriers
I. Carrier’s liability of misdelivery of goods
Allied Chemical International Corp. v. CdNLB (2nd Cir. 1985)
Buyer sold cargo of chemicals to Brazilian buyer, docs transaction. Under Brazilian law, delivery was valid on presentation of either original BL or “carta declaracion.” Buyer never paid for BL, presented “cd”, and took cargo. Buyer sued carrier for misdelivery.
Held: Carrier needed to get original BL, that’s misdelivery with strict liability, so cargo wins.
II. Bailments and Common Carriers
III. Liability of International Air Carriers:
A. Warsaw and
El Al v. Tseng (
Tseng was passenger singled out for special inspection as a high risk passenger. She was searched, no problems found, so she was allowed to board. She sued for state assault and false imprisonment. El Al claimed that Warsaw Convention was sole remedy and wipes out all local remedies.
Held: Airline wins, intent of treaty was to define all obligations and rights for international air carriage. Allowing local law defeats that purpose.
1. Limitations on Air Carrier Liability and SDRs
2. Liability for death or bodily injury
3. Jurisdiction
4. Time limits
B. Liability for Air Cargo and Baggage
C. Losses
1. Cargo losses
2. Baggage losses
3. Delay
D.
IV. COGSA
A. History
1. Harter Act
2. Hague Rules
3. COGSA
B. Limitations of Liability under COGSA
1. Forum selection clauses (SKY REEFER)
C. Nautical Liability of Carrier
1. Prima Facie Case
2. Due diligence
3. Seaworthiness
4. Errors in navigation or management of the ship
5. Fire
6. Perils of the sea
SABINE HOWALDT (2d Cir. 1971)
Cargo of steel suffered salt water damage. Carrier raised peril of sea defense, pointing to hurricane conditions and confused seas. Court accepted that defense, and also found that the ship was seaworthy at the inception of the voyage. Cargo loses.
NOTE: Different result in 9th Cir.
7. Q Clause
D. Shipper’s liability for hazardous cargo
E. Carrier’s liability for cargo shortages
Westway Coffee Corp. v. MV Netuno
Carrier issued order BL stating shipper’s load and count of a container holding a cargo of coffee. BL stated weight of cargo. On delivery, cargo was found to be 20 tons short. Carrier argued there were no “footprints in the snow” and therefore the theft could not have occurred during transit.
Held: Weight of the cargo is “readily apparent,” so negotiable BL acknowledging receipt it binding. Buyer relied on statement in BL to pay for cargo, so whether or not cargo was received or not was irrelevant.
F. Package limitation ($500 per package)
MV ARCHIGETIS (SDFl 1991)
Yacht damaged on vessel. BL had term limiting liability to $500/package or customary freight unit.
Held: Because of the way yacht was packaged, it is one package, and cargo owner gets $500.
G. Deviation
1.
H. Hamburg Rules
I. Hague Visby Amendments
V. Ocean Transportation Intermediaries
A. Freight forwarders
Panalpina, (2nd Cir. 2000)
Panalpina acted as freight forwarder for cargo of electric transformer. They used reasonable care in hiring carrier, stevedores, etc. Cargo broke loose and damaged other cargo on ship. No BL or other contract of carriage.
Held: Panalpina did not face carrier liability, and had proved it acted with due care.
B. NVOCCs
C. OSRA 1998
VI. Marine Cargo Insurance
A. Marine Insurance Policies and Certificates
B. General Average and FPA Losses
1.
2. General average claims by the carrier
3. Real and substantial danger
C. Particular average losses
D. Types of Coverage
1. Perils clause
2. All risks coverage
3. War risk
Shaver v. Travelers (D.Ore. 1979)
Cargo of caustic soda contaminated by tallow left in pipes from previous voyage. Cargo owner claimed on cargo policy. Underwriter denied claim, stating it was not a covered loss.
Held: Claim not covered. None of the insuring clauses covered contamination.
NOTE: Very dumb decision. Perils clause and Inchmaree clause both clearly cover this kind of loss.