nashe pravo
/ , 20  2017  

Limitations on Liability of Ocean Carriers and third parties, such as Stevedores, Terminal Operators, and Inland Carriers, According to Through Bill of Lading in Multimodal Contracts of Carriage of Goods

Serhiy Krayniy 01.11.2003, 10:10

: . , , Master of Laws in International Business and Trade 01/ 2002-01/2003

. . 1991-1996

:- , ׳, 2002 

- , ˳., ׳, 09/00-08/01

- . 03/00-08/00

- 03/97-03/00

________________________________________

Limitations on Liability of Ocean Carriers and third parties, such as Stevedores, Terminal Operators, and Inland Carriers, According to Through Bill of Lading in Multimodal Contracts of Carriage of Goods

Serhiy Krayniy, LL.B.[1]

Copyright 2003 by Serhiy Krayniy

1. Containerization of carriage of goods

During the last decades the level of international trade has increased to a significant level. The development of technology for the carriage of goods, containerization of the cargo, led to the changes in the transportation business. Now different types of carriers, ocean, rail, motor, and air carriers, easily transport goods in containers from the point of origin to the point of destination. It is common now that a shipper receives one Through Bill of Lading from a main carrier and the main carrier may get several separate bills of lading from independent carriers for different parts of the route to fulfill door-to-door delivery. A Through Bill of Lading is designed for the contract of the carriage of goods from the point of origin to the point of destination by several carriers. The U. S. Code, Appendix to Chapter 36--International Ocean Commerce Transportation, defines through transportation as:

continuous transportation between origin and destination for which a through rate is assessed and which is offered or performed by one or more carriers, at least one of which is a common carrier, between a United States point or port and a foreign point or port .[2]

Accordingly, a multimodal transportation contract is a contract between an ocean carrier and a shipper to transport cargo from an inland point of receipt to an inland point of destination.

The liberalization of trade and the new container technology has influenced the development of the law which set forth the principles of the liability of a carrier. There are two types of contract on carriage of goods, a Bill of Lading, used in the liner trades, and a Charter Party, used in trump shipping.[3] Containerization has raised questions concerning the relevant responsibilities and attendant liabilities associated with each leg of a multimodal shipment. This paper discusses the applicable law for liability of an ocean carrier and its agents according to a Through Bill of Lading.

2. A legal regime which regulates the legal liability of the ocean carrier and may be extended to third parties such as stevedores, terminal operators, and inland carriers

Carriage of Goods by Sea Act (COGSA) as domestic enactment of the 1924 International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (known as the Hague Rules)

In the U.S. the ocean carriage of goods to and from the U.S. is regulated by two acts: by the Carriage of Goods by Sea Act (COGSA) and by the Harter Act. The Harter ActDocument1zzFN_F185 applies to part which is not regulated by the COGSA.[4] In 1936 Congress adopted the Carriage of Goods by Sea Act (COGSA)[5] as enactment of the Hague rules or 1924 International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading. The COGSA implemented almost all provisions of the Hague rules. It governs carriage by sea in foreign trade to or from United States ports from "tackle to tackle. In 1974 the Ninth Circuit recognized in Tessler Brothers (B.C.) Ltd. v. Italpacific Line that:

Congress passed the Harter Act and the COGSA to counteract the persistent efforts of carriers, who are the drafters of ocean bills of lading, to insert all embracing exceptions to liability One of the specific purposes of the COGSA was to obviate the necessity for a shipper to make a detailed study of the fine print clauses of a carrier's regular bill of lading on each occasion before shipping a package, 494 F.2d 438, 1974 A.M.C. 937.

Thus, one of the reasons for the enactment of the COGSA was to defend the interests of the shipper, which has less power during negotiations with carriers. According to the COGSA (46 U.S.C. 1301(a)) a carrier is the owner or charterer who enters into a contract of carriage with a shipper. The other reason was to make rules which regulate cargo transportation in a uniform and simple way, in order to promote trade. On the other hand, the COGSA is favorable to the carriers, because it includes such provisions as a one-year statute of limitation for bringing a law suit[6] and limitation of the carriers and the ships liability to not more than the $500 per package or customary freight unit.[7]

The COGSA does not regulate the limits of the ocean carriers independent contractors, such as Stevedores, Terminal Operators, and Inland Carriers. Nevertheless, an ocean carrier which issues a Through Bill of Lading to the shipper may include specific clauses in order to limit its liability.

Carmack Amendment to the Interstate Commerce Act

In 1906 Congress passed the Carmack Amendment to the Interstate Commerce Act (49 U.S.C.10730 and 11707) in order to create a uniform regime for the liability of carriers. At first, the Carmack Amendment provisions applied to railroads but later were extended to motor carriers in the Motor Carrier Act of 1935 and to surface freight forwarders.[8] This Act governs the liability of U.S. inland common carriers for lost or damaged goods. The main purpose of this amendment was to reduce the burden of a shipper to search out the particular negligent carrier from all the carriers that were engaged in interstate shipment of his/her goods.[9] Moreover, this Amendment incorporated the common law rule that a common carrier is liable even without the proof of negligence. As the Supreme Court of Florida agreed in King Ocean Central America, S.A., v. Precision Cutting Services, Inc., 717 So.2d 507, 1998 A.M.C. 2372, the Carmack Amendment codified the liability of the carrier for loss or damage to cargo without the proof of carriers negligence, unless it can establish one of the common law defenses, such as an act of God, enemies of the King, and inherent vice of the goods. Moreover, this Court ruled that the Carmack Amendment applies only to land carriers by its statutory language.[10]

In 1992 in Capitol Converting Equipment, Inc., v. LEP Transport Inc, 965 F.2d 391, 1993 A.M.C. 1609, the Seventh Circuit ruled that the Carmack Amendment did not apply to a Through Bill of Lading issued in a foreign country. In this case Capitol Converting Equipment, Inc. brought action against shipping agent, LEP Transport, Inc. (LEP), Illinois, to recover for loss of goods during transit. LEP was hired to arrange for the transportation of certain machinery from Genoa, Italy, to Chicago. Because the machinery never reached Chicago, Capitol sued LEP under the Carmack Amendment. The Seventh Circuit upheld the decision of the District Court which granted LEP's motion for summary judgment and decided that the Carmack Amendment was inapplicable to this transaction and that LEP's liability to Capitol is limited to $150 under Illinois law. The Court ruled:

Because such a through bill of lading includes no separate domestic segment as described above, the Carmack Amendment is inapplicable.

One of the recent cases that set forth the principles of liability of an ocean carrier during transportation to the final destination is King Ocean Central America, S.A. v. Precision Cutting Services, Inc. 717 So.2d 507, 1998 A.M.C. 2372, decided on June 12, 1998, by the Florida Supreme Court. The Supreme Court declined to follow the decision of the Third District in Harvest International, Inc. v. Tropical Shipping and Construction Co., Ltd. 644 So.2d 112, 19 Fla. L. Weekly D2116, which misconstrued several federal decisions, including Capitol Converting Equipment, Inc., v. LEP Transport Inc. and improperly extended the Carmack Amendment to an ocean carrier which issued a Through Bill of Lading when a separate Bill of Lading was issued for the inland leg of the cargo transportation. In Harvest International the District Court held that an ocean carrier was liable under the Carmack Amendment for damage of the goods during the inland leg of the transportation, because a second, separate Bill of Lading was issued for the inland portion[11] of the transportation by inland carrier.

The issue presented in the Precision Cutting Services is the issue of applicable law but not the issue of a carriers liability. The ocean carrier, King Ocean Central America, S.A. issued a Through Bill of Lading that included an inland transportation by motor carrier in the United States. The Bill of Lading covered the ocean carriage and the land carriage. According to the Bill of Lading the cargo, a container of pants was to be delivered from Costa Rica to Miami to the Precision Cutting Services, Inc. In its "Clause Paramount," the contract's preamble provided that the Bill of Lading should have effect subject to the provisions of the COGSA. The loss of goods happened while they were in the custody of the inland carrier who had issued a separate Bill of Lading. Also the Bill of Lading had a clause which specifically required filing of a claim against King Ocean within one year. King Ocean Central America, S.A. delivered cargo to the inland carrier, Paradise Freightway, Inc. in Miami, which issued a separate Bill of Lading for inland leg of transportation. While the cargo was in possession of the inland carrier, the cargo was stolen from the inland carrier freight yard. Precision filed a claim against King Ocean only after the expiration of the one-year period.

The Supreme Court of Florida decided that the Carmack Amendment to the Interstate Commerce Act, which deals with the liability of railroads, motor carriers, and freight forwarders (U.S. inland common carriers) under receipts and bills of lading for lost or damaged goods, did not govern the liability of the carrier for the loss in King Ocean Central America, S.A. v. Precision Cutting Services. The Carmack Amendment provides two-year statute of limitations for the inland leg of the journey. Carriage of Goods by See Act (COGSA)[12] governs liability of the ocean carrier with the COGSA one-tear statute of limitation. As a result, claim of the Precision Cutting Services, Inc. was dismissed for being untimely filed.

Summarizing, the decision of this Court upheld following conclusion if:

(1) an ocean carrier issues a Through Bill of Lading which includes inland transportation by inland carrier in the United States,

(2) this Through Bill of Lading provides that an ocean carrier would be vicariously liable for any loss while the goods were in the custody of the inland motor carrier,

(3) the inland carrier issues separate Bill of Lading on domestic portion of shipment, and

(4) cargo is lost or damaged while in the custody of the inland carrier who had issued a separate Bill of Lading,

then this ocean carrier is liable for loss (or damage) of the goods which are in the custody of this inland carrier on the ground of the Carriage of Goods by See Act (COGSA), the terms of the Bill of Lading, and the COGSA one-year statute of limitation rather than the Carmack Amendment.

3. Bill of Lading and Through Bill of Lading, their Determination and Functions

In order to determine the applicable law set out in parties contract on multimodal carriage of goods, which includes the inland leg, it is necessary to analyze a Bill of Lading, which in common carriage is the evidence of the contract of carriage. A Bill of Lading includes different clauses and may be different types. Generally, a Bill of Lading is a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods." [13]

The Court in King Ocean Central America cited William Tetley [14] who determined three main features of the Bill of Lading. According to the Court, a Bill of Lading serves as:

(1) the evidence of the contract of carriage between the carrier and the seller;

(2) the receipt for the goods under transport;

(3) the document of title to property which can be endorsed and negotiated.

The determination of the a "Through Bill of Lading was given in the King Ocean Central America as a Bill of Lading with long legs," which is designed to carry goods from the point of origin to the point of destination by several ship-owners or railway companies. This Court also cited the most recent Seventh Circuit Court of Appeals definition of a Through Bill of Lading in Capitol Converting Equip., Inc. v. LEP Transport, Inc., 965 F.2d 391, 1993 A.M.C. 1609, 965 F.2d 391, 1993 A.M.C. 1609, (7th Cir.1992), as one "issued in a foreign country to govern a shipment throughout its transportation from abroad to its final destination in the United States," 717 So.2d 507, 1998 A.M.C. 2372.

4. Clauses of a Bill of Lading

A Bill of Lading may include several clauses which are very important for the determination of the carriers, and his agents, stevedores, and terminal operators liability for the inland portion of the carriage of the goods, such as the Himalaya Clause, the Period of Responsibility Clause, and the Clause Paramount, and others:

Clause Paramount

Clause Paramount in the Bill of Lading provides the COGSA as the law that governs the rights and obligation of the parties in the contract of the carriage of goods. The necessity of this clause follows from the nature of the COGSA which governs only international carriage of goods by sea to or from ports of the U.S. Thus, if parties want the COGSA to govern parties rights and liabilities in the contract of shipment between two ports within the U.S., a Bill of Lading must contain this statement. The COGSA also provides, under the so- called "coastwise option," that

"Any Bill of Lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such [domestic] ports, containing an express statement that it shall be subject to the provisions of this chapter, shall be subjected hereto as fully as if subject hereto by the express provisions of this chapter."[15]

This clause is mandatory in two circumstances: (1) when the contract is for carriage between two U.S. ports and the parties want the COGSA to apply and (2) when the contract is for carriage of goods in foreign trade from a U.S. port.

Period of Responsibility Clause

A Period of responsibility clause may be as separate clause in the Bill of Lading or may be included in the clause Paramount. This clause extends the limitation of liability of the ocean carrier, which according to the COGSA covers tackle-to-tackle period. This clause extends the application of the COGSA for a period of time while goods are located in carriers custody prior to loading or subsequent to discharge from a vessel.[16] The Period of responsibility clause does not displace conflicting state law by the COGSA. Thus, in Colgate Palmolive Co. v. S.S. Dart Canada, 724 F.2d 313, 1984 A.M.C. 305, the Court of Appeals of the Second Circuit set forth that if the COGSA applies beyond tackle to tackle period, it applies as a contractual term, but does not apply by its force. Following this conclusion, in cases, where the COGSA is in conflict with state law during application beyond the tackle to tackle period, state law prevails.[17] This decision leads to the conclusion that action against the carrier in this situation is out of the admiralty jurisdiction and is governed by state law. In Colgate Palmolive the Second Circuit stated that in the action against a terminal operator for negligent loss of cargo provisions of Carriage of Goods by Sea Act incorporated by contract in bill of lading could be valid only insofar as they did not conflict with applicable state law. The court relied on the decision set forth by the U.S. Supreme Court in Herd & Co. v. Krawill Machinery Corp., 79 S.Ct. 766, 3 L.Ed.2d 820, that in spite of the fact that the COGSA's liability limitation provision does not apply to agents of a carrier, the parties are not precluded from contracting such a limitation.

Himalaya Clause

Limitation of ocean carrier liability may be extended by an agreement between shipper and ocean carrier in the Bill of Lading to the agents, servants and independent contactors of the ocean carrier, such as stevedores, and carriers. [18] This limitation of liability, which is provided by the COGSA and includes a $500 limitation of liability per package or customary unit, one-year statute of limitations, and complete defenses provided by section 4(2) of the COGSA, such as Acts of God or inherent vice, may be extended to overland carriers by a properly expressed Himalaya clause in a through multimodal Bill of Lading.[19]

The principle of the Himalaya clause was developed in the British case Adler v. Dickson, 1 Q.B. 158 (C.A.1954), where a passenger, Mrs. Adler, injured on the steamship Himalaya, sued master and boatswain in tort because she could not sue the carrier, which was contractually exempt from all liability. The passenger won the case because the contract between her and the company did not have a clause extending the exemption to master and boatswain. Generally, a "Himalaya clause is any clause in a Bill of Lading which seeks to extend to non-carriers any immunity, defense, limitation or other protection afforded to the carrier by law and/or the Bill of Lading.[20] The extension of the COGSA provisions to third parties means not only a $500 package or customary unit limitation and a one-year statute of limitation for claims, but also defenses, provided by section 4(2) of the COGSA, such as Acts of God or inherent vice.

The Supreme Court of the U.S. in Robert C. Herd & Company v. Krawill Machinery Corp. 79 S.Ct. 766, 3 L.Ed.2d 820, defined the conditions of exemption of stevedores or agents of a carrier from liability. Court stated that provisions of the COGSA that limited the liability of carrier to a $500 per package of cargo were inapplicable to the negligent stevedore or carriers agents because in the contract the parties did not limit the liability of negligent carriers agents. The Supreme Court ruled that:

If such had been a purpose of the contracting parties it must be presumed that they would in some way have expressed it in the contract. Since they did not do so, it follows that the provisions of the Bill of Lading did 'not cut off (respondent's) remedy against the agent that did the wrongful act.

The Supreme Court also set forth a clarity requirement for identification in the Bill of Lading of parties who can obtain the benefits of the COGSA limitations. In sum this decision set forth the requirements for a valid Himalaya clause in the Bill of Lading in order to limit the liability of negligent carriers agents.[21]

Forum Selection Clause

In Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 15 S.Ct. 2322, 1995 A.M.C. 1817, the U.S. Supreme Court ruled on the question of validity of the choice of law and choice of forum clause in the Bill of Lading in international carriage of goods. In this case the Supreme Court held that a clause calling for foreign arbitration of a cargo damage dispute in a Bill of Lading does not lessen the carrier's liability under the COGSA. In this case Bacchus Associates of New York, a wholesale fruit distributor in New England, was the shipper and consignee of a shipload of oranges and lemons shipped from Agadir, Morocco to New Bedford, Massachusetts. The cargo was carried by the vessel Sky Reefer. Because of improper loading of the cargo on board by the stevedore hired by the carrier and shifting of the boxes during voyage, the cargo was damaged during transportation, causing damage to the shipper in the amount of $1 million.

The issue before the Supreme Court was whether the clause of the Bill of Lading which required foreign arbitration lessened the carriers liability under the COGSA. The Supreme Court ruled that carriers cargo liability was not lessened. The Supreme Court stated that GOGSA does not prevent the parties from agreeing to enforce [their] obligation in a particular forum.

The provision that a Forum selection clause in the Bill of Lading is prima facie valid and must be enforced, unless it is shown to be unreasonable under circumstances, has been subsequently implemented in the decisions of the lower Courts. [22]

Thus, in Union Steel America Co. v. M/V Sanko Spruce, 14 F. Supp. 2d 682, 1999 A.M.C. 344, (D.N.J. 1998) the District Court of New Jersey ruled in favor of enforcement of a Forum selection clause in the Bill of Lading which was designated in a foreign jurisdiction. A Korean shipper, Union Steel America Co., shipped hot dipped steel fence pipe on the M/V Sanko Spruce by carrier Korean Yukong Line Limited who had chartered the ship. When the cargo was discharged in Camden, New Jersey, on November 27, 1996, it was rusted, bent, scratched and otherwise damaged.

Shipper sued the vessel, time charterer of the vessel, and owners of the vessel, alleging negligence, breach of contract, and unseaworthiness of the vessel. Defendant moved to dismiss, claiming that the Bill of Lading had a Korean forum selection clause for the settlement of disputes. Yukong Line Union Steel objected to the enforcement of the forum selection clause, arguing that enforcement of the selection clause would violate the Carriage of Goods by Sea Act (COGSA) Document1zzFN_F17and the Harter Act.

The Court relied on the decision of the Supreme Court in Sky Reefer and stated that:

[T]he Supreme Court held that foreign arbitration clauses are not invalid under COGSA in all circumstances Where such a clause is challenged, the controlling question is whether the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees."

The District Court held that (1) time charterer was carrier for purposes of forum selection clause in bills of lading; (2) forum selection clause was mandatory and exclusive and thus enforceable; (3) general presumption of validity attached to forum selection clause. The District Court determined the unreasonable circumstances which must be shown by the defendant in order to overcome validity of the forum selection clauses. It stated that these circumstances potentially exist where:

(1) the integration of the forum selection clause into the Bill of Lading was a result of fraud or overreaching;

(2) the party seeking to void enforcement will for all practical purposes be deprived of his day in court because of the grave inconvenience or unfairness of the selected forum;

(3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or

(4) enforcement of the forum selection clause would contravene a strong public policy of the forum state.

Also if the shipment at issue is covered by the COGSA and the Harter Act, a forum selection clause is nullified, voided, and of no effect if it relieves the carrier or ship from the COGSA or the Harter Act liability or lessens such liability.

Court set forth, citing the federal decisions in The Bremen, 407 U.S. at 10, 15, 92 S.Ct. 1907; Mitsui & Co. (USA) v. Mira M/V, 111 F.3d 33, 35 (5th Cir.1997), that a party which seeks to avoid enforcement of the clause has a burden to show that the forum selection clause is unreasonable.

The Court also analyzed the foreign law from the point of reduction of the carriers obligation below what COGSA guaranteed. On this basis the Court granted the Motion to Dismiss complaint against carrier and denied motion as to other defendants.

This decision was upheld in several recent decisions, such as:

Kelso Enterprises, Ltd. v. M/V Wisida Frost, 8 F. Supp. 2d 1197, 1998 A.M.C. 1351 (C.D. Cal. 1998)), where the District Court stated that under law, a Forum selection clause is presumptively valid and can be voided only when defendant shows that the enforcement of the Bill of Lading will be unreasonable and unjust, or this clause was the result of fraud or overreaching. This court also ruled that a foreign forum, selected by the parties, must determine whether parties' transaction was subject to the (COGSA); whether carrier committed unreasonable deviation depriving them of protection according to the bills of lading; and that plaintiffs' negligence and tortious interference claims related directly to bills of lading and were subject to the forum selection clause.

Hartford Fire Insurance Company v. Novocargo U.S.A. Inc. et. al., 156 F.Supp.2d 372, 2002 AMC 314 9S.D.N.Y. 20010), reconsidered in 2002 AMC 319 (S.D.N.Y. 2002) and which upheld that validity of the mandatory Forum selection clause can be waived only if defendant shows that the forum selection clause is unreasonable under the specific circumstances.

Ricoh Corporation v. Ming Plenty, et al., 2002 AMC 582 (S.D.N.Y. 2002); which upheld that choice of forum clause should rarely be disturbed.

Acciai Speciali Terni USA, Inc. v. M/V Berane, et al., 2002 AMC 528 (D.Md. 2002); and Acciai Speciali Terni USA, Inc. v. M/V Berane, et al., 2002 AMC 519 (D.Md. 2002), where the Court ruled that the forum selection and choice of law provisions are prima facie valid and enforceable.

Special Bill of Lading Provisions

Limitation of liability of the ocean carrier and third parties depends on the properly worded language of the Bill of Lading. Thus, in order for third parties, such as stevedores or terminal operators to benefit from limitation of liability by the COGSA, this possibility must be provided in the additional clauses of the Bill of Lading.

The most important requirement in order to benefit from a $500 per package or unit is provision of the shipper with the fair opportunity to declare a higher value.[23] As the Eleventh Circuit stated in Hale Container Line, Inc. v. Houston Sea Packing Co., Inc.,:

If the carrier demonstrates that the shipper was given a fair opportunity to declare a higher value on paying a higher freight by being offered a choice of rates and valuations, the burden shifts to the shipper to demonstrate that a fair opportunity did not exist, 137 F.3d 1455, 23 Fla. L. Weekly Fed. C. 1219.

Also, in order to insure limitation of liability of a carrier or third parties a liberties clause may be included into the Bill of Lading. A liberties clause is the clause in the Bill of Lading which makes it possible for the ocean carrier or third parties to make some deviations that may be required in the course of shipment without defeating the COGSA benefits and limitations. [24] For example, a voyage clause which allows the ship to sail without tugs, pilots or by different routes.

A Bill of Lading may include clauses such as for carriage of the cargo (especially non-containerized one) on the deck of the ship (Deck Cargo Clause). As the Eleventh Circuit upheld in Hale Container Line, Inc. v. Houston Sea Packing Co., Inc. 137 F.3d 1455, 23 Fla. L. Weekly Fed. C 1219, in order for an ocean carrier to benefit from the $500 per package limitation to on-deck shipments, the information that the cargo is to be carried on-deck and that the COGSA is to be applied must be on the face of the Bill of Lading in plain form.

A Bill of Lading also may include clauses which allow the carrier non-scheduled port calls, changed time of sailing, and through shipments by different modes.

Furthermore, Professor T. J. Schoenbaum has classified others types of clauses:[25] Discharge and delivery clause which allows the carrier to discharge a cargo on the arrival without notice; an Acknowledgement of weight/quality marks clause which limits the carrier responsibility according to clearly shown leading marks on packages. A Carriers Liberties in the Event of Blockade or Delay clause permits the carrier to discharge cargo at any convenient port if a voyage or a vessel is threatened by specific circumstances such as war or blockade. A Container clause permits the shipper to open, repack a container and abandon a container if it is hazardous. Additionally, the Bill of Lading usually contains terms which are repeated in applicable law such as the COGSA, the Hague Rules, and international treaties.

In spite of the fact that the Bill of Lading is written by the carrier, a carrier will not include in the Bill of Lading clauses which significantly deviate from the COGSA. If any clause significantly deviates from the statutory provisions of the COGSA it can be voided and nullified. As the Second Circuit ruled in General Electric Co. v. S/S Nancy Lykes at 83-84, 706 F.2d 80, 1983 AMC at 1953, the scope of a Clause of the Bill of Lading is limited by COGSA because it does not permit an unreasonable deviation and considers this deviation as a breach of the COGSA, and the contract of carriage, which would deprive the carrier of the benefit of the COGSA liability limitation.

5. Conclusion

Although the single Through Bill of Lading promotes efficiency and speed of delivery by the carrier in the international carriage of goods, it creates a complicate legal regime regarding the liability of different types of carriers and their agents. In order to determine the applicable law set out in the parties contract on multimodal carriage of goods which includes an inland leg it is necessary for the shipper to carefully analyze the Bill of Lading which may include different clauses and applicable law. The absence of the uniform rules means that the determination of carriers liability is still uncertain and depends on a properly worded contract between shipper and carrier.

Today, the regime regulating liability of the ocean carrier and third parties is a compromise between carrier and shipper to the level which is permitted by the applicable law. Therefore, in spite of the fact that Congress and courts are focused on creating a uniform and simple legal regime for cargo transportation, carriers can still avoid the strict liability of common law on the principles of freedom of contract. For example, in the case where an ocean carrier issues a Through Bill of Lading which includes inland transportation in the United States by a motor carrier, and which provides that an ocean carrier will be vicariously liable for any loss while the goods are in the custody of the inland motor carrier, and the goods are lost or damaged while in the custody of the inland motor carrier who has issued a separate Bill of Lading, then the ocean carrier's liability as a matter of law is governed by the Carriage of Goods by Sea Act, the terms of the Bill of Lading, and the COGSA one-year statute of limitation, thus favoring an ocean carrier and third parties.

The future of the legal regime regulating cargo transport depends on the decision about what is more important for liberalization of trade: the theory of contractual freedom or the attempt to create an international uniform regime for cargo transport.


[1] Nothing contained in this article is to be considered as the rendering of legal advice for specific cases; the article is intended for educational and informational purposes only.

[2] 46 U.S.C. 1702(26)

[3] David W. Robertson, Steven F. Friedell, Michael F. Sturley Admiralty and Maritime Law in the U.S. California Academic Press, 2001, page 315

[4] David W. Robertson, Michael F. Sturley, Recent Developments in Admiralty and Maritime Law at the National Level and in the Fifth and Eleventh Circuits, 26 TLNMLJ 193

[5] 46 U.S.C. 1300- 1315

[6] 46 U.S.C. 1303(6)

[7] 46 U.S.C. 1304(5)

[8] Saul Sorkin, Limited Liability in Multimodal Transport and the Effect of Deregulation, 13 TLNMLJ 285

[9] Supra note 7

[10] Drew L. Kershen, Article 7: Documents of Title-1998 Developments, 54 BUSLAW 1911

[11] "Inland portion" means the charge to the public by a common carrier for the non-ocean portion of through transportation - 46 App. USCA 1702

[12] Title 46 Appendix U.S.C.A. 1303(6); 49 U.S.C.A. 11707

[13] UCC 1-201(6)

[14] William Tetleys Marine Cargo Claims (3-rd Ed.)

[15] 46 U.S.C.App.1312

[16] Thomas R. Denniston, Carter T. Gunn, Alfred E. Yudes, Jr., Liabilities of multimodal operators and parties other than carriers and shippers, 64 TLNLR 517, West law Cite as: 64 Tul. L. Rev. 517

[17] Richard W. Palmer, Frank P. DeGiulio, Terminal Operations and Multimodal Carriage: History and Prognosis, 64 TLNLR 281.

[18] Supra note 7.

[19] Supra note 7.

[20] Supra note 15.

[21] Supra note 15.

[22] Francis M. Dougherty, Validity of Contractual Provision Limiting Place or Court in Which Action May Be Brought, 31 A.L.R.4th 404 (1984), 31 A.L.R.4th 404

[23] Supra note 15

[24] Supra note 15

[25] Thomas J. Schoenbaums Admiralty and Maritime Law, (3-rd Ed), West Group, St. Paul, Minn., 2001


  |     |  
/ / /
Copyright 2006
.
:

:  ilos.com.ua 
, (, , ) . .