Suit on Carrier’s Bill of Lading Constitutes Acceptance

Tuesday, May 31, 2005
In a rehearing, the U.S. Court of Appeals for the Ninth Circuit ruled that the forum selection clause in a carrier’s bill of lading is accepted by the non-signing cargo owner when the owner brings suit against the carrier for breach of the bill of lading. In the instant case, plaintiff cargo owner contracted with a NVOCC to have its cargo shipped from Korea to Los Angeles. The NVOCC’s bill of lading included a forum selection clause providing for suit in the United States. The NVOCC then contracted with the carrier to actually perform the carriage. The carrier issued a bill of lading that included a forum selection clause providing for suit to be brought in Korea. Needless to say, the cargo was damaged en route and the cargo owner brought suit in the United States. The cargo owner argued that it was not bound by the carrier’s forum selection clause because it had not signed the carrier’s bill of lading. In the original decision, the appellate court ruled that the NVOCC acted as the agent of the cargo owner when it signed the carrier’s bill of lading. The Supreme Court overturned that approach in Norfolk Southern v. Kirby, 125 S.Ct. 385 (2004). On rehearing, the appellate court decided that the cargo owner accepted the bill of lading that it had not signed when the owner brought suit on it. The Ninth Circuit is not to be deterred. Kukje Hwajae Ins. v. M/V Hyundai Liberty, No. 00-56970 Source: HK Law
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