COGSA Trumps Hague-Visby in Complex Situation

Monday, February 04, 2008
In an awkward decision, the US Court of Appeals for the Sixth Circuit ruled that the US Carriage of Goods at Sea Act (COGSA) applies to a claim by a shipper against a carrier for goods damaged at sea on a voyage from Le Havre to Montreal. The goods were being shipped from Blanquefort, France to Detroit. They traveled overland from Blanquefort to Le Havre, where they were loaded aboard ship. The through bill of lading called for the goods to be shipped overland from Montreal to Detroit. The court held that COGSA would not normally apply since no seaport of the United States was involved in the shipment. Thus, the court found that the Hague-Visby Rules would normally apply, since both France and Canada subscribed thereto. The court then determined that the matter was properly before the court on cross-motions for summary judgment since there were no genuine issues of material fact in dispute. The court then launched into an extended discussion of how poorly drafted the various documents were and how they were susceptible to different interpretations. Eventually, the court decided as a matter of law that the parties had contracted to apply COGSA to this shipment. The court then proceeded to interpret the definition of package in favor of the shipper. If nothing else, this is an example of how the use of unclear language in contracts can lead to unexpected results. Royal Insurance Co. v. Orient Overseas Container Line, No. 06-1199 (6th Cir., January 30, 2008)(HK Law).

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