If goods are damaged during ocean transit, cargo interests often will sue the ship and her owner in an admiralty action for the loss. The primary objective of the lawsuit will be to indemnify the cargo owner for the loss sustained by reason of the carrier’s fault. In maritime cases involving cargo damaged through the fault of ocean carriers, the carrier’s liability is generally measured by the difference between the market value of the cargo in the condition in which it should have arrived at the discharge port and its market value in its damaged condition. Cargo interests bear the burden of proving the carrier’s liability for the loss as well as the quantum of damages. The cargo owner is also under a duty to take reasonable efforts to mitigate its losses. This is based upon the principle that damages the cargo owner might have avoided with reasonable effort are not caused by the ocean carrier’s fault and, therefore, should not charge against vessel interests.
Consignee generally accepts goods
Generally, when goods are shipped by vessel and become damaged in transit, the cargo owner (consignee) nevertheless has a duty to accept the shipment at discharge and then look to the carrier for payment of the loss. This is based on the legal theory that the ocean carrier has a duty to make delivery of the cargo, and its liability as such ceases upon delivery of the shipment to the consignee. It is also based on rationale that the consignee is in much better position to dispose of the damaged merchandise than the ocean carrier, which is not in the business of buying and selling cargo. What if the cargo is totally damaged as a result of causes for which the ocean carrier is liable? Must the consignee take delivery of the useless cargo? There is case law to the effect that consignees are justified in refusing to accept delivery of cargo that is practically valueless. What if the cargo is totally damaged, but the ocean carrier is found not liable for the loss? Must the consignee take delivery of its worthless cargo? This question was recently answered by the U.S. District Court for the Middle District of Florida, in the Tasman Star decision (1994 A.M.C. 1617).
The case of the burned bananas
In the Tasman Star case ( a case of first impression), a cargo owner sued vessel interests for $1,172,017 for a total loss of its banana cargo as a result of shipboard fire. Vessel interests filed a counterclaim against the cargo owner in the amount of $106,363, for costs associated with the discharge and disposal of the ruined cargo. The court held that vessel interests were not liable for the loss, as they had met their burden of proving the damage resulted from a statutorily excepted cause (Fire Statute). Furthermore, there was no negligence on the part of vessel interests in causing the damage.