UNCERTAINTIES OF LITIGATION MAKE CASES ON CARGO CARE VIRTUALLY UNPREDICTABLE

No test, it seems, can predict the outcome of an admiralty lawsuit for cargo damage when the loss could have been caused by the carelessness of either the shipowner or the cargo owner.

More than 50 years ago, the 2nd Circuit Court of Appeals in the Silver Sandals case (110 F.2d 60) made the following observation on the subject:

“On the one hand, there are very few goods, cased or not cased, that some degree of care will not protect from the perils of a sea voyage; and on the other, there are few that cannot be packed or cased so that they will survive the roughest handling. . . The greater part of the law is made up of the compromise of such conflicts of interest.

In the carriage of goods, the trade must always come to some accommodation between ideal perfection of stowage and entier disregard of the safety of the goods.”

Under the Carriage of Goods by Sea Act, known as Cogsa, the ocean carrier has an absolute duty to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. This duty cannot be avoided by obtaining the cargo owner’s approval of the stow or the condition of the vessel.

Cogsa also provides that the ocean carrier is bound before the commencement of the voyage to exercise due diligence to make the ship seaworthy and the cargo holds fit for the reception, carriage and preservation of the cargo. This is a non-delegable duty.

But to complicate matters, Cogsa exempts the carrier from liability for damage arising from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy.

The test for seaworthiness is whether the ship is reasonably fit to carry the specific goods. There is, however, no obligation to furnish an accident-free vessel.

An ocean carrier’s duty to properly care for the cargo must be delicately balanced with the cargo owner’s duty to properly package the goods for the ordinary hazards of ocean transit.

Cogsa provides “neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from insufficiency of packaging.”

The recent Nosira Sharon case (1992 WL 202180) in the New York federal district court demonstrates the delicate balancing test that must be applied when determining whether packaging was designed to endure the ordinary hazards of a voyage or whether the shipowner failed to satisfy its duty to properly care for the cargo.

The cargo owner alleged that bags of sugar were contaminated by debris in the ship’s holds. The shipowner raised the insufficiency of packaging defense, claiming the outer bags of the sugar were open and allowed debris to enter the bags’ liners.

Rejecting the shipowner’s argument, the court concluded that the bags were reasonably “suited to protect their contents, and in fact, did so. But for the carrier’s negligence in preparing the vessel’s holds, the harm could have been totally avoided.” (However, the bag contents were damaged.)

As the Nosira Sharon case illustrates, even when parties to ocean contracts of carriage strive to perform their respective duties with regard to packaging and caring for cargo, they still remain subject to the uncertainties associated with litigation in this compromising area of the law.


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