Bill of lading provision exonerating carrier from liability for hijacking of cargo upheld
June, 2006
By
Marilyn Raia
Polimeros Tecnologica, S.A. (Polytec) v. Maersk Sealand2006 A.M.C. 356 (S.D.Tx 2005))
Polimeros was the importer of a containerload of polyethylene plastic shipped under a through bill of lading from Houston, Texas to Guatemala City, Guatemala. The shipment was transported by vessel from Houston to Santo Tomas de Castilla, Guatemala. It was discharged from the vessel and loaded onto a truck for inland carriage. During the inland carriage, the truck was hijacked and the cargo was not recovered. The cargo was valued at $23,776.
Polimeros sued the carrier, Maersk Sealand, for the value of the stolen cargo. Maersk Sealand denied liability on the basis of a provision in its bill of lading that exonerated it from liability arising out of or in connection with the acts of any person who, by the use of threats, seizes control of the cargo, i.e. hijacks it.
Maersk Sealand moved for summary judgment on the basis of the exonerating provision in its bill of lading. Polimeros argued that the exonerating provision was void because it conflicted with the provision in the United States Carriage of Goods by Sea Act [COGSA] that prohibits carriers from inserting clauses in their bills of lading that lessen the carrier's liability from that provided in COGSA. 46 USC § 1303(8). Maersk Sealand's motion was granted.
The District Court began its analysis noting that COGSA compulsorily applies to contracts of carriage to or from the United States in foreign trade. It applies from the time that the goods are loaded onto the carrying vessel until they are discharged from the carrying vessel, otherwise known as the "tackle to tackle" period. Although COGSA does not apply of its own force outside of the "tackle to tackle" period, the parties to the bill of lading can contractually extend its applicability to those periods. In those instances, COGSA is merely a contractual term and its provisions can be modified by other contractual language.
The District Court found three facts to be uncontroverted: 1) that the hijacking occurred outside the "tackle to tackle" period; 2) the bill of lading contained a provision extending the applicability of COGSA to the entire time that the cargo was in the carrier's custody and that COGSA applied as a contractual provision when the hijacking occurred; and 3) the hijacking fell within the scope of the exonerating language in the bill of lading. It then turned to the axiom that contracts are to be construed to give meaning to all of its terms.
Under the facts before it, the District Court held that the most reasonable interpretation of the bill of lading provisions extending the application of COGSA to inland carriage and exonerating the carrier from liability for the hijacking of the cargo (and the only one to give both of them effect) is one that holds the carrier liable for all loss or damage suffered by the cargo except those falling with the language that exonerates the carrier. Further, the District Court noted that Polimeros did not present any evidence that the exonerating language in Maersk Sealand's bill of lading was the result of fraud, undue influence or overwhelming bargaining power so as to make it unenforceable.