US
SUPREME COURT DECIDES IN FAVOUR OF RAILROAD
The
case that spawned four direct and two related commentaries on Forwarderlaw has
finally been decided by the US Supreme Court. In
its recent decision, the court rejected the efforts of the cargo insurer to
subrogate against the railroad whose train wreck has resulted in the loss of
the cargo.
The
railroad had not been engaged by the NVOCC, but by the ocean carrier. The
cargo insurer had successfully argued at the first appeal level that the ocean
carrier’s Himilaya clause was irrelevant as the cargo owner was not bound
by that contract.
The
important issue is what the Supreme Court did not say. Recall
that the railroad had argued that an NVOCC acts as an agent for its customer in
entering into a contract with the ocean carrier. So
the customer and its cargo insurer had to be bound by the terms of the ocean
carrier’s bill of lading including the Himilaya clause.
If
the Supreme Court had accepted this general proposition, cargo interests would
be exposed to many claims that otherwise would have to be the responsibility of
their NVOCC.
As
Forwarderlaw has said:
"A
shipper who engages a forwarder as principal has a right to hold the forwarder
responsible for damages occurring during the transport, subject of course to
contractual defences. A case decided in the
as
principal a forwarder insulates the shipper against claims by carriers."
The
Supreme Court noted that the role of the NVOCC was inconsistent with agency in
“its classic sense.” But
yet managed to protect the railroad through the application of the Himilaya
clause in the ocean carrier’s bill of lading.
Read on to find out why.
WHAT
IS THE EFFECT OF GROSS NEGLIGENCE ON EXEMPTION CLAUSES?
When
the recovery of damages in a case involving indifference to the rights of
cargo, the carriers may rely upon limitation clauses that require an action to
be brought within a certain time. Frequently
these clauses are a matter not of mandatory law but rather contractual
stipulation. So the cargo interests claim that the indifference to the
contractual duties was so outrageous that the carrier should not be entitled to
the protection of the contractual time bar.
This issue
came up in
P.S.
One year is the legal time limit for action against freight forwarders under
French Law.
DEMURRAGE
– WHAT HAPPENS WHEN YOUR CUSTOMER DOES NOT TAKE DELIVERY OF CONTAINERIZED
CARGO?
This posting
comes from
Peter
McQueen, the National Editor for
"The case
reinforces the need for all forwarders who issue bills of lading/sea waybills as
principals to ensure that the terms and conditions in those documents allow them
to recover container detention charges from the "merchant' as defined in such
circumstances as obtained in this case."
Go
to the report of this case.
Burden
of Proof - who must show that the circumstances of loss bring the claim within a
limitation of liability? The Claimant who seeks recovery or the defendant
who relies on the exception?
Burden
of proof is generally an issue for lawyers.
On occasion the question who has
to introduce the necessary evidence, and persuade the court that its view of
the case is correct is vital. Court
call that “the burden of proof.”
Although
it happens infrequently, when it happens the reasoning of the court is
instructive. Go
to the Courts comments on “burden of proof.”
The
next edition of Forwarderlaw will be an end of the year salvo. Stay
tuned.
Forwarderlaw
welcomes all contributions from
lawyers, insurance adjusters, and arbitrators, forwarding managers, government
or administrative authorities. They will be republished with full attribution to
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