A.P. Moller - Maersk A/S, trading as Maersk Line v. Safewater Lines (I) Pvt., Ltd. et al
OPINION AND ORDER OF SUMMARY JUDGMENT. The Court agrees that Maersk is entitled to summary judgment against Defendant Samrat on its breach of contract and contractual indemnity claims. As with Maersk's claims for all loss, damage, delay, fines and other expenses, Samrat is jointly and severally liable for Maersk's attorneys' fees. The Court Orders Maersk to file an appropriate motion for attorneys' fees under the bill of lading within twenty days with supporting evidence. Samrat shall file a timely response. The Court also ORDERS Maersk to file a proposed final judgment at the same time.(Signed by Judge Melinda Harmon) Parties notified.(rhawkins)
United States District Court
Southern District of Texas
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
A.P. MOLLER-MAERSK A/S, TRADING§
AS MAERSK LINE,
SAFEWATER LINES (1) PVT, LTD., §
SAMRAT CONTAINER LINES, INC.
and ATNI, INC.,
August 23, 2017
David J. Bradley, Clerk
Civ. A. H-13-1726
Admiralty - Rule 9(h)
OPINION AND ORDER OF SUMMARY JUDGMENT
Pending before the Court, in the above referenced action in
admiralty, is a motion for summary judgment (#67) under Federal
Rule of Civil Procedure 56, filed by Plaintiff A.P. Moller-Maersk
A/S, Trading as Maersk Line (“Maersk”), based on its contract
claims against Defendant Samrat Container Lines, Inc. (“Samrat”).
Currently this lawsuit, grounded in admiralty (28 U.S.C. § 1333(1))
and/or diversity (28 U.S.C. § 1332(a)(2)) jurisdiction over Maersk,
a Danish corporation, and Samrat, a New Jersey corporation, with
its principal place of business in Piscataway, New Jersey. Maersk
asserts claims for contractual indemnity and breach of governing
contract(s) of carriage, and contribution under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980
(“CERCLA”) against Samrat.
Initially after a cargo of hydrochloric acid was allegedly
improperly packed in overfilled drums and incorrectly stowed aboard
vessels by M/S Global Multichem and carried across the ocean,
Maersk filed this action to force all the original Defendants to
take delivery of a cargo of hydrochloric acid, shipped under a
Maersk bill of lading from Pipavav, India to Houston, where it was
found on offloading that the plastic totes in Container Numbers
MSKU368505-9, POCU064333-3, and UXXU241719-9 were leaking the acid.
Maersk has since settled with and dismissed all the Defendants
other than the Samrat (i.e., #34, ATNI, Inc., intended to be the
ultimate receiver, and #45, Safewater Lines (I) Pvt., Ltd. and
Safewater Lines (India) Pvt, Ltd., which booked the containers for
the voyage to Houston under a Service Contract with Maersk and
issued at least one of the bills of lading in issue).
contracts,1 in the remaining portion of this lawsuit under Maersk’s
bill of lading terms and conditions2 and tariff,3 Maersk seeks to
Maersk and Safewater Lines (I) Pvt., Ltd. and Safewater
Lines (India) Pvt, Ltd. entered into Service Contract No. 516551,
while the bills of lading with their terms and contracts imposed
joint and several liability on Samrat as consignee and Party to
Black’s Law Dictionary (West 1990) defines “joint and
several liability as “[d]escrib[ing] the liability of copromisors
of the same performance when each of them, individually, has a
duty of fully performing the obligation, and the obligee can sue
all or any of them upon breach of performance.”
All three bills of lading in dispute have the same terms
and conditions. Attachment 2 to Ex. A.
The regulations of the Federal Maritime Commission define
a publication containing actual rates, charges,
classifications, rules, regulations, and practices of a
carrier or conferences of carriers for transportation
by water. For purposes of this tariff circular, the
term “practices” refers to those usages, customs or
modes of operation which in anywise affect, determine
or change a transportation rate, charge or service
provided by the carrier and, in the case of
conferences, must be restricted to those practices
authorized by the basic conference agreement. 46
C.F.R. [§] 536.2.
Gilbert Imported Hardwoods, Inc. v. 245 Packages of Guatambu
Squares, More or Less, 508 F.2d 1116, 1121, 1975 A.M.C. 912, 919
(5th Cir. 1975).
The Second Amended Complaint, #43 at ¶24, alleges, but
Samrat denies, that “Samrat was the freight forwarder, logistics
provider, and/or NVOCC [non-vessel operating common carrier] of
the subject cargo” and “the consignee of the cargo under the
Bills of Lading.” Maersk defines an “NVOCC” as
a common carrier that does not operate vessels by which
the ocean transportation is provided and is a shipper
in its relationship with the ocean common carrier.
Tokio Marine & Nichido Fire Inc. Co. v. SOPHIE
RICKMERS, 2O11 A.M.C. 2576, 2577 n.3 (S.D. Tex. 2012);
46 U.S.C. § 40102(16). Courts frequently describe
NVOCC’s as “intermediaries between a shipper of goods
and an operator of a vessel that carries goods.’” Id.
(quoting Axess Int’l Ltd. v. Intercargo Ins. Co., 183
F.3d 935, 937 (9th Cir. 1999).
As Maersk explains, #67, p.3 n.8,
To the extent Maersk settled the tort claims it
asserted against ATNI and [the two Safewater
Defendants], Samrat, as a non-settling party, has no
viable claim in tort against the settling parties.
Combo Maritime, Inc. v. U.S. United Bank Terminal, LLC,
615 F.3d 599, 603-04 (5th Cir. 2010). . . . To the
extent Samrat asserts contract claims against Safewater
Defendants, which have settled with Plaintiff, Samrat
resulting expensive emergency clean up costs, freight demurrage,6
and other expenses arising from the spill of hydrochloric acid from
the sealed shipping containers from the time the containers were
offloaded in Houston from the M/V MAERSK IDAHO (after free time
expired) until the time the hydrochloric acid was abandoned and
sold for salvage.7
is merely entitled to a pro tanto reduction for the
sums paid by ATNI and [the Samrat Defendants]. Evanow
v. M/V NEPTUNE, 163 F.3d 1108, 1119 (9th Cir.
1998)(“The universal non-admiralty rule is that
contract damages are offset pro tanto by the amount of
the settlement with a co-obligor. . . . This is simply
a manifestation of the rule that a contracting party
shall not receive more than was bargained for.”).
See also McDermott, Inc. v. AmClyde, 511 U.S. 202, 215
(1994)(“The [pro tanto] rule encourages settlements by giving the
defendant that settles first an opportunity to pay less than its
fair share of the damages, thereby threatening the nonsettling
defendant with the prospect of paying more than its fair share of
“Demurrage is a charge for delay after free time has
expired and is an accepted form of liquidated damages in
shipping. Ocean Transp. Line v. Am. Philippine Fiber Ind.,
Inc.,743 F.2d 85, 90 (2d Cir. 1984).” #67, p.2, n.3. “Because
demurrage is established by the parties’ shipping contract, bill
of lading and applicable tariff, courts routinely enforce these
charges as contract terms. Mediterranean Shipping Co. (USA),
Inc. v. Cargo Agents, Inc., No. 10 Civ. 5070(THK), 2011 WL
62888422, at *3 (S.D.N.Y. Dec. 15, 2011).” Id.
Maersk explains that the generally double stacked totes in
the original twenty-foot containers that arrived in Houston were
offloaded from the containers because of leaking or believed-tobe-leaking acid and repackaged into new totes and then singly
stacked into different forty-foot containers so the initial
containers could be cleaned and repaired. Thus Maersk seeks
demurrage for the new containers into which the acid was
transferred. #67, p. 2, n.4.
Standard of Review
Summary judgment under Federal Rule of Civil Procedure 56(c)
is appropriate when, viewing the evidence in the light most
pleadings, depositions, answers to interrogatories and admissions
on file, together with the affidavits, show that there is no
genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.”
A dispute of material
fact is “genuine” if the evidence would allow a reasonable jury to
find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986).
Where the nonmovant bears the burden of proof at trial,
the movant must offer evidence that undermines the nonmovant’s
claim or point out the absence of evidence supporting essential
elements of the nonmovant’s claim; the movant may, but does not
have to, negate the elements of the nonmovant’s case to prevail on
Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986); Lujan v. National Wildlife Federation, 497 U.S. 871, 885
(1990); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir.
“A complete failure of proof concerning an essential
element of the nonmoving party’s case necessarily renders all other
Celotex, 477 U.S. at 323.
If the movant meets its burden and points out an absence of
evidence to prove an essential element of the nonmovant’s case on
which the nonmovant bears the burden of proof at trial, the
nonmovant must then present competent summary judgment evidence to
support the essential elements of its claim and to demonstrate that
there is a genuine issue of material fact for trial.
Ass’n of Gov’t Employees v. City Pub. Serv. Board, 40 F.3d 698, 712
(5th Cir. 1994).
“[A] complete failure of proof concerning an
essential element of the nonmoving party’s case renders all other
Celotex, 477 U.S. at 323.
The nonmovant may
unsubstantiated assertions that a fact issue exists, but must set
forth specific facts showing the existence of a genuine issue of
material fact concerning every element of its cause(s) of action.
Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.
preclude summary judgment.
National Ass’n of Gov’t Employees v.
City Pub. Serv. Board, 40 F.3d at 713; Eason v. Thaler, 73 F.3d
1322, 1325 (5th Cir. 1996).
“‘[T]he mere existence of some alleged
factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment . . . .’”
Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990),
quoting Anderson v. Liberty Lobby, Inc.. 477 U.S. 242, 247-48
“Nor is the ‘mere scintilla of evidence’ sufficient;
‘there must be evidence on which the jury could reasonably find for
Id., quoting Liberty Lobby, 477 U.S. at 252. The
Id., quoting In re Municipal Bond Reporting
Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1978), and citing
Fischbach & Moore, Inc. v. Cajun Electric Power Co-Op., 799 F.2d
194, 197 (5th Cir. 1986).
“If the evidence is merely colorable,
Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5th
Cir. 1999), citing Celotex, 477 U.S.
at 322, and Liberty Lobby,
477 U.S. at 249-50.
Allegations in a plaintiff’s complaint are not evidence.
1996)(“[P]leadings are not summary judgment evidence.”); Johnston
v. City of Houston, Tex., 14 F.3d 1056, 1060 (5th Cir. 1995)(for the
party opposing the motion for summary judgment, “only evidence-–not
argument, not facts in the complaint--will satisfy’ the burden.”),
citing Solo Serve Corp. v. Westown Assoc., 929 F.2d 160, 164 (5th
The nonmovant must “go beyond the pleadings and by
[his] own affidavits, or by depositions, answers to interrogatories
and admissions on file, designate specific facts showing that there
is a genuine issue of material fact for trial.”
Giles v. General
Elec. Co., 245 F.3d 474, 493 (5th Cir. 2001), citing Celotex, 477
U.S. at 324.
The court must consider all evidence and draw all inferences
Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S.
574, 587 (1986); National Ass’n of Gov’t Employees v. City Pub.
Serv. Board, 40 F.3d at 712-13. The Court may not make credibility
determinations. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir.
2009), citing Turner v. Baylor Richardson Medical Center, 476 F.3d
337, 343 (5th Cir. 2007).
Factual Allegations of Maersk’s Second Amended Complaint (#43)
Prior to the shipment of the allegedly improperly packaged,
overfilled, and incorrectly stowed drums of hydrochloric acid from
Pipava, India to Houston, Texas, Safewater Lines (I) Pvt., Ltd. and
Safewater Lines (India) Pvt. (also referred to as “Safewater
Defendants” or “Safewater entities”), and Maersk entered into
established preferred rates for the carriage of marine cargo to
Safewater Lines (I) Pvt., Ltd., Safewater Lines (India) Pvt., and
their affiliates. The Service Contract indicated that the carriage
of goods and other services provided to Maersk under the Service
Contract were subject to the terms and conditions of the Maersk
bill(s) of lading governing the carriage of the cargo,8 as well as
Clause 1 of the terms and conditions of the bills of
lading defines “carriage” as “the whole or any part of the
cargo,” including loading and unloading, storing, warehousing,
handling and any other services whatsoever undertaken by the
Carrier in relation to the Goods. “Carrier” is defined as Maersk
(Plaintiff). “Goods” is defined as “all or any part of the cargo
accepted from the Shipper.” Ex. A, Attachment 2, clause 1.
the applicable tariff(s).
(“Multichem”) invoices, 102 dated January 12, 2012, 105 dated
January 27, 2012, and 106 dated February 9, 2012, respectively, for
the sale of the hydrochloric acid.
Maersk alleges that upon
information and belief, the manufacturer of the acid was Nirma,
Limited, the exporter was Multichem, and the ultimate receiver was
ATNI in Midland, Texas. The invoices demonstrate that the acid was
carried by vessel from India to Houston, for final delivery to ATNI
in Midland, Texas.
It was Multichem, as an agent for Defendants or an agent
acting on Multichem’s behalf, who stowed the acid in drums, which
were then stowed in Plaintiff-owned Container Numbers MSKU368505-9,
POCU064333-3, UXXU241719-9, and PONU754670-3 (the “containers”) and
sealed for the ocean carriage.
The Safewater entities booked the
containers for shipment under the Service Contract and assigned
them Booking Numbers 863338433, 863444274, and 863494073.
also issued bills of lading for the acid (at least bill of lading
SELDEL0133f2 sold under invoice 102) that states “SHIPPER LOAD STOW
COUNT & CUSTOMS SEAL”).
Before loading, the containers were tendered to Maersk at
Pipavav, India, and accepted by Maersk, which issued Bills of
Lading Nos. MAEU863338433, MAEU863444274, and MAEU863494073 (“Bills
of Lading”), naming Safewater Lines (I) Pvt., Ltd. and
Lines (India) Pvt. as the shipper and SAMRAT as the consignee, all
expressly subject to the Maersk Terms & Conditions of Carriage.
All Defendants are “Merchants” under ¶1 of the Terms and Conditions
of the bill of lading:
“includes the Shipper, Holder, Consignee,
Receiver of Goods, and Person owning or entitled to the possession
of the Goods or of this bill of lading and anyone acting on behalf
of such Person.”
Amendment 2 to Ex. A attached at clause 1.
Clause 3 states, “The Merchant warrants that in agreeing to the
Terms and Conditions hereof he is, or has the authority to contract
on behalf of, the Person owning or entitled to possession of the
Goods and this bill of lading.”
Containers MSKU368505-9 and
POCU064333-3 were loaded onto M/V Maersk Kampala (Voyage 1204) in
Pipavav, India on or about February 28, 2012 for carriage to
Houston, while on or about March 8, 2012 container PONU754670-3 was
loaded on the M/V HANJIN DALLAS (Voyage 1204) also in Pipavav for
carriage to Houston on the M/V Maersk IDAHO.
When the vessels
arrived at the Port of Houston on or about April 13, 2012, the
containers were purportedly leaking hydrochloric acid, except in
the case of UXXU241719-9, the container was suspected of leaking
because acid had leaked onto the container.
When the containers
were opened, the drums were found to have leaked the acid because
they were overfilled, were nonconforming, unapproved, and therefore
inadequate for carriage of hydrochloric acid.
Maersk immediately tried to stop the leakage and clean up the
spilled acid, hiring a local hazardous materials specialist to help
clean up the spill and repack the drums.
Some of the drums were
transloaded from one container to another, at significant expense
Defendants rejected the cargo at the Houston APM terminal and
refused to pay for any cleanup costs, freight, demurrage, and other
costs that Maersk necessarily incurred as a result of the leakage.
Ultimately Maersk sold the hydrochloric acid to the highest bidder
at a salvage sale and received $550 for it.
Because at all pertinent times Defendants were allegedly
shippers of the cargo, they were responsible for proper packaging
and marking of the cargo and/or for the hydrochloric acid owned by
each after the arrival of the containers in Houston.
and/or jointly they negligently failed to comply with the numerous
regulations in Chapter 49 of the Code of Federal Regulations
regarding the packaging of hazardous materials to be shipped by an
ocean carrier to the United States.
That negligence triggers
liability without fault and liability based on negligence and or
negligence per se for the total amount of damages, currently at
least $243,775.03, incurred by Maersk as a result of the failure to
comply with those regulations.
As for the breach of the governing contract(s) of carriage
claim, Defendants allegedly tendered cargo that was insufficiently
packaged to withstand the regular hardships and dangers of ocean
carriage, failed to comply with international standards for the
packaging and shipment of hazardous materials, and failed to pay
the agreed freight and other expenses of shipment and refused to
accept delivery of their goods.
Therefore, insists Maersk, each
Defendant is jointly and severally liable for the damages, costs
and expenses of at least $243,775.03, arising from these failings
applicable bills of lading. See Maersk Terms & Conditions, Clauses
(“CLS.”) 119 and 15,10 available at www.maerskline.com.
Clause 11 states in relevant part,
If the container has not been packed by the Carrier:
11.1 This bill of lading shall be a receipt only for
such a container;
11.2 The Carrier shall not be liable for loss of or
damage to the contents and the Merchant shall indemnify
the Carrier against any injury, loss, damage,
liability, or expense whatsoever incurred by the
Carrier if such loss of or damage to the contents
and/or injury, loss, damage, liability, or expense has
been caused by any matter beyond his control,
including, inter alia, without prejudice to the
generality of this exclusion:
(a) the manner in which the Container has been
(b) the unsuitability of the Goods for carriage in
(c) the unsuitability or defective condition of
the Container . . . .
Maersk further asserts that Multichem, on behalf of itself and
each of the other Defendants, executed a statutory declaration for
hazardous cargo in the Multimodal Dangerous Goods Form for the
cargo in dispute, certifying that the drums of hydrochloric acid
were properly packaged, marked, labeled/placarded, and otherwise
fit for transport per the applicable international and national
contract of carriage that the cargo was packed to survive the
typical dangers of carriage and complied with all applicable laws
Ex. A, Attachment 2, CLS. 11.
CLS. 15 provides in relevant part,
15.1 All of the Persons coming within the definition of
Merchant in clause 1 shall be jointly and severally
liable to the Carrier for the due fulfillment of all
obligations undertaken by the Merchant in this bill of
15.2 The Merchant shall be liable for and shall
indemnify the Carrier against all loss, damage, delay,
fines, attorney fees and/or expenses arising from any
breach of any warranties in clause 14.3 or elsewhere in
this bill of lading and from any other cause whatsoever
in connection with the Goods for which the Carrier is
not responsible. . . .
15.4 If Containers supplied by or on behalf of the
Carrier are unpacked by or for the Merchant, the
Merchant is responsible for returning the empty
Containers, with interiors clean, odour free and in the
same condition as received, to the point and place of
designation by the Carrier, within the time prescribed.
Should a Container not be returned in the condition
required and/or within the time prescribed in the
Tariff, the Merchant shall be liable for any detention,
loss or expense incurred as a result thereof.
and regulations. Allegedly the statutory declaration was false and
Defendants breached their warranty under the contract of carriage,
so each is jointly and severally liable for damages, costs, and
expenses in the amount of at least $243,775.03, arising from the
inadequate packaging, including but not limited to the costs of
emergency spill cleanup response and demurrage, and must indemnify
Maersk for that amount.
See Maersk Terms & Conditions, Cls. 21,
including Cls. 21.2 and 21.3.11
CLS. 21 states in relevant part regarding carriage of
dangerous goods such as hydrochloric acid:
. . . .
21.2 The Merchant warrants that such Goods are packed
in a manner adequate to withstand the risks of Carriage
having regard to their nature and in compliance with
all laws, regulations or requirements which may be
applicable to the Carriage; and
21.3 The Merchant shall indemnify the Carrier against
all claims, liabilities, loss damage, delay, costs,
fines and/or expenses arising in consequence of the
Carriage of such Goods, and/or arising from breach of
any of the warranties in clause 21.2 . . . .
Clause 22 states,
. . . .
22.2 The Merchant shall take delivery of the Goods
within the time provided for in the Carrier’s
applicable Tariff. If the Merchant fails to do so, the
Carrier may without notice unpack the Goods if packed
in containers and/or store the Goods ashore, afloat, in
the open or under cover at the sole risk of the
Merchant. Such storage shall constitute due delivery
hereunder, and thereupon all liability whatsoever of
the Carrier in respect of the Goods or that part
thereof shall cease and the costs of such storage shall
forthwith upon demand be paid by the Merchant to the
Regarding Maersk’s final claim for contribution under CERCLA,
42 U.S.C. §§ 9601 et seq., Maersk, which did not fill the drums of
acid nor stuff the containers, insists it has no liability for the
cleanup, but is entitled to seek full contribution from potentially
responsible parties, including Samrat (identified as the consignee
Safewater entities (which had a Service Contract with Maersk under
which the acid cargo was booked, for which Maersk issued the bills
of lading, and which were the Shippers listed on the bills of
lading), and ATNI, Inc. (the owner, receiver, and/or ultimate
consignee of the acid cargo shipped under the Maersk bills of
On page 12 of #43 Maersk identifies the different costs
and expenses owing, but indicates they are not limited to those on
In addition to costs and expenses now approximating at
interest, costs, and attorney’s fees.
Maersk’s Motion for Summary Judgment against Samrat (#67)
Maersk identifies as the issue here “[w]hether, under the
terms and conditions of the subject bills of lading and the
applicable law, Maersk is entitled to summary judgment against
22.3 If the Carrier is obliged to discharge the Goods
into the hands of any customs, port or other authority,
such discharge shall constitute due delivery of the
Goods to the Merchant under this bill of lading.
claims?”12 Maersk’s conclusion is that “Samrat is liable to Maersk
under alleged contracts for all of the damages Maersk incurred as
a result of or in connection with the spilled or suspected spillage
of [hydrochloric acid] from the involved containers and bills of
#67 at p.14.
Samrat, the named consignee (receiver) because Samrat was
acting as the Safewater Defendants’ U.S. Agent for cargoes that
were being imported to the United States, and as notify party on
each of the three bills of lading in dispute, concedes that it is
the agent of the two Safewater Defendants, named as the shipper on
the bills of lading, for shipments including the ones here from
India to the Port of Houston.
A critical fact is that these bills
of lading do not state or indicate in any way that Samrat is acting
in an agency capacity and as the named consignee that would have
informed Maersk that Samrat was acting in an agency capacity or as
an agent for a disclosed principal.
Samrat is therefore an
undisclosed agent, and as such, and as a “Merchant” as defined by
the terms of the bills of lading, is liable to Maersk under the
bill of lading terms and conditions by way of indemnity and through
Maersk does not seek summary judgment on the Second
Amended Complaint’s negligence claims or fault-based liability,
nor does it seek summary judgment under CERCLA. #80, Maersk’s
Reply, at p.2. Thus Samrat’s arguments about its lack of
wrongdoing, lack of fault, and CERCLA responsible parties are
irrelevant to the motion for summary judgment and to the concept
of joint and several liability.
its contractual obligations for all expenses incurred by Maersk to
clean up the leaking hydrochloric acid, costs to unload the
totes/drums of the acid to determine what was leaking and the
extent of the program, costs to load the totes/drums of leaking or
overfilled acid into new totes, and then reload all of the totes
containers, costs, interest and attorney’s fees.
Defendants would act as the NVOCC, which would issue a bill of
lading direct to its customer.
Next, Safewater Defendants would
place the shipment with an ocean carrier, here Maersk, who would
then issue its own bill of lading identifying the Safewater
Safewater Defendants would transmit the Master bills of lading to
Samrat, which, as consignee, would provide them to the ocean
carrier Maersk to collect the cargoes.
After delivery, Samrat
would make the necessary arrangements to transport and deliver the
cargoes to the ultimate consignee, ATNI.
In the instant case, before shipment of the subject cargoes,
the Safewater Defendants and Maersk entered into Service Contract
Number 516551 (Attachment 15 to Ex. A), which set preferred freight
rates for the carriage of marine cargo to the Safewater Defendants
and its affiliates and which referenced each of the involved bills
of lading (Attachment 1 to Ex. A, in the upper right hand corner on
the fourth line).
The Service Contract designated the Safewater
entities as an NVOCC under 46 C.F.R. § 530.6 and named the
Safewater entities as the shipper on each Maersk bill of lading
(Attachment 1 to Ex. A).
In January 2012, Safewater Defendants contacted Maersk to book
five twenty-foot containers for ocean carriage from India to
The transactions were booked under the Service Contract
and given Booking Numbers 863338433 and 863333490 (Attachment 4 to
These containers were loaded by someone other than Maersk
and tendered to Maersk at Pipavav, India for shipment to Houston,
Maersk accepted them and issued Bill of Lading Numbers
MAEU863338433, MAEU 843444274, and MAEU863494073 (Ex. A,
expressly subject to the Maersk Terms & Conditions of Carriage, and
naming the Safewater Defendants as the Shipper and Samrat as the
consignee and thus a “Merchant” under the bill of lading terms and
conditions, as well as the notify party.
They are called the
Master bills of lading.
On or about February 28, 2012, containers MSKU368505-9 and
POCU0643333-3 were loaded on the M/V MAERSK KAMPALA (Voyage 12) in
Pipavav, India for transport to Houston.
On or about March 7,
2012 container PONU 754670-3 was loaded on board the M/V HANJIN
DALLAS (Voyage 1204) in Pipavav, India for carriage to Houston.
All referenced containers were shipped to Houston on board a third
ship, the M/V MAERSK IDAHO.
On April 13, 2012 after the ships arrived at the APM Terminal
at the Port of Houston, Containers MSKU368505-9 and POCU0643333-3
were discovered to be leaking acid, and in the case of UXXU2417199, suspected of leaking acid, because acid was found on or under
the container that had actually leaked from another container (Ex.
C, ¶¶ 6-8).
The U.S. Coast Guard and the Port of Houston Fire
Department requested Maersk to immediately
contain any additional
leakage and cleanup that which spilled in the containers and onto
(Ex. C, ¶¶ 6-8).
Maersk timely notified all known interested parties of the
situation, kept them apprised of the cleanup efforts by email and
telephone conferences, and made numerous demands under the bill of
lading Terms and Conditions for those interested parties to pay
sums owing and due before the cargo could be picked up, and
requested that they come to retrieve the cargo.
resolve the dispute, Maersk several times offered discounts, but
Defendants, including Samrat, rejected the offers and abandoned the
Maersk then issued a Notice of Abandonment and ultimately
was forced to sell the cargo of hydrochloric gas to the highest
bidder at a salvage sale for $550.00 net.
Maersk then filed this
lawsuit to recover its losses.
Maersk insists that it is entitled to summary judgment against
Samrat for all of the damages Maersk incurred as a result of the
alleged spillage or suspected spillage of hydrochloric acid from
the discussed containers and bills of lading.
containerized cargo pursuant to a standardized bill of lading
contract that includes the particulars of that shipment and the
terms and conditions that govern the relationship between the
In this action Maersk issued three such bills of lading
with the same terms and conditions (MAEU MAEU863338433, MAEU
843444274, and MAEU863494073 (Ex. A,
16)), which list Samrat as
the consignee and notify party, and as a “Merchant” as defined in
a named consignee, Samrat is a party to the bill of
lading and is bound by the bill of lading terms and conditions.
a party to and Merchant under the bills of lading, Samrat is
jointly and severally liable to Maersk for the expenses Maersk
incurred to clean up the acid spill, for demurrage, and for
attorney’s fees, pursuant to bill of lading clauses 3,11,15,16.7,
21, and 22.
These bill of lading clauses, read together, make
Samrat liable to Maersk for breach of bills of lading.
APL Co. Pte
Ltd. v. Blue Water Shipping U.S., Inc., 779 F. Supp. 2d 358, 367-68
The bills of lading here are maritime contracts because their
main purpose was to succeed in transporting goods by sea from a
port in a foreign country to one in the United States.
Ry. Co. v. Kirby, 543 U.S. 14, 24 (2004); Thypin Steel Co. v. Asoma
Corp., 215 F.3d 273, 277 (2d Cir. 2000)(bill of lading for ocean
“construed like any other contracts by their terms and consistent
with the intent of the parties” by common law principles of
Norfolk, 543 U.S. at 31; Nippon Yusen
Kaisha v. FIL Lines USA, Inc., 977 F. Supp. 2d 343, 558-59
Thus the bills of lading at issue naming Samrat
as consignee with the terms and conditions stating that the
consignee on a bill of lading is a Merchant that is jointly and
severally liable to Maersk and shall indemnify Maersk against all
loss, damage, delay, fines, attorney’s fees and/or other expenses
arising from any breach of any of the warranties in the bill of
lading and from any other cause whatsoever in connection with the
Goods for which the Carrier is not responsible, together convey an
unambiguous and definite meaning and are not reasonably susceptible
to competing interpretations.
Furthermore there is precedent for binding a named consignee
to the bill of lading where it is shown that the consignee accepted
the bill of lading or that an agency relationship between the
consignee and one of the parties to the bill of lading.
Seguros y Reaseguros v. M/V SKY REEFER, 515 U.S. 528 (1995); All
Pac. Trading, Inc. v. M/V HANJIN YOSU, 7 F.3d 1427 (9th Cir. 1993);
FIL Lines, 2014 A.M.C. at 559-60; In re Rickmers Genoa Litig., 622
F. Supp. 56, 72 (S.D.N.Y. 2009), citing Taisheng Int’l Ltd. v.
Eagle Maritime Services, Inc., No. Civ. A. H.-05-1920, 2006 WL
846380, at *4-5 (S.D. Tex. Mar. 30, 2008).13
Under the law of agency, an agent for an undisclosed principal
is liable for breach of contract “just as though he was the
Orient Mid-East Lines v. Albert E. Bowen, Inc., 458
F.2d 572, 575 (2d Cir. 1072), quoting Restatement (Second) Agency
§§ 4, 321; CMA-CGM (Canada), Inc. v. World Shippers Consultants,
As the Honorable Sim Lake opined in Taisheng, 2006 WL
846380, at *4-5,
A consignee to a bill of lading may also be bound to
the bill of lading under agency principles. Federal
maritime law embraces the principles of agency. West
India Industries, Inc. v. Vance & Sons AMC-Jeep, 671
F.2d 1384, 1387 (5th Cir. 1982). The general rule is
that where a consignee purchases merchandise from a
seller and authorizes the seller to ship the goods, the
seller as shipper or consignor is the consignee’s agent
for the purpose of shipping. 1-2 Saul Sorkin, Goods in
Transit § 201 (2005). The shipper or consignor is
impliedly authorized to enter into the usual and
customary transportation contract with the carrier and
the consignee is bound by such terms. See United
States v. M/V Santa Clara I, 887 F. Supp. 825, 836
(D.S.C. 1995)(“Contracts or bills of lading on which a
party is named as consignee bind the party to the
agreement”). See also Jockey Int’l v. M/V “Leverkusen
Express,” 217 F. Supp. 2d 447, 456-57 (S.D.N.Y.
2002)(holding that a consignee is bound by a forum
selection clause in the bill of lading when the bill of
lading was issued to an intermediary who acted as the
consignee’s agent in arranging the shipment).
To bind a nonsignatory consignee to the bill of
lading, there must be an agency relationship between
the consignee and the shipper. See Nebraska Wine &
Spirits , Inc. v. Burlington N.R. Co., [No. 91-0103-CVW-2,] 1992 WL 328938 [*2-3](W.D. Mo. 1992). An agency
relationship can be established on actual authority,
apparent authority, or estoppel. Wells Fargo Business
Credit v. Ben Kozloff, Inc., 695 F.2d 940, 944-46 (5th
Ltd., 921 F. Supp. 2d 1, 6-7 (E.D.N.Y. 2013).
“To avoid such
liability, the agent must disclose the identity of his principal
‘at or before the time when the contractual agreement is made
CMA-CGM, 921 F. Supp. 2d at 7, quoting Orient Mid-East,
458 F.2d at 576.
“[T]he law imposes no general duty on a party to
a contract to undertake research to learn the identity of an
otherwise undisclosed principal.”
Id. at 7.
Just because a party
in a shipping arrangement is known to be acting on behalf of others
does not impose a duty on the ocean carrier, like Maersk, to
discover the identity of the party on whose behalf the first party
Orient Mid East, 458 F.2d at 576.
Maersk analogizes the situation here with that in FIL Lines,
2014 A.M.C. at 553, 559, where the ocean carrier was granted
summary judgment against the named consignee on the bill of lading
on the ocean carrier’s breach of contract claim for monies owed on
the bill of lading. Under the bill of lading terms and conditions,
the consignee, as a defined Merchant, was jointly and severally
liable to the carrier for the payment of all freight an charges and
for the performance of other obligations under the bills of lading.
Inc. at 560-61.
The court rejected FIL’s argument that it was an
agent acting for a disclosed principal so it could not be held
liable as an agent.
It found no language in the bills of lading
that indicated FIL was acting as an agent.
Id. at 562.
rules that if the fact of agency fails to appear in the contract,
an agent who appears to be a party thereto cannot submit extrinsic
evidence to demonstrate that the company is not a party to the
Id. at 561 (“If the fact of agency does not
appear in an integrated contract, an agent who appears to be a
party thereto can not introduce extrinsic evidence to show that he
is not a party”), citing Restatement (Second) of Agency § 323(3).
Here, too, nothing in the three bills of lading indicates to Maersk
that Samrat was acting “on behalf of” or “as an agent for” another
party, so Samrat cannot introduce extrinsic evidence to show that
Samrat was not a party to the contract.
Thus Samrat, as the named
consignee on the bills of lading, is a party to those bills and as
a matter of law is bound there under agency principles.
material fact, established as a matter of law, allows Maersk to
prevail on summary judgment against Samrat.
As consignee on the bills of lading bound to the bill of
lading terms and conditions under agency principles, Samrat is
jointly and severally liable to Maersk for its obligations and
responsibilities under the bill of lading terms and conditions.
Here, Samrat as consignee and as Merchant by bill of lading
definition (clauses 1,3,11,15,16.7,21 and 22) is also jointly and
severally liable to Maersk for the damages sought by Maersk.
Because Maersk did not pack the containers and did not fill the
totes, clause 11 requires Samrat to indemnify Maersk of any injury,
loss, damage, liability or expense incurred by Maersk.
obligations undertaken by the Merchant and to indemnify Maersk for
all loss damage, delay, fines, attorney fees and/or expenses
arising from any breach of any of the warranties [in clause 21,
including warranties that dangerous goods like hydrochloric acid
are packed in a manner adequate to withstand the risks of carriage
and in compliance with all laws, regulations or requirements
applicable to the carriage] in the bill of lading and from any
other cause whatsoever in connection with the Goods for which
Maersk is not responsible. Instead of compliance, the hydrochloric
acid was not properly packed in totes that were overfilled with
lids that were loose so it could not withstand the risks of
carriage. Declaration of Brian Koeper (marine surveyor and general
manager of CTS Limited marine surveyors in Houston, Texas (“CTS”),
hired by Maersk to investigate the leaking containers), Ex. C, ¶¶
6-8 and attached photographs).
Under clause 16.7 of the bill of
lading terms and conditions, Samrat as a Merchant is responsible to
Maersk to pay unpaid demurrage.
Under clause 21 Samrat is liable
to Maersk to indemnify Maersk for all claims, liabilities, loss,
damage, delay, costs, fines and/or expenses arising from the
carriage of these Goods and/or arising from breach of any of the
warranties in clause 21.1. Finally, Samrat as Merchant breached
clause 22 by failing to take possession of the Goods, so Maersk was
forced to repackage the goods and store them until abandonment when
negotiations broke down.
acid for salvage.
The contract required Maersk to sell the
Maersk received $550.00 net from the sale.
Im sum, Maersk claims it is entitled to recover its damages
minus the $550.00 obtained in the salvage sale in the total amount
of $194,325.03, as evidenced by the supporting documents to #67,
from Samrat, which is jointly and severally liable to Maersk as a
It then discusses its damages in detail, citing clauses
1,3,11,15,16.7,21 and 22 as establishing that Samrat is liable to
Maersk in contract and by way of contractual indemnity to Maersk
demurrage, costs, liabilities, and attorney fees incurred by Maersk
hydrochloric acid or suspected of leaking hydrochloric acid. #67 at
Under the terms of the bill of lading, Samrat, ATNI,
and the Safewater Defendants are jointly and severally liable to
Maersk for damages incurred by Maersk, plus costs, interest and
Maersk previously settled with ATNI and the
Safewater Defendants for a combined sum of damages in the amount of
Thus Maersk is entitled to a judgment against Samrat
in the amount of $133,775.03 ($193,775.03 minus the $60,000.00 paid
by the other Defendants), plus pre- and post-judgment interest as
allowed by law, costs of court, and attorney’s fees under the bill
of lading terms and conditions, and now makes a request for them.
Under Local Rule 54.2, Maersk shall file its application for costs
and attorney’s fees within fourteen days of the entry of a final
Samrat’s Opposition (#78)
wrongdoing that was in actuality the responsibility of defaulted
crossclaim Defendants Safewater Lines (1) Pvt. Ltd. and Safewater
Lines (India) Pvt., Ltd., now that Maersk settled with the other
Defendants in the main action, it seeks to recover additional
amounts from Samrat, which at most was “passively involved” in the
Instead the shipment was effected under the service
contract between Maersk and the Safewater Defendants, to which
Samrat was not a party.
Indeed Samrat insists it was not a party
to any contract with Maersk and only acted as an agent of the
Safewater Defendants for the agreement between Maersk and the
Safewater Defendants. Affidavit of Mr. Satish V. Anchan, President
of Samrat, #78-1, ¶4.
Nor did Samrat ever authorize any entity to
designate Samrat as consignee of any of the shipments.
named the consignee of the cargo in dispute in Houston, but it did
not load the cargo, tender it in India to Maersk, and did not
handle any of the cargo nor enter into any agreement with Maersk
regarding the cargo’s loading or shipment. Maersk has settled with
the Safewater Defendants for $60,000, less than it demanded in its
That fact does not mean that Samrat is responsible for
making up the balance of Maersk’s claimed losses of $133.775.03 in
damages, based on the contractual relationship
between Maersk and
Samrat, as pleaded in Maersk’s Second Amended Complaint (#43 at
Default judgment was granted to Samrat on the crossclaim by
Samrat against the Safewater Defendants (#49, #75).
contractual relationship between Maersk and Samrat and quotes from
Sucrest Corp. v. M/V Jennifer, 455 F. Supp. 371, 389 n.16 (D. Me.
Where, as in the present case, the charterer holds the
bill of lading, it is equally well settled that the bill
of lading serves merely as a receipt for the cargo and
does not function as the contract for the carriage of the
Furthermore it is generally held that bills of lading do not
impose liability on a consignee like Samrat in the manner that an
actual contract might.
Instead, as expressed in W. Home Transp.,
Inc. v. Hexco, LLC, 28 F. Supp. 3d 959, 963-64 (D.N.D. 2014), bills
of lading served only as a receipt for the subject cargo:
A bill of lading is a commercial document that may be
used for several purposes. It may serve as a document of
title for the transported goods.
It may function as
receipt evidencing the transfer of possession of the
goods from the shipper/consignor to the carrier,
including documenting the kind and quantity of the goods
and, in some instances, their condition. Finally, and
more importantly here, the bill of lading is usually the
basic transportation document between a shipper (who is
often but not always the consignor) and the carrier and,
absent something more, is the primary contract between
See generally 1-2 Goods in Transit § 2.01
(LexisNexis 2014)(“Goods in Transit”). The liability of
the consignee designated in a bill of lading is a much
more complicated subject and is not necessarily governed
by the bill of lading.
See generally 4-22 Goods in
Transit § 22.03-22.04.
Samrat does acknowledge the maritime rule that a consignee can
be bound to a bill of lading terms and conditions by acceptance and
through an agency relationship. According to Samrat, the two
primary methods for binding an intended beneficiary to a bill of
lading are by (1) showing that a third party agreed to be bound and
(2) having an agency relationship with one of the contracting
parties; “absent such a showing, contractual obligations cannot be
imposed on an intended beneficiary.”
In re M/V Rickmers Genoa
Litig., 622 F. Supp. 2d 56, 72 (S.D.N.Y. 2009).
Maersk has failed
to submit any evidence that Samrat’s actions “exhibited acceptance
to be  bound” by the bill of lading, nor legal or factual support
for the proposition that the bill of lading somehow imposes
contractual liability on Samrat for the Safewater Defendants’
obligations to Maersk regarding the acid cargo.14
Maersk contends that Samrat has long admitted to the agency
conditions by exercising control over the cargoes and holding them
In Hexco the consignor had agreed to pay the freight
charges and the consignee had not. Contrary to Samrat’s charges,
Maersk maintains that Hexco does not stand for the proposition
that the bills of lading in the instant suit are merely a receipt
for goods and therefore Samrat is not liable as a named
1954)(consignee is bound to the bill of lading terms and conditions
when it exercises control over the cargo). Samrat also argued that
the Safewater Defendants were at fault and therefore liable, not
Contract with Maersk and because Samrat did not handle the cargoes.
As discussed, the bills of lading terms and conditions make all
parties who qualify as “Merchants”
under their terms jointly and
severally liable for breaches of those terms and conditions and
under the bill of lading contractual indemnity clauses.
suit seeks to enforce those provisions.
The Safewater Defendants
settled with Maersk before Samrat filed its cross-claim.
contract claims Samrat is entitled to a pro tanto reduction of its
portion to the $60,000 the Safewater Defendants’ settlement with
As for Maersk’s negligence claims, which is not part of its
motion for summary judgment, Samrat has no claim against the
Safewater Defendants under maritime law because, as a non-settling
tortfeasor, it has no claim against a settling tortfeasor.
Maritime, 615 F.3d at 603-04 (In Boca Grande Club, Inc. v. Fla.
Power & Light Co., 511 U.S. 222, 222 (1994), the Supreme Court held
that in admiralty action when one defendant settles its claim
before trial with the plaintiff, “‘actions for contribution against
settling defendants are neither necessary nor permitted,” citing
AmClyde, 511 U.S. at 202 (adopting proportionate share rule that in
admiralty cases the liability of non-settling defendants should be
calculated with reference to the jury’s allocation of proportionate
responsibility for plaintiff’s injuries, not by giving non-settling
defendants credit for the dollar amount of settlement, i.e.,
Maersk states that it settled with all the Defendants other
than Samrat for $60,000 (#67 at p. 26) and claims that Samrat now
owes it $133,775.03, based on the contractual relationship between
Maersk and Samrat that Maersk pleaded in its Second Amended
Safewater Defendants (#49, ¶¶ 7 and 8).
Samrat maintains that the
Safewater Defendants are liable for any remaining damages that
Maersk seeks to recover from Samrat.
Samrat also argues that appropriate equitable factors indicate
(“response costs”) for their contribution under CERCLA, 42 U.S.C.
§ 9613 if any damages are alleged.
In sum, the Safewater Defendants, not Samrat, are the ones
involved in the underlying transactions with Maersk for which
Maersk seeks damages.
Samrat was the consignee of the cargo in
Houston, but it did not load the cargo, tender it in India to
Maersk, did not do anything to contribute to the loss Maersk
In contrast the Safewater Defendants provided in India
the containers to be loaded with the acid, and they had the direct
contractual relationship with Maersk.
An established principle in
admiralty law is that the party who has the duty for loading,
stowing or discharging of cargo is ultimately responsible for the
174 Benedict on Admiralty 17-19 (7th ed. 2005), citing
Coastal States Petrochemical Co. v. Montpelier Tanker Co., 1970
discoloration of gasoline cargo where under a typewritten clause
the charterer assumed responsibility and risk of cleaning tanker);
North Am. Steel Products Corp. v. Andros Mentor, 1969 A.M.C. 1482
(S.D.N.Y. 1967)(Where voyage charter shifted responsibility for
loading to charterer, the latter had no claim against the vessel
for cargo damages resulting from improper loading methods; owner’s
liability would only attach if there was a lack of due diligence in
making the vessel seaworthy.).
If Samrat is in any way liable to
Maersk, the Safewater Defendants are liable to Samrat for the
entire amount under Samrat’s crossclaim (#49, ¶¶ 7 and 8).
Maersk’s Reply (#80)
Emphasizing that its motion for summary judgment is based only
on breach of contract and contractual indemnity, Maersk reiterates
that its initial claims for negligence, fault-based liability, and
CERCLA contribution are irrelevant to its motion for summary
Maersk contends that Samrat, which admitted that it is
an agent of the Safewater Defendants to handle cargoes going to the
United States and which exercised control over the subject cargoes
by informing Maersk not to deliver the cargoes to the ultimate
receiver (here, ATNI) until all expenses were paid, is bound by the
Maersk bill of lading terms and conditions as a Merchant, and is
jointly and severally liable to Maersk for Maersk’s damages.
Maersk highlights the fact that Samrat does not challenge the
content of the bill of lading terms and conditions as discussed and
applied to the facts here by Maersk.
Samrat simply argues that it
is not a party to any contract with Maersk, although Samrat
concedes by the affidavit of Mr. Satish Anchan that Samrat would
serve as the Safewater Defendants’ United States agent, would aid
them with freight prepaid and freight collect cargoes shipped by
them to the United States, and that the agency agreement was in
effect during the relevant time period.
#78-1 at ¶3.
Samrat argues that the cargoes were shipped pursuant to the
Service Contract between Maersk & the Safewater Defendants. Samrat
is not named as an affiliate or a named account on the Service
Contract and is not a party to it.
According to the statutory
definition, 46 U.S.C. § 40102(20), “Service Contract” is “a written
contract, other than a bill of lading or receipt, between one or
more shippers, on the one hand, and an individual ocean common
carrier . . . in which–
(A) the shipper or shippers commit to
providing a certain volume or portion of cargo
over a fixed time period; and
(B) the ocean common carrier or the agreement
commits to a certain rate schedule and a
defined service level, such as assured space,
transit time, port rotation, or similar
The Service Contract does not list terms and conditions for the
Maersk/Safewater Service Contract explicitly states that Carriage
and other service provided pursuant or in relation to the Service
Contract are subject to the terms, conditions and provisions of the
governing carrier transport document, i.e., the bill of lading.
#67-13 at p.2. Samrat erroneously says or implies that the cargoes
of hydrochloric acid were carried only pursuant to the Service
Maersk insists that under the Service Contract, the
carriage of their goods was bound to the bills of lading issued by
Maersk and the terms and conditions for those bills of lading. Id.
Thus because of what joint and several liability allows, Maersk
seeks to apply the bill of lading terms and conditions to Samrat,
as discussed in its motion.
Samrat’s statements that it cannot be liable to Maersk as an
undisclosed agent on behalf of the Safewater Defendants are not
unsupported, but are undermined by the fact that Maersk was
Safewater as the shipper and Samrat as the named consignee,
Ex. A, exh. 1.
The bills of lading do not state “as agent for” or
“on behalf of” by Samrat’s name.
As a matter of law Maersk has no
obligation to discover the identity of an undisclosed principal,
nor does the fact that a party to a shipping arrangement is known
to act on behalf of others impose a duty on an ocean carrier like
Maersk to identify the party on whose behalf the first party acts.
Orient Mid-East Lines v. Albert E. Bowen, Inc., 458 F.2d 572, 576
(2d Cir. 1972).
Usually, “one who acts as an agent does not become
personally bound on a contract which he makes for a disclosed
principal; but if he fails to divulge the name of his principal, he
does become a party to the contract.”
Id. at 575-76. Furthermore,
the agent must disclose the identity of the principal at or before
the time when the contractual agreement is made final. Id. at 575.
Here that was not done, so Samrat is an agent for an undisclosed
principal and a party to the contract.
See Nippon Yusen Kaisha v.
FIL Lines USA Inc., 2014 A.M.C. 553, 561-63 (S.D.N.Y. 2013).
named consignee, Samrat was acting as the U.S. Agent of the
Safewater Defendants on the bills of lading.
See #78-1, ¶3
affidavit of Satish Anchan (“Anil Malik, Director of Safewater
Lines India PVT Ltd (“Safewater India” and I, as President of
Samrat, orally agreed that Samrat would serve as Safewater’s U.S.
Pursuant to the agreement, Samrat would assist Safewater
India with both Freight Prepaid and Freight Collect ocean cargoes
shipped by Safewater India into the U.S. bu ocean common carriers.
That agreement was in effect from 2008 until mid-2013.”); see id.,
¶6 (“Specifically, Samrat was named as the consignee (receiver) of
the cargo in Houston in the Master Bill of Lading issued by Maersk
at the instruction of Safewater.”).
Samrat attempts to restrict the relevance of the Maersk bills
of lading terms and conditions by calling them simply “receipts.”
Maersk maintains that each of the bills of lading terms and
conditions in this case is also a contract of carriage,15 while the
The Court concludes that Maersk is correct as a matter of
law. The Second Circuit in Berisford Metals Corp. v. S/S
Salvador, 779 F.2d 841, 845 (2d Cir. 1985), cert. denied, 476
U.S. 1188 (1986), described the significance and various
functions of the bill of lading in maritime trade as
a fundamental and vital pillar of international trade
and commerce, indispensable to the conduct and
financing of business involving the sale and
transportation of goods between parties located at a
distance from one another. It constitutes an
acknowledgment by a carrier that it has received the
described goods for shipment. It is also a contract of
carriage. As a document of title it controls the goods
themselves. See Gilmore and Black, The Law of
Admiralty, Ch. III, § 3-1, p. 93 (2d ed. 1975). It has
been said that the bill and the goods become one and
the same, with the goods being “locked up in the bill.”
Id. at 96. As the court stated in Pollard v. Reardon,
65 F. 848, 852 (1st Cir. 1985),
“In the developments of commerce and
commercial credits the bill of lading has
come to represent the property, but with
greater facility of negotiation, transfer,
and delivery than the property itself. . . .
And it has become so universal and necessary
a factor in mercantile credits that the law
should make good what the bill of lading thus
holds out. There is every reason found in
the law of equitable estoppel and in sound
public policy for holding, and no injustice
is involved in holding, that, if one of two
must suffer, it should be he who voluntarily
puts out of his hands an assignable bill of
Service Contract is not a contract of carriage.
The cases Samrat
cites are private carriage cases in which the charter party is the
contract of carriage.16 But in the instant suit there is no charter
Morever the cases cited by Samrat do not apply under the
In Sucrest, 455 F. Supp. 371, the cargo owner and the
charterer of the ship sued the ship and its owner for cargo damage
and other expenses.
The court ruled that where the charterer
(Sucrest) held the bill of lading, the bill of lading serves as a
receipt for the goods and governs the relationship between the
parties unless that charterer specifically adopts the bills of
lading as regulating the rights of the parties.
instant action has no charter party, Sucrest in not applicable.
potentially can be applied to Samrat, as the entity named the
consignee in the bills of lading, insists Maersk.
Samrat cites to
Hexco, 28 F. Supp. 3d at 964, to argue that bills of lading do not
impose liability on a consignee.
Maersk, however, points out that
lading, rather that he who innocently
advances value thereon.”
Maersk note that there are different rules for private
carriage, which is where only one party’s goods are shipped on
the vessel at issue, and common carriage, where more than a
single party’s goods are shipped on the vessel at issue, which is
always the case for containerized shipments like those in the
instant case. The cases cited by Samrat are for private carriage
and do not apply to the common carriage performed by Maersk for
Hexco is not a maritime case to which maritime legal principles
apply, and it dealt with the issue whether the consignee had looked
only to the consignor for payment of freight charges.
After a careful review of the applicable contracts and the
law, the Court agrees with Maersk that it is entitled to summary
judgment against Defendant Samrat on its breach of contract and
contractual indemnity claims for the reasons it states.
Maersk’s claims for all loss, damage, delay, fines and other
expenses, Samrat is jointly and severally liable for Maersk’s
attorney’s fees. #67, Ex. A, Attachment 2, clause 15.2. (terms and
conditions of bill of lading).
Orders Maersk to file an appropriate motion for attorneys’
fees under the bill of lading within twenty days with supporting
Samrat shall file a timely response.
The Court also
ORDERS Maersk to file a proposed final judgment at the same
SIGNED at Houston, Texas, this
August , 2017.
UNITED STATES DISTRICT JUDGE
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