FREIGHT LOSS / Held: (1) Named ship itself was liable in rem under pre-COGSA/pre-Harter maritime law for damage to freight here, and (2) named ship itself was liable as a “carrier” for damage to freight here as well. On this second point American courts differ – but same legal conclusion whether either (a) court applies bill of lading’s Clause Paramount that applies Hague-Visby Rules, or (b) court concludes that COGSA applies.

Man Ferrostaal, Inc. v. M/V Akili, 2012 WL 6050643 (U.S. Court of Appeals for the 2nd Circuit, December 6, 2012. Free copy available here.

Who is affected? Shippers and carriers of freight by ocean ship where the load is lost or damaged.  

“Boiled down, the parties dispute whether: (i) an in rem proceeding rendering the Akili liable for damage to, or loss of, cargo is unavailable in this matter because a vessel is not a “carrier” within the meaning of COGSA [Carriage of Goods by Sea Act] and (ii) the free-in-and out provision in the Voyage Charter Party purportedly absolving the Akili of in rem liability is enforceable. We hold that the first issue is essentially irrelevant because a vessel’s in rem liability for damage to cargo exists under maritime common law, not COGSA, for a violation of a carrier’s contractual or statutory—COGSA’s—obligations. We resolve the second issue against enforcement of the free-in-and-out provision so far as it might be construed to prevent in rem liability of the vessel. In doing so, we do not decide whether COGSA applied as a matter of law to this voyage because, even if it did not, the Voyage Charter Party’s Clause Paramount contractually incorporates the Hague–Visby rules prohibiting a carrier from contracting for a waiver of its obligations regarding damage to cargo.”