Appellate court says COGSA limitation applies during cargo restowage
The U.S. Court of Appeals for the Fourth Circuit has ruled that the $500 package limitation in the Carriage of Goods at Sea Act (COGSA) applies during the restowage of cargo at intermediate ports.
In “Schramm Inc.; Atlantic Mutual Insurance Co. v. Shipco Transport Inc.,” Schramm contracted with Shipco Transport to ship a mobile drilling rig from Baltimore to Arica, Chile. When the vessel carrying the rig stopped at Charleston, S.C., the ship’s master ordered the rig off-loaded so that it could be restowed on a lower deck. While the rig was dockside, being handled by SSA, it was severely damaged. A federal district court found that Shipco was liable for the damage, but limited recovery to $500 as determined by COGSA.
On appeal, Schramm and Atlantic Mutual argued that Shipco wasn’t entitled to COGSA’s limitation because Shipco didn’t have control of the rig when it was damaged.
“Appellants have this point exactly backwards. As a non-vessel-operating common carrier, Shipco never has actual control over the goods, but the cargo was indisputably in its legal custody for the duration of the voyage,” the appeals court said in a ruling April 15 that affirmed the prior decision of U.S. District Judge Patrick Michael Duffy in Charleston.