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MOBIL SALES & SUPPLY CORP. v. M.V "BANGLAR KAKOLI"

June 13, 1984

MOBIL SALES AND SUPPLY CORPORATION and BLUEFIELD INSURANCE LIMITED, Plaintiffs,
v.
M.V "BANGLAR KAKOLI," her engines, boilers, etc., and vs. BANGLADESH SHIPPING CORPORATION (NATIONAL LINE OF BANGLADESH), Defendants; STRAW PRODUCTS LIMITED, BALLARPUR INDUSTRIES LIMITED and COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, Plaintiffs, vs. M.V "BANGLAR KAKOLI," her engines, boilers, etc., BANGLADESH SHIPPING CORPORATION, PERALTA SHIPPING CORPORATION and MOBIL SALES AND SUPPLY CORPORATION, Defendants; DAIRY EQUIPMENT AND SUPPLY CO., DIVISION OF SAUDI AGRICULTURAL ENTERPRISES, INTERNATIONAL and ST. PAUL MERCURY INSURANCE COMPANY, Plaintiffs, vs. M.V. "BANGLAR KAKOLI," her engines, boilers, etc., BANGLADESH SHIPPING CORPORATION and MOBIL SALES AND SUPPLY CORPORATION, Defendants.



The opinion of the court was delivered by: WEINFELD

FINDINGS OF FACT AND CONCLUSIONS OF LAW

EDWARD WEINFELD, D.J.

 These are three consolidated admiralty actions in which plaintiffs (1) Mobil Sales and Supply Corporation ("Mobil"), (2) Straw Products Limited and Ballapur Industries Limited ("Straw Products"), and (3) Dairy Equipment and Supply Co. ("Dairy Equipment") *fn1" seek to recover damages from the vessel, the M.V. Banglar Kakoli ("the Banglar Kakoli"), in rem, and her owner, Bangladesh Shipping Corporation (collectively, "Bangladesh" or "defendants"), in personam, as a result of defendants' acts contrary to contractual and statutory duties to deliver plaintiffs' cargo in good condition to ports in Saudi Arabia and India.

 Essentially, each plaintiff shipper claims that Bangladesh is liable to it for cargo loss or damage because of Bangladesh's improper conduct in (1) stowing cargo; (2) deviating from the customary course; and (3) mishandling cargo at foreign ports. Bangladesh denies liability. It asserts as defenses under the Carriage of Goods by Sea Act *fn2" ("COGSA") that the losses sustained were caused by either (1) Mobil's improper packaging of its shipment; (2) perils of the sea; (3) errors in navigation; (4) restraints of princes; or (5) a combination of one or more of these causes. In addition, Bangladesh counterclaims against Mobil for damages incurred in connection with discharging, stowing, and cleaning up after, damaged cargo, as well as for damages for which it may be held liable to the other shippers.

 Straw Products and Dairy Equipment also assert claims against Mobil. In substance, these parallel Bangladesh's defense and claim for contribution -- that Mobil had improperly and insufficiently packaged its shipment. Mobil denies liability to Bangladesh upon its counterclaims and also denies liability to Straw Products and Dairy Equipment. During the course of the trial, Bangladesh settled with Straw Products and Dairy Equipment, who assigned to Bangladesh their claims against Mobil. With the issues thus somewhat narrowed, the trial continued with Mobil and Bangladesh as the sole litigants.

 On the voyage in issue, the Banglar Kakoli was hired to carry cargo from various United States ports on the Gulf of Mexico and eastern seaboard to points in Saudi Arabia and India. The vessel, which at the time of the voyage had been in service for about one year, has four hatches, each with an upper tween deck and a lower hold for cargo carriage. On October 18, 1980, at Savannah, Georgia, the Banglar Kakoli took on board bales of woodpulp consigned for delivery to Calcutta, India. These were loaded into the No. 1 lower hold. Straw Products was the purchaser and consignee of this shipment.

 The vessel then proceeded to New Orleans, Houston, and New York, taking on at each port additional consignments of cargo. On November 13, 1980, at Philadelphia, the Banglar Kakoli received for shipment to Jeddah, Saudi Arabia, a consignment of two surge tanks and one crate of spare parts. This consignment was loaded into the No. 1 upper tween deck. Dairy Equipment was the seller and owner of this consignment.

 The Banglar Kakoli then proceeded to Paulsboro, New Jersey, where, on November 17, 1980, Mobil delivered from the warehouse to the ship's side for loading a consignment of lubricating oil for transport to Jeddah. As will hereinafter be described in greater detail, the Mobil oil was packaged in 40 drums and 840,000 one quart cans, packed in cartons, which were in turn stacked on pallets. The Mobil shipment was loaded into the No. 1 and No. 4 upper tween decks by stevedores engaged by Bangladesh. The vessel then returned to Philadelphia, where consignments of crated cooling towers were loaded into the hatch squares of No. 1 and No. 4 tween decks. Cooling towers were also loaded, along with other cargo, on the deck of the vessel. Mobil contends that the stowage of its shipment of oil at Paulsboro by Bangladesh and its alleged rearrangement at Philadelphia to accommodate other cargo was negligent, whereas Bangladesh asserts that defects in the packaging of the oil shipment rendered Mobil's consignment unfit for a winter voyage over the Atlantic.

 On about November 20, 1980, *fn3" the Banglar Kakoli departed Philadelphia and commenced her transatlantic voyage. According to the ship's deck log, the first port of call was to be Port Said, Egypt, on the Suez Canal, where the Banglar Kakoli was to take on provisions and refuel before proceeding on its direct line to Jeddah, Saudi Arabia, the first unloading port.

 The deck log and cables from the master also show that the Banglar Kakoli, while on its great circle route toward Gibraltar and the Mediterranean, encountered rough weather beginning about November 22, 1980. The deck log entries from the 22nd through the 24th of November repeatedly refer to "very rough sea[s]," "very high seas . . . and heavy swells," and "shipping heavy seas on deck continously[.]" *fn4" Winds of Force 10 on the Beaufort Scale were recorded on all three days.

 To escape the storm, the master on November 24th altered course, taking the vessel southeast from its position at 42 deg. north latitude to a position at approximately 36 deg. north latitude. This evasive tactic was not effective, because the storm, instead of following the usual northeasterly course of North Atlantic storms, followed a southeasterly track. n.5 [Footnote omitted] Hence, instead of escaping the storm, the Banglar Kakoli continued on in its path. *fn6" Bangladesh contends that damage to cargo was proximately caused by events from November 22 through November 25, and that it is excused from any liability to cargo for this damage because such damage arose from the "[a]ct or omission of the shipper" *fn7" (i.e., Mobil); a "peril of the sea"; *fn8" or an "[a]ct, neglect, or default of the master." *fn9" On the other hand, as already noted, Mobil contends that any damage arising in this period derived from Bangladesh's failure "properly and carefully [to] load, handle, stow, carry, keep, [and] care for . . . the goods carried." *fn10"

 While the Banglar Kakoli was contending with the storm, at about 1:29 a.m. local time, November 25, 1980 (4:59 a.m., November 25, Greenwich Mean Time), *fn11" the vessel received a cable from defendants' agents in London ordering it to "proceed to London" to take on a cargo of railroad cars. The master requested from his San Francisco navigational service the "best route and expected weather" for a voyage to London. The deck log indicates that on November 25 the vessel changed course from southeast to due east and the next day made a heading for Felixstowe, England, on a route to London. Mobil claims that this trip to London constituted an unreasonable deviation, a claim Bangladesh denies and, in the alternative, seeks to avoid with its contention that all damage to cargo occurred prior to the time the Banglar Kakoli turned to London -- in sum, even if it is found that there was an unreasonable deviation, the deviation was not the proximate cause of the damage.

 Fifteen days after leaving Philadelphia, on December 4, 1980, the vessel arrived at the Port of London. There, Bangladesh representatives and a surveyor, Captain John G. Campbell, retained on Bangladesh's behalf, attended on board the vessel. These representatives observed that in the No. 2 tween deck, forty bales of rags and five packages of machinery and general cargo were scattered all over the square of the hatch, having been thrown out from the wings. Bangladesh representatives at London or their agents retained gangs of stevedores and longshoremen to restow and resecure the cargo in the No. 2 tween deck and to load the cargo of railroad cars. The Bangladesh representatives also observed, in addition to the disarray in No. 2 tween deck, attended to by the stevedores, that the consignments in the Nos. 1 and 4 tween decks, that is, the Mobil shipment, surge tanks, spare parts, and cooling towers, among other items, had shifted or collapsed in stow. The vessel's first officer, for example, testified that pallets of oil were "in broken condition" and the cartons holding the quart cans were "stained." Yet Bangladesh did not direct that the damaged consignments in the Nos. 1 and 4 upper tween decks be discharged at London, did not restow or resecure such consignments, and took no action to ascertain, with specificity, the damage to the shipments in those holds. Nor did Bangladesh notify Mobil, which had offices in London, or any of the other consignees of the damage or condition of the cargo. Mobil contends this conduct evinces Bangladesh's further breach of duty to cargo, while Bangladesh asserts that the actions demanded of it by Mobil could have served no purpose because local environmental laws and labor policies would have prevented restowing Mobil's shipment, that is, that Bangladesh was faced with a "restraint of princes."

 On December 6, 1980, the Banglar Kakoli departed from the Port of London with the Nos. 1 and 4 upper tween decks in the same condition as when the vessel arrived two days earlier. She proceeded toward Port Said, encountering very rough seas, this time off Gibraltar, on December 10 and 11, causing her "to pitch heavily," "pound violently," and "ship heavy seas on deck." Mobil claims this weather further damaged its consignment of oil, which Bangladesh denies. After passing through the Suez Canal, the vessel arrived at Jeddah on December 20, where Bangladesh's cargo superintendent, Captain M. A. Jalil, William D. Baskerville, a surveyor, also acting on behalf of Bangladesh, and Captain Z. A. Zuberi, an independent marine surveyor hired by the Arabian Petroleum Supply Company, the purchaser of the Mobil oil, examined the consignments of cargo in the No. 1 and No. 4 tween decks. Neither the Mobil consignment nor the Dairy Equipment consignment were discharged at Jeddah, the port designated in their respective bills of lading. Bangladesh asserts the failure to discharge arose from enforcement by the Saudi Arabian port authorities of environmental regulations barring the unloading of the damaged cargo, a claim Mobil does not dispute, but which Mobil instead asserts is irrelevant in light of the vessel's alleged continued breaches of duty, including the overstowage of other cargo on top of the Mobil pallets, preventing discharge of the latter at Jeddah.

 Thus, on January 5, 1981, the Banglar Kakoli sailed from Jeddah to Chittagong, Bangladesh, the vessel's home port. After she arrived in Chittagong on January 17, Captain Baskerville and Luftee M. Ayub, of James Finlay and Company, Ltd., which had been retained by both Bangladesh and the cargo interests, came abroad. Between January 17 and February 13, 1981, the Banglar Kakoli discharged all consignments of cargo, except those to be delivered at Calcutta, to the Chittagong pier/terminal area. In addition, on February 4, 1981, the M.V. Khulna ("the Khulna"), a coasting vessel owned and operated by Bangladesh, tied up alongside the Banglar Kakoli in order to receive the cargo destined for Calcutta. Discharge from the Banglar Kakoli into the Khulna was complete by February 13.

 Both Captain Baskerville's and Mr. Ayub's survey reports indicate that at outturn at Chittagong the Mobil consignment had sustained substantial damage. The surge tanks and spare parts, owned by Dairy Equipment, and the woodpulp, owned by Straw Products, were also noted as severely damaged. Bangladesh delivered the remains of the Straw Products cargo to Calcutta, where they were rejected by the shippers. No part of the Dairy Equipment Cargo nor of the Mobil shipment was ever delivered to their designated destinations. In fact, Mobil alleges that the remains of its shipment upon outturn at Chittagong were left uncovered at the pier/terminal area and further damaged by rain.Finally, a salvage sale was arranged for the Mobil oil, which realized a sum of $69,990.37, $642,102.50 less than the contract price upon delivery of the cargo in sound condition at Jeddah.

 Against the foregoing recital of facts and contentions, the Court turns to the matters in issue. Because the adequacy of the Mobil shipment's packaging affects not only Bangladesh's liability to Mobil, but also Mobil's liability to Bangladesh and also to other cargo claimants (now represented by Bangladesh), *fn12" we first address this issue.

 I.

 PACKAGING OF THE MOBIL SHIPMENT

 The Mobil consignment of lubricating oil delivered from the Mobil warehouse at Paulsboro, New Jersey, to the pier where the Banglar Kakoli was berthed was packaged in 40 drums and 35,000 cartons (each carton containing twenty-four one quart cans) on pallets. *fn13" Stevedores hired by Bangladesh loaded the pallets onto the vessel and stowed them in the Nos. 1 and 4 tween decks. The chief officer of the vessel, who also acted as the cargo officer, observed the ship's tackle lift the Mobil cargo and place it in the holds. Upon completion of the loading of the Mobil consignment at Paulsboro, "clean" bills of lading were issued. It is not disputed that upon its outturn at Chittagong the shipment was damaged. Thus, in the absence of a hidden defect, *fn14" Mobil has established a prima facie case for recovery from Bangladesh. *fn15" It is well settled law that "[w]hen the consignee proves its prima facie case, the burden shifts to the carrier to show that the loss or damage falls within one of the COGSA exceptions set forth in 46 U.S.C. ยง 1304(2) (1976)." *fn16" ...


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