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Ltd. v. Aigli

decided: March 20, 1987.

KANEMATSU-GOSHO LTD., PLAINTIFF-APPELLANT,
v.
M/T MESSINIAKI AIGLI, AMIGOS COMPANIA NAVIERA S.A., MOBIL SHIPPING AND TRANSPORTATION CO., LEEWARD PETROLEUM CORP., LTD., AND DOMAN TANKERS, INC., DEFENDANTS-APPELLEES; LEEWARD PETROLEUM COMPANY, LTD., THIRD-PARTY PLAINTIFF, V. E.W. SAYBOLT & CO., LTD., THIRD-PARTY DEFENDANT-APPELLEE



Appeal from an order of the United States District Court for the Southern District of New York (Motley, Ch. J.), dismissing plaintiff's claims for failure to present a prima facie case of liability under the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq., and assessing reasonable costs and attorneys' fees against plaintiff.

Meskill, Miner and Altimari, Circuit Judges.

Author: Altimari

ALTIMARI, Circuit Judge:

Appellant Kanematsu-Gosho Ltd. ("Kanematsu") commenced an action under the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 1300 et seq., alleging contamination of a cargo of "jet fuel, kerosene," against the vessel M/T Messiniaki Aigli ("AIGLI"); the ship's owner Amigos Compania Naviera S.A. ("Amigos"); the time charterer Mobil Shipping and Transportation Co. ("Mobil"); and the voyage charterer Leeward Petroleum Company, Ltd. ("Leeward"). Leeward impleaded E.W. Saybolt & Co., Ltd. ("Saybolt") for indemnification purposes.

The United States District Court for the Southern District of New York (Motley, Ch. J.), after a bench trial, dismissed appellant's claims for failure to present a prima facie case, finding that appellant had not "demonstrated that any material change occurred in the cargo between the time of its loading" and discharge. The district court also entered an order awarding costs and attorneys' fees to appellees Amigos, Mobil, Leeward, and Saybolt. Appellant moved the district court pursuant to Federal Rule of Civil Procedure 52(b) for an order amending its findings and judgment, but was denied the relief requested by decision dated March 12, 1986. Appellant comes before this court, contending that the district court erred in finding that appellant failed to establish a prima facie case of liability and in assessing reasonable costs and attorneys' fees in appellees' favor.

We affirm the district court's judgment insofar as it dismisses appellant's claims but reverse that part of the judgment awarding appellees costs and attorneys' fees.

BACKGROUND

On November 13, 1981, appellee Leeward, a corporation in the business of buying and selling petroleum products, contracted with a non-party to this action, Shell Oil Company, for the purchase of approximately 250,000 barrels of what it described as "jet fuel." The contract provided for the delivery of the fuel "into buyer's designated vessel" at Shell Oil Company facilities near Houston, Texas.

In order to transport the fuel, Leeward entered into an agreement with appellee Mobil for the chartering of a tanker, the AIGLI. Mobil had earlier chartered the AIGLI from its owner, Amigos, for a term of ten years, with Amigos retaining responsibility for maintaining and supporting the vessel.

The jet fuel was loaded onto the AIGLI on December 11-12, 1981 and was sampled both before and after loading by appellee Saybolt, an independent inspector. Saybolt evaluated and rated these samples of "jet fuel," and issued a "Laboratory Analysis Report." Saybolt gave the fuel oil a color rating of Saybolt , representing a bright, "water-white" color, and found the sulphur content to be.029%. Saybolt found its "smoke point" to be 27 mm.

On December 23, 1981, Leeward sold the "jet fuel," as it was once again described, to a non-party to this action, Tradax Petroleum Ltd. In the agreement for sale, Leeward attested to the quality of the jet fuel by referring to the Saybolt specifications.

Tradax promptly resold the cargo to appellant Kanematsu, describing it as "jet fuel as per loaded specifications " (emphasis added), and reiterating the Saybolt test results.

A few days later, the AIGLI began its journey from Texas to Kawasaki, Japan, with a bill of lading describing the cargo as "jet fuel, kerosene." While en route, appellant contracted to sell most of the cargo to a Japanese entity, General Sekiyu K.K. ("Sekiyu"), describing the cargo as "kerosene" and maintaining that its Saybolt specifications were inter alia as follows: Color, " 25 or over;" sulphur content, "0.001 or under;" and smoke point, "23 or over."

On arrival in Kawasaki, the cargo was tested. The sulphur level was calculated to be.021%; the composite color rating was found to be Saybolt 23, slightly darker than on loading; and the smoke point was set at 23 mm. ...


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