The opinion of the court was delivered by: Motley, J.
Plaintiff, a shipper, shipped steel products from Durban, South Africa
to ports in San Juan, Tampa, New Orleans and Houston on a vessel called
the IBN Abdoun (the "Abdoun"). On June 24, 1999, plaintiff filed this
suit pursuant to this court's admiralty jurisdiction, claiming that the
cargo was damaged en route by exposure to water, resulting in damages in
excess of $1 million.
Plaintiff filed this suit against defendant United Arab Shipping Co.
("United Arab"), the carrier responsible for transporting the steel goods
from South Africa to U.S. ports, for sweat contamination, physical damage
caused during the voyage
and rust damage caused by seawater.*fn1 In
addition, plaintiff is suing Cargill Marine and Terminal Inc.
("Cargill"), the carrier hired to transport the goods from New Orleans to
Chicago, for rust damage caused by freshwater.*fn2 On January 1, 2001,
plaintiff filed a motion to strike United Arab's defense of a $500 per
package liability limitation imposed by the Carriage of Goods by Sea Act
("COGSA") and for summary judgment as to United Arab's liability. On
January 17, 2001, defendant United Arab responded with a cross-motion for
summary judgment as to COGSA's liability limitation and opposition to
plaintiff's motion for summary judgment. This court heard argument on the
summary judgment motions on June 14, 2001.*fn3
As set forth below, United Arab has not presented prima facie evidence
that plaintiff had a fair opportunity to opt out of COGSA's $500 per
package liability limitation. In addition, United Arab has not contested
its liability for a portion of the damage to the steel shipment.
Therefore, plaintiff's motion to strike the affirmative defense of
limitation of liability and for summary judgment on liability is
The underlying facts pertinent to the summary judgment motions are, for
the most part, undisputed. In June, 1998, plaintiff's shipment of steel
products was loaded aboard the Abdoun in Durban, South Africa. During the
voyage to ports in San Juan, Tampa, New Orleans and Houston, the steel
was exposed to seawater as a result of leaky hatches aboard the Abdoun.
As a result of the exposure to seawater, the steel suffered rust damage.
Defendant United Arab does not contest, for the purposes of this action,
that the Abdoun was unseaworthy. United Arab also admits that the
unseaworthiness of the Abdoun was responsible for at least part of the
damage to the steel products.
The parties have presented two contracts regarding limitation of
liability for damage to the shipment. The first contract, the bill of
lading regarding the shipment (the "Bill of Lading"), bore no explicit
reference to any liability limitation but contained only the following
clause regarding liability:
(2) General Paramount Clause
The Hague Rules contained in the International
Convention for the Unification of certain rules
relating to Bills of Lading, dated Brussels the 25th
August 1924 as enacted in the country of shipment
shall apply, but in respect of shipments to which no
such enactments are compulsorily applicable, the
terms of said Convention shall apply.
Trades where Hague-Visby Rules apply.*fn4
In trades where the International Brussels Convention
1924 as amended by the Protocol signed at Brussels on
February 23rd 1968 — The Hague-Visby Rules
— apply compulsorily, the provisions of the
respective legislation shall apply.
The country of shipment, South Africa, has enacted the Hague Rules
setting a limitation on collectable damages of two SDRs per kilo. United
Arab does not dispute that if the standard of two SDRs per kilo applies,
the limitation would be approximately $2.66 per kilo, higher than the
actual damage claimed in this case. Therefore, if the Hague Rules as
adopted by South Africa apply to the shipment at issue, the limitation on
damages would be moot.
The second contract at issue is a charter party which has been
proffered by United Arab (the "Charter Party").*fn5 The Bill of Lading
states on its face "TO BE USED WITH CHARTER-PARTIES / CODE NAME:
COGENBILL." United Arab claims the proffered Charter Party is a standard
form referred to as a Cogenbill. United Arab claims that the Charter
Party, read in conjunction with the Bill of Lading, reflects the totality
of its contract of carriage with plaintiff.
The Charter Party, presented to this court as defendant's Exhibit D,
consists of a 15-page document including a facsimile cover page. The
second page is a cover page to the contract setting forth the parties to
the contract and providing, inter alia, a space for their signatures. The
terms of carriage are set forth on pages 3 through 15 of the Charter
Party. Pages 3 through 5 of the Charter Party appear to be boilerplate
language. No reference is made in this boilerplate to a choice of rules
governing the shipment. Each of the pages thereafter bears the heading
"RIDER CLAUSES TO M.V. "IBN ABDOUN" CHARTER PARTY DATED 2 JUNE 1998,"
(the "Rider ...