The opinion of the court was delivered by: William T. Hart, District Judge.
MEMORANDUM OPINION AND ORDER
In this action DB Trade International, Inc. ("DB Trade")
seeks to recover approximately $99,000, plus costs and fees,
for loss sustained when a shipment of steel from Argentina
arrived in damaged condition. DB Trade's claim is an
admirality claim within this Court's jurisdiction pursuant to
28 U.S.C. § 1333, and also 28 U.S.C. § 1337. Plaintiff and two
of the defendants have filed cross-motions for partial summary
judgment on the issue of damages, the matters currently before
In connection with these motions, the parties have submitted
a stipulation of uncontested facts. The defendants maintain
that plaintiff's recovery is limited to the $11,500 by the
Carriage of Goods by Sea Act ("COGSA"). 46 U.S.C. § 1304(5).
For the reasons set forth below, the defendants are not
entitled to the protection of the COGSA limitation of liability
provision. Accordingly, the defendants' motion is denied and
the plaintiff's motion is granted.
Since January, 1980, plaintiff DB Trade has been engaged in
the business of importing steel and other products from
overseas. On September 10, 1981, DB Trade contracted to
purchase cold rolled steel from Columbia International
Investments and also contracted to resell the steel to
National Material Corporation in Illinois. Propulsora
Siderurgica SAIC ("Propulsora") manufactured the steel in
Argentina and made arrangements for its shipment from
Argentina to Chicago. Propulsora arranged for shipment by
engaging Fletamar S.A.C., a local broker and shipping agent.
The steel was loaded on board the ocean going vessel
Scandinavia Maru at Ensenda, Argentina between October 16 and
1981. The Scandinavia Maru is owned by defendants Mitsui
Engineering & Shipbuilding Co., Ltd. ("Mitsui") and Showa
Aircraft Industry Co., Ltd. ("Showa") who had chartered the
vessel to Fuji Marine Co., Ltd. ("Fuji"). Fuji, in turn,
subchartered the vessel to its vessel managing subsidiary Fuji
Kisen Kaisha, Ltd. ("Fuju-Kisen"), who subchartered the vessel
to Carl Bulk Carriers, A.P.S. of Copenhagen, Denmark, who, in
turn, subchartered the vessel to defendant Astramar CIA
Argentina de Navegacion S.A.C. ("Astramar") for the voyage
from Argentina to Chicago.
After loading the steel on board, the ship's mate (an
employee of Fuji) prepared and signed receipts for the goods.
Based on these receipts, Fletamar then prepared a cargo
manifest and signed the bills of lading issued by Astramar.
Under the customary practice, the carrier (Astramar) provides
the shipper (Fletamar) with blank form bills of lading. The
shipper completes the forms with the requested information,
signs the bills and returns them to the carrier. The parties
have stipulated that Fletamar and Astramar followed this
customary practice Although Astramar's bill of lading form
does not contain a specific space labelled "valuation" in
which the shipper may insert the actual value of the shipment,
the form also has no restriction prohibiting the shipper from
including such a valuation in its description of the goods.
The forms used here contain the following provision on their
This Bill of Lading shall have effect subject to
the provisions of any legislation relating to the
carriage of goods by sea which incorporates the
rules relating to Bills of Lading contained in
the International Convention, dated Brussels 25th
August, 1924, and any modification thereof which
is compulsorily applicable to the contract of
carriage herein contained.
The COGSA is the legislation in this country which
incorporates these treaty provisions. It contains the
following section on limitations of liability:
(5) Neither the carrier nor the ship shall in any
event be or become liable for any loss or damage
to or in connection with the transportation of
goods in an amount exceeding $500 per package
lawful money of the United States, or in case of
goods not shipped in packages, per customary
freight unit, or the equivalent of that sum in
other currency, unless the nature and value of such
goods have been declared by the shipper before
shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading,
shall be prima facie evidence, but shall not be
conclusive on the carrier.
By agreement between the carrier, master, or
agent of the carrier, and the shipper another
maximum amount than that mentioned in this
paragraph may be fixed: Provided, that such
maximum shall not be less than the figure above
named. In no event shall the carrier be liable
for more than the amount of damage actually
Neither the carrier nor the ship shall be
responsible in any event for loss or damage to or
in connection with the transportation of the
goods if the nature or value thereof has been
knowingly and fraudulently misstated by the
shipper in the bill of lading.
46 U.S.C. § 1304(5) (emphasis added). Neither DB Trade,
Propulsora nor Fletamar requested that a declaration of actual
value be inserted in the bills of lading. DB Trade's marine
cargo insurer, Employers Insurance of Wausau, and the
underwriter, American Marine Underwriters, Inc. also failed to
request a declaration of actual value. DB Trade brought ...