A consignment of relays was water damaged during ocean carriage from China to Denmark. The cargo insurers claimed against the carrier for their loss. The court concluded that the goods were a total loss. Even if the carrier could limit its liability, the limit exceeded the limit of liability as the goods were described in the bill of lading.
A cargo owner contracted a carrier to carry a consignment of relays from China to Denmark. When the goods arrived, the packaging was found water damaged. The relays were surveyed in order to ascertain the amount of damage and whether the relays themselves had been damaged. During the survey the surveyor found cockroaches in the consignment as well.
The relays were an important part of the machines they were intended for and the question was whether the court would find them a total loss based only on the survey and information from the cargo interest.
In addition, the carrier alleged that they were able to limit liability for damage to 5 packages, as the amount of packages in the bill of lading was noted to be 5. This applied although elsewhere the description of the goods in the bill of lading was 5 pallets / 108 cartons, and this had been listed in the packing list sent to the carrier when the carriage was booked.
The relays were a total loss
The court found that it would be impossible to sell the relays as they were a critical component in the safety of the machines they were intended for and their failure could cause great damage to other products. The expenses that would have to be incurred to ascertain the condition of each and every relay would exceed the revenue that could be had by selling them as well, and it was not possible to exclude a risk of corrosion in any event. They were, therefore, a total loss.
The court further found that the bill of lading listed 108 packages from which to calculate limitation, even if this was not written in the correct place in the bill. The carrier had executed the bill and bore the risk of it being unclear.
IUNO’s opinion
The decision shows that the court takes the function of the goods and viability of an inspection into regard when deciding whether goods are damaged. It also shows that the carrier’s description of the cargo in a bill of lading can be set aside and cannot be determined by the carrier alone. This is in line with Danish law in general.
IUNO recommends that bills of lading are inspected carefully on receipt to root out such issues.
[Maritime and Commercial High Court judgment of 21 April 2023 in case BS-36988/2022-SHR]