Ferrostaal, Inc. v. M/v Sea Phoenix Formerly Known as M/v Express Phoenix Interway Shipping Co. Ltd. Pacific & Atlantic Corp. Trans Sea Transport Nv Delaro Shipping Company Limited, 447 F.3d 212, 3rd Cir. (2006)
Case name: STANDARD BRANDS, Inc., v. NIPPON YUSEN KAISHA et al.
Date: November 19, 1941. Plaintiff: Standard Brands Respondents: Nippon Yusen Kaisha, Boston Terminal Analysis of case: (summarize the case, rules or shipping act used, final judgment) On the morning of November 3 rd , 1939, Friday, the S. S. "Arima Maru" arrived at the Army Base Pier, Boston, and immediately began unloading. Notice of its arrival was sent to the plaintiff that day. The unloading, which was conducted by stevedores employed by agents of the respondent, was not completed until 11 A. M. of the following day, which was a Saturday, November 4 th . The consignee was not present or in any way represented at the unloading operations. The tea was placed in a storage shed on the wharf, the use of which was provided to the respondent for six days without storage charge as an incident to their docking accommodations. The tea was placed on the floor of the shed about two feet away from a sliding door which was some twenty-five feet wide, and which opened out onto the wharf facing north. This door opened and closed by sliding it up and down. Due to some defect, it could never be completely shut, so that when it was pulled down as far as it would go there remained a gap about two inches wide between the bottom of the door and the floor. The only protection beneath plaintiff's cargo, separating it from direct contact with the floor, was a thin layer of sawdust. On the Sunday night, November 5 th , the plaintiff's tea was damaged by a large quantity of water seeping underneath the door during a storm. The wind, blowing from the northeast during a heavy rainstorm, was one of the severest ever recorded in Boston, reaching a velocity at one time of fifty-six miles per hour. Efforts were made to stop the seepage of water by placing sawdust bags along the bottom of the door, but without success. On other occasions water had leaked underneath this door. NYK, the respondent contends that it cannot be held liable, first, because its liability as a common carrier had terminated under the terms of the bill of lading; second, because there was no negligence on its part causing the damage; and, third, because the damage was the result of an "act of God". It is true that, under the bill of lading involved, the respondent's liability as a common carrier had ceased on discharge of the cargo from the ship. However, according to the local admiralty law of U.S, where the consignee is not present to accept immediate delivery of the goods, regardless of the form of the contract of carriage, the carrier cannot exempt itself from its negligence in exposing goods to loss or damage after discharge from its ship. Until receipt by the consignee, the carrier, despite any terms to the contrary in its bill of lading, continues to hold goods unloaded by it as a financial guarantee. Or, as some cases have put it, where, by the terms of the bill of lading, the contract of carriage terminates on discharge of the cargo from the ship, its liability changes from that of a common carrier to that of a warehouseman, and, as such, it is bound to exercise ordinary care in the protection of the goods. The plaintiff was not negligent in failing to seasonably remove its shipment of tea. The unloading operation continued until almost noon on Saturday, and it was reasonable for the consignee to wait over the weekend before coming to get its goods since they were not perishable, and it probably knew that the respondent was allowed six days free use of the storage sheds on the wharf where the ship docked. On the other hand, placing the tea on the floor within two feet from a door which could not be properly closed, and under which water had leaked on previous occasions, was certainly not exercising the degree of ordinary care which would be expected of any warehouseman for hire. Heavy rains are to be expected at the time of year when this damage occurred. A reasonable amount of precaution in blocking the gap under this door, or placing elevating supports under these chests, or placing them far enough away from the door so as to be free from seepage water, would have prevented the damage. The contention of respondent that the damage was occasioned by an "act of God" is without merit, since, the injury could have been avoided by precaution. The final judgment is that the respondent was negligent in failing to properly care for the plaintiff's consignment of tea. The plaintiff is entitled to recover from the respondent the sum of $295.20.
Strategic analysis: (compare the differences in monetary value if different rules to be used for the similar cases (only for that particular section under the rules used), e.g. if now NYK follow Hague-Visby Rules, What will be the compensation, liability or punishment when compare to Hamburg Rules and soso) In my case, as it used the local rules, so I have to compare the value if the case is using Hague-Visby Rules. At that time, both U.S and Japan did not sign the Hague-Visby Rules and the forum in which the dispute was litigated was in U.S. Thus, local admiralty law of U.S is used to make the judgment due to no other choices. For this case, the NYK is considered win the court case by shifting the liability to Boston Terminal. If NYK is held liable, it has to pay $295.20 to recover lost of the plaintiff, Standard Brands. If NYK is going to compensate under Hague-Visby Rules which it ratified in 1979, it has to pay around SDR 10,000.
Recommendation: (it is the same at which we compare the differences between the rules used for that particular section under those rules, for my case is carrier liability and compensation compared between Hague-Visby and Hamburg Rules..e.g. if ur case used Hamburg rules, u will compare it with Rotterdam rulesand finally give recommendation, whether NYK which come under NYK, should sign higher rules or not, like Hague-Visby rules -> Hamburg Rules) Since Japan ratifies Hague-Visby Rules in year 1979, if similar cases happened again and NYK is held liable, the compensation will be SDR 2 per kilogram or SDR 667 per package, whichever is higher. For comparison purpose, if Japan chooses to sign the Hamburg Rules, the compensation would become SDR 2.5 per kilogram or SDR 835 per package. Under Hamburg Rules, the carrier is liable for the risk in goods from the moment the goods are put under his or her care until the time they are delivered as agreed. This means as long as the consignee have not recognize the successful of delivery, NYK is still held liable even it shifted the responsibility to the Boston Terminal. However, in Hague-Visby Rules, the carrier only liable for the risk in goods during the carriage of goods- the period after the goods pass the ships rail for loading and before the goods pass the ships rail for discharged. For similar case, NYK would not longer to be held liable once the goods are discharged completely at the Boston Terminal. Therefore we recommend that Japan only stick with the Hague-Visby Rules instead of upgrading it into Hamburg Rules since it is not good for the NYK, one of the biggest shipping companies in Japan.
Ferrostaal, Inc. v. M/v Sea Phoenix Formerly Known as M/v Express Phoenix Interway Shipping Co. Ltd. Pacific & Atlantic Corp. Trans Sea Transport Nv Delaro Shipping Company Limited, 447 F.3d 212, 3rd Cir. (2006)