Defendants found not liable in maritime shipping case

A federal appeals court recently ruled against a company’s lawsuit against multiple defendants for property that arrived in damaged condition after being transported by ship from Asia.

The Fifth Circuit Court of Appeals affirmed a summary judgment against QT Trading LP which sought damages for its order of steel pipes that allegedly arrived in rusty condition after being transported on ship from Dalian, China to Houston, Texas.

QT sued the Chinese company, ship charterer, ship owner and ship operator.

It turned out that the company that sold the pipes went bankrupt.

At issue before the court was whether the remaining defendants were liable for the damage under the Carriage of Goods by Sea Act, or COGSA.

The court affirmed the summary judgment because none of the other parties met the requirement of “carriers” under COGSA. It also rejected QT’s argument that the other defendants were liable under a bailment theory. The court said that under bailment the property must remain in the exclusive possession of a bailee, and in this case the bills of lading showed that the pipes were not in the exclusive possession of any one party.

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Source: Hawaii Ocean Law.com