The plaintiff, an offshore drilling company, contracted to ship cargo of marine drilling components from Port Klang, Malaysia, to Mobile, Alabama, on the M/V Pac Altair. The cargo was carried 'on deck'. Part of the cargo was lost or damaged by a ‘rogue wave’ during transit. The plaintiff brought an action in contract and tort against several parties involved in the shipment and moved for summary judgment against the carrier, which had issued a bill of lading identifying the plaintiff as a ‘Merchant’ subject to its terms.

The bill of lading at issue contained language stating that the identified cargo is ‘shipped on deck at shippers risk & expense’. It further contained a provision stating that if COGSA / Hague Rules applies, it ‘shall govern before loading and after discharge and throughout the entire time the cargo is in the Carrier’s custody'. The provision also stated that if COGSA / Hague Rules applies, 'the Carrier shall in no event be or become labile for any loss or damage to the cargo in an amount exceeding USD 500 per package'.

The Plaintiff moved for summary judgment arguing that the COGSA / Hague Rules limitation of liability did not apply to the on-deck cargo.

The issues before the court were:

1. Whether the deck cargo was subject to the COGSA / Hague Rules limitation of liability by its own force;
2. Whether the deck cargo was subject to the COGSA/ Hague Rules limitation of liability through an express provision in the bill of lading.

Held: 

The court held that COGSA / Hague Rules did not apply to the shipment by its own force. Interpreting COGSA / Hague Rules art 1(c), the court found that the ‘goods’ subject to COGSA / Hague Rules expressly exclude on-deck cargo.

The court further held that the COGSA / Hague Rules limitation of liability did not apply to the shipment by way of any bill of lading clause. While the court acknowledged it is possible for parties to contractually extend such limitations of liability to on-deck cargo, the bill of lading at issue failed to do so. The court found that the ‘shipper’s risk’ clause did not contain the ‘sufficiently express language’ and that the clause paramount only referenced ‘the cargo’ rather than the ‘on-deck cargo.’ Since the bill of lading was ‘wholly silent’ regarding the application of COGSA / Hague Rules to on-deck cargo, the court held that the limitation of liability did not apply.