The plaintiff claimed against the carrier for damage suffered by the 54.5 ft motor yacht Sea Ray Sundancer during its sea transport from the port of Miami, United States, to the port of Buenos Aires, Argentina, on the MV Stadt Bremen. Even though the bill of lading did not mention any layover or transhipment, the yacht was unloaded in Kingston, Jamaica, and loaded on board the MV Stadt Wismar. At the stopover in Santos, Brazil, as the yacht was not declared to Customs in transit, it was unloaded and seized by the Brazilian Customs for auction.

Held: The Court mentioned that carriage of goods covers the period from the time the goods are loaded onto the ship to the time they are discharged from the ship (from 'tackle to tackle'). The Court added that nothing contained in the Hague Rules prevents the parties from entering into any agreement as to extending the Rules' applicability prior to the loading onto and subsequent to the discharge from the ship. In fact, it is not rare that the bill of lading makes use of said capacity by clauses that lengthen the extension of the carrier's defences and limitations of the Hague Rules to the whole period in which the carrier is responsible for the goods by virtue of the law or the contract.

In addition, it is important to highlight that the relations between the carrier and the shipper are contractual and consequently the liability is normally based on the breach of the contractual obligations of one of the parties.

The Hague Rules state that 'before and at the beginning of the voyage the carrier shall be bound to exercise due diligence to make the ship seaworthy, to properly man, equip and supply the ships, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried, fit and safe for the their reception, carriage and preservation' (art 3.1). In addition, the carrier shall 'properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried' (art 3.2).

Under the liability system of the Hague Rules, the carrier is responsible for the loss or damage of the goods resulting from the violation of any of those duties. This suggests an obligation of means and not an obligation related to the ends desired - in this respect the Court of Appeals disagreed with the First Instance Court. The carrier does not guarantee that the goods received will be undamaged. The carrier only binds itself to act with due diligence in order to achieve such a result.

Furthermore, under the Hague Rules it is generally understood as a rule that if the goods were received in sound condition by the carrier - a fact that is presumed by the lack of reservations or objections in the bill of lading - the delivery of these goods to the consignee with damage or shortage, or the non-delivery of the goods - as in this case - creates the assumption that the damage occurred under the carrier's custody and would be attributed to its fault. This assumption, or prima facie evidence, in the Anglo-Saxon terminology, is like any other proof, entitled to be rebutted with contrary evidence, but not with only suppositions or speculations, as the appellant intends when it mentions that the administrative proceedings in Brazil have not yet been finalised, and that it is therefore not possible to state that there is a definitive loss of the yacht or its auction or disposal.

In cases like this it is clear that the fact that the yacht has not been delivered has full probative value, and the Court considered that the carrier had not acted with due diligence. In fact, the Court understood in this regard - and in keeping with what was expressed by the first instance Judge - that the defendant could not ignore the severe consequences deriving from the omission to declare the goods to the Brazilian Customs authorities and therefore it is fair that the carrier should compensate the damage caused to the plaintiff in full, considering that its conduct has been reckless. Thus, the first instance judgment should be confirmed, the Court stated.