The plaintiffs, Canadian cargo owners, sued the defendants, US-based terminal operators, for negligent handling of an electrical cabinet. Plaintiffs alleged that cargo was safely transported from Italy to Baltimore by ocean carriage, but in the care of defendants at the Port of Baltimore the cargo fell on its side when being transferred to a flatbed truck, resulting in damage of USD 500,000.

The plaintiffs had contracted with an ocean carrier to perform the ocean carriage and provide stevedoring and terminal services at the port in Baltimore. The carrier issued a bill of lading, which contained a clause extending COGSA / Hague Rules ‘until the time the goods were delivered to the Merchant at the port of discharge’. The bill of lading also contained a Himalaya clause allowing the defendants to invoke its terms for their own benefit.

The defendants filed a motion for summary judgment arguing that the suit was time barred under the COGSA / Hague Rules one-year statute of limitations or alternatively capped by the COGSA / Hague Rules USD 500 limitation on liability.

The issues before the court were:

(1) Whether COGSA / Hague Rules applied at the time of the loss;

(2) Whether the claim was time-barred under COGSA / Hague Rules;

(3) Whether the defendants' liability was limited under COGSA / Hague Rules.

Held: While COGSA / Hague Rules 1.e on its terms covers only the period from the time the goods are loaded to the time they are discharged from the ship, parties are free to extend its coverage by the terms of the bill of lading. The parties agreed that the bill of lading at issue extended COGSA / Hague Rules to the time of delivery to the consignee.

However, a genuine issue of material fact remained as to whether the cargo had been actually or constructively  delivered to the consignee at the time of the loss. In particular, it was unclear whether the defendant was acting on behalf of the carrier or on behalf of the trucking company hired separately by the consignee when loading the cargo onto the truck. If acting on behalf of the carrier, COGSA / Hague Rules would apply because delivery would not yet have been accomplished, but if acting on behalf of the trucking company COGSA / Hague Rules would not apply because delivery would have already taken place.