Plaintiff, a large producer of stainless steel, shipped a 63-ton tilt drive industrial machine (the melt shop) on board the M/V Vegaland. Nordana Line A/S (Nordana) was the common carrier and time charterer of the M/V Vegaland. While in transit, the M/V Vegaland encountered heavy weather and the melt shop was found tipped over on its side. Thereafter, the plaintiff filed a suit against Nordana claiming damage to the melt shop. Parties cross-moved for summary judgment on the issue of whether Nordana could limit its liability to USD 500 per package under COGSA/the Hague Rules. Nordana argued that the melt shop was a single package under COGSA/the Hague Rules. The plaintiff countered that: 1) the melt shop did not constitute a package; 2) Nordana did not give the plaintiff a fair opportunity to declare a higher value for the cargo; 3) M/V Vegaland unreasonably deviated from its customary service route.

Held: Partial summary judgment granted in favour of Nordana.

First, the melt shop was a ‘package’ for purposes of the package limitation under COGSA/the Hague Rules. The court reasoned that the melt shop was pre-packaged for shipment. It was fully wrapped in plastic, surrounded on all sides by wooden slats and mounted to H-beams to facilitate lashing. Therefore, the Court held that despite the size and weight of the equipment, the common sense and visual appearance of the melt shop was a package.

Second, Nordana had given the plaintiff a fair opportunity to declare a higher value for the melt shop. In order for a carrier to benefit from the package limitation under COGSA/the Hague Rules, the carrier must provide the shipper with a fair opportunity to declare the value of the package. The Court held that the terms of the bill of lading and the incorporated tariff provided by Nordana afforded the plaintiff an opportunity to declare an increased value and pay a higher freight charge. The plaintiff knew the value of cargo but chose not to declare this value in order to avoid incurring higher freight charges.

Third, Nordana did not lose the protection of the limitation of liability under COGSA/the Hague Rules, because the plaintiff has failed to create a genuine issue of material fact with regard to any deviation that occurred during the relevant voyage.