## Facts

- Associated Metals & Minerals Corp. (Associated Metals) purchased steel shipped from Bilbao, Spain to Port Elizabeth, New Jersey aboard the M/V Arktis Sky.
- The bill of lading contained a clause calling for application of foreign maritime rules as the statutory framework for the carriage and cargo liability, and those rules provided higher liability limits than COGSA’s $500-per-package cap.
- The shipment consisted of galvanized steel in coils; the cargo was loaded and stowed in Spain using stevedores engaged on the shipper’s side under “F.I.O.S.” (free in and out stowed) terms allocating loading/stowage work to the shipper/its stevedore.
- During the voyage the cargo shifted, and upon arrival some coils were found damaged, with claimed losses of about $249,629.76.
- Associated Metals sued the vessel in rem and related vessel interests in federal district court for cargo damage.
- Defendants asserted COGSA defenses, including (a) limitation of liability to $500 per package under COGSA § 4(5) and (b) liability exceptions under COGSA § 4(2), arguing the loss resulted from acts/omissions attributable to the shipper or its stevedore under the F.I.O.S. arrangement.
- Associated Metals moved to strike the $500-per-package limitation defense, contending the bill of lading’s foreign-rules clause displaced COGSA’s limitation.
- On the merits, the parties sought summary judgment; the carrier argued it was exonerated from liability under COGSA exceptions as a matter of law.

## Issues

1. Whether the bill of lading’s clause adopting foreign maritime rules with higher limits displaced COGSA so as to prevent defendants from invoking COGSA’s $500-per-package limitation defense.
2. Whether, given the F.I.O.S. loading/stowage allocation and the record on stowage and cargo shifting, defendants established COGSA § 4(2) exceptions as a matter of law, warranting summary judgment and dismissal of the cargo claim.

## Decision

- The court denied Associated Metals’ motion to strike defendants’ affirmative defense under COGSA § 4(5) and allowed defendants to maintain the $500-per-package limitation defense.
- The court treated COGSA as governing the dispute in U.S. litigation notwithstanding the bill of lading’s reference to foreign rules.
- On the merits, the court granted summary judgment for defendants, concluding they had established COGSA exceptions as a matter of law based on the contractual allocation of loading/stowage responsibilities under F.I.O.S. terms.
- The complaint was dismissed.

## Legal Principles

- When COGSA governs carriage to or from the United States, a carrier may invoke the statute’s defenses and limitation provisions unless the contract clearly and specifically substitutes a different, valid liability regime.
- A bill of lading’s general reference to foreign maritime rules with higher limits does not, without clear language of substitution, eliminate the carrier’s ability to assert COGSA § 4(5)’s $500-per-package limitation in U.S. court.
- In a COGSA cargo case, once the cargo interest makes a prima facie showing (receipt in good order and delivery in damaged condition), the burden shifts to the carrier to prove a statutory exception under COGSA § 4(2) caused the loss.
- Contract terms such as F.I.O.S. provisions may allocate the performance of loading and stowage to the shipper/its stevedore; where the loss is shown to stem from the shipper’s acts or omissions (or those of its agents), the carrier may rely on the corresponding COGSA § 4(2) exception.
- Summary judgment is appropriate where the record permits only one conclusion as to the applicability of COGSA defenses and exceptions.

## Conclusion

The district court held that COGSA governed the dispute and that the bill of lading’s foreign-rules clause did not bar defendants from asserting COGSA’s $500-per-package limitation. The court further ruled that, under the F.I.O.S. allocation and the evidence presented, defendants established COGSA exceptions as a matter of law, granted summary judgment in their favor, and dismissed Associated Metals’ cargo-damage claim.


Associated Metals & Minerals Corp. v. M/V Arktis Sky, 1991 AMC 1499 (1991)