## Facts

- Bally arranged for an Italian freight forwarder, Odino, to consolidate leather goods from multiple manufacturers and ship them to Bally in New York.
- Odino packed the goods into two containers, sealed them, and tendered them to Zim for ocean carriage from Livorno, Italy to New York.
- Zim issued bills of lading describing the contents by carton count as “said to contain,” reflecting Odino’s information rather than a carrier count; Zim had no practical opportunity to verify the cartons inside the sealed containers.
- After arrival, the containers were discharged and placed with Port Security, then released to Maypo for inland trucking to Bally’s warehouse; the original seals remained intact when released from the terminal.
- At Bally’s warehouse, one container was opened and found to be short by 65 cartons.
- Bally did not weigh the container or cargo at outturn and did not provide written notice of loss to Zim within three days of delivery.

## Issues

1. Whether Bally proved a COGSA prima facie case by showing delivery of the claimed quantity to Zim and a shortage at outturn attributable to loss while the cargo was in Zim’s custody.
2. Whether a “said to contain” bill of lading for shipper-packed, sealed containers is sufficient, without more, to prove the quantity delivered to the carrier.
3. What effect Bally’s failure to provide timely COGSA notice had on Bally’s proof of short delivery.

## Decision

- The Second Circuit reversed the district court’s judgment for Bally and remanded with instructions to dismiss the complaint.
- The court held Bally failed to establish a COGSA prima facie case because it did not prove the shortage occurred while the goods were in Zim’s custody.
- The intact container seal through discharge and release, combined with the absence of objective outturn evidence (such as weighing), left open non-carrier explanations, including short packing before shipment or loss after delivery from Zim.
- The “said to contain” bills of lading did not, standing alone, prove that the stated carton count was actually delivered to the carrier in sealed-container circumstances.
- Because Bally did not establish a prima facie case, the court did not reach carrier defenses under COGSA.

## Legal Principles

- Under COGSA, a shipper generally must prove a prima facie case by showing (1) delivery of the cargo to the carrier in good order and in the claimed quantity, and (2) outturn by the carrier in damaged or deficient condition.
- For shipper-packed, sealed containers where the carrier lacks a fair opportunity to inspect or count internal units, a bill of lading stating carton counts as “said to contain” has limited evidentiary value on the quantity actually delivered to the carrier.
- Evidence that container seals remained intact through the carrier’s custodial period can defeat an inference that loss occurred during ocean carriage, absent additional proof tying the shortage to that period.
- Failure to give timely notice of loss within COGSA’s three-day period triggers a statutory presumption that the carrier delivered the goods as described in the bill of lading, placing a heavier evidentiary burden on the claimant.

## Conclusion

The court required concrete proof that the claimed carton quantity was delivered to the carrier and that the shortage occurred during the carrier’s custody; where a sealed container remained intact and the shipper relied largely on a “said to contain” bill of lading without timely notice or objective outturn evidence, the COGSA claim failed.


Bally, Inc. v. M/V Zim Am., 22 F.3d 65 (2d Cir. 1994)