## Facts

- Ta Chi Navigation (Panama) Corp., S.A. owned the S.S. *Eurypylus*, a cargo vessel sailing from Japan to Panama.
- On November 10, 1975, an explosion and fire occurred at sea, gutting the vessel; the ship was later sold for scrap and most cargo was destroyed.
- The fire began when acetylene gas leaking from a welding hose in the engine room ignited; oxygen and acetylene cylinders stored in a port tonnage alleyway near the engine room exploded, and the fire became uncontrollable.
- A central factual dispute was whether storing oxygen/acetylene cylinders in that alleyway was proper practice.
- Cargo claimants offered expert testimony that the storage was unsafe; the shipowner offered contrary evidence, including that the ship was built with a storage rack near the engine room and carried Lloyd’s 100 A-1 classification.

## Issues

1. What are the correct elements and burdens of proof under COGSA in cargo-damage claims involving a shipboard fire where claimants allege negligence or unseaworthiness.
2. In a limitation proceeding, how the court must sequence (a) proof of causative negligence/unseaworthiness and (b) the shipowner’s proof of lack of privity or knowledge.
3. Whether the district court improperly treated the cylinder-storage arrangement as effectively establishing unseaworthiness or fault by misallocating burdens and failing to apply the proper analytical framework.

## Decision

- The Second Circuit reversed the judgment that denied exoneration/limitation and imposed cargo liability on the shipowner.
- The court held the district court erred in defining and allocating the elements and burdens of proof in the combined COGSA cargo case and limitation action.
- The case was remanded for further proceedings under the correct burden-shifting and limitation standards.

## Legal Principles

- Under COGSA, cargo interests generally must first establish a prima facie case by showing good-order delivery to the carrier and damaged (or non-) outturn; the carrier then seeks to bring the loss within a statutory defense (including the fire defense, where applicable) consistent with COGSA’s burden framework.
- Unseaworthiness or negligence must be established within the proper COGSA structure; a court may not effectively shift to the carrier the obligation to disprove fault by treating a contested condition as dispositive without the required proof sequence.
- In limitation proceedings, claimants bear the initial burden to prove causative negligence or unseaworthiness; only after such fault is shown does the shipowner bear the burden to prove the absence of privity or knowledge.
- When evaluating alleged unseaworthiness tied to shipboard practices or equipment placement, courts must weigh the full evidentiary record (including classification/design evidence and expert testimony) under the correct burden allocation, rather than substituting an assumed safety rule for the legal standard.

## Conclusion

The Second Circuit required reconsideration of cargo-fire liability and limitation under a correctly structured allocation of proof, reversing because the district court’s approach improperly fixed the elements and burdens governing COGSA claims and the shipowner’s limitation petition.


In re Ta Chi Navigation (Panama) Corp., 677 F.2d 225 (2d Cir. 1982)