## Facts

- Ford Motor Company contracted with Orient Overseas Container Line Ltd. (OOCL) under a multimodal agreement to transport automatic transmission units from Blanquefort, France, to inland destinations in the United States.
- The planned route included inland carriage to Le Havre (France), ocean carriage from Le Havre to Montreal (Canada), and inland carriage from Montreal to U.S. cities.
- Ford delivered thousands of transmissions, loaded into racks and then into containers; OOCL issued bills of lading listing Blanquefort as the place of receipt, Le Havre as port of loading, Montreal as port of discharge, and various U.S. cities as places of delivery.
- During the Atlantic crossing, severe storms caused container losses and flooding, resulting in alleged loss of 4,387 transmissions and damage to 840 more.
- Ford’s cargo insurer, Royal Insurance Company of America, indemnified Ford for approximately $5.7 million and sued OOCL with Ford to recover cargo losses.
- OOCL asserted the Carriage of Goods by Sea Act (COGSA) and its $500-per-package limitation; Ford and Royal argued the Hague–Visby Rules applied compulsorily to the Le Havre–Montreal sea leg.

## Issues

1. Whether COGSA applies by its own force to the sea leg of a multimodal shipment when the ocean carriage is between foreign ports, but the cargo’s final destination is in the United States.
2. Whether the Hague–Visby Rules apply compulsorily to the ocean leg because carriage commenced at a port in a contracting state (France), and how that affects liability limitation.
3. If a limitation regime applies, whether the relevant “package” is each rack of transmissions or each individual transmission unit.

## Decision

- The Sixth Circuit reversed the district court’s partial summary judgment and remanded.
- COGSA did not apply compulsorily to the Le Havre–Montreal ocean leg because COGSA’s statutory scope is limited to carriage “to or from” U.S. ports; an inland U.S. ultimate destination does not expand that scope.
- The Hague–Visby Rules applied by force of law to the ocean leg because the shipment was from a port in France, a contracting state.
- The court left for remand the determination of the applicable limitation calculation and any “package” or “unit” characterization under the governing regime and any contractual incorporation beyond mandatory coverage.

## Legal Principles

- COGSA applies by force of law only to contracts for carriage of goods by sea “to or from ports of the United States” during the tackle-to-tackle period; foreign-to-foreign sea carriage is outside COGSA’s compulsory reach.
- The “port of loading” and “port of discharge” control COGSA’s statutory applicability; an inland ultimate destination does not convert a foreign discharge port into a U.S. discharge for compulsory COGSA purposes.
- The Hague–Visby Rules apply compulsorily to a covered bill of lading for carriage “from a port in a contracting state,” which can govern the sea leg within a broader multimodal movement.
- Compulsory application of a cargo-liability regime is distinct from contractual incorporation; parties may contractually extend COGSA or Hague–Visby terms beyond their mandatory periods, but that does not create statutory applicability.
- Where the governing regime is unsettled, “package” analysis and limitation computations must be re-evaluated under the correct compulsory regime and any valid contractual extensions.

## Conclusion

The Sixth Circuit held that COGSA’s mandatory application does not extend to a foreign-to-foreign ocean leg merely because the cargo ultimately moves to the United States, and that the Hague–Visby Rules apply compulsorily to carriage from a French port; it remanded for reconsideration of limitation and package/unit questions under the proper legal framework.


Royal Ins. Co. v. Orient Overseas Container Line Ltd., 525 F.3d 409 (6th Cir. 2008)