Liability of Third Party on Bill of Lading

The U.S. Court of Appeals for the First Circuit ruled that a third party can be liable on a bill of lading based on its conduct. In the instant case, a cargo owner arranged for shipment of frozen fish and prepared a bill of lading naming itself as the shipper. The consignee orally agreed to pay to the carrier the applicable freight charges. The cargo was shipped and the consignee paid the freight charges. The cargo owner arranged a second shipment in the same manner and the consignee again agreed to pay the freight charges. The cargo was delivered, but the freight charges were not paid. The carrier brought suit against both the shipper and the consignee. The consignee contended that, because it was not named as a party on the bill of lading, it was exempt from liability under the Carriage of Goods at Sea Act (COGSA). The court held that COGSA only creates a presumption regarding liability, which can be overcome by evidence of the conduct of the parties. Eimskip, The Iceland Steamship Company, Ltd v. Atlantic Fish Market, Inc. , No. 04-2168 Source: HK Law