Saturday, May 17, 2014

Fruit of the Loom v. Arawak Caribbean Line Ltd. case brief summary

Fruit of the Loom v. Arawak Caribbean Line Ltd. case brief summary
Facts: FRUIT contracted with ARAWAK, an ocean carrier, to carry goods from Jamaica to FRUIT’s warehouse in Kentucky. The goods were to be shipped by “multimodal transport” first by a sea carrier from Jamaica to Florida then by trucks from Florida to Kentucky. FRUIT used a nonnegotiable through bill of lading. ARAWAK sub-contracted with SEASIDE, who was responsible for picking the goods up from Florida and transporting them by truck to Kentucky. The goods made it safely to Florida, however, when they were in SEASIDE’s trucks and en route to Kentucky the trucks were hijacked and the goods stolen. The Contract between FRUIT and ARAWAK had a “Clause Paramount” which states that COGSA applies to all forms of transportation, as long as it is in the possession of the carrier or his agent (This is how we know that ARAWAK can be responsible for the trucking portion of the shipping). Further, there is a “Himalaya clause” which Extends liability to an agent or subcontractor (non-ocean carriers) (We know that Seaside is subject to the terms of COGSA because of this clause). Lastly, the contract had an exceptions clause, which limited liability if it were due to “acts of public enemies, thieves, pirates, or assailing thieves. Fruit argues that this clause should not apply in this case because they believed that it was an inside job.
Issue: Which law should apply: a) Carriage of Goods by Sea COGSA (which Arawak wants to apply because of the $500 limited liability of the act; or b) The Interstate Commerce Act
Holding: COGSA applies; Fruit bargained for a transportation contract with Arawak wherein Fruit assumed the risk of cargo loss resulting from criminal hijackings due to the exceptions clause.
-Through bill of lading: When a bill of lading is issued to a destination, which requires multimodal transport, all connecting carriage is subject to the bill of lading.

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