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.
Reasoning:
-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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