BLUMENFELD, Senior District Judge:

This appeal from a judgment of the District Court for the Southern District of New York limiting damages to $500 per container again confronts us with the interpretation of the term "package" as used in section 4(5) of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1304(5). This provides in pertinent part:

Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, . . . unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

The Facts and Proceedings Below

The vessel M/V "Eurygenes" loaded cargo in Japan in August 1973 for carriage to New York and European ports. After sailing from New York, where she had loaded additional cargo, there was a fire on board the vessel which destroyed or damaged a substantial quantity of her cargo.

Two suits were filed in the United States District Court for the Eastern District of New York to recover cargo losses. Included were losses sustained in three shipments made by Universal Electric Merchandise Co. (Universal) consisting of cartons of stereo equipment packed in containers bound for European ports. Subsequently, the suits were transferred to the United States District Court for the Southern District of New York for consolidation with other litigation arising out of the same fire.

A settlement formula was agreed on and embodied in a consent decree. Agreement could not be reached with respect to the three shipments of stereo equipment as to whether the "package" limitation should apply to the containers or to the cartons within the containers. The issue was referred to Magistrate Raby by the district court.

The hearing before the Magistrate revealed that the ship was capable of carrying both containerized and break-bulk (noncontainerized) cargo. Universal chose to use containers because in the past it had lost considerable cargo due to pilferage. The containers were supplied by the carrier, but were loaded and sealed by Universal's freight forwarder, who delivered them to the ship.

The bills of lading specified both the number of containers ( e.g., 8 containers) and the number of cartons ( e.g., 1500 cartons). The bills of lading incorporated the terms of COGSA, 46 U.S.C. § 1300 et seq. by reference, and specified that they would be construed according to the laws of the United States.

The Magistrate applied the "functional economics" test of Royal Typewriter Co. v. M/V Kulmerland, 483 F.2d 645 (2d Cir. 1973). He found that the cartons in which the stereo equipment was packed were functional and capable of being shipped without being containerized, giving rise to a rebuttable presumption that the parties intended that the cartons should constitute the COGSA "package." The Magistrate then proceeded to examine other relevant factors and concluded that there was a "subjective intent" that the containers, not the cartons, should constitute the COGSA "packages."

The district court rejected the Magistrate's finding of "subjective intent" concluding that the parties had not agreed on the definition of the term "package" for purposes of ascertaining liability. The district court, however, applied the $500 limitation to the containers, basing its decision on the fact that the "shipper had the option to ship its goods either break-bulk or by container" and it chose to containerize. The district court effectively held that the shipper's choice of containers instead of break-bulk shipment indicated its acquiescence in the definition of the container as the COGSA "package."

Subsequent to the district court's decision, this court issued its opinion in Mitsui Co. Ltd. v. American Export Lines, 636 F.2d 807 (2nd Cir.). The question on appeal is whether the district court's decision limiting recovery to $500 per container should be upheld in light of our opinion in Mitsui. Having determined that it should not, we reverse and remand to the district court for calculation of damages.

Discussion

In Mitsui this court, after reviewing the Congressional policy reflected in section 4(5) of COGSA and the rationale of Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800 (2d Cir. 1971), as well as the problems with the "functional economics" test of Kulmerland, held that "generally a container supplied by the carrier is not a COGSA package if its contents and the number of packages or units are disclosed [in the bill of lading] . . . ." 636 F.2d at 821. Judge Oakes, the author of Kulmerland and Cameco, Inc. v. S.S. American Legion, 514 F.2d 1291 (2d Cir. 1974), concurred in Mitsui saying: "[i]n the realm of container shipping, where the bill of lading specifies the contents, the ship's container should not be deemed a package — even presumptively only — irrespective of how the goods within it are packed." 636 F.2d at 825.

Appellees in the instant case ask us to distinguish Mitsui on the basis that here the shipper chose to use containers. Because we do not understand the rationale of Mitsui to be limited to cases where the shipper is "forced" to use containers, we see no basis for distinguishing Mitsui from the instant case.

Appellees' attempt to distinguish this case from Mitsui on the basis of Universal's choice of containers implies that the nonexistence of such a choice was a critical factor in Mitsui and our previous cases. Appellees contend that the existence of such a choice negates the possibility that the carrier, through its superior bargaining power, coerced the shipper into utilizing containers in order to reduce its liability, and that absent such coercion, the general rule of Mitsui does not apply.

While it is true that there is some language in Leather's Best and Mitsui which indicates a concern with the equality of bargaining strength between the shipper and the carrier, neither of those cases relied solely or even primarily on that ground. In both those cases the ships carried only containers, but that fact was not stressed nor specifically relied on in the holdings.

Were appellees correct in their contention that coercion or an unequal bargaining situation was an essential component of Mitsui, one would expect to find some discussion of that point in our cases. In our careful review of Mitsui, we find only one reference to bargaining power, where Judge Friendly, writing for a unanimous court, observed that one purpose of section 4(5) was to fix a "minimum level of liability . . . to prevent carriers from using their superior bargaining power to compel shippers to agree to provisions reducing their liability to insignificant amounts." Id. at 815.

Clearly, the above quotation does not support appellees' argument that Mitsui relied on the existence of an unequal bargaining relationship for its holding. Nowhere in Mitsui or any of our previous cases, are there specific findings that an unequal bargaining relationship existed or that the shipper was coerced into using a container-only ship. In order to explain the conspicuous absence of findings or discussion of the "choice" (bargaining strength) issue in our previous cases, appellees would argue that such findings were unnecessary because in the context of a container-only ship, a coerced choice could be assumed, since it was the only choice. Such an argument, however, misses the point. Were a finding of an unequal bargaining relationship necessary to our previous holdings, we would have had to inquire into the question of whether the shipper freely chose the all-container ship in the first instance. That no such inquiry took place only indicates that we never considered the existence of unequal bargaining power to be determinative of the meaning to be ascribed to the term "package."

Not only did our previous cases not rest on a finding of coercion or lack of choice, but the attempt to distinguish this case from our precedents on the basis of the shipper's "choice" is unsound. In all our previous cases, it could have been argued that the shippers chose to use containers, inasmuch as they contracted with a ship which they knew carried only containers. Presumably, the shippers could have chosen to send their cargo break-bulk by contracting with a ship which handled cargo in that manner. The choice of containers in the context of a mixed-cargo carrier (break-bulk and containers) is no different from the initial choice to ship, via an all-container ship. Both choices may reflect the shipper's desire to utilize containers for a variety of reasons. Appellees' argument implies that whenever a shipper affirmatively prefers to use containers for its own convenience, then it must be held to have agreed that the container will be the COGSA "package." Because Mitsui and our previous cases clearly do not support such a proposition, we reject appellees' argument.

Mitsui and its predecessors were not primarily concerned with the actual or potential inequality of bargaining power between shippers and carriers. They were concerned with interpreting section 4(5) of COGSA to give effect to the congressional purpose of establishing a reasonable minimum level of liability. See Mitsui, 636 F.2d at 815; Leather's Best, 451 F.2d at 815. To give effect to this purpose, the courts must "take a critical look at any proposed construction of [section 4(5) ] that would reduce a carrier's liability below reasonable limits." Mitsui, 636 F.2d at 815.

Appellees argue that we need not concern ourselves with the congressional policy underlying COGSA, because the shipment involved in this case was from Japan to European ports, and therefore the statute was not applicable ex proprio vigore. Appellees argue that since the policy concerns of COGSA are inapplicable, we should look to the intent of the parties to establish the meaning of the term "package." Our attention is directed to Pannell v. United States Lines Co., 263 F.2d 497 (2d Cir. 1959), which held that "when COGSA does not apply ex proprio vigore, effect should be given to the parties' definition of package even if that definition is contrary to that which would control if COGSA were directly applicable." Commonwealth Petrochemicals, Inc. v. S/S Puerto Rico, 607 F.2d 322, 325 (4th Cir. 1979).

Were this a case where the parties had defined what "package" means in the bills of lading, we would find appellees' argument persuasive. This case, however, is unlike Pannell and Commonwealth Petrochemicals precisely because the bills of lading do not define "package." Appellees state again and again that the bills of lading clearly indicate Universal's assent to the definition of "package" as the containers. We agree with Judge Goettel, however, that the bills of lading quite obviously do not support such a contention. On the contrary, on their face the bills of lading reflect the lack of agreement, insofar as they refer to both "containers" and "cartons." We are not dealing here with a case where the parties' intent is clear and unambiguous. We are thus forced to look elsewhere for the definition of "package." The bills of lading incorporate COGSA and specifically make provision for interpretation according to the laws of the United States. It is therefore appropriate to follow prevailing case law in this circuit in our interpretation of the term "package."

It is undeniable that Mitsui's holding that generally a carrier-supplied container is not a COGSA package if its contents are disclosed is applicable to the instant case. Appellees, however, seek to distinguish this case from Mitsui on several grounds. First, appellees argue that where, as here, the shipper loaded and sealed the container, the carrier should not be held to the shipper's self-serving description of its contents for the purposes of the package limitation. The short response to this argument is that the same situation was present in Mitsui, and this court did not consider it significant.

In Mitsui the containers "were packed and sealed by the shippers at their own premises and were intended to be forwarded, unopened, to the consignees at their place of business in Japan." Id. at 811. There is no mention of the carrier or its agent checking the contents of the containers, and no indication that the carrier's failure to verify the container's contents was considered significant. In Leather's Best a truck driver did watch the loading of the container and issued a receipt, 451 F.2d at 804 and n.2, but no special significance was attached to that fact. Appellees would have us seize on this comment in Leather's Best and construct a rule that the contents of the container cannot be the COGSA package where the carrier (or its agent) has not verified the contents of the container. Mitsui obviously does not support such a rule, and we decline to adopt it in this case.

Appellees' second argument is that because the shipper can protect himself by declaring the full value of the goods and paying a higher tariff, the limitation clause should not be strictly construed against the carrier. Judge Friendly rejected this argument in Mitsui:

We find scant force in the argument that there is no need for a fairly strict construction of the package provision since a shipper can always protect himself by declaring a higher value and paying a higher rate. Although this was doubtless expected at the time of the drafting of the Hague Rules, see Diplock, [ Conventions and Morals — Limitation Clauses in International Maritime Conventions, 1 Journal of Maritime Law and Commerce 525 (1970)] at 529, "[t]he option to declare a higher value is practically never exercised." One obvious reason is that a declaration of value and payment of higher ad valorem rates benefits the shipper or consignee only when the carrier is liable. Shippers, consignees and persons financing maritime transactions insist on insurance that will protect against all risks of shipment, including loss or damage attributable to such causes as acts of the crew, fire, perils of the sea, not just those risks for which recovery may be had under COGSA. As Lord Diplock has explained:

[T]he increase over the standard freight rates which the carrier requires for accepting the higher liability is greater than the reduction in the insurance premium which the cargo insurer is prepared to offer for the prospect of recovering a higher amount from the carrier or his P. and I. insurer, in the event of a loss for which the shipper [sic] is liable . . . . There are so many risks covered by the cargo insurance policy that the prospect of recovery in respect of one of them has little influence in fixing the premium, whereas the risk of liability to the cargo-owner is one of the principal risks insured under the carrier's P. and I. policy, and his maximum liability is a significant factor in the rates of premiums.

Diplock, supra, at 529.

Id. at 815-16 n.9.

[Mitsui] adopted a general rule that where the bill of lading discloses the contents of the container, then the container is not the COGSA package. This general rule both adheres to the congressional purpose behind the statute and meets the goal of international uniformity. See Mitsui, 636 F.2d at 821. Appellees argue that this seemingly straightforward pronouncement is not really what it appears to be. Instead, appellees would have us apply something similar to the twelve criteria analysis employed by Judge Clarke in Complaint of Norfolk, Baltimore Carolina Line, Inc., 478 F.Supp. 383 (E.D.Va. 1979).

We decline to adopt Judge Clarke's analysis because we do not believe it is a "common sense test" which will help "avoid the pains of litigation." See Kulmerland, 483 F.2d at 649 (quoting Standard Electrica, S.A. v. Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft, 375 F.2d 943, 945 (2d Cir.), cert. denied, 389 U.S. 831, 88 S.Ct. 97, 19 L.Ed.2d 89 (1967)). Judge Clarke's analysis is essentially another means for arriving at the intent of the parties where such intent is not clear from the bill of lading. Mitsui and Leather's Best rejected a complex intent analysis in favor of a clear rule that where the contents of the container are disclosed in the bill of lading then the container is not the COGSA package. The rule has the advantage of being a bright line, achieving "certainty" but not "at the expense of legislative policy and equity . . . ." Mitsui, 636 F.2d at 825 (Oakes, J., concurring) (quoting Judge Feinberg's statement in dissent in Standard Electrica, 375 F.2d at 948). Mitsui and our decision today will put carrier interests on notice that the container will not be considered the COGSA "package" where the bill of lading discloses the contents of the container. Mitsui's holding is consistent with the congressional purpose of establishing a reasonable minimum level of liability. And nothing in appellees' argument suggests that Mitsui is inequitable to carrier interests.

Mitsui's general rule does not resolve all the questions in these "package" cases. It merely resolves the question of whether the container is the COGSA "package." Having determined that it is not, we must consider whether this is a "case of goods not shipped in packages," in which case the $500 limit applies to the "customary freight unit." COGSA § 4(5), 46 U.S.C. § 1304(5). See Mitsui, 636 F.2d at 818. In the instant case, there is no evidence which leads us to conclude that the cartons are not "packages" for COGSA purposes. It is conceded that these same cartons were shipped break-bulk. The carrier has not argued that the cartons are not "packages" within the statutory language, nor that some other customary freight unit is more appropriate. We therefore hold that the $500 per package limit on liability applies to the stereo cartons in this case.

In conclusion, we hold that our decision in Mitsui applies to this case, regardless of the fact that the shipper had a choice of break-bulk or container shipment. In view of Mitsui, it was error to conclude that the shipper's choice indicated its acquiescence in the definition of the "package" as the container. Accordingly, we are constrained to reverse and remand to the district court for calculation of damages in keeping with this opinion.