Opinion
99 Civ. 4183 (MBM)
March 25, 2002
WILLIAM R. BENNETT, ESQ. (Attorney for Plaintiff), New York, NY.
PATRICK MICHAEL DECHARLES, II, ESQ., STEPHEN H. VENGROW, ESQ. (Attorneys for Defendants), Cichanowicz Callan Keane Vengrow Textor, New York, NY.
OPINION AND ORDER
This lawsuit arises from losses allegedly suffered by plaintiff in January 1998 when the Dubai Ports Authority auctioned four containers of textile goods plaintiff had shipped after those containers lay unclaimed at the Jebel Ali terminal in Dubai following their arrival in June 1997. In a prior Opinion and Order herein, dated October 20, 2001 (the "Opinion"), familiarity with which is assumed for current purposes, I denied defendants' motion to dismiss this case as barred by the one-year limitations period in the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. (1994) ("COGSA") because, as set forth in the Opinion, applicability of that limitations period depended on whether Jebel Ali was suitable as the port of discharge for goods shipped to Dubai, and whether proper delivery otherwise was made. A hearing on that subject was held on December 17 and 19, 2001. Based on the evidence introduced at that hearing, as well as the deposition testimony of Ajai Joseph, managing director of defendant Consolidated Shipping Services LLC, taken on April 11 and December 11, 2001, it appears that Jebel Ali, located about 35 kilometers from the city of Dubai (DX 17) was a suitable port of discharge for goods shipped to Dubai, and that proper delivery otherwise was made. Therefore, and for the reasons set forth below, this action is time-barred.
The four containers of goods in question were shipped on two vessels, each carrying two containers, in June 1997, under bills of lading that listed their destination simply as "Dubai." (PX 1-4) Plaintiff's president, Prakash Nebhnani, testified that plaintiff was paid for the goods after they were loaded on board the two vessels, based on presentation of bills of lading, and thus the goods belonged to the consignees by the time the containers arrived. (Tr. 38) He said he never discussed with the consignees whether they received arrival notices. (Tr. 39) However, he testified that plaintiff claims damages, and thus standing to bring this suit, because it refunded the purchase price to its customers partly by wire transfer and partly by replacement goods and got back the original bills of lading, although he could present no documentation to show either such transfer or such replacement of goods. (Tr. 48-49, 58-59)
As noted in the Opinion, proper delivery may result from either actual or constructive delivery. Defendants do not dispute that there was no actual delivery to the consignees.
Constructive delivery occurs where the goods are discharged from the ship upon a fit wharf and the consignee receives due and reasonable notice that the goods have been discharged and has a reasonable opportunity to remove the goods or put them under proper care and custody.Wemhoener Pressen v. Ceres Marine Terminals, Inc., 5 F.3d 734, 742 (4th Cir. 1993) (citations omitted).
There are two parts to that test: discharge upon a fit wharf, and notice to the consignee. Plaintiff's argument is that when only "Dubai" is listed as the destination on the bill of lading, the terminal at Port Rashid is the only fit wharf, and a discharge at Jebel Ali constitutes an unreasonable geographic deviation that prevents defendants from relying on COGSA's one-year limitations period contained in 46 U.S.C. § 1303 (6). See Thyssen, Inc. v. Fortune Star, 777 F.2d 57, 63-65 (2d Cir. 1985).
Plaintiff's evidence on this issue consisted of excerpts from three publications — the Journal of Commerce (PX 17), Gulf News Business (PX 18) and the Khaleej Times (PX 19) — conceded to be authoritative on the subject of ship movements in and around Dubai (Tr. 22-23, 94), which list Dubai and Jebel Ali as separate ports, as well as the testimony of Nebhnani, its president, and the president of Dependable Freight Forwarding, Inc., plaintiff's agent. Nebhnani testified as follows:
Q. What is your understanding of the relationship between the port of Dubai and port of Jebel Ali?
A. They are two different ports.
(Tr. 29) Dependable's president, Roopa Mirchandni, testified in the same conclusory fashion:
Q. Dubai and Jebel Ali are two separate ports, right?
A. Yes.
(Tr. 76) Mirchandni did not claim any particular familiarity with the ports of Dubai, and indeed had never visited those ports. (Tr. 78).
Moreover, plaintiff's president, Nebhnani, testified also that he did not instruct Dependable as to which port to ship the containers, but left it entirely to them. (Tr. 32)
Hans Mikkelsen, executive vice president of defendant Shipco Transport, Inc., testified that the ports of Dubai are, in respect of the matter in dispute, somewhat like the ports of New York, in that cargo may be directed to Port Elizabeth or Howland Hook or Port Newark, for example, but all three would be considered within the area that constitutes the port of New York. (Tr. 87-88, 92) He testified also that Jebel Ali is a newer port than Port Rashid, and that, as is true in Bombay, India and New York, most carriers try to use the newer port because it is quicker and more efficient. (Tr. 90-91, 93) His conclusion was that, "Jebel Ali and Port Rashid are considered Dubai." (Tr. 92) Testimony to the same effect was given in the deposition of Ajai Joseph, managing director of Shipco's agent in Dubai, defendant Consolidated. (Joseph Dep. 12) Further, defendants' expert, Richard Wilmott Butcher, himself a mariner, helped develop and implement the container system used in the ports of Dubai and has had 50 years of experience in Dubai and has run seminars for the Dubai Ports Authority. (Tr. 106-08) He testified that Port Rashid and Jebel Ali "operate virtually as one complex." (Tr. 111) Both he and Mikkelsen testified that as a result, if a container was deposited at one port, it was an easy matter to have it transported to the other at minimal cost. (Tr. 93, 112-13, 121) Butcher testified that about 90% of bills of lading are simply marked "Dubai," without specifying either Jebel Ali or Port Rashid. (Tr. 132) His ultimate opinion was stated as follows:
If Dubai is in the port of discharge column in the bills of lading, the containers can be discharged in Jebel Ali or Port Rashid, which is common in Dubai.
(Tr. 115)
On the issue of notice to the consignees, the evidence consisted of the testimony of Joseph, supported by exhibits, which showed that notices of arrival were faxed to the notify parties listed on the bills of lading. (Joseph Dep. 18-25, 66-67, 72; compare PX 1-4 and DX 1-4 (bills of lading) with DX 7-10 (cargo arrival notices with corresponding container numbers)) Joseph testified specifically that there was no difficulty sending such faxes in Dubai and that Consolidated did not receive any complaint that a consignee had not received an arrival notice. (Joseph Dep. 71-72) Indeed, two other containers shipped by plaintiff at the same time, under bills of lading designating only "Dubai" on one of the same vessels, were sent to Jebel Ali and were picked up by the consignee. (Joseph Dep. 60-65; DX 5, 6)
As to the issue of whether Jebel Ali was a fit wharf for goods traveling under a bill of lading marked Dubai, I credit the testimony of defendants' witnesses Mikkelsen, Joseph and Butcher, who testified in far greater detail and seemed far more knowledgeable of the operations of the ports of Dubai than any of plaintiff's witnesses, or all of them in the aggregate. That publications introduced into evidence by plaintiff, even those regarded as authoritative, may list Jebel Ali separate from Dubai does not in itself control when the issue is how these ports are actually regarded — i.e., one of economic reality and reasonableness. Defendants introduced into evidence as well the 1997 edition of Lloyd's Ports of the World, which lists both Port Rashid and Jebel Ali under Dubai. (DX 17) Without further amplification of what significance plaintiff's publications may have, they cannot welcome the entirely credible and plausible testimony of defendants' witnesses, particularly Mikkelsen and Butcher, that it is common knowledge that goods sent to Dubai may be unloaded at either Port Rashid or Jebel Ali.
On the issue of notice, I credit the unrebutted deposition testimony of Joseph that notice was faxed to the notify parties, supported by the cargo arrival notices introduced as exhibits through that testimony. The force of that proof was enhanced by the evidence that two other containers shipped by plaintiff to Dubai at the same time on one of the same vessels were sent to Jebel Ali and were delivered without incident. Plaintiff's only response to this evidence is to suggest that it cannot be accepted absent confirmation that the faxes were received, an argument that has little persuasive merit when one considers that there is no evidence that the consignees ever complained that they had not received notice, as Joseph testified. Plaintiff's suggestion that it should have received notice rings hollow because plaintiff is not listed as a notify party on the bills of lading, and its president testified that the goods had already been paid for, and plaintiff no longer had any ownership interest in them, by the time they arrived in Dubai.
I find support for the conclusion that the notify parties in fact were notified also in the odd testimony of plaintiff's president, Nebhnani, that he never discussed with the consignees whether they had received notice of the arrival of the goods. This testimony is, to say the least, counter-intuitive, and suggests that if Nebhnani avoided discussing that subject with the consignees it was because he was aware that they had been notified of the arrival of the goods.
Plaintiff contends that even if the containers were delivered to a fit wharf, and even if proper notice was given of their arrival, the illegibility of the terms on the reverse side of the bills of lading voids the contract of carriage and makes Shipco absolutely liable for the containers. The bills in question, which contain a nine-month limitations period, were on-board bills of lading, which is to say they were issued only after the goods were loaded and thus only after the contract of carriage had already come into existence. However, Shipco's tariff, on file with the Federal Maritime Commission, contains a one-year limitations period, coinciding with the period applicable to the carrier under COGSA. Bills of lading generally are regarded as evidence of the contract with the shipper. See 46 U.S.C. § 1300 (referring to "[e]very bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea.") The contract of carriage here could only be determined by reference to Shipco's tariff, which in any event is more advantageous to plaintiff in respect of a limitations period than the bills of lading. In any event, Shipco does not seek to enforce the more limited period set forth in the bills of lading, but only the one-year period set forth in its tariff and coinciding with the period specified by COGSA. In these circumstances, there is no reason to impose the radical remedy of voiding the contract of carriage.
Finally, plaintiff argues that it was the responsibility of defendants to notify the consignees that the containers were to be auctioned after having been left unclaimed for longer than six months. There are at least two reasons why that argument is unpersuasive. First, there is no evidence in this record that any of defendants were notified that any of these containers were about to be auctioned. Second, there is evidence in the record, in Butcher's testimony, to the effect that it was "general knowledge, it is well promulgated in the press that cargo that remains for over six months, and then subsequently three months when it was changed in the beginning of 1998, that were collection not made of that cargo, then it is subject to public [auction]." (Tr. 118)
The transcript here reads "option," but obviously should read "auction."
For the above reasons, for those set forth in the earlier Opinion, and because the parties do not dispute that the containers were auctioned on January 25, 1998 and this case was not filed until June 10, 1999 — more than a year after the claim arose, judgment will be entered for defendants and the complaint dismissed. Settle judgment on 10 days' notice.