A.P. Moller - Maersk A/S, trading as Maersk Line v. Safewater Lines (I) Pvt., Ltd.
4:13-cv-01726
S.D. Tex.Aug 23, 2017Background
- Maersk transported three containers of hydrochloric acid from Pipavav, India to Houston; on arrival containers leaked due to allegedly overfilled/defective drums. Maersk cleaned up, repackaged cargo into new containers, incurred cleanup and demurrage costs, then abandoned and sold the cargo for salvage ($550).
- Maersk issued three Maersk master bills of lading naming Safewater entities as shipper and Samrat as consignee/notify party; the bills incorporated Maersk’s standard Terms & Conditions (including indemnity, warranty for proper packing of dangerous goods, and joint-and-several Merchant liability).
- Maersk settled with all defendants except Samrat and sued Samrat for breach of contract, contractual indemnity, and CERCLA contribution (the summary judgment motion sought only contractual claims).
- Samrat admits it acted as U.S. agent for Safewater but contends it was a passive agent, not a contracting party with Maersk, and argues liability rests with Safewater (with whom Maersk had a Service Contract).
- Maersk argues that (1) the bills of lading are maritime contracts binding the named consignee; (2) Samrat was an undisclosed agent/consignee appearing on the bills of lading, so it is a “Merchant” jointly and severally liable and required to indemnify Maersk under clauses 11, 15, 16.7, 21, and 22; and (3) Samrat cannot introduce extrinsic evidence to defeat its apparent status as a party to the integrated bills.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Samrat is bound by Maersk bills of lading as a party/"Merchant" | Samrat is named consignee on Maersk master bills; bills are maritime contracts and Samrat is bound as Merchant and undisclosed agent | Samrat was only an agent of Safewater and not party to any contract with Maersk; bills may be mere receipts | Court: Samrat is bound. As named consignee/undisclosed agent it is a party to the bills and cannot use extrinsic evidence to defeat that status |
| Whether Samrat is jointly and severally liable / must indemnify Maersk under bill clauses (warranty/indemnity/delivery/demurrage) | Clauses 11,15,16.7,21,22 make Merchants jointly and severally liable and require indemnity for improperly packed dangerous goods and related costs | Samrat says Safewater (shipper) was responsible for packing and had primary liability; Samrat therefore should not bear Maersk’s claims | Court: Clauses apply; Samrat, as Merchant/consignee, is liable and must indemnify Maersk for the claimed contractual damages |
| Whether extrinsic evidence can show Samrat was not a contracting party (agency defense) | Agency existed but Samrat failed to disclose its principal at time contract was finalized, so it is personally bound | Samrat: agency relationship means it should not be treated as a contracting party; no acceptance of bills shown | Court: Agency law supports binding an undisclosed agent; absence of “as agent for” on the bills bars extrinsic evidence to avoid liability; Samrat liable |
| Relief / amount recoverable after partial settlements | Maersk seeks full contractual recovery minus amounts recovered from settling defendants (pro tanto credit) | Samrat argues settlement with others does not make it responsible for balance; equitable considerations point to Safewater | Court: Grants summary judgment for Maersk on contract/indemnity claims against Samrat; awards Maersk judgment subject to pro tanto credit and directs Maersk to move for attorneys’ fees and submit proposed final judgment |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard) (establishes "genuine issue" standard for trial)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting) (movant may show absence of evidence on essential element)
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (maritime contract law) (bills of lading are maritime contracts construed by contract principles)
- Vimar Seguros y Reaseguros v. M/V Sky Reefer, 515 U.S. 528 (consignee liability under bill of lading) (confirms circumstances where non-signatories are bound)
- Orient Mid–East Lines v. Albert E. Bowen, Inc., 458 F.2d 572 (agency and undisclosed principal) (undisclosed agent liable on contract unless principal disclosed)