In Engineered Arresting System Corp. v. M/V SAUDI HOFUF, 2014 WL 4756420 (S.D.N.Y. Sept. 5, 2014), the Southern District of New York granted partial summary judgment in favor of a Roll on / Roll off ("RoRo") carrier Defendant to limit liability based on applicable package and held that the ondeck stowage of a shipment of six wheeled trailers containing aircraft arresting systems was not a deviation.
Under U.S. law, a carrier may not have the benefit of a limitation of liability clause if it materially deviated from the terms of the contract of carriage. The deviation can be geographic or a quasideviation for unauthorized ondeck stowage. In either case, the deviation or quasideviation must cause the resulting damage to cargo. The presumption that a bill of lading containing a stowage option clause implies belowdeck stowage is rebuttable. For instance, in absence of actual notice, a stowage option clause is enforceable where a party has notice through prior custom and practice that on deck stowage is allowed.
In opposition to the carrier's motion, the shipper Plaintiff argued that it did not receive notice that the shipment would have been carried ondeck and that there was no custom at the port of loading that allowed for ondeck stowage of the shipment. As to the first point, the District Court noted that the stowage option clause in the operable bill of lading expressly stated that cargo could be stowed on or below deck without notice to the shipper.
Notwithstanding this clause, the District Court went on to hold that, based on the testimony of the parties' experts, not only was it customary at the loading port to load shipments ondeck on a RoRo, but that it was also common practice to allow for ondeck stowage of the particular kind of cargo at issue. Thus, the District Court determined that there was no merit to the Plaintiff's lack of notice argument.
As the Second Circuit has already established, in the context of containerships, technological innovation and vessel design has made the ondeck stowage of a container a reasonable deviation. Barrowing from this concept, in light of the fact that a RoRo is specially designed to handle the ondeck stowage of cargo, the District Court held that even assuming that ondeck stowage of the shipment was a contractual deviation, it would not have been an unreasonable one. In the end, the shipper Plaintiff did not present evidence that the RoRo carrier Defendant substantially increased the risk of danger to the shipment by stowing it in the same manner as to other RoRo cargo.