Maritime Law

• Author: International Law Group

In 1994, the M/V Tokyo Senator was damaged en route to Norfolk, Virginia, when the cargo of 300 drums of Chinese thiourea dioxide (TDO) ignited. TDO is a white powder used in the bleaching of fibers such as paper and textiles. The fire apparently broke out within a TDO container and resulted from TDO's inherently dangerous properties. TDO was considered a stable chemical at the time of shipment, but since then its classification has changed. The U.S. listed TDO as hazardous in the International Maritime Dangerous Goods Code (IMDGC) in 1998, and in the U.S. Department of Transportation Hazardous Materials Table in 1999.

The carrier, Senator Linie GmbH & Co. KG (Senator), brought this admiralty action in U.S. district court against the shippers of the TDO, Zen Continental Co., China National Chemicals Import & Export Corp. and others (jointly "defendants"). The Carriage of Goods by Sea Act (COGSA) codifies the U.S. obligations under the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (the "Hague Rules"). It applies to all contracts for the carriage of goods between the U.S. and foreign countries.

The district court found that for a shipper of inherently dangerous goods to be liable under COGSA at 46 U.S.C. Section 1304(6), the shipper must have had preshipment knowledge of the danger. Furthermore, the district court held that general maritime law in both the Second Circuit and the United Kingdom did not require a shipper to absolutely warrant its cargo as non-hazardous. The court also concluded that the scientific literature at the time did not put any party on notice that TDO could ignite during transport. Senator appealed from the part of the judgment granting motions for judgment to the defendants. The U.S. Court of Appeals for the Second Circuit vacates and remands.

The application of Section 1304(6) to the unusual facts of this case presents an issue of first impression in the Second Circuit.

In essence, the Court holds that where neither the carrier nor the shippers had actual or constructive knowledge of the inherently dangerous nature of the shipped goods, Section 1304(6) imposes strict liability on the shippers for damages and expenses arising out of the shipment of those goods.

As a threshold matter, the Court examines whether the shippers did have actual or constructive knowledge of TDO's dangerous properties. The Court finds no clear error in the district court's findings that they...