In September 1968, Lloyd Italico & l’Ancora (Lloyd Italico) insured in favour of the shippers, Valperga and Montanini, 12 prefabricated school buildings against the risks of transport from Marina di Carrara, Italy, to Tripoli, Libya. The cargo was loaded onto the Tore Russo. The bill of lading contained a 'free in and out' clause.

On arrival at Tripoli, the school buildings were delivered to the buyer, Scuola Arti e Mestieri. The buyer claimed damage to the cargo. Lloyd Italico compensated the buyer, paying ITL 12,353,000. In April 1970, Lloyd Italico sued Agenzia Marittima Fanfani SNC (AMF), as the agent of the Tore Russo, in the Tribunal of Massa, claiming compensation for the amount it had previously paid. The Tribunal of Massa rejected the claim. Lloyd Italico appealed to the Court of Appeal of Genoa. The Court upheld the appeal and ordered compensation for the damage by the carrier. AMF recurred to the Supreme Court of Cassation against the judgment of the Court of Appeal of Genoa. AMF argued that the bill of lading included a 'free in and out' clause. That implied the shifting of liability for cargo damage during loading and unloading operations from the carrier to the shipper or the consignee, considering the high risk of damage during unloading.

Held: The appeal in cassation is dismissed.

The 'free in and out' clause embodied in the bill of lading, when drafted more synthetically, as in the present case, plays the exclusive role of a clause dealing with expenses. In other words, the parties' intention was only to allocate the loading and unloading costs to the shipper and the consignee respectively. This clause does not have the effect of exempting the carrier from its legal obligations to carry out those activities, and does not exclude the carrier's due diligence for the custody and stowage of the cargo. Nor does this clause have an effect on the burden of proof regime provided by the Code of Navigation and art 4 of the Hague Rules.

By contrast, the argument relating to the violation of art 3.6 of the Hague Rules is upheld. The one year-term period provided by this article to the claim had already expired. However, parties cannot raise this claim for the first time in the appeal in cassation.