The plaintiff hired the defendant to transport a shipment of frozen boneless beef. During the voyage, the carrying vessel lost power, causing the cargo to spoil. The plaintiff disposed of the damaged cargo and sued the defendant for failure to deliver the shipment in good order and condition, pursuant to the US Carriage of Goods by Sea Act (COGSA), 46 USC § 30701 ff.

The defendant conceded liability but moved for summary judgment as to the amount of damages owed to the plaintiff.

Held: Motion for summary judgment denied.

The cargo was carried from Montevideo, Uruguay, to New York, USA. In Uruguay, the shipper loaded the cargo into two containers. One container held 1,080 cartons of beef palletised onto 29 pallets, and the other held 894 cartons of beef palletised onto 34 pallets. The shipper then loaded the two containers onto the M/V MSC Dardanelles.

The defendant issued two bills of lading. They included the following clauses:

6.2 For limitation purposes under the GOGSA [sic: COGSA], it is agreed that the meaning of the word 'package' shall be any palletised and/or unitised assemblage of cartons which has been palletised and/or unitised for the convenience of the Merchant, regardless of whether said pallet or unit is disclosed on the front hereof. ...

7.2.2 Where COGSA applies by virtue of clause 6, neither the Carrier nor the Vessel shall in any event be or become liable in an amount exceeding US $500 per package or per customary freight unit.

The parties agree that COGSA governs the dispute and that the bills of lading incorporate COGSA's USD 500 per package limitation for lost or damaged cargo. However, the parties dispute how to define a 'package' under COGSA. The defendant contends that a package is a pallet, and that its liability is therefore USD 31,500 (63 pallets at USD 500 each). The plaintiff contends that the bills' definition of 'package' is ambiguous because it references both cartons and pallets. It also argues that the defendant cannot demonstrate the cargo was palletised 'for the convenience of the Merchant', as required by cl 6.2.

This Court is faced with the 'troublesome conundrum: When is a package not a package?': Allied Intl Am Eagle Trading Corp v SS Yang Ming 672 F 2d 1055, 1057 (2d Cir 1982) (CMI2709). 'The question of what constitutes a COGSA package, a question we frequently confront, is largely and in the first instance a matter of contract interpretation': Allied Chem Intl Corp v Companhia de Navegacao Lloyd Brasileiro 775 F 2d 476, 485 (2d Cir 1985). 'The most obvious place for us to begin our search for the intent of the contracting parties is, of course, the bill of lading': id. If the parties 'unambiguously identif[y]' the relevant package in the bill of lading, the Court will 'adopt [that] unit of packaging': Seguros Illimani SA v M/V Popi P 929 F 2d 89, 94 (2d Cir 1991) (CMI1828). However, '[w]e bear in mind that bills of lading are contracts of adhesion and, as such, are strictly construed against the carrier': Companhia de Navegacao Lloyd Brasileiro 482.

The 'Description of Packages and Goods' heading on the front of a bill of lading generally identifies the intended COGSA package unless it is 'plainly contradicted by contrary evidence of the parties’ intent': Seguros 94. The bills here include a 'Description of Packages and Goods' heading, under which the text reads '894 cartons', 'Total cartons: 894', '1,080 cartons', and 'Total cartons: 1080'. This section does not reference pallets, and the defendant concedes that pallets are not mentioned anywhere else on the face of the bills of lading.

The front of the bills therefore suggests that the parties intended a carton to be the operative COGSA package. However, the reverse side of the bills contains language that may constitute 'contrary evidence of the parties’ intent': Seguros 94. The bills' boilerplate terms define a COGSA package not as a carton but as 'any palletised and/or unitized assemblage of cartons'. This definition conflicts with the description of packages as cartons on the front of the bills and introduces ambiguity about the parties' intended definition of 'package'.

The defendant claims that the bills' faces do not reference pallets because federal regulation requires bills of lading to identify cargo by 'the quantity of the lowest external packaging unit': see 19 CFR § 4.7a. Here, the lowest external packaging unit is a carton, not a pallet. The defendant's reliance on § 4.7a raises factual questions about intent that cannot be resolved summarily.

Even if the Court were to find that a pallet is the COGSA package, the defendant must also demonstrate that the cargo was palletized 'for the convenience of the Merchant' to invoke the USD 500 per package limitation in cl 6.2. The parties dispute who requested the palletisation. The parties' conflicting declarations and testimony raise genuine disputes of material fact, the resolution of which would require this Court to make impermissible credibility determinations and choose between competing versions of events. These functions cannot be performed on summary judgment.

The defendant cites three cases that interpreted language identical to cl 6.2 and found a pallet to be a COGSA package: HDI Glob Ins Co v Kuehne + Nagel Inc 2025 WL 444992 (SDNY, 10 Feb 2025) (CMI2613), aff'd, 2026 WL 569833 (2d Cir, 2 Mar 2026) (CMI2772); Fed Ins Co v MSC Mediterranean Shipping Co SA 784 F Supp 3d 570 (SDNY 2025) (CMI2680); Hercules OEM Grp v Zim Integrated Shipping Servs Ltd 2023 WL 6317950 (SDNY, 28 Sept 2023) (CMI2288). These cases do not alter the Court's conclusion. They do not compel the entry of summary judgment because they turned on distinct factual records and concessions not made in the present dispute.

The plaintiff further contends that the ship's power failure constitutes an unreasonable deviation from the bills' terms, which precludes enforcement of COGSA's USD 500 limitation. This argument is unavailing because the Second Circuit recognises only two types of unreasonable deviation: geographic deviation and unauthorised on-deck stowage: Sedco Inc v SS Strathewe 800 F 2d 27, 31 (2d Cir 1986) (CMI1827). The plaintiff asserts neither theory.

The Court cannot resolve how to define a COGSA package and whether the cargo was palletised for the convenience of the Merchant on the present record. The defendant's motion for summary judgment is denied.