Archilla and Cucalón hired Smyth Worldwide Movers Inc (Smyth) for the transportation and delivery of furniture and appliances from their residence in Puerto Rico to their new home in Cali, Colombia. Smyth subcontracted with American Red Ball Transit Co Inc (Red Ball) to perform its contract. Red Ball in turn hired Nopal Caribe Lines (Nopal) for the transportation of the cargo by sea. When the cargo was delivered, Archilla and Cucalón found that most of the cargo had been lost and the rest of it had been seriously damaged.

Archilla and Cucalón filed an action for damages against Smyth claiming, among other things, an amount for mental suffering. Smyth sued Red Ball as a third party and Red Ball filed another third-party complaint against Nopal. Red Ball filed a motion for partial judgment on the pleadings in order to dismiss the petition for mental suffering. Among other statutes, Red Ball invoked COGSA/the Hague Rules in order to support its partial judgment. The Trial Court granted the motion.

Archilla and Cucalón appealed. On appeal, one of the arguments made by Archilla and Cucalón was that COGSA/the Hague Rules were not applicable to this case.

Held: Appeal allowed.

Article 1.e of COGSA/the Hague Rules provides that COGSA/the Hague Rules only apply from the time the goods are loaded to the time when they are discharged from the ship. In addition, art 7 of COGSA/the Hague Rules allows stipulations on the bill of lading with the purpose of extending the shipper's liability to the periods prior to loading and subsequent to the discharge from the ship.

The bill of lading agreed upon by Red Ball and Nopal extended COGSA/the Hague Rules to such periods. However, it did not appear from the record that a similar clause existed in the carriage contracts between Red Ball and Smyth and between Smyth and Archilla and Cucalón. Therefore, COGSA/the Hague Rules were relevant only for determining Nopal’s liability and not Red Ball's liability. It also did not appear from the record that Archilla and Cucalón had agreed to, or that they knew about, the abovementioned contractual extension of COGSA/the Hague Rules. Thus, COGSA/the Hague Rules did not govern this case.