This action stemmed from the sale and shipment of various automotive parts by Delphi-Delco Electronics Systems (the plaintiff) in the United States to Daewoo Corp (Daewoo) in South Korea. The plaintiff shipped most of the parts through Ace Shipping Corp (Ace), a NVOCC which issued 91 bills of lading to the plaintiff. Daewoo’s payment for the shipments was secured by letters of credit issued by Korean banks. These letters of credit required 'full on board' bills of lading that consigned the automotive parts to the banks rather than to Daewoo.

Ace in turn arranged for actual shipment of the parts with Hanjin Shipping Co (Hanjin) and NYK Line (NYK). Rather than issuing bills of lading, both Hanjin and NYK issued electronic seaway bills naming Ace as the shipper and Daewoo or Sun Express Corp as consignee.

The plaintiff alleged that it suffered damages when Ace, Hanjin and NYK misdelivered the parts without production of bills of lading. The plaintiff further alleged that Ace was liable for issuing false bills of lading, failing to issue bills of lading, and/or delivering shipment without payment.

Ace and Hanjin brought motions for summary judgment, limiting their liability, if any, to USD 500 per package under the US Carriage of Goods by Sea Act (COGSA). NYK moved for dismissal based on a forum selection clause in NYK’s standard bill of lading, or, in the event that the forum selection clause was unenforceable, for summary judgment limiting NYK’s liability to USD 500 per package under COGSA. The plaintiff opposed the motions, and brought its own motion to strike out Hanjin’s and NYK’s package limitation defence.

Held: The plaintiff’s motion to strike out the package limitation defence of Hanjin and NYK is denied. Ace's motion to limit its potential liability to USD 500 per package is granted in respect of the Ace bills of lading where no value for the cargo was declared, but denied in respect of the 71 bills where the cargo's value was included in the description of the goods. Ace's motion to extend its liability limitation to additional parties under the Himalaya clause in its bills of lading is denied. NYK's motion to dismiss based on the forum selection clause in its standard bill of lading is denied, pending adequate discovery on the issue of whether Ace acted as an agent for NYK and Hanjin. Hanjin's motion for summary judgment is granted, in so far as it seeks a ruling that COGSA's USD 500 per package liability limitation incorporated in the contract of carriage between Ace and Hanjin is valid and enforceable, but denied in so far as it seeks to limit its liability to the plaintiff pending discovery on the agency issue.

The standard terms and conditions of Hanjin's sea waybill state that the waybill is subject to the terms and conditions of the standard bill of lading and tariff, and that the Hague Rules as adopted in the country of shipment, in this case COGSA, shall apply to waybills issued in lieu of bills of lading.

The terms and conditions of the bill of lading applicable to the cargoes shipped under the Ace/Hanjin service contract meet the fair opportunity test. In order to view these terms, Ace merely had to visit Hanjin’s website, request a copy of a long-form bill from Hanjin’s offices, or change its standing request to ship the cargoes under sea waybills. In short, the application of COGSA's package limitation to the shipments in question is unambiguous and the route to the relevant terms and conditions in Hanjin's long-form bill of lading is clear and straight. Under the circumstances, it would be an absurd result to find that Ace lacked a fair opportunity to declare a higher value and pay a correspondingly higher transportation rate. The plaintiff has offered no evidence to rebut Hanjin’s prima facie showing, therefore the Court denies the plaintiff's motion to strike out Hanjin's package limitation defence, and grants Hanjin's motion for summary judgment in so far as it seeks a ruling that COGSA's liability limitation provisions apply to the contract of carriage between Ace and Hanjin.

The NYK electronic sea waybills explicitly incorporate what are known as the CMI Uniform Rules for Sea Waybills, as well as NYK's applicable bill of lading and tariff. The plaintiff does not contest that the language contained in these incorporated documents gave Ace adequate notice of COGSA's package limitation and the opportunity to declare a higher value; rather, it argues that the fair opportunity requirement may only be satisfied by language actually included in the NYK electronic sea waybill. Where a shipper has requested sea waybills in lieu of a traditional paper bill of lading, and where those waybills explicitly incorporate the carrier's standard bill of lading, which is readily available to the shipper, the fair opportunity doctrine may be satisfied by language contained in that bill of lading. Accordingly, the plaintiff's motion to strike out NYK's package limitation defence is denied.