La Unión Compañía Nacional de Seguros SA (the plaintiff), an insurance company acting under an assignment of rights, claimed for damage to a cargo carried from Panama to Guayaquil, Ecuador, on the MV Albemarle Island, operated by Ecuadorian Line. The plaintiff filed the lawsuit against Compañía Transportes Marítimos Bolivarianos TRANSMABO SA, the agent of the vessel at the port of destination. The plaintiff based the action against the agent on the law on companies of Ecuador. This law orders that any local or foreign company doing business in Ecuador must have a representative with the capacity to answer to complaints and comply with the respective obligation. In the absence of this requirement, lawsuits can be filed against the person that executes acts and possess the goods referred to in the lawsuit, who shall be hold personally liable.

The first instance Court dismissed the claim. On appeal, the Court of Appeal reversed the decision and ordered the defendant to pay compensation. The defendant recurred the decision on cassation before the National Court of Justice/Corte Nacional de Justicia (NCJ). It alleged that the joint liability of the liner agencies with the shipowners and the carrier stated in the law refers only to the payment of duties and taxes, and not to liability for cargo damage.

Held: The NCJ reversed the decision. The SC noted that the contract of carriage was governed by the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (the Hague Rules). The plaintiff's claim is bound by these Rules as it is acting under an assignment of rights granted by the consignee of the cargo. The bill of lading stated that the carrier was Ecuadorian Line. According to the Hague Rules and art 206 of the Code of Commerce, this is the company that was responsible for the cargo (art 1.a of the Hague Rules). There was no evidence that Ecuadorian Line was a foreign company and had omitted to appoint a representative in Ecuador, nor that the defendant was its representative. The joint liability of the carriers and their agents stated in the law of Ecuador is limited to administrative and commercial matters related to maritime traffic and the use of ports. Therefore, no causal link between the claimant and the defendant was proven.