Morishigue Enterprises Co Ltda (the plaintiff), a yacht owner, sued for breach of a carriage contract. The plaintiff pre-paid freight for the carriage of a yacht onboard the M/V Trident Eagle from Port Everglades, Florida, to Osaka, Japan.  When the vessel arrived at the Atlantic side of the Panama Canal, it could not continue its voyage as it lacked funds to buy bunkers, pay the Panama Canal transit toll and cover the crew’s salaries. In addition, it was the subject of several arrest orders filed by creditors in Panama. Therefore, the plaintiff had to arrange and pay additional expenses to tranship the yacht onto another ship to continue its voyage to Japan. The plaintiff alleged that the M/V Trident Eagle was in a state of 'financial unseaworthiness' and claimed for reimbursement of the pre-paid freight and transhipment expenses. The bill of lading provided for the application of the United States Carriage of Goods by Sea Act of 1936 (US COGSA), which mirrors the Hague Rules.

The lawsuit was filed against United Arab Shipping Co (UASC) and Trident Shipping Co Ltd (Trident), the registered owner and time charterer of the ship respectively. The M/V Trident Eagle was arrested and UASC filed a guarantee to release the vessel from arrest on behalf of both defendants. Although the process was duly served on Trident, it did not appear in court. It was later acknowledged in court that UASC was not a party to the contract of carriage. The Maritime Court held Trident liable and ordered it to pay the plaintiff damages in full. As the compensation was to be collected from the guarantee filed by UASC, it appealed the decision. In the appeal, UASC argued that Trident was entitled to limit its liability for any kind of damages according to the US COGSA § 1304.5 (art 4.5 of the Hague Rules). Hence, a yacht must be considered a single package and the compensation must be reduced to USD 500.

Held: The Supreme Court of Justice (SCJ), acting as Court of Maritime Appeals, affirmed the decision of the Maritime Court. The SCJ analysed the doctrine of fair opportunity under US law, and found that the existence of a box in the bill of lading where the shipper can indicate the value of the cargo and the existence of a paramount clause stating the US COGSA as applicable law suffice for the application of the limited amount stated in the US COGSA § 1304.5. However, the SCJ concluded that it was not a case of damage to the cargo that occurred during its carriage, but a case of a breach of contract by the M/V Trident Eagle that obliged the plaintiff to contract another vessel and incur in several expenses. In such a case, the defendant is not entitled to limit its liability.