This case follows on from earlier proceedings in which Shelter Forest International Acquisition Inc (SFI) filed an action against defendants COSCO Shipping (USA) Inc, COSCO Shipping Lines (North America) Inc, COSCO Shipping Terminals (USA) LLC, Rudy Rogers, and COSCO Shipping Lines Co Ltd (CSL), alleging multiple contractually-based claims under state law. On 2 April and 4 May 2020, CSL moved for summary judgment, asserting that SFI's claims were time-barred under the one-year statute of limitations in the Carriage of Goods by Sea Act 1936 (US) (COGSA). On 28 July 2020, the Court issued an opinion and order granting CSL's motions: see Shelter Forest International Acquisition Inc v Cosco Shipping (USA) Inc (CMI933).

CSL now seeks USD 160,930 in demurrage charges from 2 June 2019-8 January 2020, as well as attorney fees and costs.

Held: Summary judgment granted on the demurrage claim. CSL and SFI to attempt to reach an amicable agreement as to the proper amount of and entitlement to attorney fees and costs.

CSL argues that summary judgment on its remaining claim is proper because the undisputed evidence of record demonstrates that 'SFI breached the bill of lading by refusing to take timely possession of the Portland Shipment and refusing to pay demurrage.' Further, CSL maintains that fault for the damage to CSL's container and SFI's cargo is irrelevant: 'Neither the bill of lading nor maritime law allow SFI to withhold amounts due under the bill of lading as a set-off for its time barred claims for damage under COGSA.'

In contrast, SFI contends that CSL's motion is premature because a 'carrier can only recover these costs if the dispute that gave rise to the possessory lien is ultimately determined in the carrier's favor'. Specifically, SFI asserts that, '[p]ursuant to both the terms of the controlling bill of lading and the general maritime law, CSL has the burden of proving that the damage to the container, and the costs flowing therefrom which give rise to CSL's possessory lien, were caused by SFI's improper loading of the container' before being entitled to demurrage. Alternatively, SFI argues CSL failed to mitigate its damages since 'CSL's claim for container damage amounted to $6,360' and the Portland shipment 'had an invoice value of $21,000 and had suffered de minimis damage'. Stated differently, SFI maintains it was unreasonable for CSL 'to protect its $6,360 claim by incurring additional costs more than 25 times greater than its initial claim'.

Any dispute concerning which party was ultimately responsible for the damage to CSL's container or SFI's cargo is immaterial because both the parties’ underlying agreements and federal maritime law make clear that SFI must accept delivery of its goods and pay all costs without offset (and regardless of whether SFI has its own claim for damages). See King Ocean Cent Am SA v Angel Food & Fruit Co, 1995 WL 819141 (SD Fla, 12 Oct 1995): '[i]t is a well-established and ancient rule that once the goods have been carried to their destination and are ready for delivery, the freight must be paid even though the goods are damaged ... [this] is an independent obligation and is not discharged because of failure to deliver the cargo in good condition'; see also Metallgesellschaft AG v M/V Capitan Constante, 790 F 2d 280, 281-82 (2d Cir 1986): clause calling for freight 'to be payable without discount on delivery ... clearly expressed [the parties'] intent [that the shipper] would not be able to evade the prompt performance of this contractual obligation by asserting a claim in abatement or set-off'; Maersk Inc v Am Midwest Commodities Exp Co Inc, 1998 WL 473945, 6 (SDNY, 10 Aug 1998): shipper's counterclaim for untimely delivery of cargo, which was time-barred under COGSA, was not grounds to withhold or offset payment due to a carrier under the bill of lading, explaining that '[t]he carrier's obligation to deliver the goods is legally distinct from any claim by the shipper that the goods were damaged'.

As a result of CSL's failure to mitigate, however, the Court finds that a reduction of the period of demurrage is warranted. CSL's damages are therefore limited to 2 June 2018-15 March 2019. In accordance with the rates set forth in CSL's published tariff, CSL's reasonable damages total USD 78,705.