UK Aerosols Ltd (UK Aerosols) shipped a cargo of 717,120 cans of hair spray and 59,760 cartons of hair mousse on an APL Co Pte Ltd (APL) vessel from Istanbul, Türkiye, to Long Beach, California, on behalf of UG Co Inc (UG) and Kamdar Global LLC (Kamdar). The terms of the carriage were governed by a bill of lading.

When the cargo arrived in Long Beach, APL discovered that one of the containers in the shipment was 'leaking, dangerous and hazardous'. APL spent approximately USD 700,000 in assessing, cleaning up, removing, and disposing of the shipment. APL filed a complaint against UK Aerosols, UG, and Kamdar, asserting negligence and breach of contract, and alleging that the defendants had breached their indemnification obligations under the bill of lading.

The District Court entered a default judgment against UK Aerosols.

UG and Kamdar moved for summary judgment, arguing that certain provisions of the bill of lading were void because they violated provisions of the Carriage of Goods by Sea Act (COGSA), 46 USC ss 30701 ff (COGSA). The District Court held that cl 9 of the bill of lading would only violate COGSA to the extent that it imposed liability without fault on a party that was a 'shipper', and because neither party had alleged that UG and Kamdar were 'shippers', cl 9 was not necessarily void. The Court also held that APL might not be able to prevail under cl 19 if it was on notice of the hazardous nature of the goods, but that the issue of whether it had notice was a factual issue in dispute. Consequently, the Court denied summary judgment to UG and Kamdar on the contract claims, but entered summary judgment for the negligence claims.

UG and Kamdar then filed a second motion for summary judgment, and APL also filed for summary judgment. The Court denied UG and Kamdar's motion and granted APL's motion. The Court held that UG and Kamdar were contractually liable under cls 9 and 19 of the bill of lading. UG and Kamdar were not entitled to the protection of COGSA's rule against liability without fault because they were not 'shippers'. The Court entered judgment against UG and Kamdar for USD 733,963.10.

APL filed a motion for attorneys' fees, arguing that the bill of lading provided that the attorneys' fees issue was governed by Singapore law, and therefore, the prevailing party was entitled to attorneys' fees. The Court denied this motion. It held that COGSA would control the dispute over attorneys' fees, that federal law would apply to the issue, and thus no attorneys' fees would be awarded.

UG and Kamdar appealed to the Court of Appeals, and APL filed an appeal from the decision to deny attorneys' fees.

Held: The summary judgment of the District Court is upheld. The District Court's denial of attorneys' fees is reversed, and this claim is remanded to the District Court.

Clause 9 of the bill of lading provides that where the container at issue was packed by a party other than APL, a 'merchant' must indemnify APL for losses incurred as a result of 'the manner in which the Container has been filled, packed, stuffed or loaded; or ... the unsuitability of the Goods for Carriage in [the] Container'. As defined in the bill of lading, the term 'merchant' includes UG and Kamdar as parties having a future right to receive the goods and the owner of the goods, respectively.

However, s 1304(3) of COGSA provides that '[t]he shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault, or neglect of the shipper, his agents, or his servants'. UG and Kamdar argue that they are also 'shippers' entitled to the protection of s 1304(3), and are not obligated to indemnify APL because the leak did not result from their own acts, fault or neglect; rather, the leak was the result of UK Aerosol's negligent packing.

COGSA does not define the word 'shipper'. However, the COGSA statutory scheme indicates that, for the purposes of s 1304(3), a 'shipper' is a party separate and distinct from other parties to a bill of lading, including the owners of the goods and those who have a future interest in the goods, as in this case. Congress chose to use different terms in COGSA when referring to a shipper in conjunction with other parties and shipper alone. Section 1301(b) of COGSA defines a 'contract of carriage' to include bills of lading and other similar documents which 'regulate the relations between a carrier and a holder of the same'. A 'holder' means the person in possession of a document of title, if the goods are deliverable either to bearer or to the order of the person in possession. A holder of a bill of lading can refer to any person in possession of the bill of lading, whether the shipper or subsequent endorsee of the bill of lading. If Congress had intended s 1304(3) to protect both the shipper and subsequent endorsees of the bill of lading, it could instead have used the term 'holder', as it did in s 1301(b).

It would undermine the underlying policy goals of COGSA to expand the definition of 'shipper' to include multiple parties to the bill of lading. For example, s 1303(3) of COGSA mandates that the carrier must issue to the shipper a bill of lading 'on demand of the shipper'. A bill of lading evidences the receipt of goods for shipment and operates as a document of title. If each party to the bill of lading, including both the named 'shipper' and 'notify parties', was entitled to demand that the carrier issue a bill of lading, multiple parties could possess an original bill of lading, which would create competing chains of title and undermine COGSA's goal of promoting predictability in the implementation of sea carriage rules: see Senator Linie Gmbh & Co Kg v Sunway Line Inc 291 F 3d 145, 148 (2d Cir 2002), holding that Congress' goal with COGSA was to foster 'international uniformity in sea-carriage rules and allocating risk between shippers and carriers in a manner that is consistent and predictable'.

The use of the term 'shipper' in other COGSA provisions implied that a shipper was an entity that delivered the goods to the carrier, and not the eventual receiver of the goods. Section 1303(5) provides that '[t]he shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight, as furnished by him', which suggests that a shipper has to be an entity that will be providing the particulars regarding the shipment. Section 1303(5) requires the shipper to indemnify the carrier against losses resulting from 'inaccuracies' in the description of the marks, number, quantity and weight of the shipment. Since the party most able to verify the specifics of the shipment would be an entity that delivered the goods to the carrier and provided the particulars, a 'shipper' must refer to an entity which shipped the goods.

Significantly, s 1303(5) specifies that '[t]he right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper'. If Congress had intended all parties to the bill of lading (including the owners and those with a future interest in the goods) to be included in the definition of 'shipper', there would be no need to include a provision making the carrier liable to parties to the bill of lading other than the 'shipper', because there would be no other parties to whom the carrier would be liable.

There was also no indication that Congress intended to merge the definition of 'shipper', which includes 'a cargo owner' or the 'person to whom delivery is to be made', from the Shipping Act of 1984 into COGSA. Although case law offered different definitions for 'shipper' depending on the context, there was no need for the Court to articulate a precise definition of 'shipper' to fill in the definitional gap in COGSA. UG and Kamdar did not also qualify as 'shippers' for the purposes of s 1304(3). Accordingly, s 1304(3) did not shield UG and Kamdar from liability under the bill of lading.

Clause 9 was also readily distinguishable from the bill of lading clause at issue in Excel Shipping Corp v Seatrain International SA 584 F Supp 734, 747-748 (EDNY 1984). That clause stated that 'the shipper, the consignee and the goods, jointly and severally, shall be liable for, and shall indemnify [the carrier] and the ship against' damages caused by cargo tendered for carriage.' Since that bill did not contain a provision exempting the shipper from liability stemming from the carrier's negligence, it made the shipper liable for acts caused by any party and, therefore, directly violated s 1304(3) of COGSA.

Section 1303(8) of COGSA provides that:

[a]ny clause ... in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this chapter, shall be null and void and of no effect.

Clause 9 does not relieve APL of liability for loss caused by its own negligence, and would not be triggered if APL packed the containers that caused the damage. The parties could not be held liable for any negligence on the part of APL in packing and shipping the goods. Accordingly, cl 9 did not impermissibly 'lessen APL's liability'.

Under cl 9, 'merchants' must indemnify APL for losses caused by the manner in which a shipper-packed container was packed, or the unsuitability of goods for carriage. The bill of lading defined the merchant to include the shipper, consignee, receiver, holder of the bill of lading, and owner of the cargo, or person entitled to the possession of the cargo, or having a present or future interest in the goods for carriage. Since UG and Kamdar come within the definition of 'merchant' under the bill of lading, UG and Kamdar are contractually bound to indemnify APL under cl 9.

The District Court's determination that Singapore law does not apply to the determination of attorneys' fees must be reversed. Clause 28(i) provides: '[i]nsofar as anything has not been dealt with by the terms and conditions of the bill of lading, Singapore law shall apply'. Accordingly, Singapore law was, by the terms of the bill of lading, the parties' choice of law as to attorneys' fees. COGSA is silent as to attorneys' fees - it neither authorises their award, nor prohibits fees: see Noritake Co Inc v M/V Hellenic Champion 627 F 2d 724, 730 (5th Cir 1980). The parties did not contend that cl 28 was void under any provision of COGSA. Accordingly, the attorneys' fees issue was one that was not 'dealt with' in the bill of lading and fell squarely in the domain of cl 28.