The defendant carrier moved for summary judgment claiming that the plaintiff's action was time-barred, in that it was not brought within the one-year period specified in the contract of carriage between the parties.

The plaintiff claimed:

1. That delivery of only a portion of the cargo specified in the bill of lading was not sufficient 'delivery' as to bring the time limitation into effect.
2. That the six-year statute of limitations (Section 319, Trust Territory Code) applies, although agreeing that 'the parties may ... fix by agreement a shorter time for the bringing of suit on the contract of shipment than that provided by the statute of limitations', so long as the period fixed is reasonable.
3. That the defendant by its conduct is estopped from invoking the one-year time limit within which to bring suit.
4. That the US Carriage of Goods By Sea Act (COGSA), 46 USC §§ 1300-1315, is inapplicable in the Trust Territory of the Pacific Islands.

The plaintiff alleges in its complaint that the plaintiff and the defendant entered into a contract of affreightment on 8 May 1967, and that the defendant delivered a bill of lading to the plaintiff. There appears to be no disagreement that the parties intended to be bound by that contract. Therefore, the Court must look to the terms of that contract as set out in the bill of lading to determine the rights and duties of the parties. The parties to the bill of lading agreed that COGSA would apply to performance of the contract. In para 18 on the reverse side of the bill of lading, the parties agreed that unless notice of any loss or damage and the general nature of such loss or damage was given in writing to the carrier, removal of the goods into the hands of the person entitled to delivery would be prima facie evidence of delivery by the carrier of the goods described in the bill of lading. In para 19, the parties agreed on a one-year time for suit limitation.

Held: The motion for summary judgment is granted.

There is no indication in the pleadings that the parties were not competent to agree on the terms of this contract, the inclusion of COGSA as part of it, or that there was any fraud in connection with the execution of it. Conduct of the defendant which might result in application of estoppel is not specified.

As to the reasonableness of the one-year time limitation, the complaint in para 7 indicates that the plaintiff from May 1967 to the date of the complaint made at least one demand upon the defendant for completion of the contract or for a refund of prepaid freight, thus indicating knowledge on the part of the plaintiff of a possible cause of action against the defendant. This action was brought on 28 May 1968, one year and 10 days from the date of discharge of the cargo at Naha, Okinawa.

Paragraph 19 on the reverse side of the bill of lading reads as follows:

In any event the Carrier and the ship shall be discharged from all liability in respect of loss or damage (including misdelivery or conversion) unless suit is brought within one year after the delivery of the goods or the date when the goods should have been delivered. Suit shall not be deemed brought until jurisdiction shall have been obtained over the Carrier and/or the ship by service of process or by an agreement to appear. [Italics supplied by the Court.]

In Zifferer v Atlantic Lines Ltd 278 F Supp 736, the Court cites cases in which the validity of a one-year period, a six-month period, and a three-month time-to-suit provision have been found valid. The Court said: 'the one year time for suit must be brought within one year, even if the carrier fails to comply with his obligations under the law and the contract'.

[For the unsuccessful appeal to the Appellate Division of the High Court, see Guerrero Family Inc v Micronesian Line Inc [1970] TTLawRp 15, 5 TTR 87 (CMI1751).]