This was an appeal from the Seoul Central District Court's judgment of 5 February 2021. The plaintiff was a Korean company involved in domestic and foreign cargo transport and customs clearance, and the defendant was a Swiss company involved in the business of maritime transport.

The plaintiff entered into a cargo transport contract with Samsung Heavy Industries Co Ltd (SHI) for a period from 1 October 2015-30 September 2016. The main provisions were as follows:

Article 3 (Definition of Terms)
The term 'transportation' in Article 2 means the receipt of all cargo transportation and shipping documents (B/L, invoice, packing list, etc) requested by SHI from the plaintiff, all administrative procedures necessary for transportation, the progress of transportation, and the result thereof. It refers to the overall procedure related to the transportation of goods ...

Article 4 (Obligations of Plaintiff)
(1) The plaintiff shall transport the cargo promptly, properly, and safely to the place designated by SHI on the transportation schedule requested by SHI as a good manager in transporting the cargo requested by SHI.
(2) The plaintiff shall, in the handling of SHI's cargo, notify SHI without delay and do its best to rectify it in advance if a special abnormality occurs during transportation from the place of departure to the place of arrival.
(3) The plaintiff is responsible for compensating for all damages caused by the negligence of the above provisions and causing damage to SHI.

Article 13 (Compensation for Damages)
(1) The plaintiff shall indemnify SHI for all damages in the event of an accident during cargo transportation or damage to SHI due to the loss, damage, or loss of all or part of the cargo. ...
(3) In the event that the damage referred to in Paragraph 1 occurs without a cause attributable to the plaintiff, the plaintiff shall prepare the necessary materials (photos, confirmation documents, etc) and submit it to SHI and prove that there is no cause attributable to the plaintiff.

SHI requested the plaintiff to transport a jackup rig and other goods from Haugesund, Norway, to SHI's warehouse in Geoje, South Korea, on 1 December 2015 in accordance with the above cargo transportation contract. The plaintiff negotiated with Mueller+Partner GmbH (Mueller), a German transport brokerage company, for the transport of this cargo around September 2015. On 21 September 2015, Mueller inquired about a shipping fee from MSC Germany GmbH (MSC Germany). MSC Germany sent an email with an estimate and a booking confirmation email.

After that, the cargo was loaded into a 40-foot flat rack container and housed together with a 20-foot container loaded into the bumper frame of the cargo. It was delivered to Spedman Global Logistics AS (Spedman), a Norwegian freight forwarder, and loaded onto the deck of the defendant's ship, the ECL Challenger. The cargo was transported by sea to Bremerhaven, Germany, the transhipment port, and was unloaded there on 6 January 2016.

Muller informed the plaintiff on 11 January 2016 that there was possible damage to the cargo, as the tarpaulin was torn. The cargo was repackaged and shipped under deck on the defendant's ship, the Mary Maersk, on 21 January 2016 to Busan. It was then transported by land from Busan to the SHI's warehouse on 17 February 2016. SHI found that the cargo had suffered rust damage.

On 30 November 2016, SHI filed a complaint against the plaintiff in the Seoul Central District Court. The Court found in favour of SHI. The plaintiff appealed to the Supreme Court, arguing that the defendant carrier, rather than the plaintiff, was liable to SHI.

Held: Appeal dismissed.

The reservation confirmation email sent by MSC Germany as the defendant's agent to Mueller contained a hyperlink to the defendant's website, which provided that 'all litigation shall be brought exclusively in the High Court of London, and the shipper agrees not to bring action in any other Court' (cl 10.3). However, it is nonetheless reasonable to assume that the Korean courts have international jurisdiction over this case. The facts alone are insufficient to conclude that the plaintiff consented to this English exclusive jurisdiction agreement, and there is no other evidence suggesting that the plaintiff and the defendant intended such an exclusive jurisdiction agreement. It seems insufficient to acknowledge that an agreement on exclusive jurisdiction to the London High Court has been reached between the plaintiff and the defendant in these circumstances.

Even if it is considered that there was a jurisdiction agreement between the plaintiff and the defendant, it is difficult to recognise the effect of excluding the jurisdiction of the Republic of Korea therein in light of legal principle. The shipper, Mueller, is a German corporation, and the defendant carrier is a Swiss corporation. The plaintiff consignee of the cargo is a Korean corporation, the destination of transport is Korea, and after the cargo damage was discovered by SHI, the owner of the cargo, the cause of the cargo damage and the amount of damage was investigated through litigation. All of this was done in the Republic of Korea, and the Korean courts have substantial relevance to the parties to this case and the disputed matter. A speedy, appropriate, and efficient trial is possible in a Korean court. The defendant is a company engaged in the international shipping business and has a local corporation in Korea. As a result, an exclusive jurisdiction agreement to exclude the jurisdiction of the Korean courts and to have exclusive jurisdiction only in the London High Court of the United Kingdom is remarkably unreasonable and unfair, and thus has no effect, as a violation of public order and morals.

The governing law of the contract of carriage between the parties is the law expressly or impliedly chosen by the parties (art 25.1 of the Private International Law). The plaintiff asserts that Korean law, not English law, should be applied as the governing law (however, Korean law has also adopted the Hague-Visby Rules, so it is not substantially different from English law). This argument cannot be accepted.

English law regulated the liability of sea carriers through the Carriage of Goods by Sea Act 1924 (UK), which gave domestic effect to the Hague Rules, and later through the Carriage of Goods by Sea Act 1971 (UK), which gave effect to the Hague-Visby Rules. Meanwhile, regarding the rights of the consignee or holder of the bill of lading, the Carriage of Goods by Sea Act 1992 (UK) was enacted, which replaced the Bills of Lading Act 1855 (UK). In matters not governed by these two statutes, English common law applies.

The sea waybill in this case clearly states that the Hague-Visby Rules will apply even though it is not a document of title, such as a bill of lading. In the case of deck cargo, art 1.c of the Hague-Visby Rules specifies that the Rules do not apply, but the risk of loss or damage to the cargo is high, so the parties are free to contract to set out the conditions of carriage differently. However, in order to avoid the application of the Hague-Visby Rules, the bill of lading must indicate that the cargo will be transported on deck, and must in fact be transported as such on deck. English case law seems to interpret the above requirements strictly in terms of third-party protection, regarding an indication of deck loading in the contract of carriage, for example, together with a provision granting the maritime carrier the discretion to carry out deck transportation. There are cases where these requirements have been judged not to be met: see Svenska Traktor v Maritime Agencies (Southampton) [1953] 2 QB 295.

On the other hand, carriage on deck without the consent of the shipper is a completely different issue from authorised above-deck cargo, and is treated as a so-called fundamental breach of contract under English law. This is because, under English law, the party who has fundamentally breached the contract is at a disadvantage because it cannot invoke all the indemnification clauses. In the judgment of Photo Production v Securicor Transport [1980] AC 827, this traditional typology was abolished, and the subsequent jurisprudence is somewhat unclear. However, if the bill of lading stipulates that it grants the shipper the discretionary power to carry out deck transport, there is a precedent that it can be considered that consent has been obtained (Svenska Traktor).

The Hague-Visby Rules also govern insufficient packaging, etc, which is set out as a reason for the carrier's immunity (art 4.2.n). The maritime carrier is obliged to provide a seaworthy vessel (art 3.1), and must load, handle, transport, store, manage, and discharge the cargo to be transported with due care and due diligence. This is because there is an obligation to do so (art 3.2). 'Properly' here means 'according to the normal system', and means transporting the goods in accordance with a system that would be considered normal in light of the knowledge the carrier knew, or should have known, about the nature of the goods.

In the course of negotiations between Mueller and MSC Germany, the quotation explicitly indicated that the cargo in this case would be transported on deck, according to the 'Provisions for Open Top Containers and Flat Rack Containers'. The phrase ‘loading on deck at the risk of the sender’ was also included in writing, and the estimate was made accordingly. The terms and conditions also stated that 'unless it is specifically stated on the front of this sea waybill that the container or cargo will be loaded below deck, the cargo will be loaded and transported above or below the deck without notice to the shipper' (cl 18.1). This corresponds to a so-called free deck agreement, which gives the carrier the discretion to carry the cargo on deck according to its choice. The cargo was packaged in waterproof tarpaulin, and it seems to have been expected to be transported on deck in a flat rack container. There is no evidence to suggest that the consignor requested that the cargo in this case be loaded in the hold rather than on the deck, or that it requested a re-evaluation accordingly. Accordingly, the plaintiff's argument in this regard is without merit.