This claim arose from a delivery of rusted pipes from Dalian, China, to Houston, Texas. In March 2008, the appellant QT Trading LP (QT) purchased 800 bundles of steel pipe from a Chinese company. The seller contracted with Daewoo Logistics Corp (Daewoo) to transport the cargo from Dalian to Houston. Daewoo chartered the MV Saga Morus from Saga Forest Carriers International AS (Saga). Saga had chartered the vessel from Attic Forest AS (Attic). Patt Manfield & Co Ltd (Patt) was the ship's operator and technical manager. In April 2008, the ship's captain authorised Daewoo and its agent to sign bills of lading on his behalf in strict compliance with the mate's receipts in relation to 'all remarks of quantity and condition'. Prior to loading, Attic's Protection and Indemnity Club (P&I club) hired an independent cargo surveyor who issued a 'pre-shipment cargo condition report' to the captain, finding damage to a large number of pipes. Based on this, the shipper issued documents entitled 'shipping orders' which were the same as mate's receipts. These documents described the cargo as 'clean on board', but incorporated the pre-shipment cargo condition report by stating 'as per P&I surveyor report'. However, the bills of lading issued by Daewoo's agent stated that the cargo was received 'clean on board' without mentioning any reference to the mate's receipts or the pre-shipment cargo condition report. The bills of lading were signed 'as agent for the carrier Daewoo'. After the vessel arrived in Houston, it was found that the cargo was rusted, and there was damage owing to improper handling and stowage.

QT filed a claim against the vessel, Daewoo, Attic, Saga, and Patt. On summary judgment, the District Court found that Attic and Patt were not parties to the bills of lading, and Daewoo had overreached its authorisation from Saga to sign on the bills of lading by not incorporating the mate's receipts. Daewoo was bankrupt and never entered an appearance. The District Court held that none of the defendants was a carrier under the Carriage of Goods by Sea Act 46 USC § 30701 (COGSA). The District Court also found that QT had failed to show that any of the defendants was a bailee with exclusive possession of the cargo so as to maintain a claim under bailment. QT appealed against the District Court's judgment on COGSA and bailment.

Held: The District Court's judgment is affirmed.

The thrust of QT's arguments was that all the defendants were COGSA 'carriers'; Daewoo had authority to bind all of them because the captain gave authority to Daewoo; the charterparty gave authority to the captain to sign bills of lading on behalf of the defendants; and the pre-shipment cargo condition report was not issued until after the bills of lading were signed.

A cargo owner may only recover under COGSA from the 'carrier' of the goods: see Thyssen Steel Co v MV Kavo Yerakas 50 F 3d 1349 (5th Cir 1995). COGSA incorporated the definition of the carrier and contract of carriage from the Hague Rules. However, the contract of carriage with an owner need not be direct. It may also be established by virtue of the charterer's authority to bind the vessel owner by signing the bill of lading 'for the master': Thyssen 1352 citing Pacific Employers Insurance v The MV Gloria 767 F 2d 229 (5th Cir 1985). Thus, in order to bind the owner and confer COGSA’s 'carrier' status, the charterer must have authority to sign the bill of lading 'for the Master', and the master must have authority to sign bills of lading for the shipowner: Pacific Employers 237 citing EAC Timberlane v Pisces Ltd 745 F 2d 715 (1st Cir 1984) (CMI1648). QT had the burden to prove that Attic, Patt, and Saga were COGSA carriers.

The District Court was correct in finding that QT failed to present any evidence that either Attic or Pratt was a party to the bills of lading or was Daewoo's agent. In order to assert a direct claim against Attic or Patt, QT had to establish privity of contract: Thyssen 1353. QT did not establish this. QT could have established an indirect claim by proving that the master was an agent of Attic or Patt. All references to the master and the owner in QT's pleadings related to Daewoo’s charterparty with Saga. QT presented no evidence that the master was an agent of Attic or Patt, or that either gave any authority to the master.

As for Saga, it cannot be said to be the COGSA carrier either. First, the signatures on the bill of lading state 'as agent for the carrier Daewoo' in the box labelled 'signed for the carrier'. This is in contrast to Pacific Employers, where the shipowner was a COGSA carrier by virtue of the charterer's agent signing bills of lading on behalf of the shipowner. In that case, the charterer's agent signed the bills of lading 'as agents by authority of the master'. In Pacific Employers, the Court noted that the owner's liability depends on the effect of the signature captioned 'by authority of the master'. However, in this case, the agent's signature indicates that it signed on behalf of Daewoo, not the master. Moreover, the charterparty between Daewoo and Saga does not appear to indicate that the authority of the master is necessary to sign bills of lading; the relevant provision notes that 'the captain, who if requested to do so by Daewoo, is to sign bills of lading for cargo as presented'. Therefore, Saga was not a party to the bills of lading because Daewoo's agent did not sign them on behalf of the master: see Man Ferrostaal Inc v MV Akili 763 F Supp 2d 599 (SD NY 2011) (CMI299) holding that the owner and manager of a vessel 'cannot be held personally liable' as COGSA carriers where the bill of lading clearly names only the charterer as carrier and does not purport to be a document signed 'for the master': Mahroos v SS Tatiana L 1988 AMC 757 (SD NY 1986). In general, a shipowner is not personally liable for a bill of lading issued by a charterer which does not indicate the name of the owner and which is not signed by or for the master: The Poznan 276 F 418 (SD NY 1921), holding that a vessel’s owner was not liable under the bills of lading, issued in the name of the charterer, because these did not purport to bind it.

Second, even if the language of the signature was not determinative, Saga was not a COGSA carrier because Daewoo's agent exceeded the authority granted to it by the master by failing to sign the bills of lading in conformity with the mate's receipts. Both the charterparty and the captain's authorisations to sign on his behalf granted Daewoo and its agent only the authority to sign the bills of lading in conformity with the mate's receipts. The charterparty explicitly noted that:

Charterers accept all consequences that might result from Charterers and/or their agents signing bills of lading not adhering to the remarks in mate’s or tally clerk’s receipts.

Daewoo’s agent signed the bills of lading as 'clean on board', without incorporating the mate's receipts or the pre-shipment cargo condition report. When the signing party exceeds its authority in signing bills of lading not in accordance with the master's instructions, the owner cannot be held liable as a COGSA carrier: see Cargill Ferrous Int’l v MV Sukarawan Naree 1997 WL 537992 (ED La 1997); Tuscaloosa Steel Corp v MV Naimo 1992 WL 477117 (SD NY 1992). QT's argument that there were no mate's receipts to rely on fails, because Patt established that the 'shipping orders' were in fact mate’s receipts. QT was not able to genuinely dispute this fact. QT’s argument that the pre-shipment cargo condition report was not issued until after the issuance of the bills of lading was immaterial, since the shipping orders and corresponding bills of lading were issued on the same day. The fact that Daewoo failed to sign the bills of lading in accordance with the mate's receipts is sufficient to establish that Daewoo exceeded its authority. Reliance on the argument that the pre-shipment cargo condition report was issued later was unhelpful. Therefore, the District Court’s summary judgment to defendants on QT’s COGSA claims was affirmed.

QT then argued its bailment claim. Bailment is the delivery of goods or personal property to the bailee in trust, under express or implied contract, which requires the bailee to perform the trust and either to redeliver the goods or to otherwise dispose of the goods in conformity with the purpose of the trust. A claim of bailment does not arise under admiralty law unless: (1) delivery to the bailee is complete; and (2) the bailee has exclusive possession of the bailed property, even as against the property owner: Thyssen 1354-55, citing TNT Marine Serv Inc v Weaver Shipyards & Dry Docks Inc 702 F 2d 585 (5th Cir 1983). In Thyssen, it was held that the cargo owner's bailment claim against the shipowner failed because the bills of lading and cl 8 of the charterparty indicated that the charterer also had possession of the cargo, thereby destroying exclusivity. Clause 8 of that charterparty contained similar language to cl 8 of the charterparty here, both noting that the charterers had responsibility for loading, stowing, securing, and discharging the cargo 'at their expense under the supervision of the Captain'. When a charterer has taken responsibility for stowage of cargo on a ship, the shipowner does not have exclusive possession of the property and so cannot be held liable as a bailee: Man Ferrostaal 9. Thus, the charterparty provision destroyed QT’s exclusive-possession argument because it is nearly identical to the provision used in Thyssen to find a lack of exclusive possession. Additionally, Daewoo’s agent signed the bills of lading on behalf of Daewoo, further undermining the claim that Saga had exclusive possession of the cargo.