This was a cargo claim brought by Saray Dokum ve Madeni Aksam Sanayi Turizm AS (Saray), a Turkish architectural manufacturing company, against MTS Logistics Inc (MTS), a New York-based non-vessel operating common carrier (NVOCC), under the US Carriage of Goods by Sea Act, 46 USC § 30701 n (COGSA). Saray alleged that MTS failed to deliver 1,534,000 kgs of resin, which Saray had purchased from Oxyde Chemicals Inc, to Istanbul, as provided for in two bills of lading issued by MTS. For previous proceedings in this matter, see CMI1349.

Held: Judgment for MTS. MTS is not liable to Saray under COGSA, the Pomerene Act, or general maritime law. The Court awards MTS attorneys' fees in an amount to be determined.

COGSA is 'the culmination of a multilateral effort to establish uniform ocean bills of lading to govern the rights and liabilities of carriers and shippers inter se in international trade': Vimar Seguros y Reaseguros SA v M/V Sky Reefer 515 US 528, 537 (1995) (CMI1456). COGSA establishes rules that overlay bills of lading between carriers and their identifiable contracting partners - usually suppliers and consignors. COGSA claims are unique in that an action under COGSA is a maritime action in the nature of a mixed tort, contract, and bailment cause of action. See Polo Ralph Lauren LP v Tropical Shipping & Constr Co 215 F 3d 1217, 1220-21 (11th Cir 2000) (CMI1536) (concluding that COGSA provides a 'hybrid' claim 'born of elements from contract and tort'). Under COGSA, a carrier must 'properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried': COGSA § 3(2). To establish a prima facie case under COGSA, Saray bears the initial burden of proving both delivery of the goods to the carrier in good condition, and outturn by the carrier or by the stevedore, for whose conduct the carrier is responsible, in damaged condition. If the plaintiff establishes a prima facie case for recovery, it will be entitled to prevail unless the carrier brings itself within one of the exceptions for defences to liability set forth in COGSA. For instance, the carrier shall not be responsible for loss or damage arising or resulting from, among other things, '[a]rrest or restraint of princes, rulers, or people, or seizure under legal process' or 'any other cause arising without the actual fault or privity of the carrier and without the fault or neglect of the agents or servants of the carrier': COGSA § 4(2). If the carrier-defendant proves that the breach implicates one of COGSA's exceptions, the burden shifts back to the plaintiff to show concurrent negligence on the part of the carrier.

The parties both contend that the Pomerene Bills of Lading Act, 49 USC § 80101 ff (the Pomerene Act) applies to this dispute as well. Having assessed the evidence adduced at trial, the Court concludes that Saray is a 'merchant' under the original bills of lading's merchant clause. Accordingly, Saray may sue on the original bills of lading.

The Court concludes that MTS has established its entitlement to the 'restraint of princes' defence to any liability under COGSA for its failure to deliver the resin. The defence 'refers to a sovereign's exercise of its power controlling and divesting the dominion or authority of an owner over its ship': Sedco Inc v SS Strathewe 800 F 2d 27, 33 n 3 (2d Cir 1986) (CMI1827). It covers 'any forcible interference with the voyage or adventure at the hands of the constituted government, or ruling power of any country, whether done by it as an enemy of the State to which the ship belongs, or not': Lekas & Drivas Inc v Goulandris 306 F 2d 426, 430 (2d Cir 1962). In order for the restraint of princes defence to shield a carrier from liability, however, 'the restraint must be a proximate cause of the loss': Sedco 33.

Here, the evidence shows that US Customs issued a redelivery notice for the resin to Mediterranean Shipping Co SA (MSC) while the resin was in the middle of its journey from Houston to Istanbul. Accordingly, MSC had no choice but to offload the Resin at Sines - the first relay point in its journey - and then arrange for the resin to be reshipped back to Houston as quickly as possible. The Court concludes that the redelivery notice was the only reason for (and therefore the proximate cause of) the resin being redelivered to the Port of Houston on 6 April 2017. Accordingly, the redelivery notice constitutes a restraint of princes under COGSA.

The Court rejects Saray's argument that the redelivery notice was insufficient to constitute a 'seizure' or restraint by the US government. The Second Circuit has defined restraint broadly to encompass any forcible interference with the voyage or adventure at the hands of the constituted government. The defence covers far more than permanent seizure or complete destruction of cargo by a government. In fact, courts frequently find the defence applicable when goods are temporarily detained by a government's customs administration.

Further, COGSA ceased to apply after the resin was returned to the Port of Houston for inspection by US Customs, because that was the moment when the resin was no longer in MTS's 'care, custody and/or control'. Even if COGSA and the original bills of lading somehow still governed the parties' relationship vis-à-vis the resin following its release from US Customs, the redelivery notice proximately caused MTS's sale of the resin to a third party, and thus the sale is covered by the restraint of princes defence. Here, the Court finds that the sale of the resin was a foreseeable consequence of the redelivery notice. From the moment US Customs issued its redelivery notice, the resin began incurring additional freight charges for its return journey from Sines to Houston. In addition, it incurred detention and demurrage charges for each day of the roughly two months that it sat on the dock at the Port of Houston pending inspection by US Customs. MTS's sale of the resin was not only a valid exercise of its carrier's lien under the original bills of lading, but also an entirely reasonable decision.

Finally, the Court notes that Saray has failed to prove that MTS's negligence caused the restraint of princes - the redelivery notice. Accordingly, Saray has failed to prove that MTS is liable under COGSA and/or the original bills of lading.