Ditta Goldoni & Iodio and Ditta Sani & Pettinelli were the consignees of 4,608 bales of cellulose carried from Nanaimo, Canada, to Livorno, Italy, on a ship owned by Italia Navigazione SpA (IN). Some of the bales were damaged in transit. The consignees sued IN in the Tribunal of Genoa.

In March 1982, the Tribunal of Genoa upheld the claim. IN appealed to the Court of Appeal of Genoa, which confirmed the Tribunal's judgment in November 1983. Notably, the Court of Appeal of Genoa held that it is not enough for the carrier to prove its due diligence to be exempt from liability. The carrier also has to provide evidence that the damage was caused by an excepted peril under art 4.2 of the Hague Rules and, in cases otside the list of excepted perils, must identify the source of the damage, otherwise the exemption mechanism does not come into play.

IN appealed the decision of the Court of Appeal of Genoa in cassation, invoking a violation of art 4 of the Hague Rules. In particular, IN argued that the United States COGSA 1936 applied, as stated in the bill of lading, and that further, in the case of an 'unknown cause' of cargo damage, the carrier is exempt from liability if it proves that one of the excepted perils occurred or if it shows that it fulfilled its obligations under art 3 of the Hague Rules, including the duty of seaworthiness and of taking care of the cargo.

Held: The appeal is dismissed.

Concerning the applicability of the United States COGSA 1936, the Court noted that its provisions and those of the Hague Rules were equivalent in this case, and that IN also recognised this equivalence.

As to cargo damage from an 'unknown cause', the Court emphasised that the carrier needs to show that one of the excepted perils occurred, as well as the causal link between the latter and the damage, in order to be exempted from liability. The Court recalled that the typical excepted perils provided by arts 4.2.a-4.2.p of the Hague Rules represent fortuitous or force majeure cases.

Further, the Court highlighted the distinction between typical and atypical excepted perils in respect of the burden of proof. Concerning typical excepted perils in arts 4.2.a-4.2.p, the carrier must prove only that this event caused the damage, without having to prove that the excepted peril did not occur because of its personal fault or the commercial fault of its auxiliaries (as this burden falls on the cargo interests). On the other hand, the carrier has a double burden of proof when atypical excepted perils are concerned under art 4.2.q of the Hague Rules. First, it must show that the damage did not depend on its fault or that of its auxiliaries, and secondly, that such fault was not a concurrent cause in the causal link of the event.

Therefore, the Court held that IN could not be exempted from liability by invoking an unknown cause, as that could not be identified with one of those exempt events, or its exercise of due diligence during loading, stowage and unloading operations. The Court also noted that damage from an unknown cause could not be included in the typical excepted perils, as it related to an unknown event, or the atypical excepted perils provided by art 4.2.q of the Hague Rules. Indeed, in the latter category, the carrier must prove that an atypical event outside its sphere of control took place, and if it succeeds in providing this, the cause of the loss or damage of the cargo will not be unknown, by definition.

In conclusion, the Court pointed out that its reasoning was in line with the objective test of the carrier's liability and the need for equity in the relationship between the cargo interests and the carrier.