In April 1982 and April 1983, Uncle Ben's International Division of Uncle Ben's Inc (Uncle Ben's) contracted with Hapag-Lloyd AS (Hapag-Lloyd) for the carriage of cargoes of rice from Houston, Texas, to various places in Europe. Hapag-Lloyd transported the rice, completing most shipments by January 1984, and delivered the final shipment around November 1984.

On 13 November 1985, Uncle Ben's filed suit in the state court in Houston against Hapag-Lloyd and its agent Biehl & Co (Biehl) claiming that the rice was delivered in a contaminated state. Uncle Ben's alleged that the contamination was caused by the negligent provision of storage containers and general negligence. Hapag-Lloyd removed to the federal court by invoking the Carriage of Goods by Sea Act, 46 USC ss 1300 ff (COGSA).

Uncle Ben's filed an amended petition, alleging breach of warranty and negligence. Hapag-Lloyd in turn moved for summary judgment, invoking time limitation. Hapag-Lloyd claimed that its bills of lading incorporated the COGSA one-year time limit for filing suits for damage to goods.

The District Court granted Hapag-Lloyd's motion, concluding that Uncle Ben's suit was not filed within the time limit. Uncle Ben's appealed, contending that COGSA's one-year time limit did not apply to the agreement to provide containers, but if it did, the limit was invalidated by the Harter Act, and that Biehl remained liable for its negligence, separate from any claim under the bills of lading.

Held: The appeal is dismissed. The decision of the District Court is affirmed.

Uncle Ben's argued that the COGSA statute of limitations should not apply to the claims for damage to the rice because, even though the bills of lading incorporate COGSA and apply its provisions to the preloading actions of Hapag-Lloyd, the bills of lading do not apply to the claims asserted, because Uncle Ben's and Hapag-Lloyd had a separate agreement affecting the containers. In the alternative, Uncle Ben's argued that the COGSA limitations offend the Harter Act's prohibition against a carrier unreasonably limiting its liability through its bills of lading.

Uncle Ben's offered no proof of a separate agreement for the provision of storage containers. Rather, its affidavit mentions that Hapag-Lloyd was aware of Uncle Ben's requirement that its goods must be shipped in contamination-free containers. Uncle Ben's contended that since the bills of lading were issued after the containerisation, they cannot apply to their claims. This Court concluded to the contrary in Baker Oil Tools v Delta Steamship Lines Inc 562 F 2d 938 (5th Cir 1977). In that case a carrier lost goods before they were loaded. The bill of lading was not issued because the goods were not loaded. In that situation, this Court held the parties to the terms of the bill of lading which would have been issued. Because the bill of lading would have incorporated COGSA, and would have made it applicable to the period of custody during the preloading period, the carrier was held liable to the shipper under COGSA.

Uncle Ben's maintained that the one-year limitation period drawn from COGSA violates the Harter Act prohibition against unreasonable limitations of liability. If the parties extend the provisions of COGSA to the preloading phase, any inconsistency with the Harter Act must yield to the latter. However, COGSA's limitation period is not inconsistent with the Harter Act.

Uncle Ben’s final argument is that since COGSA does not apply to Hapag-Lloyd, nor should it apply to Biehl. However, the COGSA limitation is applicable to preloading, and thus the Himalaya clauses in the bills of lading make the limitation applicable to Biehl. The District Court properly dismissed the action against Biehl.