Berisford Metals Corp. v. S/S Salvador

Berisford Metals Corporation (Berisford) (plaintiff) contracted with a seller in Brazil for the purchase of 50 metric tons of tin ingots for $13,000 per metric ton. Berisford and the seller agreed that Berisford was obligated to pay upon presentation of a negotiable on-board bill of lading covering the ingots. A bill of lading constitutes an acknowledgment by a carrier that it received the described goods for shipment and is a contract of carriage. The seller delivered the ingots to A/S Ivarans Rederi, the owner and operator of the ship the S/S Salvador (defendant) (Ivarans). Ivarans acknowledged receipt of the 50 tons of ingots, which were packed in 100 bundles. The bundles of ingots were stored in four containers in a Brazilian government-controlled security yard before being loaded onto the ship. After the containers were loaded, Ivarans issued a clean on-board bill of lading stating that the ship had received all 100 bundles of ingots. Ivarans did not verify the contents of the containers or confirm they contained 100 bundles of ingots at the time of loading. The seller had presented Berisford with the negotiable bill of lading covering the 100 bundles of ingots with a draft in the amount of $662,938.50. Berisford paid the full amount of the draft and received the negotiable bill of lading. However, when the ship arrived in New York, it was discovered that two of the containers that were supposed to contain 70 bundles of ingots were empty. Berisford brought an action against Ivarans seeking $525,000 in damages for the missing 70 bundles of ingots. Ivarans responded by invoking the limitation-of-liability provision in § 4(5) of the Carriage of Goods by Sea Act (COGSA) and claimed its liability was limited to $500 per bundle.