The sea-carriers' containership loaded containers at Chinese and Japanese ports and then arrived at Long Beach, USA. A part of containers were transhipped into the train for Chicago. During the inland carriage, the train was derailed near Tyrone in Oklahoma and some of container cargoes sustained damage. Cargo interests filed a lawsuit against the shipping company and railroad company to a California State Court. It was removed to U.S. District Court in California later.

The first instance court granted the validity of the Jurisdiction & Himalaya clauses in the carriers' through B/L and found that the U.S. COGSA applied to the through B/L even the incident occurred during the inland carriage. However, the Ninth Circuit Court of Appeals reversed the decision of the District Court and held that the Carmack Amendment (which stipulates carriers' strict liability). Both defendants appealed the case to the United States Supreme Court.

The Supreme Court reversed the Ninth Circuit decision and granted the validity of the above clauses in the carriers' through B/L. Further, the Court held that the sea- carriers were allowed to limit their liability by U.S. COGSA under their through B/L covering the carriage of cargo from an overseas port to United States destination even where cargo is lost or damaged during the inland leg of the carriage.

Please find attached file from US law firm in Long Beach, Cogswell Nakazawa & Chang LLP which give detailed more expositions. We hope this would be of your help.

Attachment : Information from US Law firm in Long Beach