The Supreme Court has ruled that a shipping company cannot be held liable if goods loaded in a container for ocean transport are damaged during overland transport.
According to legal sources on the 21st, the Supreme Court's Second Division (Presiding Justice Park Young-jae) affirmed a lower court ruling that partially sided with the plaintiff in a recourse claim lawsuit filed by a non-life insurer against a logistics company and three land and sea carriers. However, the Supreme Court reversed the portion that had ruled against the plaintiff with respect to A Shipping and remanded the case to the Seoul High Court.
The case arose in 2022 during the process of transporting 20 robotic arms by Doosan Robotics to a U.S. corporations via a port. Doosan Robotics commissioned a freight broker for the transport, and the broker subcontracted the sea and land segments to companies A and B, respectively. Company B re-subcontracted part of the transport to another firm.
The problem occurred during overland transport. Doosan Robotics asked the freight broker to set the temperature inside the container carrying the robotic arms at 18 degrees Celsius. But an employee of company A told a container storage company employee "minus 18 degrees Celsius." The robotic arms, kept frozen for several days, were damaged.
The insurer paid Doosan Robotics the insurance money and then filed a recourse suit worth $710,000 (about 1 billion won) against the freight broker, company A, company B, and a road carrier.
In the first trial, the court ruled that all carriers must jointly pay $640,000 (about 900 million won). Recognizing the liability of the logistics company and the carriers, the court sided with the insurer. The appeals court also ruled partially in favor of the insurer, but limited the defendants' liability to 70% of the damages. Company A's liability was also reduced compared with the first trial.
The Supreme Court found that the lower court's ruling recognizing the compensation liability of the broker and the remaining companies was justified. However, it overturned the portion recognizing company A's liability.
The Supreme Court determined that because the accident occurred on land, separate from ocean transport, the limitation of liability provisions for shipping companies could not be applied to company B.
The Supreme Court noted, "Ocean transport, unlike land transport, involves inherent risks, and the amount of damage can be large, so there is a need to limit a sea carrier's liability for compensation."
It went on to say, "Company A's provision of the container and the incorrect temperature setting cannot be viewed as acts of receiving or storing the cargo as a sea carrier, and it is also difficult to see this accident as an inherent risk associated with ocean transport."