Ship Lawyer Maritime Contracts and Liens 2 — Questions and Answers
Question 1: What is a 'forum selection clause' in a bill of lading and how do courts treat it?
- A contractual provision designating where disputes must be litigated, generally enforced in maritime cases (Correct answer)
- A clause requiring arbitration of all disputes
- A provision limiting the carrier's liability
- A requirement to file claims within 1 year
Correct answer: A contractual provision designating where disputes must be litigated, generally enforced in maritime cases
Forum selection clauses in bills of lading designate a specific court or country for dispute resolution and are generally enforced by U.S. courts in maritime cases under The Bremen v. Zapata decision.
Question 2: What is the 'Himalaya clause' in maritime cargo contracts?
- A clause extending the carrier's defenses and liability limits to stevedores and sub-contractors (Correct answer)
- A clause requiring cargo to be insured
- A provision for force majeure events
- A clause governing perishable cargo handling
Correct answer: A clause extending the carrier's defenses and liability limits to stevedores and sub-contractors
A Himalaya clause extends the carrier's COGSA defenses and liability limitations to agents, servants, and independent contractors (like stevedores) who assist in the performance of the contract.
Question 3: What must a cargo claimant do to preserve a COGSA claim for cargo damage that is not apparent at the time of delivery?
- Give written notice to the carrier within 3 days of delivery (Correct answer)
- File suit within 1 year
- Notify the carrier within 24 hours
- Report the damage to U.S. Customs
Correct answer: Give written notice to the carrier within 3 days of delivery
COGSA requires written notice of non-apparent cargo damage within 3 days of delivery; otherwise, delivery is presumed to have been in good condition.
Question 4: What is the effect of a 'full and down' or 'Said to Contain' notation on a bill of lading?
- It limits the carrier's liability by indicating the carrier did not verify the cargo contents (Correct answer)
- It confirms the cargo was inspected and delivered in good condition
- It indicates the vessel was fully loaded
- It means the cargo was sealed and delivered intact
Correct answer: It limits the carrier's liability by indicating the carrier did not verify the cargo contents
A 'Said to Contain' (STC) notation means the carrier did not verify the cargo contents, limiting the bill's evidentiary value regarding the condition of goods inside containers.
Question 5: What is a 'ship mortgage' under U.S. maritime law and what statute governs it?
- A preferred ship mortgage under the Commercial Instruments and Maritime Liens Act (CIMLA) (Correct answer)
- A standard real property mortgage applied to vessels
- A chattel mortgage under state law
- An admiralty lien for unpaid vessel purchase price
Correct answer: A preferred ship mortgage under the Commercial Instruments and Maritime Liens Act (CIMLA)
A preferred ship mortgage is a recorded lien on a U.S.-flag vessel created pursuant to CIMLA (46 U.S.C. §§ 31321-31330), giving the mortgagee a priority claim on the vessel.
Question 6: What happens to maritime liens when a vessel is sold through a U.S. Marshal's sale in admiralty?
- All pre-existing maritime liens are extinguished and the buyer receives the vessel free and clear (Correct answer)
- All liens survive the sale and bind the new owner
- Only wage liens survive the sale
- The buyer must satisfy all liens within 90 days
Correct answer: All pre-existing maritime liens are extinguished and the buyer receives the vessel free and clear
A U.S. Marshal's sale in admiralty extinguishes all pre-existing maritime liens, delivering the vessel to the buyer free and clear of such encumbrances.
Ship Lawyer Maritime Contracts and Liens 2
What is a 'forum selection clause' in a bill of lading and how do courts treat it?