In case of any damage or loss incurred to cargo that is not attributable to maritime shipping, if the shipper errors in delivering the cargo or releasing the cargo to the consignee without following the agreed-upon terms of release after the cargo arrives at port, Article 56 of the Maritime Law does not apply (Taiwan)

Ankwei Chen

The Taichung Branch of the Taiwan High Court rendered the 106-Chung-Shang-170 Civil Decision on March 21, 2018 (the “Decision”) in which it held that for damage or loss incurred to cargo that is not attributable to maritime transportation, Article 56 of the Maritime Law does not apply to errors made by the shipper in releasing the cargo at port.

The Plaintiff in this case filed a complaint alleging that it had consigned RIM Co. and the Defendant to jointly ship certain goods, and the Defendant issued a bill of lading in the name of RIM Co. to the Plaintiff.  The Defendant then mistakenly failed to wait for the Plaintiff’s telephone notification before releasing the goods to the customer, and the Plaintiff was unable to receive payment from the customer after the customer announced it was undergoing reorganization, thereby depriving the Plaintiff of possession of the goods.  The Plaintiff thus filed this action to recover damages against the Defendant.

According to the Decision, although Article 56 of the Maritime Law specifically stipulates that the statute of limitations on pursuing a shipper’s liabilities for damage or loss of cargo is one year, this refers to damage or loss that occurred in the course of maritime transport; if the damage or loss is not attributable to maritime transport but only after the cargo arrived at port where the shipper erroneously delivered the goods to an unauthorized party or failed to release the goods to a consignee pursuant to the agreed-upon terms of release, then the above statute does not apply.

It was further pointed out in the Decision that the goods at issue in this case arrived at the port and were forwarded to a container yard in Chicago, Illinois, and after RIM cleared customs and took delivery of the cargo, it released the goods to a third party without waiting for the Plaintiff to notify the Defendant to forward such information to RIM.  Since such damage or loss was not incurred in the course of maritime shipping, Article 56, Paragraph 2 of the Maritime Law does not apply.   Therefore, the Defendant’s argument that the Plaintiff’s one-year statute of limitation had already run out in claiming damages against the Defendant was not accepted by the court, and the court then subsequently ruled in favor of the Plaintiff on such basis.