[1] In a case where a bill of lading has a general governing law provision on the scope of a carrier's liability, the law of a specific country which enacted an international convention on the scope of a carrier's liability shall be applied, and where it satisfies the applicable requirements of the pertinent country's law, whether the law of the said country shall be applied preferentially

[2] In a case where Gap corporation entered into a sales contract with Eul corporation and entered into a marine cargo insurance contract with Gap corporation to claim damages for a tort against Eul corporation which transported the cargo after receiving a bill of lading held by Gap corporation after paying insurance money to Gap corporation, the case holding that the governing law of damages for the above tort is the governing law of the bill of lading in accordance with Article 32 (1) and (3) of the Private International Act

[1] It is based on the principle of party autonomy to allow the designation of governing law in an international contract. Although a bill of lading provides for the general governing law, it is a matter of interpretation of a party’s intent to determine whether the so-called “clause clause” is a partial designation of governing law or the incorporation of the pertinent international convention or foreign legal provisions into a contract, which is basically a matter of interpretation of a party’s intent to apply the law of a specific country that enacted the international convention or the relevant international convention with respect to the scope of a carrier’s liability, provided that the law of a specific country that enacted the international convention regarding the scope of a carrier’s liability even though the general governing law provision exists and that country satisfies the requirements for the application of the applicable law of the pertinent country, preferentially applying the law of that country as the governing law to the limitation of a carrier’

[2] In a case where Gap corporation entered into a sales contract with Eul corporation and entered into a marine cargo insurance contract with Eul corporation to the extent that the cargo imported into the Republic of Korea is not commercial goods during the transportation, and Eul et al. paid insurance money to Gap corporation and claimed damages for tort against Eul corporation which transported the cargo after obtaining a bill of lading held by Gap corporation, the case holding that the legal relationship between Byung corporation which is a bill of lading holder and Eul corporation which is a carrier shall, in principle, be governed by the governing law of the bill of lading, and that the governing law shall also be applied to cases where the legal relationship is infringed by the illegal act of a fixed corporation pursuant to Article 32 (1) and (3) of the Private International Act

[1] Article 25 of the Private International Act / [2] Article 32 (1) and (3) of the Private International Act

D non-life insurance Co., Ltd. (formerly: Dong Fire and Marine Insurance Co., Ltd.) and six others (Law Firm Cheonghae, Attorneys Seo-gu et al., Counsel for the plaintiff-appellant)

Klomar Group AG (Attorney Jeong Byung-hee et al., Counsel for the defendant-appellant)

Eitzen Pool Pte (Law Firm Sejong, Attorneys Choi Jong-tae et al., Counsel for the plaintiff-appellant)

Busan High Court Decision 2012Na10751 decided May 22, 2014

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff’s Intervenor, and the remainder are assessed against each appellant.

The grounds of appeal are examined.

1. Regarding the plaintiffs' grounds of appeal

A. As to the grounds of appeal Nos. 1 through 4

1) The principle of party autonomy is based on which the designation of the governing law in an international contract is allowed. Even if a bill of lading provides for the general governing law, it is a matter of interpretation of a party’s intent to determine whether the so-called “clause clause” is a partial designation of the governing law in the international agreement or the law of a specific country that enacted the said international agreement with respect to the scope of a carrier’s liability or the said international agreement, or whether the said clause is incorporated into a contract under the said international agreement or the relevant foreign legal provision. If the provision provides that the law of a specific country that enacted the international convention regarding the scope of a carrier’s liability despite the general governing law provision provides that the law of a specific country that enacted the international convention regarding the scope of a carrier’s liability shall govern the carrier’s limitation of liability, barring special

2) The lower court, based on its stated reasoning, determined as follows.

A) Since the provision of the English law as the governing law under the instant maritime shipping contract was incorporated into the instant bill of lading pursuant to the preamble of the instant bill of lading, the general and overall governing law of the instant bill of lading is the English law.

B) The latter part of the instant bill of lading explicitly provides that the scope of the Defendant’s liability, who is a carrier, shall be governed by the U.S. Maritime Cargo Transportation Act. Notwithstanding the general governing law clause, if the law of a specific country is prescribed with respect to the limitation of liability of a carrier, barring special circumstances, the intent of a party shall be deemed to apply the U.S. Maritime Cargo Transportation Act to the limitation

C) In the interpretation of the latter part of the instant bill of lading, the port of loading the instant cargo is a U.S. port of loading and the U.S. Maritime Cargo Act provides that “the port of loading or unloading shall apply to all international maritime cargo transport contracts located in the U.S..,” so the applicable law on the Defendant’s limitation of liability based on the instant bill of lading is the U.S. Maritime Cargo Transportation Act. In addition, in applying the U.S. Maritime Cargo Transportation Act as the applicable law, other requirements such as applying the law of the country where the port of loading is located as the applicable law in addition to the aforementioned requirements. Moreover,

D) When applying the legal principles of the English Maritime Cargo Transportation Act with respect to the contractual liability of the carrier under the instant bill of lading, the instant cargo was delivered from the consignor without any defect to the carrier, and the damage was incurred as the carrier went away in the course of maritime transport, barring special circumstances, the Defendant is liable to compensate the Plaintiffs, who are the bill of lading holders.

E) The Defendant’s liability is limited to USD 500 per ton under the U.S. Maritime Cargo Transport Act, the applicable law on limitation of the Defendant’s liability.

3) Examining the aforementioned legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the applicable law, interpretation of terms and conditions of a bill of lading, and interpretation of the language of the disposal document, or by misapprehending the parties’ agreement.

B. Ground of appeal No. 5

The lower court, as a matter of course, deemed that the tort liability even if the parties did not have any express or implied agreement to apply the limitation of liability clause stipulated in the bill of lading to tort liability.

In light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on tort liability of the issuer of a bill of lading.

2. As to the Defendant’s ground of appeal

A. As to the first ground for appeal

1) Of the grounds of appeal No. 1, the argument that there is a violation of the rules of evidence regarding the carrier's contractual liability is merely a dispute over the selection of evidence and the fact-finding by the court below, and thus, it does not constitute

2) As to the damages for delay in the first place of appeal, the court below set the interest rate in its discretion on the ground that applying the English law, which is the governing law on the carrier’s contractual liability based on the instant bill of lading, the rate of delay interest under the English law, shall be set at the discretion of the court until the judgment is rendered, and that, in the event of ordering performance in a currency other than the English currency even after the date the judgment was rendered, it may be set at the discretion of the court. The judgment of the court

B. Regarding ground of appeal No. 2

1) Article 32(1) and (3) of the Private International Act provides that a tort shall be governed by the law of the place where the tort was committed, and that the legal relationship existing between the perpetrator and the victim is infringed by a tort, the legal relationship shall be governed by the law applicable to such legal relationship. In principle, the legal relationship between the plaintiffs who are the holders of the bill of lading of this case and the defendant who is the carrier shall be governed by the law applicable to the bill of this case. In a case where such legal relationship is infringed by the defendant's tort, the governing law shall also be the governing law of the bill of this case. As seen earlier, the general and overall governing law of the bill of this case is the English law, and the governing law of the

Therefore, the amount of compensation for damages caused by the defendant's illegal acts is the same as the contractual liability.

2) The lower court deemed that the applicable law of the claim for damages caused by the Defendant’s tort was the Republic of Korea Act, which is the place of tort, but did not separately determine whether tort liability is established on the ground that the limitation of liability under the U.S. Sea Cargo Transport Act is recognized regarding tort liability, and even if the Korean law is applied to the damages for delay, it did not determine whether tort liability is established on the ground that the damages for delay for which the liability is recognized under the contract. However, although there are some inappropriate parts in the reasoning on the governing law of the lower court, the lower court’s error

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the Intervenor, and the remainder is assessed against each appellant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)