Opinion ID: 339154
Heading Depth: 1
Heading Rank: 2

Heading: Time Charterer's Contractual Duty to Shipowner.

Text: 13 The Time Charterer appeals from the district court's ruling that it must indemnify the Shipowner under Clause 8 of the time charter. Clause 8, in pertinent part, provides that the charterers are to load, stow, trim and discharge the cargo at their expense under the supervision of the Captain. . . . 10 Relying primarily on this Court's decisions in Nichimen Company v. M. V. Farland, 462 F.2d 319 (2d Cir. 1972), and Demsey & Associates v. S.S. Sea Star, supra, the district court concluded that Clause 8 shifted responsibility for loading, stowing, trimming and discharge of cargo to the Charterer, which then must indemnify the Shipowner for all damages resulting from the improper performance of any of the stipulated cargo operations for which Shipowner was held liable. The Time Charterer proffers two arguments in opposition to this interpretation: first, that Nichimen applies only to cases of cargo damage where the negligence or fault of the charterer caused the damage; and second, that the district court in effect imposed upon it a species of liability without fault . . . in the nature of a warranty of safe and proper performance of cargo operations. We reject the Time Charterer's overly restrictive interpretation and affirm the district court's granting of indemnification in favor of the Shipowner under Nichimen. 14 Nichimen involved damage to a cargo of steel coils negligently stowed and loaded by a specialist hired by the time charterer's port agent. Under the Carriage of Goods By Seas Act (Cogsa), both the time charterer and shipowner were held responsible for damages owed to the purchaser of the cargo. 11 On appeal, the time charterer challenged the conclusion that, as between itself and the shipowner, it was responsible to indemnify the shipowner under Clause 8 of the time charter, which clause was virtually identical to that involved in the instant case. 15 Judge Friendly, speaking for this Court, noted that absent any special provision, the duty to care for cargo and the consequences for failing to do so properly would fall upon the ship and the shipowner. However, under Clause 8, the time charterer assumed the primary responsibility for the safety of stowage, insofar as cargo damage was concerned. Since the cause of the damage, improper stowage, was within the scope of responsibility which Clause 8 intended to shift from the shipowner to the time charterer, the shipowner was entitled to indemnification. 16 The Time Charterer in the instant case attempts to distinguish Nichimen by arguing that Nichimen involved cargo damage resulting from negligent conduct while the case at bar concerns personal injury without any showing of negligence by the Time Charterer. We can find no convincing basis to limit Nichimen to cargo damage situations. When Clause 8 shifts the responsibility of proper discharge of cargo to the charterer, that responsibility includes whatever damage results from improper discharge, whether to the cargo or to the personnel unloading it. 12 The Time Charterer also argues that Nichimen requires a finding of negligence on the part of the charterer before indemnification is justified. However, in Nichimen, the defective stowage was caused by a specialist hired by the time charterer's port agent; there did not appear to be any negligent conduct by the port agent or the time charterer. Similarly, in Demsey & Associates v. S.S. Sea Star, supra, the time charterer was found to have breached its duty to properly load and stow the goods under Clause 8 where its agent had negligently designed the stowage plan. Thus, in both cases, the time charterer was required to indemnify the shipowner under Clause 8 of the charter because of the negligence of its stowage agent. In the instant case, the Stevedore hired by the Time Charterer was found to have breached its warranty of workmanlike performance by failing properly to supervise and provide for the safety of its employees during unloading operations. Since the cause of the damage, improper discharge of cargo, is within the scope of responsibilities shifted from Shipowner to Time Charterer by Clause 8, the Time Charterer is obligated to indemnify the Shipowner. 17