The Supreme Court has ruled that the provisions of the Commercial Act, which limit liability for damages in consideration of the risks associated with maritime transport, should not be applied in cases where an accident occurs during land transport due to an incorrect container temperature setting by a shipping company employee. On November 13, the Supreme Court’s Civil Division 2 (Presiding Justice Park Youngjae) overturned the lower court’s ruling that limited HMM’s liability in a subrogation claim lawsuit filed by DB Insurance against HMM and others, and remanded the case to the Seoul High Court (2025Da211111).
[Facts]
DB Insurance entered into an insurance contract with Doosan Robotics to cover damages incurred during the transport of 20 robot arms for export to the United States. HMM was entrusted with the maritime transport by Doosan Robotics’ shipping agent and also provided the container required for land transport.
In September 2022, Doosan Robotics shipped the robot arms to Incheon Port. The robot arms were to be transported by land to Busan Port and then shipped by vessel to Chicago, United States. The issue was with the temperature setting. Due to an error by an HMM employee, the container temperature, which should have been set at 18°C, was instead set at -18°C. As a result, 15 out of the 20 robot arms were damaged.
In April 2023, DB Insurance paid Doosan Robotics an insurance payout of 714,270 US dollars. Two months later, DB Insurance filed a subrogation claim lawsuit against HMM and others. HMM argued that “the provision of the container is also part of maritime transport,” and that Article 797(1) of the Commercial Act, which limits the liability of maritime carriers, should apply.
[Lower Court Rulings]
The court of first instance rejected HMM’s argument, stating that “it is difficult to regard the accident as having occurred during maritime transport.”
On appeal, however, the appellate court found that HMM’s liability should be limited. The appellate panel held that “both the provision of the container and the temperature setting by HMM are acts incidental to transport and constitute part of the process of receiving or storing cargo.” The court reasoned that since the accident occurred as an extension of maritime transport, Article 797(1) of the Commercial Act should apply.
[Supreme Court Ruling]
The Supreme Court overturned the appellate court’s decision, stating that it had misunderstood the legal principles regarding the limitation of maritime carrier liability. The Supreme Court stated, “Unlike land transport, maritime transport involves unique risks, and the damages can be substantial, which is why there is a need to limit the liability of maritime carriers.” However, the Court also held that “the provision of the container and the incorrect temperature setting by HMM cannot be regarded as acts of receiving or storing cargo as a maritime carrier, nor can they be considered unique risks associated with maritime transport.”
Lee Sangwoo, Legal Times Reporter
※This article is based on content supplied by Law Times.
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