Contributory negligence set-off in cargo claims in Korea

A MARINE carrier's first line of defence in marine cargo claims is usually one of the specific exceptions to liability provided for in the statute of the relevant jurisdiction governing the carrier's liability in respect of cargo claims.

The list of exemptions as provided for in the Korean Commercial Code which adopted the Hague-Visby Rules are (i) perils of the sea; (ii) act of God; (iii) act of war; (iv) act of public enemies; (v) arrest or restraint of princes, rulers or people, quarantine restrictions or seizure under legal process; (vi) act of the shipper or owner of the goods, its agent or representative; (vii) strike or lock-out; (viii) any deviation in saving or attempting to save life or property or any reasonable deviation; (ix) insufficiency or inadequacy of package or marks; (x) inherent vice of the goods; or (xi) latent defect of the vessel.

Where concurrent causes of loss are possible, including both a cause for which the carrier is liable, e.g., breach of the carrier's duty of care and custody of the cargo or unseaworthiness, and an excepted cause, the rule in many jurisdictions - including the United States - is that the carrier must bear the entire loss unless it can show what part of the damage is attributable to the cause for which it is not responsible. As a practical matter in the case of concurrent causation, the carrier is liable for the entire loss, since this burden is rarely discharged.

However, the Korean courts have frequently applied the civil code to uphold a contributory negligence set-off in their own discretion, where such concurrent causes exist. Nonetheless, the courts appear to have permitted such contributory negligence set-off only where a fault on the shipper's side is involved, such as an act or omission of the shipper or owner of the goods, its agent or representative, and insufficiency or inadequacy of packing or marks, etc.

The supreme court decision of June 13, 2000 (Case no 98Da35389) once again confirmed the applicability of this principle in marine cargo claims. The court held that a contributory negligence set-off should be permitted even in the case of simple negligence on the part of the claimant, if such negligence contributed to or aggravated the damage. The court further held that, in deciding upon the scope of liability for damage based on breach of contract, the issues of whether such contributory negligence exists, and if so, the ratio thereof, should be determined upon due consideration of the overall circumstances of execution and performance of the contract in question, and the fault of each party. The court went on to state that the finding of facts in relation to the existence and ratio of contributory negligence is a matter entrusted exclusively to the first and second instance courts, unless the finding is manifestly unreasonable under the principle of equity.

In the above case, the court allowed a thirty per cent contributory negligence set-off based on the shipper's fault in respect of the insufficient packing of the goods.