Not a Lexis Advance subscriber? Try it out for free.

Hong Kong Islands Line America S.A. v. Distribution Services, Ltd.

United States District Court for the Central District of California

July 29, 1991, Decided ; July 29, 1991, Filed; July 31, 1991, Entered

CV 89-3029 JSL (Gx)

Opinion

 [*984]  IN ADMIRALTY

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This matter came on for court trial on March 12, 1991 before the Honorable J. Spencer Letts, United States District Judge, The matter having been duly tried, the Court now makes the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT 

1. Plaintiff and counterdefendant Hong Kong Islands Line America S.A. ("HKIL") was at all times relevant to this action a corporation duly organized and existing under and by virtue of the laws of the Republic of Panama, with its principal place of business in Hong Kong, and was qualified to do business in the State of California. HKIL was at all relevant times a vessel-operating ocean common carrier of goods in international commerce.

2. Defendant and counterclaimant Distribution Services Limited ("DSL") was at all times relevant to this action a corporation organized and incorporated under the Companies Ordinance of Hong Kong, with its principal place of business in Hong Kong, and was qualified to do business in the State of California. DSL was at all relevant times a nonvessel-operating common carrier ("NVOCC") doing business within the jurisdiction of  [**2]  this Court. As an NVOCC, DSL was a shipper with respect to vessel-operating common carriers like HKIL, and a carrier with respect to its own customers.

3. On January 9, 1988, HKIL and DSL entered into Service Contract No. 231 (hereinafter "SC 231" or "the contract"). In general, SC 231 covered the transportation of any and all commodities shipped by DSL in containers from certain ports in the Far East to certain ports or points in the United States. (Ex. 1, Clause 3) SC 231 required DSL to ship a minimum volume of three thousand five hundred (3,500) forty-foot (40') equivalent units ("FEUs") of cargo with HKIL during the term of the contract. (Ex. 1, Clause 6) SC 231 included a schedule of various HKIL rates and charges for the transportation of cargo, depending upon the size of the container and the destination. (Ex. 1, Clause 7(AA)) The duration of SC 231 was from January 12, 1988 through January 11, 1989. (Ex. 1, Clause 2) The service commitment of SC 231 required HKIL to provide DSL with containers and space on a regularly-scheduled basis, and to provide a minimum of fifty (50) voyages during the term of the contract. (Ex. 1, Clause 5) The liquidated damages for nonperformance [**3]  under SC 231 was the lesser of (i) $ 1,500 per FEU of shortfall under the contract; or (ii) an amount representing the difference between the contract rates and HKIL's tariff rates for the cargo actually shipped under the contract. (Ex. 1, Clause 10) 1

4. On January 12, 1988, the effective date of SC 231,  [**4]  a copy thereof, and a  [*985]  statement of its essential terms, were duly filed in tariff format with the Federal Maritime Commission ("FMC"), in accordance with the Shipping Act of 1984. (Ex. 1A)

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

795 F. Supp. 983 *; 1991 U.S. Dist. LEXIS 20796 **; 1992 AMC 82

HONG KONG ISLANDS LINE AMERICA S.A., a Panama corporation, Plaintiff, v. DISTRIBUTION SERVICES LIMITED, a Hong Kong corporation, Defendant. AND RELATED COUNTERCLAIMS

CORE TERMS

ship, cargo, force majeure, volume, shortfall, tariff, rates, transportation, space, liquidated damages, contracts, quantity, containers, shipments, carriers, voyages, discount, vessel, riots, terms of the contract, service contract, third-party, parties, strikes, terms, common carrier, charges, damages, format, invoke

Admiralty & Maritime Law, Maritime Workers' Claims, General Overview, Contracts Law, Standards of Performance, Impossibility of Performance