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Himalaya clause affords protection to downstream carriers?

“Himalaya clause” and Multimodal Bill of Lading: Are downstream carriers (providing sea, road and rail carriage) protected by Himalaya clause?

Ref: Royal SMIT Transformers BV v. Onego Shipping & Chartering, No. 17-30543 (5th Cir. 2018)

Background: cargo owner contracted with an intermediary company for transportation of goods from Netherlands to US. This intermediary contracted with three separate companies (for rail, road and sea carriage) for moving the goods and these individual companies performed the actual carriage. The goods arrived damaged and the cause could not be traced to any particular leg of carriage. The cargo owner and its insurers claimed against the contractor and sub-contractors.

US court of Appeal for 5th Circ. upheld the validity of the barrier (between the cargo owner and downstream/performing carriers) afforded by such clauses. In holding so it said that Himalaya clause provides for some sort of mechanism regulating which party is liable to whom, i.e. in this case the non-performing carrier/intermediary to the cargo owner, and the actual carrier to the non-performing carrier. The cargo owner cannot circumvent it and claim against the actual carrier.

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