On 4 September 2025, the Danish Maritime and Commercial High Court rendered judgment in an interesting case concerning alleged damage to a shipment of pharmaceutical products during sea carriage, and the liability for such damage, which was alleged to have been caused by either incorrect setting or defects in the container used for the transport.
The Facts of the Case
A Norwegian pharmaceutical manufacturer of contrast medium, used in connection with patient X-ray imaging, sold a consignment of 5,924 cartons of contrast medium to its U.S. subsidiary for USD 1,042,000.
According to the applicable product specifications, based on stability data, the contrast medium had to be stored at temperatures between 15 °C and 25 °C. It could not be exposed to freezing temperatures, and exposure to 0 to -2 °C was permissible only for a maximum of four hours.
The sea carriage from Shanghai to Los Angeles was booked with a Danish freight forwarder, who subcontracted the transport to a container shipping line. Pursuant to the agreement between the shipper and the freight forwarder, a container pre-set to 21 °C was to be provided. Upon receipt of the container, the shipper affixed a label covering the temperature display to prevent adjustment and, on 28 March 2020, loaded the pharmaceuticals into the container. Two temperature loggers were also placed inside.
During the carriage, temperatures below -2 °C were recorded between 29 February 2020 and 24 March 2020. The lowest temperatures recorded were -6.0 °C and -5.4 °C.
Upon delivery to the consignee, a claim was made regarding the temperature deviation. Determining whether the products had sustained damage required destructive batch testing. An expert inspection of 50 vials revealed no visible damage; however, it could not be excluded that other vials had been adversely affected by the temperature deviations.
The shipper’s cargo insurers brought an action against the freight forwarder, arguing:
- That the products could not safely be used, and since testing was destructive, all vials would have to be tested;
- That the products should therefore be regarded as worthless; and
- That the damage could have been caused by incorrect container settings, for which the freight forwarder was liable, or by a defect in the refrigeration unit, for which the freight forwarder was also liable.
The freight forwarder denied liability, submitting:
- That there was no evidence that the products were damaged, as the expert inspection had revealed no actual damage; and
- That if damage had occurred, it must have been caused by an incorrect setting of the container, which the shipper ought to have verified, including whether the container was cooling properly.
The Court’s Decision
The Court held that the contrast medium must be considered damaged due to the temperature deviations. It referred to the requirement that the vials be stored between 15 °C and 25 °C, and that exposure to sub-zero temperatures was only permissible for short periods to avoid freezing and expansion of the medium. The Court stated:
“As the contrast medium was stored during sea transport at temperatures below -2 °C for a period of 24 days, which far exceeds [the manufacturer’s] specifications intended to ensure and guarantee the sterility, quality, and safe use of the contrast medium, and as no stability data or scientific studies exist showing that product quality can nevertheless be maintained as required […], the Court finds it beyond doubt, particularly considering that these are pharmaceutical products intended for patient use, that the contrast medium could not be marketed, distributed, or used as intended in the U.S. market.”
The Court further held the freight forwarder liable for the damage, noting:
“[The shipper] had a duty to examine the container delivered by [the shipping line], pursuant to both the provisions of the Danish Maritime Code and clause 17 of the terms printed on the bill of lading. However, it has not been established that [the shipper], in fulfilling this duty, ought to have discovered either that the container was set to 21 degrees Fahrenheit instead of °C or that it was defective.”
Comments
The Court emphasised that in determining whether a shipment of pharmaceuticals has suffered transport damage, the starting point must be whether the prescribed temperature requirements have been complied with. A failure to comply gives rise to a presumption of damage. Unless reliable evidence exists to justify disregarding the deviation, the presumption cannot be rebutted, and the product must be considered unsuitable for medicinal use.
In this case, the fact that no damage was found in the samples tested did not displace the presumption, since the expert could not exclude that other vials in the shipment were damaged.
The judgment aligns with established case law in this area.
It is also noteworthy that the Court held that the carrier could not avoid liability by arguing that the shipper had failed to check the container’s suitability or temperature setting. The burden of proof lies with the carrier to demonstrate that the shipper ought to have discovered a defect or error in the container provided for the agreed transport. In many cases, it will be difficult to establish that the shipper should have identified defects which the carrier itself did not detect in its own checks.
Case law sets a relatively low threshold for the shipper’s duty of inspection and control, and the judgment is consistent with that approach.
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