ABSTRACT
Clause in a bill of lading or charter-party which stipulates that, in the event of a collision between two ships where both are at fault, the owners of the cargo must indemnify the carrying ship against any amount paid by the carrying ship to the non-carrying ship for damage to that cargo. This clause arises because, under American law, a cargo owner is not able to make any recovery from the carrier for damage resulting from negligent navigation but may instead sue the noncarrying ship which in turn seeks recovery from the carrying ship in proportion to its fault. This would render a carrier indirectly liable for a loss for which he is not directly liable to the cargo owner. The clause has, however, been held to be invalid in the American courts when incorporated into a contract with a common carrier.
