Judge Alison Nathan
Cedar sued Dongbu for breach over delivery of nonconforming liquid phenol. The phenol was transported from a tank in Yuso, Korea to Dongbu’s ship the Green Pioneer, which carried it to another Korean port for transfer to Cedar’s ship the Bow Flora for shipment to Rotterdam. Arriving in Rotterdam the phenol was found discolored. It was sold to an Indian firm at a heavy loss. At bench trial the court held Cedar did not show the phenol damaged prior to transfer from the Green Pioneer to the Bow Flora. The court was not convinced by Cedar’s experts that the phenol—meeting specifications before and after transfer—was “seeded” before transfer to the Bow Flora by a contaminant causing a “slowly unfurling chemical reaction” that did not become apparent until transfer to the Bow Flora. Numerous alternative explanations for the phenol’s discoloration—including potential differences in how samples were tested and stored—undermined the plausibility of a single explanation. Further, Cedar’s “seeding” theory contradicted testimony as to blending of on- and off-specification phenol. Any blending would, under Cedar’s theory, inevitably lead to the sample’s degradation.
