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B-119991, NOV. 1, 1965

B-119991 Nov 01, 1965
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TO DENNING AND WOHLSTETTER: REFERENCE IS MADE TO YOUR LETTER OF JUNE 4. THE SHIPMENTS ON GOVERNMENT BILLS OF LADING HAVE BEEN REFERRED TO AS BERTH-TERM SHIPMENTS. THE DIFFERENCE BETWEEN THE STEVEDORING CHARGE OF $1.06 PER TON WHICH HAD BEEN APPLIED BY THE DEPARTMENT OF THE ARMY AND THE RATE OF $0.35 WAS REMITTED. CONTENDED THAT NO DISTINCTION SHOULD HAVE BEEN MADE BETWEEN BERTH TERM AND SPACE-CHARTER SHIPMENTS IN THE SETTLEMENT OF ITS CLAIMS INVOLVING THE DISCHARGE OF ARMY CARGO AT JAPANESE AND KOREAN PORTS FROM THAT DATE. THE CONTENTION WAS CONSIDERED AND REJECTED IN OUR DECISION OF APRIL 3. WHEN OUR DECISION WAS RENDERED. ONE OR MORE APPEALS OF STEAMSHIP COMPANIES FROM DECISIONS OF CONTRACTING OFFICERS CONCERNING THE RATE APPLIED FOR STEVEDORING SERVICE ON CARGO SHIPPED UNDER SPACE-CHARTER AGREEMENTS WERE PENDING BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS.

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B-119991, NOV. 1, 1965

TO DENNING AND WOHLSTETTER:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 4, 1964, AND SUBSEQUENT CORRESPONDENCE SUBMITTING ON BEHALF OF THE STATES STEAMSHIP COMPANY A REQUEST FOR RECONSIDERATION OF OUR DECISION DATED APRIL 3, 1958, B 119991, WHICH SUSTAINED THE DISALLOWANCE BY OUR CLAIMS DIVISION OF CLAIMS SUBMITTED BY THAT COMPANY AND ITS SUBSIDIARY, THE PACIFIC ATLANTIC STEAMSHIP COMPANY, FOR REFUND OF ALLEGEDLY EXCESS AMOUNTS WITHHELD BY THE DEPARTMENT OF THE ARMY AS STEVEDORING CHARGES ON SHIPMENTS OF ARMY CARGO UNDER SPACE-CHARTER AGREEMENTS TO JAPANESE AND KOREAN PORTS DURING THE PERIOD BEGINNING ON OR ABOUT NOVEMBER 30, 1946, AND CONTINUING UNTIL ABOUT OCTOBER 1, 1949.

DURING THAT PERIOD VARIOUS STEAMSHIP COMPANIES DISCHARGED AT JAPANESE AND KOREAN PORTS ARMY CARGO WHICH HAD BEEN SHIPPED ON GOVERNMENT BILLS OF LADING OR PURSUANT TO ORDERS ISSUED UNDER SPACE CHARTER AGREEMENTS WITH THE OWNERS OF THE VESSELS. THE SHIPMENTS ON GOVERNMENT BILLS OF LADING HAVE BEEN REFERRED TO AS BERTH-TERM SHIPMENTS, AND THE OTHERS AS SPACE- CHARTER SHIPMENTS. AS STATED IN THE PETITION ACCOMPANYING YOUR LETTER OF JUNE 4, 1964, OUR OFFICE DENIED ALL CLAIMS FOR REFUNDS INVOLVING THE DEDUCTION OF A STEVEDORING CHARGE OF $1.06 PER TON ON CARGO DISCHARGED PRIOR TO AUGUST 1, 1947, AND ALL CLAIMS INVOLVING THE DEDUCTION OF THAT CHARGE ON SPACE-CHARTER SHIPMENTS REGARDLESS OF THE DATE OF DISCHARGE. HOWEVER, WITH RESPECT TO THE SO-CALLED BERTH-TERM SHIPMENTS DISCHARGED FROM AUGUST 1, 1947, THE DIFFERENCE BETWEEN THE STEVEDORING CHARGE OF $1.06 PER TON WHICH HAD BEEN APPLIED BY THE DEPARTMENT OF THE ARMY AND THE RATE OF $0.35 WAS REMITTED.

THE STATES STEAMSHIP COMPANY DID NOT OBJECT TO THE DISALLOWANCES OF ITS CLAIMS CONCERNING THE DISCHARGE OF CARGO PRIOR TO AUGUST 1, 1947, BUT CONTENDED THAT NO DISTINCTION SHOULD HAVE BEEN MADE BETWEEN BERTH TERM AND SPACE-CHARTER SHIPMENTS IN THE SETTLEMENT OF ITS CLAIMS INVOLVING THE DISCHARGE OF ARMY CARGO AT JAPANESE AND KOREAN PORTS FROM THAT DATE. THE CONTENTION WAS CONSIDERED AND REJECTED IN OUR DECISION OF APRIL 3, 1958, IN WHICH WE POINTED OUT THAT THE COMPANY HAD FAILED TO EXHAUST AVAILABLE ADMINISTRATIVE REMEDIES UNDER THE SPACE-CHARTER AGREEMENTS FOR APPEALING THE REASONABLENESS OF THE CHARGE OF $1.06 PER TON FOR STEVEDORING SERVICES. WHEN OUR DECISION WAS RENDERED, ONE OR MORE APPEALS OF STEAMSHIP COMPANIES FROM DECISIONS OF CONTRACTING OFFICERS CONCERNING THE RATE APPLIED FOR STEVEDORING SERVICE ON CARGO SHIPPED UNDER SPACE-CHARTER AGREEMENTS WERE PENDING BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS. THE BOARD EVENTUALLY DENIED ALL APPEALS WHICH INVOLVED THE SAME QUESTION, INCLUDING THE APPEALS WHICH, YOU STATE, WERE FILED BY THE STATES STEAMSHIP COMPANY ON MARCH 23, 1959, AFTER HAVING RECEIVED ADVERSE DECISIONS OF THE CONTRACTING OFFICER ON ITS CLAIMS.

THE PRESENT PETITION IS BASED UPON AN ALLEGED DISCOVERY OF NEW EVIDENCE RELATING TO THE DEVELOPMENT OF THE $1.06 STEVEDORING RATE, AND THE RATE OF $0.35 PER TON WHICH WAS USED BY THE DEPARTMENT OF THE ARMY BEGINNING ON JANUARY 1, 1949, IN CONNECTION WITH THE DISCHARGE OF BOTH BERTH-TERM AND SPACE-CHARTER SHIPMENTS AT JAPANESE PORTS. AN ATTEMPT IS MADE TO SHOW THAT THE ARMY WAS NOT JUSTIFIED IN DELAYING THE APPLICATION OF THE $0.35 RATE DURING THE PERIOD AUGUST 1, 1947, TO JANUARY 1, 1949, AND THAT THERE IS NO APPARENT BASIS FOR CONSIDERING THAT THE SAME RATE SHOULD NOT HAVE BEEN MADE APPLICABLE TO THE DISCHARGE OF CARGO AT KOREAN PORTS AS WELL AS TO CARGO DISCHARGED AT PORTS IN JAPAN. IT IS STATED THAT THE SUBSIDIARY OF THE STATES STEAMSHIP COMPANY IS NOT INVOLVED IN THE PETITION BECAUSE IT CARRIED NO SPACE-CHARTER SHIPMENTS TO JAPANESE AND KOREAN PORTS FROM AUGUST 1, 1947. WITH RESPECT TO THE SPACE-CHARTER SHIPMENTS MADE BY THE PARENT COMPANY ON AND AFTER AUGUST 1, 1947, IT IS ALLEGED THAT THE OVERALL REDUCTIONS RESULTING FROM THE APPLICATION OF THE LOWER RATE AMOUNT TO $52,494.40 FOR PORTS IN JAPAN AND TO $50,723.02 FOR PORTS IN KOREA.

THE QUESTION AS TO THE PROPER RATE TO BE APPLIED FOR STEVEDORING SERVICES ON THE DISCHARGE OF ARMY CARGO SHIPPED TO JAPAN AND SOUTH KOREA UNDER GOVERNMENT BILLS OF LADING WAS FIRST CONSIDERED BY OUR OFFICE IN A DECISION OF MAY 4, 1950, B-93978, TO THE SECRETARY OF THE ARMY, RENDERED IN RESPONSE TO A LETTER DATED MARCH 22, 1950, FROM THE ASSISTANT SECRETARY. ON THE BASIS OF THE INFORMATION FURNISHED IN THE ASSISTANT SECRETARY'S LETTER, OUR OFFICE AGREED THAT A CHARGE OF $1.06 PER TON WOULD BE REASONABLE. HOWEVER, THE ARMY FAILED TO COLLECT THE CHARGES RAISED AGAINST TWO OF THE CARRIERS WHICH HANDLED ONLY TWO BERTH-TERM SHIPMENTS, AND THE CLAIMS OF THE GOVERNMENT AGAINST THEM WERE EVENTUALLY SETTLED BY COMPROMISE AGREEMENTS REACHED WITH THE DEPARTMENT OF JUSTICE, UNDER WHICH THE COMPANIES ACCEPTED THE $1.06 PER TON RATE FOR CARGO DISCHARGED UP TO AND INCLUDING JULY 31, 1947,AND THE RATE OF $0.35 PER TON FOR CARGO DISCHARGED FROM AUGUST 1, 1947, UNTIL THE END OF THE PERIODS INVOLVED.

IN VIEW OF THE DISPOSITION OF THOSE CASES, IT WAS CONSIDERED THAT IT WOULD BE EQUITABLE TO USE THE SAME RATES IN THE CONSIDERATION AND SETTLEMENT OF THE CLAIMS OF OTHER CARRIERS FOR REFUNDS OF PORTIONS OF AMOUNTS COLLECTED FROM THEM AS STEVEDORING CHARGES ON BERTH-TERM SHIPMENTS. WE CONCLUDED THAT THERE WAS NO PROPER BASIS TO GRANT REFUNDS ON SHIPMENTS UNDER SPACE-CHARTER AGREEMENTS WHICH WERE NOT INVOLVED IN THE SETTLEMENTS ACCEPTED BY THE DEPARTMENT OF JUSTICE. THERE WAS AT SUCH TIME NO CLEAR SHOWING THAT THE $1.06 PER TON RATE WAS UNREASONABLE, AND THE ACCEPTANCE BY THE DEPARTMENT OF JUSTICE OF SETTLEMENT OFFERS ON BERTH-TERM SHIPMENTS, ALTHOUGH BELIEVED TO BE SUFFICIENT TO JUSTIFY REFUNDS TO OTHER COMPANIES ON SIMILAR TRANSACTIONS, WAS NOT CONSIDERED TO JUSTIFY REFUNDS ON SPACE-CHARTER SHIPMENTS. IT WAS RECOGNIZED, HOWEVER, THAT THE REASONABLENESS OF SUCH RATE MIGHT HAVE BEEN DECIDED UNDER THE DISPUTES CLAUSES OF THE SPACE CHARTER AGREEMENTS, SINCE ARTICLE 8 (B) OF THOSE AGREEMENTS PROVIDED THAT THE CREDIT FOR STEVEDORING SERVICES WHEN THE ARMY ELECTED TO HANDLE THE LOADING OR DISCHARGE OF CARGO WOULD BE BASED ON "A SCHEDULE OF ALLOWANCES IN ACCORDANCE WITH COMMERCIAL COSTS TO BE AGREED UPON," AND THAT "FAILURE TO AGREE UPON SUCH SCHEDULE OF COMPENSATION SHALL BE DEEMED TO BE A DISAGREEMENT ON A QUESTION OF FACT WHICH SHALL BE DISPOSED OF IN ACCORDANCE WITH ARTICLE 28 (DISPUTES).'

IT WAS NEVERTHELESS INDICATED IN OUR DECISION OF APRIL 3, 1958, THAT THE STATES STEAMSHIP COMPANY HAD ACQUIESCED IN THE RATE CHARGED FOR STEVEDORING CHARGES AT PORTS IN JAPAN AND KOREA BY CONSISTENTLY CERTIFYING ON ITS INVOICES THE CORRECTNESS OF SUCH CHARGE, AND HAVING IN OCTOBER 1948 OBJECTED TO A CHARGE OF $3.69 PER TON ON THE GROUNDS THAT $1.06 WAS THE CORRECT RATE. ALTHOUGH IT IS NOW ALLEGED THAT THE TRANSACTION REFERRED TO BY THE COMPANY IN OCTOBER 1948 CONCERNED A BERTH-TERM SHIPMENT TO A KOREAN PORT, IT IS APPARENT THAT THE COMPANY'S LETTER COMPLAINING OF THE USE OF $3.69 PER TON RATE, AND STATING THAT $1.06 WAS THE CORRECT RATE, MUST BE REGARDED AS EVIDENCE THAT THE COMPANY DID NOT EXPECT TO BE CHARGED A RATE LOWER THAN $1.06 PER TON FOR DISCHARGE OF SPACE-CHARTER CARGOES.

AMERICAN PRESIDENT LINES, LIMITED, WAS THE FIRST COMPANY TO FILE AN APPEAL ON THE ISSUE BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS. ON MARCH 21, 1960, THE BOARD RENDERED A DECISION, ASBCA NO. 4075, DENYING THE APPEAL. ON APRIL 21, 1960, THE BOARD ISSUED TO THE STATES STEAMSHIP COMPANY AND TO OTHER APPELLANTS AN ORDER TO SHOW CAUSE WHY THEIR APPEALS SHOULD NOT BE DENIED OR OTHERWISE DISPOSED OF ON THE AUTHORITY OF THE MARCH 21, 1960, DECISION ON THE APPEAL OF AMERICAN PRESIDENT LINES, LIMITED. ON JULY 18, 1960, THE BOARD DENIED THE PENDING APPEALS, STATING IN ART:

"GRANTING THE CIRCUMSTANCES RELIED UPON BY APPELLANTS IN RESPONDING TO THE ORDER, THE RESULT WOULD BE NO DIFFERENT THAN IN THE AMERICAN PRESIDENT LINES, LTD. CASE. APPELLANTS HAVING FAILED TO SHOW CAUSE, THE APPEALS ARE DENIED.'

THE STATES STEAMSHIP COMPANY FILED A MOTION FOR RECONSIDERATION WITH A LEGAL MEMORANDUM IN SUPPORT THEREOF. BY DECISION OF DECEMBER 9, 1960, ASBCA NOS. 5017 AND 5250, THE BOARD DENIED THE MOTION FOR RECONSIDERATION, STATING THAT THE MOTION PRESENTED NO MATTERS NOT CONSIDERED IN REACHING THE DECISIONS DATED JULY 18, 1960.

IT WAS REPORTED IN THE LETTER DATED MARCH 22, 1950, FROM THE ASSISTANT SECRETARY OF THE ARMY TO OUR OFFICE, THAT IN THE PERIOD PRIOR TO AUGUST 1, 1947, THE SUPREME COMMANDER FOR THE ALLIED POWERS (SCAP) HAD MADE A RECOMMENDATION BY RADIO TO THE DEPARTMENT OF THE ARMY THAT THE RATES OF $1.06 PER TON FOR DRY CARGO AND $1.33 PER TON FOR REFRIGERATED CARGO BE ESTABLISHED TENTATIVELY AS THE COST TO OPERATORS FOR THE DISCHARGE OF CARGOES AT JAPANESE PORTS; AND THAT AS OF AUGUST 1, 1947, SCAP PUBLISHED A SET OF RATES OF $0.35 A TON FOR GENERAL CARGO, $0.66 A TON FOR REEFER CARGO AND $1.05 A TON FOR HAZARDOUS CARGO AS THE COST OF SERVICES PERFORMED BY THE ARMY IN DISCHARGING THE CARGOES. IN SUPPORT OF THE LATTER STATEMENT THERE WAS SUBMITTED AS ENCLOSURE 4 TO THE LETTER A MIMEOGRAPHED SCHEDULE OF RATES FOR PORT FACILITIES AT JAPANESE PORTS, WHICH INCLUDED A RATE OF $0.22 PER TON FOR HANDLING OF GENERAL CARGO. ALTHOUGH NO $0.35 RATE IS MENTIONED IN THE SCHEDULE, THE ASSISTANT SECRETARY'S LETTER REFERRED TO THAT RATE AS HAVING BEEN "ANNOUNCED BY SCAP," AND STATED THAT THE RATE WAS OBTAINED BY ADDING $0.06 PER TON FOR TALLYING, AND $0.07 PER TON FOR PORT CHARGES, TO THE $0.22 PER TON RATE FOR STEVEDORING.

THE LETTER ALSO INDICATED THAT THE TENTATIVELY ESTABLISHED RATE OF $1.06 PER TON WAS COMPUTED ON THE MILITARY CONVERSION RATE OF 15 JAPANESE YEN TO $1, BASED ON CHARGES WHICH EXISTED PRIOR TO WORLD WAR II. THE MILITARY CONVERSION RATE WAS CHANGED IN MARCH 1947 FROM 15 TO1 TO 50 TO 1, AND THE RECORD SHOWS THAT YOU WERE AWARE OF SUCH CHANGE PRIOR TO APRIL 3, 1958, SINCE ON JUNE 11, 1957, YOU ADDRESSED A LETTER TO THE ARMY REQUESTING A COPY OF THE PERTINENT ORDER IN AN APPARENT EFFORT TO ESTABLISH THAT THE CHANGE IN CONVERSION RATES ACCOUNTED PRINCIPALLY FOR THE DIFFERENCE BETWEEN THE TENTATIVE RATE OF $1.06 PER TON FOR STEVEDORING SERVICE AND THE RECOMMENDED OR ,PUBLISHED" RATE OF $0.35 PER TON FOR USE ON AND AFTER AUGUST 1, 1947. OUR OFFICE WAS ALSO AWARE OF THE CHANGE IN MILITARY CONVERSION RATES APPLICABLE TO JAPANESE YEN AND AMERICAN DOLLARS WHEN OUR DECISION OF APRIL 3, 1958,WAS RENDERED.

THE PETITION FILED ON JUNE 4, 1964, STATES THAT IT IS BASED UPON NEW EVIDENCE, HITHERTO UNAVAILABLE TO THE CLAIMANT, IN THE RECENTLY DISCOVERED COPY OF THE FULL FIVE-PAGE LETTER OF MARCH 22, 1950, FROM THE ASSISTANT SECRETARY OF THE ARMY, TO OUR OFFICE, FOUND IN THE FILES OF THE NATIONAL ARCHIVES, AND IN A "MEMO FOR THE RECORD" DATED MARCH 2, 1948, IN THE SAME FILES CONTAINING INFORMATION AS TO THE METHODS USED AND FACTORS APPLIED BY SCAP IN ARRIVING AT STEVEDORING RATES. HOWEVER, IT IS APPARENT THAT THE SO-CALLED NEW EVIDENCE DID NOT ADD SUBSTANTIALLY TO THE INFORMATION AVAILABLE TO THE CLAIMANT AS OF THE TIME THAT THE APPEAL FROM THE DISALLOWANCE OF ITS CLAIMS BY OUR CLAIMS DIVISION WAS FILED. THE BRIEF SUBMITTED ON AUGUST 27, 1957, IN SUPPORT OF THE CLAIMS FOR REFUND OF THE ALLEGEDLY EXCESSIVE STEVEDORING CHARGE AS APPLIED FOR REMOVING CARGO SUBSEQUENT TO JULY 31, 1947, CLEARLY INDICATES THAT THE CLAIMANT WAS FULLY COGNIZANT OF THE ESSENTIAL FEATURES OF THE CASE, INCLUDING THE SUBSTANCE OF THE COMMUNICATIONS BETWEEN SCAP AND THE TRANSPORTATION CORPS OF THE DEPARTMENT OF THE ARMY, RELATING TO THE TENTATIVELY ESTABLISHED STEVEDORING RATE OF $1.06 PER TON AND THE REDUCTION IN THAT RATE WHICH WAS EFFECTED ON SHIPMENTS TO JAPANESE PORTS ON AND AFTER JANUARY 1, 1949. THE BRIEF FURTHER SHOWS THAT THE CLAIMANT WAS COGNIZANT OF THE AUTHORITY PLACED IN SCAP FOR THE CONTROL OF JAPAN, AND FOR THE COMMAND OF THE ARMED FORCES OF THE ALLIED POWERS IN SOUTH KOREA. HOWEVER, THE PETITION DOES REFER TO THE $0.35 PER TON RATE AS HAVING BEEN "PUBLISHED BY SCAP AS OF 1 AUGUST 1947," WHEREAS, IN THE BRIEF DATED AUGUST 27, 1957 IT IS STATED:

"WE CAN NOT FIND THAT ANY SCHEDULE OF COMMERCIAL ALLOWANCES FOR STEVEDORING WAS EVER ISSUED OR PUBLISHED APPLICABLE TO THE DISCHARGE OF GENERAL CARGOES IN JAPAN OR KOREA OTHER THAN THE TENTATIVE RATE OF $1.06 PER TON RECOMMENDED BY SCAP IN THE EARLY PART OF 1947, AND WHICH WAS REVISED DOWNWARD TO $0.35 PER TON, EFFECTIVE AUGUST 1, 1947. WHILE THE SCHEDULE OF AUGUST 1, 1947, WAS A REVISION OF RATES FOR JAPAN, IT WAS NO MORE LIMITED IN SCOPE THAN THE ORIGINAL TENTATIVE SCHEDULE WHICH WAS APPLIED BY THE ARMY TO KOREA AS WELL AS TO JAPAN.'

IT IS ALLEGED IN THE PETITION THAT YOU WERE INFORMED BY OUR OFFICE THAT THE LETTER OF MARCH 22, 1950, FROM THE ASSISTANT SECRETARY OF THE ARMY, COULD NOT BE LOCATED IN OUR FILES. HOWEVER, OUR RECORDS INDICATE THAT THE LETTER WAS LOCATED WHEN YOU REQUESTED A COPY AND THAT AT SUCH TIME THERE WAS INVOLVED SOLELY A QUESTION ON A MATTER OF POLICY, WHETHER A COPY OF THE LETTER SHOULD BE RELEASED TO YOU WITHOUT THE APPROVAL OF THE DEPARTMENT OF THE ARMY. IN ANY EVENT, OUR DECISION IN RESPONSE TO THE ASSISTANT SECRETARY'S LETTER WAS CITED AND QUOTED FROM IN THE BRIEF DATED AUGUST 27, 1957, AND THE DECISION SET FORTH THE BASIC CONTENTS OF THE ASSISTANT SECRETARY'S LETTER, INCLUDING THE QUOTATION THAT "AS OF 1 AUGUST 1947 SCAP PUBLISHED A SET OF RATES OF 35 CENTS A TON FOR GENERAL CARGO * * * AS THE COST OF SERVICES PERFORMED BY THE ARMY IN DISCHARGING CARGOES.' THAT STATEMENT IS NOW INVOLVED AS AN ISSUE IN THE CASE, SINCE IT IS INDICATED IN A NOTE TO APPENDIX "A" ATTACHED TO THE DECISION RENDERED BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS ON THE APPEAL OF AMERICAN PRESIDENT LINES, LIMITED,"THAT SCAP, CONTRARY TO THE COMPTROLLER GENERAL'S STATEMENT, DID NOT IN FACT CHANGE THE RATE TO $0.35 DURING THE PERIOD NOW IN CONTROVERSY HAS BEEN CONCEDED BY APPELLANT * * *.' THE APPELLANT PURPORTEDLY ADMITTED THAT THE STAFF STUDY PERFORMED BY SCAP DID NOT RESULT IN PRESCRIBING AN OVERALL RATE FOR CARGO DISCHARGE OR LOADING BUT ONLY IN THE RECOMMENDATION OF A BASIC CARGO HANDLING RATE OF "$0.22 PER TON PLUS A NUMBER OF OTHER RATES FOR COMPONENTS OF THE LOADING OR DISCHARGING OPERATION WHICH WOULD PRODUCE VARYING RESULTS ACCORDING TO THE TIME REQUIRED TO PERFORM SUCH COMPONENTS AND THE OTHER SPECIFIC REQUIREMENTS OF A PARTICULAR SHIPMENT.'

IN COMMENTING UPON THE RATE-FIXING ACTIVITIES OF SCAP, IN RELATION TO THE SPACE-CHARTER AGREEMENTS, THE BOARD'S DECISION ON THE APPEAL OF AMERICAN PRESIDENT LINES, LIMITED, STATES AS FOLLOWS:

"22. APPELLANT INTRODUCED A MASS OF EVIDENCE CONCERNING ACTIONS IN THE NAME OF THE SUPREME COMMANDER, ALLIED POWERS IN JAPAN. THAT EVIDENCE INDICATES, INTER ALIA, THAT SCAP ENGAGED IN THE FIXING OF RATES FOR THE LOADING AND DISCHARGING BY JAPANESE STEVEDORING CONCERNS OF VESSELS IN JAPAN. IT IS APPARENT, HOWEVER, THAT SCAP'S RATE-FIXING ACTIVITIES WERE INDEPENDENT OF THE TERMS OF CONTRACTS OF CARRIAGE AND DID NOT OPERATE DIRECTLY ON THE OBLIGATIONS OF THE PARTIES UNDER THE INSTANT SPACE CHARTERS. WHILE SCAP WAS THE SOURCE OF THE DOLLAR FIGURES USED IN THE DEDUCTIONS, THE DEDUCTIONS WERE GIVEN EFFECT WITH RESPECT TO THE INSTANT SPACE CHARTERS ONLY BY THE ACTION OF THE SAN FRANCISCO AND NEW YORK PORTS OF EMBARKATION, WHO ACTED ON BEHALF OF THE CHIEF OF TRANSPORTATION, NOT ON BEHALF OF SCAP. THE EVIDENCE CONCERNING SCAP AND RELATED ACTIONS DOES NOT TEND TO SHOW THE ABSENCE OF AGREEMENT BETWEEN THE PARTIES TO THE INSTANT SPACE CHARTERS UNDER ARTICLE 8 (B) (6), NOR DOES IT DEMONSTRATE THE PRESENCE OF AMBIGUITY AS TO WHAT WAS BEING AGREED TO. THE BULK OF SUCH EVIDENCE MAY ONLY SHOW IMPROVIDENCE ON APPELLANT'S PART; BUT EVEN WHEN VIEWED IN A LIGHT MOST FAVORABLE TO APPELLANT IT HAS A BEARING ONLY ON APPELLANT'S CONTENTION THAT IF APPELLANT DID AGREE ON THE DEDUCTIONS THE AGREEMENT WAS UNDER MISTAKES OF FACT AS TO THE OFFICIAL YEN-DOLLAR AND WON DOLLAR CONVERSION RATES AND AS TO THE EXISTENCE OF CHANGES BY SCAP IN THE METHOD OF FIXING LOADING AND DISCHARGING RATES.

"23. THE PREPONDERATING WEIGHT OF THE EVIDENCE CONCERNING THE PRESENCE OR ABSENCE OF AGREEMENT BETWEEN THE PARTIES AS TO THE DEDUCTIONS POINTS TO THE CONCLUSION THAT THERE WAS NOT A "FAILURE TO AGREE," UNDER ARTICLE 8 (B) OF THE SPACE CHARTERS WHICH WOULD HAVE GIVEN RISE TO A DISPUTE ENTITLING APPELLANT TO DECISIONS UNDER THE "DISPUTES" CLAUSE. THERE WAS NO "FAILURE TO AGREE," SINCE BY EXPRESS ASSENT, BY ACCEPTANCE OF PAYMENT LESS DEDUCTIONS, AND BY FAILURE TO SEEK A REVISION UNDER ARTICLE 5 IN THE STIPULATED FREIGHT RATES, ALL WITHOUT REGISTERING ANY PROTEST FOR MORE THAN FIVE YEARS, APPELLANT ACKNOWLEDGED THE CORRECTNESS OF THE DEDUCTIONS AND ACCEPTED THE PAYMENTS MADE TO IT AS FULL PAYMENT FOR FREIGHT EARNED, WITH THE RESULT THAT THE PARTIES DID IN FACT AGREE ON THE $1.06 RATE. SEE PUTNAM TOOL COMPANY ET AL. V. UNITED STATES, 137 C.CLS. 183 (1957).'

THE BOARD'S DECISION OF JULY 18, 1960, WHICH DENIED THE OTHER APPEALS, REJECTED THE CONTENTION THAT THE ACTION TAKEN ON THE APPEAL OF AMERICAN PRESIDENT LINES, LIMITED, SHOULD HAVE HAD NO BEARING UPON THE DECISION ON THE APPEALS OF THE REMAINING APPELLANTS. APPARENTLY IT WAS ARGUED THAT THE DEDUCTIONS WERE "TENTATIVE" AND THE APPELLANTS WOULD BE BOUND ONLY BY "FINAL" RATES. HOWEVER, THE BOARD STATED THAT THE RESULT DID NOT TURN UPON THE EXISTENCE OF THE SCAP RATES AS SUCH OR ANYONE'S CHARACTERIZATION OF SUCH RATES THEN OR LATER AS "FINAL.'

IT ALSO APPEARS THAT THE APPELLANTS ALSO SOUGHT TO DISTINGUISH THEIR CASES ON THE GROUND THAT THEY NEVER EXECUTED THE SCHEDULE OF DEDUCTION ALLOWANCES WHICH IS MENTIONED IN THE CASE OF AMERICAN PRESIDENT LINES, LIMITED, AS HAVING BEEN AGREED TO EXPRESSLY WITH REFERENCE TO SHIPMENTS FROM ATLANTIC COAST PORTS. ON THAT POINT, THE BOARD STATED THAT AMERICAN PRESIDENT LINES, LIMITED, EXECUTED NO SCHEDULE OF ALLOWANCES AS TO PACIFIC COAST SHIPMENTS AND THAT THE DECISION ON ITS APPEAL DID NOT REST ON THE INITIATION OF DEDUCTIONS BY THE APPELLANT ON PACIFIC COAST SHIPMENTS. RATHER, IT WAS INDICATED THAT THE DENIAL OF THE PARTICULAR APPEAL WAS IN ANY EVENT REQUIRED BECAUSE THE COMPANY ACCEPTED PAYMENT LESS THE DEDUCTIONS AND HAD DONE SO "WITHOUT PROTEST FOR AN EXTENDED PERIOD AND WITHOUT SEEKING REVISION OF FREIGHT RATES UNDER THE CHARTER PROVISION PERMITTING EITHER PARTY TO SEEK A REVISION.' THE SIMILARITY OF THE SEVERAL CASES IN THAT RESPECT WAS CONSIDERED BY THE BOARD TO BE ENOUGH TO LEAD TO THE CONCLUSION THAT AGREEMENTS IN FACT EXISTED WITH ALL OF THE APPELLANTS CONCERNING THE DEDUCTIONS MADE AT THE RATE OF $1.06 PER TON.

THE MILITARY SEA TRANSPORTATION SERVICE, DEPARTMENT OF THE NAVY, REPRESENTED THE GOVERNMENT IN CONNECTION WITH THE APPEALS WHICH WERE DECIDED BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS. IT HAS EXPRESSED THE OPINION IN ITS REPORT ON THE PETITION HERE INVOLVED THAT, ONCE THE PARTIES AGREED ON A FIGURE UNDER ARTICLE 8 (B) OF THE RELEVANT SPACE- CHARTER CONTRACTS, THE AGREEMENT PRECLUDED ANY REVIEW, JUDICIAL OR ADMINISTRATIVE. THE CONTRACT PROVISION IS REFERRED TO AS MAKING THE QUESTION OF "COMMERCIAL COSTS" FOR STEVEDORING IMPORTANT ONLY WHERE THE PARTIES DISAGREE; AND IT IS STATED THAT, FROM ALL OF THE EVIDENCE, THERE IS NO QUESTION THAT THE PETITIONER KNEW AND AGREED TO THE $1.06 RATE DURING THE ENTIRE PERIOD OF THE CARGO DISCHARGES FORMING THE BASIS OF ITS CLAIMS (FROM THE TIME THAT THE RATE WAS FIRST APPLIED IN 1947 WHEN COMPUTING THE SUMS DUE THE PETITIONER OUT OF THE 20 PERCENT WITHHOLDINGS ON PREVIOUS BILLINGS UNTIL JANUARY 1, 1949, ON SPACE-CHARTER SHIPMENTS TO PORTS IN JAPAN, AND SUBSEQUENT TO THAT DATE ON SPACE-CHARTER SHIPMENTS MADE TO KOREAN PORTS).

THE REPORT SETS FORTH THAT THE PETITIONER, DURING THE CURRENCY OF THE CHARTER AGREEMENTS, HAD MANY OPPORTUNITIES TO DISPUTE THE STEVEDORING COST ALLOWANCE; THAT ITS FAILURE TO DO SO COULD ONLY BE A REFLECTION OF ITS THEN AGREEMENT TO THE ALLOWANCE; AND THAT ITS PRESENT CLAIM CANNOT NOW BE RELATED BACK TO SHOW DISAGREEMENT AT THE ONLY TIME OF SIGNIFICANCE, WHEN THE DEDUCTIONS WERE MADE EITHER BY THE GOVERNMENT OR ON INVOICES PRESENTED BY THE PETITIONER FOR TRANSPORTATION OF ARMY CARGO. THE POINT IS ALSO MADE THAT THE GOVERNMENT WAS NOT OBLIGATED TO ISSUE ORDERS UNDER THE SPACE -CHARTER AGREEMENTS AND THAT THE GOVERNMENT MIGHT WELL HAVE ELECTED TO MAKE OTHER TRANSPORTATION ARRANGEMENTS IF THERE HAD IN FACT BEEN A FAILURE TO AGREE ON THE RATE TO BE CHARGED FOR STEVEDORING SERVICE FROM ABOUT AUGUST 1, 1947, IN THE DISCHARGE OF CARGO AT JAPANESE AND KOREAN PORTS.

THE ADMINISTRATIVE REPORT INCLUDED COPIES OF SEVERAL INVOICES AND REFUND CHECKS BASED ON THE $1.06 RATE, WHICH APPARENTLY HAD BEEN RECEIVED WITHOUT OBJECTION BY THE COMPANY, AS EVIDENCE TO SHOW THAT THE PETITIONER AGREED TO THAT RATE. IT IS THE POSITION OF THE MILITARY SEA TRANSPORTATION SERVICE THAT, IF THE STATES STEAMSHIP COMPANY HAD REASON TO DOUBT THAT THE RATE WAS PROPER AND THEREFORE DID NOT AGREE TO ACCEPT THAT RATE, THE COMPANY, HAD A DEFINITE OBLIGATION AT SUCH TIME TO PROTECT ITS APPEAL RIGHTS UNDER ARTICLES 8 (B) AND 28 OF THE SPACE-CHARTER AGREEMENTS; OR IN THE ALTERNATIVE TO REQUEST A RENEGOTIATION OF THE CHARTER RATE. SUCH TIMELY ACTION BY THE COMPANY WOULD THEN HAVE GIVEN THE GOVERNMENT THE OPPORTUNITY TO RENEGOTIATE THE CHARTER RATE OR SELECT OTHER CARRIERS.

IT IS EXPLAINED IN THE ADMINISTRATIVE REPORT THAT WHEN THE SPACE CHARTER AGREEMENTS WERE NEGOTIATED IT WAS ADMITTEDLY DIFFICULT TO DETERMINE THE EQUIVALENT OF COMMERCIAL DISCHARGING COSTS FOR JAPAN AND KOREA. FOR THAT REASON THE STEVEDORING RATES WERE MADE DEPENDENT UPON AGREEMENT OF THE PARTIES INSTEAD OF TO SOME OUTSIDE PUBLISHED RATE OR OTHER INDEX. THE MILITARY SEA TRANSPORTATION SERVICE CONSIDERS THAT, IN SUCH CIRCUMSTANCES, THE BEST MEASURE OF THE REASONABLENESS OF THE $1.06 RATE AS A COMMERCIAL COST IS THE VESSEL OWNERS' CONTINUOUS ACQUIESCENCE THERETO; AND THAT, IF THE OWNERS BELIEVED THAT THE TRANSPORTATION OF ARMY CARGO WOULD NOT RESULT IN A SUFFICIENT PROFIT WITH THE APPLICATION OF A STEVEDORING RATE OF $1.06 PER TON, THEY SHOULD HAVE REFUSED THE BUSINESS SINCE THE MASTER SPACE- CHARTER AGREEMENTS LACKED THE NECESSARY ELEMENT OF MUTUALITY OF OBLIGATION TO MAKE THEM ENFORCEABLE EXCEPT UNDER SEPARATE VOYAGE COMMITMENT ORDERS ISSUED THEREUNDER.

THE REPORT OF THE MILITARY SEA TRANSPORTATION SERVICE ALSO STATES IN EFFECT THAT INFORMATION FURNISHED BY SCAP WITH RESPECT TO A POSSIBLE REDUCTION IN RATES DID NOT CONCERN THE ORIGINALLY RECOMMENDED RATE OF $1.06 FOR DISCHARGE OF GENERAL CARGO AT KOREAN PORTS. THE REPORT FURTHER INDICATES THAT THE RECOMMENDED STEVEDORING RATE IN EACH CASE WOULD HAVE COVERED ONLY THE ASSUMED COST OF PHYSICALLY DISCHARGING THE CARGO FROM THE SHIP'S HOLDS, WHEREAS THE CHARTER AGREEMENTS PROVIDED THAT "ALL EXPENSES OF WHATEVER NATURE AND KIND IN CONNECTION WITH THE LOADING AND DISCHARGING OF THE CARGO SHALL BE FOR THE ACCOUNT OF THE CHARTERER.' HENCE, EVEN IF IT SHOULD BE ASSUMED THAT SCAP HAD "PUBLISHED" A SET OF RATES, INCLUDING A RATE OF $0.35 PER TON FOR STEVEDORING AT JAPANESE PORTS, TO BE EFFECTIVE AS OF AUGUST 1, 1947, THE EXTENT SUCH PUBLICATION SHOULD AFFECT A DETERMINATION OF "COMMERCIAL COSTS" WITHIN THE MEANING OF ARTICLE 8 (B) OF THE SPACE-CHARTER AGREEMENTS WOULD STILL BE IN QUESTION.

ALL OF THE AVAILABLE EVIDENCE OF THE CASE POINTS TO THE CONCLUSION THAT THE ARMED SERVICES BOARD OF CONTRACT APPEALS WAS CORRECT IN CONSIDERING THAT SCAP HAD NOT "PUBLISHED" A SET OF RATES FOR STEVEDORING SERVICE EFFECTIVE AS OF AUGUST 1, 1947, BUT SUBMITTED ONLY ITS RECOMMENDATIONS AS OPPOSED TO THE ARMY'S ORIGINAL BELIEF THAT A STEVEDORING RATE OF $2 PER TON WOULD CONSTITUTE A REASONABLE CHARGE FOR THE DISCHARGE OF ARMY CARGO AT JAPANESE AND KOREAN PORTS. YOU INDICATE THAT THE STATEMENT OF THE ASSISTANT SECRETARY OF THE ARMY IN 1950 MUST BE REGARDED AS FINAL AND CONCLUSIVE ON THE PARTIES. HOWEVER, IT IS OUR POSITION THAT THE FINDING OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS THAT SCAP DID NOT PUBLISH THE STEVEDORING RATES IS CONTROLLING UNDER THE CONTRACT PROVISIONS FOR THE ADMINISTRATIVE SETTLEMENT OF DISPUTES ON QUESTIONS OF FACT ARISING UNDER THE CONTRACTS; AND THAT OUR OFFICE WOULD NOT BE WARRANTED IN TAKING EXCEPTION THERETO, SINCE IT IS NOT SHOWN THAT THE BOARD'S FINDING WAS ARBITRARY IN ANY RESPECT OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

CONCERNING THE STATED RATE-FIXING ACTIVITIES OF SCAP IN RELATION TO THE LOADING AND DISCHARGING OF CARGO BY JAPANESE STEVEDORING CONCERNS, WE ARE ADVISED BY THE MILITARY SEA TRANSPORTATION SERVICE THAT SCAP DID NOT FIX ANY RATES FOR COMMERCIAL CONCERNS PRIOR TO AUGUST 1, 1947, BUT THAT SCAP HAD CONSIDERED NEAR THE END OF THE YEAR 1948 THE QUESTION OF STEVEDORING RATES WHICH COULD BE CHARGED BY RECENTLY ORGANIZED OR PROSPECTIVE JAPANESE STEVEDORING COMPANIES. APPARENTLY, DURING MOST OF THE PERIOD OF THE CLAIMS OF STATES STEAMSHIP COMPANY THERE WERE NO SO-CALLED COMMERCIAL RATES AND THE REQUIRED SERVICES WERE PERFORMED EITHER BY THE ARMY OR, AS ALLEGED, BY JAPANESE NATIONALS WITHOUT DIRECT COST TO THE UNITED STATES BUT, RATHER, IN THE DISCHARGE OF CERTAIN OBLIGATIONS OF JAPAN TO THE OCCUPYING POWERS. CONSEQUENTLY, THERE WERE NO RATES IN EXISTENCE WHICH COULD BE SAID TO REPRESENT "COMMERCIAL COSTS" WITHIN THE MEANING OF ARTICLE 8 (B) OF THE RELEVANT SPACE CHARTER AGREEMENTS, AND IT APPEARS THAT THE ARMY WAS JUSTIFIED IN CONTINUING TO APPLY THE GENERAL CARGO RATE OF $1.06 PER TON AFTER JULY 31, 1947, NOTWITHSTANDING SCAP'S FURNISHED SCHEDULES OF RECOMMENDED CHARGES TO BE APPLICABLE ON AND AFTER AUGUST 1, 1947, WHICH PRESUMABLY WERE BASED IN PART UPON CONSIDERATION OF A CHANGE IN THE MILITARY CONVERSION RATE FOR JAPANESE YEN AND AMERICAN DOLLARS. ASSUMING THAT STEVEDORING SERVICES WERE AT THESE TIMES AVAILABLE FOR PROCUREMENT FROM COMMERCIAL FIRMS IN JAPAN, AND THAT SCAP HAD PUBLISHED A SET OF RATES APPLICABLE TO THEM, IT WOULD BE HIGHLY SPECULATIVE TO ASSUME THAT THE COMPANIES WOULD NOT HAVE BEEN PERMITTED TO INCREASE THEIR CHARGES IN JAPANESE YEN UPON THE EFFECTIVE DEVALUATION OF THAT CURRENCY.

IN ANY EVENT, EVEN IF IT SHOULD NOW BE CONSIDERED THAT A CHARGE OF $1.06 PER TON FOR STEVEDORING SERVICE IN THE CHARGE OF ARMY CARGO DID NOT CONSTITUTE A REASONABLE CHARGE FOR THE PERIOD PRIOR TO JANUARY 1, 1949, WITH REFERENCE TO SPACE-CHARTER SHIPMENTS TO JAPAN, OR WITH REFERENCE TO SPACE-CHARTER SHIPMENTS TO KOREA BEFORE AND SUBSEQUENT TO THAT DATE, WE REMAIN OF THE OPINION THAT THE STATES STEAMSHIP COMPANY MUST BE CONSIDERED AS HAVING ACQUIESCED TO THE RATE CHARGED IN CONNECTION WITH THE BILLINGS AND PAYMENT FOR THE PARTICULAR TRANSPORTATION SERVICES. THE ARMED SERVICES BOARD OF CONTRACT APPEALS HAS ADOPTED A SIMILAR VIEW. WE FIND NO LEGAL BASIS WHATEVER FOR MODIFYING OUR PRIOR DECISION. THE CASE OF ST. LOUIS, BROWNSVILLE AND MEXICO RAILWAY COMPANY V. UNITED STATES, 268 U.S. 169, CITED BY YOU IN OPPOSITION TO THE THEORY OF ACQUIESCENCE IN THIS CASE, IS CLEARLY DISTINGUISHABLE SINCE THE DEDUCTION MADE FROM THE PLAINTIFF'S BILLING WAS BASED UPON AN AMOUNT FIXED BY FREIGHT TARIFF AND THE SUPREME COURT FOUND THAT SUCH DEDUCTION "WAS WITHOUT WARRANT IN LAW.' HERE, THERE WERE IN FACT NO ESTABLISHED COMMERCIAL RATES FOR STEVEDORING SERVICES AND THE CHARTER AGREEMENTS PROVIDED A DEFINITE PROCEDURE FOR THE SETTLEMENT OF ANY DISPUTE WHICH MIGHT ARISE WITH RESPECT TO THE REASONABLENESS OF THE RATES WHICH THE GOVERNMENT PROPOSED TO CHARGE FOR THE UNLOADING OF SHIPMENTS TO JAPANESE AND KOREAN PORTS. THE STATES STEAMSHIP COMPANY ACCEPTED THE STEVEDORING CHARGES WITHOUT PROTEST OF ANY KIND AND THE CONCLUSION IS THEREFORE REQUIRED THAT THERE WAS NOT A ,FAILURE TO AGREE," THAT THE CHARGES REPRESENTED "COMMERCIAL COSTS" WITHIN THE MEANING OF ARTICLE 8 (B) OF THE RELEVANT SPACE-CHARTER AGREEMENTS.

ACCORDINGLY, OUR DECISION OF APRIL 3, 1958, RENDERED IN RESPONSE TO THE REQUEST FOR REVIEW OF THE ACTION TAKEN BY OUR CLAIMS DIVISION ON CERTAIN OF THE CLAIMS ORIGINALLY FILED BY THE STATES STEAMSHIP COMPANY, MUST BE, AND IS, HEREBY AFFIRMED.

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