PAUL ROBERT RODGERS, RODGERS & CO SOLICITORS (ASIA) PTE LTD

Transcription

1 PAUL ROBERT RODGERS, RODGERS & CO SOLICITORS (ASIA) PTE LTD International Sales Rodgers & Co Solicitors (Asia) Pte Ltd 5 Shenton Way, #19-01 UIC Building, Singapore Tel: , Fax: prodgers@rodgersco.com October 2011

2 1. Title/Ownership?? Contract of Sale/Retention of Title Bill of Lading Payment Terms October 2011

3 2. Risk of Loss/Damage Not the same as ownership May follow ownership Or Delivery of Goods Or Ship s rail at load port (FOB/CIF)

4 Contractual Parties Bill of Lading: Negotiable/Transferable (issued by ship owner or BBC) Charter Party: Voyage / Time charter (no control over ship) / (Control over ship)

5 When It Goes Wrong I Wet Damage in Transit 1. You sell FOB and voyage charter ship (cargo value US$ 8.0 Million). 2. Alumina suffers minor water ingress (about 2.3 % volume into 2 holds). 3. Receiver/Buyer rejects whole consignment due to concern about damage to smelter and extra discharge costs. 4. Carrier claims demurrage 5. No one accepts cargo No dumping allowed due to local regulations. 6. Cargo underwriters say they are not responsible as no legal obligation to receiver and not all the cargo is damaged. They tell you and receiver to act as a prudent uninsured.

6 Legal Analysis The Buyer has risk in the cargo. He cannot legally reject cargo notwithstanding wetness unless cargo has completely changed specification (which it has not). However, commercially, receiver can control port/stevedores/local authorities. Discharge not possible. Carrier is ship owner as Master signed B/L. He time chartered ship to single trip time charterers who are a small company. They voyage charter to you. They claim demurrage against you. Ship owner claims against you as shipper under B/L for dangerous cargo. You claim unseaworthy ship under voyage charter against T/C but they have no assets. Receiver threatens to arrest ship for damaged cargo. Ship owner threatens you as shipper under B/L and time charter.

7 Legal Analysis (contd) 7. Ship owner says if cargo not discharged within 48 hours, they will sail out of disport and dispose of whole cargo. Does he have that right probably yes. 8. Receiver attempts to stop payment under sale contract whether he can or not depends on sale contract/payment terms. NB: L/C contract different to sale contract. What are your options? You have shipped US$ 8.0 Million of cargo which you might lose and have no insurance for that loss.

8 When It Goes Wrong II Warehouse Receipt 1. You purchase 70,000 mt Alumina in warehouse from well-known trader. 2. Pay cash against warehouse receipts issued by local branch of major international warehouse in China. 3. After payment, you hear your cargo has been attached by local Chinese buyer claiming ownership. 4. Your local lawyer reports Today I visited warehouse and could not find cargo.

9 Legal Analysis 1. Who owns cargo? Sale Contract? Law and Jurisdiction? 2. Has seller breached contract? Can you recover? Governing law? Probably not. 3. Can you lift attachment in local court? Depends on local court. 4. Can you claim against warehouse company? (Difficult). Limited duties. 5. Upon further investigation, local port unlawfully taking cargo from stockpiles and using incoming cargo to cover up loss of previous cargo. What are your options?

10 PREVENTION is Cheaper than Cure 1. Know your contractual partners. 2. Know your contracts watch standard forms. 3. It costs little to survey ship or cargo but a lot if it goes wrong. 4. Ascertain the facts before you act. Decision made on bad information are usually bad decisions. 5. Once you know the facts, act firmly and commercially. Litigation is a last resort and even if you win, your victory is never complete, e.g. management time/unrecoverable costs. 6. GET A GOOD COMMERCIAL LAWYER ASAP. Paul Rodgers Rodgers & Co Solicitors (Asia) Pte Ltd 5 Shenton Way, $19-01 UIC Building, Singapore Tel: , Fax: prodgers@rodgersco.com