Fruits but of the sea

A liner agent booked two containers for a shipping line, one with a cargo of bananas and one a cargo of shrimps, both for delivery to the same country.

The ship agent created delivery notes for both containers. However, they transposed the wrong release numbers on each of the delivery notes. A haulier came to pick up the container of bananas and when they entered the details intothe terminal system it was rejected as the container number and release number did not correspond. The haulier then contacted his office who reviewed the port system to see what the correct container number should be for that release number.

The container number was clearly entered into the port system as being shrimp and not bananas. However, rather than contact the line for clarification, the haulier simply corrected the delivery note with a pen so it showed the container number for what should have been the bananas, but was actually shrimp. As a result, the wrong container was collected and the error was only noticed when the cargo of shrimp was delivered to a surprised fruit wholesaler. As the container had been opened withoutveterinarian inspection and the seal was broken the cargo needed to either be destroyed or exported back to the country of origin. Eventually, the cargo was sent back and a 30% value was received in a salvage sale.

The value of the cargo after the salvage was US$ 205,000. The line settled with the cargo owner in full and sought recovery against the liner agent for the mistake. ITIC agreed to reimburse the claim in full as long as the line assigned their rights of recovery against the haulage company. ITIC then brought a subrogated recovery against the haulage company.

The haulage company claimed they were acting as a forwarder. Under their national freight forwarding conditions a freight forwarder can limit their liability to SDR 50,000 (around US$ 68,000); whereas if they were a carrier the limitation is SDR 8.33 per kilo, which would have been in excess of the claimed amount. The haulier put forward an offer of SDR 50,000 to settle the matter, which ITIC rejected. The matter was taken to court, where unfortunately although the haulier was found negligent, the court upheld they were a forwarder and therefore the limitation of SDR 50,000 applied.

This decision was appealed and the appeal court overturned the original decision. The haulier was to be considered a carrier. Therefore the full claim, plus interest and costs was payable by the haulier. The total claim paid (and then recovered from the haulage company) was US$ 205,000 in liability US$ 135,000 in legal costs. The claim from notification to recovery took five years.

If a recovery can be made, it is worth doing so as the claim on the member’s record will be reduced by the recovered amount.

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