In Chans advice/14 dated 28/2/2002, we discussed this topic 15 years ago. In its Judgment dated 16/10/2017, the District Court of New South Wales in Australia had to deal with, inter alia, a malpractice that a forwarder issued its own house B/Ls but signed off with as agent for China Ocean Shipping, Pacific International Lines, Mitsui O.S.K. Lines Limited or Orient Overseas Container Line without authority. [2017 NSWDC 279]
This matter concerned bills of lading created by the defendant, which was a freight forwarder. The plaintiff was a finance company, which lent money to an exporter to purchase goods for export. The exporter engaged the forwarder to arrange shipment of its product to ports in China. During the course of so acting, the forwarder created bills of lading. The exporter provided the B/Ls to the finance company as security for borrowings. When the exporter later defaulted on its obligations to the finance company, it was found that the bills of lading issued by the forwarder were not valid securities which would enable the finance company to take action to obtain possession of the cargo.
Background
On 16 May 2014 the finance company entered into a Loan Agreement with the exporter. That agreement provided that the exporter could make drawdowns for the purchase of sheep skins and/or cow hides for export to China. It was a term of the contract between the finance company and the exporter that all original shipping documents, including bills of lading, relating to a proposed advance of funds by the finance company to the exporter would be deposited with the finance company
There were some early drawdowns which were repaid on time. The exporter made three later drawdowns which totalled $742,800 and which were not repaid:
(a) On 8 July 2014 – $289,120 (b) On 29 July 2014 – $271,000 (c) On 29 August 2014 – $182,680
The forwarder issued eight original bills of lading in respect of the goods purchased by the exporter with the three drawdowns. The exporter provided those bills of lading to the finance company as part of the documentation which the finance company required to be lodged with it, before making each further advance of funds.
Each of the bills of lading purported to be and had the hallmarks of a negotiable instrument providing an entitlement to the holder to present the bill of lading to obtain delivery of the goods. Each bill of lading on its face appeared to be:
(a) a receipt for the relevant goods specifying the cargo and the containers for transportation; (b) evidence of a contract of carriage; and (c) a document of title providing rights to the holder of the originals and identifying the “Consignee” as “TO ORDER”.
The goods were subsequently delivered to unidentified receivers in China and that when the exporter failed to pay its outstanding obligations to the finance company, the finance company was unable to use the bills of lading issued by the forwarder to obtain delivery of the goods.
The finance company had two causes of action against the forwarder. Firstly it sued for misleading or deceptive conduct within the meaning of the Australian Consumer Law. It was said that by issuing the bills of lading, the forwarder represented that:
(a) each bill of lading was a negotiable instrument providing an entitlement to the holder to present the bill of lading to obtain delivery of the goods; (b) alternatively, in issuing sets of “original” bills of lading consigned “TO ORDER”, each bill of lading could be held by a third party as security for payment for the goods and/or to secure financial arrangements.
The finance company alleged that in reliance upon those representations the finance company accepted the bills of lading as security for amounts outstanding by the exporter to the finance company, did not take any steps to obtain further security, and made advances to the exporter in the belief that it had taken security by acceptance of delivery of the bills of lading. The finance company claimed damages for such misleading or deceptive conduct.
The second cause of action pleaded by the finance company was for breach of warranty of authority. It was said that by signing each of the bills of lading the forwarder held itself out as having authority to act on behalf of each relevant carrier described in each bill, including the authority to issue bills of lading providing an entitlement to the holder to present the bill of lading to obtain delivery of the goods described. Each of the bills were signed by the forwarder as agents for the carrier, and purported to be a negotiable instrument providing an entitlement to the holder to present the bill of lading to obtain delivery of the goods. The forwarder did not have authority to act on behalf of each relevant carrier and that its warranty of authority in respect of the bills of lading induced the finance company to make the further advances to the exporter, which advances would not have been made but for the warranty of authority. As a result of the alleged breach of express warranty of authority, the finance company suffered loss and damage, being the amounts further advanced to the exporter plus interest.
For each of the drawdowns under the loan facility, the exporter deposited bills of lading supplied to it by the forwarder with the finance company, by sending the original bills of lading by post, or by delivering the bills of lading to the finance company’s Sydney office by hand. As each drawdown was repaid, the finance company arranged for the return of the original bills of lading to the exporter.
The particular bills of lading issued by the forwarder and provided to the exporter, which were then lodged with the finance company, were:
(a) Bill of lading no. MELZHE1010 dated 25 June 2014 (b) Bill of lading no. MELZHE1011 dated 25 June 2014 (c) Bill of lading no. MELZHE1020 dated 7 July 2014 (d) Bill of lading no. MELZHE1012 dated 7 July 2014 (e) Bill of lading no. MELCGO140000075 dated 7 July 2014 (f) Bill of lading no. MOLU17101551936 dated 24 July 2014 (g) Bill of lading no. OOLU3079110572 dated 31 July 2014 (h) Bill of lading no. MOLU17101564173 dated 7 August 2014.
The important features of bill of lading no. MELZHE1010 were as follows.
In the top right-hand corner it was said to be a bill of lading issued by Freight Solutions (Vic) Pty Limited (i.e. the forwarder).
The carrier was said to be “China Ocean Shipping”. In the bottom right-hand box these words appear: “In witness of the contract herein contained the above stated number of originals have been issued one of which being accomplished the other(s) to be void. For the carrier CHINA OCEAN SHIPPING. ”
That box was then executed under the name of Freight Solutions (Vic) Pty Limited. The seal of the forwarder and a signature was placed on an execution line against which were the words “Signed As Agents Only”.
Above the execution box was, in large capital letters, the word “ORIGINAL”.
In the top left-hand corner of the bill of lading the Shipper was ASSH (i.e. the exporter). The Consignee was “TO ORDER”.
The port of loading was Melbourne, the port of discharge was Shanghai and the place of delivery was Zhengzhou.
There were three original bills of lading and three copies of the bills of lading. The goods were described, along with their marks, numbers and weights.
There was no endorsement on the bill of lading.
Bill of lading number MELZHE1011 was in identical terms, except for the description of the goods. Bill of lading number MELZHE1020 was in identical terms apart from the description of the goods and the name of the vessel. Bill of lading number MELZHE1021 was in identical terms apart from the description of the goods and the name of the vessel. Bill of lading number MELCGO140000075 was in similar terms, except that the carrier was “Pacific International Lines”. The forwarder had signed as agent only for Pacific International Lines. Once again the description of the goods and the name of the vessel was different. Bill of lading number MOLU17101551936 was in similar terms except that the carrier was Mitsui O.S.K. Lines Limited. The forwarder had signed as agent only for Mitsui O.S.K. Lines Limited. The description of the goods and the vessel was different. The port of discharge was the same as the port of delivery being Qingdao. Bill of lading number OOLU3079110572 was in similar terms except that the carrier was Orient Overseas Container Line. The forwarder had signed as agent only for Orient Overseas Container Line. The description of the goods and the vessel was different and the port of discharge and delivery was Quingdao. Bill of lading number MOLU17101564173 was in similar terms except that the carrier was Mitsui O.S.K. Lines Limited and the forwarder had signed as agent only for that carrier. The description of the goods and the vessel was different, and the goods were being discharged at and delivered to Quingdao.
Misleading or Deceptive Conduct
The finance company firstly sued the forwarder for a breach of s 18 of the Australian Consumer Law which is contained in Schedule 2 to the Competition and Consumer Act 2010 (C’th). Section 18(1) provides:
“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
The relevant legal principles in relation to a misleading or deceptive conduct claim are set out in paragraph [10] in Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 as follows:
(1) A contravention of s 18 is established by “conduct” which is misleading or deceptive or likely to mislead or deceive; (2) Section 18 is concerned with the effect or likely effect of “conduct” upon the minds of that person or those persons in relation to whom the question of whether the “conduct” is or is likely to be misleading or deceptive falls to be tested. The test is objective and the court must determine the question for itself; (3) “Conduct” can, of course, include making a statement that is misleading or deceptive or likely to mislead or deceive; (4) By making a statement of past or present fact, a corporation’s state of mind is irrelevant unless the statement involved the state of the corporation’s mind; (5) Contravention of s 18 does not depend upon the corporation’s intention or its belief concerning the accuracy of the statement of fact but upon whether the statement conveys a meaning which is false; (6) A false meaning will be conveyed if what is stated concerning the past or present fact is inaccurate but also if, although literally true, the statement conveys a meaning which is false.
The intent of the defendant is not relevant under s 18. All that is relevant is whether, tested objectively, the conduct was misleading or deceptive or likely to mislead or deceive – Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216 at 223. The remedy sought by the plaintiff is damages under s 236 of Australian Consumer Law. This provides as follows:
“(1) If:
(a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.”
It is not essential that the contravention be the sole cause of the loss or damage. Where there are two concurrent causes, and misleading or deceptive conduct was one of those causes, that is enough – Henville v Walker at [14]. The plaintiff must prove that it has relied upon the conduct, in acting as it did, thus suffering loss.
The Judge found that (i) by issuing the bills of lading the forwarder represented that each bill of lading was a negotiable instrument providing an entitlement to each successive lawful holder of the bill to present the bill of lading to obtain delivery of the goods, and that (ii) by issuing the bills of lading the forwarder represented that because they were “ORIGINAL” bills of lading consigned “TO ORDER”, each bill of lading could be held by a third party as security for payment for the goods and/or to secure financial arrangements.
However, the Judge found that the finance company did not become a lawful holder of each bill because each bill was not endorsed. But the Judge found that the finance company could have become a lawful holder of each bill by requesting and obtaining endorsement of the bill by the exporter. The exporter wanted these drawdowns in order to do business, buy goods and sell them for profit in China. The Judge found that if a request was made by the finance company for the exporter to endorse each bill of lading it was likely that it would have done so, just as it voluntarily provided possession of the bills as a condition of the approval of each drawdown.
The Judge found that even without endorsement, each bill of lading, if issued with authority, would have given the finance company a lien as pledgee over the bills of lading, which would have had the practical effect of the finance company being empowered to prevent any other party taking delivery of the cargo, unless the finance company was repaid for each drawdown.
A false meaning was conveyed by these bills of lading issued by the forwarder. Firstly, the falsity was that they were ocean bills of lading issued by the forwarder as authorised agent of each ocean carrier. Secondly, by being specifically stated to be “ORIGINAL” and “TO ORDER” they purported to be ocean bills of lading which would have entitled the lawful holder to possession of the goods.
Even if these were genuine ocean carrier bills (issued by the forwarder with the authority of each carrier), the finance company would not have obtained a perfect security because each bill was not endorsed. However, it had a security which could be perfected by endorsement, which the Judge had found would probably have been given by the exporter if asked.
The Judge found that the finance company relied upon the bills as original negotiable bills of lading (as they appeared to be on their face) and in view of such reliance the finance company suffered loss or damage because of the misleading or deceptive conduct of the forwarder.
The conduct of the forwarder was a cause, in fact the dominant cause, of the loss or damage.
The finance company might therefore recover the amount of the loss or damage against the forwarder under s 236 of the Australian Consumer Law.
Breach of Warranty of Authority
The forwarder had no authority from any of the carriers nominated on the bills of lading which the forwarder issued.
The fundamental principle is that a person who enters into a contract expressly as agent for a principal named impliedly warrants his authority. If he has no such authority, he may be sued on that implied contract and is bound to make good to the other contracting party what that party has lost, or failed to obtain, by reason of the non-existence of the authority – Leggo v Brown & Dureau Limited (1923) 32 CLR 95 at 99.
In Firbank’s Executors v Humphreys (1886) 18 QBD 54 Lord Esher MR said (at 60):
“The rule to be deduced is, that where a person by asserting that he has authority of the principal induces another person to enter into any transaction which he would not have entered into but for that assertion, and that assertion turns out to be untrue, to the injury of the person to whom it is made, it must be taken that the person making it undertook that it was true, and he is liable personally for the damage that has occurred.”
In BHPB Freight Pty Limited v Cosco Oceania Chartering Pty Limited & Ors [2009] FCA 1087 Justice Finkelstein said that it is not necessary for the plaintiff to enter into a transaction with the supposed principal in order to establish an action for breach of warranty of authority. The cause of action is established even if the plaintiff enters into a transaction with another person. His Honour cited Firbanks Executors v Humphreys and also Penn v Bristol & West Building Society [1997] 1 WLR 1356.
In the normal case of breach of warranty of authority, the person to whom the warranty is given is the other party to the purported contract. However, the characteristics of a bill of lading are such that the creation, issuing and delivery of a bill of lading mean that a commercial document is put into the world which can end up in the hands of third parties, and not just the person to whom the bill is originally delivered. One of the three characteristics of a bill of lading is that it constitutes a document of title for the goods nominated in the bill.
A person who is given possession of a bill of lading, even though they did not have the warranty of authority conveyed directly to them, has a document of title purportedly signed by an agent for the carrier, and execution in that fashion carries with it a warranty of authority which is made not only to the original recipient of the bill, but to any person who subsequently comes into possession of the bill.
The Judge found that (i) the forwarder’s bills of lading purported to evidence a contract of carriage between the shipper and the forwarder as an agent for the various ocean carriers, and that (ii) the forwarder purported to execute each bill of lading as agent for the ocean carrier, without having authority from any of the ocean carriers, and that (iii) the breach of warranty of authority by the forwarder was a cause of the finance company approving and permitting each of these three drawdowns by the exporter, and that (iv) if the forwarder had not breached its warranty of authority, the finance company would have suffered no loss, as it would never have advanced the three unpaid drawdowns to the exporter.
In the result, the Judge found that the forwarder was liable to the finance company on the cause of action pleaded for breach of warranty of authority.
Conclusions
The Judge’s orders were:
(1) Judgment for the finance company against the forwarder in damages for misleading or deceptive conduct within the meaning of the Australian Consumer Law. (2) Judgment for the finance company against the forwarder in damages for breach of warranty of authority.
Please feel free to contact us if you have any questions or you would like to have a copy of the Judgement.
23/F, Excel Centre, 483A Castle Peak Road, Lai Chi Kok, Kowloon, Hong Kong 香港九龍荔枝角青山道483A卓匯中心23樓 Tel: 2299 5566 Fax: 2866 7096 E-mail: gm@smicsl.com Website: www.sun-mobility.com A MEMBER OF THE HONG KONG CONFEDERATION OF INSURANCE BROKERS 香港保險顧問聯會會員
The Hong Kong High Court issued a decision on 31 May 2022 ordering a South Korean shipowner to provide a Hong Kong shipowner with security for costs in the amount of HK$600,000 in relation to a ship collision case that happened in Hong Kong during the super typhoon Hato in August 2017. [HCAJ 80-85/2019] [2022 HKCFI 1631]
In Chans advice/215, we reported the High Court of Hong Kong refused Changhong Group’s application to stay the Hong Kong action. The Court of Appeal also subsequently dismissed Changhong Group’s appeal. On 13 July 2020, the Court of Final Appeal finally dismissed Changhong Group’s application for leave to appeal. [FAMV No. 34 of 2020] [2020 HKCFA 24]
The Hong Kong Court of Appeal issued a Judgment on 20 February 2019 dismissing Changhong Group’s appeal against the High Court’s Decision of 15 November 2018 (reported in Chans advice/215) because Changhong Group had not obtained leave to appeal from the Hong Kong High Court. [CACV576/2018] [2019HKCA246]
The Hong Kong High Court issued a Decision on 25 February 2019 dealing with Changhong Group’s delayed application for leave to appeal in relation to the collision case reported in our Chans advice/218 and Chans advice/215. [HCAJ3/2018, 2019HKCFI542]
In the transport industry, the contracts of carriage (e.g. Bills of Lading, Air Waybills) usually contain an exclusive jurisdiction clause for settling disputes. However, it is not uncommon that the shippers and consignees sue the transport operators in a court other than the one specified in the exclusive jurisdiction clause. In Hong Kong, the transport operators may rely on the Foreign Judgments (Restriction on Recognition and Enforcement) Ordinance to tackle this kind of situation.
The United States District Court (Southern District of New York) issued an order on 29 November 2021 to deny a shipping company’s motion to rely on the Singapore jurisdiction clause in its bill of lading. [1:19-cv-5731-GHW-RWL]
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The Hong Kong Court of Appeal issued a Judgment on 12/2/2018 to deal with the cargo owners’ seeking leave to appeal against the High Court’s Judgment reported in our Chans advice/209 last month. [CAMP 38/2017] [2018 HKCA77]
The Hong Kong High Court issued a Decision on 15 March 2021 converting a domestic Mareva injunction into a worldwide Mareva injunction in a shipowner’s freight and demurrage claim against a charterer. [HCMP 1190/2020] [2021 HKCFI 680]
The Hong Kong High Court issued a Judgment on 16 January 2019 dealing with the appeal of the wasted costs’ case reported by our Chans advice/214. [HCA1919/2016] [2019HKCFI127]
On 12/4/2017, the Hong Kong High Court dismissed an application made by a cargo owner for stay of proceedings commenced by two forwarders in relation to an uncollected cargo case. [HCA 1927/2016]
The Hong Kong High Court issued a Judgment on 11 January 2019 dealing with a dispute of US$335,858.31 between a bunker supplier and a ship agent. [HCA119/2015] [2019HKCFI57]
Remember our Chans advice/171 of 31/3/2015 reporting that the Hong Kong Court of Appeal discharged the Mareva injunctions against Hin-Pro? The Hong Kong Court of Final Appeal issued a Judgment on 14/11/2016 reversing the Court of Appeal’s Judgment of 11/3/2015. [FACA No. 1 of 2016]
The Hong Kong High Court issued a ruling on 2/12/2016 dealing with a shipowner’s interrogatory application in relation to an uncollected cargo case. [HCAJ 118/2015]
The Hong Kong High Court issued a Decision on 4 March 2020 dismissing a shipowner’s application for a stay of proceedings in favour of arbitration in a case of cargo misdelivery without presentation of original bill of lading. [HCAJ 5/2019] [2020 HKCFI 375]
The Hong Kong High Court issued a Judgment on 25/8/2017 to determine whether the Hong Kong Court or the Yangon Court was the natural and appropriate forum in an in rem legal proceedings in relation to a cargo damage claim of USD143,852.02. [HCAJ 101/2015]
In the issue of our Chans advice last month, we talked about the major provisions of the Montreal Convention (which is for the international carriage of goods by air). In this issue, we would like to discuss the major terms of an equally important international convention for the international carriage of goods by sea, viz. the Hague Visby Rules.
The Hong Kong High Court issued a Decision on 9/5/2017 allowing a time extension for some cargo interests to claim against the Tonnage Limitation Fund constituted by the owner of one of the two vessels involved in a collision that happened on 7/11/2013. [HCAJ 189/2013]
The Hong Kong District Court issued a Decision on 30 April 2021 dealing with a personal injury case in relation to a container terminal. [DCPI 110/2020] [2021 HKDC 463]
The English High Court issued a Judgment on 31/7/2015 dismissing a cargo owner’s conversion claim US $565,891.58 against a shipowner in an uncollected cargo case. [(2015) EWHC 2288 (Comm), (2015) 2 C.L.C. 415]
The High Court of Hong Kong issued a Judgment on 22/5/2017 holding that the District Court has jurisdiction to determine bill of lading and bailment cases. [HCAJ 150/2014]
The High Court of Hong Kong issued a Decision on 31/8/2018 concerning a feeder company’s claim against a shipping company’s lawyer for wasted costs. [HCA1919/2016] [2018HKCFI1879]
The amendment to the International Convention for the Safety of Life at Sea (SOLAS) 1974 Chapter VI, Regulation 2 in respect of the verified gross mass of a container carrying cargo (laden container) is for entry into force globally on 1 July 2016.
The Hong Kong High Court issued a Decision on 11 May 2021 staying a South Korea container terminal’s legal action in Hong Kong with respect to its allision claims of more than US$90,000,000 against the owners of a container ship. [HCAJ 31/2020] [2021 HKCFI 1283]
The Hong Kong Court of Appeal issued a Judgment on 20 September 2019 declining to give leave of appeal to Changhong Group in relation to the High Court Decision dated 29 January 2019 (reported in our Chans advice/221). [CAMP197/2019] [2019HKCA1061]
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The Hong Kong High Court issued a Judgment on 3/2/2017 holding Natural Dairy liable to pay HK$4,360,948.38 to Schenker being the outstanding freight charges. In the Judgment, the Judge also explained the principles regarding the meaning of notice of the forwarder’s standard trading conditions. [HCA 1755/2011].
Our Chans advice/191 reported a Hong Kong High Court’s case concerning a shipping company’s restitution claim against its former deputy general manager (Mr Ma) for HK$387,655,303.70. The latest development of this case is: the Hong Kong High Court issued a Judgment on 1/2/2018 and a Decision on 9/2/2018 holding that Mr Ma was in contempt of Court as a result of his breach of a Mareva Injunction Order and that he be committed to prison for 4 months. [HCMP1115/2017] [2018 HKCFI176] [2018 HKCFI328]
The Hong Kong High Court issued a Decision on 30 September 2021 holding a shipowner’s Defences as an abuse of process in a case of unpaid crew wages. [HCAJ 76/2020] [2021 HKCFI 2961] [HCAJ 91/2020]
In our last issue of Chans advice/253, the Hong Kong District Court’s judgment dated 26 April 2022 mentioned a case authority of China Ocean v Mitrans Shipping. We would like to discuss this judgment dated 11 July 1995 of the Hong Kong Court of Appeal in our Chans advice this month. [1995 No. 71 Civil]
We have received some enquiries from our forwarder clients about the FCR e.g. what is FCR? How many types of FCR are there? What are the uses of FCR? We would like to discuss these in this issue.
The Hong Kong Court of Appeal issued a Judgment [CACV144/2017] [2018HKCA299] on 29/6/2018 upholding the High Court’s Judgment dated 2/6/2017 (which was reported in our Chans advice/201).
The High Court of Hong Kong issued a Decision on 23 May 2018 allowing a shipowner to be represented by 2 different firms of solicitors (one appointed by its hull underwriters and the other appointed by its P&I Club). [HCAJ84/2017] [2018HKCFI1136]
The Hong Kong High Court issued a Decision on 20/12/2017 dealing with a dispute of US$948,802.05 (as the price of bunkers supplied to a vessel) between a vessel charterer and a bunker supplier. [HCA2265/2016]
We mentioned in our Chans advice/225 that the limit of liability under the Montreal Convention for carriage of cargoes was increased from 19 SDR/kg to 22 SDR/kg of the gross weight of the cargoes effective on 28 December 2019. We have recently received some forwarders’ request asking us to talk about the major terms in the Montreal Convention. We in this issue would like to introduce the Montreal Convention’s major provisions as follows:
The Hong Kong High Court issued a Decision on 22 January 2021 dealing with an appeal against a Small Claims Tribunal’s award concerning a dispute over a container terminal’s storage charges. [HCSA 44/2020] [2021 HKCFI 200]
The Hong Kong High Court issued a Judgment on 9/4/2018 dealing with a cargo total loss case in which a NVOC in Malta was wrongly sued (because it had the same name as that of the correct NVOC in BVI). [HCAJ 65/2016], [2018 HKCFI 699]
The Hong Kong High Court issued a judgment on 21/4/2016 and disallowed a cargo owner’s application for summary judgment against a forwarder in connection with a cargo (a diamond) missing claim of US$900,000. [HCCL 10/2015]
To continue our recent series of loss prevention articles, we would like to discuss in this issue the major provisions of the PRC Maritime Code as far as the international carriage of goods by sea is concerned.
The Hong Kong High Court issued a Decision on 19 March 2018 dealing with some legal principles in relation to granting relief against unless orders in a ship collision case. [HCAJ 84/2017] [2018 HKCFI 609]
The High Court of Hong Kong issued a Decision on 15 November 2018 concerning the tragic collision between the cargo vessel CF Crystal and the tanker Sanchi, which happened on 6 January 2018 and led to the death of all the officers and crew of the Sanchi. [HCAJ3/2018] [2018HKCFI2474]
The Hong Kong District Court issued a Judgment on 26 April 2022 dealing with a case concerned with transfer of business and lifting the corporate veil, and held a forwarder and its shareholder and director jointly and severally liable for a debt of HK$975,733.71. [DCCJ 2104/2019] [2022 HKDC 289]
The English Court of Appeal issued a Judgment on 13/12/2017 dealing with a cargo damage claim of EUR2,654,238 and a charter hire claim of USD1,012,740 in connection with a NYPE charterparty. [2017 EWCA Civ 2107] [2017 WL 06343564] [Case No. A3/2016/4770]
The Hong Kong High Court issued a Decision on 22 Feb 2021 holding that the wreck removal claims of a ship sunk were not subject to the Convention on Limitation of Liability for Maritime Claims 1976. [HCAJ 98/2019] [2021 HKCFI 396]
Following the issue of Chans advice last month, we would like to report the latest decision issued by the court over this theft case. On 17 January 2023, the Hong Kong High Court dismissed Mr Ma’s application to withdraw HK$1.5 million out of his frozen assets for paying the legal costs for his appeal against conviction in theft. [HCA 619/2016] [2023 HKCFI 197]
The Ningbo Maritime Court issued a Judgment on 25/5/2016, and dismissed a cargo insurer’s (PICC Ningbo) recovery claim of USD25,238.40 against Mitsui O.S.K. Lines Ltd (“MOSK”) in relation to the vessel MOL Comfort sinking into the Indian Ocean on 17/6/2013.
The Hong Kong High Court issued a Decision on 13 May 2021 to deal with an interpleader action concerning the stakeholding of US$700,000 in relation to a dispute over some management fees between two transport operators. [HCMP510/2020] [2021 HKCFI 1373]
The Hong Kong High Court issued a Decision on 29 January 2019 dismissing Changhong Group’s application for stay of the legal proceedings against it brought by the consignee and the insurer of the cargo on board the Sanchi. [HCAJ6/2018, 2019HKCFI263]
We recently have received a lot of uncollected cargo claim cases from our forwarder clients, which have kept our 6 claim handlers very busy. We would like to take this opportunity to talk about this troublesome problem of uncollected cargoes. Actually, the forwarders have been facing this real headache in at least these two decades.
More and more junior staff of the banks insist all the Bills of Lading to be signed and issued with the above remark “As agent for the Carrier”. This is of course right if the concerned Carrier does not have its own office in the place of issuing the Bill of Lading and therefore instruct its agent there to issue the Carrier’s Bill of Lading.
The High Court of Hong Kong issued a Decision on 21/9/2017 dealing with the principles in respect of the real risk of dissipation of assets in a case of Mareva Injunction involving a shipowner and a charterer. [HCMP 1010/2017]
In our newsletter last month, we talked about some essential terms in house Air Waybills. In this issue, as the continuation of the loss prevention exercise for freight forwarders, we would like to discuss some essential terms in house Bills of Lading.
In Chans advice/215, we reported that the Hong Kong High Court refused Changhong Group’s application to stay the Hong Kong proceedings; and in Chans advice/234, we reported that the Court of Final Appeal dismissed Changhong Group’s application for leave to appeal. On 7 April 2022, the Hong Kong High Court issued a Decision dealing with Changhong Group’s action to re-litigate its stay application. [HCAJ 3/2018] [2022 HKCFI 920]
The Hong Kong High Court issued a Decision on 21 July 2023 in relation to a case that an aircraft (worth at least USD 80 million) and its cargoes were destroyed by a fire caused by the goods of chlorine dioxide disinfection tablets. [HCA 837/2022] [2023 HKCFI 1896]
The Hong Kong Court of Appeal on 1 December 2021 allowed a charterer’s appeal against a High Court’s Decision dated 13 April 2021 (which disallowed the charterer’s charter hire claims of US$234,955 against the shipowner because the High Court was not satisfied the claims were well founded). [CACV 294/2021] [2021 HKCA 1865]
In the last issue of Chans advice, we reported the case that the Hong Kong Court of Appeal rejected the mortgagee’s appeal against the High Court’s order of granting a stay until 24 April 2019 for the sale of the Vessel Brightoil Glory. On 17 May 2019, the Court of Appeal issued another judgment refusing the shipowners’ appeal in respect of their application for a further stay of the sale of the Vessel until 22 May 2019. [CAMP81/2019] [2019 HKCA 561]
The Hong Kong High Court issued a Decision on 2 October 2024 dismissing a shipping company’s application to strike out a forwarder’s third party indemnity claim in a cargo (frozen beef) damage case. [HCAJ 9/2023, HCAJ 22/2023, 2024 HKCFI 2708]
Without even knowing, we have published including this one 200 issues of the Chans Advice. As this is a monthly bulletin, 100 issues took more than 8 years and 200 issues took 17 years to run.
The Hong Kong Court of Appeal issued a Judgment on 4 October 2019 upholding the High Court’s Decision dated 9 April 2018 (reported in our Chans advice/208). [CACV593/2018][2019HKCA1101]
The Hong Kong High Court issued a Judgment on 2/6/2017 dealing with the liability apportionment among 3 vessels in 2 almost simultaneous collisions that happened near Hong Kong on 14/5/2011. [HCAJ158/2012 and HCAJ49/2013 and HCAJ48/2011]
The limit of liability for international carriage of cargoes by air under the Montreal Convention has been revised from 19 SDR/Kg to 22 SDR/Kg of the gross weight of the cargoes effective from 28 December 2019. We have received many enquiries from freight forwarders about changing their house Air Waybills’ terms to cope with the new limit of liability. We would like to take this opportunity to discuss some essential terms in house Air Waybills.
The Hong Kong District Court issued a Decision on 8 May 2020 upholding a summary judgment ordering one forwarder to pay outstanding airfreight charges of HK$440,000 to another forwarder. [DCCJ1202/2018] [2020HKDC307]
We reported in our Chans advice/252 that the Hong Kong High Court held Hyundai Hong Kong’s ex-Deputy General Manager (Mr Ma) liable to compensate HK$387,655,303.70 to Hyundai Hong Kong in the case of his theft of his employer’s money. On 23 December 2022, the Hong Kong High Court issued a decision ordering a sum of HK$500,000 (which was deposited by Mr Ma as bail money) to be released to Hyundai Hong Kong in partial satisfaction of Mr Ma’s judgment debt. [HCA 619/2016] [2022 HKCFI 3798]
The Hong Kong Court of Appeal’s Judgment dated 11/4/2008 explained some legal principles relating to whether indemnity claims are allowed by in rem legal actions against vessels. [CACV 257/2007]
The Hong Kong High Court issued a Judgment on 13 August 2021 holding a forwarder liable to pay nominal damages of HKD1,000 to a shipper in a cargo misdelivery claim case of USD1,299,189.87. [HCA 937/2016] [2021 HKCFI 2310]
We have received a lot of cargo claims from our forwarder clients in the recent months. In this issue, we would like to discuss in general how the forwarders should handle the cargo claims.
The Court of Appeal of Hong Kong issued a judgment on 28 March 2019 dealing with a matter concerning the sale pendente lite of an oil tanker Brightoil Glory. [CAMP49/2019][2019HKCA395]
Against the post-Covid tide, we ran an off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Attendance could not be compared with any webinars but the number of enthusiastic questions in the Q&A session reflected the demand for transport liability issue solutions. For the sake of recapitulations and sharing the Q&A among the Chan Advice readership, we like to report the Q&A in two issues. We welcome any other questions you may have on the following.
This continues the Q&A in our off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Participants were keen to know more about seaway bills, how war plays in insurance? How modes of transport differ mis-delivery claims handling? What is insurers’ attitude towards transloading claims? And finally, why mis-delivery and uncollected cargo claims deserve special attention. SMIC deals with similar questions daily. Each case varies in its cause, and therefore healing recipe differs. But if you are conversant with fundamentals. They could be simple.
Remember our Chans advice/165 (reporting the Hong Kong Court of Appeal holding the Hong Kong forwarder liable to pay US$852,339 plus costs and interest to the Indian bank in the air cargo misdelivery case)? On 19/5/2016, the Court of Final Appeal dismissed the Hong Kong forwarder’s application for seeking leave to appeal. [FAMV Nos 45 & 52 of 2015]
The PRC Supreme Court on 26/11/2015 issued a Judgment holding a shipping company’s container demurrage claim against a shipper time barred. [2015民提字第119號]
The Hong Kong High Court issued a Judgment on 18/11/2016 dismissing a shipping company’s application for summary judgment against its former deputy general manager (Mr Ma) for restitution of the sum of HK$387,655,303.70 on the ground of money had and received and/or unjust enrichment. [HCA 619/2016]
In our Chans advice/244, we reported the Hong Kong High Court case [HCA937/2016] [2021 HKCFI 2310] that the forwarder was held liable to pay nominal damages of HKD1,000 to the shipper in the cargo misdelivery claim of USD1,299,189.87. On 20 October 2021, the Hong Kong High Court issued a Decision on Costs holding the shipper liable to pay the costs of the forwarder. [2021 HKCFI 3021]
The Hong Kong High Court issued a Judgment on 22/8/2016 dealing with a case that a forwarder wanted to strike out a cargo misdelivery claim on the ground that the claim disclosed no reasonable cause of action. [HCCL 5/2015]
SMIC has finally jumped on the bandwagon of the cyber media rush by its presence on the Facebook. We would have done this for a long time had it not been for the daily chores and that we were then not too convinced of its value in the commercial world. Thereafter, it becomes obvious that more and more firms are capitalizing on this new media; and unlike the old economies where information flow was imperfect, consumers of the new economies tend to prefer looking up for information by themselves from the web, or augmenting information they are given.
The Hong Kong High Court issued a judgment on 12/4/2016 to dismiss a cargo owner’s action in respect of breaking a barge owner’s tonnage limitation. [HCAJ 178/2014]
The Montreal Convention is an international treaty agreed by 140 states in respect of governing carriers’ liability for injury or death of passengers, damage to or loss of baggage and cargo and losses caused by delays. Hong Kong has adopted it through the Carriage by Air Ordinance (Cap 500).
Remember our Chans advice/163 about the English High Court’s Judgment holding the Hague Visby Rules instead of the Hague Rules to apply to the cargo damage claim case in excess of US$3.6 million? The English Court of Appeal issued a Judgment on 24/2/2016 upholding the High Court’s conclusion but with different reasons. [Case No: A3/2014/1285, 2016 EWCA Civ 101, 2016 WL 00692394]
Are Standard Trading Conditions (“STC”) equivalent to the House Bill of Lading (“HB/L”) terms or the House Air Waybill (“HAWB”) terms? We have been frequently asked this question by our forwarder clients.
The VGM laws have come into operation in Hong Kong since 1/7/2016. They are mainly contained in Section 3 and Section 3A of the Merchant Shipping (Safety) (Carriage of Cargoes and Oil Fuel) Regulation (Chapter 369AV) as follows: