Search terms: Shipping & Transport, China
Bills of lading and sea waybills differ in their nature and function, and also in the obligations imposed on the carrier. In a dispute arising from the transportation of goods from China to the United States, the Shanghai Maritime Court considered the classification of documents as bills of lading or sea waybills, as well as the effect of a standard term on the back of a bill of lading that stipulated the application of US law.
A ruling of the Shanghai Maritime Court provides guidance on the period within which a court may hear a compensation claim against a carrier for disputes relating to cargo carriage at sea. The court also considered the defendant's argument that it was entitled to exemption because the accident resulted from maritime peril and an inherent defect in the vessel's equipment.
In international trade, bills of lading issued by carriers may relate to multiple subjects. As a result, it can be difficult to determine the legal relations that underlie the operation merely by the bills of lading; companies shown on the bills may not even exist. A recent case before the Shanghai Maritime Court demonstrates how claimants may seek to proceed.
Under Chinese law, where cargo damage occurs during land transportation, the carrier must normally pay compensation in the amount of the actual loss, unless the parties have contracted otherwise. However, the Xiamen Maritime Court has chosen to apply a limitiation under Italian law in a case where the consignee was a foreign company, the goods were transported by sea and land and the place of tort was Italy.
A Shanghai Maritime Court case which was brought following the auction of uncollected goods demonstrates the risk of seeking compensation from the wrong party, even where the legal relationships between the various parties appear to be relatively simple.
The loss or damage of a cargo and a dispute over the insurance coverage gave rise to a case before Wuhan Maritime Court. The issues included the jurisdiction of the court (as opposed to the courts designated on the bills of lading), the right of subrogation and the carrier's liability.
A recent dispute over a delivery of goods without the original bill of lading provides a reminder that a carrier which commits an error must have a correct and objective understanding of its responsibilities and obligations. In such cases, parties should consider whether negotiation can be used to resolve the dispute and preserve the business relationship.
A Chinese company concluded three contracts with an overseas vendor for imports of young soybean oil. However, a dispute arose when the goods were found to be around 273 tons short and partially contaminated. The subsequent litigation was mainly based on the disagreement between carrier and purchaser over quantity and the question of whether the company was a good-faith purchaser.
Before accepting the shipping commission from cargo owners, freight forwarding companies should conclude written commission contracts or ask the owners for written freight forwarding orders before each business operation. If this is impossible, it is vital to preserve a full set of the relevant documents, including freight invoices, packing lists and declarations.