E-News for January 22, 2007

E-News for January 22, 2007

Liability for ‘On Board’ Bills of Lading

General Editor Peter Jones comments on a case presently before the Canadian Courts. The shipper represented that goods were ready for shipment, and the forwarder issued an “on board” bill of lading in satisfaction of the requirements of the letter of credit. Through the gullibility or participation of the forwarder’s agent, the shipper obtained the original bill of lading and the bank ultimately paid out on the letter of credit. The goods were never shipped, the shipper was an empty shell company, and the consignee went into receivership: the bank sought to hold the forwarder liable for their participation in the fraud. Can the bank rely on the “on board” notation in paying out under the credit note and, if so, can it claim against the forwarder as a holder of the bill of lading for value without notice? For the full article, click here:
http://www.forwarderlaw.com/library/view.php?article_id=415

What’s a Package?

Whether under international or US domestic law, most contracts of carriage by sea incorporate a ‘per package’ limitation on the carriers liability. Carriers naturally want to limit this liability, and have been successful in rare cases in defining an entire container as a ‘package’ for limitation purposes. Shippers, by contrast, want the largest number of ‘packages’ to maximize their potential recovery in situations of loss or damage. Contributor Steve Block helps guide us through the potential minefield. For the full article click here:
http://www.forwarderlaw.com/library/view.php?article_id=421

Limitation of Liability under Chinese Law and Practice

Ik-Wei Chong, Forwarderlaw member for Shanghai, provides a concise discussion of limitations under the Chinese Maritime Code. While Article 56 of the code provides weight and package limitations, the Supreme Court has ruled that NVOCCs may not take advantage of the tonnage limitations extended to owners and operators under articles 204 and 207. Commercial realities, however, dictate that in practice the liability of an NVOCC will not exceed RMB800,000, the bond required under government regulations. For the full article click here:
http://www.forwarderlaw.com/library/view.php?article_id=416

Liability of Consignee for Unpaid Freight

When can a consignee be held responsible for unpaid freight? Much will depend on the details of the relationship between the shipper and consignee, in particular whether the transport document evidence a responsibility for the charges and whether the consignee exercised independent control over the cargo. The situation becomes less clear when the unpaid charges relate to freight and storage – charges that may have accrued before title to the goods passed to the consignee. General Editor Peter Jones provides a helpful analysis here:
http://www.forwarderlaw.com/library/view.php?article_id=419

Directors May Be Held Liable For Misrepresentations On Credit Agreements

England’s Court of Queen’s Bench recently wrestled with the conflict between limited liability for incorporated companies and the principle that those committing wrongful acts should be held accountable. Gavin Magrath reports on this carefully reasoned judgment, in which the Court provides guidance as to what circumstances may justify a claim against a director personally for corporate defaults. For the full article click here:
http://www.forwarderlaw.com/library/view.php?article_id=418

Transport Documents under Article 19 of the UCP 600

Changing terminology has created some confusion with respect to the nature of documents required to comply with letter of credit requirements on combined transport or multimodal shipments. International Trade Consultant Vlad Cioarec responds to a reader’s question about the treatment of transport documents covering at least two different modes of transport here:
http://www.forwarderlaw.com/library/view.php?article_id=420

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