Cefor – Marine Insurance Education, Copenhagen 22-23 April 2014 Henrik Thal Jantzen

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Cefor – Marine Insurance Education, Copenhagen 22-23 April 2014Henrik Thal Jantzen

Why does cargo underwriters need to know about transport law? to assess appropriate premium (taking possible

recovery funds into considerations) to advise on possible risk and exposure to cover

(limitations, exemptions, forum, legal entity responsible)

to advise about possible additional cover (on-carriage, rejection, deck cargo, subsidiary coverage)

to consider appropriate warranty clause to be inserted (deck cargo, pre-loading survey, packages, parking places)

INTRODUCTION

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Why does cargo claims handler need to know about transport law? recovery profits are a substantial part of the

premium assessment To advise about – or take - immediate actions to

protect and safeguard cargo interest position

INTRODUCTION


No uniform legislation applies in relation to the various mode of transport

No inter-connection regulations between the various unimodal conventions

Actual place of jurisdiction decisive in relation to the relevant rules to apply

TRANSPORT LAW IS COMPLEX


It is not possible to predict the recovery prospect until you have an actual cargo claim in hands Is it a C/P claim or a B/L claim? The alternative forum available Terms and conditions applicable Carriers involved (actual and/or contractual) and their

prospects to honour a claim Evidence established as regards cause and extent of

damage

RECOVERY PROSPECT


1. Contract of carriage (B/L, C/P, fixing note, recap) to identify the contractual carrier to decide on the mode of transport agreed to identify the Terms and Conditions agreed

MOST RELEVANT DOCUMENTS REQUIRED


2. Commercial invoice Valuation of goods (to verify the extent of loss or

damage) Delivery terms - to substantiate the entity entitled

to sue



3. Evidence in relation to the damage/loss Survey reports (preferable joint survey) Sea protest and/or reports about the occurrence Police reports, firefighting reports, custom reports or

other public reports or info Tally reports, temperature records, outturn reports Logbook, engine log, pre-loading reports etc.



Mode of transport Road (CMR) Sea (Hague, Hague Visby, Hamburg) Air (Montreal Convention) Rail (Codif/CIM) Multimodal (Rotterdam Rules ? or agreed terms)

LEGAL REGIME


Basically elementary to determinate applicable rules BUT

Has the transport been carried in accordance with the agreement?

What rules apply in case the carriers have deviated from the agreed mode of carriage?

CASE (Salmon Roe)

UNIMODAL


No mandatory rules applicable Multimodal terms agreed

Fiata Combined transport B/L NSAB 2000 - or similar freight forwarder terms Individual Terms and Conditions

Network clauses often agreed Known damage – unimodal rules to apply Unknown damage - general rules to apply (SDR 2

per kilo)

MULTIMODAL CARRIAGE


Decisive factor in relation to liability prima facie evidence in favour of cargo interest carriers carry a heavy burden of proving that

damage did actually not incur while in the carriers’ custody

damage was caused by circumstances for which the carriers are not liable

LOSS/DAMAGE CAUSED WHILE GOODS ARE IN THE CARRIERS’ CUSTODY


Condition of goods while taken over by the carriers visible inspection of the carriers clean receipt documents (B/L, interchange receipt,

mate receipt, consignment note (CMR)) qualified remarks (what about FCL – containers)

Case: 850 boxes of fish fingers From pepper to corn



Condition of goods upon delivery to the consignee receivers lodge a notification in time as per the

applicable rules reservation made on the receipt document



Loss or damage actually caused during transit (fire, road accident, rubbery during parking, salt-water damage)

Loss or damage based on documentation/evidence considered caused in transit

Imaginary loss constituted incurred in transit (B/L in hands of third party)

Case: From ram units to microwave oven



Extremely important for the recovery prospect: applicable law decided by the competent court in

question (conventions incorporated in the jurisdiction)

period of time and costs required to obtain a judgement - important factor for level of settlement

predictability of the outcome enforceability of the judgement

FORUM


Claim under a B/L: mandatory legislation applicable mandatory jurisdiction in the country where the

goods have been taken over and/or at the place of delivery (and often as well in the place of loading and the place of discharging)

contractual carrier (liner company named on the B/L) and performing carrier jointly liable

B/L VS. C/P CLAIM


Claim under a C/P: no mandatory legislation applicable terms and conditions inserted in the C/P apply forum clause (often at the place of business of the

carriers) applies exclusion or limitation of liability - see ex clause 2 of

Gencon 94

B/L VS. C/P CLAIM


Owners’ Responsibility Clause The Owners are to be responsible for loss of or damage

to the goods or for delay in delivery of the goods only in case the loss, damage or delay has been caused by personal want of due diligence on the part of the Owners or their Manager to make the Vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied, or by the personal act or default of the Owners or their Manager.

GENCON CLAUSE 2


Transference from C/P claim to B/L claim: CIF terms - seller C/P party - buyer third party B/L

holder FOB terms - Seller Shipper - Buyer C/P party and

not third party B/L holder

B/L VS. C/P CLAIM


1) Established that loss of or damage to goods incurred in the carriers’ custody2) Prima facie evidence in favour of cargo interests3) B/L claim - exemption of liability in case of fire and errors in navigation4) No liability for damage outside the carriers’ control (inherent vice, shippers fault, act of god)

LIABILITY


CMR: SDR 8.33 per kilo SEA: SDR 2 / 667 AIR: SDR 19 Rail: SDR 17

LIMITATIONS


Limitation only for loss of or damage to cargo during carriage

No limitation for other losses in relation to the performance of the carriage such as mis-deliveries (CAD, COD), improper customs clearance

Rotterdam Rules and FF-terms include universal limitation for all claims under the contract

LIMITATION REGIME


CMR: Gross negligence of the road carrier or his servant

SEA: Art. 4, subsection 4, of the Hague Visby Rules: “Is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result."

AIR: Montreal Convention: Limitation cannot be breached

BREACH OF LIMITATIONS


Now we are prepared to handle loss of or damage to the cargo

How has the transport been contracted? How has it actually been carried out? Information about cause of damage Info about transport document issued and remarks

made hereon, if any Info about any notice of damage or loss made by

the consignee B/L issued and negotiated Possible forum

CLAIMS HANDLING – IN PRACTICE


Cefor – Marine Insurance Education, Copenhagen 22-23 April 2014 Henrik Thal Jantzen

Documents

relevant rules

transport law

occurrencepolice reports

infotally reports

public reports

custom reports

firefighting reports

safeguard cargo