Who is liable when scrap aluminium turns into bricks?
An unusual piece of
black magic was recently
related to FTW – where
a container-load of scrap
aluminium turned into a
container-load of bricks.
That was the nightmare
for a reader of Hariesh
Manaadiar’s Shipping
and Freight Resource blog
whose company was also,
unfortunately, the shipper
of the aluminium.
And his company was
extra-careful in moving
the container and its load
of 25 tonnes of aluminium
from the Chinese Port
of Xingang to the
Brazilian Port of
Santos.
They personally
supervised loading
the scrap in the
container, placed
seals on the container
doors themselves,
followed the container
to the port of Xingang,
and delivered it to
the shipping company’s
warehouse on July 16.
And, when the container
was delivered to the port,
our aggrieved shipper told
us, they paid the Chinese
supplier.
But when the container
arrived in Santos, it was
weighed and found to be
2.9 tonnes light. Alarms
went off immediately.
The company’s seal and
the shipping company
seal both appeared to
be intact. But, when the
container was opened by
the Brazilian customs and
pest inspection agents,
there was no aluminium
scrap inside – it was full of
bricks.
That indicated that the
aluminium scrap cargo
must have been removed
and replaced with bricks
at the shipping company
warehouse or at the dock
sometime during the
four days before it was
loaded on the vessel.
The supplier/
shipper term was cost,
insurance, freight (CIF).
That leaves three
questions that our reader
is anxious to know the
answers to. Who should be
held responsible for this
crime? Who do they file a
claim with? Is there any
realistic expectation that
they will be able to recover
all or any portion of their
approximately US$40 000
loss?
To find these answers,
FTW rushed along to speak
to legal eagle on maritime
transport and insurance
matters, Andrew Robinson,
director of legal firm
Norton Rose Fulbright SA.
“Firstly,” he told FTW,
“it is not recommended
that containerised cargo
be sold on CIF terms. The
CIF Incoterm is usually
reserved for the shipment
of bulk or breakbulk
cargo. CIP – carriage
and insurance paid to (...
named place of destination)
– terms are preferable in
these circumstances.
“Secondly, as the sale was
CIF, the cargo was insured,
and a claim may lie under
the relevant insurance
policy (subject to that
policy’s terms).
“Thirdly, and on the
evidence, a claim may lie
against the carrier if it can
be shown that the sealed
container with the cargo
was delivered to the carrier
at the carrier’s warehouse
and that the probabilities
were that the loss took
place whilst the container
(and cargo) was in the
carrier’s care and custody.”
A nasty “However…”
comes in here though.
The contractual
relationship between the
cargo owner and the carrier
will, in all probability,
be determined by the
bill of lading conditions,
or the conditions of the
carrier’s tariff, according to
Robinson.
“These terms,” he added,
“are likely to reduce or even
exclude liability prior to the
container being loaded.”
